Comparative Analysis of Integrated Marketing Communications Mix - Essay Example

?Integrated Marketing Communication Mix Comparison Grade (05, December, Outline Outline 2 0 Executive summary 3 2.0 Introduction 4 3.0 Market review 4 4.0 Literature review 5 5.0 Critical analysis and discussion 9 6.0. Conclusions 12 7.0. Recommendations 13 References 15 Appendix 18 1.0 Executive summary The report is comparative analysis of the integrated marketing communication mix strategies of Vodafone and Virgin Mobile. A market review indicates that creativity and introduction of new products are the two key strategies for increasing market share. Literature shows that the use of external agents and a shift away from mass marketing are the key trends. The brand equity framework model was critical in understanding how integrated marketing mix communications ought to take place. An analysis of the two groups reveals that Vodafone has a preference for mass markets, rebranding its messages, conveying a strong positioning marketing and allocating a large budget for marketing communication. Conversely, Virgin mobile has a smaller budget and seems to prefer the use of personal marketing channels. It was suggested that the narrowness of the company’s communication mixes needs to be revised. Furthermore, the company ought to increase the extent to which it defines its positioning in the next marketing campaign. It was found that a rebranding campaign would be appropriate. Word Count: 166 words 2.0 Introduction The two companies under analysis are Virgin Mobile and Vodafone. Currently, the organization that controls the largest share of the UK mobile industry is Everything Everywhere (Orange and T-Mobile). 27 million subscribers in the UK belong to this network. 02 is the organisation with the next largest market share, and has about 23 million subscribers. Vodafone accounts for 23% of this market while Virgin has a market share of 18%. Since Virgin is performing relatively poorly, it is critical to study the integrated marketing mix of its competitor, Vodafone, and adopt some of its ideas when dealing with consumers. Integrated marketing communications mix strategies can make the difference between market leadership and low market share. However, sometimes these relationships are cyclical; having a low market share minimises the resources that one can allocate to their marketing communications. Virgin and Vodafone have various capabilities, which will be analysed in light of integrated marketing communication theories. 3.0 Market review The UK mobile phone market is already saturated. Statistics show that about 97% of the population owns a mobile phone. Therefore, there is little that organisations can do to acquire new and untapped markets. However, they have the option of causing customers to switch from their current mobile networks to theirs, or at least get them to own dual simcards that include their brands. Alternatively, they may introduce various products in the market that could increase expenditure in their existing market base. Since all mobile organisations are restricted by contract reinforcements, it is imperative for them to use creative methods for reaching new categories of clients (Winning, 2013). Due to the proliferation of technology, mobile consumers are becoming more aware of their rights. Companies must add greater value to their technologies and satisfy consumer appetites through product innovation. Therefore, regular introduction of products takes place across this industry. Several marketing communications revolve around the introduction of a new product or service. Currently, the introduction of 4G internet has taken centre stage among several mobile operators. Additionally, mobile commerce has also been a point of interest. Messaging services for corporate companies is another service that has attracted attention. Other marketing communications simply revolve around rebranding, sponsorship deals as well as investment decisions like mergers. 4.0 Literature review Integrated marketing communications mix refers to the process of delivering relevant and consistent brand messages so as to influence consumer behaviour and create profitable relationships (Claywood, 2013). It is facilitated through creating, planning, implementing and integrating the different marketing communications. These may include personal selling, sponsorships, advertisements, and public relations (Corneliseen and Cristensen, 2012). Literature indicates that an effective marketing communications mix is one that has three elements; that is, process, synergy and concept. The concept is the idea or the message under analysis (Navaroo and Delgado-Ballester, 2012). It may target various stakeholders like investors, employees or consumers. Synergy encompasses consistency and the coordination of the marketing message. Finally, the process encompasses profiling consumers and determining the right channels to communicate to these individuals (Boone, 2012). A company must first profile the identified target market during integrated marketing communication. It should then select the most appropriate media platform to communicate with them. Thereafter, it needs to ascertain that communication synergy occurs across all channels. The company should aim at influencing market behaviour. Perhaps the most critical part is to build customer relationships with the intended audience (Schultz et. al., 2012). Profiling