Week 1 MKT Discussion

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Integrated Advertising, Promotion, and Marketing Communications

Seventh Edition

Chapter 1

Integrated Marketing Communications

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Learning Objectives

1.1 How does communication take place?

1.2 What is an integrated marketing communications program?

1.3 What new trends are affecting marketing communications?

1.4 What are the components of an integrated marketing communications program?

1.5 What does the term GIMC mean?

These are the objectives for Chapter 1.

Chapter Overview

Highly competitive global marketplace

Wide variety of media available

Clear communications needed

Customers bombarded with communications

Integrated advertising and communications

This chapter provides an overview of integrated marketing communications. It is a highly competitive and global marketplace, and firms are looking for ways to stand out. Brands are looking for means to become a part of customers’ evoked sets. Companies have a wide variety of media from which to choose, both traditional and nontraditional. Because customers are bombarded with so many marketing messages, it is vital for a company to stand out with a clear, consistent, and integrated message.

Miracle Whip

Love or Hate campaign

mcgarrybowen advertising agency

“We’re not for everyone”

Primetime advertising

Social media campaign

Consumer contest

Risky, controversial campaign

In 2011, Miracle Whip was promoted in a surprising, risky, and controversial way. The essence of the campaign was you either love or hate the product. Both sides were shown in the ad. Associated with the broadcast and print ads was a social media campaign that centered on a contest asking consumers to upload their videos taking one side or the other, and how it affected their relationship with their spouse or significant other. The campaign drew criticism, but also gained considerable attention.

Figure 1.1 Communication Process

The communication process consists of five stages, or components. The sender is the individual or company that wants to send a marketing message to consumers or to other businesses. It can be an advertisement, a brochure, or even a salesperson. Encoding is the process of taking the message and putting it into an ad, brochure, or sales presentation. The transmission device is the television, the paper on which the brochure is printed, or the salesperson at the retail store. The receiver is the consumer or business buyer. Decoding is the process of interpreting the marketing message. Effective communication has taken place if the message that is decoded is the same as was encoded. But, often noise occurs and distorts the message. Noise can be anything and can occur at any stage. Senders can obtain feedback from receivers and use the information to start the process again.

Chick-fil-A Social Media

Integrates online with offline

Facebook – 500 profile mentions

Official Chick-fil-A Facebook page

Fans helps administer the page

Allows fans to interact

Announces specials, provides coupons

Promotions on Twitter

“Eat Mor Chikin” offline advertising

Social media has become an important marketing medium for businesses. A brand that has successfully used social media is Chick-fil-A. The online message has been carefully integrated with the offline marketing thrust of the brand. Fans now help to administer the social media page, which has grown rapidly. The official Facebook page for Chick-fil-A allows the company to interact with fans. It provides a venue for posting announcements about store openings, special deals, and coupons. Promotions are also now offered on Twitter.

Figure 1.2 Examples of Communication Noise

Talking on the phone during a commercial on television

Driving while listening to the radio

Looking at a sexy model in a magazine ad and ignoring the message and brand

Scanning a newspaper for articles to read.

Talking to a passenger as the car passes billboards

Scrolling past Internet ads without looking at them

Being annoyed by ads on a social media site

Ignoring tweets on Twitter because they are irrelevant

Being offended by the message on a flyer for a local business

These are examples of noise that can impact effective communication and prevent the encoded message from being heard at all or lead to the message being decoded differently than was intended.

Integrated Marketing Communications

Integrated Marketing Communications is the coordination and integration of all marketing communication tools, avenues, and sources within a company into a seamless program which maximizes the impact on consumers and other end-users at a minimal cost. The IMC includes all business-to-business, channel, customer, external communications, and internal communications.

Definition of integrated marketing communications. Key components are:

Coordination and integration of all marketing communication tools and venues

Seamless marketing program designed to maximize impact at lower costs

Includes all b-to-b, channel, customer, external, and internal communications

Figure 1.3 The Components of Promotion

The traditional marketing mix consists of product, price, promotion, and distribution. Traditionally, the promotion component consisted of advertising, sales promotions, and personal selling. Today, it has expanded to include database marketing, direct response marketing, sponsorship marketing, digital marketing, social media, alternative marketing, and public relations. The venues for reaching consumers have increased beyond advertising.

