INTEGRATED MARKETING COMMUNICATION: concept, process, and application

1. INTEGRATED MARKETING COMMUNICATION: concept, process, and application Reza A. Nasution, PhD Director of MBA Program School of Business and Management InstitutTeknologi Bandung

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

3. 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 and are a means by which it can establish a dialogue and build relationships with consumers. • 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 and are a means by which it can establish a dialogue and build relationships with consumers. • 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 and are a means by which it can establish a dialogue and build relationships with consumers.

4. CHANGES IN MARCOMM SPENDING

5. TRADITIONAL MARCOMM TOOLS

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

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

11. 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.

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

13. EXAMPLES • Honda Jazz • GudangGaram International

14. 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

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

16. THREE BASIC ANTECEDENTS • Cross-functional strategic planning • Mission marketing • Interactivity Source: Reid, 2005

17. IMC SEQUENCE Organizational Prerequisites IMC Antecedents IMC Practices IMC Performance

18. 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

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

20. TACTICAL COORDINATION 6criteria to check tactical integration: • Coverage • Contribution • Commonality • Complementarity • Versatility • Cost

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

22. INTEGRATED MARKETING COMMUNICATION PLAN Analyse the various customer and prospect segments and determine which to target and to what extent Identify target audience 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 Analyse SWOTs Decide what marketing communication programmes should accomplish Determine MC Objective

23. 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 Develop strategies and tactics Decide what the overall MC budget will be and then how money will be divided among the selected MC functions Determine the budget 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 Evaluate effectiveness

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

25. EXAMPLE • JAKARTA EYE CENTER

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

27. 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

30. 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.

31. Brand Value Chain 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 • “Marketers can judge marketing communications according to its ability to build brand equity and drive brand sales.” (Kotleret al., 2009)

32. PRACTICAL INDICATORS • 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 • 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

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

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

35. EXAMPLES • Semen TigaRoda Honda Beat Source : okezoneautos

36. BRAND EQUITY EVALUATION

40. BEHAVIORAL CHANGES (Source: Kotleret al., 2009)

41. LASIK LIFE CYCLE

42. 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

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