Integrated Marketing Communications - Term Paper Example

22-04-2007 Marketing concept and Marketing communication Introduction: The new economy has brought success to e-bay and other organizations that use technology to apply marketing concepts like customer focus, good value, quality service and efficient exchange mechanisms for satisfying customer needs and wants. Basically marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is “meeting needs profitably (Kotler, 2003). Whether the marketer is Procter & Gamble, which created crest white strips in response to people’s desire for whiter teeth; or Monster.com, which developed an online resume databank so job-hunters and employers can find each other more efficiently; or CarMax which invented a new way to sell used cars because people want more certainly when buying such vehicles, all illustrate a drive to turn a private or social need into a profitable business opportunity (Hansell, 2002; Healey, 2002). Companies must carefully monitor their customers and competitors, continuously improve their value offerings, carefully define the target market and value proposition, and take a long term view to satisfy customers, stockholders, employees, suppliers and channel partners. Defining marketing: As a managerial definition marketing has often been described as the “art of selling products”. But Peter Drucker (1973) a leading management theorist says, “the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sell itself. Ideally, marketing should result is a customer who is ready to buy.” The American Marketing Association offers this managerial definition: Marketing (Management) is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfying individual and organizational goals. So we see that marketing management as the art and science of choosing target markets and getting keeping and growing customers through creating delivering and communicating superior customer value. Evolution of marketing theories: The success enjoyed by many firms like General Motors has been a strong influence on the strategic school of management thinking. Not surprisingly, therefore as marketing emerged as a distinct management discipline in the second half of the twentieth century, many academics drew upon strategic management concepts to create the first ever-theoretical models of marketing process. Coca-Cola, McDonalds and Levi Strauss performance could be linked to the adoption of a marketing oriented business philosophy. This approach to management is based on the concept that financial goals can best be achieved by first determining the needs of the customer and then satisfying these by providing appropriate products and/or services. Marketing theorists like D.J. McCarthy and P. Kotler were clearly influenced by the classicist view of management. As a consequence and to this date many standard textbook presents marketing as a sequential, logical process designed to answer to three questions: Where are we now? ; Where are we going? How are we going to get there? Writers such as Nystrom (1990) asserts that the classicist school of marketing is based upon the economic theory of the firm in which well defined products are made available in a market where both suppliers and consumers are fully informed about the relative merits to competing offerings. As with the marketers in industrial/service marketing theorists focused on the fact that firms who were placing emphasis on single transactions should in fact be attempting to build long-term relationships with customers. A strong impetus to this alternative philosophy was provided by Reichfeld and Sasser (1990) who demonstrated that a transaction orientation could result in focusing excessive resources on attracting new customers when in fact the real benefits of marketing come from programmes directed at retaining existing customers (ensuring Zero defection). A new form of marketing schools of thought has emerged which examined how the firm can orchestrate internal resources and processes to create and sustain customer loyalty. Supporters of this new form of marketing argue that in order to survive in markets, which have become more competitive and more turbulent, organization must move away from managing transactions and instead focus on building long lasting customer relationships (Webster, 1992). Nevin (1994) proposed that forms should adopt a segmentation philosophy ranging from building strong, relationship with key customers through to continuing to utilize the traditional ‘4P’s approach for those customers seeking a standardized, generic product proposition. A similar balanced view is presented by Anderson and Narus (1991) who recommend that firms weigh both customer orientation towards closer relationships and the cost/benefit implication of sustaining close relationships when selecting the most appropriate strategy to suit prevailing market conditions. After long discussions and debates, a new vision of marketing has come up. The basic tenets of the new vision are that variations in circumstance across areas such as markets, customer behaviours, process technologies and organizational competencies are combining to require marketing to move away from a single purist managerial concept towards a multifaceted approach in which strategic decisions are influenced by whether the organization has adopted a transactional, relationship and/or entrepreneurial orientation to manage process. The philosophy of flexi-marketing should be adopted where the marketer first determines the nature of the customer need and then select the marketing style most suited to prevailing circumstances. Marketers must adopt much more flexible approach. Target Markets and segmentation: Looking at Vast market and number of people, a marketer can rarely satisfy everyone in a market. Marketers have to identify and profile distinct group buyers who might prefer or require varying products and marketing mixes. Examining demographic, psychographics and behavioural differences among buyers can identify these marketing segments. The firm then decides which segments present the greatest opportunity, which are its target markets. Companies’ responses using target marketing, are not selling to everyone but trying to