imc new

Integrated Marketing Communication

Yogesh Baviskar

IMC - Overview

• Global Advertising Market :- $ 440bn • Indian Advertising Market :- $ 5bn

• Global growth rate :- 3.5 %• Indian growth rate :- 12.4 %

Subject Outline: - IMC

1 Introduction to IMC

2 Situation Analysis

3 Communication Process

4 Objective & Budgeting

5 Elements of IMC

6 Integration of IMC elements – IMC Strategies

7 Monitoring & Evaluation

8 IMC – Rules & Regulation

9 IMC – Global Perspective

10 Case Studies & Illustration

11 Doubt Clearing

Suggested Reading:- Brand Equity – Economic Times (Wednesday)

4 Ps :- Magazine / www.AgecyFaqs.com / www.campaign india.com

Continuous Evaluation :-

Assignment 1:- Analysis of IMC program

Assignment 2:- Designing & Presentation of IMC program

Instructions :-

http://www.agecyfaqs.com/

IMC- Introduction

• What is the goal of a Marketing Manager ?• Higher Brand Equity • Top Positioning• Higher Market Share• Highest revenue• Higher Brand Recall

IMC- Introduction

• What is the role of marketing manager in the organization ?• To design the marketing mix in order to achieve the desired corporate

objective

» Marketing Mix

-Product

-Price

-Place

-Promotion

Marketing Mix:-

Promotional Mix

“Effective communication of value proposition created by the organization to potential customers to build the favorable response towards its products/Services with the help of tools like advertisement, Sales Promotion, Direct Marketing, Public Relation, Internet/Interactive Marketing”

• Basic Objective:-• Inform• Persuade• Remind

• Elements of Promotion Mix:-• Advertisement• Sales Promotion• Interactive Marketing• Public Relation• Personal Selling

Promotion Mix

Evolution of IMC:-

Pre IMC Era :-

Inside Out Approach

Dominance of Mass Media Advertising

No synchronization between different tools of Promotion

Lack in the consistency in the message

IMC:-

“A management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation”

Reasons for growing importance of IMC:-

• Expanding Markets- Global Scenario

• Traditional Marketing dose not delivers the expected results

• Emergence of New Media

• Diverse & Fragmented Marketplaces

• Changes in the Socio-economic status of the Consumers

• Changing buying behavior of the consumers

• Need of Data centric customer driven approach (CRM )

• ROI ( Measurement of Marketing Communication Program ) & Competition

IMC - Approach

• Outside In:-

Tools of IMC

Advertising

Direct Marketing

Sales Promotion

Interactive Marketing

Public Relation

IMC Program Process:-

Review of the Marketing Plan

Promotional Program Situation Analysis

Analysis of Communication Process

Objective & Budget Determination

Monitoring, Evaluation & Control of IMC Program

Developing the IMC Program

Examination of Overall Marketing plan & ObjectiveCompetitive analysis

Environmental analysis

Internal analysis:-Evalution and selection of agency External analysis:- STP & Consumer Behavior analysis

Analysis of receiver response processes, Analysis of Source, Message, Channel Factor

Establishing communication objective Establishing communication budget & allocation

Creative Strategy Planning and Execution of IMC elementsDesigning the IMC plan with the help of Elements of IMC- Advertisement,

Direct Marketing, Sales Promotion, Public Relation / Publicity Interactive/ Internet Marketing, Personal Selling

Strategic integration of IMC elements to achieve the communication objective

Evaluation of IMC program

IMC Planning Process

Part 2IMC- Situation Analysis

• Internal Analysis:-– Firms capability to execute the & Implement the IMC program– Success & Failure of past IMC programs– Agency Evaluation and selection – Review of Previous Program result

• External Analysis:- – Market Segmentation and Target Marketing

– Market Positioning – Consumer Behavior analysis

Evalution of Advertising & support Agencies • Wieden + Kennedy:- Nike, • Ogilvy & Mather :- Vodafone, Cadbury, Tata Sky• JWT:- Sony Vaio, Ford, Airtel• Mudra Communications:- The Economic Times, Big Bazaar, Moov• RK Swammy BBDO:- Mercedes, 7 up• Grey worldwide:- Parle-G, Bharti Axa• Leo Burnett:- Mc Donalds, Samsung, P&G, GM• FCB- Ulka:- KFC, Motorola, Del Monte • McCann-Ericsson India Ltd:- Coca Cola, • Rediffusion DY&R Pvt Ltd• Igintee:-• Interactive Avenues :-• Genesis Burson-Marsteller

