Analysing Marketing

communication process and STP in

IMC process

Dr. Gobinda Roy

International Management Institute Kolkata
1 1 & 3 November 2022
2 Objectives
 Describe the communication process and its role in IMC.
 Describe the basic model of the communication process.
 Discuss the role of word-of-mouth influence and viral marketing.
 Explain the process of STP marketing.
 Describe bases for identifying target segments.
 Discuss criteria for choosing a target segment.
 Identify the essentials of a positioning strategy.
 Review the necessary ingredients for creating a brand’s value proposition.
3 1. The Nature of Communication
 Communication
 Passing of information. (new products- ai based games; aqua robotics)
 Exchange of ideas. (Collaboration or partnership)
 Process of establishing a commonness of thought between sender
and receiver.
 Success depends on many factors.
 Nature of message, audience’s interpretation, environment,
receiver’s perception of source and medium used to transmit
message, etc.
 Language is a major barrier.
 4 The Nature of Communication

Cadbury’s ads in with headlines

in different languages promoting
‘Unity Bar’ on Indian
Independence Day

 Cadbury’s ads in with headlines

Cadbury Unity Bar  in different languages
 promoting ‘Unity Bar’ on Indian
 Independence Day
5 A Model of the Communication Process
6 Basic Model of Communication 1
 Source:
 Person or organization that has
information to share with another
person or group of people. (Deepika
Padukone for Nescafe)
 Encoding:
 Putting thoughts, ideas, or Virat Kohli is the source in this ad for Boost health drink.

information into symbolic form. (“1 .

Coffee cup, 1 good feeling”)

 7 Basic Model of Communication
Message
• Contains information or meaning the
source hopes to convey.
• Includes content, structure, and design.
• “100% pure Instant coffee” –Nescafe
Classic
• “A true café”- Nescafe Cappuccino

This Coach ad uses only a picture to deliver its message of aspirational

heritage mixed with an urban attitude. The image projected by an ad
often communicates more than words.
 Basic Model of Communication 3
8
Channel
Facilitates communication between sender and receiver.
Nonpersonal channel or mass media.
Lacks direct, interpersonal contact between sender and receiver.
Includes print and broadcast.
Personal channel or direct communication between two or more persons.
Word-of-mouth (WOM): Informal communication among consumers about products and services.
Buzz marketing: Generating positive word-of-mouth discussion
Viral marketing: Propagating marketing-relevant messages with the help of individual consumers.
Factors affecting success:
Message characteristics.
Individual sender or receiver characteristics. Kotak Karma- Girl Power is Gold Power
Social network characteristics.
Seeding: Identifying and choosing initial group of consumers who will start spreading the
message.
9 Basic Model of Communication
 Receiver/Decoding
 Receiver: Person with whom sender shares thoughts or information.
 Decoding: Transforming sender’s message into thought.
 Heavily influenced by receiver’s field of experience:
 Experiences, perceptions, attitudes, and values a person
brings to the communication situation.
 Must establish common ground.
 People differ in location, education level, social status, age, etc.
10 Basic Model of Communication

 Noise
 Unplanned distortion in the communication process.
 Occurs because the fields of experience of sender and receiver don’t overlap.
 Response/Feedback
 Response: Receiver’s set of reactions after seeing, hearing, or reading the
message.
 Feedback: Receiver’s response that is communicated back to the sender.
11 Analyzing the Receiver*

 Identifying the Target Audience

• Individuals: Specific needs; communication must be specifically tailored.
(insurance products, leadership coaching)
• Groups: People who make or influence purchase decision. (Tour package)
• Market niches: Very small, well-defined groups of customers. (Drones)
• Market segments: Broader classes of buyers who have similar needs and can
be reached with similar messages. (B2B and IT products)
• Mass markets: Large numbers of present or potential customers. (5G Mobile
phone)
 2. STP Marketing
12
 STP marketing is the process of segmenting, targeting, and positioning. Marketers pursue
this set of activities to formulate marketing strategies for their brands.

 STP marketing also provides a strong foundation for the development of advertising
campaigns.

 While no single approach can guarantee success in marketing and advertising, STP
marketing should be considered when customers in a category have heterogeneous wants
and needs.
13 STP- Something for Everyone from Estée Lauder

https://www.esteelauder.in/
14 Segmenting—Identifying Target Segments
• In market segmentation, the goal is to break down a heterogeneous market into
more manageable subgroups or segments.

