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The Inevitability of Integrated Don E. Schultz MEDILL SCHOOL OF JOURNALISM, NORTHWESTERN UNIVERSITY

Communications

The concept and practice of integrated marketing and communications has been challenged by functional specialists and practitioners. Evidence presented shows integration being driven by technology, and, thus, an irresistible force. Advertising, as currently practiced, is based on a mass production model. The future is one-to-one marketing and communication, based on behavior more than attitudes and driven by databases and new electronic delivery systems. A "sh/ft of information technology" model illus- trating three types of marketing systems is presented. This provides a practi- cal method for practitioners to identify their need for integrated marketing and communications and the speed with which the integration must occur. © 1996 Elsevier Science Inc. j BUSN RE5 1996. 37.139--146

ecently, the concept of integrated marketing, integrated arketing communications, and integrated communica-

tions has been raised, discussed, and challenged by both practitioners and academicians. Those favoring integration have argued that the rapidly diffusing technologies impacting the marketplace, consumers, the media and the distribution of products and services cannot be reversed (Shocker, Srivastava, and Ruekert, 1994) (Schultz, Tannenbaum, and Lauterborn, 1992). Those opposed to the concept, as commonly defined in the media, have challenged the principles presented as being nothing more than traditional marketing and advertising dressed up in fancy words and a new language. Further, oppo- nents argue integration is something all marketers and advertis- ers have always done. Thus, they contend the issue is primarily one of interest to the academic community and has few manage- rial implications (Sloan, 1994; O'Dwyer, 1994; Miller and Rose, 1994).

Since the American Academy of Advertising (AAA) and the Southern Marketing Association (SMA) have provided a venue for additional discussion, apparently there are both prac- titioners and academics, who believe the concept has merit for further discussion. Additionally, the conference raises again the issue of what integration really is, how it might impact

Address correspondence to Don E. Schultz, Ph.D., Integrated Marketing Communica- tions Department, Medill School of Journalism, Northwestern University, 1908 Sheri- dan Road, Evanston, IL 60208-1290.

existing communication disciplines and whether or not it is something everyone has already done or is really not worth doing. Hopefully, this conference will shed light on whether, as I have argued on several occasions (Schultz, 1993; 1994), integration truly is a radically different way of considering, planning, and implementing various forms of persuasive com- munication programs or is simply a passing fad that will soon disappear.

The G a m e is Over: I n t e g r a t i o n Wins! The question of integration or not is moot. It is not a question of whether the marketer or advertiser should integrate his or her communication programs. The fact is, it really doesn't matter. The consumer integrates the marketer's and advertiser's communication whether the marketing or advertising organiza- tion does or not. Integration in truth, is not up to the marketer, it is up to the consumer. Thus, even if the marketing or advertising organization has decided to direct totally uncoordinated mes- sages to the same consumer, that consumer will aggregate and integrate those communication messages in some fashion. Un- fortunately, that fashion might be to (1) arrange the messages as the advertiser intended, (2) ignore the messages and materi- als, or (3) put them together in ways the advertiser or marketer never considered, ways that might even be harmful to the marketing organization and the brand. Thus, integration occurs whether the marketer or advertiser plans it or not. The primary question then is: does the communication integration process that the consumer develops help or hinder the marketing orga- nization distributing the messages. Thus, the question of inte- gration, as it is being argued by practitioners and academicians alike, is really rather pointless. Integration occurs at the con- sumer or receiver level. The marketing organization may help but eventually doesn't control the integration process. There is no way to stop integration by consumers nor has there ever been. The challenges being raised about integration therefore, in my opinion, miss the point of the argument.

In this article, I illustrate why the integration of marketing and marketing communication b y the organization is inevitable. Therefore, the best marketers and advertisers can do is to try to understand the integration process and to modify their

ISSN 0148-29631961515.00 PII S0148-2963(96)00063-X

1 4 0 J Busn Res D.E. Schultz 1996:37:139-146

a p p r o a c h e s and concepts to m a x i m i z e the r e t u r n o n the integra- tion w h i c h occurs naturally.