involves the collection of data about the lifestyles, values and needs of the market in relation to the product being offered by the company. In this regard, one must determine the quantity of the product that the market buys, the frequency of purchase and the place of purchase. Once the organisation has this information, it will be in a position to effectively inform and persuade the target consumers. Relevant media channels must be selected in order to get the message across to the buyer (Webster et. al., 2012). Companies in recent times have started considering new channels like sponsorships as their media channels. Thereafter an organisation must create synergy of its marketing communication through event sponsorships, personal selling, signage, advertisements and several other platforms (Smith, 2012). The brand image should be maintained and consistent across all channels. A positioning statement is imperative in all marketing communications. This means bringing out what the brand stands for (Johansen and Andersen, 2012). Influencing the market’s behaviour occurs when the concerned company ignites some behaviour change among its consumers. This means causing them to act in some way that will lead to positive outcomes to the company under consideration. It is not enough to simply get consumers to like a brand or have a positive attitude towards it. The need for change in behaviours explains why direct to consumer advertisements are in favour. They tend to encourage buyers to engage in more practical forms of response such as product trials (McWiliam, 2012). Finally, organisations must work towards establishing relationships with their consumers in their integrated marketing communications. When companies have strong relationships with their buyers, they are likely to generate repeat sales or enjoy greater levels of consumer loyalty than before. Firms may build relationships by strengthening the quality of experiences that consumers get from them (Abratt and Kleyn, 2012). Many organisations often confuse customer relationship management with database marketing. The latter entails selling to current consumers through the use of their demographic details. This strategy has proven to be unsuccessful as it irritates buyers and may actually cause them to leave the concerned company. Literature also indicates that certain trends exist in the integrated marketing communications field. First, companies are shifting away from mass media advertisements. It has been shown that this communication approach is quite expensive and may not have a personal effect. However, this does not imply that mass media has no place in integrated marketing communications. It just indicates that firms needs to consider other options before automatically assuming that this is the right one. The shift away from mass advertisement has led to an increase in focused communication approaches. Some of them include opt in emails, direct mail, event sponsorships, pay TV, social media and mobile applications. By relying on a database to reach consumers, many companies are directing their messages to consumers as required (Papasolomou and Melanthiou, 2012). Another trend that businesses are witnessing is increasing demand for suppliers of communications mixes. Public relations organisations, advertisement agencies, web content firms among others are offering a wide range of services to organisations that want to boost the public relations, sales promotions, advertising or direct marketing efforts of corporate consumers (Nekmat and Gower, 2012). It is also becoming clear that several organisations want to see a return on investment for their marketing communications choices. A number of them feel that it is not worth it to invest in a certain idea if it is incapable of affecting their bottom line. They are measuring the yields or outcomes that emanate from marketing efforts. Several organisations have now appreciated that it is imperative for them to do this in a systemic way. Therefore, they have made it a routine part of the marketing communications process (Barker et. al., 2012). The brand equity framework is critical in assessing the extent to which marketing communications have achieved what was intended. This model consists of the marketing communications programs; this consists of fundamental decisions like positioning, budgeting, targeting and objective setting. It also consists of the implementation decisions which are mixing elements, media selection, momentum building as well as creation of the message. After the program, one must conduct evaluation by measuring results, giving feedback and correcting the mistakes. Finally, the brand equity framework consists of outcomes which may come in the form of altered consumer behaviour or improved brand equity. (Refer to Appendix 1 for a diagrammatic illustration of this framework). Fundamental decisions in integrated marketing have a direct influence on implementation decisions. Eventually, outcomes, like improved brand equity and altered consumer behaviour will depend on these decisions. The fundamental decision of positioning is critical in integrated marketing communications. This refers to the central idea that captures the meaning of the brand (Ivanov, 2012). Targeting on the other hand empowers companies to focus only on those consumers whose profile will be in tandem with the marketing message. It usually consists of a series of traits that describe consumers with similar buying behaviour. Objective setting will depend on the nature of marketing communication to be used. Sometimes a company’s integrated marketing communication may be done in order to enhance its brand image, to heighten consumer loyalty, to facilitate product introduction, to create positive publicity or counter negative ones, to boost purchase choices or even create corporate relations with certain groups. Budgeting may occur from the top down, where senior managers decide how much will be allocated to a marketing campaign or it may be bottom up. Here, the nature of the marketing decision is what counts (Yeshin, 2012). 