In terms of globally integrated marketing communications adaptation is

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Chapter 1 Integrated Marketing Communications CHAPTER OBJECTIVES Students should be able to answer the following questions:

1.1 How does communication take place? 1.2 What is an integrated marketing communications program? 1.3 What trends are affecting marketing communications? 1.4 What are the components of an integrated marketing communications program? 1.5 What is meant by GIMC? OVERVIEW

Advertising and promotion face a rapidly shifting landscape. A decline in traditional media viewing combined with the rise in internet usage and the use of social media have created a new order. Effective advertising and marketing campaigns often now involve more than one well-made commercial because such a wide variety of media is available. Current advertising and marketing methods range from simple stand-alone billboard advertisements to complex, multilingual global websites. Lean Cuisine How do you convince consumers that the same product should be viewed in a different way? The marketing team realized that the term “diet” was fading in usage and popularity. Nestle, ConAgra, Kellogg, and General Mills jointly launched a three-year, $30 million image campaign entitled “Frozen. How Fresh Stays Fresh.” The idea was to convince consumers, many of whom had begun to strongly prefer fresh food over frozen, that the latter was equally tasty and healthy.

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Every element of this new approach sought to generate a change in consumer perceptions of a longstanding product, noting that in FDA standards the word “lean” means food items cannot contain more than 10 grams of fat. Questions for Students: 1. What do you think of when you hear the term “diet” food? Will these

companies be able to change your perception? 2. Did you see this campaign? What was your reaction? 3. Do you think using social media will work in this instance? Why or why

not? This chapter explains the nature of an integrated advertising and marketing communications program. First, communication processes are described. Understanding how communication works builds the foundation for an integrated marketing program. Also, the trends affecting marketing communications are noted. Next, an integrated marketing communications program is described. Finally, the integrated marketing communications process is applied to global or international operations, creating a globally integrated marketing communications (GIMC) program. Objective 1.1: How does communication take place? The Nature of Communication Communication is defined as transmitting, receiving, and processing information. The parts of a communications model are displayed in Figure 1.1. Components that should be discussed include:

• Sender—the person(s) attempting to deliver a message or idea

• Encoding processes—the verbal (words, sounds) and nonverbal (gestures, facial expression, posture) cues that the sender utilizes in dispatching the message

• Transmission device—all of the items that carry the message from the sender to the receiver

• Decoding—takes place when the receiver employs any set of his or her senses (hearing, seeing, feeling, etc.) in the attempt to capture the message

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• Receiver—the intended audience for a message

• Feedback—information the sender obtains from the receiver regarding the receiver’s perception or interpretation of a message

• Noise—anything that distorts or disrupts a message Figure 1.1 A Model of Communication A message, from a company such as Chick-fil-A, is being prepared by the Sender. Encoding processes include all of the verbal and nonverbal cues that are part of the marketing message. Messages travel to audiences via various transmission devices, such as a television, billboard, Sunday paper with a coupon, or a letter to the purchasing agent of a large retail store. Decoding occurs when the receiver’s (consumer’s) senses are touched in some way by the message. Feedback occurs through inquiries, trips to the store, and purchases. 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 (see Figure 1.2) Figure 1.2 Displays examples of communication noise that affect television. Question for Students: Can you think of additional examples of noise in advertising or marketing communications? Objective 1.2: What is an integrated marketing communications program? Integrated Marketing Communications 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.

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The marketing mix consists of

• Products • Pricing systems • Distribution systems • Promotional programs

The promotions mix consists of • Advertising • Sales promotions (including consumer and trade promotions) • Personal selling activities

The IMC promotions mix also includes

• Database marketing • Direct response marketing • Online marketing • Social media • Guerilla marketing • Alternative marketing • Public relations programs

Figure 1.3 Displays all of these elements. Figure 1.4 Lists the steps required to complete a marketing plan.

1. Situational analysis (examining problems and opportunities in the organization’s external environment and strengths and weaknesses in the firm itself)

2. Defining marketing objectives (sales, market share, competitive position, and customer actions desired)

3. Budget preparation

4. Finalizing marketing strategies and tactics

5. Evaluation of performance Objective 1.3: What trends are affecting marketing communications? Emerging Trends in Marketing Communications Figure 1.5 Illustrates current trends affecting marketing communications

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Emphasis on Accountability and Measurable Results

Advertising agencies are expected to produce tangible outcomes. Promotional dollars must be spent carefully. Many companies have switched from 30-second television spots to digital, social, and alternative communication messages. These messages are combined with special events where names, profiles, and addresses of prospective customers can be collected and tracked. Integration of Digital Media Smartphones, tablets, and text-messaging systems have created a new landscape and, in some cases, nearly a new language. These digital marketing techniques seek to create experiences with a brand rather than mere purchases with little or no emotional attachment. Companies using these techniques include the following:

• Procter & Gamble (P&G) • AT&T • Johnson & Johnson • Kraft Foods • Toyota

When P&G introduced its Star Wars limited edition CoverGirl products, the company utilized Snapchat and geo-targeted advertising to drive in-store sales.

