Marketing Communication - Essay Example

Marketing Communication 1. Critically appraise the processes used by organisations to select communication agencies. Working with partners is often imperative for an organization to either market a product or implement a campaign or a program that requires some form of communication to a target audience. Such relationship is important even if there is an existing capability within the organization to do what a communication agency does. A communication agency – such as advertising, public relations, marketing – has a special focus and expertise that can make a difference for an organization. What is more important is that by getting the services of a communication agency an organization is expanding the reach of a program or a campaign. Partnership with an agency will pool resources and promote a project with more people, expertise and capabilities working towards the same goal. As a result an organization can produce a synergistic effect greater what it could achieve on its own. Choosing a communication agency or what some call as information agency is, therefore, a pivotal task for the success of a particular communications project. There is no standard selection process for this task since organizations follow different approaches tailored according to their requirements. However, it should be done in a systematic manner so that the organization does not lose time, effort and money. All processes in communication agency selection start with the decision to seek an agency and henceforth, a definition of exactly what the organization will require from the agency (in terms of capabilities, skills, tasks, etc.) as well as the expected nature of the client-agency relationship. In defining agency requirements, a marketing audit may be performed. Current services must be analyzed to determine who is served well and how well. Marketing audit, Greg Clarke (2000) wrote, is a systematic information gathering process that highlights clearly where an organization stands along a scale ranging from no marketing to total sophistication. (p. 184) The idea is that by employing such approach a communication agency’s niche – a portion of a market segment in which that provider can meet specialized needs that are not being met by other providers as well as the specific services, capabilities, commitment and experience offered – will be identified. An organization can, hence, filter out the agencies that would not meet their requirements. The downside of this process is that it could be a daunting task when performed early in the process. A simple study of an agency’s profile is not enough since the organization must also find information in regard to the company’s administration and sales force, service range, among others. According to John Lidstone, Janice MacLennan (1999), focus should also be given to financial audit (this focuses on how the agency conducts its own business), and qualitative audit (this focuses on the agency’s efforts in the planning, developing and implementing of the communications programmes and considers the results achieved). (p. 105) This audit, however, can be done later on, when agencies are asked to bid and submit their organizational profiles. But if the organization’s resources will permit, I would recommend doing marketing audit in the first stages of the selection process in order to separate agency selection from project/campaign proposal selection (A very effective pitch could cloud the objectivity in choosing a communication agency based on its capabilities.). One should remember that some agencies work above the line and some below the line, while others work through the line. The choice is often as much about whether one agency can handle all the client needs, one-stop shopping, or whether it’s preferable to use a specialist in each field. As stated earlier, I advocate choosing a specialist – one who caters to your niche – because such agency will have the focus and dedication to do the job. I would like to elaborate on a case study cited by Aino Halinen (1997) wherein an organization is searching for the right communication agency to undertake a research study. Here, a version of marketing audit called process perspective in case selection was employed. A two-step procedure was followed: First, an agency is chosen and, second, one of its clients is studied. In the first procedure, the following criteria were used: 1. The agency had to be ordinary and average in terms of type, size and operations. At the end of 1989, an ordinary advertising agency in the Finnish market is characterized as a local independent or a part of a national advertising group. Excluding the largest and smallest agencies, the number of personnel employed by an ordinary agency should have been somewhere between 10 and 40 employees and the gross margin between FIM 2 million and FIM 15 million. More than 50 per cent of the agency’s turnover should have originated from media advertising, about 25 percent from the invoicing of purchased production and about 15 per cent from its own work. 2. The agency had to be mature enough to have established and positioned itself in the market with long-term client relationships. 3. The agency had to be big enough to have sufficient long-term clients to choose from. 4. The agency management and personnel should be willing to participate in the study. There were two agencies selected based from this criteria. In choosing the client/client relationship to be studied, the following criteria were set: 1. The relationship had to be mature enough to be able to study several assignments and different events and situations. 2. Typical assignments had to concern brand advertising for consumers. 3. The account size had to be average in relation to the agency’s other accounts. 