5.0 Critical analysis and discussion As mentioned in the brand equity framework, companies often make fundamental decisions before implementing their marketing communication. One of the key decisions is positioning. Vodafone appears to have positioned itself as a company that constantly innovates. Its marketing strategies have often communicated this message. In fact, the company’s latest marketing campaign, known as the power of red, positions the company as one that is always in progress. In this campaign, posters, television advertisements and other platforms contain a rhombus shape that is anchored by the Vodafone company logo. This is an indication that the firm does not compromise on progress. The brand identity of Vodafone is such that it always conveys this image of energy and innovation (The Brand Union, 2013). When asked about this position decision, leaders within the company have stated that the company has always prided itself in its ability to stay ahead of competitors. Not all companies can boast about this achievement. On the other hand, Virgin Mobile also has its own positioning strategy. Its integrated marketing communication mix strategy revolves around selling the idea of a daring and fun company (O’Reilly, 2012). This is in tandem with the Virgin group positioning statement. Through the personality of its founder Richard Branson, several marketing campaigns done by Virgin Mobile have received a lot of media attention (Parsons, 2011). Regardless of this inclination, the positioning statement is not always clear. Sometimes the organisation may appear to be a low-cost alternative, in other instances, it may seem innovative (Shields, 2013). Therefore, positioning in Virgin Mobile is not as consistent as it is in Vodafone. Furthermore, large rebranding campaigns have not been that forthcoming. Objective setting is another crucial part of an integrated marketing communications mix. Vodafone seems to have a range of objectives that it attempts to pursue within even one marketing campaign. It may intend on penetrating a new market through the introduction of a new data service. The organisation may carry out a campaign in order to boost its brand image or it could do so for the sake of reaching new corporate clients (O’Reilly, 2011b). Vodafone’s most elaborate marketing mix communications entails rebranding the company’s identity. The most influential objective is the facilitation of a new product (O’Reilly, 2011a). Others include creating publicity for the company and enhancing loyalty. Similarly, Virgin is motivated by more or less the same objectives for marketing communications. However, the level of priority given to each of these strategies differs because of company priorities. Virgin mobile seems to be quite interested in the facilitation of a new product, such as its free wi-fi during the 2012 London Olympics or the roll out of TiVo televisions service to over 200, 000 homes in the UK (Joseph, 2012; Davies, 2011a; Davies, 2011b ). The company also does marketing communications to raise the brand image, for publicity in public relations as well as to increase loyalty (UK Business Case Studies, 2012). Within the brand equity framework, organisations often decide on the budget to allocate to a certain marketing communications mix. Vodafone has the benefit of having a large advertising budget. Therefore, it comes as no surprise that the company has created elaborate advertisements for its new products. One such case was a 4G advertising campaign which began on 29th August 2013. The campaign relied on a Star Wars character called Yoda. Vodafone spent more than its rival 02, which has a larger market share than this organisation (O’Reilly, 2013b). Conversely, Virgin Mobile has a relatively smaller marketing budget than its rivals. Therefore, creativity must be exhibited for the company to get to people it initially targeted in its campaigns. This explains why the company has been quick to go for methods that may sometimes take long but are less draining on their revenue. Internet strategies like content management have been a favourite for the organisation because this is an effective way of getting to its target audience without having to spend too much. Implementation also involves targeting. Vodafone often targets various categories of consumers depending on the marketing message. For instance, if it intends on introducing a new service like 4G, then it will target previous internet users. Since these persons are likely to be technology lovers, then the campaign is likely to feature a personality that applies to this market segment, like the star wars character. Alternatively, if it intends on introducing mobile messaging services for company brands, then it will focus on that group. Therefore the company appears to