Chapter 15 Blog

Designing and Managing Integrated Marketing Communications

The means by which firms inform, persuade, and remind consumers about the products and brands they sell is known as Marketing Communications (MCs) Through MCs a company is able to establish a dialogue and build relationships with consumers. MCs show consumers how and why a product is used, by whom, where and when: lets consumers know who makes the product and what the firm and brand stand for; and offer an incentive for trial or use. They allow companies to their brands and other people, places, events, brands experiences, feelings and things. They can contribute to brand equity-by establishing the brand in memory and creating a brand image-as well as strengthen customer loyalty, drive sales, and even affect shareholder value. In light of this marketers have to really be creative in using technology without intruding in consumers’ lives.

The effectiveness of mass media has changed tremendously due to the fact that there is a rapid diffusion of multipurpose smart-phones, broad band and wireless internet connections, and ad skipping digital video recorders. Technology and other factors have deeply changed the way consumers’ process communications.

The marketing communications mix consists of eight major modes of communications:

1. Advertising: Is a paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor.

2. Sales promotion: Is used when encouraging trial or purchase of a product or

service.

3. Event s and experiences: company sponsored activities and programs designed to create brand-related interactions.

4. Public relations and publicity: programs directed internally or externally or promote or protect a company’s image or its individual product communications.

5.  Direct marketing: Use of mail, telephone, fax, email or internet to communicate directly with or solicit response or dialogue from specific customers and prospects.

6. Interactive marketing: online activities and programs to engage customers or prospects and directly or indirectly raise awareness improve image or elicit sales.

7. Word-of –mouth marketing: People to people oral, written, or electronic communications that relate to the merits or experience.

8.  Personal selling: Face to face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions and procuring orders.

Developing effective communications requires eight steps:  (i)Identifying the target audience (ii) Determine objectives (iii) Design communications (iv) Select channels (vi) Establish budget (vii) Decide on media mix (viii) Measure results

  Manage integrated marketing communications

The process must start with a clear target audience in mind: potential buyers of the company’s products, current users, deciders or influencers and individuals, groups, particular publics, or the general public. The target audience critically influences the communicator’s decisions about what to say, how, when, where and to whom.

Determine the communication objectives

Category need

Establish a product or service category as necessary to remove or satisfy a perceived discrepancy between a current motivational state and a desired emotional state.

Brand awareness:

Foster the consumer’s ability to recognize or recall the brand within the category, in sufficient detail to make a purchase. Recognition is easier to achieve that recall, but brand recall is important outside the store, whereas brand recognition is important inside the store. Brand awareness provides a foundation for brand equity.

Brand attitude:

Help consumers evaluate the brand’s perceived ability to meet a currently relevant need. Relevant brand needs may be negatively oriented (problem removal, problem avoidance incomplete satisfaction, normal depletion) or positively oriented (sensory gratification, intellectual stimulation, or social approach.

Brand purchase intention:

Move consumers to decide the brand or take purchase related action

Design the communications

Formulating the communications to achieve the desired response requires solving three problems: what to say (message strategy), how to say it (creative strategy), and who should say it (message source).

Message Strategy:

In determining message strategy, management searches for appeals themes, or ideas that will tie in to the brand positioning and help establish points-parity or points- of -difference. Some of these may be related directly to product or service performance (the quality, economy, or value of the brand), whereas others may relate to more extrinsic considerations (the brand as being contemporary, popular, or traditional).

Creative strategies are the way marketers translate their messages into a specific communication. We can classify them as either informational or transformational appeals. An informational appeal elaborates on product or service attributes or benefits assuming that consumers will process the communication very logically. A transformational appeal elaborates on a non product related benefit or image. It might depict what kind of person uses a brand or what kind of experience results from use.

Takeaway

Although Integrated Marketing Communications (IMC) requires a lot of effort it delivers many benefits. It can create competitive advantage, boost sales and profits, while saving money, time and stress. IMC wraps communications around customers and helps them move through the various stages of the buying process. This ‘Relationship Marketing’ cements a bond of loyalty with customers which can protect them from the inevitable onslaught of competition. The ability to keep a customer for life is a powerful competitive advantage.

IMC also makes messages more consistent and therefore more credible. This reduces risk in the mind of the buyer which, in turn, shortens the search process and helps to dictate the outcome of brand comparisons.

Finally, IMC saves money as it eliminates duplication in areas such as graphics and photography since they can be shared and used in say, advertising, exhibitions and sales literature.

Chapter 10

A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information and ideas.

Product Level - is an important aspect in marketing that a marketer has to critically understand and address. There are five different product levels and each level adds more customer value, and the five levels constitute a customer-value hierarchy.

The basic level is the core benefit: the service or benefit the customer is really buying. A hotel guest is buying rest and sleep. The purchaser of a drill is buying holes. Therefore marketers in the first place have to see themselves as benefit providers.

