An Introduction to Integrated Marketing Communications

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© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

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An Overview of Chapter-I overview of the field of advertising and promotion and its role in the marketing process the concepts of marketing and relationship marketing also introduces the concept of integrated marketing communications (IMC), its evolution, and examines how various marketing and promotional elements must be coordinated to communicate effectively. importance of the IMC perspective in planning and executing advertising and promotional programs.
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‡ value of strategically integrating the various communication functions rather than having them operate autonomously. ‡ adaptation by marketers to a changing environment, particularly with respect to consumers, technology, and media. ‡ various elements of the promotional mix are introduced in this chapter along with a brief discussion of these basic tools of IMC. ‡ examines the various tasks and responsibilities involved in advertising and promotion management and a model of the integrated marketing communications planning process is presented
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Evaluate how various marketing and promotional elements are coordinated to communicate effectively. 4 . 6. 5. 4. Introduce a model of IMC planning process and examine the steps in developing this marketing communications program. 3. 2. Examine the growing importance of advertising and promotional elements in the marketing programs of domestic and foreign companies. Introduce the various elements of promotional mix and role in an IMC program. Introduce the concept of integrated marketing communications (IMC).Chapter Objectives 1. Importance of IMC perspective in planning. executing advertising and promotional programs.

McGraw-Hill/Irwin . Inc..Taking The ³Only Vegas´ Campaign in a New Direction 5 © 2007 McGraw-Hill Companies.

‡ Importance of an organization¶s promotional efforts in various industries and markets. soft drinks. the beer industry.Only Vegas-Vignette ‡ The changing roles of advertising and promotional strategy in modern marketing. ‡ Might include the automotive market. 6 . and consumer electronics.

is a good example of how R&R Partners and the Las Vegas Convention and Visitors Authority (LVCVA) uses an integrated marketing communications to market the city of Las Vegas. 7 .³Only Vegas´ campaign in vignette. Not only as a tourist destination but also as a site for µconferences & conventions¶.

A&P are integral to our social and economic systems. 4. 2. In market-based economies.GROWTH OF ADVT. AND PROMOTION 1. consumers rely on advertising and other forms of promotion. Advertising evolved into a vital communication system for consumers and businesses. In providing them information they influence making purchase decisions.Corporations rely on advertising and promotion to help them market their products and services 8 . 3.

By 2005 an estimated $276 billion was spent on advertising while sales promotion expenditures increased to more than $300 billion! 9 . were $53 billion and $49 billion was spent on sale promotion.S. advertising expenditures in the U.Statistics In 1980.

Sales Promotion 2004 1980 U.. U. McGraw-Hill/Irwin .S. Advertising $0 $50 $100 $150 $200 $250 $300 $350 10 © 2007 McGraw-Hill Companies. Inc.S.The Growth of Advertising and Promotion Expenditure in Billions of Dollars Advertising Outside U.S.

S. event sponsorship. interactive marketing. and global economies. 11 . 3. Billions more are spent on domestic and foreign companies in other promotional areas like: Direct marketing. 4.1. personal selling and public relations. Tremendous growth in expenditures for A&P reflect growth of U. Expansion-minded marketers take advantage of integrated marketing opportunities through mostly µevent sponsorship and use of Internet¶.

pricing. ‡ 12 . goods.What is Marketing ? Since 1984 (two decades). the American Marketing Association. promotion. defined marketing as: ³The process of planning and executing the conception. and distribution of ideas. and services to create exchanges that satisfy individual and organizational objectives. that represents Marketing professionals in US and Canada.

many experts argue that exchange is the core phenomenon for study in marketing. 2. This includes: 1. 13 . two or more parties with something of value to one another.e. what is needed for this process to occur. A desire and ability to give value to the other party. Therefore it can focus on the µNature of Exchange¶ i. However. and a way for the parties to communicate with one another.The above definition of marketing focused on exchange as a central concept along with Various other activities involved in µmarketing Process¶.

14 .Change in Marketing Definition Revised Definition of Marketing In 2004 the AMA adopted a revised definition of marketing is given below in the next slide.

Inc. Value Relationship marketing Mass customization Customer relationship management (CRM) 15 © 2007 McGraw-Hill Companies. McGraw-Hill/Irwin . communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders.What is Marketing? Marketing is an organizational function and a set of processes for creating..

Marketing Views Views marketing as being more strategic in nature and focuses on the important role marketing plays in developing and sustaining relationships with customers and delivering value to them. 16 .

17 . making the purchase and others. experiential or psychological.Value Value is the customer¶s perception of all of the benefits of a product or service weighed against acquiring. Costs include money paid for the product or service as well as other factors such as acquiring information. Benefits can be functional.

