Integrated Marketing

Communication
 Definition of IMC
A concept of marketing communications planning that
recognizes the added value of a comprehensive plan that
evaluates the strategic roles of a variety of communication
disciplines and combines these disciplines to provide
clarity,
consistency and maximum communications impact.

The coordination and integration of all marketing

communication tools, avenues and sources within a
company into seamless program that maximizes the
impact
on consumers and other end users at a minimum cost
IMC
IMC isis aa strategic
strategic business
business process
process
used
used to
to plan,
plan, develop,
develop, execute
execute and
and
evaluate
evaluate coordinated,
coordinated, measurable,
measurable,
persuasive
persuasive brand
brand communication
communication
programs
programs with with consumers,
consumers, customers,
customers,
prospects
prospects employees
employees and
and other
other
relevant
relevant external
external and
and internal
internal
audiences.
audiences.

The
The goal
goal of
of IMC
IMC isis to
to
generate short-term financial
generate short-term financial
returns
returns and
and build
build long-term
long-term
brand
brand value.
value.
 Features of IMC
• Involves creating awareness
• Various promotional tools
• Sub-variable of marketing mix
• Art and Science
• Multiple devices available
• Internal communication
• Multiple Messages Must Speak with a Single Voice
• Starts with the customer or prospect
• Build Relationships Rather Than Engage in Flings
• Affect the behavior of the target audience or target market
Evolution of IMC
The Traditional Approach
THE IMC APPROACH
 Traditional Marketing Approach
Sales
Special
Point of promotion
events
purchase Interactive
marketing

Media
Packaging
Adver-
tising
Public
relations
Publicity Direct
Direct
marketing response
Contemporary IMC Approach
Sales Direct
Packaging
promotion response

Media
Point of
purchase Adver-
Public
tising relations
Publicity

Interactive
marketing Direct
Special
marketing
events
 Reasons why marketers
adopting IMC approach
• Strategic integration of communications
functions
– Avoids duplication
– Synergy among promotional tools
– More efficient and effective marketing
– Maximizes returns on investment
• Rapidly changing environment
– Consumers
– Technology
– Media
 Reasons for Growing
Importance of IMC
• Shift from media advertising to other forms of
marketing communication
• Movement away from advertising focused-
approaches that emphasize mass media
• Shift in power from manufacturers to retailers
• Rapid growth of database marketing
• Demands for greater ad agency accountability
• Changes in agency compensation
• Rapid growth of the Internet
• Increasing importance of branding
 Reasons for the Growing Importance of IMC

From Toward
Media
Media advertising
advertising Multiple
Multiple forms
forms of
of communication
communication

Mass
Mass media
media Specialized
Specialized media
media

Manufacturer
Manufacturer dominance
dominance Retailer
Retailer dominance
dominance

General
General focus
focus Data-based
Data-based marketing
marketing

Low
Low agency
agency accountability
accountability Greater
Greater agency
agency accountability
accountability

Traditional
Traditional compensation
compensation Performance-based
Performance-based compensation
compensation

Limited
Limited Internet
Internet availability
availability Widespread
Widespread Internet
Internet availability
availability

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 3. IMC and Branding

2005 Brand Value

Brand
Brand Identity
Identity is
is aa (Billions of Dollars)
combination
combination of of factors:
factors:
Name,
Name, logo,
logo, symbols,
symbols, 1. Coca-Cola
design,
design, packaging,
packaging, $67.52
product
product or
or service
service 2. Microsoft
performance,
performance, andand image
image $59.94
or
or associations
associations inin the
the 3. IBM
consumer’s
consumer’s mind.
mind.
$53.38
IMC
IMC plays
plays aa major
major role
role 4. GE $46.99
in
in the
the process
process of
of 5. Intel
developing
developing andand
sustaining $35.59
sustaining brand
brand
identity
identity and
and equity.
equity. 6. Nokia
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
$26.45
 4. The promotional mix: The tools of IMC

4.1.
4.1. Advertising
Advertising

4.2.
4.2. Direct
Direct Marketing
Marketing

4.3.
4.3. Internet
Internet Marketing
Marketing

4.4.
4.4. Sales
Sales Promotion
Promotion

4.5.
4.5. Public
Public Relations
Relations

4.6.
4.6. Personal
Personal Selling
Selling
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
 4.1. Advertising

