Integrated Marketing Communications - Term Paper Example

 «Integrated Marketing Communications» Table of Contents «Integrated Marketing Communications» 1 Table of Contents 1 Executive Summary 2 Introduction: A slow awakening 2 Changing the corporate image 4 Positioning 4 Packaging 10 Internal Changes 10 Advertising and Promotion 11 Conclusion & Recommendations 12 Reference 13 Bibliography 15 Executive Summary Now-a-days consumers are more inclined to green products and services. As a result, the business houses too are manufacturing green products and offering nature friendly services to tap the market of environment conscious consumers. However, this metamorphosis from a usual corporate image to a ‘green oriented’ organisation, is a gradual one. The fact that it has been implemented must be communicated to the consumers for successful marketing of the respective product or service. The essence of implementation entails the alignment of the functional elements in accordance with the revised corporate brand. Changes in the corporate brand image not only require introduction of new product lines, but also its alignment with all the internal and external components to support the product line as well as the transformed image of the organisation. Introduction: A slow awakening Since the publication of the Bruntland Report in the year 1987 and the successive Earth summits in Rio de Janerio (1992) and Johensberg (2002), environmental issues continue to raise the necessary concern across the globe. Sustainable development has become so imperative that no organisation can afford to ignore it. “Sustainable development can be understood as the development which maintains the quality of Earth’s natural systems so that they can continue to meet the needs of today’s population without compromising the ability of future generations to meet their own needs” (CIRANO, “Introduction”). People have now realized that natural systems are especially susceptible to human activities because of limited adaptive capacity. As a consequence, some systems may face irreparable damages in future. In the wake of such environmental awareness, even the business firms have realized that ‘business-as-usual’ can have adverse consequences on both the business and the environment. The organisation, Electron: Present State ‘Electron’ is a medium sized electronics organisation having its operation around the world. Currently Electron is offering electronic products of various price ranges. The consumer base is quite wide spread, comprising of middleclass, higher middle class and upper class people, as it offers a wide range of products starting from a simple bulb to high end appliances. The organisation had been doing consistently well in the past few years. However, recently the market share of Electron is experiencing a continual decline. In an attempt to identify the reason behind its falling market share, the organisation conducted a research, the results of which revealed that increasing number of consumers are switching to eco friendly sustainable products and services, which is primarily responsible for its dismal state. The consumers are now looking forward to appliances with energy saving and environment friendly attributes. Instead of aligning itself with the changing demands of the customers, the organisation was offering traditional products, which was not of much interest to the consumers. As a consequence, the market share was experiencing a continual decline. To deal with the problem, the organisation has decided to introduce a range of ‘green’ electronic products to meet the requirements of the changing demand of the consumers. The organisation is looking forward to change its corporate image from being ‘traditional’ to become ‘green oriented’. This report has evaluated the process elements, which are required to be changed in order to rebrand the corporate image. Changing the consumers’ perceptions is not an easy task. It requires the introduction of new product attributes, processes, personnel and alignment of the existing ones with its revised corporate image. To achieve the same, Electron is required to integrate all its marketing activities to change the perception of the consumers regarding its product lines as well as the organisation as a whole. Changing the corporate image “In business, the term ‘green product’ and ‘environmental product’ are commonly used to describe those that strive to protect or enhance the natural environment by conserving energy and/or resources and reducing or eliminating use of toxic agents, pollution, and waste” (Ottman, Stafford & Hartman, “Avoiding Green Marketing Myopia”). Green marketing must satisfy two objectives, these are, enhanced environmental quality and improved customer satisfaction. Misjudging any of them or emphasizing the former at the cost of latter can have adverse consequences on business. “Customer perception is critical in differentiating products” (Pride & Ferrell, “Product Differentiation Through quality, Design and Support Services”) .The products are required to be appealing to the traditional green niche. However, the marketing process should be all inclusive and must take into account the consumer base outside the traditional green niche. Positioning Past researches on marketing strategies have revealed that most of the successful green products follow three important principles. The three ‘Cs’ are, consumer value positioning, credibility of product claims and calibration of consumer knowledge. Marketing process of a successful green product must showcase all the positive attributes of non green products. In addition to that, the products must display the desirable attributes that characterize the green products. The household electronics products of the organisations are expected to display all the features of a traditional product. Apart from that, they must also have attributes like cost effectiveness, efficiency, safety, performance, status and convenience. Consumer value is added by relevant product designing and market offering so as to widen the market of green products. Studies have revealed that in practice, organisations are required to align the value of their respective products with the corresponding segment of consumers. For example, effective price should be offered to the cost conscious people. Although the organisation, Electron, is required to incorporate almost all the above mentioned attributes in