be the best firm serving well defined target markets. Target marketing is being facilitated by the proliferation of special interest Magazines, TV channels and Internet news groups. Companies are also moving away from selling the same offer in the same way to everyone in the target market and instead and individualizing and customizing messages and offerings. Using integrated marketing communications, marketers are no longer relying on one communication tool such as advertising, but rather blending several tools to deliver a consistent brand image to customers at every brand contact. They are also thinking of intermediaries not as customers but as channel partners in delivering value to final customers. Marketing communications: Modern marketing calls for more than developing a good product, pricing it attractively, and making it accessible. Companies must also communicate with present and potential stakeholders as well as general public. For companies it is not important to communicate but rather what to say, to whom and how often. The marketing communication (promotional) mix consists of advertising, sales promotion, public relations and publicity, personal selling and direct marketing (Kolter, 1997). However the products styling and price, the packages shape and color, the sales persons manner and dress, the store’s décor- all communicates something to buyer. Therefore the entire marketing mix must be integrated to deliver a consistent message and strategic positioning. Today communication in seen as an interactive dialogue between the company and its consumers that takes place during the pre selling, consuming and post consuming stages. Given the nature of broader definition of promotion it should be apparent that although planning a promotional strategy may remain the responsibility of marketing department, implementation of process would involve every employee within the organisation (Garvin, 1987; Peters, 1987). Promotion can be considered as a process whereby information about the organisations product or service in encoded into a promotional message for delivery to the customer (Ray, 1982; Crowley and Hoyer, 1994). There are 8 steps to follow in an effective marketing communication program: 1) Identify the target audience 2) Determine the communication objectives 3) Design the message 4) Select the communication Channels 5) Establish the communications budget 6) Decide on the media mix 7) Measure the results and 8) Manage the integrated marketing communications process. Given that normally the objective of an organization is to minimize the costs associated with the delivery of information to customers, it is critical to recognize the promotional planning must be a dynamic process which is continually being adopted to suit identified changing circumstance in the external market environment. One change factor is the reduction in information needs as product complexity is reduced in an industrial sector where customers have moved form purchasing unique, tailored solutions to accepting products produced using standardized process technologies, operating system and components. As customers gain experience through usage of a product their need for information will also usually decline. It an organisation recognizes this trend ahead of competition; it can provide an opportunity for gaining competitive advantage. A classic example of this scenario has occurred in the UK car insurance market. Traditionally, car owners had one-to-one contact with the employees of an insurance company or staff. Direct line insurance recognized that as most customers only really have one question namely “What is the price upon renewal of the policy?” They moved to replace one to one selling with centralized telesales operations. The impact of this initiative was that the firm went from nowhere to market leaders in just 2-3 years. Direct line example demonstrate the powerful capability which advances in IT can offer the proactive marketer until recently, one of the greatest constraints in direct marketing was the ability to further enhance service response by finding cost effective ways of capturing data on individual customer buying behaviour. Columbia house is one example of the kinds of companies fueling the growth in direct marketing. Company is offering 12 free music CD,s if anyone agree to buy 5 additional CD’s over the next two years. This obstacle has now been overcome by the advent of the ‘Smart Card’, because companies who provided their customers with these cards now have the ability to use the encoded information as the basis for developing highly targeted, promotional campaigns. For example UK supermarket chain Sainsbury’s to create their ‘Pets’ Scheme, which is a club for customers offering tips and information on how best to care for their animals. Similarly Another UK Supermarket chain, Tesco has recently created clubs targeted at specific customer groups (e.g. pensioners or mothers with very young children). Coca-Cola Venezuela created a partnership with the “who wants to be a millionaire” television program that led to increased awareness and preference for Coco-Cola in the teen-market. As we know effective promotional planning have 8 stages and each stage needs considerable look. Promotional planning in the most important step starts with reviewing market situation and compatibility be taken organization overall marketing plan and current promotional strategy. Issues covered in the determination of future aims and objective typically include. Quantitative goals for customers awareness product trail repeat purchase rates product distribution targets and definitions of cost of information delivery per customers for each area or promotional activity. For Example, the seven companies- General Motors, Procter & Gamble, Time Warner, Pfizer, Daimler-Chrysler, Ford and Disney –each spending a total of more than $2 billion annually on promotion (Advertising Age, 2004). The budget having been determined, the next promotional management’s phase is concurrent activities of planning promotional campaigns and selecting appropriate channels through which to deliver information to the market. Some of this work may be done in house (e.g. determining the sales techniques