Paid
Paid

Non-personal
Non-personal

Cost
Cost effective
effective

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 Advertising
• Paid forms of non-personal communication

– About an organization, product, service, or idea

by an identified sponsor
– No feedback from audience
– Important for products and services aimed at
mass consumer markets
– Cost effective
 The Most Common Forms of Advertising
National
National Advertising
Advertising

Retail/Local
Retail/Local Advertising
Advertising

Primary
Primary vs.
vs. Selective
Selective
Demand
Demand Advertising
Advertising
Consumers

Business-to-Business
Business-to-Business Advertising
Advertising

Professional
Professional Advertising
Advertising

Trade
Trade Advertising
Advertising
Organizations
 4.2. Direct Marketing

Direct
Direct
Mail
Mail

Internet Direct
Direct
Internet Response
Sales Response
Sales Advertising
Advertising
Direct
Direct
Marketing
Marketing
Shopping
Shopping Telemarketing
Telemarketing
Channels
Channels

Catalogs
Catalogs

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 4.3. Internet marketing

The
The
Internet
Internet

Educates
Educates or
or AA persuasive
persuasive AA sales
sales tool
tool or
or
informs
informs advertising
advertising an
an actual
actual sales
sales
customers
customers medium
medium vehicle
vehicle

Obtains
Obtains Communicates Provides
Provides Builds
Builds and
and
customer Communicates customer maintains
customer and
and interacts
interacts customer maintains
database
database service
service and
and customer
customer
with
with buyers
buyers
information
information support
support relationships
relationships
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
 Interactive/Internet Marketing
• Back-and-forth communication
– Users participate in and modify the form and
content of information
– Happens in real time
• Interactive media
– Internet
– CD-ROMs
– Kiosks
– Interactive television
– Digital cell phones
 4.4. Sales Promotion Tools

Coupons

Samples Trade
Allowances
Premiums
POP Displays
Contests/Sweepstakes
Training
Refunds/Rebates Programs
Bonus Packs Trade
Shows
Loyalty Programs
Coop
Events Advertising

• Consumer- • Trade-oriented
• [For resellers]
oriented
• [For end-users]
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
 Sales Promotion

• Most of the promotional budget now goes to

sales promotion
– Declining brand loyalty
– Increased consumer sensitivity to “deals”
– Larger and more powerful retailers are
demanding more trade promotion support
 4.5. Public Relations Tools

Publicity Special
Vehicles Publications

Community Corporate Cause-related

Activities Advertising Marketing

Public Affairs Special Event

Activities Sponsorship

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 Advertising Versus Publicity

Factor
Factor Advertising
Advertising Publicity
Publicity
Control
Control Great
Great Little
Little
Credibility
Credibility Lower
Lower Higher
Higher
Reach
Reach Measurable
Measurable Undetermined
Undetermined
Frequency
Frequency Schedulable
Schedulable Uncontrollable
Uncontrollable
Cost
Cost High/Specific
High/Specific Low/Unspecified
Low/Unspecified

Flexibility
Flexibility High
High Low
Low
Timing
Timing Specifiable
Specifiable Tentative
Tentative
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
 Publicity Vehicles
Feature
Feature
Articles
Articles

News
News Interviews
Interviews
Releases
Releases Publicity
Publicity
Vehicles
Vehicles

Press
Press Special
Special
Conferences
Conferences Events
Events
 Public Relations

Systematically planning and

distributing information in an attempt to
control and manage image and the nature of
the publicity received.
 Public Relations Tools
Cause-related
Marketing

Publicity
Publicity Special
Special
Vehicles
Vehicles Publications
Publications

Community
Community Corporate
Corporate
Activities
Activities Advertising
Advertising

PublicAffairs
Public Affairs Special
SpecialEvent
Event
Activities
Activities Sponsorship
Sponsorship
 Personal selling

Face-to-face
Face-to-face communication
communication

Mostly
Mostly used
used for
for business
business customers
customers

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 Personal Selling

• Person-to-person communication
– A seller attempts to assist and/or persuade
prospective buyers to make a purchase or act
on an idea
 IMC Audience Contact Tools
Public
Public
Broadcast
Broadcast Internet/
Internet/
Print
Print media
media Relations/
Relations/
media
media interactive
interactive
publicity
publicity

Out-of-home
Out-of-home Direct
Direct
media
media marketing
marketing

Target
Target Audience
Audience
Personal
Personal Sales
Sales
selling
selling Promotion
Promotion

