Critical Evaluation of Current Integrated Marketing Communications Practice - Report Example

Critical Evaluation of Current Integrated Marketing Communications Practice Number: Lecturer: Critical Evaluation of Current Integrated Marketing Communications Practice Executive Summary This paper critically evaluates the current integrated marketing communications (IMC) practice. The beginning is to set the theoretical framework and background of IMC of how it came to be how firm in modern day communications should be using applying. After the theory, the paper will consider a company and how it employs, or lack of it thereof, in two countries in different geographical locations. In studying the two countries, it will bring out explicitly the differences that exist. Finally, it will conclusion and recommendation that the company management can consider implementing in order to improve both sides of the divide or if one is good, then where is the differences. Introduction This report seeks to explore an area in marketing called integrated marketing communication (IMC), as used in modern day marketing as opposed to traditional marketing. The brand messaging in modern communication operates in a different landscape unlike advertising and other traditional marketing modes. In its application, therefore, this paper will study the evolution of marketing to what it is today and how it is applicable to a real organization. These changes in marketing landscape have brought with it many channels and modes in which messaging can be used to reach out to the current and potential customers. It means that a company can incur a lot of expenses if it tries to use the old model of marketing. There are multi-level customer stratification which means that reaching all these people will require a mode that integrates all current and potential customers in an impactful and cost effective marketing (Kitchen, & Burgman, 2010). Integrated marketing communication, in its theoretical framework and models behind it, will be considered in order to understand its applicability in the paper. Jaguar Land Rover is the United Kingdom’s largest automobile manufacturer. It is built around two landmark British car brands; the Land Rover, the world’s leading manufacturer of premier all-wheel and drive vehicles and Jaguar, the highly-rated and premier luxury sports saloon and sports car marquees. This study looks at the integrated marketing communication employed by the company to achieve the maximum impact and drive its sales forward. This is a company that has used IMC to a very high degree of success and has, therefore, seen success in driving sales and maintaining its market dominance. Discussion Background of Integrated Marketing Communication (IMC) The term Integrated Marketing Communications (IMC), was first coined in 1989 by the American Association of Advertising Agencies (4A’s). They defined it as an approach to achieve the objectives of a marketing campaign through a well-coordinated use of different promotional methods that are intended to reinforce each other. They recognized the importance of various mediums including public relations, advertising, sales promotions, and direct marketing for delivering consistent messages across all marketing channels. It was increasingly becoming difficult for a single message to have a significant impact in that there were a growing number of channels to reach the customer. Technology, too, was advancing rapidly making audience targeting and database marketing more efficient and cost effective (Shimp & Andrews, 2013). IMC evolved just like any other concept; hence, it is now more centred on the customer with more focus on shopping and buying preferences. There is a theory that says it takes between seven to twelve impressions before a message is effective in moving a customer to purchase. IMC leverages an opportunity to place messages in front of the customer at various stages of a buying cycle. A different integrated product messages series will tell the full story of a product, depending on the customer, and effectively reach him/her (Shin, 2013). To understand the marketing communication it is imperative to understand the process that best describes how marketing communication works, from sender to receiver. Pickton & Broderick (2005) posit that it is attributable to modelling the process of communication that involves four key elements; The sender who is the originator or the source of the message. The message that is the actual information being communicated. The medium of communication to relay the message that is the channel. The receiver who receives the intended message (Schultz, D. & Schultz, H, 2003). Pickton & Broderick (2005) suggest that it entails ensuring that the communication process is effective, and the right message is received using the right means. IMC process model provides a more comprehensive framework in the understanding how marketing communication works. The IMC model is characterized by more elements. The receiver box is expanded to suggest that members, other than the intended audience, otherwise known as non-members, frequently and equally receive the intended message. Some of the message receivers would probably take no action (respond positively to the message), in terms of consumption or purchasing. IMC recognizes in its model that marketing communication might fall short of and not being received by all and hence a limited number of recipients (Baker, 2012). Encoding, decoding, noise and feedbacks elements are very important in the process of sending messages from the source to the destination. Noise refers to the distortions while encoding and decoding, leading to inaccurate interpretation of the messages. When feedback takes place, there is a two-way