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Integrated Marketing Communications

By Sam Hamilton,2014-01-20 22:54
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Integrated Marketing Communications

     MODULE 1

    Integrated Marketing Communications

? Can anyone name some elements of marketing communications?

    ? What is IMC?

    ? Some elements of MARCOM are

    ? Advertising

    ? Sales Promotion

    ? Direct Marketing

    ? Public Relations

    ? IMC is coordinating all the promotional and other marketing activities that communicate with a firm’s customers and other stakeholders

    ? The key here is coordination or integration

    ? Why integration?

    ? Consistency, else confusion

    ? Clarity, else confusion

    ? Impact, since diff tools have diff strengths

    ? The tools of IMC thus need to be integrated

    ? Why are AD, SP, PR and DM clubbed together?

    ? All communicate

    ? All aim to persuade; Persuasion is the aim

    ? E.g. Wooing a girl involves different activities, seemingly unrelated! ? Should never deviate from a brand’s position

    ? Let us have a look at each tool

     Advertising

    ? It is any paid form of non-personal communication link, initiated by an

    identified marketer, to establish or continue exchange relationships with

    customers and at times, with other stakeholders

? Why advertise? What are some objectives of advertising?

     Objectives of Advertising

? Build Awareness

    ? TOMA factor important given today’s time pressures

    ? In the Introductory phase of the PLC

    ? Position a product/brand

    ? Build preference

    ? Differentiate your product/brand

    ? The primary purpose of Advertising is to position your product ? David Ogilvy, founder of Ogilvy and Mather

    ? Differentiation is achieved as a result of advertising

? Build Brand Equity

    ? Brand Equity is the monetary value one can attach to a brand ? You take the factories, the mortar, the machines; just give me the

    brands (John Stuart Mills, Quaker Oats Co.)

    ? Think of MRF, Surf, Liril, Marlboro, Coke, Pepsi ? Without advertising, would they have been as strong? ? Brand-building is the goal of marketing and takes a lot of time ? Advertising helps in brand-building ? To make people buy

    ? overnight sale cannot be expected advertising is a long

     term investment however, in the long run, this should increase sales

    otherwise, this is not good advertising Maruti did not advertise for long

    Now paying the price, maybe

     To remind consumers about existence

? For instance, Coke and Pepsi

     Build company image

? Called corporate advertising

     A positive side effect of advertising is cross-

    subsidising media

    ? Without ad, India Today would cost Rs. 100! ? All TV would be Pay-per-view, like boxing matches ? A very useful social function in a democracy ? The next time you see a commercial, be glad!

     The Ad Agency

    ? There are 3 depts in an agency ? Creative

    ? Media Planning

    ? Client Servicing

    ? Advertising is a tough job, make no mistake

    ? Often the first guy to be blamed is the agency, an outsider

Sales Promotion

     A direct inducement that offers an extra value or incentive for a product, to

    the trade or consumer, with the objective of creating an immediate sale .Thus,

    there can be two types, consumer-oriented or trade-oriented. Let us look at both

Consumer-Oriented Sales Promotion

    Coupon

    ? Very popular in West, not so much here

     Sampling

    ? Very useful in generating trial

    ? Ariel used this successfully

Premium

    ? Buy Horlicks, get Mug free

    ? Very popular, “freebie” used like “promos”

Price off

    ? Again, very popular since easy to do

Rebate

    ? Get a mail-in rebate of $5 off

    ? Widely used by durables industry in the West

Bonus Packs

    ? 150 gms + 50 gms free Colgate

Frequency Programme

    ? Like airlines, stores, hotels

Contests and sweepstakes

    ? Plethora of them in the World Cup

Trade-Oriented

    Sales Promotion

    Trade Allowances

    ? offer cash payments for good display, promotion

    ? many companies will give franchisees support for good

     infrastructure, display, shelf display

     Incentives

    ? quantity discounts

    ? cash discounts

    ? encourage the reseller to stock more

    ? apply “stock pressure”

     Contests

    ? The # 1 dealer wins a trip to Thailand and back for two

    ? monthly contests

    ? product-wise contests

     Cooperative Advertising

    ? share the cost when channel members advertise your brand

Ad Vs. SP

    ? What are some differences between AD&SP?

    ? Advertising is long-term focused while SP is short-term

? Advertising is hard to measure, while SP is easy to measure

    ? Advertising gives you a reason to buy, while SP gives you an incentive to buy

    ? Ratio of AD:SP used to be 75:25 40 years back, now is 25:75 in the west

    ? Due to short-term pressures

    ? Differentiation getting harder

    ? Retailer becoming stronger

    ? Trend will happen in India too at some point

    ? A major issue is that too much SP damages brand equity

    ? I am studying this at present

     Direct Marketing

Direct marketing is defined as any communication to a consumer

     that is designed to generate a behavioural response

     Usually it is used to sell e.g. Dell, Amazon

     Also the case with personal selling

     Communication may be direct

     Direct mail

     Or thru mass medium

     TV e.g. direct-response advertising

    DM Why?

     Why DM? Why is DM so popular? What are its pluses?

     All of us are “members” of some sort of “club”

     Lots of us own mobile phones

     Credit cards

     Phones

     Cable TV

     So easy for marketers to target offers

     A database is essential for direct marketing

     We live in a “digitised society”

     Useful for marketers! Growth of DM syndicates

     Lots of companies make money selling lists Technology

     Imagine a Dell, Amazon 20 years back

     Impossible for them to do DM

     One more reason for shift from advertising Time Pressure

     Direct mail comes to you Improved image of the DM industry

     From shady, pushy telemarketing to sophisticated DM

     It is now “kinda cool & sexy” to do DM

     Dell, Mercedes

     Poor experience with distribution channels

     E.g. Japan where there is a maze of channels

     Or take the case of Dell computer

Public Relations

     PR is an activity that fosters goodwill between an organization

     and its publics, or stakeholders

     PR, managed effectively can be useful

     PR, managed poorly can be damaging

    E.g. Microsoft funding to cut funds for the Justice Dept! This way, a double-edged sword

     More than any other tool, PR rebounds on you

     What are some major pluses with PR?

     Why PR?

     From consumer-centric organisation to stakeholder

     Management e.g. Wal-Mart, Reliance

     PR it is that targets other stakeholders

     Credibility present

     PR is generally more credible than advertising

     Especially publicity

     PR managers however have really bad reputations “spin doctors”

     A curious paradox

Less Expensive

     If used effectively

     Like James Bond movies, for instance

     Microsoft does this brilliantly Can cut back on costly ad spending

     For instance, Great Lakes Institute of Management gets lots of

    press while we are PR-shy Build company image

     Sony, Intel, GE

     Tatas are very effective at this e.g. recently JRD’s centenary year

     Can create positive buzz for the company

     Everyone is talking about you

     For instance, get a famous person as Chief Guest

     Similar to what Saarang does for IITM IMC is crucial

     Communication is vital, reaching out is harder and harder

     Integration key, else confusion

     We have just touched the tip of the iceberg here

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