At the second level, the marketer must turn the core benefit into a basic product. Thus a hotel room includes a bed, bathroom and towels. At the third level, the marketer prepares an expected product, a set of attributes and conditions buyers normally expect when they purchase this product. Hotel guests expect a clean bed, fresh towels, and bathing gel etc…

At the fourth level the marketer prepares an augmented product that exceeds customer expectations. In developed countries, brand positioning and competition takes place at this level. In developing and emerging markets, competition takes place mostly at the expected product level.

At the fifth level is the potential product, all the possible augmentations and transformations the offering might undergo in the future. At this point companies search for new ways to satisfy customers and distinguish their offering.

Basing on product augmentation, it is here that differentiation arises and competition increasingly occur which also leads the marketer to look at the user’s total consumption system: the way the user gets and uses products and related services. Each augmentation adds costs, however, and features and benefits to differentiate themselves. As some companies raise the price of their augmented products, others offer a stripped-down version for less.

Product classification is yet another aspect that marketers use to classify 

products on the basis of durability, tangibility and use (consumer or industrial).

Durability and tangibility:

Non-durable goods are tangible goods normally consumed in one or a few uses, such as beer and shampoo. Since such goods are frequently purchased, the appropriate strategy is to make them available in many locations.

Durable goods are tangible goods like appliances that survive many uses, require personal selling and service, command a higher margin and require more seller guarantees.

Services are intangible, inseparable and variable.

Consumer-goods classification:

These are classified according to shopping habits; these products include convenience goods such as soft drinks, which are purchased frequently, immediately and with minimal effort.

Industrial-goods- classification:

Materials and parts are goods that enter the manufacturer’s product completely.

Takeaway: One of the important elements of marketing mix is Product. Any firm is most known by the product it is offering. The other elements of marketing mix are based on it. Therefore it is of utmost importance that the firm develops a sound product policy.

As mentioned in chapter 8 am fascinated with the topic of branding, and in this particular chapter I see exactly where branding comes in at the augmented product (fourth level). This is where a customer expects to see more than a clean bed and more than a white towel. For emerging markets branding is done at the third level (expected product), its done even earlier in the product level. 

Companies tend to raise prices of augmented products and others offer a stripped-down version for less; this aspect shows me how China and other Asian countries are trying to imitate high quality products in the US and Europe and offer similar products but for less money.

Chapter 8

A brand strategy is how, what, where, when and to whom the firm plans on communicating and deliver brand messages. Where the firm advertises, the distribution channels are part of the brand strategy. What the company visually and verbally communicates is also part of the brand strategy.

A company’s branding strategy indicates the number and nature of both common and distinctive brand elements which would be (1) to develop new brand elements for the new products, (2) to apply some of its existing brand elements, or (3) use a combination of new and existing brand elements.

In this era, successful firms are those that know how to make decisions about how they want to brand themselves. A brand will distinguish one company from the other to be specific from its competitors. If a brand decides to brand its offerings, it must choose which brand name to use.

Three general strategies are:

Individual or separate family brand names:

If a product fails or seems to be low quality, the company’s reputation is not hurt because the brands are separate. Firms often use different brand names for different quality lines within the same product Class.

Corporate umbrella or company brand name:

Many firms such as Bralirwa (for beer and soft drinks) in Rwanda use their corporate brand as an umbrella brand across their entire range of products. In such an instance the development costs are lower and the sales are likely to be stronger if the manufacturer’s name is good.

A corporate umbrella strategy gives the firm a way of combining efforts in its branding. If a company achieves the goal of establishing a positive reputation for the umbrella, then it requires less effort to create a brand appeal for the individual brands. When a customer has a positive experience with an individual brand this can also help create a positive image of the umbrella brand in his mind.

Takeaway

Branding is one of my favorite topics in this course and I want to relate branding to the characteristics of a human being, all the way from their name, height, skin color, and temperament to mention but a few. The temperament may brand each person as an extrovert, introvert, melancholic and so on and so forth. The human traits will always distinguish us humans, no one is like another even twins. In the same way branding products brings a difference; a Gucci brand will never be the same as a Dolce Gabbana, branding will always differentiate the two. I am tempted to say that branding is that special name every person has on them.

Blog 2 (Chapters 5, 6, 7)

Chapter 5

Consumer behavior is influenced by various factors such as cultural, social and personal factors. Among these cultural factors exert the broadest and deepest influence.

Consumer behavior refers to the way individuals, groups and organizations select, buy, use and dispose of goods, services or experiences to satisfy their needs and wants. It is of utmost importance for marketers to understand the theory and the reality of consumer behavior.

In this blog I will talk about cultural factors only. Culture is the way of life or in other words the ideas, customs, and social behavior of a particular people or society. The norms, ideas, customs, behavior are embedded in people’s lifestyle. And as such these determine the person’s wand and behavior.

Each culture consists of smaller subcultures that provide more specific identification and socialization for their members. Subcultures include nationalities, religions, racial groups and geographic regions. When subcultures grow larger and affluent enough, companies often design specialized marketing programs to serve them.