Technology Drives Integration Integration of the marketplace, b y which is m e a n t the integra- tion of p r o d u c t i o n , operations, marketing, distribution, finance, c o m m u n i c a t i o n , and other forms of business activity, is also inevitable. Integration is inevitable because it is being driven b y technology. It is not just c o m m u n i c a t i o n s technology, which is found in media and message delivery systems, that is the driving force. Instead, it is the total technological revolution o c c u r r i n g t h r o u g h o u t the world. Technology is m o v i n g us f r o m the industrial to the information revolution. Technology is shrinking the globe to one vast, interconnected marketplace. Technology is creating the intersection of c o m m u n i c a t i o n a n d distribution, which is the m a j o r thrust of the change in m a r k e t - ing. Technology can't be s t o p p e d and can't be reversed. T h e r e is simply no w a y w e can put the genie o f technology back in the bottle. In short, technology is driving the need a n d d e m a n d for integration. To relate the technological i m p a c t of integration directly back, to the area of traditional m e d i a advertising, it is useful to u n d e r s t a n d h o w the discipline of traditional, mass media, general advertising is practiced today and h o w it devel- o p e d o v e r the past 100 years. This explains h o w and w h a t real integration is a n d w h y it has b e c o m e such an i m p o r t a n t factor in all business areas.

First, a review of h o w traditional advertising has b e e n stud- ied, taught, and practiced in the w e s t e r n w o r l d helps us u n d e r - stand the massive changes that are occurring. This review points out the two k e y elements that have i m p a c t e d and will continue to impact the w a y m a s s media, general advertising is conducted. They are: (1) the practice of m a s s p r o d u c t i o n and the resulting d e v e l o p m e n t of the concepts of a m a s s market, m a s s communication, and m a s s advertising a n d (2) the devel- o p i n g and shifting nature of information a n d c o m m u n i c a t i o n s technology. W e start with h o w the industrial revolution and the rise of mass p r o d u c t i o n influenced w h a t we, today, call general, m a s s media advertising.

Mass Production Model of Advertising As cheap p o w e r and mechanical p r o d u c t i o n facilities were de- veloped o v e r the past 200 years, it allowed firms to p r o d u c e millions, and in s o m e cases, billions of identical products. Be- cause m o s t of the p r o d u c t s p r o d u c e d m a d e the lives o f c o n s u m - ers better o r easier or m o r e pleasant, there was i n h e r e n t de- m a n d for what was made. The focus of the p r o d u c i n g firm, therefore, was o n the p r o d u c t with little consideration given to w h o might want o r b u y the resulting product. T h e r e was sufficient inherent d e m a n d for a l m o s t everything that could be manufactured. Therefore, it m a d e little difference what the

organization p r o d u c e d . If the c o m p a n y m a d e s o m e t h i n g and t o o k it to market, it generally would sell o r c o n s u m e r s would buy.

Because the p r o d u c t s being p r o d u c e d w e r e identical (it was this identicalness of p r o d u c t that p r o v i d e d the value of m a s s p r o d u c t i o n and e c o n o m i e s o f scale), the m a r k e t e r ' s natural a s s u m p t i o n was that the c o n s u m e r s m u s t also b e identical. The scenario: If the organization m a d e one style and type of toaster, and millions of c o n s u m e r s bought that model of toaster, then ergo, c o n s u m e r s must be identical as well. It was on this p r e m i s e that today's m a s s m a r k e t i n g and m a s s advertising was devel- oped. T h e c o m p a n y d e v e l o p e d a p r o d u c t it wanted to make. The organization built plants o r factories to p r o d u c e those products. Generally, the p r e m i s e was the bigger the plant, the m o r e efficient and m o r e productive. Based o n w h a t w a s p r o - duced, it w a s t h e n the j o b o f marketing and advertising to find c o n s u m e r s w h o w a n t e d or could b e c o n v i n c e d to p u r c h a s e the product. Since p o p u l a t i o n w a s always g r o w i n g and the m a r k e t e c o n o m i e s were always expanding, the task of advertising and marketing was relatively simple. Get the p r o d u c t to m a r k e t and let people k n o w it was there and get it into retail channels.