• Vaishnavi Corporate Communications Pvt. Ltd

Evaluation of Advertising and other Marketing Communication Agencies

Key Participants in IMC Process:-• Advertiser• Advertising Agency • Media Organization• Marketing Communication Specialist Organization

• Direct response agencies• Sales Promotion agencies• Interactive agencies• Public Relation Firms

• Collateral Services • Marketing Research Organization

Clients Role :-Selection of Agency for IMC

Internal Management :-• Centralized System • De-centralize System • In House Agency

External Management:-• Advertisement Agency

Types of Advertising Agency» Full Service Agency» Creative Boutique» Media Buying Services

Agency Commensuration & Evalution

Agency Commensuration:-– Commission System– Fee Arrangement– Cost Plus Agreement – Incentive Based Compensation

– Percentage Charges

Evalution of Agencies:-Performance of Services

Communication

Interpersonal Relation

Other Agencies

Other Specialized Services:-• Direct Response Agencies• Sales Promotion Agencies• Interactive Agencies• Public Relation Agencies

Collateral Services:-• Marketing Research Companies

Market Segmentation

Segmentation

“ Dividing Market into distinct group that have common needs and wants and will respond similarly to marketing actions”

Why Segmentation:-• To Concentrate on Specific Customer segment• Design the Proper Product, Place and Distribution channel • Designing effective communication program to reach the segmented customer• To design the effective overall marketing strategies

Effective Segmentation:- • -Measurable : Market Size, Market Growth rate, Purchasing Power • - Sustainable:- Market Potential, Opportunity, Profitability • - Accessible :- The Segment Should be effectively reached & Served • - Differentiable:- Different response to different marketing mix • - Actionable:- Operational ability of the firm

Market Segmentation

• Geographic Segmentation:-“Dividing the market into different geographical units such as continent , Nation , State ..”

• Region :- Continent , Country, Region• City :- Size by population , Tier 1, Tier 2…, • Semi -urban, Rural• Climate:- Hot, Cold, Humid …

Ex:- FMCG, Consumer Durable, Automobile

Market Segmentation

• Demographic Segmentation:-“Dividing market based on Demographic variables. “

Its more popular as its easy way to segment the market

Demographic variable provide more insight about the customer needs & wants, usage rate

• Age :- Under 6,6-11, 12-19, 20-34, 35-49, 50-64, 65+ ( J&J, Insurance, Entert.)

• Family Size :- 1, 2, 3, 4, 5, 6+ ( packaging of toothpaste, car , Packaging of cola drink)• Gender :- Male, female ( beauty products, Two wheelers )• Income:- Under 10,000, 11,000-20,000, 21,000- 30,0000 (Unit pricing- Packaging)• Occupation:- Unemployed, students, farmers, professionals, self employee, retired,• Education:- Grade school, high school, college, graduate, post graduate, doctorate • Religion :- Hindu, Catholic, Muslim • Race:- White , Black, Asian, Hispanic• Generation:- Old generation, generation X, Generation Y• Nationality :- Indian, American, Chinese • Social-Economic Class:-A1, A2, B1, B2, C, D, E1, E2, ( based on Education & Occupation)

Market Segmentation

• Psychographic Segmentation:-“Use of Psychology & Demographic to understand the consumer in better manner”.

• Life Style :-

Lifestyles influence both consumption patterns and the processing of different forms of marketing communication

Ex -Wristwatch brands, Mac D

• Personality :- MTv –roadies

( SRI Consulting Business Intelligence – VALS framework )

• Major Tendency of group with higher resources are

Innovators Thinkers Achievers Experiencers

• Major Tendency of group with lower resources are

Belivers Strivers Makers Survivors

Market Segmentation

• Behavioral Segmentation:-

• Occasions:- Air travel- ( Business, Vacation ) Greeting cards:-• Usage Type:- Light user, Normal user, heavy user• Benefit sought :- Soap, Automobile, Mobile phone • Loyalty Status:-None, Medium, Strong, Absolute• Awareness & Intentions:- Unaware, Aware, Informed, Interested, Desirous, Intended to buy• User Status :-

Benefit Segmentation

“It is based on the Attributes (characteristics) of products, as seen by the customers”

Ex:-, People buy something because it causes a benefiti.e.. Diet coke - less sugar, lose weighti.e.. Extra white toothpaste, whiter teeth, better smile

“Many marketers now consider benefit segmentation one of the most useful methods of classifying markets”

Illustration :- Ms Shah is a healthy, 60-year-old lady and a pensioner, who cycles, rather than drives, to keep fit, and buys organic foods for their perceived health benefits. She is not an environmentalist and her main reason for not driving was not because she wants to avoid polluting the environment with [CO.sub.2], but to be fit and healthy. The benefits that she seeks from her shopping are likely to be a wide choice of 'healthy foods' and advice on fitness training. An ample parking space and free home delivery will not be of benefit to her. Benefits sought are manifestations of both consumer requirements (needs and/or wants) and the value that consumers such as Ms Smith are willing to pay in return for the sacrifices that they are willing to make.