Point-of-
Point-of- Events
Events and
and Product
Product
Word-of-mouth
Word-of-mouth
purchase
purchase sponsorship
sponsorship placements
placements
• Service centre
• Trade shows b2b and exhibitions b2b &
b2c
• Art handicraft exhibitions
 Review of marketing plan

Promotional program situation analysis

Analysis of the communications process

Budget determination

Develop integrated marketing communications programs

Sales PR/ Personal Direct Internet/
Advertising
promotion publicity selling marketing interactive

Advertising Sales
promotion
PR/
publicity
Personal
selling
Direct
marketing
Internet/
interactive
objectives objectives objectives objectives objectives objectives

Advertising Sales
promotion
PR/
publicity
Personal
selling
Direct
marketing
Internet/
interactive
strategy strategy strategy strategy strategy strategy

Message and Media strategy

Integrate and implement marketing communications strategies

Monitor, evaluate and control IMC Program

The Role of IMC in the
Marketing Process

5. IMC Planning Model

 Last Class
• Introduction to IMC
• Links to marketing and
promotional elements
 Today’s Objectives

• Role of IMC in Marketing

What kind of a strategy is Samsung using to
compete against Sony?
– a repositioning strategy
– niche market strategy
– a concentrated market strategy
– an undifferentiated market strategy
– lifestyle segmentation
 What is?
• A market opportunity
• A competitive advantage
• A market threat

• Marketing and Promotions Process Model

 Pen
• Rs. 3- Rs.
• 3 – use and throw
• 5 – lexi
• 10 – cello, rorito, linc, hauser, montex, pentel,
flair,
• 20-
• 30
• 50
• 100 - parker
Marketing to a Lifestyle

+
 The Role of IMC in Marketing
• Nike’s and Reebook’s success : they recognize their
business is no longer about just selling shoes.

• It’s about selling sports, entertainment, style, and fashion.

Tell me about other brands… What business are they in?

Kale
Duru
Nivea
The Target Marketing Process

Identify markets with unfulfilled needs

Determining market segmentation

Selecting market to target

Positioning through marketing strategies

Is a Roof just a Roof!
Different products for different needs
 The Marketing Segmentation Process
Find
Find Ways
Ways To
To Group
Group Consumers
Consumers
According
According
AccordingTo
To
ToTheir
Their
TheirNeeds.
Needs
Needs.
Needs

Find
Find Ways
Ways To
To Group
Group Marketing
Marketing Actions
Actions -- Usually
Usually the
the
Products
Products Offered
Offered -- Available
Available To
To the
the Organization.
Organization.

Develop
Develop aa Market/Product
Market/Product Grid
Grid To
To Relate
Relate the
the Market
Market
Segments
Segments ToTo the
the Firm’s
Firm’s Products
Products and
and Actions.
Actions.

Select
Select the
the Product
Product Segments
Segments Toward
Toward Which
Which the
the Firm
Firm
Directs
Directs Its
Its Marketing
Marketing Actions.
Actions.

Take
Take Marketing
Marketing Actions
Actions To
To Reach
Reach Target
Target Segments.
Segments.
 Bases for Segmentation
Psychographic
Psychographic Demographic
Demographic

Customer
Customer
Characteristics
Characteristics

Socioeconomic
Socioeconomic Geographic
Geographic

Behavior
Behavior Outlets
Outlets

Buying
Buying
Situation
Situation

Usage
Usage Benefits
Benefits
Hispanics Prefer Spanish
Language Ads
 Six Positioning Questions
1.What position do we have now?
2.What position do we want to own?
3.From whom must we win this position?
4.Do we have the money to do the job?
5.Do we have the tenacity to stay with it?
6.Does our creative strategy match it?
What is this?
 The first production Model T Ford was built on
September 27, 1908. Ford continued building the "T"
for the next 19 years, until it was replaced by the
Model "A" in 1928.
Ford Motor Company
 Positioning Strategies
How should By
By Attributes
Attributes and
and Benefits?
Benefits?
we position?
By
By Price
Price or
or Quality?
Quality?

By
By Use
Use or
or Application?
Application?

By
By Product
Product Class?
Class?

By
By Product
Product User?
User?

By
By Competitor?
Competitor?