Using this m a s s p r o d u c t i o n model, m o s t m a r k e t i n g and advertising concepts, w h i c h were developed in the 1920 to 1950 period, as mass m e d i a was being developed as well, fo- cused on the creation of a single message or image for the single v e r s i o n b r a n d e d product. These single focus b r a n d messages were delivered t h r o u g h m a s s c o m m u n i c a t i o n s y s t e m s a n d vehi- cles. If the p r o d u c t s w e r e the s a m e and the c o n s u m e r s were the same, then one message would fit a n y o n e and everyone. Hooray! Mass m e d i a advertising was born. As a result of this process, m o s t advertising focused on the product, not on the c o n s u m e r . The goal o f m u c h m a r k e t i n g and advertising was to differentiate the p r o d u c t since, it was assumed, the c o n s u m e r s w e r e all the same. And, that is the w a y mass marketing, m a s s c o m m u n i c a t i o n and m a s s advertising developed and in m a n y cases, is still practiced, particularly b y c o n s u m e r p r o d u c t orga- nizations in the United States today.

It's All Linear, Larry In addition to the a s s u m p t i o n of m a r k e t homogeneity, m a r k e t - ers also s e e m e d to believe that marketing, c o m m u n i c a t i o n , p r o - motional, and advertising p r o c e s s e s were linear. Like a p r o d u c - tion line, which m o v e d a p r o d u c t s t e p - b y - s t e p f r o m raw materials to finished product, m a r k e t i n g a n d c o m m u n i c a t i o n processes w e r e developed that simulated the p r o d u c t i o n p r o - cess of the plant. In o t h e r words, "advertising factories" w e r e created w h e r e advertising was p r o d u c e d f r o m a formula, just as p r o d u c t s w e r e p r o d u c e d from a blueprint. Products m o v e d f r o m p r o d u c e r to wholesaler to retailer to c o n s u m e r . Advertis- ing m o v e d f r o m m a r k e t e r to agency to m e d i a to c o n s u m e r . It was all linear. It was all one way. And, it was all a s y s t e m that the m a r k e t e r and advertiser believed they controlled. Advertis-

Inevitability of Integrated Communications J Busn Res 141 1996:37:139-146

J Related Movement Behavioral toward Dimensions Purchase

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AFFECTIVE l the realm of emotions Ads change attitudes and feelings.

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COGNITIVE R t the realm of thoughts Ads provide information and facts.

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Examples of types of promotion or advertising relevant to various steps Point-of-purchase Retail store ads =Last Chance" offers Price appeals Testimonials

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Announcements Descriptive copy Classified ads Slogans, Jingles Sky writing Teaser campaigns

Examples of reseamh approaches related to steps of greatest applicability

Market or sales tests Split,run tests Intention to purchase Projective techniques

Rank order of preferences for brands Rating scales image measurements, including check lists and semantic differentials Projective techniques

Information questions Play-back analyses Brand awareness surveys Aided recall

Figure 1. Advertising and Advertising Research Related to the Model.

ers and practitioners built models and examples of marketing and advertising and distribution systems. All were linear. All were one way, i.e., from the marketer or producer through the channels to the consumer. Systems were developed for advertising production and distribution. Concepts of how ad- vertising worked and how consumers responded to marketing and advertising efforts were generated. Consumer behavior models were presented that attempted to explain how consum- ers went about buying automobiles or cans of soup or new suits. In many cases, those models assumed the process of purchase was the same no matter what was being bought or who was buying.

One of the best known models of how advertising was sup- posed to work is the famous or perhaps now infamous, Hierar- chy of Effects model by Lavidge and Steiner (Lavidge and Steiner, 1961). Figure 1 illustrates the hierarchy as developed by those researchers. Figure 2 is a revised rendition of how the hierarchy is currently used in advertising planning today.