Figure 1.4 Steps of a Marketing Plan

Current situational analysis

SWOT analysis

Marketing objectives

Target market

Marketing strategies

Marketing tactics

Implementation

Evaluation of performance

In understanding integrated marketing communications, it helps to review the steps in a marketing plan. The current situational analysis and SWOT set the stage for setting marketing objectives and choosing the target market. Once these are set, the marketing person can develop strategies and tactics. IMC will be part of the overall marketing strategy to reach consumers. It will also be part of the tactics, which are the plans for achieving the objectives and carrying out the strategies. Implementation and evaluation conclude the marketing planning process.

Figure 1.5 Trends Affecting Marketing Communications

Emphasis on accountability & measurable results

Explosion of the digital arena

Integration of media platforms

Shift in channel power

Increase in global competition

Increase in brand parity

Emphasis on customer engagement

With global competition has come a greater scrutiny of advertising and marketing budgets. This has led to a greater emphasis on accountability of expenditures and measurable results. The drive for measurable results is one of the factors that has led to the explosion of the digital arena, which includes social media. Measuring the impact of digital expenditures is easier than for traditional advertising. Because consumers now access information from smartphones, tablets, and other media platforms, companies must integrate their marketing communications across all platforms. With greater access to information, consumers now have considerably more channel power. With the rise of the Internet, competition now comes from the entire world. This global competition has increased the level of brand parity now seen across most product categories. To decrease brand parity and build some brand equity, brands are putting greater emphasis on customer engagement.

Accountability and Measurable Results

Economic pressures

Want results from marketing budgets

Effort led by CEOs, CFOs, and CMOs

Advertising agencies expected to deliver results

Emerging social media changes communication

Emerging alternative methods and media

Less reliance on mass TV ads

Economic pressure, especially recent downturns in the economy, has put pressure on ad agencies and marketing officers to be accountable for their expenditures. CEOs, CFOs, and CMOs want measureable results. Show us the proof that the $50 million ad campaign is working and will translate into sales. In the past, once an ad agency was hired, they stayed with a client for a number of years because they knew the brand. Now, companies want results. If not, then a new agency will be chosen. With the rise in popularity of social media, there is less reliance on mass TV advertising. Agencies continue to explore alternative ways of reaching consumers where it is less cluttered than mass media.

Explosion of Digital Media

Emergence of

interactive web sites, blogs, and social networks

smartphones, tablets

Companies shifting expenditures from traditional to digital media

Social media allows interaction

Alternative media has become the new buzz phrase in advertising, especially online. The Internet provides an interactivity with consumers. Websites, blogs, and social networks all provide two-way communications. Smartphones are replacing cell phones, so consumers now have the Internet with them at all times, increasing the ways and means of reaching them. As a result, companies are shifting dollars from traditional media to digital media.

Integration of Media Platforms

Consumers integrate platforms

5 hours 16 minutes  non-television screens

4 hours 31 minutes  television

Ways consumers integrate media formats

Content grazing

Investigative spider-webbing

Quantum journey

Social spider-webbing

Consumers now spend more time with non-television screens than they do watching TV. Research by Ipsos OTX identified 4 ways that consumers interact with multiple media formats. Content grazing involves looking at two or more screens simultaneously to access different content. Investigative spider-webbing occurs when consumers pursue specific content across multiple platforms. Quantum journey focuses on completing a specific task across multiple platforms. Social spider-webbing occurs when consumers share content across multiple devices.

Figure 1.6 Pathways Consumers Use to Interact Across Media Devices

Source: Based on Mark Walsh, “Microsoft Highlights Usage Across Device Pathways,” Online Media Daily, March 14, 2013, www.mediapost.com/publications/article/195786

In the survey by Ipsos OTX, consumers were asked how they integrate across multiple platforms. Content grazing is the most frequently method used, at 68%. Social spider-webbing is the least used, 39%. Respondents were able to select more than one method of interacting, thus producing percentages that add to more than 100%.

Changes in Channel Power

Retailers

Control channel

Control shelf space

Have purchase data

Determine products and brands on shelves

Consumers

Internet shifts power to consumers

Multiple methods of making purchases

Channel power has changed and is continuing to change. For the first 60 or so years in the 1900s, channel power resided with the manufacturers, such as Procter & Gamble. It then shifted to retailers, especially large chain retailers like Wal-Mart. Retailers controlled shelf space, had purchase data, and determined what products and brands went on the shelves. Consumers had to buy whatever brands a retailer stocked. Power is now beginning to shift to consumers, primarily because consumers do not have to purchase from the local retail store. They have options. Retailers who realize this are providing multiple ways for consumers to purchase and receive products.