By
By Cultural
Cultural Symbols?
Symbols?
Positioning Strategy Development Process
1. Identify the competitors

2. Assess perceptions of them

3. Determine their positions

4. Analyze consumer preferences

5. Make the positioning decision

6. Monitor the position

Developing a Positioning
Strategy

• Attribute/benefit - Energizer
• Price/quality - Ikea
• Use/application - Baking Soda
• Product class - Butter or margarine
• Product users - Nike
• Competitor - Sana vs. Aymar, 7UP
• Cultural symbol - CocaCola in
• Repositioning Ramadan
- Volvo
 Product Decisions
A product is a bundle of benefits or
values.

Product quality, branding,

packaging, and company name
contribute to product image.
 Branding and Packaging Work Closely Togethe
Product
Product Decisions
Decisions

BRANDING
BRANDING PACKAGING
PACKAGING

Brand
Brand Advertising
Advertising Packaging
Packaging It’s
It’s often
often
name
name creates
creates and
and has
has become
become customers’
customers’
commun-
commun- maintains
maintains increasingly
increasingly first
first
icates
icates brand
brand important
important exposure
exposure to to
attributes
attributes equity
equity product
product
and
and
meaning
meaning
A Package Is More than a Container

+
Packaging Enhances Brand Identity
For other products?
Which one is more expensive?
 Pricing Decisions
• consistent with perceptions of the product.
• Higher prices ------------ higher product
quality.
• Lower prices reflect bargain or “value”
perceptions

• Price, advertising and distribution be

unified in identifying the product
position
 Distribution Channel Decisions
Channel decisions involve:
– Selecting
– Managing
– Motivating

-Independent intermediaries:
– Wholesalers
– Distributors
– Brokers
– Retailers
 Promotion to Push Goods
Through Channels vs Promotion
to Pull Goods Through Channels
PUSH PULL
Push Policy Pull Policy
Producer
Producer Producer
Producer

Wholesaler
Wholesaler Wholesaler
Wholesaler

Retailer
Retailer Retailer
Retailer

Consumer
Consumer Consumer
Consumer

Information Flow
 Promotion to Push Goods Through Channels
Point
Point of
of Sale
Sale Displays,
Displays, Racks,
Racks, Stands
Stands
PUSH
Trade
Trade Deals,
Deals, Special
Special Displays
Displays

Dealer
Dealer Premiums,
Premiums, Prizes,
Prizes, Gifts
Gifts

Cooperative
Cooperative Advertising
Advertising Deals
Deals

Advertising
Advertising Materials,
Materials, Mats,
Mats, Inserts
Inserts

Push
Push Money
Money or
or “Spiffs"
“Spiffs"

Collaterals,
Collaterals, Catalogs,
Catalogs, Manuals
Manuals

Company
Company Conventions,
Conventions, Meetings
Meetings
 Promotion to Pull Goods Through Channe
Sampling,
Sampling, free
free trial
trial
PULL
Cents-off
Cents-off promotions
promotions

Cents-off
Cents-off coupons
coupons

Combination
Combination offers
offers

Premiums
Premiums or
or gifts
gifts

Contests,
Contests, sweepstakes
sweepstakes

Point-of-purchase
Point-of-purchase

Trading
Trading stamps
stamps
 Push strategies
• involve promoting the product only to the next link
down the distribution channel;

• advantage : cheap and relatively straightforward,

straightforward and

• Not consumer-orientated.

• Techniques used:
– Point of sale displays, racks, stands
– Trade deals, special displays
– Dealer premiums, prizes, gifts
– Cooperative advertising deals etc
 Pull Strategies
• Focuses on consumer, aimed at the final consumers

• Most launch strategies would involve elements of both

push and pull.

• Techniques used:
• Sampling, free trial
• Cents-off promotions
• Cents-off coupons etc.
Integrated Marketing Communications

Module 2: Understanding communication process

Concept 1: Source, Message and channel factors

79
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

What is communication?

- passing of information

- exchange of ideas

- process of establishing a commonness of thought

The function of all elements of the IMC program is to communicate.

Some of the ways are through advertisements, brand names, logos,

graphics, websites, press releases, package designs, promotions, visual
images etc.
80
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

A model of the communication process

Sender’s Receiver’s
Field of Field of
experience experience

Source / Channel
Encoding Decoding
Sender Message Receiver
Feedback

Response
81
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Source Encoding

The sender or source of a communication is the person/organization that

has information to share with another person/group of people.

The process of putting thoughts, ideas or information into a symbolic

form by the use of words, symbols, pictures etc. is called encoding.