As Lavidge and Steiner described their process of how adver- tising worked, it is clear ,that their premise is that all consumers are alike, i.e., they all go through the same process and are impacted in the same way b y advertising. As can be seen, the Lavidge and Steiner model is linear. The marketer or advertiser is always in control, that is, the marketer knows customers' favorite brand in the advertising program. The consumer is no

more than a p a w n in the process the marketer devises. Or, at least that's what the model suggests.

The problem with the Lavidge and Steiner approach, which was developed in 1960, is that we are rapidly learning that isn't how advertising works today, if it ever worked that way. Larry Light, Chairman, Coalition for Brand Equity, states he has reviewed over 900 advertising studies conducted over the past 20 or so years. He has yet to find any support or justification for the Lavidge and Steiner hypotheses and resulting model (Light, 1993). Light's findings are, at the least, discourag- ing, since most of the advertising planning processes in use around the world are based on the Hierarchy of Effects model or concept.

In addition, this hierarchy is also the basis for the most widely accepted method of evaluating the effects of advertising. That is the concept, developed by Russell Colley in the early 1960s, called DAGMAR (Designing Advertising Goals for Mea- sured Advertising Response). The Association of National Ad- vertisers thought so much of Colley's work, they updated and published a more current version in 1993 (Colley, 1961). DAGMAR, unfortunately, is based on the same mass produc- tion, linear, attitudinal approach to advertising that has been used for at least the past 40 years. CoUey's DAGMAR model is illustrated in Figure 3.

The major factor, which ties Lavidge and Steiner and Colley

147- J Busn Res D.E. Schultz 1996:37:139-146

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together, is the use of attitudinal and psychological measures as the basis for their models. As will be s h o w n next, one of the major issues facing general, mass media, advertisers is not just integration, but, h o w and w h e n and w h e r e and u n d e r what circumstances advertising w o r k s in the marketplace. Perhaps, u n d e r s t a n d i n g of the broad issues of integration can provide some of the answers.

It Ain't Atoms, Either As a last point, what has created additional difficulties for mar- keters and advertisers is what has c o m m o n l y been called the "scientific method" of study, which is used in western cultures. This is the a p p r o a c h that suggests if one wants to learn about something, the best w a y is to break it d o w n to its smallest parts. Then, study the parts and their relationships. F r o m this, one should be able to understand the whole. It is this atomistically based a p p r o a c h that I argue has created m u c h of the difficulty in marketing, marketing communications, and advertising. It is this continuing attempt to understand advertising as a piece or a part of the brand's communication in isolation, rather than as part of the whole. That is, study advertising in isolation, and do the same with other p r o m o t i o n and c o m m u n i c a t i o n

From unawareness tO)

AWARENESS

COMPREHENSION

CONVICTION

ACTION

Figure 3.

The prospect must first be aware of the existence of a brand or company.

He must have a comprehension of what the )roduct is and what it will do for him.

-le must arrive at a mental disposition or conviction to buy the product.

Finally, he must stir himself to action.

elements. Then, try to determine or break d o w n what sales p r o m o t i o n contributes or what public relations does or h o w an event impacts the overall process of communicating with a c o n s u m e r or customer or prospect. By looking at all the pieces, one should be able to understand the whole. In today's ever m o r e complex, and ever m o r e interconnected world of com- munication and p r o m o t i o n at all levels, that doesn't appear possible or practical. It's almost impossible to create a clean, clear, uncontaminated situation where advertising o r any other c o m m u n i c a t i o n element can be studied in isolation. Even if i t were possible, there is considerable concern about h o w valu- able that might be.

W h a t has really prevented an understanding of advertising and what I argue is one of the major factors d riving the inevitable integration of marketing, promotional elements, and advertising is the increasing availability of feedback loops. In other words, the ability to actually measure the behavior of c o n s u m e r s and customers and prospects in the real world and in some cases, in real time rather than simply measuring changes in awareness or attitudes. Thus, rather than trying to predict what c o n s u m e r s might do, the marketer or advertiser can actually examine what c o n s u m e r s really do. This has been a dramatic shift from the attitudinally based approaches developed in the middle of this century (Lavidge and Steiner and Colley both use attitudinal approaches, avoiding behavior altogether). As a result~ behav- ioral data is challenging many of o u r long-held notions about communication and marketing effects.