Demanding and want personalized products and services tailored to their specific needs and wants 18 .Relationship Marketing Marketers are seeking more than just a one-time exchange or transaction with customers.

Mass Customization Flexible manufacturing systems which have led to the mass customization. 19 . company can make a product or deliver a service in response to an individual customer¶s needs in a cost-effective way.

Companies recognize that it is not less than 5 times more cost effective to retain customers than to acquire new ones.Lifetime value They give emphasis on the lifetime value of a customer. 20 .

is an integral part of CRM systems. 21 . particularly database systems. Information technology.Customer relationship management (CRM) programs Involve the systematic tracking of customers¶ preferences and behaviors and modifying the product or service as much as possible to meet individual needs and wants.

22 . place. and promotion. This leads into the concept of integrated marketing communications. price. Promotional program is a part of a viable marketing strategy.Marketing Mix The four elements of the marketing mix are product. IMC focuses on the promotion element of the marketing mix. coordinated with other marketing mix variables.

. McGraw-Hill/Irwin .Coordinated Marketing Mix Elements Build Image 23 © 2007 McGraw-Hill Companies. Inc.

‡ Ad agencies to coordinate the use of a variety of promotional tools rather than relying primarily upon media advertising. ‡ Coordinating the various promotional elements along with other marketing activities that communicate with a firm¶s customers.IMC Genesis ‡ In the 1990s many companies are moving toward the concept of integrated marketing communications (IMC). 24 .

. Inc. McGraw-Hill/Irwin .Traditional Approach to Marketing Communications Sales promotion Point of purchase Publicity Special events Media Advertising Packaging Direct response Public relations Direct marketing Interactive marketing 25 © 2007 McGraw-Hill Companies.

McGraw-Hill/Irwin ..Contemporary IMC Approach Packaging Sales promotion Direct response Point of purchase Publicity Media Advertising Public relations Interactive marketing Direct marketing Special events 26 © 2007 McGraw-Hill Companies. Inc.

IMC Definition American Association of Advertising Agencies (4As) developed one of the first definitions of integrated marketing communications defining it as: 27 .

28 . general advertising.and combines these disciplines to provide clarity. direct response. and maximum communications impact. sales promotion.A concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines for example. consistency. and public relations.

All sources of brand or company contact that a customer or prospect has with a company. 29 .³big picture´ approach Company¶s marketing and promotional activities should project a consistent and unified image to the marketplace. product or service.

What IMC Looks for ??? A big picture approach to planning Marketing and promotion Programmes and communicating various Communication functions . 1-72 30 .

Four positive personality traits for IMC consultants 1-72 31 .

Don Schultz of Northwestern University. developed a new definition of IMC which is as follows: 32 . who has been one of the major proponents and thought leaders in the area.

persuasive brand communication programs with consumers. The goal of IMC is to generate short-term financial returns and build long-term brand value. Inc. prospects employees and other relevant external and internal audiences. execute and evaluate coordinated. McGraw-Hill/Irwin . customers. measurable. develop. 33 © 2007 McGraw-Hill Companies.New Defining IMC IMC is a strategic business process used to plan..

McGraw-Hill/Irwin . Inc.A Contemporary Perspective of IMC Definition Recognized as an on going Recognized as a business process strategic business process IMC Importance of relevant audience Multiple relevant audiences Demand for accountability and Demand for accountability Measurement of Outcomes 34 © 2007 McGraw-Hill Companies..

McGraw-Hill/Irwin . C) The use of the Internet and electronic commerce is growing. D) New global markets are emerging.Test Your Knowledge Why are marketers decreasing their usage of advertising in mass media to reach their target market and increasing their use of integrated marketing communications? A) The mass market has become fragmented. Inc. 35 © 2007 McGraw-Hill Companies. E) All of the above explain the increasing reliance on integrated marketing communications.. B) The explosion of new technologies has given consumers greater control over the communication process.

Reasons of Growing Importance of IMC They recognize the value of strategically integrating the various communication functions rather than having them operate autonomously. Fragmentation of media and the shift from mass to micromarketing Driven by a ³marketing which includes: revolution´ 36 .

. Inc.Reasons for the Growing Importance of IMC From Media advertising Mass media Manufacturer dominance General focus Low agency accountability Traditional compensation Limited Internet availability Toward Multiple forms of communication Multiple forms of communication Ex. Specialized media Specialized media Ex: TV Network Retailer dominance Ex: Promo Retailer dominance mix Data-based marketing Greater agency accountability Performance-based compensation Widespread Internet availability 37 © 2007 McGraw-Hill Companies. McGraw-Hill/Irwin ..Trade oriented sales promo.