The goal is to encode in such a way that will be understood by the

audience.

82
Sharapova Yao Ming

83
 Source Credibility

Ethical
Ethical

Knowledgeable
Knowledgeable Trustworthy
Trustworthy

Skillful
Skillful Source
Source Experienced
Experienced

Believable
Believable Unbiased
Unbiased

Honest
Honest

84
 Source Attractiveness

Similarity
Similarity Familiarity
Familiarity Likeability
Likeability

Resemblance
Resemblance Knowledge
Knowledge of of the
the Affection
Affection for
for the
the
between
between the
the source
source through
through source
source resulting
resulting
source
source and
and repeated
repeated or
or from
from physical
physical
recipient
recipient of
of the
the prolonged
prolonged appearance,
appearance,
message
message exposure
exposure behavior,
behavior, or
or
personal
personal traits
traits

85
 Source Power

Perceived
Perceived Perceived
Perceived Perceived
Perceived
control
control concern
concern scrutiny
scrutiny

Compliance
Compliance

86
Sources

87
Advertising Risks of Using Celebrities

The
The celebrity
celebrity may
may overshadow
overshadow
the
the product
product being
being endorsed
endorsed

The
The celebrity
celebrity may
may bebe overexposed,
overexposed,
reducing
reducing his
his or
or her
her credibility
credibility

The
The target
target audience
audience maymay not
not be
be
receptive
receptive to
to celebrity
celebrity endorsers
endorsers

The
The celebrity’s
celebrity’s behavior
behavior may
may pose
pose
aa risk
risk to
to the
the company
company
88
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Message

Message can be verbal / nonverbal, oral / written or symbollic

Semiotics – nature of meaning of words, gestures, signs, symbols etc.

Marketers must consider the meanings consumers attach to the various

signs and symbols.

The message should be appropriate for the channel of communication

being used.

89
 Forms of Encoding

Verbal
Verbal Graphic
Graphic Musical
Musical Animation
Animation

•• Spoken
Spoken •• Pictures
Pictures •• Arrange-
Arrange- •• Action/
Action/
Word
Word ment
ment Motion
Motion
•• Drawings
Drawings
•• Written
Written •• Instrum-
Instrum- •• Pace/
Pace/
Word
Word •• Charts
Charts entation
entation Speed
Speed
•• Song
Song •• Voices
Voices •• Shape/
Shape/
Lyrics
Lyrics Form
Form
90
 Message Sidedness

One Sideness Two Sideness 91

Verbal vs. Visual Messages

92
 Message Appeal Choices

Appeal
Appeal toto the
the logical,
logical, Appeal
Appeal to
to the
the feelings
feelings and
and
rational
rational minds
minds of of emotions
emotions ofof consumers
consumers
consumers
consumers

Appeal
Appeal to
to both
both

93
 Message Appeal Options

Comparative
Comparative Fear
Fear Humor
Humor
Ads
Ads Appeals
Appeals Appeals
Appeals

•• Especially
Especially useful
useful •• May
May stress
stress •• Can
Can attract
attract and
and
for
for new
new brands
brands physical
physical danger
danger oror hold
hold attention
attention
threats
threats to
to health
health
•• Often
Often used
used for
for •• Often
Often the
the best
best
brands
brands with
with small
small •• May
May identify
identify remembered
remembered
market
market share
share social
social threats
threats •• Put
Put consumers
consumers in
in
•• Used
Used often
often in
in •• Can
Can backfire
backfire ifif aa positive
positive mood
mood
political
political level
level of
of threat
threat
advertising
advertising isis too
too high
high

94
 Humor Appeals
Pros Cons
Does
Does not
not aid
aid persuasion
persuasion in
in
Aids
Aids attention
attention and
and awareness
awareness general
general

May
May aid
aid retention
retention of
of the
the May
May harm
harm recall
recall and
and
message
message comprehension
comprehension

Creates
Creates aa positive
positive mood
mood and
and May
May harm
harm complex
complex copy
copy
enhances
enhances persuasion
persuasion registration
registration

May
May aid
aid name
name andand simple
simple Does
Does not
not aid
aid source
source credibility
credibility
copy
copy registration
registration

May
May serve
serve as
as aa distracter,
distracter, Is
Is not
not effective
effective in
in bringing
bringing
reducing
reducing counterarguing
counterarguing about
about sales
sales

May
May wear
wear out
out faster
faster than
than non-
non-
humorous
humorous ads
ads
95
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Channel

Channel is the method by which the communication travels from the

source or sender to the receiver.

