Chapter 2

The Role of IMC in the

Marketing Process

Source: Citizen Watch Company of America, Inc

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 Learning Objectives
1. Describe the role of advertising and promotion in an
organization’s integrated marketing program.
2. Define target marketing.
3. Discuss the role of market segmentation in an IMC
program.
4. Describe positioning and repositioning strategies.
5. Identify the marketing-mix decisions that influence
advertising and promotional strategy.

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 Figure 2-1 Marketing and Promotions Process
Model

Jump to Appendix 1 long image

description
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 Marketing Strategy and Analysis

• Strategic marketing plan:

– Guides allocation of organization’s resources
– Guides specific marketing programs and policies
– Evolves from an organization’s overall corporate
strategy
– Allows for an understanding of market opportunities,
competition, and market segments
• Market segments: distinct consumer groups within
a market who have common needs

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 Opportunity Analysis

• Market opportunities: Areas where:

– There are favorable demand trends
– Customers’ needs and opportunities are not being
satisfied
– Firm can compete effectively
• Steps to identify market opportunities
– Examine the marketplace
– Observe demand trends and competition in various
market segments

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 Competitive Analysis
• Analyzing the competition in the marketplace and
searching for a competitive advantage
– Competitive advantage: Attributes that give a firm
an edge over competitors
• Better quality products
• Superior customer service
• Low production costs and lower prices
• Dominating channels of distribution
• Advertising

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 Target Market Selection
• Done after evaluating market opportunities and
doing a competitive analysis
• Has direct implications on a firm’s advertising and
promotional efforts

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 Figure 2-2 The Target Marketing Process

Identifying Determining Positioning

Selecting a
markets with market through
target
unfulfilled segmentation marketing
market
needs strategies

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 Identifying Markets
• Marketer identifies the specific needs of groups of
people (or segments)
• Selects one or more of these segments as a target
• Isolates consumers with similar lifestyles, needs, and the
like
• Increased marketer’s knowledge of consumers’ specific
requirements

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 Market Segmentation
 Dividing a market into distinct groups with common
needs, who respond similarly to a marketing situation
 Customer characteristics segmentation criteria
 Geographic: Dividing the market on the basis of region,
city size, metropolitan area, and/or density
 Demographic: Dividing the market on the basis of age, sex,
family size, marital status, etc.
 Socioeconomic: Dividing the market on the basis of
income, education, or occupation
 Psychographic: Dividing the market on the basis of
personality, lifecycles, and/or lifestyles

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 Buying Situations
 Markets can also be divided by customer buying
situations
 Buying situations segmentation criteria
 Outlet type
 Benefits sought
 Usage
 Awareness and intentions
 Behavior

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 Basis for Market Segmentation
 Behavioristic segmentation
 Dividing consumers into groups according to their
usage, loyalties, or buying responses to a product
 80-20 rule: 20 percent of buyers account for 80
percent of sales volume
 Benefit segmentation
 Grouping of consumers on the basis of attributes
sought in a product

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 Selecting Target Market
 Determine how many segments to enter
 Utilizing market coverage alternatives
 Determine which segments offer the most potential
 Selecting the most attractive segment

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 Market Coverage Alternatives
• Undifferentiated marketing
• Ignoring segment differences and offering just one
product or service to the entire market
• Differentiated marketing
• Involves marketing in a number of segments,
developing separate marketing strategies for each
• Concentrated marketing
• Selecting a segment and attempting to capture a
large share of this market

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 Selecting the Most Attractive Segment
 Sales potential of segment
 Opportunities for growth
 Competition analysis
 Ability to compete
 Ability to market to this group

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 Market Positioning
• Positioning: Fitting a product or service to one or more
segments of the broad market to make it unique within
the marketplace
• Approaches
– Focusing on the consumer—Linking the product with
the benefits the consumer will derive
– Focusing on competition—Positions the product by
comparing the benefit it offers versus the
competition

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 Positioning Strategies (1 of 2)
 Positioning by product attributes and benefits
 Sets the brand apart from competitors on the basis of
specific characteristics or benefits offered
 Salient attributes: Important to consumers and are the
basis for making a purchase decision
 Positioning by price/quality
 Done where cost comes secondary
to quality

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 Positioning Strategies (2 of 2)
 Positioning by use or application
 Used to enter a market on the basis of a particular use
or application
 Positioning by product class
 Positioning by product user
 Positioning by competitor
 Positioning by cultural symbols
 Makes the brand easily identifiable
and differentiated from others

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 Repositioning
• Altering a product’s or brand’s position due to:
– Declining or stagnant sales
– Anticipated opportunities in other market positions
• Difficult to accomplish because of entrenched
perceptions and attitudes toward the product or
brand

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 Product Decisions
 Product symbolism: Refers to:
 What a product or brand means to consumers
 What consumers experience in purchasing and
using a product
 Branding
 Building and maintaining a favorable identity of the
company and its products
 Packaging
 Provides functional benefits such as economy,
protection, and storage

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 Branding
 Builds and maintains brand awareness and interest
 Develops and enhances attitudes toward the company
or product
 Builds relationships between the consumer and the
brand
 Brand identity
 Combination of name, logo, symbols, design, packaging,
image, and associations held by consumers
 Brand equity
 Intangible asset of added value

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 Packaging

 Traditionally, the package provided functional benefits:

economy, protection, and storage
 Role and function have changed due to:
 Self-service emphases of many stores
 More buying decisions at point of
purchase
 First impressions matter
 Often first exposure to product

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 Price Decisions
 Price variable—Refers to what the consumer has to
give in exchange for a purchase
 Factors that determine price
 Costs
 Demand factors
 Competition
 Perceived value
 Product quality
 Advertising

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 Marketing Channels
• Interdependent organizations involved in making a
product or service available for use
• Direct channels: Directly deal with customers
– Driven by direct-response ads, telemarketing, the
Internet
– Used when selling expensive and complex products
• Indirect channels: Network of wholesalers and/or
retailers

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 Promotional Push Strategies
• Programs designed to persuade the trade to stock,
merchandise and promote a manufacturer’s products
• Goal
– Push the product through the channels of distribution
by selling and promoting it
• Trade advertising: Used to motivate wholesalers and
retailers to purchase products for resale

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 Promotional Pull Strategies
• Spending money on advertising and sales promotion
efforts directed toward the ultimate consumer
• Goals
– Create demand among consumers
– Encourage consumers to request the product from the
retailer

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