communication, asymmetric of direct dialogue symmetric (Toth, 2007). For a message to be encoded for the purpose of accurate decoding, the sender and receiver must share a common experience at that moment. Factors that influence the perception of credible adverts or messages include the attractiveness of the source and or the celebrity endorsements to create a level of trust by consumers. The diagram below demonstrates the inter-relatedness of a host of elements that is ultimately required to produce one seamless impact in IMC (Hulbert, Capon, & Piercy, 2003). Jaguar Land Rover: Company’s integrated marketing communication (IMC) The company was recently acquired by Tata Motors but initially was owned by Ford Motors Corporation, US. As has been mentioned earlier, the company manufactures two major models; a saloon Jaguar as a luxury model and Land Rover full-time four-wheel drive sports utility vehicle (SUV). The company has a worldwide network of dealers and Land Rover Experience Centres where its full range of models can be put through their paces. The company is experiencing global sales growth, hence the need to expand its global presence. It commenced production of Freelander 2 and Jaguar XF at a facility in Pune, India. The company has local assembly facilities in Kenya, Malaysia, Pakistan, and Turkey alongside testing and development centres in Dubai, Minnesota USA and Nürburgring in Germany (Jaguar Land Rover 2014). JLR is in the process of transitioning it global strategic and creative account for the Land Rover brand to Spark44. It is a joint venture agency that it owns 50:50 with Spark44 management and JLR. The joint venture is intended to consolidate marketing communication the company’s two brands into Spark44. Anthony Bradbury, the Global Marketing Communications Director for JLR says that the company is extending its innovative Spark44 agency model to the Land Rover brand will maximize global marketing efficiency and effectiveness. According to him, it will enhance consistency of approach and quality worldwide as it builds on the tremendous marketplace today. The single marketing agency strategy perfectly aligns with the JLR global retail and organizational structure and will be essential to building the next generation of distinct brand marketing communications in support of its global growth. The CEO continues to say that this is a long-term strategic decision and is not, in any way, a reflection on the performance of the incumbent agencies. He continues to reiterate that they are proud of their award-winning work with them and would like to acknowledge and apprciate their work to date for what they are doing for Land Rover brand. Spark44 is the leading global, strategic creative agency for the Jaguar brand and is there, responsible for creating Jaguar brand content and global delivery across all media channels. It has its offices in Birmingham, Frankfurt, Los Angeles, London, Sidney and Shanghai. Global creative communications have been handled over the past by Y&R for advertising, Ogilvy for digital UX and website design, Cogent Elliot for brochure and website delivery and Wunderman for customer relationship management. JLR continue to work with Mindshare for media planning and buying across both brands and Redwood (OneLife customer magazine) and Brooklyn Brothers (social media content) are also unaffected by the move (Magee, 2014). The company is expanding both Jaguar and Land Rover brands are expanding their product line-ups, with fifty major new and model-year upgrade product launches planned for the next five years (Media Centre, 2015). Source: http://www.jaguarlandrover.com/gl/en/brands/ JLR in China The company knows too well that it is competing for this market against the likes of BMW, Mercedes, Audi, Lexus, Volkswagen, and Volvo among others making up of a massive 73% of the market share. Per unit sales, China is the largest single market for the brand marketing about 24% of the company’s sales, but the company in 2012 held about 6.5% of the market share as is estimated that it will only improve to 8% by end of a decade after entry. Over 80% of the JLR’s market is overseas, and as said earlier in 2012 China overtook UK as the biggest market. In 2012 Chinese sales grew 71% to nearly 72,000 units and by 2013 it had reached over 90,000 units due to emerging affluent middle class. It is estimated to be 240,000 units in 2020 as compared to the current from about 111,218 units in 2012. It is due to increasing disposable income in China, rising proportion of affluent people, and their strong affinity for premium cars and low-level luxury cars’ ownership rate. As part of its market penetration strategy, the company will offer a range of different capacity vehicles from fuel-efficient to high capacity vehicles. The fuel-efficient vehicles are tailored to those who are mindful of costs involved in running the vehicle but would wish to have big brand name on the road (British Chamber of Commerce in China & China-Britain Business Council, 2011). It then means that the company is segmenting the marketing to three different segments; upper class, middle class and emerging middle class. The company primarily wants to target the first two for its premium models to begin with (Riley, 2014). JLR has employed a multi-faceted mode of promoting itself to increase its footprint in China. This country is becoming the largest market, the world over, for luxury brands. In order to ramp-up its sales and try to catch up with the German models, the company has used various modes to increase its market share. The company has stepped up investment in the country by entering into a joint venture with Chery Automobile Company in October 2012 to assemble units and to manufacture China-specific models. The local