Planning and organizing IMC

process
Dr. Arijit Bhattacharya
IBS Mumbai
 Segmentation, Targeting,
Positioning, Differentiation
Dr. Arijit Bhattacharya
STP Process

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Market Segmentation
• A segment consists of a group of customers who
share a similar set of needs and wants.

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 Types of Segmentation
Geographic Demographic Psychographic Behavioral
1. Region 1. Age, life-cycle 1. Personality 1. Needs,
2. City stage 2. VAL Benefits
3. Rural and 2. Life stage 3. AIO 2. Decision roles
semi-urban 3. Gender 3. Occasions
areas 4. Income 4. User status
(Population 5. SEC 5. Usage rate
density) 6. Generation 6. Buyer-
4. Climate readiness
5. Terrain 7. Loyalty
8. Attitude

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Product Segmentation

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Psychographic Segmentation
• Buyers are divided into different groups on the basis
of
• Psychological/personality traits, lifestyles, values
• Needs and motivation
• Perception
• Attitude
• Personality
• Involvement
• Lifestyle
• Activities, Interests, Opinions (AIO)
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Needs and Motivation

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Perception

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Attitude

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Personality

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Involvement

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Behavioral Segmentation
• Occasions
• Greeting card?
• Benefits
• Shampoo?
• User Status
• Non ex, potential, 1st time , regular
• Usage Rate
• Light, medium, heavy
• Buyer-Readiness (Brand Funnel)
• Unaware, aware, informed, interested, desire, intent to buy
• Loyalty Status
• Hard-core, split, shifting, switcher
• Attitude
• Enthusiastic, positive, indifferent, negative, hostile

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Benefits-based segmentation
• Getting rid of dandruff
• Get great looking hair
• Soothing itchy scalp
• Dry scalp solutions
• Soothing a sensitive scalp
• Hair thinning solutions
• Soft & Silky cream conditioner
• Split ends protection
• Keratin damage blockers
• Daily moisture repair
• Hairfall solution
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Viability of a Segment
1. Measurable
• total size, purchasing power, segmentation variables
2. Substantial
• profits, growth potential
3. Accessible
• Reachable
4. Differentiable
• Between two segments
5. Actionable
• Possible to design a marketing program

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Targeting
Evaluating the viability of
each segment and then
selecting one or few
market segment (s) to
serve better and in a
superior way

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Targeting strategies

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Positioning
• “Designing an offer so that it occupies a distinct and valued place in
the minds of the target customer.”
Kotler

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 Positioning Strategies
Points-of-Parity (POPs) Points-of-Difference (PODs)
• Attributes or benefits • Attributes or benefits
that are not unique that consumers
but shared with believe they could
other brands not find in a
• Every smart phone competitive brand
has touch screen, • Apple iPhone
camera • Design
• Ease-of-use

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Differentiation
• The process of adding meaningful and valued
differences to distinguish the company’s offering
from the competition.
• A firm can differentiate along 5 dimensions:
• Product
• Service
• Personnel
• Channel
• Image

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IMC Communication
Objectives
Dr. Arijit Bhattacharya
IBS Mumbai
The objective of this ad is to…
Marketing vs. Communication Objectives
Sales v. Communication Objectives
• Any direct link between • Factors Influencing Sales
advertising and sales?
• Sales can be due to any of the
other marketing-mix variables
• Product design, quality, packaging,
distribution, pricing
• Effects of advertising may not have
an immediate effect on sales
• Where sales objectives are
appropriate?
• Direct response advertising
Communication Objectives
• Company’s focus on building for
• Brand knowledge the future
• Brand interest
• Favorable attitudes and image
• Purchase intentions
• Customer pass through
successive stages
• Cognitive (thinking)
• Affective (feeling)
• Conative (behavioral)
DAGMAR

• Defining Advertising Goals for Measured Advertising Results

• Helps businesses to set clear objectives for their
advertising campaigns and measure their success

