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
10Case Studies & Illustration
11Doubt 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 :-
 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:-
Examination of Overall Marketing plan & Objective
Review of the Marketing Plan Competitive analysis
Environmental analysis

Internal analysis:-Evalution and selection of agency

Promotional Program Situation Analysis External analysis:- STP & Consumer Behavior analysis

Analysis of receiver response processes,

Analysis of Communication Process Analysis of Source, Message, Channel Factor

Objective & Budget Determination Establishing communication objective

Establishing communication budget & allocation

Creative Strategy Planning and Execution of IMC elements

Designing the IMC plan with the help of Elements of IMC-
Advertisement,
Direct Marketing, Sales Promotion, Public Relation /
Developing the IMC Program Publicity
Interactive/ Internet Marketing, Personal Selling
Strategic integration of IMC elements to achieve the
communication objective

Monitoring, Evaluation & Evaluation of IMC program

Control of IMC Program
IMC Planning Process
 Part 2
IMC- 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 benefit

i.e.. Diet coke - less sugar, lose weight
i.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 Name
The
The Sensory The Independent
Segment Sociable's The Workers Segment

Principal benefit sought Flavor, product Brightness Decay Price

appearance of teeth prevention

Demographic strengths Children Teens, young Large families Men

people
Special behavioral Users of Smokers Heavy users Heavy users
characteristics spearmint-
flavored
toothpaste
Personality characteristics High self- High High High
involvement 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 understanding

how 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
Consumer
Gap 5
Perceived Product

Gap External
Marketer Product Delivery
4 communications
Gap 3 to consumers

Gap Translation of
1 perceptions
into product-quality
specifications

Gap 2
Management
perceptions
of consumer
expectations
 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 Buyer Responses

Buyer’s Black Box
Marketing :- Product Choice
Product, Price, Place, Promotion Brand Choice
External Buyers Characteristics Dealer Choice
Economic,, Political, Buyers Decision Making Process Purchase Timing
Cultural, Technological Purchase Amount
 Consumer Behavior Process

Consumer Behavior Decision Making Process

 Relevant Psychological Process

Problem Recognition Process Motivation

Information Search Perception

Alternative Evaluation Attitude Formation

Purchase Decision Integration

Post Purchase Evaluation 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
IMC- Communication Process
 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)



 IMC- Communication Process

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
 Promotional Planning Elements

Promotional
Promotional Planning
Planning

1 2 3 4
Receiver/
Receiver/ Channel/
Channel/
Channel/
Channel/ Message/
Message/
Message/
Message/ Source/
Source/
comprehension
comprehension
comprehension
comprehension presentation
presentation
presentation
presentation yielding
yielding
yielding
yielding attention
attention

Can
Can the
the Which
Which media
media What
What type
type of
of Who
Who will
will be
be
receiver
receiver will
will increase
increase message
message will
will effective
effective in
in
comprehend
comprehend presentation?
presentation? create
create getting
getting
the
the ad?
ad? favorable
favorable consumers’
consumers’
attitudes?
attitudes? attention?
attention?

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

 Source Creditability

Source Attribute Process

Credibility
Credibility
Credibility
Credibility Internalization
Internalization
Internalization
Internalization

Attractiveness
Attractiveness
Attractiveness
Attractiveness Identification
Identification
Identification
Identification

Power
Power Compliance
Compliance

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

 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 Expert

Yuko 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
Models
Stages AIDA Hierarchy of Innovation Information
model effects model adoption Processing

Attention Awareness Awareness Presentation

Cognitive Attention
(Information Knowledge Comprehension
Processing)

Interest Linking Interest Yielding

Affective
Preference
(Emotions)
Desire Conviction Evaluation Retention

Conative Trial
(Will & Desire ) Action Purchase Behavior
Adoption
 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
 Tools of IMC- Public Relation
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

 Tools of IMC- Public Relation
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



 Tools of IMC- Public Relation

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:-


1. It not executed properly may misfire due to lack of co-ordination with marketing
department.
2. If Marketing and PR operate independently there are more chance of inconsistent
communication
3.