4. The client company’s management should be willing to participate in the study. (p. 72-73) The main drawback of this procedure is that it is a complicated methodology and therefore limits the number of agency to be evaluated. Otherwise a separate selection process must be employed beforehand in order to select the subject-agency in the study. Agency Assessment There are organizations that formulate their own evaluation and assessment process in as the main procedure in selecting a communication agency. I would like to go back on the previously mentioned process cited by Lidstone and Maclennan which focuses on the financial and qualitative assessment. Figure 1 would illustrate how an evaluation form may look like: Fig 1. Team Skill Base Rating 1 2 3 4 5 CVs/relevant experience/expertise Writing Ability Media Contacts Creative Ability Financial Management Rating 1 2 3 4 5 Costs incurred explicit Invoices received promptly Resource Allocation Comments Source: Lidstone and Maclennan (p. 108) In this process, the people or the team responsible for the program or project within the organization agree on a criteria and that agencies bidding for the project are given the same assessment form. One of the major pitfalls of this marketing audit approach is that it is prone to generalization and that results may not be substantiated and quantified by facts and figures. For instance, in rating “Costs incurred explicit” a communication agency may tick Rating 2 but the organization doing the research is not provided by the specific reason as to why the rating was such. It will require the submissions of pertinent documents in order validate claims as well as the services of an accountant or a financial analyst to comprehensively analyze the data gathered from such financial evaluation. Fortunately, this approach can be easily integrated by the submission of project proposals such as a media strategy. However, agencies may not be amenable to creating a sample campaign before signing a contract with the organization. If that is the case, the organization is left with providing contacted organizations with information about the project, discussing needs or sending out a request for proposal to solicit bids to produce the campaign. Or the organization works out a paid pitch from the short listed agencies wherein understanding of the organization’s problem and the creativity of the agency in solving it is tested. (Elwood, 2002, p. 96) Here, the organization must take steps in order to ensure that proposals are not just a bunch of fancy PowerPoint slide presentations. The procedure must be able to determine the communication agency’s own process. Queries must be raised in regard to how the agency intend to allocate resources (time and people) to particular aspects of the campaign, including planning, concept development, testing and evaluation, etc. (Smith & Taylor, 2004, p. 81) What is good about this combination of processes is that the end result makes for a better comparison among communication agencies. If an agency is unclear about this, then perhaps it is running an inefficient business. The processes the organizations employ to select communication agency vary according to the needs and resources that the organization has. Nonetheless, they work around the same goal: To determine what skills and expertise the organization feels are most important to its program and to find an organization that matches those criteria. (Weinreich, p. 39) Say, Agency A has not done any social marketing before but it has experience in campaigns related to health and social issues with the organization’s target audience. These kinds of information are addressed by tailor-made processes which often are combination of different methodologies. It also addresses the issue of conflict that may arise when a communication agency is contracted. Conflict The process of the communication agency selection must identify if there is any conflict in an agency’s body for the project. This is especially important if the organization’s project or campaign concerns a brand that has competition. Roughly speaking, if an agency’s handling of another client or brand is going to make the organization very uncomfortable, then it is considered a conflict. (Lundin 1987, p. 6) This is very important because today there is widespread consolidation as large communication companies become larger by adding new business and brands and as agency holding companies grow through the acquisition of new agencies. Hence, the potential for conflict has increased more than ever. According to Robert Lundin , generally, most communication agencies accept that one distinct agency brand under a holding company can handle one client in a given industry, while another agency brand under the same umbrella can handle a competing client – as long as the two agencies are managed as separate business units and profit centers. (p. 6) There are even cases where one agency’s office handles a local or regional account on a given industry, while another office of the same agency handles a different local or regional account – where the business geography doesn’t overlap. For example, an agency’s Chicago office handles a local bank or hotel group, while the same agency’s New York office handles a non-competing local bank or hotel in their market area. With these in mind, the organization’s selection methodology should be the one that identifies the presence of conflict and one that determines whether a communication agency could objectively represent its brand or its campaign with objectivity especially if there is an absence of a “conflict policy” within the agency. There are many ways in which organizations choose a communication agency, some may even opt to do it by informal conversations in a restaurant. However, Iain Ellwood stressed that today using the services of a communication agency is no longer a client-agency relationship anymore. According to her, stakeholder must develop a rapport because each becomes part of a single team. I am inclined to favor a “mix and matching” process wherein organizations pick various elements from different methodologies some of which were outlined above. I expect that by doing this, the organization will be able to get the benefits for its specific circumstance while minimizing the obvious pitfalls associated with each model. 