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BBA / MBA

SUMMER 2012
Institute of Business Management
a process of integrating
marketing communications
activities across relevant
audience points to achieve
greater brand coherence.
...a process of aligning
brand communication
objectives with corporate
goals, thereby achieving
accelerated returns on
investments.
1980s
Concept evolved during the 1980s
Most companies were NOT Ready!

structured by Departments, operating


independently of each other.
1980s
A regimen of command & control,
operated top-down.

BUT businesses was good!


Shareholder value was growing

Result: Belief in the functionally


segregated business model remained
strong.
1980s
In the US, business was content with the
classical/ segregated organizational
model.
Management consultants Edwards Deming,
Joseph Juran & others urged corporate
America to change.
1980s
In Japan & parts of Europe, business
was on the right track
Organizational integration was
already in practice.
TQM (pioneered by Edwards Deming &
Joseph Juran in Japan) had become the
buzz-word.
1980s
Four Ps concept of Marketing, fitted in
well with functionally structured, mass
production oriented silo organizations.

New products, new markets, higher


prices seen as the obvious strategy for
profit maximization!
1980s
The popular belief: If a company got
their Four Ps right, business would
grow & prosper.
What was or is wrong with 4Ps?
4Ps: inwardly focused approach.
Manufacturers - NOT Consumers -
drive the business.
1980s
Sales Promotion, Direct Marketing, PR
activities part of the promotional mix
Concept of ATL & BTL media applied as a
two-part approach to promotions.
Advertising agencies offered o become
one-stop-shops for both ATL & BTL.
Companies opted for specialization of
services.
1990s
Product differentiation was diminishing.
Global competition was intensifying.
Business focus remained on Building &
protecting market share at any cost was
becoming costlier!
Companies strategic focus:
Out-maneuver, Out-promote competition!
1990s
Despite focus on the Four Ps, companies
fell short of target & profitability
suffered.
Four Ps unable to deliver results!
Cost-efficiencies & economies of
scale NOT higher marketing spend,
became the NEW route to mass market
penetration.
1990s
Big retailers (Wal-Mart, Toys R Us &
Best Buy) drove out smaller competition
& also dictated terms to manufacturers.
Private labels sales grew from $41.5
billion in 1998 to $51.5 billion in 2002, in
the US.
Manufacturers no longer controlled
distribution...
Three major external factors started
influencing markets:
1. Digital technology: spread across
business operations;
2. Brands & branding became the major
competitive differentiating tool;
3. Globalization & regionalization became
the favored MNC strategy.
A fourth major shift soon followed:

Demand for Value-based, &


Accountability-based business.
Computer technology became a major
enabler & equalizer for business.
Technology made better identification &
understanding of customers (& their
motivation to buy) possible.
Impact of promotional activities also could
be better measured.
Was Direct Marketing (DM) a source of
learning for IMC? WHY?
DM focused on customer identification,
contact & measurement (of response)!
DM began in the 1960s - matured into
Database Marketing (in the 1990s).
Internet marketers (banks, auto dealers,
retailers) started using DM + Technology
for broad scale marketing.
From 1950s until 1990s: new products/
new technologies, & innovations remained
the preferred theme for business.
Innovate & grow!
TV, Microwave, Computers, Walkman
companies brought innovation to market &
created new segments.
Japanese companies did not innovate -
preferred to copy & improve new
technology - at much lower cost.
A whole new breed of competitors
emerged in the marketplace.
Private labels sales in US grew from $41.5
billion in 1998 to $51.5 billion in 2002.
Come the NEW millennium, market
dynamics changed. Innovators again
became leaders!
Investment firms in the 1980s first to
discover the value of Brands.
Saw brands as a cache of loyal
customers - a means of generating
income flows into the future.
1990s: New trading blocs - similar to
ASEAN emerged: European Union &
MERCOSUR (in Latin America). Eastern
Europe also underwent restructuring.
Companies started adopting more unified,
consistent, & integrated brand strategies
(balancing later with unique needs of
individual markets).
Global, cross functional teams started to
replace departmental structures.
Companies set about integrating
communication role of ad agencies
became weaker!
Brand essence became the basis for
integration & alignment of marketing
activities.
IMC evolved from being a communications
tool into a key component of overall
business strategy.
IMC shifted focus from one-way to two-
way, interactive communication.
Internet & e-commerce became the game
changers with real-time, buyer-seller
interactions.
Role of IMC changed from coordinating
outbound communication to integrating
outbound & inbound communication.
Organizations started rallying around a
single factor: wants & needs of the
customer.
Satisfaction of customers wants & needs,
became the basis for VALUE CREATION.
Major companies adopted IMC as their basic
business philosophy:
Dow Chemical,
CIGNA Insurance,
Kraft,
FedEx,
IBM,
Dell,
Hyatt International.
TODAY, IF A FIRM CANNOT:
Master communications,
Use it to influence & bind customers,
Build on brand relationships as the
basis of sustainable competitive
advantage,
Find ways to use communication for
building long-term brand loyalty
THAT FIRM WILL NOT SURVIVE!