5tarring in the mid- 1970s, measurement of actual c o n s u m e r behavior became possible and practical. It came, not as a result of advertising or marketing thinkers developing or d e m a n d i n g a m o r e effective w a y to measure the impact of the discipline, they were apparently h a p p y with attitudinal information. Rather, measurement came as a b y - p r o d u c t of a logistical system designed to control and evaluate p r o d u c t inventory flow and to speed up the check-out process in retail stores. It is the n o w ubiquitous UPC (Universal Product Code) bar coding system and point of purchase (POS/systems), which are being used

Inevitability of Integrated Communications J Busn Res 143 1996:37:139-146

on a l m o s t every p r o d u c t and in every retail location imaginable, a n d increasingly, a r o u n d the world. By linking c o n s u m e r p u r - chases, through b a r c o d e d products, to the actual c o n s u m e r w h o has agreed to identify h i m or herself to the m e r c h a n t as the p u r c h a s e r , suddenly, m a r k e t i n g communications, particularly advertising a n d sales p r o m o t i o n , has b e c o m e a closed loop system, rather than the linear, one-way, o u t b o u n d activity that Lavidge a n d Steiner and Colley suggest (Peppers and Rogers, 1993). T h r o u g h scanner panels d e v e l o p e d b y IRI (Information Resources, Inc.) and A. C. Nielsen, m a r k e t e r s and academicians found there w e r e a n u m b e r of factors that influenced c o n s u m e r b e h a v i o r and that they were all interconnected. In other w o r d s , they were integrated into a whole s y s t e m or process. Not just a b u n c h of parts, an interconnected whole. The c o n s u m e r re- s p o n d e d not just to advertising b u t to the c o m p o u n d e d effect of price and displays and c o u p o n s and in-store features and public relations activities and events and packaging o n a n d on a n d on. W i t h s c a n n e r data, the atomistic a p p r o a c h to explaining o r u n d e r s t a n d i n g advertising as a c o m m u n i c a t i o n force b e c a m e obsolete, almost overnight. W h e r e a s m a n y m a r k e t e r s a n d ad- vertisers still t r y to p a r s e out the effects of traditional, m a s s media, general advertising, increasingly all are beginning to u n d e r s t a n d that it is the whole or s y s t e m that is important, m u c h m o r e than the individual p a r t or parts. More important, in c o m m u n i c a t i o n systems, the whole is generally greater than the s u m of the parts. It is this increasing recognition of a holistic, systemic p r o c e s s of c o m m u n i c a t i o n in w h i c h there are all types of synergies that will inevitably drive the acceptance a n d use of integrated m a r k e t i n g a n d c o m m u n i c a t i o n p r o g r a m s . W e can't b a c k off f r o m w h a t w e have learned. Advertising is n o t a whole. It is only a part. And, as a part, it m u s t b e considered in c o m b i n a t i o n with all the o t h e r m a r k e t i n g a n d c o m m u n i c a t i o n activities that i m p a c t a n d affect the b e h a v i o r of c o n s u m e r s in the marketplace.

As w e m o v e f r o m the industrial age to the information age, as we m o v e f r o m the parts to the whole, as we increasingly u n d e r s t a n d the n e t w o r k s a n d systems and processes, we slowly but surely begin to u n d e r s t a n d that integration of the elements m a k e s the s y s t e m work. Not m o r e of the parts a n d pieces. Integrated systems are i m p o r t a n t , not the individual elements. It is the integrated p r o c e s s w e m u s t understand, for that is w h a t is impacting the c o n s u m e r a n d the customer.

