MKTG 405-2Integrated Marketing

CommunicationsSpring 2007

Week of January 22, 2007

• What is IMC?• What are the elements of IMC?• What is the IMC planning model?• What is market analysis, and how important is it

to IMC?• How do the marketing mix elements affect IMC,

and vice-versa (push & pull, etc.)?• What is the difference between client

organizations and IMC agencies?• How are IMC agencies structured?

What is Integrated Marketing Communications (IMC)?

IMC is the coordination and integration of all marketing communication tools, avenues,

and sources within an organization that results in a seamless program, which has

the desired impact on consumers and other end users at an acceptable cost to the

organization.

Advertising & brands

A focus on brands

• Most valuable brands

What is a brand?

• The word “brand” is derived from the Old Norse word “brandr,” which means “to burn.”

• According to the AMA, a brand is a “name, term, sign, symbol, or design, or combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.”

What distinguishes a product from a brand?

• A product is any entity offered to a market for attention, acquisition, use or consumption that might satisfy a need or want (Kotler,2000).

• A brand is the sum total of consumers’ perceptions and feelings about the product’s attributes and how they perform, about the brand name and what it stands for, and about the company associated with the brand.• (Achenbaum, 1993)

Customer-Based Brand Equity

“ . . . the differential effect that brand knowledge has on customer response to the marketing of that brand.”

Kevin Lane Keller, 1998

Positive brand equity results in:

• Greater perceived differentiation

• Stronger brand loyalty• Larger profit margins• Higher trade support• Increased marketing communication effectiveness

• Opportunities to extend and license brand name

Brand Equity: 2005 Big Winners

2005 Rank Brand 2005 Brand Value

($billions)

2004 Brand Value

($billions)

Percent Change

55 EBAY $5.70 $4.70 +21%

29 HSBC 10.43 8.67 +20

20 SAMSUNG 14.96 12.55 +19

41 APPLE 7.99 6.87 +16

44 UBS 7.57 6.53 +16

Brand Equity: 2005 Big Losers

2005 Rank Brand 2005 Brand Value

($billions)

2004 Brand Value

($billions)

Percent Change

28 SONY $10.75 $12.76 -16%

33 MORGAN STANLEY

9.78 11.50 -15

56 VOLKS-WAGEN

5.62 6.41 -12

96 LEVI’S 2.66 2.98 -11

13 HEWLETT-PACKARD

18.87 20.98 -10

Other elements of IMC

• Direct• Interactive/Internet• Sales Promotion• PR/Publicity• Personal Selling

IMC Planning Model

• Review of the marketing plan• Analysis of promotional program situation

• Analysis of communications process• Budget determination• Develop IMC program• Integrate and implement marketing communication strategies

• Monitor, evaluate, and control IMC program

A Fundamental Approach to Marketing Strategy

• Segmentation• Targeting• Positioning

Definitions of Market Segmentation, Targeting, and

Positioning

• Market segmentation: a process of dividing a heterogeneous market into homogeneous subparts • Targeting: a process of selecting a market segment(s) to pursue.• Positioning: a process of creating and serving a market niche defined by the customer (often relative to the competition)

What Constitutes a “Good” Segment?

• Uniqueness - Are there large between-group differences in segments?

• Responsiveness - If we design specific strategies for a segment, will that segment respond?

• Actionability - Can we take action with this segment?

• Stability - Will the segment be stable over time?

• Profitability - Will this segment benefit the organization?

Purposes of and Bases for Segmenting Consumer Markets

Decision-making purpose

Product design

Advertising message

Advertising media

Packaging

Distribution

Price

Bases for segmentation

Benefits or attributes soughtProduct usage situationBenefits or attributes soughtProduct usage situationBuyer characteristicsHeavy user characteristicsVolume or size of purchaseProduct usage situationShopping patternsSignificance of purchasePrice sensitivityVolume or size of purchase

Purposes of and Bases for Segmenting Business-to-Business

Markets

Decision-making purposeSales force allocation to accounts

Product design and communication appeals

Communication targets

Bases for segmentationVolumeLocationProduct usage (industry type)

Product usage (application type)Benefits/attributes sought

Buying center members

The Targeting Decision

• Segment size and growth rate• Firm objectives and resources

• Does this segment fit with our objectives?

• What are the success requirements for this segment?

• Do we possess the needed competencies?

Positioning

• What is positioning?• Why positioning?• How do you know your position?

Approaches to Positioning

• Attribute• Price/quality• Use or application• Product user• Product class• Competition

Push vs. Pull?

Chapter 3

• Please prepare questions 1, 4, 6, and 9 for the next class.