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Chapter 1 Integrated marketing communications and brand equity enhancement

Learning objectives After studying this chapter, you should be able to understand explain: • the nature of marketing communications • the foundations of integrated marketing communications • the marketing communication process • the concept of brand equity • the rationale of co-branding and world-class brands.

Understanding marketing communications To understand marketing communications, we should examine the two elements that make up the concept. 1. Marketing 2. Communication

Marketing is a mix of related activities that transfers the idea of ‘value’ to customers through the process of exchange.

Communication is the process that conveys thoughts and shared meaning between individuals, or between organisations and individuals.

Marketing communications • Facilitates exchanges by targeting a group of customers. • Positions the product away from competitors to offer ‘uniqueness’. • Shares a common meaning with the target audience.

Marketing communication mix Advertising Digital marketing communications Marketing public relations Sponsorship Marketing communication elements Point-of-purchase communications Direct marketing Personal Sales promotion

Integrated marketing communications (IMC) The concept relies on delivering the marketing message to all relevant stakeholders. Synergy works to ensure that all marketing communications are coordinated and consistent. A process determines the types of messages and media channels that will best reach the chosen market segment.

Integrated marketing communications (IMC) A strategic process aimed at enhancing brand equity by: • providing a consistent message • targeting a group of consumers • creating unique mental associations • optimising long-term value of the brand.

Key features of IMC 1 Profile the identified target market 2 Use the relevant media channel 3 Achieve communication synergy, i. e. same brand message 4 Positively influence the target market’s behaviour 5 Build customer relationships, e. g. loyalty programs

Traditional marketing versus IMC A fundamental, strategic change from traditional marketing communications, IMC includes: • exploring advertising channels outside the traditional mass media outlets • a more focused communications method that better targets selected segments • expectations from advertising agencies of greater diversity of communication channels, while still creating a consistent message • ensuring optimal ROI due to higher levels of accountability • creating a culture of ethical behaviour.

IMC building blocks IMC is a communication process involving the planning, creation, integration and implementation of diverse forms of marketing communications that are delivered over time to a brand’s targeted customers and prospects.

Brand is the key to marketing communications • Most marketing communications occur at the brand level. • Brands can be an invaluable asset. • Successful brands can create barriers to entry for competitors. • A brand helps differentiate products from competitors. • IMC can lead to higher levels of brand equity (four fundamental decisions need to be addressed).

Fundamental marketing communication decisions that can enhance brand equity Positioning Targeting Setting objectives Budgeting

Positioning and targeting • A brand’s position is directly related to the target segment. • The position represents the brand’s meaning and shows off its uniqueness. • Targeting offers a cost-effective approach to communications. • Positioning and targeting encompass demographics, values and lifestyles.

Setting objectives and budgeting • Communication decisions reflect the brand’s goals. • Some goals include: – introduction, building and defending a brand – developing awareness, recall and intention to buy the brand. • Communications decisions should remain cost-effective.

Fundamental marketing communication decisions Position and target Guiding structure (What to say and who to reach) Objective Budget (What to accomplish) (How much to spend)

Marketing communication implementation decisions Evaluate program Create the messages Select the mix of communication elements Select media outlets Establish the brand

Program evaluation • Measure campaign results against marketing objectives. • Measure communication outcomes: – Awareness – Comprehension – Attitude – Attention • Increasing accountability related to effectiveness.

ICM should positively affect brand equity • ‘Brand’ is a perception made of a singular element or a combination of: – name – term – sign – symbol – design.

Brand equity goals • Increase market share • Increase brand loyalty • Set premium pricing strategies

Brand equity Brand awareness Brand image (familiarity with the brand) (strong and unique brand associations) Brand equity (Two dimensions form brand knowledge. )

Two dimensions of brand knowledge Brand awareness Brand image • Does a brand name come to mind when consumers think about a particular product category? How easily is the name evoked? • What types of associations (thoughts and feelings) come to consumers’ minds when deciding whether to purchase a particular brand?

Brand awareness • Move brands from a state of unawareness to awareness • To recall • Ultimately move to top-of-mind awareness (TOMA) TOMA Brand recall Brand recognition Unaware of brand Source: Reprinted with the permission of The Free Press, a Division of Simon & Schuster Adult Publishing Group, from Managing Brand Equity: Capitalizing on the Value of a rand Name by David A. Aaker, Copyright 1991 by David A. Aaker. All rights reserved

Brand image • The associations (specific thoughts and feelings) about a particular brand – Stored in memory – Recollections of experiences – Conceptualised as: • type • favourability • strength • uniqueness

Customer-based brand equity framework

Enhancing brand equity • Favourable brands do not emerge automatically. • IMC should develop a favourable message and strong, unique associations. • One example is Coca-Cola’s message of fun, freedom and refreshment.

Leveraging brand meaning

Extending the brand • Various marketing techniques allow for the parent brand to be extended: – Co-branding – Ingredient branding – Products carry multiple brand names. – Associations of each brand are likely to be shared. – The names of brands that make up a product can be promoted, leading to more favourable and stronger associations.

World-class brands • Some brands have exceptional (global) presence. • This can be measured globally by researching: – awareness – perceived quality – intention.