Shift of Information Technology T h e s e c o n d m a j o r force, w h i c h is driving the n e e d for integrated a p p r o a c h e s and integrated thinking, is the shift in information t e c h n o l o g y - t h a t is, the flow of information data capture, stor- age, a n d u n d e r s t a n d i n g that is or has m o v e d f r o m the manufac- turer to retailer of distribution channel a n d is h e a d e d for the c o n s u m e r o r end u s e r along the famed I n f o r m a t i o n Superhigh- way. To u n d e r s t a n d this i n f o r m a t i o n technology shift and its i m p a c t o n m a r k e t p l a c e organirations, a simple graphic device

is used. It is called the Evolution and Revolution o f l n f o r m a t i o n Technology (see Figure 4).

As illustrated on the left-hand side of Figure 4 in the Histori- cal Marketplace, the m a n u f a c t u r e r or m a r k e t e r d o m i n a t e d the system. Because the m a n u f a c t u r e r had raw materials, plants and equipment, technology and m o s t of all, money, the organization d o m i n a t e d the marketplace, which included the channel, the media, and the c o n s u m e r . The information technology that the m a n u f a c t u r e r controlled, along with the rise of inexpensive and pervasive t r a n s p o r t a t i o n a n d c o m m u n i c a t i o n systems, p r o - vided the facilities for the d e v e l o p m e n t of m a j o r national b r a n d s and m a s s markets. Mass c o m m u n i c a t i o n s y s t e m s advised con- s u m e r s of the availability of those p r o d u c t s and b r a n d s . As a result, the m e g a - b r a n d s we so revere today, were generally built in the 1 9 3 0 - 1 9 6 0 period in the United States. T h o s e include such h o u s e h o l d n a m e s as Kraft, Colgate-Palmolive, Nes- tle, Q u a k e r Oats, Lever Brothers, IBM, American Airlines, and the like. Because the m a n u f a c t u r e r controlled the information technology, he or she controlled the marketplace. Such it was until the mid-1970s.

D u r i n g the 1970s, two things occurred. Retail and distribu- tion organizations began to consolidate a n d concentrate. Dis- tributors organized massive warehouses. Cooperatives formed. Retail o p e r a t o r s b o u g h t or m e r g e d with other retail operators. And, with the rise of scanners, UPC codes, a n d c o m p u t e r sys- tems, retailers s u d d e n l y gained superiority o v e r manufacturers in t e r m s of knowledge and information about the marketplace, particularly c o n s u m e r s (Kim, 1993; A c h e n b a u m and Mitchell, 1987). Suddenly the retailer k n e w exactly w h a t was being sold out of each a n d every store and in m a n y cases, to w h o m . Instantaneously. Retailers k n e w w h o c u s t o m e r s were. W h a t they bought. W h e n they bought. H o w they bought. This shift of information technology, w h i c h had b e e n in the h a n d s of the m a n u f a c t u r e r for o v e r 200 years, d i s a p p e a r e d almost overnight.

In the middle section of Figure 4 labeled New Marketplace, we find the situation of m a n y industrialized, w e s t e r n markets. The retailer, because of the shift in information technology, n o w controls the marketplace. (The distribution channels are called retailers only for simplification. In truth, it is the distribu- tion channel, w h e t h e r distributor, wholesaler, retailer, sales force, or other channel m e m b e r , w h o controls the information). In the New Marketplace, the retailer controls the m a n u f a c t u r e r because he or she has the interface with the end user and has the technological capability to capture, store, and manipulate transaction information. Thus, the retailer also controls the media and the c o n s u m e r or end user because he o r she has location, inventory, and marketplace p o w e r to p r o v i d e the best alternative to those c o n s u m e r s . (The retailer is said to control the s y s t e m because, for the c o n s u m e r to obtain the p r o d u c t s or services desired, he or she m u s t visit the fixed location o r o t h e r facility w h i c h the retailer has created.) Manufacturers are too r e m o v e d f r o m the interface with the end user to maintain their traditional control.

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Inevitability of Integrated Communications J Busn Res 145 1996:37:139-146

p r o d u c t s and b r a n d s in the United States today. Increasingly, we are seeing the same information technology shift in business- to-business markets. It is not the p r o d u c t innovator o r devel- oper that is d o m i n a n t today, it is the distribution channel or the organization that has the information technology and the interface with the c o n s u m e r or end user.