Benefit Segmentation of the Toothpaste Market

Segment NameThe

The Sensory The IndependentSegment Sociable's The Workers Segment

Principal benefit sought Flavor, product Brightness Decay Priceappearance of teeth prevention

Demographic strengths Children Teens, young Large families Menpeople

Special behavioral Users of Smokers Heavy users Heavy userscharacteristics spearmint-

flavoredtoothpaste

Personality characteristics High self- High High Highinvolvement sociability hypochondria sis autonomy

Lifestyle characteristics Hedonistic Active Conservative Value-oriented

Target Marketing

Deciding on how many segments to enter and what potential these segments have

Types of Target Marketing– Differentiated Marketing:- Maruti, VW , Sugar Free Natura, Kellogg’s Corn Flakes– Concentrated Marketing :- Mercedes, Audi – Undifferentiated Marketing :- Essential Commodity, Coke

Positioning

Positioning

A concept so simple, people have difficulty understandinghow powerful it is!

• Positioning is owning a piece of consumer’s mind• Positioning is not what you do to a product, It's what you do to the mind of the prospect

- Ries & Trout

A/V- Absolute

Positioning

Colgate is Protection

Lux is Glamour ( Beauty)

Pond’s DFT is Confidence

Axe is Sexual Attraction

Fair & Lovely is Instant Fairness

Santoor is Younger looking Skin

Maruti is Fuel efficiency

Sony Vaio is Fashion Accessory

Indigo is Low cost carrier

Why Positioning

The assault on our mind…• The media explosion• The product explosion• The advertising explosion

• So little message gets through that you ignore the sender and concentrate on the receiver

Positioning Strategies:-

“Cherchez le creneau – look for the gap ( In Prospects mind)

Cherchez le creneau and then fill it”

Approaches to the Positioning :-

Positioning by the Product:-

Positioning by Quality / Size / Price :- VW – Beatle

Positioning by use of application:-

Positioning by the competition : Avis

Line Extension Positioning :-

Repositioning the Competition :-

External Analysis – Consumer Behavior

“Consumer Behavior can be defined as the process and activities people engage in when searching for, selecting, purchasing, using and disposing of products and services so as to satisfy their needs and desire”

Role of Marketing is:

To Understand the ‘INTERVENING PROCESS’ that Influences Buying Decision.

That is

Who buys?

Why do they buy?

How do they buy?

When do they buy?

Where do they buy?

Why Consumer Behavior ?

Word-of-mouth Personal Needs Past Experience

Expected Product

Perceived Product

Product Delivery

Translation of perceptions into product-quality specifications

Management perceptions of consumer expectations

External communications to consumers

Gap 5

Gap 4

Gap 3

Gap 2

Gap 1

Consumer

Marketer

Why Consumer Behavior ?

• Customer’s Gap– Customer’s expectation not matching with customer’s perception (Gap

5)

• Provider’s Gaps– Not Knowing what Customers Expect (Gap 1)– Not Selecting Right Product Designs & Standards (Gap 2)– Not Delivering to Product Standards (Gap 3)– Not Matching Performance to Promises (Gap 4)

Consumer Behavior Model

• Stimulus Response Model

– Marketing and other stimuli enter the buyer’s “black box” and produce certain choice/purchase responses.

– Marketers must figure out what is inside of the buyer’s “black box” and how stimuli are changed to responses.

Marketing & External Stimuli

Marketing :- Product, Price, Place, Promotion

External Economic,, Political,

Cultural, Technological

Buyer’s Black Box

Buyers CharacteristicsBuyers Decision Making Process

Buyer Responses

Product Choice Brand ChoiceDealer Choice

Purchase TimingPurchase Amount

Consumer Behavior Process

Consumer Behavior Decision Making Process Relevant Psychological Process

Problem Recognition Process

Information Search

Post Purchase Evaluation

Purchase Decision

Alternative Evaluation

Motivation

Perception

Attitude Formation

Integration

Learning

Factors Influencing Consumer Behavior

• Personal & Psychological :-– Perception– Motivation– The Self– Personality & Lifestyle – Attitude

• Sub- Cultural:-– Income & Social Class– Ethnic, Racial & Religion– Age

• Cultural :-

Buying Situations

Complex Buying Behavior

Dissonance –Reducing Buyer Behavior

Habitual Buying Behavior

Variety – Seeking Buying Behavior

IMC- Communication Process


Why to Study Communication process ?

