THE IGMC PLANNING PROCESS

1. THE IGMC PLANNING PROCESS Sunarto Prayitno Intellectual Property of IMCS

2. Background • The first step in the development of an IGMC program is the planning process. • The eight-step planning process discusses on the following pages has been used successfully with a number of companies around the world. • It is a logical approach that leads the planner through the various steps involved in developing a successful communication program. Intellectual Property of IMCS

3. Background • Some organizations may need to expand some of the steps; other may need to delete some of the activities. • Much depends on the specific organization in its current contextual circumstances for which the communication program is being planned. Intellectual Property of IMCS

4. The Eight-Step IGMC Process • Global Database • Consumer/Prospect Valuation • Contact Points and Preferences • Brands Relationships • Message Development and Delivery • Estimate of Return on Customer Investment (ROCI) • Investment and Allocation • Marketplace Measurement Intellectual Property of IMCS

5. Steps 1 Global Database Steps 2 Customer/ Prospect Valuation Steps 8 Marketplace Measurement IGMC Steps 3 Contact Points/ preferences Steps 7 Investment & Allocation Steps 4 Brand Relationships Steps 6 Estimate of Return on Customer Investment (ROCI) Steps 5 Messages Development & Delivery The Eight-Step Integrated Global Marketing Communication Process Source: Don E. Schultz & Philip J Kitchen, Communicating Globally: An Integrated Marketing Approach, NTC Business Book, 2000

6. Global Customer and Prospect Databases • One of the key ingredients in the IGMC approach to developing effective and efficient IGMC program is substantive, continually updated knowledge about customers and prospects. • That generally come from data an information stored electronically in a customer or prospect database or in databases that the organization may maintain. • This simple phrase relationship with the customer or prospect separates a database from a mailing list or various types of segmentation schemes. Intellectual Property of IMCS

7. Global Customer and Prospect Databases • To plan and manage marketing communication in global basis, the organization simply must have information on its customer relationships, whether that be sales, services, or simply contact with customers and prospects. • Without this type of data, the firms must resort to practicing mass marketing on global scale. • The database is the core of any IGMC planning process. Intellectual Property of IMCS

8. Global Customer and Prospect Databases • Most useful databases contain, at a minimum, details on past purchases by the customer or qualifications of prospects that allow them to be separated from mere suspects. • Generally, most organization will have demographic details attached to their customer’s records for customers or end users. • In the business-to-business area, commonly the records will include products or services produced, number of employees, annual turnover, standard industrial code, and so on. Intellectual Property of IMCS

9. Global Customer and Prospect Databases • The key ingredient in the database is the relationship the organization has develop with customers and prospects over time, reflected in data on purchases, inquiries, responses to promotions, and other behavioral data that allow the organization to determine what actions the customers or prospects have taken in the past and thus what might be expected in the future. • If one can observe customer behavior over time, it is much easier to understand the buying strategy the customers are employing or at least the trade-offs being made in brand purchase and supplier selection. Intellectual Property of IMCS

10. Global Customer and Prospect Databases • Database come in many form. Ideally they are electronic so the data can be managed and analyzed by multiple people in the organization. • The key ingredient in a database is bringing all the known information and data about customers and prospects together in one easily accessible form, whether that be electronic or hard copy. Intellectual Property of IMCS

11. Global Customer and Prospect Databases • One of the major challenges for almost all organizations is simply gathering and combining the data that they currently hold on customers and prospects and putting it into some usable form that can be accessed by those needing information, no matter where they may be or how the information might be used. Intellectual Property of IMCS

12. 2.Customer/Prospect Valuation • The reason for this valuation is simple. If we are to invest the finite resources of the organization in cultivating the best customers and prospects, we must have some way of valuing each of them as a basis for this investment process. • The best way we have found to value customers and prospects is financially, that is, by determining their purchases, or what we call “income flow”. Intellectual Property of IMCS

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14. 2. Customer/Prospect Valuation • If we know the financial value of a customer or prospect, we have a solid base from which we might determine the amount we would be willing to invest to either retain, grow, or migrate that customer to other products or services in our portfolio. • Likewise, if we have some idea of the financial value of a prospect, that is, how much income that person or group might generate in the future, we would have a fair idea of how much we would be willing to invest to acquire that prospect and turn him or her into a customer. Intellectual Property of IMCS