manufacturing is expected to see prices on vehicles drop by about 15% on account of local manufacturing, because of reduced import tariffs and transportation costs hence boosting demand (Trefis Team, 2014). A research and development facility and an engine production plant are part of the joint venture. The joint venture manufacturing plant is manufacturing Range Rover Evoque besides also increasing the introduction of JLR models by 2016. The factory is to be established in a Chinese commercial city, Changshu in an Economic Development Zone north of Shanghai (Media Centre, 2014). The manufacturing plant was expected to be complete by the end of 2014. The rolled its premium luxury Range Rover Evoque at a very colourful ceremony in October 2014 to coincide with the inauguration of its overseas factory in China with an investment of USD 1.7 billion. It was intended to consolidate its position in the world’s largest car market. Tata Group chairman, Cyrus Mistry, alongside top British and Chinese officials took part in the event, to manufacture new models (PTI, 2014). JLR says that establishing in China will enable it to build vehicles designed specifically for the Chinese market. The changing a product or service to meet the specific needs of customers in a different geographic location, in this case, China means that it is a good example of the concept of localization. It will enable it to have access to a much wider and well-established dealer network across the country. The company had a network of about 150 dealers in most of the main and second-tier cities in China, hence, allow it maximizes sales opportunities in the main urban areas. An expected distribution agreement with Chery would also mean Chinese-made JLR automobiles would be sold through the existing Chery dealership network (Riley, 2014). The company recognized, alongside other luxury manufacturers, that China has become a buying centre, not only for cheap brands. It means that it has to do more over and above the brands of the cars, to win market share. It has focused on corporate social responsibility (CSR) as part of marketing armoury to open doors to the government-controlled media, to the hearts and minds of the Chinese consumer and the government officials. The company put money in charity funding that supports commercial expansion. JLR used the Beijing Auto Show in April 2014 as platform to announce the establishment of a 50 Million Yuan (£4.86 million) China and Youth Dream Foundation. It is to be used to support the dreams of underprivileged and disadvantaged children. It will enable the company to pursue a profit agenda by supporting the needs of a China who cannot afford its products, in order to encourage the China that can afford to embrace the brand more. This strategy is sound for non-listed companies in that it is a sign of maturing corporate landscape on an on-message way to provide a strong point of difference in an increasing highly competitive environment. This makes the company signal a long-term commitment to a locality (Rice, 2014). JLR in Britain The company has a vague marketing campaign in the UK almost similar to that of the developed world, other than a few distinct marketing campaigns unique to the British market. The company has been involved in typical media campaigns in advertising through television ads, newspaper, social media, radio, and billboards. These are the traditional modes that it has been using for a long time, and there is still no turning back as it will still use the same modes all through. Over the past three years though, the company, has been emerging from depressed performance occassioned by the world financial crisis which nearly crippled its sales totally. The company had to make tough decisions that included discontinuing the production of Land Rover Defender series later this year and staff restructuring. Ford also decided to sell the company as it was no longer viable in the long-term, hence the coming of Tata Group which bought a majority stake. The company has since adopted a lean manufacturing process which has involved manufacturing vehicles and parts overseas as earlier mentioned in a least-cost destination, majorly India. The parts can be re-shipped back to the UK though still a majority of the manufacturing is still going on in the country (West, 2014). Since then, the company has been emerging from depression and is now making profits and has since rehired staff min all its departments due to increased vehicle demand across the world. In the last three years, the company has added more than 11,000 workers to make a 26,000 strong workforce around the world. A majority is in Britain. As part of its messaging and communications though, the company is involved in many campaigns to ensure a strong presence in the integrated communication business. The company is now very strong in media coverage in all media including internet presence to cover events and product range production. The Spark44 Media Centre is leading the campaign overall. It launched a partnership with sports federation. The luxury and sports car manufacturer Jaguar announced as official sponsor and car partner to All England Lawn Tennis Club (AELTC) for Wimbledon. It was to supply vehicles for its award-winning range including XE, XJ and XF models in order to give fans an opportunity to make their first visit to their Championship through its #JaguarWimbledon initiative (Jaguar, 2015). In Britain, its primary focus has been the retail market. But, recently and with the hindsight of the world financial crisis, the company has decided to segment a new model of marketing. The company has decided to pursue fleet sales to corporate bodies in order to rebalance volume with fleet and business sales in order to seek maximum residual