Integrated Advertising, Promotion and Marketing Communications Chapter 1 Integrated Marketing Communications

Learning Objectives How does communication take place? What is an integrated marketing communications program? What new trends are affecting marketing communications? How does an integrated marketing communications program create value? What are the components of an integrated marketing communications program? What does the term GIMC mean?

Exploring the Communication Process (LO 1) How does communication take place? This section explores the communication process in two stages: first, by following a message from one sender to one receiver in the basic communication model; and second, by expanding on that with multiple messages and participants in the social communication model.

The Basic Communication Model The Sender Has an Idea 1 Sender Encodes Idea as a Message 2 Sender Produces the Message 3 Sender Transmits the Message 4 By viewing communication as a process, you can identify and improve the skills you need to be more successful. The sender has an idea. The success of a communication effort starts here and depends on the nature of the idea and the motivation for sending it. The sender encodes the idea as a message. When someone puts an idea into a message, he or she is encoding it, or expressing it in words and images. The sender produces the message in a transmittable medium. The sender needs a communication medium to present the message to the intended audience. The sender transmits the message through a channel. The communication channel is the system used to deliver the message.

The Basic Communication Model Audience Receives Sender’s Message 5 Audience Decodes the Message 6 Audience Responds to the Message 7 Audience Gives Feedback to Sender 8 The audience receives the message. It is not enough for the message to reach the intended audience. The audience must also sense the presence of a message, select it from all the other messages, and perceive it as an actual message. The audience decodes the message. Decoding is complex; receivers often extract different meanings from messages than the meanings that senders intended. The audience responds to the message. Before a receiver can respond as the sender hopes, the receiver must remember the message long enough to act on it, must be able to act on it, and must be motivated to respond. The audience sends feedback—verbal, nonverbal, or both. Just like the original message, however, this feedback from the receiver needs to be decoded carefully. This process is complex, so communication efforts often fail to achieve the sender’s objective.

Social Communication Model The traditional model of business communication was largely defined by a publishing or broadcast mindset. For external communication, a company released carefully scripted messages to a mass audience that often had few, if any, ways to respond. Likewise, customers and other interested parties had few ways to connect with one another to ask questions, share information, or offer support. Internal communication tended to follow the same “we talk, you listen” model, as upper managers issued directives to lower-level supervisors and employees. Today, a variety of technologies have enabled and inspired a new approach to business communication. In contrast to the publishing mindset, this new social communication model is interactive, conversational, and usually open to all who wish to participate. Audience members are no longer passive recipients of messages; instead, they are active participants in a conversation. This new model is revolutionizing business communication. Social media have given customers and other stakeholders a voice they did not have in the past. And businesses are listening to that voice.

Social Communication Model (in Practice) Hybrid Method Traditional Approach Social Media Approach Of course, no matter how enthusiastically a company embraces the social communication model, it is not going to be run as a social club in which everyone has a say and a vote. Instead, a hybrid approach is emerging in which some communications (such as strategic plans and policy documents) follow the traditional approach and others (such as project management updates and customer support messages) follow the social model. Strategic Plans Policies Customer Support Project Updates

Noise is critical in the entire communication process Sender Encoding Process Transmission Devices Noise is all of the factors that prevent the consumer from seeing the message. A classic example is clutter, which exists when consumers are exposed to hundreds of marketing messages per day, and most are tuned out Question for Students: Can you think of additional examples of noise in advertising or marketing communications? Decoding Receiver Feedback

L/O 2: What is an integrated communication?

Integrated Marketing Communication Integrated marketing communications (IMC) is the coordination and integration of all marketing communication tools, avenues, and sources in a company into a seamless program designed to maximize the impact on customers and other stakeholders. The program should cover all of a firm’s business-to- business, market channel, customer-focused, and internally-directed communications.