It can be broadly classified as:

Personal Channels – face to face contact with people

eg. Salespersons, word-of-mouth

Nonpersonal Channels – no interpersonal contact

eg. Mass media (print and broadcast)

96
 Communication Channel

Personal
Personal Nonpersonal
Nonpersonal Channels
Channels
Channels
Channels

Word of Mouth Personal Print Broadcast

Selling Media Media

97
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Receiver/Decoding

It is the process of transforming the sender’s message back into thought

and this process is heavily influenced by the receiver’s frame of
reference or ‘field of experience’

For effective decoding, there should be some ‘common ground’

(overlapping region) between the sender and the receiver

Dilemma: Ad agency people – urban, well educated,

Consumers – rural, blue collared jobs

98
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Noise

The message is subject to extraneous factor that can distort or interfere

with its reception.
It means unplanned interference or distortion.

Eg. Signal distortion in TV or radio

Lack of common ground in the fields of experience of sender and

receiver also results in noise.

Eg. A symbol used by the sender which is unfamiliar to the receiver.

99
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Response/Feedback

A receiver’s set of reactions after seeing, hearing or reading the

message is known as a response.

Response can range from non-observable actions (storing in memory) to

immediate action (calling a toll-free number)

Feedback is important to marketers. They take it through

sales
customer inquiries
store visits
reply cards
research based feedback
100
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Effective communication occurs when:

The marketer selects an appropriate source, develops an effective

message that is encoded properly and then selects the channels / media
that will best reach the target audience so that the message can be
effectively decoded and delivered.

The target audience should be clearly defined…

101
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Levels of target audience

Mass markets and audiences

Market Segments

Niche Markets

Individual &
Group
Audiences

102
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Communication Response Models

The most important aspect of developing effective communication

program is the understanding of response process of consumers.

A consumer may pass through several stages from not being aware
about the product / brand to the actual purchase. The response models
can be classified as:

103
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Communication Response Models

Traditional Response Alternative Response

Hierarchy Models Hierarchies

1. AIDA model 1. Standard learning hierarchy

2. Hierarchy of effects model 2. Dissonance/Attribution hierarchy
3. Innovation adoption model 3. Low involvement hierarchy
4. Information processing model

104
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

AIDA model – stages a salesperson must take a customer through in the

personal selling process

Stages AIDA model

Cognitive Attention
learn
Stage
Interest
Affective
feel
Stage
Desire
Behavioral
do
Stage Action

105
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Hierarchy of effects model – process by which advertising affects the

consumer response. Series of steps from initial awareness to purchase.

Hierarchy of
Stages
effects model
Awareness
Cognitive
learn
Stage
Knowledge
Liking
feel Affective
Preference
Stage
Conviction
do Behavioral
Stage Purchase
106
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Innovation adoption model stages a consumer passes through in adopting a

new product or service. After trial, the consumer either adopts or rejects the
product
Innovation
Stages
adaption model
Cognitive Awareness
learn
Stage
Interest
Affective
feel
Stage
Evaluation
Trial
Behavioral
do
Stage
Adoption
107
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Information processing model – It says that the receiver of persuasive

communication is a processor of information

Information
Stages
processing model
Presentation
Cognitive
learn Attention
Stage
Comprehension
Yielding
feel Affective
Stage
Retention

do Behavioral
Stage Behavior
108
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Standard learning hierarchy

Consumer involvement in purchase - HIGH

Perceived product differentiation - HIGH

Learn Feel Do
(cognitive) (affective) (conative)

Eg. Buying high-involvement products like industrial products,

computers, cars etc.

109
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Dissonance/Attribution theory

Consumer involvement in purchase - HIGH

Perceived product differentiation - LOW

Do Feel Learn
(conative) (affective) (cognitive)

Consumer may buy the product on recommendation from a nonmedia

source and then attempt to support the decision by developing a positive
attitude or even a negative attitude towards other brands.
110
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Low-involvement Hierarchy

Consumer involvement in purchase - LOW

Perceived product differentiation - LOW

Learn Do Feel
(cognitive) (conative) (affective)

Consumer engages in passive learning and random information catching

rather than active information seeking.