Integration of Media Platforms Today’s consumers spend an average of 5 hours and 16 minutes in front of screens other than television. When combined with television (which consumers watch for an additional 4 hours and 31 minutes per day), the total becomes more than 10 hours per day examining some kind of screen. Figure 1.6 Four ways consumers interact across multiple media formats:

• Content grazing involves looking at two or more screens simultaneously to access unrelated content, such as watching TV and texting a friend at the same time.

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• Investigative spider-webbing occurs when consumers pursue or investigate specific content across multiple platforms, such as watching a football game and accessing stats for various players on a PC or mobile phone.

• Quantam journey focuses on completing a specific task, such as when a consumer

looks for a Chinese restaurant using a PC to locate one in the area, then obtains consumer reviews of the units close by on a smartphone, and finally employs a map app to locate the restaurant or to place an order.

• Social spider-webbing occurs when consumers share content or information

across multiple devices, such as by posting pictures on Facebook from a laptop then texting friends to go check out the posts.

Changes in Channel Power Retailers seek to maintain channel power by controlling shelf space and purchase data that allows them to determine which products and brands are placed on store shelves. Fifty-seven percent of consumers say they will not buy a particular brand after just one negative experience, and 40 percent are likely to tell others not to purchase that brand. Consequently, the internet and information technology have shifted more power to the consumer.

Understanding shifts in channel power has become essential. Marketers cannot rely solely on mass media advertising. They must incorporate social media and engage consumers with their brands.

The same principles apply to business-to-business purchasing activities. 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. Increases 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.

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Marketers must generate messages in a voice that expresses a clear difference. They must 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. The Role of Integrated Marketing Communications

Effective integrated marketing communications ensures a brand’s target audiences hear the same message across all traditional and new media channels. Each piece of a campaign should be driven by a single strategy that guides the creative development process. An integrated approach times the release of individual campaign components in a manner that maximizes a customer’s journey from awareness to purchase. Figure 1.7 Five reasons why integrated marketing communication works Objective 1.4: What are the components of an integrated marketing communications program? IMC Components and the Design of This Text Figure 1.8 An overview of the integrated marketing communications model The foundation of the IMC plan includes

• Corporate and brand management (Chapter 2) • Analysis of buyer behaviors (Chapter 3) • The IMC planning process (Chapter 4)

Advertising includes

• Advertising campaign management, including the major functions of all those involved in an advertising campaign, advertising goals, and advertising theories (Chapter 5)

• Advertising design focused on message strategies, appeals, executions, and

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spokespersons (Chapter 6) • Traditional media channels, including television, radio, magazines, newspapers,

outdoor signs, and direct mail (Chapter 7) Digital and alternative include

• Digital marketing integratation of e-commerce programs with recent trends in interactive marketing, such as online advertising, search engine optimization, and mobile advertising (Chapter 8)

• Social media and new trends in the area (Chapter 9) • Alternative marketing programs, including buzz marketing, guerilla marketing,

product placements, branded entertainment, and lifestyle marketing (Chapter 10)

Selling components include • Database, direct response programs, and personal selling (Chapter 11) • Sales promotions (consumer and trade promotions) (Chapter 12) • Public relations and sponsorships (Chapter 13)

Integration includes

• Regulations and ethics (Chapter 14) • IMC evaluation (Chapter 15)

Objective 1.5: What is meant by GIMC?

International Implications 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.” Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section. The authors’ blog for professors and students may be found at http://blogclowbaack.net/

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Both methods contain actual print materials produced for the campaign. Broadcast material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers. These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created. IMPLICATIONS FOR MARKETING ACCOUNT EXECUTIVES (Note to professors— these materials are not in the text. They provide a method for you to summarize the chapter in a different way) Describe the role of marketing account executive to students. This individual is in charge of the connection between an advertising agency and a client company. Review the following ideas: Account executives are going to be asked to justify how marketing funds are being spent. Therefore, three things are important:

1. Make sure that all marketing efforts focus on an integrated theme. 2. Establish clear-cut marketing objectives in the area of communication. 3. Recognize the difference between short-term outcomes (immediate sales,

coupon redemptions, internet “hits”) and longer term brand equity and company image issues. Both are vital components in the marketing success of a firm over time.