Increases in Global Competition

Information technology and communication has changed the marketplace.

Products can be purchased from multiple locations.

Customers want both low prices and high quality.

Manufacturers and retailers must work together.

Advances in communication technology have led to the rise of global competition. Every business competes in some way with global firms, either directly or indirectly, either for customers or for supplies. Products can be purchased from multiple locations. As a result, the level of competition has increased, and the prices of products have fallen. The challenge businesses now face is that consumers want it all. They want the lower prices created by global competition, but they also want quality. To provide this to consumers, manufacturers and retailers must work together. They must become partners with mutual goals that benefit both parties.

Increase in Brand Parity

Brands viewed as being equivalent

Consumers select from a group of brands

Quality and characteristics less important

Price more important

Decline in brand loyalty

With brand parity, consumers see the brands as about equal in quality and attributes. Rather than having one brand that is viewed as being superior, consumers often have a group of brands they feel are equal and would meet their needs. As a result, in brand parity situations, quality and characteristics become less important since these are viewed as being equal. That makes price often the determining factor. The rise in brand parity has led to a decline in brand loyalty.

Emphasis on Customer Engagement

Marketers seek to engage customers

Contact points important

Digital media now part of IMC

Two-way communication

Strive to develop emotional commitment

With the increase in brand parity and the decline in brand loyalty, companies have placed greater emphasis on customer engagement. Contact points between customers and the product are examined in an effort to improve communication and the relationship. Digital media is now a critical component of IMC plans because it provides two-way communication. It is no longer sufficient to talk to customers, you must develop a dialogue with customers. The goal – a deeper emotional commitment on the part of consumers towards the brand.

Understanding Customer Engagement Also Applies to Nonprofits

Customer engagement is vital to the success of brands. It is also important for nonprofits, such as the Salvation Army.

Figure 1.7 Composite Scores of Top Ten Restaurants on Advertising Perceptions

Source: Based on Colleen Rothman and Gina Gapp, “Perceptions of Restaurant Advertising,” Technomic white paper, Issue 3, September 2013.

Technomic Consumer Brand Metric monitors 120 restaurants across 60 attributes. For this survey, 78,743 people responded to three metrics about restaurant advertising – has memorable advertising, has advertising I can relate to, and has advertising that makes me hungry. The bar chart shows the results of the survey. Subway had the highest composite score (73.3) followed by Olive Garden (72.9).

Figure 1.8 Overview of IMC Text

This pyramid represents the structure of the text. At the bottom level are issues such as brand management, buyer behaviors, and the IMC planning process. Section 2 deals with advertising issues, section 3 with digital marketing, social media, and alternative channels, and level 4 with database and direct response marketing, sales promotions, and public relations. The book concludes with discussions on regulations, ethics, and an evaluation of the IMC effort.

International Implications

Goal – to coordinate marketing efforts

Greater challenge due to national and cultural differences

Standardization versus Adaptation

“Think globally, but act locally”

Because of the increase in global competition, firms must coordinate marketing efforts across multiple countries. Because of cultural differences and language differences, it is a greater challenge. Firms can use a standardized approach which means the same approach and message is used in every global market. This works only for global brands that are worldwide and well known. An alternative is adaptation, which means firms adapt their marketing communications to each country, region, and culture. The idea is to “think globally, but act locally.”

Integrated Campaigns in Action

Actual campaigns created by

Agencies

Internal marketing departments of brands

Highlights application of theories

Five Campaigns

Section 1: Progressive Bank (Chapter 4)

Section 2: Snoring Center (Chapter 7)

Section 3: Interstate Batteries (Chapter 10)

Section 4: Wayport Austintatious (Chapter 13)

Section 5: Centric Credit Union (Chapter 15)

The Integrated Campaigns in Action feature includes actual campaigns created by either an advertising agency or the internal marketing department of brands. The campaigns are in the last chapter of each section of the book.

Blog Exercises

Chick-fil-A

Subway

Integrated Marketing

The blog exercises for Chapter 1 include Chick-fil-A, Subway, and videos about integrated marketing. Links are embedded in the text for each.