• Markets can be segmented on the basis of:

• Usage patterns and commitment levels—heavy users (primary target segment),
nonusers, brand-loyal users, switchers or variety seekers, and emergent
consumers (point-of-entry marketing).
• Demographics—age, gender, race, marital status, income, education, and
occupation
• Geography—geodemographics (PRIZM)
15 Segmenting—Identifying Target Segments
• Markets can be segmented on the basis of:
• Psychographics—activities, interests, and opinions (AIOs)
• Lifestyles—Pillsbury’s eating habits segmentation (chase and grabbits, functional
feeders, down-home stokers, careful cooks, and happy cookers); VALS system
(groups consumers by psychological characteristics—primary motivation—and
key demographics—resouces)
• Benefits sought—segmentation by benefit package

• Different bases are typically applied for segmenting consumer markets versus
business-to-business markets.
• Standard Industrial Classification Codes—SIC codes are commonly used to
identify categories of business and to locate them precisely.
 V.A.L.S. Model (Values and Lifestyles) 

16 VALS™ Segments

• Ideals - knowledge and principles

• Achievement - look for products
and services that demonstrate
success to their peers.
• Self-expression: Desire social or
physical activity, variety, and risk.
 VALS™ Segments
17
18 Targeting—Prioritizing Target Segments
• In STP marketing, after segment identification, an organization must settle
on one or more segments as a target audience for its marketing and
advertising efforts.

• Several criteria are useful in establishing a target segment:

• The organization’s ability to serve the segment in question
• The size of the segment and its growth potential
• The intensity of the competition the firm is likely to face in the
segment.
• Often, small segments known as market niches can be quite attractive
because numerous competitors will not be hotly contesting for the same
market.
 Positioning—Formulating the Positioning Strategy
19

• The P in STP marketing refers to the positioning strategy, which should guide all marketing and
advertising activities undertaken in pursuit of the target segment.

• Effective positioning strategies should be linked to the substantive benefits offered by the brand.
The brand should then have no problems delivering on its promises.

• Effective positioning strategies are also consistent internally and over time, and they feature
simple and distinctive themes.

• Options for positioning strategies include:

• benefit positioning—features a benefit or option of the brand
• user positioning—focuses on a target user
• competitive positioning—uses an explicit reference to a competitor

• Advertisers often opt to create a hybrid strategy by blending all or some of the three positioning
strategies. A frequent hybrid is benefit-plus-user positioning.
20 Positioning—Formulating the Positioning
Strategy
21 Capturing Your Strategy in a Value Proposition
• Many complex considerations underlie marketing and advertising strategies, so
it is useful to summarize the essence of one’s strategy with a device such as a
value proposition.

• A value proposition is a statement of the brand’s various benefits (functional,

emotional, and self-expressive) that create value for the customer.

• These benefits as a set justify the price of the product or service. Clear
expression of the value proposition is critical for developing advertising that
sells.

• “100% pure Instant coffee” –Nescafe Classic

• “A true café”- Nescafe Cappuccino
 Value Propositions for Two Popular Brands
22
23 Thorson and Moore’s Strategic Planning Triangle

• Thorson and Moore’s Strategic Planning Triangle is a useful tool in

identifying and applying a brand’s overall IMC strategy. The three
apexes of the triangle are:
• Identify and profile target segments
• Specify the brand’s value proposition
• Select persuasion tools
24 3. Regulatory aspects of advertising,
promotion ethics and social responsibility
Social Impact of Brand Promotion
 On the positive side, promotional efforts are said to:
• Benefit society by increasing the standard of living through
lowered product costs (by stimulating demand, increasing
probability new products will succeed, fueling competition and
improvement, diffusing innovations)
• Foster innovation, especially artistic creations
• Provide revenues to support mass media
• Deliver a constant flow of information valued by consumers
• Inform people about political and social issues
25 Regulatory aspects of advertising, promotion
ethics and social responsibility
 Social Impact of Brand Promotion
 At the same time, critics have said:
• promotional expenditures are wasteful, intrusive, and manipulate consumers into
buying something they may want but don’t really need (NOTE: Remember that
advertising cannot stimulate a basic need, but it can stimulate a person to act on
an existing desire.)
• messages are often offensive to society and frustrating to those who can’t afford
a lavish lifestyle
• advertisements are superficial and rarely furnish useful information
• advertisements perpetuate superficial stereotypes
• some critics have been concerned that advertisers are controlling consumers with
subliminal advertising messages (this claim is not well supported)
26 4. Promotions – Lower costs or wasted
resources
 Lower costs – Stimulating demand, enhance new products
success, fuels competitions leading to high standard products,
diffusions of innovation, greater market
 Wasted resources and uneven benefits: Brand differences are
trivial, but promotions make it prominent, widen gaps between rich
and poor
27 Promotions – some questionable roles

