Chapter 4 The IMC Planning Process

The IMC Planning Process
– begins with an analysis of the context, which involves the 3 C’s – customers, competitors, and communication. – From the analysis of the 3 C’s, decisions about the target market and product positioning can be made.
– It is a joint decision because one affects the other. Next communication objectives are formulated.
– From the objectives come the budget and a selection of the appropriate IMC components.
– Again, it is a mutual decision because the budge impacts which IMC components can be used and the selection of the IMC components affects the budget.
Customers in The IMC Planning Process:
-Current customers
-Former customers
-Potential new customers
-Competitors’ customers
Competition in The IMC Planning Process
-Identify major competitors.
-Identify communication strategies and tactics of each competitor.
Sources of information
– Primary research
– Secondary data
– Research what others say
Communications in The IMC Planning Process
-Company communications
-Industry communications
-Competitor communications
Target Markets
-Consumer markets
-Business-to-business markets
-Market segment
-Market segmentation
Tests to Determine if a Particular Market Segment Is Viable
– The individuals or businesses within the segment are homogeneous.
– The market segment is different from the population as a whole and distinct from other market segments.
– The market segment is large enough to be financially viable to target with a separate marketing campaign.
– The market segment must be reachable through some type of media or marketing communications method.
Methods of Segmenting Consumer Markets
-Demographics
-Psychographics
-Generations
-Geographic
-Geodemographics
-Benefits
-Usage
Gender Segments Based on Demographics
-Gender based products
-Gender difference in communications
-Female consumers
-Control 66% of spending ($12 trillion)
-Involved in purchasing high-priced electronics (96%)
-Deal with financial advisors (90%)
-Buy and sell stocks (80%)
-Household’s primary accountant (70%)
Age Segments Based on Demographics
-Target specific age group
-Combine with other demographic variables
-Children attractive group
Psychographic Segmentation
-are an individual’s activities, interests, and opinions. -They help marketers to understand why consumers buy what they buy.
-often combined with demographic profiles to provide a much richer description of a target segment.
VALS 2 Psychographic Segmentation
-Consumers are divided into 8 different segments based on their AIO measures (activities, interests, and opinions).
-This type of information helps marketers design more effective communication.
-For instance, reaching achievers requires ads that stress careers, families, goals, and a conservative lifestyle.
-On the other hand, reaching experiencers requires ads to convey youthfulness, enthusiasm, impulsiveness, fashion and social acceptance.
Characteristics of Generation Segments
-Markets can be segmented based on generations. This table shows the five major generation groups, when they were born, and primary characteristics of each group.
-The idea behind generation segmentation is that people who grow up experiencing common events will become similar in their AIO measures. These groups often enjoy the same music, foods, and products.
Geodemographic segmentation
-combines demographic information, geographic information, and psychographic information.
-is beneficial for national firms conducting direct mail campaigns and for retailers in targeting customers in a geographic area around the store.
-The most well known system is PRIZM.
Benefit Segmentation
-focuses on the advantages consumers receive from a product rather than the characteristics of the consumer.
-An excellent example of benefit segmentation is the fitness industry.
-People exercise for different reasons. The three most common benefit segments are winners, dieters, and self-improvers. The winners exercise because they like to exercise.
Usage Segmentation
-segmentation focuses on how consumers use a product or on their purchase history.
-Marketers can create clusters of heavy users, light users, or any other category of users.
-companies can target a specific cluster creating a unique marketing approach.
-The message to a light user of a product will certainly be different than a heavy user of a product.
-One of the goals of targeting light or average users is to move them up into a higher group in terms of usage.
Methods of Segmenting B-to-B Markets
-markets can be based on industries, size of businesses, geographic location, product usage, or customer value. -Because most businesses have records of their business customers, segmentation is often easier than with consumers, at least in identifying customers
Product Positioning
-is the perception in consumers’ minds of the nature of a company and its products relative to competitors. It is important to recognize the two major points – in consumers’ minds and relative to the competition
-is created by factors such as product quality, prices, distribution, image, and marketing communications.