On-Ramp to the Superhighway W h e r e a s one could make a strong case for the need for integra- tion of marketing, communication, and advertising simply be- cause of the shift of information technology, it is the third phase that will truly drive the need for total integration.

As illustrated, it is an arguable point in the Historical Market- place that integration of marketing, communication, and adver- tising is not critical, because the manufacturer, in essence, drives the marketplace. In the New Marketplace, integration is m u c h m o r e important, particularly to the mass media-oriented, gen- eral b r a n d advertiser and the mega-retailer. It is the aligning of the manufacturer and retailer efforts that are critical if the national brand, as we k n o w it, continues to be important.

Of m u c h m o r e importance, however, is the information shift to the consumer, which lies on the horizon. This is called the 21st Century Marketplace in Figure 4. The premise is that this shift of information technology will truly drive the need for integration. In the third scenario, information technology shifts to the consumer. In other words, the c o n s u m e r has the ability and capability to communicate and even purchase through the media, the retailer and the manufacturer on an interactive basis. The manufacturer and retailer can send messages. The con- s u m e r can request information. It is the interface and the inter- action between the g r o u p s or individuals that is really the critical issue. One can, for instance, imagine a marketplace where the b u y e r holds u p his or h e r h a n d in some way and says, in effect, "I a m ready to b u y a p r o d u c t in category X. W h o is ready to sell?" At this point, all the suppliers of p r o d u c t s in category X are alerted to the buyer. The question, however, is h o w the seller responds. Thus, in this case, the b u y e r has b e c o m e the advertiser, and the sellers have b e c o m e the respondents or consumers. Given this scenario, h o w do traditional marketing, communication, and advertising activities fit? W h a t is the role of advertising? O r of sale p r o m o t i o n ? O r of direct marketing? O r any of the other host of discrete disciplines that have devel- o p e d over the years. Are they rdevant? Are they useful? D o they have any e c o n o m i c value?

In the scenario just described, it is assumed that the p u r - chaser has knowledge of the marketplace and p r o d u c t availabil- ity. It assumes search m e c h a n i s m s are in place that allow the p u r c h a s e r to k n o w w h a t they w o u l d like to buy. It also assumes there are all types o f distribution channels that could supply the p r o d u c t o r service that the c o n s u m e r might desire. But, these are not just assumptions. In truth, such a marketplace exists today, and it will only develop and b e c o m e m o r e refined in the years to come.

An anecdote will provide an example of development of the 21st Century Marketplace today. A few weeks ago, an associate w h o lived in Chicago was preparing to leave o n vacation. She decided she needed a new camera for it was to be a vacation where unique birds and animals were to be seen. She first delved into her knowledge of h o w and where to b u y a camera. She decided on a set of b r a n d s that she would consider. (The Historical Marketplace, where the manufacturer's b r a n d was critical, illustrates this example.) Because camera technology has changed rather dramatically in the last few years, she de- cided to visit a selection of camera retailers. She went to several retail stores, asked for demonstrations and made her p r o d u c t and b r a n d decision. (The New Marketplace in action). But, she didn't buy. She returned to her h o m e with all the information she had gathered and p r o c e e d e d to telephone 47th Street Photo in New York. She b o u g h t the camera b y telephone, using her credit card and the information technology that had shifted to her in the form of credit cards, 8 0 0 # telephone numbers, tar- geted advertising, and various forms of information technology. The point of the story is simple. It was the integration of the advertising, sales p r o m o t i o n , the sales force, the retailer, the telephone technology, the credit card system, transportation and distribution facilities, and the information technology that made this transaction possible. The 21st Century Marketplace is not some pie-in-the-sky d r e a m of marketers and technolo- gists. It is here and now. The real question is n o w we will deal with these shifts in information technology, for they too will drive the inevitable requirements for integration of all market- ing and c o m m u n i c a t i o n efforts.