 Promotion of materialism: distort individual's’ wants and aspirations;

influence people to seek conformity and status-seeking behavior
 Perpetuating stereotypes: Many ads shows women as a homemaker
 Showing sensitivity: Ads for women beauty products that offer something other
than the body of a supermodel as valid point of reference.
 Offending Sensibilities: Poor taste, even offensive.
28 4. Ethical Issues in Promotion
 Ethical considerations that frequently arise involve:
• truthfulness (puffery is considered legal)
• concern for the impact of promotional messages on children
• the promotion of controversial products and practices such as firearms,
gambling, alcohol, cigarettes, and junk food
 Ethical standards are a matter for personal reflection; for example, there are many
shades of gray between purely fact-based ads and intentional efforts to deceive by
withholding information or lying.
 Unethical people can create unethical advertising, but there are also many
safeguards against such behavior, including the corporate and personal integrity of
advertisers.
29 Regulation of Advertising
 In the United States, advertisers may not engage in deceptive or unfair practices,
including:
• false vertical cooperative advertising allowances
• unfair comparison advertising
• the exercise of monopoly power
 According to the Federal Trade Commission (FTC) both implied claims and missing
information can be basis for deeming an ad deceptive.
 Legislation defines unfair advertising as “acts or practices that cause or are likely to
cause substantial injury to consumers, which is not reasonably avoidable by
consumers themselves, and not outweighed by the countervailing benefits to consumers
or competition.”
 The government places limits on the amount of advertising aimed at children on
television, and industry groups have developed guidelines for the content of ads
targeting children.
30 The Advertising Standards Council of India (ASCI)

 ASCI’s goals include monitoring, administering and promoting standards of advertising practices in India with a
view to:
 ensuring truthfulness and honesty of representations and claims made through advertising and safeguarding
against misleading advertising.
 ensuring that advertising is not offensive to generally accepted norms and standards of public decency.
 safeguarding against indiscriminate use of advertising for promotion of products or services which are
generally regarded as hazardous to society or to individuals or which are unacceptable to society as a whole.
 ensuring that advertisements observe fairness in competition and the canons of generally accepted competitive
behavior.
 To codify adopt and from time to time modify the code of advertising practices in India and implement, administer,
promote and publicize such a code.
 To promote, maintain and uphold fair, sound, ethical and healthy principles and practices of advertising.
 To promote better understanding of benefits of fair, sound and ethical advertising amongst the practitioners of
advertising and in society at large.
 To represent, protect, inform and guide members of the company on matters relating to advertising.
31 The Advertising Standards Council of India (ASCI)
32 New Guidelines on Regulation of Advertisements

 First, the guidelines provide better clarity to the existing rules and provisions. It defines
‘bait advertisement’, ‘surrogate advertisement’ and clearly provides what constitutes as
‘free claim advertisements’. 
 Second, it will help in upholding and protecting the rights of consumers like right to
be informed, right to choose and right to be safeguarded against unsafe products and
services. 
 Third, several preemptive provisions have been laid down on advertisements targeting
children. This has been done keeping in view the sensitivity and vulnerability of
children and the severe impact advertisements make on the younger minds.
 Fourth, the guidelines perform an essential function in bringing the Indian regulatory
framework at par with international norms and standards.
33 What are the concerns associated with the Guidelines?

 First, surrogate advertisements have been banned. However, there is ambiguity regarding
brand extensions. A brand extension is when a company uses one of its established
brand names on a new product or new product category. The Guidelines recognize
advertisements of Brand extensions (provided they comply with other guidelines), there is
no objective criteria prescribed to determine the validity/genuineness of such
advertisements. 
 Second, in case of any ambiguity or dispute in interpretation, the decision of CCPA shall
be final. This might lead to increased litigation and put further pressure on the Judiciary.
34 What are the concerns associated with the Guidelines?

 Third, the opinion is divided over the provisions related to celebrity endorsements vis-a-
vis due diligence. Some experts believe, celebrities lack technical knowledge to
undertake due diligence. Other critics argue that the penalty (INR 10 Lakh) is too small
for big celebrities who charge crores of rupees for endorsements.
 Fourth, a lot of claims made by advertisements are unverifiable (e.g., products may claim
they make the child stronger, or taller). It is difficult to define what is misleading. The
ambiguity might increase consumer complaints.
35 Regulation of Direct Marketing and E-Commerce

 In direct marketing and e-commerce, the primary concern has to do with consumer
privacy.
 Laws and regulations, including the Do Not Call Registry and the CAN SPAM Act,
restrict the ways in which companies can contact consumers with a sales offer.
 Other restrictions are aimed at ensuring that contests and sweepstakes do not amount to
gambling opportunities.
 In sales promotions, premium offers, trade allowances, and offline contests and
sweepstakes are subject to regulation. Firms must state the fair value of “free” premiums,
trade allowances must follow the guidelines of fair competition, and contests and
sweepstakes must follow strict rules specified by the FTC.
 The regulation of public relations efforts requires that privacy (appropriation) be protected
and that firms avoid copyright infringement and defamation (slander and libel).
36

Thank you