Chapter 3 - Summary - Belch & Belch

The development, execution, and administration of an advertising and promotions program involve the efforts of many individuals, both within the company and outside it. Participants in the integrated marketing communications process include the advertiser or client, ad agencies, media organizations, specialized marketing communications firms, and providers of collateral services.Companies use three basic systems to organize internally for advertising and promotion. Centralized systems offer the advantages of facilitated communications, lower personnel requirements, continuity in staff, and more top management involvement. Disadvantages include a lower involvement with overall marketing goals, longer response times, and difficulties in handling multiple product lines.Decentralized systems offer the advantages of concentrated managerial attention, more rapid responses to problems, and increased flexibility, though they may be limited by ineffective decision making, internal conflicts, mis-allocation of funds, and a lack of authority. In-house agencies, while offering the advantages of cost savings, control, and increased coordination, have the disadvantage of less experience, objectivity, and flexibility.

Many firms use advertising agencies to help develop and execute their programs. These agencies may take on a variety of forms, including full-service agencies, creative boutiques, and media buying services. The first offers the client a full range of services(including creative, account, marketing, and financial and management services); the other two specialize in creative services and media buying, respectively. Agencies are compensated through commission systems, percentage charges, and fee- and cost-based systems. Recently, the emphasis on agency accountability has increased. Agencies are being evaluated on both financial and qualitative aspects, and some clients are using incentive-based compensation systems that tie agency compensation to performance measures such as sales and market share.In addition to using ad agencies, marketers use the services of other marketing communication specialists, including direct-marketing agencies, sales promotion agencies, public relations firms, and interactive agencies. A marketer must decide whether to use a different special- ist for each promotional function  or have all of its integrated marketing communications done by an advertising agency that offers all of these services under one roof.Recent studies have found that most marketers believe it is their responsibility, not the ad agency’s, to set strategy for and coordinate IMC campaigns. The lack of a broad perspective and specialized skills in non-advertising areas is seen as the major barrier to agencies’ increased involvement in integrated marketing communications.

Introduction Video - Shantanu Mital

Session 3

·         Total benefit = Total Functional Benefit + total subjective benefits

Apart from functional benefits which a brand offers, it also offers subjective benefits. Say why a person purchases Rolex watch or a Mercedes car? Apart from functionality I am buying status. 

·         Brands also acts as “Extended Self”

Consumers tend to extend the brand to what they believe and what goes well with their personality. Before purchasing a brand, we not only communicate with external world but also with ourselves.

Total perceived value = Total perceived benefit/ Total perceived cost

Total Perceived Benefits = Functional benefits + Subjective benefits

Total Perceived Cost = Financial Cost (Price) + Non-Financial Cost (Time, Effort, Tension)  

As Total Perceived Benefits increases, probability of brand Purchase increases

Functional benefits can be increased by augmented benefits for e.g. Watch also functions as calculator

Total perceived value can be increased by reducing the cost or by increasing the benefits For e.g.

1.       Combo products: Reduces financial cost

2.       Free product (Bundling): Increases functional benefits 

·         Communication of Buyer occurs at 2 different levels

o   With oneself  - Effect is purchase

o   With outside world – Effect is the buyer seeks what do people perceive about him after the purchase

·         There are 2 aspects to tell about one’s lifestyle

o   Behavioural and Personality

o   Dressing Sense

·         Verbal and Non-verbal communication

o   Attire

o   The gadgets or material one uses

·         Differentiation and USP

o   The role is to increase the total perceived value

·         Communication

o   The approach to solve the problem that arrives during communication

§  Outside-In Approach

§  Inside-Out Approach

o   Communication is to be done by marketer and the challenge is to communicate at 2 different levels

§  With Customers

§  With R&D team

The language of communication is entirely different for both

Value Creation – Manufacturer

Value Delivery – Distribution

Chapter 2 - Summary - belch and belch

THE ROLE OF IMC IN THE MARKETING PROCESS

Marketing strategies can influence the role of promotion and promotional decisions must be coordinated with other areas of the marketing mix. All elements of the marketing mix must be consistent in a strategic plan that results in an integrated marketing communications program. 