111
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Consumer Involvement

Involvement is a variable that can help explain how consumers process

advertising information and how this information might affect the
message recipients.

Advertising managers must be able to determine targeted consumers’

involvement levels with their products.

112
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Foote, Cone & Belding (FCB) grid

Antecedents of Possible results
Involvement Of involvement

Person Factors Counter arguments

-Needs Involvement To ads
-Importance
Effectiveness of ad
-Interest To induce purchase
-Values With advertisements
Relative importance
Object or stimulus Of product class
Factors Perceived differences
With products
-Differentiation of In product attributes
Alternatives
-Source of Preference of brand
Communication With purchase decisions Influence of price on
-Content of Brand choice
communication
Time spent choosing
Alternatives
Situational Factors
-Purchase / use Amount of information
search
-Occasion
113
 Integrated Marketing Communications
Module 2: Understanding communication process
Concept 1: Source, message and channel factors

Elaboration Likelihood Model

:- Central route to Persuasion
receiver is very active, involved participant in the
communication and attend, comprehend and evaluate with
interest.

:- Peripheral Route to Persuasion

Rather than evaluating the information presented in the
message, the receiver relies on peripheral cues such
celebrity, music, theme song, jingles, visual imagery
These cues can lead to the acceptance or rejection of the
message.

114
 Establishing Objectives
and Budgeting for the Promotional
Program
 Starbucks
• Core competencies
– Third Place
– Neighborhood coffee shop
• Failed Ventures
– Joe magazine
– Café Starbucks
– Circadia
• Losing focus
– Hear Music
– Akeelah and the Bee
• Closing down stores
 Value of Objectives

Specific
Objectives Communications
Communications

Planning
Planning &
&
Decision
Decision Making
Making

Measurement
Measurement
&
& Evaluation
Evaluation
 Characteristics of Objectives

Specific

Attainable Measurable

Realistic Quantifiable
Measurable Results
 Marketing vs. Communications Objectives

Communications
Communications
Marketing
Marketing Objectives
Objectives Objectives
Objectives

•• Generally
Generallystated
statedin
inthe
the firm’s
firm’s •• Derived
Derived from
from the
the overall
overall
marketing
marketingplan plan marketing
marketingplanplan
•• Achieved
Achievedthrough
throughthe
the overall
overall •• More
More narrow
narrowthan
than marketing
marketing
marketing
marketingplan plan objectives
objectives
Vs.
•• Quantifiable,
Quantifiable, such
such as
assales,
sales, •• Based
Based ononparticular
particular
market
market share,
share, ROI
ROI communications
communications taskstasks
•• To
To be
be accomplished
accomplished in in aa given
given •• Designed
Designedto todeliver
deliver appropriate
appropriate
period
periodofof time
time messages
messages
•• Must
Must be
be realistic
realistic and
and attainable
attainable to
to •• Focused
Focused ononaa specific
specific target
target
be effective
be effective audience
audience
 Sales Objectives

Increased Market Share

Increased Sales Brand Extensions

 Factors Influencing Sales

Technology
Competition

The
Advertising economy
& promotion

Product
quality
Distribution
Price
Where Sales Objectives are Appropriate
Where Sales Objectives are Appropriate
 Test Your Knowledge

Which of the following statements about

communications objectives is true?
A) Sales goals are easily translated into

communications objectives.
B) It can be difficult to determine the relationship
between communications objectives and
sales performance.
C) Communications objectives cannot serve
as operational guidelines for planning,
executing, and evaluating promotional
programs.
D) Marketing managers often do not recognize
the value of setting communications objectives.
 IMC perspective Geico
• Increases in Advertising
– Sell via internet & direct sales
– In 2005, increased advertising expenditures 75% to
$403 million
– In 2006, spent twice as much as nearest competitor
– Also spent in more places
• Increases in Sales
– 5.8% new customer acquisition (2.1% is industry
average)
– 91% ad message recognition
– Only brand to have double digit market share growth
13.1%
 From Awareness to Action

Point of purchase
Conative Purchase Retail store ads, deals
Realm of motives. “Last-chance” offers
Ads stimulate or direct Price appeals
desires Conviction Testimonials

Competitive ads
Affective Preference Argumentative copy
Realm of emotions.
Ads change attitudes Liking “Image” copy
and feelings Status, glamour appeals

