Integrated Marketing Communications

Marketing Mix Product Price Place Promotion

Integrated Marketing Communications IMC involves coordinating the various promotional elements and other marketing activities that communicate with a firm’s customers. Value of strategically integrating the various communications functions rather than having them operate autonomously

Tools of IMC

How BIG is the business…

Size of the global advertising business

The Indian advertising business

Big spenders in India

Big spending categories in India

Big spenders in India

Advertising Advertising is defined as any paid form of non personal communication about an organization, product, service, or idea by an identified sponsor.

Advertising The world’s second oldest profession OR

Advertising A mirror and maker of culture and society …. OR

Advertising Magic in the marketplace… OR

Scope Understanding Integrated Marketing Communication The increasing importance of IMC ▫Shifting from ‘advertising’ to IMC Role of IMC in the marketing process Understanding consumers and audiences

Promotion Promotion is often regarded as a more direct form of persuasion Based frequently on external incentives rather than inherent product benefits Designed to stimulate immediate purchase

The IMC toolkit Advertising Promotions PR Direct Marketing Internet/Interactive marketing Personal Selling

Objectives of Advertisements Building Brand image Providing information Persuasion Supporting Marketing efforts Encouraging Action

Types of Advertising

The different types of advertising Brand Advertising : Long term brand identity and image  Nescafe, Dove, Hamam Retail : “ Buy it from our store”  Big Bazzar, Pantaloons, Univercell Political: “People to vote for them or ideas”  BJP shining India campaign, Obama’s campaign. Directory: Refer to find how out buy a product.  Yellow pages, Just dial Corporate Advertising – “getting a corporate identity”  Wipro, TCS

Different types of advertising Public Service : “ Do this, its good for all of us”  Aids awareness, World tobacco day Business to Business: “ directed at retailers, wholesalers for doing business with them ”  Professional publications, SAP targeting SME s Direct response advertising: “ Directly reaching customers ” Interactive advertising.  Banner ads, web pages, You tube

Sender Medium Feedback Encoding Decoding Receiver Communication process

Appeal Appeal is how to design the advertisement that attracts attention or presents information to consumers.  Humor  Sex  Fear  Logic  Emotions

Ethical issues Advocacy : Persuade its audience to do something. Accuracy : Are all claims are verifiable?  Axe – attraction to opposite sex. Acquisitiveness: greed to increase one's possessions  Eg: Volvo car roof controversy

Ethical issues Ethical issues to be considered because advertisements are highly visible and damage the company. Ban on marketing of alcohol beverages through sponsorship of sports, etc. Targeting youth : underage drinking. Benetton Ads – controversial.

Advertising as untruthful False or misleading claims. Presenting the information which is favorable to them.  Telemarketing from banks. Failing to award claims in contests  Eg: Scratch cards

Advertising in Bad Taste Home computers - young children couldn’t use it, they would fail in school. Depicting women as sex objects – condoms, lingerie. shock advertising, in which marketers use nudity, sexual suggestiveness to get consumers’ attention.

Advertising and Children Television is an important source of information for children about products. Lack the experience and knowledge to understand. child may learn practices from advertising that can affect his or her health.

Social consequences It provides ideas about style, morality, behavior. Adverse effect on consumer values by encouraging materialism. Symbols of status, success, and accomplishment.  Eg: Onida

Stereotyping Depicts women as preoccupied with beauty, household duties, and motherhood. Boys shown as aggressive and in outdoor than girls. Creating ads based on race. Advertising controls media channels.

Economic Effects of Advertising Can encourage consumption and foster economic growth. Economies of scale  low cost Effects on Consumer Choice Restricts the choice alternatives to a few well-known  soft drinks, beer, and cereals

Effects on Competition Too much of ads restricts market entry Results in less competition and higher prices. Firms such as Procter & Gamble and PepsiCo, which spend over $2 billion a year. Critics say that it only facilitates. Effects on Product Costs and Prices Critics argue that advertising increases the prices consumers pay for products and services. increases the perceived differences and allows brands to command a premium price

Participants in IMC Advertiser ( Client) Agency Media organizations Collateral services Marketing communication specialists ▫E.g.: PR agency, Sales promotion agency

A Procter & Gamble – Category management

Ad agencies In-house agency is an advertising agency that is set up, owned, and operated by the advertiser. ▫Saving money ▫Bad experiences with outside agencies ▫Increased coordination Consolidation of number of medium-size agencies. ▫Omnicom Group, WPP Group

Reasons for Using an Agency Highly skilled who are specialists in their chosen fields. Specialize in a particular type of business Previously worked with the competitor.

Types of Ad Agencies Full-Service Agencies Creative Boutiques Media Buying Services

Full service Full range of marketing, communications,promotions services including planning, creating, and producing the advertising; performing research; and selecting media. ▫Account service : Understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel ▫Marketing services : a) Research department ▫ b) Media department ▫Creative services : conceive the ideas for the ads and write the headlines – copy writers  Art department  Production department – movie directors ▫Management and Finance:

Creative and Media buying A creative boutique is an agency that provides only creative services. Coca –cola entered into a JV with Disney. Media buying: specialize in the buying of media, particularly radio and television time. Purchase such large amounts of time and space, they receive large discounts.

Selection of agency Steps: ▫Goal setting ▫Select process and criteria ▫Screen initial list of applicants ▫Request client references ▫Reduce the list to two or three ▫Creative pitch ▫Select agency

Steps Goal setting ▫Identify and prioritize corporate goals. ▫To create a fit between company and agency Selection criteria ▫Size of the agency ▫Relevant experience ▫Conflicts of interest ▫Reputation – awards won ▫Production capabilities

Steps ▫Media purchasing capabilities – Read web pages, annual reports, etc.

Agency compensation Commission system Fee, Cost and incentive based system. Percentage charges.