Opportunity Analysis:- Analysis of market for alternative market opportunities for existing product lines in current or new markets, new products for current markets, or new products for new markets. A market analysis will reveal areas where there is emerging demand or areas where customer needs are not being satisfied, and accordingly, a company may plan its marketing campaign.

Competitive Analysis: Companies have to factor in the products offered by competitors in the same category or substitutable categories and identify the competitive advantage their product offers the customer before launching their marketing campaign. Ways to achieve a competitive advantage include having quality products that command a premium price, providing superior customer service, having the lowest production costs and lower prices, or dominating channels of distribution. Competitive advantage can also be achieved through advertising that creates and maintains product differentiation and brand equity.

Target Marketing: After analyzing the market for opportunities and a thorough competitor analysis, the firm is now in a position to identify the specific customer group it wishes to cater to. Based on this target market, marketing strategies and objectives are set.

Steps to be undertaken under the target marketing process are:-

1)     Identifying markets with unfulfilled needs-Target market identification isolates consumers with similar lifestyles, needs, and the like, and increases our knowledge of their specific requirements.

2)     Determining market segmentation:- Markets can be segmented on the basis of customer characteristics like demography which include gender, age, race; geography which include factors like region, city size; socio-economic factors which include income, education; and psychographic factors which include personality, values, lifestyle. Markets can also be segmented on the basis of buying situations like outlet type, benefits sought, usage, awareness and behavior.

3)     Select target market- The firm here decides how many segments to cater to and which segment offers maximum potential.

4)     Positioning- Marketers position products with respect to product specific benefits or with respect to the competition. Positioning could be by product attributes, price, quality, use, product class, user, cultural symbols etc.

Developing Marketing Planning Program:-

1)     Product Decisions:- These include decisions with respect to the bundle of values that the product brings to the customer and may include aspects like branding, packaging etc.

2)     Price Decisions:- Factors such as product, quality, competition, and advertising all interact in determining what price a firm can and should charge.

3)     Distribution Channel Decision:- Channel decisions involve selecting, managing, and motivating intermediaries such as wholesalers, distributors, brokers, and retailers that help a firm make a product or service available to customers. These intermediaries, sometimes called resellers, are critical to the success of a company’s marketing program.

4)     Developing Promotional Strategies: This involves deciding if the promotional strategy must be push based, or pull based. The choice between selling and marketing.

After a company applies the model presented above, it uses a mix of marketing tools like advertising and sales promotion to fulfill the marketing strategy.

Introduction Video - Smriti Nandakumar

Introduction Video - Mayur Jain

Session 1 & 2

Thus begins the journey into the world of Integrated Marketing Communication by Prof. Dhume.

The discussion started with the basics of marketing. Marketing is the art and science of providing the right and appropriate stimulus to get the desired response. It is not restricted to business and can be applied to the entire spectrum of life. It is defined as the process of creating, communicating and delivering value to customer. Some major aspects such as relationship marketing , mass customization and customer relationship management.

Using tv commercials and other promotions we saw the importance of IMC for showcasing the value of the product to the customer. The goals of IMC are to create a short term financial return and buld a long term brand value

IMC is important to marketers because, it is only through being aware of the knowledge, skills and attitudes of the consumer base, can the marketer design a suitable marketing strategy for the target market.

IMC leads to better customer acquisition and retention

Introduction Video - Ankita Shah

Introduction Video - Keshav Sridhar

Introduction Video - Aritra Nayak

Chapter 1 - Summary - Belch and Belch

The fragmentation of mass markets, the explosion of new technologies that are giving consumers greater control over the communications process, the rapid growth of the Internet and electronic commerce, the emergence of global markets, and economic uncertainties are all changing the way companies approach marketing as well as advertising and promotion. Developing marketing communications programs that are responsive to these changes is critical to the success of every organization. However, advertising and other forms of promotion will continue to play an important role in the integrated marketing programs of most companies.

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

Effective marketing requires that managers recognize the interdependence of such activities as sales and promotion and how they can be combined to develop a marketing program.

The focus of market-driven companies is on developing and sustaining relationships with their customers. This has led to a new emphasis on relationship marketing, which involves creating, maintaining, and enhancing long-term relationships with individual customers as well as other stakeholders for mutual benefit.