• Breaks down the buying process into four stages

• Awareness  Comprehension  Conviction  Action
DAGMAR Example
• A company is launching a new line of toothpaste. The company's
advertising campaign might have the following objective
1. To increase awareness of the new toothpaste brand among 50% of the target
audience within 6 months.
2. To increase comprehension of the toothpaste's benefits among 30% of the
target audience within 3 months.
3. To convince 20% of the target audience that they need the new toothpaste
within 1 month.
4. To generate 10,000 new leads within 2 months.
DAGMAR contd…
• Advantages
• It helps businesses to set clear and measurable objectives for their advertising
campaigns.
• It provides a framework for measuring the success of advertising campaigns.
• It can help businesses to track their progress and make necessary
adjustments to their campaigns.
• Disadvantages
• It can be a complex model to implement.
• It requires businesses to have a good understanding of their target audience.
• It can be difficult to measure the impact of advertising campaigns on sales.
Promotional Budgeting
• Two-way interaction
• Communication Analysis <----> Budget determination
• Establishing the budget
• An investment/expense?
• Contributing to additional sales/cutting into profits
• Budget setting
• Marginal analysis
• Budgeting approaches
• Top-down
• Affordable method
• Percentage-of-sales method
• Competitive parity
• Return on Investment (RoI)

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Marginal Analysis
• You are a marketing manager for a new brand of coffee that is targeting young
adults in India. You have a budget of $100,000 to spend on advertising, and you
want to use marginal analysis to determine how to allocate your budget.

• First, you would need to estimate the marginal impact of each additional Rs
spent on advertising.
• Spending an additional $100 on advertising will increase brand awareness by 5% among 18-24
year olds in India.

• As you continue to increase your advertising budget, the marginal impact of each
additional dollar spent will eventually decrease.
• Spending an additional $100 on advertising will only increase brand awareness by 1% among
18-24 year olds in the United States.

• Why?
• There is a limit to how much advertising can impact brand awareness. At some point, people
will be aware of your brand, and additional advertising will not have a significant impact on
their awareness.
Marginal Analysis

Advertising Budget Brand Awareness Increase Marginal Impact

$100 5% 5%

$200 4% 1%

$300 3% 1%

$400 2% 1%

$500 1% 1%
Budgeting approach: Top-Down
• Setting the overall advertising
budget at the top management
level, and then allocating funds to
specific campaigns or initiatives.
This approach typically relies on
historical data, industry
benchmarks, and management's
judgment to determine the budget.

• Methods
• Affordable method
• Arbitrary allocation
• Percentage of Sales
• Competitive parity
• Return on Investment (ROI)
Top-Down Budgeting - Types
• Affordable method
• Promotions budget is allocated after all other spending (production/operations)
• Arbitrary allocation
• Promotions budget determined by management solely on the basis of what is
felt to be necessary
• Percentage of sales
• Promotions budget is based on sales of the product
• Difficulty to apply for new products
• Decrease in sales may reduce budgets
• Competitive parity
• Promotions budged is based on matching competitior’s % of sales
expenditures
• Similar expenditure doesn’t mean equally effective promotional programs
Budgeting approach: Bottom-Up
• Involves a more granular and detailed
approach, where the budget is • Objective and Task Method
determined by estimating the costs of
individual campaign components or
initiatives, which are then aggregated
to create the overall advertising
budget.
Example
• A large multinational company has decided to allocate a specific percentage
of its annual revenue for advertising. The senior management has a revenue
target of $10 million, and the management decides to allocate 10% ($1
million) of that for advertising purposes. The marketing team is then given
this budget to plan and execute various campaigns (different advertising
channels, creative production, media buying).
• A startup that wants to launch a new product and needs to create an
advertising budget. The marketing team begins by identifying the specific
tactics and activities required for the campaign. They estimate the costs for
each element, such as social media ads, influencer partnerships, content
creation, and event sponsorships. The team estimates that social media ads
will cost $10,000, influencer partnerships will require $5,000, content
creation will be $8,000, and event sponsorships will be $7,000. These
individual cost estimates are then added together to arrive at the total
advertising budget of $30,000.
Steps to Develop and Implement the Budget
Budget Allocation: Factors to consider
• Allocating to IMC elements
• Traditional …?
• Client/agency policies
• Preference?
• Market size
• Smaller or larger?
• Market potential
• High potential => more money allocation
• Market share goals
• Maintaining or increasing?
• Market share vs. share of advertising voice
• Organizational characteristics
• Centralized v. decentralized?
• Accounts vs. Operations