Remember that because account executives are being held accountable, they also tend to hold more power. Effective use of this power would include the following:

• Careful selection of creatives who will stay focused on company themes, objectives, and desired outcomes.

• Realistic expectations when designing campaigns so that they do not “oversell” anticipated outcomes.

• Precisely tuned measurement instruments that provide clear information regarding success and failure rates for individual marketing communications campaigns.

Account executives should be reminded of several points from the communications model:

1. How the communications process works 2. What can go wrong (clutter, poor media selection, etc.)

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3. Ways to overcome clutter and send a clear, coherent message to all concerned Account executives must be aware of the technologies and alternative media available for sending and receiving messages. These include the following:

• Social networks • Blogs • Buzz marketing • Guerilla marketing • Lifestyle marketing

Account executives must utilize the total IMC approach.

• Note that it is a building process that begins with an effective overall marketing plan.

• Conceptualize advertising as part of the IMC program, and fit other marketing activities together with ads to construct a more powerful approach to the promotions part of the marketing mix.

• Discover ways to incorporate IMC efforts to make better contacts with those internal to the company (employees, other department heads, management teams, etc.).

• Watch for shifts in channel power, especially when customers have clearly established the ability to make decisions by seeking out information on their own (through websites, personal visits, responses to advertisements, and so forth).

• The account executive must rethink methods to reach consumers in ways which keep the company at the forefront as they make purchase decisions.

• Focus on ways to make an IMC message a global message. This involves keeping a theme intact although adapting that theme to the requisites of individual countries and cultures.

REVIEW QUESTIONS 1-1. Define communication. How does it play a crucial role in marketing and business?

Communication may be defined as transmitting, receiving, and processing information. It is critical to business because through communication businesses make contact with potential customers and complete transactions.

1-2. What are the parts of an individual communications model?

The parts of the individual human communications model are as follows: Senders—the persons or companies sending messages

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Encoding—transforming an idea to an attention-getting form, such as through an advertisement or personal (e.g., personal selling) medium

Transmission devices—occurs when a channel or medium delivers the message through the channel

Decoding—occurs when the receiver’s senses are touched in some way by the message

Receivers—the person who receives the message as encoded by the sender 1-3. Who are the typical senders in marketing communications? Who are the

typical receivers?

The typical senders in the communications model are companies seeking to sell a product or idea. The typical receivers in the communication model are potential customers who are looking to buy the product.

1-4. Name the transmission devices, both human and nonhuman, that carry

marketing messages.

Transmission devices include television advertisements, billboards, and coupons from a Sunday paper (nonhuman). They also include people (humans) telling other people about an advertisement and other messages.

1-5. Define clutter. Name some of the forms of clutter in marketing

communications. Clutter is the most common form of noise in the marketing communications. It occurs when receivers are exposed to many different messages (television, radio, billboards, bunches of ads in the Wednesday paper, etc.) in one day and therefore some messages get tuned out. 1-6. Define integrated marketing communications (IMC).

Integrated marketing communications as 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.

1-7. What are the four parts of the marketing mix?

The four parts in the marketing mix are taken from product, price, promotion, and distribution. This book concentrates on the promotions mix through advertising,

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personal selling, consumer and business-to-business promotions, publicity, and direct marketing.

1-8. What steps are required to write a marketing plan?

The steps in writing a marketing plan are o Situation analysis o Marketing objectives o Marketing budget o Marketing strategy and tactics o Evaluation

1-9. What trends were given to explain the growth in importance of IMC plans in

this chapter? Trends include the an emphasis on accountability, the explosion of digital media, integration of media platforms, changes in channel power, increases in global competition, increases in perceptions of brand parity, and an emphasis on customer engagement. 1-10. How has the explosion of the digital arena impacted marketing communications? Digital media has created a new landscape and, in some cases, nearly a new language. Digital marketing techniques seek to create experiences with a brand rather than mere purchases with little or no emotional attachment. It cannot be considered as an option for companies, but rather as a mandatory ingredient. Marketers now seek to engage a brand with all current and prospective customers in order to achieve success. 1-11. Identify and describe the four ways consumers can interact with multiple

media formats.

Content grazing involves looking at two or more screens simultaneously to access unrelated content, such as watching TV and texting a friend at the same time. Investigative spider-webbing occurs when consumers pursue or investigate specific content across multiple platforms, such as watching a football game and accessing stats for various players on a PC or mobile phone. Quantam journey focuses on completing a specific task, such as when a consumer looks for a Chinese restaurant using a PC to locate one in the area, then obtains consumer reviews of the units close by on a smartphone, and finally employs a map app to locate the restaurant or to place an order.