2. Critically evaluate the role of a web site in an organisation's marketing communications. The Internet has revolutionised the worldwide business paradigm since the United States government allowed its commercial use in 1994. It particularly signified a momentous development in the way organisations operate as products are now conceptualized, designed, manufactured, marketed, bought and delivered via the Internet. Indeed, numerous businesses around the world - big, small and startups – have been founded and, as we speak, are competing in the Internet arena. What makes the Internet appealing and popular (and the basis for its marketing value) is that it is open and democratic. It allows for many-to-many communications where an information, or in the case of marketing, a product, is available to many people at the same time. And we are not talking about a one-way process but a dynamic two-way interaction among the participants. Also, the power of the Internet not only lies in its ability to provide information and services, but also in delivering these features 24 hours a day and 7 days a week. (Khosrowpour 2002, p. 271) A website, therefore, is pivotal in an organisation’s marketing strategy either as a tool for information dissemination where a company website is used in conjunction with promotional techniques or as a business platform by itself or what is popularly known as e-commerce. Marketers identify this trend as the e-marketing model, which is generally known as the use of electronic communications technology to achieve marketing objectives. When we say electronic communications technology it could mean a number of things. First, wrote Michael John Baker, it may refer to the use of Internet-based (TCP-IP) network technology for communications within an organisation using an intranet, beyond the organisation to partners such as suppliers, distributors and key account customers using password based access to extranets and the open Internet, where information is accessible by all with Internet access. Second, it could mean the use of web servers to enable informational or financial exchanges. It also points to the use of other digital access platforms such as interactive digital TV, wireless or mobile phones and Internet-capable game consoles such as the Ipod Touch or the PSP. Finally, we have the use of electronic mail for managing enquiries as well as the use of information systems, customer database and web applications for customer relationship management. (Baker, p. 638) In integrating a website to a marketing strategy, an organisation is benefited substantially in many ways. For instance, a website can identify needs from customer comments, enquiries and complaints solicited via email or a website’s contact facility, bulletin board, forum, chatroom, online searches as well as sales support. Furthermore, the it can also record data that could identify for an organisation the customer’s/client’s statistics such as the most pages or link visited or the buying or browsing pattern of a website visitor. Websites have the capacity to record all transactions within a log in a web database. Websites also provide an opportunity for an organisation to satisfy needs in regard to prompt responses, punctual deliveries, order status updates, helpful reminders, after sale services, and added value services, combined with dynamic and interactive dialogue. To illustrate: Cookie-based profiling allows companies to analyse a visitor’s interests without even knowing his name – courtesy of a piece of code sent to the visitor’s PC. It recognises the PC as well as the records that help in profiling techniques. Finally, a website can be very important in maintaining the customer relationship by efficiently automating transactions and therefore improving responses to the customers’ needs. How does a website do this? It deals with the customer or its visitor real-time, raising expectations on instant query resolution, immediate response to requests and even faster delivery. E-commerce A website used as part of an organisation’s strategy is rationalised by the following equation: Profit – Revenue – Costs. (Kalakota & Whinston, p. 4) This is when websites function more like a shop than, say, a catalogue. The reason is, unlike a catalogue, a website cannot be sent to a list of prospective customers. Like a shop, it must wait for customers to come in that is why it needs promotion. The case study of Norway by Niels Kornum and Mogens Bjerre (2005) underscores this point: Twenty-five percent of Norwegian Internet users have ordered a product and/or service online during the past 30 days… Furthermore, Norwegian customers plan to order a lot more on the Internet. Fifty-four percent of Norwegian Internet users will shop online in the next 12 months. Customers expect well-known retailers to offer a website with information as a minimum, and a large group of customers even expect retailers to offer a transactional website. Figures from Gallup indicate that 20 percent of Norwegian customers use the Internet prior to a purchase in a physical store. (p. 280) While figures may vary from one country to another, the fact is that there is now a trend that says, a website is an indispensable platform for any organisation that is engaged in marketing and the sale of products and services. The overall implication of this is that for organisations wishing to develop and expand, e-commerce or transactional websites represent a monumental opportunity to engage a huge marketplace at costs that were previously inconceivably low. This is also one way in which small fry lacking any economies of scale can break into market segments that were previously inaccessible due to the cost leadership advantages of large operators. Here, organisations use technology in order to lower operating costs or increase revenue. For example, if we are to compare a traditional store and an online store – the difference is huge especially when we talk of expenses that goes with the entire logistical efforts and expenditure of setting up a conventional or what is known as “bricks-and-mortar” shop, say a store in a shopping mall. The case is different with the Internet; all an organisation needs is a web host, a web domain and a handful of staff to oversee each and every transaction that is accomplished virtually. Zwass (1996) broadly define e-commerce as the sharing of business information, maintaining business relationships, and conducting business transactions by means of telecommunications networks. (p. 3) It involves both electronically mediated request for information as well as marketing and sales transactions or to put it in another way, it endeavors to improve the execution of business transactions over various networks. These improvements can definitely