Announcements
Knowledge Descriptive copy
Cognitive Classified ads, slogans,
Realm of thoughts. Jingles, skywriting
Ads provide information
and facts Awareness Teaser campaigns
Creating an Image
 Communications Effects Pyramid

5% Use

e
tiv
na
Co
20% Trial
ive

25% Preference
ct
fe
Af

40% Liking
ve

70% Knowledge/Comprehension
iti
gn
Co

90% Awareness
 The DAGMAR Approach

Define Awareness
Awareness

Advertising
Goals for
Comprehension
Comprehension

Measuring Conviction
Conviction

Advertising
Results Action
Action
 Characteristics of Objectives

Concrete, Well-defined
measurable tasks audience

Benchmark Specified
measures time period
 Pros and Cons of DAGMAR

Pros Cons

Focus
Focus onon communications
communications Relies
Relies heavily
heavily on
on the
the response
response
objectives
objectives hierarchy
hierarchy

Measurement
Measurement of
of stages
stages May
May not
not increase
increase sales
sales

Better
Better understanding
understanding of
of goals
goals Practicality
Practicality and
and cost
cost
and
and objectives
objectives

Less
Less subjective
subjective Inhibition
Inhibition of
of creativity
creativity
 Advertising-Based View of Communications

Ads

Acting on Consumers
Utilizing a Variety of Media
San Diego Zoo Protect Endangered Species

*Click outside of the video screen to advance to the next slide

Establishing & Allocating the Promotional Budget

Sponsorship Direct
Underwriting Marketing

Public Group Sales

Relations

Sales Internet
Promotions
 Test Your Knowledge

In marginal analysis, all of the following should be

considered except:
A) Sales
B) Fixed costs of advertising
C) Advertising expenditures and other
variable costs
D) Gross margin
E) Net worth
Establishing a Budget
 Budget Adjustments

Increase
Increase Spending
Spending IfIf the
the cost
cost is
is less
less than
than the
the
marginal
marginal return
return

Hold
Hold IfIf the
the cost
cost is
is equal
equal to
to the
the
Spending
Spending incremental
incremental returnreturn

Decrease IfIf the

the cost
cost is
is more
more than
than the
the
Decrease incremental
Spending
Spending incremental returnreturn
 Assumptions for Marginal Analysis

Sales are a direct Sales are

measure of determined solely
advertising and by advertising
and promotion
promotions efforts
 Factors Influencing Advertising Budgets

Product Hidden product

life cycle qualities

Product Product
durability price

Purchase
Differentiation frequency
Top-Down vs. Bottom-Up Budgeting
 Top-Down Budgeting Methods

Affordable
Affordable
Method
Method

Return
Return on
on Arbitrary
Arbitrary
Top
Top
Investment
Investment Allocation
Allocation
Management
Management

Competitive
Competitive Percentage
Percentage
Parity
Parity of
of Sales
Sales
 Test Your Knowledge

Well known brand name products do not receive

incremental advantages from increased dollar
expenditures on advertising. Once the ad hits the
market, subsequent budget increases result in little or
no incremental gains. This is best explained by:
A) Arbitrary allocation
B) The objective and task method
C) Competitive parity
D) An S-shaped response
E) Rapidly diminishing returns
 Object and Task Method

Isolate
Isolate objectives
objectives

Determine
Determine tasks
tasks required
required

Estimate
Estimate required
required expenditures
expenditures

Monitor
Monitor

Reevaluate
Reevaluate objectives
objectives
Payout Planning
Quantitative Models
Allocating to IMC Elements
 Share of Voice Effect

Share of Voice
High

Decrease–find
Decrease–find aa defensible
defensible
Competitor’s

Increase
Increase to
to defend
defend
niche
niche

Attack
Attack with
with large
large SOV
SOV Maintain
Maintain modest
modest spending
spending
Low

premium
premium premium
premium

Low High
Your Share of Market
 Economies of Scale

Proposition I
Larger firms can support their brands with lower relative
advertising costs than smaller firms.

Proposition II
The leading brand in a product group enjoys lower
advertising costs per sales dollar than do other brands.

Proposition III
There is a static relationship between advertising costs
per dollar of sales and the size of the advertiser.

There is no evidence to support any of these!

 Organizational Characteristics

• Factors that influence advertising and

promotion budgets
– The organization’s structure
– Power and politics
– The use of expert opinions
– Characteristics of the decision maker
– Approval and negotiation channels
– Pressure on senior managers to arrive
at the optimal budget