From Inside-Out to Outside-In The 21st Century Marketplace, which has been illustrated, changes the process and system of advertising dramatically. The c o m m u n i c a t i o n flow moves from inside-out, that is, the marketing organization sending messages to prospective cus- tomers and consumers, to one w h i c h is essentially outside-in. In the outside-in scenario, the c o n s u m e r or customer accesses o r requests information as needed or desired. C o n s u m e r s are no longer dependent o n the marketer to develop or supply information o r messages. In the Historical Marketplace, the marketer decided w h e n and where and in w h a t media, what message was to be sent, and, to whom. The marketer sent the message. The consumer, supposedly, received it. Much the same is true in the New Marketplace. The only difference is that the retailer o r channel is sending most of the messages. Still, the c o n s u m e r or customer is perceived o r h o p e d to be the receiver.

In the 21 st Century Marketplace, senders b e c o m e receivers and receivers b e c o m e senders. The market is interactive and the c o m m u n i c a t i o n flow is in both directions, not just o u t b o u n d from the marketer. This dramatic change in information tech- nology will truly drive the need for integrated marketing and communication. In a marketplace where the c o n s u m e r and

146 J Bush Res D.E. Schultz 1996:37:139-I 46

customer is inundated with information, their question is not h o w to get more information about p r o d u c t s o r services, it is h o w to sort through all the information available. Increasingly, product, service, and marketplace information is supplied not just by marketers; it is supplied by all forms of media and from a variety of sources, m a n y of which are not controlled or even managed by the marketer. For example, in almost every major Sunday newspaper, there is an automotive or transportation section, which contains reviews and c o m m e n t s and test drive reports of various makes of automobiles. The same is true for automotive publications such as Car & Driver and Automotive News. And, Consumer Reports regularly reviews automobiles through their testing services. The J. D. Powers organization rates automobiles on a variety of criteria every model year. So, although General Motors, Ford, Chrysler, Honda, and Toyota spend billions on traditional, media-delivered, general advertis- ing, it is likely only a fraction of the information prospective automobile b u y e r s use to make their purchase decision comes from that advertising. This is said, not to demean the value of advertising, only to suggest that advertising is only one form and one factor that influences and persuades consumers. It is the integration of advertising with all the other sources of information the c o n s u m e r uses that is critical to u n d e r s t a n d - in other words, the process, not just the parts.

The task of the marketing and marketing communications managers of the future will not only be to develop and execute planned messages, it will also be to attempt to manage all the information sources and resources that might influence a con- sumer's purchase decision choice and as important to be able to r e s p o n d to customer and project requests for additional information. Thus, as we move from primarily internally di- rected, planned marketing and c o m m u n i c a t i o n programs to those in which the prospective customer influences the type and kind of information they need and want to make a purchasing decision, the drive for integration will b e c o m e not just neces- sary, but, inevitable.

Summing Up or Setting Up the Next Questions In this article, the move to integrated marketing and c o m m u n i - cations has been reviewed and explained b y using the example of mass media, general advertising; it is clear integration is not just desirable, it is inevitable. Two major factors are driving the need and requirements for integration. They are: (1) the move from a traditional, industrially oriented view of advertis- ing to one that reflects m o r e the holistic information systems

in place today, and (2) the shift of information technology on a diagonal from the manufacturer to the retailer to the consumer.

W i t h this m o v e m e n t to integration, some major issues in advertising practice, education, and research begin to emerge. For example, does the traditional functional management of the marketing and communications activities make sense w h e n developing and managing an integrated and holistic a p p r o a c h to communication? W h a t about all the specialists, i.e., advertising, sales promotion, direct marketing, and the like? Are they still needed? W h a t about education? Today specific, discipline- related curricula are taught. Should c o m m u n i c a t i o n processes be taught instead? W h a t would that do to the traditional course b y course a p p r o a c h to education? And, what h a p p e n s to adver- tising research? As we move from attitudinal research to behav- ioral information, do o u r traditional advertising research tech- niques still apply? All these and a host of other questions arise when we acknowledge that integration, whether needed or wanted by advertising practitioners and academicians, is inevi- table, but that is another subject for another study.

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