38 . Brand identity: It is the sum of all points of encounter or contact that consumers have with a brand.Brand Identity and IMC Major reasons for the growing importance of integrated marketing communications over the past decade is that it plays a major role in the process of developing and sustaining brand identity and equity. See next for details.

Disney 8.45 $26..01 $24. Inc. product or service performance. Mercedes $67. McDonald¶s 9. packaging.44 $26.94 $53. Intel 6. IBM 4. design. and image or associations in the consumer¶s mind. GE 5. Marlboro 10.38 $46.IMC and Branding Identity Brand Identity is a combination of factors: Name. Nokia 7.59 $26.99 $35. symbols. Coca-Cola 2. IMC plays a major role in the process of developing and sustaining brand identity and equity. logo.84 39 $21. McGraw-Hill/Irwin 1. Microsoft 3.52 $59.19 . Business Week Ranking 2005 (Valued 10 Brands) (Billions of Dollars) © 2007 McGraw-Hill Companies.

Implicitly communicate with consumers.PROMOTIONAL MIX: THE TOOLS FOR IMC Promotion is defined as the coordination of all seller-initiated efforts to set up channels of information and persuasion to sell goods and services or promote an idea. Promotion is best viewed as the communication function of marketing. 40 .

The role and function of each promotional mix element in the marketing program can be discussed along with its advantages and limitations.Promotion Mix promotional mix is defined as the basic tools or elements that are used to accomplish organization¶s objectives. 41 .

McGraw-Hill/Irwin .Basic Elements of the Promotional Mix Advertising Direct Marketing Interactive/ Internet Marketing Sales Promotion Publicity/Public Relations Personal Selling 42 © 2007 McGraw-Hill Companies.. Inc.

43 . service.Different Promotional Mix Advantages and Disadvantages Advertising²any paid form of non-personal communication about an organization. or idea by an identified sponsor. product.

44 . it is viewed as a component of promotional mix. However. because it has become such an integral part of integrated marketing communications program of many organizations.Direct Marketing is a system of marketing through which organizations communicate directly with target customers. Direct marketing was traditionally not been considered as an element of promotional mix. to generate a response and/or a transaction.

Inc.Direct Marketing is Part of IMC Direct Mail Internet Sales Direct Response Advertising Direct Marketing Shopping Channels Catalogs 45 © 2007 McGraw-Hill Companies.. McGraw-Hill/Irwin Telemarketing .

Bose Uses Direct Response Advertising 46 © 2007 McGraw-Hill Companies. Inc. McGraw-Hill/Irwin ..

and public relations 47 . The major interactive medium is the Internet. and is a global collection of computer networks linking both public and private computer systems. it is actually a medium that can be used to communicate other elements of the promotional mix including sales promotion. While the most prevalent perspective on the Internet is that it is an advertising medium. direct marketing. whereby uses can participate and modify the content of information.Interactive/Internet Marketing Interactive media allow for to-and-fro flow of information.

. Inc.Using the Internet as an IMC Tool The Internet Educates or informs customers A persuasive advertising medium A sales tool or an actual sales vehicle Obtains customer database information Communicates and interacts with buyers Provides customer service and support Builds and maintains customer relationships 48 © 2007 McGraw-Hill Companies. McGraw-Hill/Irwin .

Sharp Creatively Integrated Advertising and the Internet

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© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Sales Promotion Marketing activities that provide extra value or incentive to the sales force, distributors, or the ultimate consumer and can stimulate immediate sales. Sales promotion is generally broken into two major categories: consumer-oriented and trade-oriented activities.

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Various Uses of Sales Promotion
Introduce new products Get existing customers to buy more

Combat competition

Attract new customers

Sales Promotion
Enhance personal selling Maintain sales in off season

Tie in advertising & personal selling

Increase retail inventories
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© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

McGraw-Hill/Irwin .Sales Promotion Tools Coupons Samples Premiums Contests/Sweepstakes Trade Allowances POP Displays Training Programs Trade Shows Coop Advertising Refunds/Rebates Bonus Packs Loyalty Programs Events ‡ Consumeroriented ‡ [For end-users] ‡ Tradeoriented ‡ [For resellers] 52 © 2007 McGraw-Hill Companies. Inc..

identifies the public policies and procedures of an individual or organization with the public interest. service or idea that is not directly paid for nor run under identified sponsorship. and executes a program of action to earn public understanding and acceptance. Public Relations: A management function which evaluates public attitudes. product. 53 .Publicity and PR Publicity: Non-personal communications about an organization.

Inc.Publicity Vehicles Feature Articles News Releases Publicity Vehicles Interviews Press Conferences Special Events 54 © 2007 McGraw-Hill Companies.. McGraw-Hill/Irwin .