values. It has been a considered view that the retail market falls more rapidly than fleet and the stronger presence in the corporate sector will help in the reduction of risks involved (Harris, 2014). In marking its 80th anniversary, the company will field nine of the marque’s most famous 1950s models in the 2015 Millie Miglia. The event will run from 14th-17th May, 2015, with drivers piloting three C-types, three D-types, an XK140, an XK120, and an MK VII. The star-studded event will feature from motorsport, entertainment and music to drive historic Jaguars on the Millie Miglia. The event will be covered by live updates from company’s social media channels, as well as Twitter (#JaguarMillie) profiles of drivers (Media Centre, 2015). Those who will participate in the event include Derek Bell, David Gandy, Jodie Kidd, Elliot Gleave, James Martin, Charley Boorman, Nick English, Giles English, and Ian Callum. The company has engaged other celebrities in trying to boost the company’s sales in Britain and all over the world. They include but not limited to David Beckham and James Bond movie series actor Daniel Craig. The two markets The two markets, from our paper, have entirely different marketing communications messages that it is carrying. The two markets are different in that one is a developed market and the other is an emerging market that is joining the reach list but still has less disposable income comparatively. The differences, according to my opinion, will still remain in the long-term. One is characterized by a home brand that has been in existence for long, and the other is a new product in the market coming to try to localize in the face of other establishing companies. One is partnering in recreational events while the other is establishing to focus on CSR in order to gain market traction. Key Issues affecting IMC Some of the key issue that have impacted the company from practising IMC in its full array include; The new market in China still requires more acceptances locally that might take longer time than expected. The company is emerging from a world financial crisis and depression that made it almost close down, only saved by an Indian company that invested to revive it. IMC in the short-term might still require a heavy budget outlay that the company is not yet ready to be engaged in the near future. From figure 3 above, it is evident that the company has fully employed the IMC Model in Britain in its marketing plan. The company is involved in product promotion, PR, sales promotion, advertising, events, personal selling and direct marketing. While in China, I would say it is still in its formative stages, and the IMC model has not been fully employed and used. The company just started with PR, advertising, events like product launching and sales promotion. Direct marketing and personal selling is not yet used. Conclusion and recommendations Conclusion In conclusion, the IMC model is a valuable tool that can be used deployed by an organization to increase its sales. In traditional marketing communications, businesses and agencies plan separate campaigns, PR, direct marketing, and sale promotions. But, IMC uses the same tools to reinforce each other and improve marketing effectiveness. IMC uses advertising to raise awareness of a product and will to the generation of lead for the sales force. By communicating the same information through different media, reinforces the message in the advertising. A company can go further to use mail and electronic means to follow up inquiries from press or advertisingcampaigns and provide prospects with more information (Pickton, & Broderick, 2005). IMC model creates consistency as the different tools features the same creative treatment. By repeating key phrases, headlines, and images in each communication, the company ensures that prospects and currents customer receive consistent messages each time they come across one of the elements of the campaigns. It helps reinforce the basic campaign themes by increasing the frequency each time prospects see or hear the same message. This consistency provides customers with information in the format they prefer. They can prefer to specify the modes they want to receive through and the messages they want to see in a mode. The needs for customers who search the internet for information can bump into company’s consistent information appearing in different media (Hulbert, Capon, & Piercy, 2003). It also comes with cost savings in that it uses the same copy for various media by avoiding creating new messages. When an external communication agent is used, it will reduce agency fees and use of one specialist firm. It is fair to conclude then that IMC model is the best and more result-oriented than the traditional models. Recommendations The company should deploy more in using IMC model in China to increase its market footprint as it can enjoy more sales due to large population There are Chinese celebrities like Li Na (top athlete golf player), Fan Bingbing (actress), Tong Liya (actress), Andy Lau (actor and singer), Jay Chou (singer and actor), and Yang Mi (actress), though the list is endless (Flannery, 2014). There is a growing online community in China, who apart from shopping or looking for other goods, should find targeting messages shareable in social media or adverts running on shopping sites. The company also can increase outreach through professional personalized selling and sales teams can cover the entire country Jaguar Land Rover is all about British identity and history and so the company should participate in many events including the birth of the royal baby early Saturday 2 May 2015 and observation of end of World War II besides its 80th anniversary. 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