to be used by the sales force and the selection of customer target groups), while other elements may be delegated to an external supplier (e.g. assigning to an advertising agency the responsibility for developing advertising campaigns and recommending appropriate media channels for message deliver). Having completed campaign development and channel selection the marketer will then supervise programme implementation, followed immediately by the initiation processes to monitor actual achievements against plan and where appropriate take effective remedial action. Given the fragmenting of mass markets, the proliferation of new media and the growing sophistication of consumers companies need to use a wider range of tools and message through IMC. Possibly the prime objective incorporating new technologies into the promotional process is to create real time interactive customer links. (Schultz et al., 1993) terms the Internet and other technological advances such as e-mails and other forms of technology based communication as “Integrated marketing communications”(IMC). This plays a major role in felicitating marketing promotion in an effective ways. American Association of Advertising Agency defines IMC is a concept of marketing communications planning that recognizes the added value of a comprehensive plan evaluating the strategic roles of a variety of communications disciplines such as advertising direct response, sales promotion, and public relations and combines these disciplines to provide clarity, consistency and maximum communications impact through the seamless integration of discrete messages. For example, Beck’s North American recently launched a $10 million IMC campaign to promote Beck’s Beer Among 21 to 34 year old man. Disney uses “team” promotion deals, partnerships and joint ventures. A team of companies for example was used to promote the movie “finding nemo”. Frito-lay put $50 million stickers announcing a Nemo sweepstakes on packages of lays and Doritos; Wal-Mart distributed 3-D glasses to children to use to find hidden images of Nemo; McDonald’s offered plastic versions of the Nemo characters as happy meal premiums. This promotion demonstrates the opportunity for creativity in communication with potential customers and the importance of integrating the various elements of a communication programme. IMC produces stronger message consistency and greater sales impact; it also gives someone responsibility to unify the company’s various brand image and messages. Properly implemented IMC improve the firms’ ability to reach the right customers with the right messages at the right time and in right place (Shultz et al., 1993). Conclusion: It has been clearly evident that in today’s global village where geographical distances do not matter anymore marketing communication with customers is the backbone of any organization. Currently, about one-fourth of all businesses assess program effectiveness by measuring “most of their communication tactics”(Flynn and Oneal, 1992). For most organizations, the assessment focuses on trying to determine which element of promotion works better. Promotional strategies must be compatible with the overall marketing strategy. Furthermore given that promotion usually represents a significant proportion of total expenditure, effective diagnostic control system must be in place. The advent of integrated IT systems has greatly helped in creation of more effective control over promotional processes. As firms move closer to a relationship orientation with customers it will need to create information systems which ensure all interested parties know what has been the needs and requirements of the customer. Most of the companies are adopting an integrated approach to communicate. Companies uses media advertising to build awareness, sales promotion to generate an inquiry, direct mail to provide additional information to individual prospects, and a personal sales call to complete the transactions. So marketing communication becomes heart and soul of any organization in the present circumstances and without it almost nothing could be expected. References: 1. Advertising Age (2004) 49th Annual Report: 100 National leading Advertisers, June 28, pp. S2. 2. Anderson, J.C. and Narus, J. A. (1991) Partnering as a focused market strategy, California management review, spring: 95-113. 3. Bennett, D.P. ed. (1995), Dictionary of Marketing Terms, 2nd ed. American Marketing Association, Chicago. 4. Crowley, A.E. and Hoyer, W.D. (1994) An integrative framework for understanding two-sided persuasion, Journal of consumer research, March: 44-45. 5. Drucker, P. (1973), Management: Tasks, Responsibilities and Practices, Harper & Row, New York. 6. Flynn, J. and Oneal, M. (1992), A Tall Order For The Prince Of Beers, Business Week, March, 23. 7. Garvin, D. A. (1987), Competing On Eight Dimentions Of Quality, Harvard Business Review, Nov. - Dec.: 101-109. 8. Hansell, S. (2002) “The Monster that’s feasting on newspapers”, New York Times, March 24, sec 3, pp 1, 13. 9. Healey, R. James (2002) “ Circuit City Plans To Push CarMax out of the nest”, USA Today, February 25. 10. Kotler, P. (2003), A Framework for marketing management, Pearson education Singapore pte. Ltd. 11. Kolter, P. (1997) Marketing Management: Analysis, Planning, Implementation And Control, 9th Ed., Upper Saddle River, NJ: Prentice Hall. 12. Nevin, J.R. (1994) Relationship marketing and distribution channels: exploring fundamental issues, Journal of academic marketing science, 23(4): 334-337. 13. Nystrom, H. (1990) “Technological and Market Innovation: Strategy for Product and Company Development”, Chichester: Wiley and Sons. 14. Peters, T. (1987) Thriving on chaos, New York: Alfred knopf. 15. Ray, M.L. (1982) Advertising And Communication Management, Upper Saddle River, NJ: Prentice Hall. 16. Reichfeld, F.F. and Sasser, W. (1990) Zero defections: quality comes to services, Harvard Business Review, September- October: 301-307. 17. Schultz, D.E., Tannenbaum, S. I. and Lauterborn, R.F. (1992) Integrated marketing communications, Lincolnwood, IL: NTC Business Books. 18. Webster, F.E. (1992) ‘The Changing Role Of Marketing In The Organisation’ Journal of marketing, 56, (October): 1-17. Read More