. McGraw-Hill/Irwin . Inc.Public Relations Tools Publicity Vehicles Special Publications Community Activities Corporate Advertising Cause-related Marketing Public Affairs Activities Special Event Sponsorship 55 © 2007 McGraw-Hill Companies.

broader purpose positive public relations generally has a objective than publicity. however other tools may also be used. 56 . as its is to establish and maintain a image of the company among public. Publicity is an important communications technique used in public relations.The distinction should be made between publicity and public relations. In fact.

Personal Selling Direct person-to-person communication whereby a seller attempts to assist and/or persuade prospective buyers to purchase a company¶s product or service or act on an idea. 57 .

Classifications of Advertising National Advertising Retail/Local Advertising Primary vs.. McGraw-Hill/Irwin Organizations 58 . Selective Demand Advertising Consumers Business-to-Business Advertising Professional Advertising Trade Advertising © 2007 McGraw-Hill Companies. Inc.

Test Your Knowledge _____ is nonpersonal communication neither directly paid for nor run under identified sponsorship. McGraw-Hill/Irwin . Inc. A) Advertising B) Sales promotion C) Publicity D) Public relations E) Personal selling 59 © 2007 McGraw-Hill Companies..

Advertising Versus Publicity Factor Control Credibility Reach Frequency Cost Flexibility Timing Advertising Great Lower Measurable Schedulable High/Specific High Specifiable © 2007 McGraw-Hill Companies.. McGraw-Hill/Irwin Publicity Little Higher Undetermined Uncontrollable Low/Unspecified Low Tentative 60 . Inc.

2. The various promotional mix elements are the major tools that marketers use to communicate with current and/or prospective customers as well as other relevant audiences.IMC INVOLVES AUDIENCE CONTACTS 1. They consider all of the potential ways of reaching their target audience with their messages. 61 .

packaging) Sales Promotion Word-ofmouth Events and sponsorship Product placements (TV and movies) 62 © 2007 McGraw-Hill Companies. magazines) Public Relations/ publicity Internet/ interactive Out-of-home media Direct marketing Target Audience Personal selling Point-ofpurchase (displays.. McGraw-Hill/Irwin .IMC Audience Contact Tools Broadcast media (TV/radio) Print media (newspapers. Inc.

product line. Inc. A) B) C) D) E) promotional plan marketing plan communications plan marketing audit situation analysis 63 © 2007 McGraw-Hill Companies.. McGraw-Hill/Irwin . or brand.Test Your Knowledge The _____ is a written document that describes the overall marketing strategy and programs developed for an organization.

64 .Integratedmarketingcommunications management It is defined as the process of planning. and controlling the use of the various promotional-mix elements to effectively communicate with target audiences. executing. evaluating. It involves coordinating the promotional mix elements to develop a controlled and integrated program of effective marketing communication.

65 .This process is guided by the development of the integrated marketing communications plan which provides the framework for developing. implementing. and controlling an organization¶s IMC program and activities.

A marketing strategy and program 4. A program for implementing the strategy 5.. A detailed situation analysis 2. Inc.The Marketing Plan 1. Specific marketing objectives 3. A process for monitoring and evaluating performance 66 © 2007 McGraw-Hill Companies. McGraw-Hill/Irwin .

. Inc.Integrated Marketing Communications Planning Model Review of marketing plan Promotional program situation analysis Analysis of the communications process Budget determination Develop integrated marketing communications programs Advertising Advertising objectives Message strategy Sales promotion Sales promotion objectives Sales promotion strategy PR/ publicity PR/ publicity objectives PR/ publicity strategy Personal selling Personal selling objectives Personal selling strategy Direct marketing Direct marketing objectives Direct marketing strategy Internet/ interactive Internet/ interactive objectives Internet/ interactive strategy Integrate and implement marketing communications strategies Monitor. evaluate and control IMC Program © 2007 McGraw-Hill Companies. McGraw-Hill/Irwin 67 .

IMCExercise This exercise is designed to give an opportunity to think more about the concept of integrated marketing communications. How it might be used by a company. 68 .

publicity/public relations.Choose a specific company and discuss how this firm can use the concept of integrated marketing communications in developing a promotional program for one of its products or services. You should analyze all of the company¶s promotional mix elements including advertising. interactive media. 69 . sales promotion. sponsorships. branded entertainment and personal selling and discuss how each one is used in the integrated marketing communications program. direct marketing.

price and other factors communicate with the company¶s target audience.You should also consider how other marketing mix elements such as the brand name. Is this company using all of the promotion mix tools in its marketing communications program? Are they integrated and sending a consistent image and message? 70 . package.

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