have a strong focus on how it achieves this. Virgin Mobile appears to have a clear understanding of its target audience as well. The reason why it often selects internet strategies is to reach out to its young and technologically savvy population (Davies, 2011). The company believes that buyers are more likely to respond to lively content than to sit through lengthy television advertisements. This explains why it has established what it calls a newsroom in which it creates content and that is shareable on social networking sites like face book and twitter (Oreilly, 2013a). As mentioned in the literature reviews, certain trends have pervaded the integrated marketing communications industry. One such method is the use of third party marketing communications consultants. Vodafone seems to have grasped this concept and has applied it in the creation of its recent rebranding effort known as the Power of Red (Radic, 2013). In this campaign, the organisation worked with a leading global brand agency called Brand Union (The Brand Union, 2013). It has applied the campaign across a series of platform including static and digital ones. The trend has also caught on in Virgin Mobile. The company has hired the services of Buzzfeed, which is an online content management company. It is responsible for some of the most captivating and shareable content on social media. The agency is now working with individuals from Virgin Mobile in order to create content that will be shared by its users (Morrisey, 2008). This increases the extent to which people perceive the brand and eventually respond to its sales pitches. The method may be less rewarding than display ads because it does not always guarantee brand enhancement. Furthermore, the process is quite resource intensive as it requires a representative to wait for the latest happenings in popular culture, brainstorm new ideas, send them to buyers and wait for feedback concerning whether they will be shared. 6.0. Conclusions Certain things are evident from the analysis of these two organisations using the brand equity framework. First, Vodafone appears to be a doing a better job than its rival in terms of delivering an integrated marketing communications mix that is consistent and well targeted. Whenever a company carries out a campaign to rebrand, this usually attracts the attention of all categories of buyers. Conversely, those that only engage in marketing communication mixes in order to facilitate a new product may narrow their brand equity. Virgin Mobile seems to be more inclined towards this narrow approach. Consequently, this could explain why it may not be performing as well as its rival. Furthermore, an integrated marketing mix process needs to profile its consumers in a manner that ensures only the right audience accesses the message. It has been shown that Virgin Mobile seems to have a clear definition of who its target demographic is. In fact, perhaps such a narrow focus may be preventing the organisation from expanding its market base. It needs to realise that young consumers may not always have the financial capability required to keep the business afloat. For this reason, it may be advisable to reach into the larger markets like Vodafone. However, this must also be done systematically in order to match marketing communication messages with the target group. Vodafone seems to rely on mass marketing slightly more than Virgin Mobile does. Although the use of this platform has its demerits, one cannot deny the benefit that the platform has on raising the company’s brand image. If a rebranding effort is underway, the best way of letting consumers know that one has made these changes is by the use of mass marketing techniques. Virgin Mobile seems to use this strategy only in dire situations. It may need to consider the use of such an approach if it intends on appealing to a wider client base. Even its choice of a third party in content management may be ill-informed owing to the slow speed that the company must contend with when waiting for responses. 7.0. Recommendations Virgin Mobile may need to consider carrying out a rebranding strategy. It needs to create a new visual identity that captures what the brand stands for. This campaign needs to be distributed across traditional and digital media in order to avoid sidelining a crucial part of the market. While Vodafone had the resources to hire external experts for this part, it may not be practical for the company to hire external help. Marketing employees, managers and experts in the company will need to sit down and establish this identity. Virgin Mobile will also need to do a better job of targeting its customers. Currently, it may be stated that the company has focused too much on young audiences. Instead, it needs to analyse the mobile market on the basis of their need for its new services such as 4G. This should be the approach utilised. Regardless of this move, the organisation must not abandon its core market segment by incorporating them into future marketing decisions. Finally, it would be insightful to make the positioning statement evident in all the marketing communications that the company creates. Sometimes Virgin mobile tries to do too much in one campaign. Consumers tend to get confused by such an approach. In the future, it ought to stick to one message that captures its intended objectives. References Abratt, R. and Kleyn, N., 2012. Corporate identity, corporate branding