15. 3. Contact Points and Preferences • Traditionally, marketing communications managers have made the decisions as to how and when and under what circumstances customers and prospects were contacted, or at least exposed to the organization’s marketing messages. • Thus, historically, the primary goal of the marketing communicator has been to get the messages and incentives in front of customers and prospects efficiently with only passing regard for effectiveness. Intellectual Property of IMCS

16. 3. Contact Points and Preferences • As result, various forms of efficiency measures such as cost per thousand delivered, gross impressions, total audience, and the like have been developed. • Only rarely have we developed or used effectiveness measures: cost per sale, cost per order, return on investment, or the like, except in direct selling situations. • When we use financial measures to value customers and prospects, many of our traditional media and communications tools become woefully in adequate. But, there is a larger problem as well. Intellectual Property of IMCS

17. 3. Contact Points and Preferences • We are now beginning to understand that customers and prospects come in contact with the organization in a multiple of ways in the market place. • Often the marketplace contacts come about with employees or channel partners or services groups or other non marketing people. • Yet these communication or brand contacts are often much more powerful messages deliver. Intellectual Property of IMCS

18. 3. Contact Points and Preferences • Thus our focus in the planning process is to attempt to audit and value the various ways in which customers already come into contact with the organization. • From this we can then view each of those contact points as useful methods of communicating in the future. • In many cases the most powerful communication tools at the disposal of the IGMC manager are non-controllable but manageable communication methods both internal and external to the organization. Intellectual Property of IMCS

19. 3. Contact Points and Preferences • It is critical to determine what communication approaches customers and prospects prefer since, given the many alternatives available, we simply can’t push our wishes on them. Instead we must respond to their preferences. • Another important part of understanding contact points is the impact of various internal and external stakeholders. • The group may achieve great public awareness through the press and electronic media. Obviously the global marketing communication planner must take these activities into consideration. Intellectual Property of IMCS

20. 4. Brand or Organization Relationships • Obviously, there are major differences in how a firm should or would communicate with a long-term, valuable customer and how it would communicate with the ones which had little or no relationship. • That sound obvious, but many global organizations attempt to treat all customers the same, or at least they do so in their communication activities. • Every one is the same to the communication manager, so all treated the same in the communication program. Intellectual Property of IMCS

21. 4. Brand or Organization Relationships • Often, this is done in the guise of efficiency is not always more effective. • And in the customer-driven marketplace of the 21st-century it is effectiveness that will count the most. • We have different relationship with different customers and prospects. Intellectual Property of IMCS

22. 4. Brand or Organization Relationships • We simply must understand the relationship customers and prospects with our firm to develop effective marketing communication program. • We must also understand the relationship customers believe they have with us. • For the most part customers have relationships with brands; that is, they have confidence in the brand and the organization that produces it. Intellectual Property of IMCS

23. 4. Brand or Organization Relationships • Customers buy brands. Customers thrust brands. Customer rely on brands, but most of all customers have relationships with brands. • To build effective communication programs, the marketing communication planner must know what type of relationship the customer has with the brand. • It is also important to take into account the activities of various stakeholder groups. The goals of these groups may be either to enhance or to destroy brand relationship. Intellectual Property of IMCS

24. 5. Message and Incentive Development and Delivery • One of the most dramatically different features of the IGMC process is that development messages and incentives, generally at the heart of any marketing communication program, is fairly far down in the development process. • That reflects the basic premise of IGMC; you can’t develop effective messages or incentives unless and until you understand the people and organizations you are trying to communicate with. Intellectual Property of IMCS

25. 5. Message and Incentive Development and Delivery • Creative is important, but it must be controlled creative that reaches and impacts customers and prospects, not creative that is simply unique and different for its own sake. • You may have noticed that we use the terms messages or incentivesrather than advertising or public relations or sales promotion. This is intentional. • We have found that customers rarely differentiate among the functional areas of marketing communication. Intellectual Property of IMCS

26. 5. Message and Incentive Development and Delivery • Along with the development of messages and incentives, this step includes delivery system. • Historically, we have thought of delivery systems as being forms of media – print or broadcast, in-store or through the mail, and so fort. • The broader view, that delivery systems include whenever and wherever a customer or prospect comes into contact with the brand or the organization, give us a new view of how we might communicate with our audiences. Intellectual Property of IMCS

27. 5. Message and Incentive Development and Delivery • In truth the concept of delivery systems opens up totally new form of communication for the IGMC planner. • With this new freedom for the planner, however, comes accountability. • That is, if new and unique forms of delivery are to be used, there must be methods and ways of measuring the impact and effect of those delivery systems so they can be compared with existing media forms. Intellectual Property of IMCS