The primary focus is on one element of the marketing mix: the promotional variable. However, the promotional program must be part of a viable marketing strategy and be coordinated with other marketing activities. A firm can spend large sums on advertising or sales promotion, but it stands little chance of success if the product is of poor quality, is priced improperly, or does not have adequate distribution to consumers. Marketers have long recognized the importance of combining the elements of the marketing mix into a cohesive marketing strategy.

The IMC approach to marketing communications planning and strategy is being adopted by both large and small companies and has become popular among firms marketing consumer products and services as well as business-to-business marketers. There are a number of reasons why marketers are adopting the IMC approach. A fundamental reason is that they understand the value of strategically integrating the various communications functions rather than having them operate autonomously. By coordinating their marketing communications efforts, companies can avoid duplication, take advantage of synergy among promotional tools, and develop more efficient and effective marketing communications programs. Advocates of IMC argue that it is one of the easiest ways for a company to maximize the return on its investment in marketing and promotion.

Brand identity is a combination of many factors, including the name, logo, symbols, design, packaging, and performance of a product or service as well as the image or type of associations that comes to mind when consumers think about a brand. It encompasses the entire spectrum of consumers’ awareness, knowledge, and image of the brand as well as the company behind it. It is the sum of all points of encounter or contact that consumers have with the brand, and it extends beyond the experience or outcome of using it.

Promotion has been defined as the coordination of all seller initiated efforts to set up channels of information and persuasion in order to sell goods and services or promote an idea.

The basic tools used to accomplish an organization’s communication objectives are often referred to as the promotional mix. Traditionally the promotional mix has included four elements: advertising, sales

promotion, publicity/public relations, and personal selling.

Advertising is defined as any paid form of non personal communication about an organization,

product, service, or idea by an identified sponsor.

Direct marketing is much more than direct mail and mailorder catalogs. It involves a variety of activities, including database management, direct selling, telemarketing, and direct response ads through direct mail, the Internet, and various broadcast and print media.

Interactive media allow for a back-and-forth flow of information whereby users can participate in and modify the form and content of the information they receive in real time.

Consumer-oriented sales promotion is targeted to the ultimate user of a product or service and includes couponing, sampling, premiums, rebates, contests, sweepstakes. Trade-oriented sales promotion is targeted toward marketing intermediaries such as wholesalers, distributors, and retailers.

Publicity refers to nonpersonal communications regarding an organization, product, service, or idea not directly paid for or run under identified sponsorship. It usually comes in the form of a news story, editorial, or announcement about an organization and/or its products and services.

Public relations is defined as “the management function which evaluates public attitudes, identifies the policies and procedures of an individual or organization with the public interest, and executes a program of action to earn public understanding and acceptance.”

Personal selling is a form of person-to-person communication in which a seller attempts to assist and/or persuade prospective buyers to purchase the company’s product or service or to act on an idea.

Promotional management involves coordinating the promotional-mix elements to develop a controlled, integrated program of effective marketing communications.

Like the overall marketing situation analysis, the promotional program situation analysis includes both an internal and an external analysis.

The internal analysis assesses relevant areas involving the product/service offering and the firm itself. The capabilities of the firm and its ability to develop and implement a successful promotional program, the organization of the promotional department, and the successes and failures of past programs should be reviewed.

The external analysis focuses on factors such as characteristics of the firm’s customers, market segments, positioning strategies, and competitors, An important part of the external analysis is a detailed consideration of customers’ characteristics and buying patterns, their decision processes, and factors influencing their purchase decisions.

This stage of the promotional planning process examines how the company can effectively communicate with consumers in its target markets. The promotional planner must think about the process consumers will go through in responding to marketing communications.

After the communication objectives are determined, attention turns to the promotional budget.

Developing the IMC program is generally the most involved and detailed step of the promotional planning process. At this stage of the planning process, decisions have to be made regarding the role and importance of each element and their coordination with one another.

The final stage of the promotional planning process is monitoring, evaluating, and controlling the promotional program. It is important to determine how well the promotional program is meeting communications objectives and helping the firm accomplish its overall marketing goals and objectives.