Product Positioning Approaches
-Product Attributes
-Competitors
-Use or application
-Price/quality
-Product user
-Product class
– Cultural symbol
Positioning by product attributes
by product attributes involves promoting a unique attribute that is superior or different from the competition.
competitors to establish a position
can be accomplished by contrasting the company’s brand against competing brands.
Use or application
involves creating a memorable set of uses for a product, or applications that allow it to stand out.
Price/quality
positioning can occur in two ways – by emphasizing value (low price) or by emphasizing high quality, with little mention of the higher price.
The product user
approach emphasizes who uses the product, such as educators for Apple computers
Positioning can be based on the product class
such as beverages, breakfast foods, or sports cars.
cultural symbol
which strives to connect the brand to some cultural symbol that is recognized and known by consumers.
Elements of Positioning
-Never completely fixed
-Applies to business-to-business also
-International positioning important
-Critical component of image and brand management
Marketing Communications Objectives
These objectives tie the organization’s context, target markets, and positioning approaches to the selection of budget figures and IMC components. Communication objectives also guide account executives and advertising creatives in designing the actual advertising campaign.
Communication Objectives
-Develop brand awareness
-Increase category demand
-Change customer beliefs and attitudes
-Enhance purchase actions
-Encourage repeat purchases
-Build customer traffic
-Enhance firm image
-Increase market share
-Increase sales
-Reinforce purchase decisions
Marketing Communications Budget
-based on communication objectives
-marketing objectives
-vary from consumer to B-to-B markets
-Unrealistic assumption to assume direct relationship between advertising and sales
Factors Impacting Relationship Between Promotions and Sales
-The goal of the promotion
-Threshold effects
-Diminishing returns
-Carryover effects
-Wear-out effects
-Decay effects
-Random events
Threshold effects
are present at the point where the advertising or communications begins to affect consumer responses in a positive direction.
The goal of the promotion
may be to increase brand awareness or build brand image. If so, there will be less impact on sales than with some of the other objectives.
Carryover effects
refer to an ads message being remembered or carried over to the time when the product is needed and the consumer is thinking about the purchase.
Wear-out effects
effects happen when an ad or message becomes old and stale and the consumer no longer pays attention to it.
Decay effects
occur when a company quits advertising and the brand name begins to fade in people’s memories. Sales can also be impacted by just random events, such as a major snow storm
A Decay Effects Model
During the advertising campaign, sales often continues to climb. Then the campaign ends and consumers begin to forget the brand name, it starts decaying.
Methods of Determining Marketing Communication Budgets
-Percentage of sales
-Meet-the-competition
-“What we can afford”
-Objective and task
-Payout planning
-Quantitative models
Types of Budgets
-Percentage of Sales
-Meet the competition
-What we can afford
-Objective and task
-Payout planning
-Quantitative models
Percentage of Sales
-Sales of current year, or next year
-Simple
-Tends to work in the opposite direction
-Does not meet special needs
Meet the competition
-Seeks to prevent market share loss
-Highly competitive markets
-Dollars may not be spent efficiently
What we can afford
-approach sets the communications budget after all of the other budges are set. Normally, with this approach, management does not see the importance of communications.
Objective and task
-sets the budge based on what it will cost to accomplish communication and the marketing objective that has been established. Most marketers see this as the best method of budgeting. It is now being used by about half of all firms.
Payout planning
-involves setting a budget based on a ratio to sales or market share. This method usually results in more money being spent early in the process and then reducing the budget after the brand is established
Quantitative models
-use historical data to determine the relationship between sales and marketing, then sets the budget accordingly.
IMC Components
-Traditional advertising
-Trade promotions
-Consumer promotions
-Media spending
-Alternative media spending
-Business-to-business media spending
Breakdown of Marketing Expenditures
approximately 41.1% is spent on some form of advertising. Consumer promotions account for 27.9% and trade promotions for 27.5%. These percentages will vary from industry to industry. It will also be different for products and services, and for consumer companies and B-to-B firms.
Successful Globally Integrated Marketing Communications Tactics
-Understand the international market
-A border-less marketing plan
-Thinking globally but acting locally
-Local partnerships
-Communication segmentation strategies
-Market communication analysis
-Solid communication objectives