Marketers must understand how consumer will perceive and interpret their message and how these reactions will shape consumer response to the company product(s) / Service(S)


How Organizations Communicate ?– Brand Logo– Packaging – Advertisement– Public Relations– Presentations– Website– Mails and many more ways

IMC – Communication Process

Communication:-• The passing of information• The exchange of ideas• The process of establishing a commonness or oneness of thought between and a

receiver.

The Basic Communication Process

Elements of Communication Process

Sender/Source: the person or organization that has information to share with another person or group of people.Receiver/Audience: the person with whom the sender shares thoughts or information.Message: the information or meaning the source hopes to convey.Channel: the method by which the communication travels from the source or sender to the receiver.

Personal: Salespeople; word-of-mouth.Non personal (mass media): print and broadcast

Encoding: the process that the source puts thoughts, ideas, or information into a symbolic form (words, symbols, or pictures).

Decoding: the process that the receiver transforms the sender’s message back into thought.

Field of Experience (Frame of Reference): experiences, perceptions, attitudes, and value.

Noise: unplanned distortion or interference.

Response: the receiver’s set of reactions after seeing, hearing, or reading the message.

Feedback: the part of the receiver’s response that is communicated back to the sender.

The Persuasion Matrix

Who will be effective in

getting consumers’ attention?

Who will be effective in

getting consumers’ attention?

Source/attentionSource/attention

4

Receiver/comprehension


Can the receiver

comprehend the ad?

Can the receiver

comprehend the ad?

1

Which media will increase presentation?

Which media will increase presentation?

Channel/presentation

Channel/presentation

2

What type of message will

create favorable attitudes?

What type of message will

create favorable attitudes?

Message/yielding

Message/yielding

3



Channel/presentationChannel/

presentationMessage/yielding

Message/yielding

Promotional Planning Elements

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

Promotional PlanningPromotional Planning

CredibilityCredibility

AttractivenessAttractiveness

PowerPower

InternalizationInternalization

IdentificationIdentification

ComplianceCompliance

CredibilityCredibility InternalizationInternalization

AttractivenessAttractiveness IdentificationIdentification

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

Source Attribute Process

Source Creditability

Source :-• Source Credibility:-

– Applying Expertise– Applying Trustworthiness

» Corporate Leaders

• Source Attractiveness:- – Applying Similarity– Applying Likeability

» Celebrities» Decorative Models

• Source Power:-

Source – Credibility (Expertise):-

Jamad Hammadi – The Shine Expert, Dr. Francesca Fusco – The Hair fall Expert, Teddy Charles – The Shape & Length Expert, TomTaw – The Dry & Damage Expert, Rita Hazan – The Color Care Expert, Ouidad – The Curls ExpertYuko Yamashita – The Straight & Smooth Expert

Source – Corporate Leader

• A/V on • GM CEO –Whitacre 60 day • Apple CEO- Product launch• BP CEO- Apology

Source – Attractiveness

Source Power

Message

• Order of Presentation:• At the Start • In the Middle • In the End

• Conclusion Drawing• Firm Conclusion• Allow prospect to draw their own conclusion

• Message Sidedness– One Sided Message :- Communicate only positive attributes or benefits – Two Sided Message :- Communicate positive & Negative Attributes– Refutation

• Verbal Vs Visual Message :- • Message Appeals:

– Comparative Appeal :- – Fear Appeal :- – Humor Appeal:-

Channel:-

• Personal Vs Non Personal Channels• Effect of Mass Media

– Why to use different media:-– Impacts of different media

• Effect of Context and Environment:-• Clutter :-

Consumer Response Process

Models of Communication Response :-

Traditional Response Hierarchy Models:-

AIDA model:- For Personal Selling

Hierarchy of effects model:- For any product

Innovation adoption model:- For New Product

Traditional Hierarchy Models

Stages

Cognitive(Information

Processing)

Affective

(Emotions)

Conative

(Will & Desire )

Models

AIDA

model

Attention

Interest

Desire

Action

Hierarchy of

effects model

Awareness

Knowledge

Linking

Preference

Conviction

Purchase

Innovation

adoption

Awareness

Interest

Evaluation

Trial

Adoption

Information

Processing

Presentation

Attention

Comprehension

Yielding

Retention

Behavior

Alternative Response Hierarchy Models

• Learn Feel Do• Do Feel Learn• Learn Do Feel

• Alternative Response Hierarchies

The standard learning hierarchy

The dissonance/attribution hierarchy

The low-involvement hierarchy

Objective & Budgeting of IMC

Objective of IMC

Why IMC Objective ?