There are three Mixes in the entire approach The Three Mixes •Marketing • Promotions • IMC Promotions • Mixture of the Mixes

Marketing Mix Marketing Mix •Products • Pricing Systems • Distribution Systems • Promotional Programs

IMC Promotions Mix IMC Mix •Advertising • Sales Promotions [including consumer and trade promotion] • Personal Selling Activities • Online Marketing

IMC Promotions Mix IMC Mix •Database Marketing • Direct Response Marketing • Social Media • Guerilla Marketing

IMC Promotions Mix IMC Mix • Alternative Marketing • Public Relations Program

Steps Require to Complete a Marketing Plan The Steps •Situational analysis • Defining marketing objectives • Budget preparation • Finalizing marketing strategies and tactics Situational analysis (examining problems and opportunities in the organization’s external environment and strengths and weaknesses in the firm itself). Defining marketing objectives (sales, market share, competitive position, and customer actions desired). Budget preparation. Finalizing marketing strategies and tactics Evaluation of performance. • Evaluation

L/O 3: Are there any new trends affecting marketing communications?

Adopting an Audience- Centered Approach Changes in Tasks Performed Emergence of Alternative Media Accountability & Measurable Results Emphasis on Accountability and Measurable Results Advertising agencies are expected to produce tangible outcomes. Promotional dollars must be spent carefully.   Many companies have become less inclined to rely on 30-second television spots. Instead, alternative communication venues and methods are combined with special events where names, profiles, and addresses of prospective customers can be collected and tracked. Changes in Tasks Performed The first person facing new job responsibilities is the account executive who is employed by an advertising agency (see Figure 1.6) and oversees advertising and promotional programs for client companies. Growing demand for accountability means the account manager carefully examines each marketing campaign and look to provide evidence of success to show prospective clients. The brand or product manager oversees a specific brand or line of products for the client company. The brand manager organizes the activities of multiple individuals and agencies while integrating each marketing campaign. Creatives are the people who develop the actual advertisements and promotional materials. An account planner is the voice of the consumer within the agency. It is the account planner’s job to represent the consumer’s viewpoint to the agency’s creative staff and to be involved the development of an advertising campaign. Emergence of Alternative Media Many companies have cut expenditures on traditional media commercials and have moved to nontraditional or alternative media.

L/O 4: How does IMC program create value?

Reasons for the shift to greater integration of advertising and marketing communications programs Advances in Information technology Changes in Channel Power Increases in Global Competition Increase in Brand parity Emphasis on Customer Engagement Increase in Micro-Marketing Advances in Information technology Technology allows instant communications between business executives and their employees, even when workers are disbursed throughout the world.   Consumers have access to a wealth of information about companies, products, and brands. They can communicate with each other, sending both favorable and unfavorable ratings and information. Marketers are adapting methods to communicate and vend products effectively in this new communication-rich age. Changes in Channel Power The internet and the availability of information technology have shifted more power to the consumer. Both individual customers and businesses can shop online and even place orders without ever visiting a retail store. Increases in Global Competition Consumers can purchase goods and services from anyplace in the world. Competition no longer comes from the firm just down the street—it can also come from a firm 10,000 miles away. This shift affects manufacturers, retailers, and intermediaries. Customers want both value and price. Quality relationships between members of the marketing channel help to acquire and keep customers. Increase in brand Parity Many products have nearly identical benefits. When consumers believe that most brands provide the same set of attributes, the result is brand parity. This means shoppers will purchase from a group of accepted brands rather than one specific brand. In response, marketers must generate messages in a voice that expresses a clear difference. They must, in essence, build some type of perceived brand superiority for the company and its products or services Emphasis on Customer Engagement A contact point is any place where customers interact with or acquire additional information about a firm. Customer engagement programs often utilize digital media; however, they should also become part of a more integrated marketing approach. Increase in Micro-Marketing DVRs, VCRs and other devices make it possible to watch programs without commercials. Consequently, many marketing professionals have shifted efforts to micro-marketing techniques. These programs focus more on individuals and micro-segments rather than the mass population

L/O 5: What are the components of an IMC program?

Components of the IMC Program Foundation of the IMC Plan – Chapter 2 – 4 Advertising tools – Chapter 5 – 7 Media tools – Chapter 8 – 10 Promotional Tools – Chapter 11 – 13 Integration tools – Chapter 14 - 15

L/O 6: What does the term GIMC mean?

GIMC In the past, marketers had two different strategies for global companies. One was to standardize the product and message across countries. The second is called adaptation, in which the product and message are customized for each region. The Globally Integrated Marketing Communications (GIMC) approach is easier to apply when a company has relied on the standardization method; however, GIMC can and should be used with either standardization or adaptation. In terms of marketing, perhaps the best philosophy to follow is “market globally but act locally.”