result in a more effective performance (better quality, greater customer satisfaction, and better organisational decision making), greater economic efficiency by lowering costs, and more rapid exchange (high speed, accelerated, or real-time interaction). Kalakota and Whinston (1997) outlined a range of different perspectives for e-commerce that highlight the type of communications involved. These are: Communications perspective, which points to the delivery of information, products/services or payment by electronic means. Business process perspective or the application of technology towards automation of business transactions and workflows. A service perspective, which enables cost cutting at the same time an increase in the speed and quality of the delivery. An online perspective, which is concerned with the buying and selling of products and information online. (p. 3-4) These perspectives are all valid in terms of the Internet phenomenon. It is just a matter of which lens is used to view the electronic commerce landscape. Needless to say, these perspectives emphasise the generation and exploitation of new business opportunities and, to use popular phrase: “generate business value” or “do more with less.” The benefits of e-commerce for companies are simply tremendous. It is instructive to identify opportunities for buy-side and sell-side e-commerce transactions. Baker differentiated the two: Buy-side e-commerce refers to transactions to procure resources needed by an organisation from its suppliers. These business-to-business (B2B) transactions are often neglected in favour of discussion of sell-side e-commerce, which refers to transactions involved with selling products to an organisation’s customers through distributors as appropriate. (p. 638) However, the trend now is changing. It has been forecasted that the bulk of Internet business in the foreseeable future comes from industrial and commercial markets and not consumer markets known as business-to-consumer (B2C) markets.. According to Baker, most estimates suggest that B2B companies will reap 10 times more revenue than their B2C counterparts. To quote: In 2000, it is estimated that world-wide B2B transactions will rise from $145 billion in 1999 to $7.3 trillion in 2004. This increases are driven by the desire of large corporations to reduce costs and increase supply chain efficiency. For example, in the late 1990s, General Electric made the decision to procure $1 billion worth of purchases online in year 1, followed by $3 billion in year 2, followed by total procurement online. More recently, Cisco Systems announced that they will no longer do business with suppliers who can’t take orders via the web. Ford and General Motors have combined forces through the B2B marketplace Covisint (www.covisint.net) and moved their $300 and $500 billion dollar supply chains online. (p. 639) An insightful way of looking at electronic commerce is to view it as a production process that converts digital inputs into value-added outputs through a set of intermediaries. To illustrate: in the case of online trading, production process can add value by including more value-added processing (such as trend analysis) on the raw information (such as stock quotes) supplied to its online customers. Other value-added processing might include the charting of thirty-day moving averages, industry sector performance analysis, and other processing that results in more refined information leading to better decision making. Web applications further enhance a websites capacity to market products, particularly in the area called opportunistic marketing. For example, when a customer puts a Manchester United Annual in the shopping basket, this may trigger the offer of a David Beckham biography. To underscore the significance of websites and Internet-mediated marketing and sales transactions, I would like to cite that organisations are not the only ones taking advantage of the business models. Industries and even countries and regional blocks are utilising it to reach out to their market in the backdrop of globalisation and the increased competition it entails. There is another broader concept related to this Internet business model and it is called E-business. This model covers e-commerce and that it is concerned with the internal use of Internet technologies through an intranet to streamline business processes. The creation of a business website in its own right is an insufficient objective, particularly if it is intended to generate profit because one has to integrate the contribution made towards the development and growth of the organisation. (Butler, p. 99) In regards to its marketing value, it is useful to reapply the definition of what constitutes successful marketing: It can identify, anticipate, and satisfy customer needs and requirements efficiently. (Mackay 2005, p. 2) A website, as explained, can do these things and what is more significant is that it can do it better than most marketing channels and platforms. There are websites who fail to deliver the expected results and there is a sizable number out there who folded up, but these efforts failed to see website development as the same as any business enterprise whose inception must undergo the same business development process. Also, more and more studies are undertaken that refines issues such as usability, website interface, website marketing, “search engine optimisations” or SEO, and a number other concepts and models that seek to ensure that the website achieve its goals and objectives. Finally, it is important to note that websites blend seamlessly with any contemporary marketing campaign that uses digital technology in managing the customer relationship. Efficiency is the key here: A website is an automated way, yet and impersonal platform that allows tailor-made technology to improve service quality and increase the organisation’s capability to retain data and information that will help in maintaining customer relationship through time. As previously mentioned, a trading website is always open, new technologies are now available to address minor glitches such as downtime caused by restocking, correcting programming errors to repair broken links to other business systems, among other issues. 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