- Planning & Decision Making

- Measurement & Evalution

Determining Communication Objective:-

Marketing Vs Communication Objective

Sales Vs Communication Objective

Communication Objective based on Response Hierarchy Model

DAGMR Approach & Its disadvantages:-

Setting an IMC objective:-

IMC- Objective

Budgeting

Budgeting :-

• Establishing Budget:-– Managerial Analysis – Sales Response Model

• Budgeting Approaches:-

Top Down Approach– The Affordable Method– Arbitrary Allocation– Percentage of Sales– Comparative parity – ROI

Build-Up Approaches– Objective & Task Method– Payout Planning ( For New Product )– Quantitative Methods ( Computer Simulation )

Budgeting

• Allocation of Budget– Allocating to IMC elements

• Other Factors Affecting the Budget– Market Size– Market Potential– Market Share Goals

Elements of IMC- Advertising “ Any Paid form of non- personal communication about the organization,

product, service or idea by an identified sponsor”

• Types of Advertising• Departments in Advertising • Objective & Budgeting :- Setting up the Advertising Objective• Message :- Creative Strategy & Implementation• Media Buying / Media Planning

– Reach / Frequency – Types of Media Vehicle ( TVC / Print / Outdoor / Magazines / Radio – Deciding Media Vehicle– Deciding Media time – Evalution of Effective Advertising

• Advantages of Advertising • Dis- Advantages of Advertising

Direct Marketing

“Any direct communication to a consumer or business recipient that is designed to generate a response in the form of an order (direct order), a request for further information (lead generation), and/or a visit to a store or other place of business for purchase of a specific product(s) or service(s) (traffic generation).”

Direct Marketing Approach

• Objective of Direct Marketing:- ( Behavior )• To Seek Direct Response- Sales, Test Drive, Registration

• Database Management :-• Developing a database• Source of database• Determining the effectiveness of database

• Direct marketing strategies & Media• One Step Approach• Two Step Approach

• Role in IMC :- • Advertising• PR• Sales Promotion• Internet Marketing

Direct Marketing Media

• Direct mail• Catalogs• Broadcast DR ( TVC/ Radio/ Cable)• Infomercials• Tele-shopping• Print• Telemarketing• Internet

Tools of IMC – Sales Promotion

“Sales promotion is the process of persuading a potential customer to buy the product. It can be part of the personal selling process”

Types of Consumer Promotion• Point-of-purchase materials• Coupons• Electronic coupons• Convenience cards• Cents-off promotions• Refunds• Rebates• Premiums• Sampling• Combination offers• Contests• Sweepstakes

Advantage and Dis-Advantages of Direct Marketing

Advantages of Direct Marketing • Selectivity• Frequency• Creative flexibility• Timing• Personalization• Measurability

Dis- Advantages of Direct Marketing• Image problems• Accuracy• Costs

Public Relation

Public Relation:-

Tools of IMC- Public Relation

• Public Relation :-

“The Management Function which evaluates public attitude, identifies the policies and the procedures of an organization with the public interest and execute the communication program to earn public understanding and acceptance”

• Stakeholders in the organization:-

Suppliers

Distributors

End users

Employs

Financial firms

Government

Media

Allies

Competitors

The General public


The Process of Public relation :-

Determining and evaluating public attitude

Developing and executing the PR program:-

-Defining target audiences:-

-Internal & External

- Employees of the firm

-Stockholders and Investors

-Community members

-Suppliers and Customers

-The Media

-Governments & Financial Groups

-Civic and business organizations


Implementation of the PR Program :-

Tools used:-

Press Kit

Press conference

Speeches

Interviews

Community Involvement – Charitable donations

Internet / Social Networking

Annual Report

Lobbying

Exclusive Program


Advantage & Dis-Advantages of PR:-

1. Credibility

2. Cost

3. Avoidance of clutter

4. Lead Generation

5. Ability to reach specific group

6. Image Building

Dis-advantages:-

7. It not executed properly may misfire due to lack of co-ordination with marketing department.

8. If Marketing and PR operate independently there are more chance of inconsistent communication

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