28. 5. Message and Incentive Development and Delivery • Delivery system may be more important in the 21st-century marketplace than messages or incentives. • If the message or incentive can’t be delivered to intended customer or prospect, it really doesn’t matter what the message or inventive is or was. • Thus delivery system have become extremely important and will become even more so in our view in the years ahead. Intellectual Property of IMCS

29. 5. Message and Incentive Development and Delivery • Obviously one of the major decisions at this point will be whether or not the marketing communication program should be local, regional, or global. Intellectual Property of IMCS

30. 6. Estimate of Return on Customer Investment (ROCI) • With a thorough knowledge of customers and prospects, their knowledge and understanding of our firm and our brands, and their relationship with them and to us, we now should be able to develop appropriate messages and incentives and find ways to deliver them to relevant customers and prospects. • The next logical step is to estimate what type of return or response we might generate from marketing activities. • In the IGMC process, we call this return on customer investment (IGMC). Not the more return on investment (ROI). Intellectual Property of IMCS

31. 6. Estimate of Return on Customer Investment (ROCI) • Most organizations get absolutely nothing back from their advertising investments. That is, no return is given for their level of spending. • Income from marketing communication comes not from doing the activities or events or even doing them well. • The only return an organization gets from its communication activities is from customers and prospects. Intellectual Property of IMCS

32. 6. Estimate of Return on Customer Investment (ROCI) • They are the ones who respond to the communication programs by purchasing the firm’s goods or services, thereby producing income. • Therefore our approach is to attempt to estimate what type of return we might get from investing in various customers and customer groups. • Obviously, the better the customers or prospects we choose to invest in, the better our returns should be. Intellectual Property of IMCS

33. 6. Estimate of Return on Customer Investment (ROCI) • One of the key ingredients necessary to estimate any type of return from customer is knowledge of the current value of that customer. • In other words, we must know what the customer is worth now to be able to estimate what we might get back from any level of investment in the future. • Our initial information will come from step two, where we estimated the current and potential value of the customer. Intellectual Property of IMCS

34. 6. Estimate of Return on Customer Investment (ROCI) • By knowing that value and what our investment in messages and incentives might be, we can began to estimate what type of return we might generate. • Clearly, in planning IGMC program, we will rely on estimates of returns-that is, based on experience or research or management knowledge, what we reasonably assume might come back. • Once the program is in the marketplace, however, if we have set up the necessary closed-loop systems, we should be able to measure the actual results of our investment. Intellectual Property of IMCS

35. 6. Estimate of Return on Customer Investment (ROCI) • Thus we start with estimates and convert those into actual returns as we capture marketplace results. • This initial estimating activity is critically important to the IGMC process. We generally have before us a wide variety of activities and alternative messages and communication programs. • Only by estimating in advance can we determine which might be most valuable or return the greatest result to the organization. Intellectual Property of IMCS

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37. 7. Investment and Allocation • This is primarily a process of matching up costs of various marketing communication activities and testing them against estimated returns. • Here a great deal of judgment is needed along with the information and material that is contained in our databases and our actual marketplace experience. • The critical step in most investment and allocation decisions is to take zero-based budgeting approach. There should be no preconceived conditions or preset media or delivery choices. Intellectual Property of IMCS

38. 7. Investment and Allocation • Each decision should be made independently, allowing for interaction among the various programs being planned and executed. • Inherent in this approach is the idea of media neutrality: decisions will be based on what will provide the best return to the organization, not on which medium is most attractive to the planner or what might be considered the “sexiest” allocation decision. • We are dealing with the finite resources in developing the best customers and prospects in hope of the greatest returns. Intellectual Property of IMCS

39. 8. Market Measurement • Once the investment and allocation decisions have been made, the final step is to set up systems of measurements to determine what really happened in the marketplace. • Of critical importance here is the understanding that while the marketplace measurement really sums up the results of our IGMC program, that is not the end of the process. In fact it is really the beginning. Intellectual Property of IMCS

40. 8. Market Measurement • We will input the marketplace results of our global marketing communication programs into our customer or prospect database. • The data enhanced by our results will provide the base from which we can start the process all over again. It is this closed-loop, circular system that really differentiates the IGMC approach from other, generally ad hoc approached. Intellectual Property of IMCS