and corporate reputation: Reconciliation and integration. European Journal of Marketing, 14(5), pp. 76-81. Barker, N., Valos, M. and Shimp, T., 2012. Integrated marketing communications. NY: Prentice. Boone, L., 2012. Contemporary marketing. NY: Routledge. Claywood, C., 2013. The handbook of communication and corporate reputation. NY: John Wiley and Sons. Corneliseen, J. and Cristensen, L., 2012. Corporate brands and identity: Developing stronger theory and a call for shifting the debate. Journal of marketing, 2(18), pp. 102-108. Davies, J., 2011a. Virgin rolls out Tivo to 220,000 homes. [online] Available at: http://www.marketingweek.co.uk/brands/vodafone/ [Accessed 5 December 2013] Davies, J., 2011b. Virgin media to develop ad targeting across TV platform. [online] Available at: http://www.marketingweek.co.uk/virgin-media-to-develop-ad-targeting-across-tv-platform/3032302.article [Accessed 5 December 2013] Ivanov, A., 2012. The internet’s impact on integrated marketing communication. Procedia Economics and Finance, 4(12), pp. 44-49. Joseph, S., 2012. Virgin names first tube wi-fi advertisers. [online] Available at: www.marketingweek.co.uk/news/virgin-names-first-tube-wi-fi-advertisers/4002552.article [Accessed 5 December 2013] Johansen, T., and Andersen, S., 2012. Co-creating ONE: Rethinking integration within communication. Corporate Communication Journal, 15(6), pp. 22-39. McWiliam, G., 2012. Building stronger brands through online communities. Sloan Management Review, 59(7), pp. 154-161. Morrisey, B., 2008. How virgin mobile fell in love with content. [online] Available at: http://digiday.com/brands/how-virgin-mobile-fell-in-love-with-content/ [Accessed 5 December 2013] Navaroo, A. and Delgado-Ballester, E., 2012. Revitalising brands through communication messages: The role of brand familiarity. Journal of Marketing, 3(6), pp. 88-90. Nekmat, E. and Gower, K., 2012. Effects of disclosure and message valence in online worth of mouth communication: Implications for integrated marketing communication. International Journal of Integrated Marketing Communications, 13(40), pp. 99-111. O’Reilly, L., 2013a. Virgin group overhauls digital strategy to tell amazing stories. [online] Available at: www.marketingweek.co.uk/news/virgin-group-overhauls-digital-strategy-to-tell-amazing-stories/4007126.article [Accessed 5 December 2013] O’Reilly, L., 2013b. Vodafone outspends O2 on marketing boost 4G demand. [online] Available at: http://www.marketingweek.co.uk/news/vodafone-outspends-o2-on-marketing-to-boost-4g-demand/4007753.article [Accessed 5 December 2013] O’Reilly, L., 2011a. Vodafone launches campaign in bid to increase mobile internet use. [online] Available at: http://www.marketingweek.co.uk/vodafone-launches-campaign-in-bid-to-increase-mobile-internet-use/3031468.article [Accessed 5 December 2013] O’Reilly, L., 2011b. Virgin media readies free gift loyalty campaign. [online] Available at: http://www.marketingweek.co.uk/virgin-media-readies-free-gift-loyalty-campaign/3030469.article [Accessed 5 December 2013] O’Reilly, L., 2012. Virgin strikes gold with Farah campaign. [online] Available at: http://www.marketingweek.co.uk/news/virgin-strikes-gold-with-farah-campaign/4004406.article [Accessed 5 December 2013] Papasolomou, I. and Melanthiou, Y., 2012. Social media: Marketing public relations’s new best friend. Journal of Promotion Management, 2(11), 64-68. Parsons, R., 2011. Virgin media gets patriotic with logo. [online] Available at: http://www.marketingweek.co.uk/virgin-media-gets-patriotic-with-logo/3030956.article [Accessed 5 December 2013] Radic, K., 2013. Vodafone updates its look. [online] Available at: http://www.brandingmagazine.com/2013/09/06/vodafone-new-identity/ [Accessed 5 December 2013] Schultz, D., Block, M. and Raman, K., 2012. Understanding consumer created media synergy. Journal of interactive Marketing, 24(4), pp. 288-299. Shields, R., 2013. Virgin media names new CEO. [online] Available at: http://www.marketingweek.co.uk/news/virgin-media-names-new-ceo/4006593.article [Accessed 5 December 2013] Smith, B., 2012. Communication integration: An analysis of context and conditions. Public Relations Review, 2(13), pp. 55. The Brand Union, 2013. The Brand union helps Vodafone create a new brand identity. [online] Available at: http://www.thebrandunion.com/insight/press-release/brand-union-helps-vodafone-create-new-visual-identity [Accessed 5 December 2013] UK Business Case Studies, 2012. Vodafone UK, Ferrari and formula one products: Building public relations. [online] Available at: http://businesscasestudies.co.uk/vodafone/superbrand-sponsorship/vodafone-uk-ferrari-and-formula-1-products.html#axzz2mWiaFoQe [Accessed 5 December 2013] Webster, F., Malter, A. and Ganesan, S., 2012. The decline and dispersion of marketing competence. MIT Management Review, 3(6), p 4. Winning, A., 2013. Four UK mobile operators agree to stop enforcing mid contract price. [online] Available at: www.reuters.com/article/2013/12/03/us-britain-mobile-idUSBRE9B200920131203 [Accessed 5 December 2013] Yeshin, T., 2012. Integrated marketing communications. London: Palgrave. Appendix 1. Brand equity framework 2. Company logo 3. Revenue growth for Vodafone 2010 2011 2012 Data growth 19.3% 26.4% 22.2% Data users 52 million 87 million 108 million Data volume 95 Petabytes 161 Petabytes 216 Petbytes European contract customer 10% 19% 27% 4. Total return for Virgin Media (Virgin Mobile) Read More