INTEGRATED MARKETING COMMUNICATION concept process and application Reza

INTEGRATED MARKETING COMMUNICATION: concept, process, and application Reza A. Nasution, Ph. D Director of MBA Program School of Business and Management Institut Teknologi Bandung

COMMUNICATION Communication is a transactional process between two or more parties whereby meaning is exchanged through intentional use of symbols (Engel et al, 1994).

MARKETING COMMUNICATION • Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers—directly or indirectly— about the products and brands that they sell. • Marketing communications represent the “voice” of the brand are a means by which it can establish a dialogue and build relationships with consumers.

Ads spending was reduced to be 75% 2003 Ads dominatio n (almost 100%) Early 90’s 80’s and under CHANGES IN MARCOMM SPENDING 50% trade promo, 25% consumer promo, & 25% ads

TRADITIONAL MARCOMM TOOLS

THE IMPORTANCE OF INTEGRATION Marketing communication activities must be integrated to deliver a consistent message and achieve the strategic positioning desired.

COMMUNICATION PROBLEMS • Level A: technical = transmission • Level B: semantic = message representation • Level C: effectiveness = customer behavioral change

HAVE YOU EVER EXPERIENCED THESE? • You sent an e-mail to a friend and got a response that you did not expect. You decided to talk to him/her directly and eventually he/she understood your intention. • You received a flyer from a reputable institution that did not match the image of the institution. • You found different FB accounts for a single institution or company and they look different to each other.

INTEGRATED MARKETING COMMUNICATION Management and control of all marketing communication activities = “One Voice, One Look”

EXAMPLES • Honda Jazz • Gudang Garam International

MORE TO BE INTEGRATED • Strategic integration between brand personality and its communication through any media that entirely build the brand personality • Analysis, choice, implementation and strategic control of all marketing communication elements that help companies to create transaction with their customers efficiently, economically and effectively • The essence of IMC is a call to make coordination and strong brand strategy, which is driven by customer feedback data

DIFFERENT FACETS OF INTEGRATION • • Vertical Horizontal Marketing mix Communication mix Creative design Internal-external Financial

THREE BASIC ANTECEDENTS 1. Cross-functional strategic planning 2. Mission marketing 3. Interactivity Source: Reid, 2005

IMC SEQUENCE Organizational Prerequisites IMC Antecedents IMC Practices IMC Performance

ORGANIZATIONAL PREREQUISITES OF IMC • Cultural predisposition to cooperate • Market and brand orientation • Market and consumer-sensing capability • Practice of ‘informed approach’ • Top management support Source: Madhavaram, 2004 and Reid et al. , 2005

STAGES OF IMC ADOPTION • Tactical coordination • Marcomm scope redefinition • Strategic integration Source: Adapted from Kitchen and Schultz, 2000

TACTICAL COORDINATION 6 criteria to check tactical integration: 1. Coverage 2. Contribution 3. Commonality 4. Complementarity 5. Versatility 6. Cost

IMC TACTICAL PLANNING Identify target audience Evaluate effectiveness Analyze SWOTs Determine MC Objective Determine the budget Develop strategies and tactics

INTEGRATED MARKETING COMMUNICATION PLAN Identify target audience Analyse the various customer and prospect segments and determine which to target and to what extent Analyse SWOTs Summarize internal (strengths, weaknesses) and external (opportunities, threats) brand – related conditions with respect to communicating with the selected target; determine the success of the MC functions and media used in preceding years Determine MC Objective Decide what marketing communication programmes should accomplish

Develop strategies and tactics Determine which MC functions should be used and to what extent. Choose brand messages and means of delivery. Support each strategy with a rationale. Decide when each MC Programme will begin and end Determine the budget Decide what the overall MC budget will be and then how money will be divided among the selected MC functions Evaluate effectiveness Conduct ongoing MC tests in an effort to find more effective ways to do IMC. Monitoring and evaluate all the IMC efforts to determine effectiveness and accountability

FACTORS TO CONSIDER MC Objectives Buyers Readiness Stage IMC Strategy & Tactics Regulations Competitors’ MC tactics Products and Brand Factors Buyer Behavior Characteristics of MC Tools

EXAMPLE • JAKARTA EYE CENTER

IMC AUDIT • Duncan and Moriarty’s IMC Miniaudit is used to assess marcomm integration • The audit consists of 5 aspects: 1. Interactivity 2. Mission marketing 3. Organizational infrastructure 4. Strategic consistency 5. Planning and evaluation

PRETEST • The purpose of Pre-Test is to measure the knowledge of customer about the brand before IMC is conducted. • The analysis includes IMC concept, creative strategy, brand awareness, brand knowledge, and perceived positioning. • The method used are Focus Group Disscusion (FGD) and Survey

IMPLEMENTATION ISSUES • Holm (2006) – Strategist lack of understanding about communication theory and practice – Tactical persons lack of strategic management process and practice – The intersection area between the two is very small • Kotler et al. (2009) – Large companies employ several communications specialists to work with their brand mangers who know comparatively little about the other communication tools. – Many global companies use a large number of ad agencies located in differing countries and serving different divisions.

ASSESSING IMC IMPACT Activity & Program Metrics Customer Perceptions & Behavior Market Performance • Marketing Investment • Program Quality • Clarity • Relevance • Distinctiveness • Consistency • Channel expansion • Brand awareness • Brand associations • Perceived quality • Brand Loyalty • Sales • Market share • Price premium • Profitability • Price elasticity • Brand penetration Brand Value Chain “Marketers can judge marketing communications according to its ability to build brand equity and

PRACTICAL INDICATORS v Marketing communications is GREAT when : - People remember the ad and the brand - The promotion draws people into the store - The store display motivates people to try the product v Marketing communication DOES NOT work, when : - The ad is forgettable or point is unclear - No one remember the promotion - The direct email piece gets thrown away without being opened

PERFORMANCE AUDIT • Sales-related performance • Brand-related performance • Customer satisfaction

SALES-RELATED MEASURES • • • Sales Market share Sales margin Price premium Price elasticity Brand penetration index

EXAMPLES Honda Beat Semen Tiga Roda 1200000 1033928 1000000 800000 712007 600000 426935 400000 200000 0 208490 2008 Source : okezoneautos 2009 2010 2011

BRAND EQUITY EVALUATION Academic Models Generic/Basic Models: Aaker (1991, 1996) Keller (1993, 1998, 2003) Campbell (2002) Netemeyer (2004) Specific Models (adapted generic models) Practical Models Brand Asset Valuator Brand Dynamics Equity Engine

BEHAVIORAL CHANGES (Source: Kotler et al. , 200

LASIK LIFE CYCLE 2000 1800 1600 1400 1200 1000 800 600 400 200 0 2011. 5 2012. 5 2013. 5 2014. 5 2015. 5 2016

EVALUATION, CONTROL AND REVISION • Driving forces: – Internal dynamics – External dynamics: • Macro environment dynamics • Industry dynamics • Market dynamics • Evaluation and control should be done periodically and when necessary • Revision should be done promptly and impacts should be measured properly • Sometimes, all IMC planning steps should be repeated entirely

The World keeps changing and so must we. Only when we rule the change, we can rule the world THANK YOU!! For further discussion please send e-mail to reza@sbm-itb. ac. id