its new line of green products; various factors of advertising and marketing decide which attributes will gain prominence over others in response to certain market segments. Efficiency and Cost Effectiveness The inherent benefit of many green products is their ability to save energy or minimize energy loss. Given the rising price of energy coupled with tax incentives in favor of eco-friendly energy efficient home appliances; cost conscious consumers are now buying green products to increase their long term savings. In most of the cases, consumers are looking for EPA (Environmental Protection Energy) star ratings in the green products (Energy Star, “Federal Tax Credits for Consumer Energy Efficiency”). Energy star appliances are known to use less amount of energy as compared to the traditional ‘non green’ appliances. “For example, Energy Star refrigerators use at least 15 percent less energy and dishwashers use at least 25 percent less energy than do traditional models” (Ottman, Stafford & Hartman, “Marketing Myopia Defined”). However, the price of these energy saving appliances are bit higher than the non green ones. It is better to take examples from the home appliances industry. Popular Duet front-loading washer and dryer of Whirlpool cost over $2000, which is much higher than its traditional line of products. However, the appliance can save up to 12,000 gallons of water and $110 on electricity annually as compared to the standard models. As the price of energy and resources are rising, it would not be wrong to say that opportunities for green products that offer savings on cost and efficiency are bound to experience a stupendous growth in the market. Safety Safety is one of the significant criteria of any electronic product. The green products should also concentrate on safety measures along with energy minimizing attributes. Electron must position its products by claiming to provide consumer safety and health. Such proclamation will also help it to stay ahead from their traditional counterparts. For instance, in regards to CFL bulbs, Electron can position itself in the mind of the consumers by introducing such features that minimize eye problems. Another way could be to show the disadvantages of normal non-green bulbs as compared to the green ones. Both the ways will ensure that green bulbs get more popularity among the health and safety conscious people. In another instance, while marketing its line of portable music players, features that lessen ear problems, headache or fatigue among the listeners should be introduced. A research study conducted by the maker of Alliance for Environmental Innovation and household products, S.C Johnson, suggests there is a high probability that the consumers would react to green messages which strongly connects with their personal environments. Findings have suggested that most of the consumers prefer environment friendly household appliances which emphasizes on safety. The product must promote family oriented values to make the world a safer place to live and work in. Electron is required to emphasize this message in its marketing strategies so that the appliances get broader appeal among the family oriented people. Apart from efficiency and cost effectiveness, safety and health is one significant factor in the home appliance industry that drives the green movement. To tap a considerable market share with its green line of products, Electron must take into consideration all this factors. Performance Common notion prevails that the green products are not going to work as effectively as their traditional ‘non green’ counterparts. “This is a legacy from the first generation of environmentally sensitive products that clearly were inferior” (Ottman, Stafford & Hartman, “Performance”). However, today most of the green products are designed to perform better than the conventional ones, although they command a price premium for the same. For instance, the front-loading dish washers are designed to clean better and to be gentler on clothes as compared to the top loading machines. The front-loading washers spin the clothes in a motion quite similar to the clothes driers and use centrifugal force to pull dirt and water from the materials. On the contrary, most of these top-loading washers use agitators to pull out the clothes through water tanks, which, in turn reduces the efficiency of cleaning process, affecting the clothes in the long run. Hence, the front-loading washers can easily justify their premium prices by showing the benefits that they are offering over the top-loading traditional ones. High performance positioning can widen the appeal of the green products. Status Symbol Cost conscious family oriented people requiring better efficiency and safety can be easily wooed with the above mentioned attributes. However, it is not easy to incite the young people with the same set of attributes. “According to popular culture experts, green marketing must appear grass-roots driven and humorous without sounding preachy”(Ottman, Stafford & Hartman, “Symbolism and Status”). To entice the youth community towards green revolution, unsolicited endorsement from high profile celebrities are mandatory. Conservation and green consumption are required to be marketed as the coolest technology in talk. Keeping up a high tech image is important to attract the young people. Electron can even advertise its product in some of the Hollywood films to tap the market of young people. Electron has a wide range of audio and video products. Stylish design and high end technological features of these products can be flaunted to attract the status conscious consumers. Green products can be positioned as a symbol of status to gain popularity among the youth community. Convenience Most of the energy efficient products have inherent convenience benefits which can be exhibited to attain competitive advantage. For instance, Electron can market its CFL bulbs as they do not need frequent replacements. The light emitting diodes (LEDs) are more efficient and long lasting than the CFL bulbs. “CFLs are four times more efficient than incandescent lights and LED lights are 90 percent more efficient than incandescent” (Pew Center, “Environmental Benefit / Emission Reduction Potential”). The LEDs emit brighter and clearer light and is immune to extreme weather conditions. Electron can try its hands on these types of bulbs as well. Concerns regarding rising mobility and reliance over electronics can be eased to a great extent with the help of solar power. Benefits of household appliances like washers, dryers, refrigerator having certain automated processes can be communicated to the consumers to ensure a greater appeal in the market. Hence from the above discussion it is evident that ‘convenience’ is a significant attribute that results in greater appeal of household electronics appliances. Packaging “Packaging helps to drive the way consumers experience a product” (Louw & Kimber, “The Relevance of Packaging as a Marketing Tool”). The packaging of the products must convey the idea of ‘green’ and environment friendly commodities. The process should be executed with degradable and recyclable materials, which are the main constituents of the green revolution. A sustainable packaging can enhance the cost efficiency of Electron. As a consequence, the benefits can eventually be passed on to the consumers. Internal Changes Since Electron is trying to change its corporate image to enhance the marketing of its green line of products, it must execute certain internal changes to add more consumer value to its products. One cannot have green products without ‘green management’ (Wasik, “preface”). The company can recruit some of the prominent environmentalists in its management board. The manufacturing and packaging of the products can be done with the assistance from the environmentalists. Inclusion of environmentalists in the management can intensively enhance the corporate image of Electron. The consumer will take it as a significant step towards the green movement. The green products of Electron would be manufactured by using more energy efficient, green components. Hence, the suppliers of Electron are also required to ensure that its products meet the criteria of sustainable development. Electron can encourage its suppliers to incorporate more eco friendly raw materials. On the other hand, they can even bring in some new suppliers, who are known for their eco friendly materials, on its board. Having such known suppliers on board can help Electron to change the consumers’ perception about the brand. This would be one step forward towards a greener world. Change of corporate image is not possible until the organisation is able to change its perception in the consumers’ mind. If consumers start perceiving Electron as an eco friendly organisation and welcome its line of green products, only then can the company say that its objective of image makeover has been achieved. Business operations are also required to be in alignment with the sustainable green movement. Electron would also be required to take on people with the required knowledge and skill sets to produce and market eco friendly home appliances. Advertising and Promotion “With customer’s behavior becoming more complex and dynamic, media mix across marketing communications is evolving rapidly to include varied channels” (ISB, “Integrated Marketing and Communications”). The attributes and benefits of the products are required to be properly communicated to the consumers for successful marketing of the products. Advertising and promotion are the two important marketing communication tools of an organisation. “Successful corporate rebranding may require retaining at least some core or peripheral brand concepts to build a bridge from the existing corporate brand to the revised corporate brand” (Merrilees & Miller, “Extending the theory of corporate rebranding”). Finding the right communication mix is crucial for the success of the marketing communication program. In the ‘positioning’ part, a detailed discussion needs to be done on the attributes, which are then displayed and conveyed with the help of marketing communication programs. Electron can advertise its products on internet, TV, magazines and newspapers. Electron has a wide range of products starting from portable music player to heavy household appliances. Each of them can have different marketing communication mix. For instance, advertisements and promotion centering on audio and video players will focus on digital media like TV and internet. The reason is that, the customers of these products are mostly the youth who prefer digital media over print media. On the other hand, household appliances, such as washing machines, refrigerators should be advertised more on women’s magazines and newspapers. However, with technological advancement, one must use balanced communication mix to attract the consumers. Promoting events on environment will help Electron to curve a greener image in the consumer’s minds. However, Electron cannot afford to lose its earlier customer base that may be happy with its conventional products. The customers of traditional products should not be compromised for the sake of environmental friendly ones. The company should endeavor to change the mindset of its earlier customers by educating them on the benefits of green products. This would help the company to sell its product in the untapped market of conventional consumers. Conclusion & Recommendations “The impulse to ‘go green’ is spreading faster than morning glories” (Bonini & Oppenhim, “Helping ‘green’ products grow”). People have become increasingly concerned with their environment. However, it has been noticed that when it comes to actual buying, the consumers are more concerned about their own benefits rather than the cumulative benefit of the mankind. Hence it is required by the company to strike a balance between both. Rather than having a myopic view on ‘greenness’, the organisation must focus on the broader expectation of the consumers. Reference Bonini, J. M. S. & Oppenhim, M. J. Helping ‘green’ products grow. October, 2008. The McKinsey Quarterly. September 23, 2010. < http://www.mckinsey.com/clientservice/sustainability/pdf/helping_green_products_grow.pdf>. CIRANO. Introduction. November, 2007. When and Why Does it Pay to be Green. September 23, 2010. < http://www.cirano.qc.ca/pdf/publication/2007RB-03.pdf>. Energy Star. February, 2010. Federal Tax Credits for Consumer Energy Efficiency. September 23, 2010. < http://www.energystar.gov/index.cfm?c=tax_credits.tx_index>. ISB. Integrated Marketing and Communications. October, 2010. Finding The Right Communication Mix. September 23, 2010. < http://isb.edu/ProgramCalandar/IntegratedMarketingandCommunications.pdf>. Louw, A. & Kimber, M. 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