Speaking about social classes they are relatively homogenous and enduring divisions in a society, hierarchically ordered and with members who share similar values, interests and behavior. Social class members show distinct product and brand preferences in many areas, including clothing, home furnishings, leisure activities, and automobiles. There are also language differences - advertising copy and dialogue must ring true to the targeted social class.

In my view cultural factors seem not only to influence consumer behavior but also other political and socio-economic issues. It is the foundation of what drives one into their success, freedom, and so on and so forth. Culture is passed on even from one generation to another so it dominates and influences how we behave in each circumstance. When branding, it is important to distinguish the cultural factors inherent to each market or to each situation in order to adapt its product and its marketing strategy since these will play a role in the perception, habits, behavior or expectations of consumers.

I will give an example, in the United States; it is common to invite colleagues or friends at home for a drink or dinner. In Japan, on the contrary, inviting someone at home does not usually fit into the local customs. It is better to eat with friends or colleagues in a restaurant.

Chapter 6

The business buying-decision process includes eight stages called buy-phases. In modified re-buy or straight – rebuy situations some stages are compressed or bypassed. For example, the buyer may have a favorite supplier or a ranked list of suppliers and can skip the search and solicitation stages.

The buying process begins when someone in the company recognizes a problem or need that can be solved by obtaining a good or service. The need is triggered by internal or external stimuli. Internally it could be a decision to develop a new product which requires new equipment and material or a decision to search for new vendors, lower prices or better quality. Externally the buyer may get new idea at a trade show, see an ad, visit a web or a call from a sales representative who offers better products or lower prices.

Next the buyer determines the needed item and the specifications and quantity required. Reliability, durability and price are determined. Here business marketers can help by describing how their products meet or even exceed the buyer’s needs.

The buyer tries to identify the most appropriate suppliers through different channels. For example in my organization we have a vendors database and we always know what each supplier can offer. The searching can also be done through directories, asking other companies, or the internet.

The buyer will then ask suppliers to submit their proposals; in my organization usually we will ask for three proposals (Proforma Invoices) from three suppliers in order to compare prices and specifications, delivery time and quality.

Selecting the supplier is based on what the buyer wants to achieve i.e. depends on the criteria set when soliciting for the proposals.

After selecting the supplier, the buyer negotiates the final order, listing the technical specifications; the quantity needed, the expected time of delivery, return policies and so on.

Performance review of the retained supplier is very vital, if they are not giving the services as stipulated in the contract then it would be ideal to drop them. Feedback can be received from end-users. The buyer may contact the end users through their evaluation.

I do strongly think that understanding the buying decision process will enable companies to align their marketing strategies accordingly.

Chapter 7

Segmentation can be done either by looking at the descriptive characteristic: geographic, demographic and psychographic, or, at behavioral trends such as consumer responses to benefits, usage occasions, or brands. Regardless of the type of segmentation used, the key is adjusting the marketing program to recognize customer differences.

Geographic Segmentation

Geographic segmentation divides the market into geographical units such as nations, cities, neighborhoods. The company can operate in one or a few areas or it can operate in all but pay attention to local variations. It can tailor market programs according to the needs and wants of local customer groups in trading areas, neighborhoods even individual stores.

Demographic Segmentation

One common way of segmenting a market is through the use of demographics. Demographics are quantitative characteristics of a group of people. These characteristics might include sex, age, income or geography (where they live). Businesses that segment their market based on demographics are attempting to target specific market segments that are more likely to be interested in what they have to offer. The cosmetics industry, for example, primarily targets women. The hunting industry might be more likely to target men. Luxury car makers target their markets based on income. Marketers are likely to consider multiple demographic characteristics when segmenting their consumer markets.

Psychographic Segmentation

Psychographics are qualitative attributes of a market and refer to the way people think and what they like to do. Psychographics are personal attributes related to personality, values, attitudes, interests, or lifestyles.

Takeaway

The more segments that marketers are able to identify and combine to specifically target groups of individuals most likely to be interested in what they have to offer, the more effective--and cost effective--their marketing efforts can be. Toward this end, businesses attempt to learn as much as they can about their customers--where they live, their age, their income levels, what they purchase, what their hobbies are and what their likes and dislikes are. This information can then be used to target these customers by reaching out to non-customers who share similar traits and characteristics.

Blog 2 (Chapter 3, 4)

Chapter 3

A marketing information system (MkIS) is a management information system (MIS) designed to support marketing decision making. Jobber (2007) defines it as a "system in which marketing data is formally gathered, stored, analyzed and distributed to managers in accordance with their informational needs on a regular basis."

The system draws from data based on internal company records, marketing intelligence and marketing research. Marketing managers rely on internal reports and databases of all sorts in order to spot important opportunities and potential problems.

At the heart of internal records system is the order-to-payment cycle; sale representatives, dealers and customers send orders to the firm then the sales department prepares invoices and transmits copies to various departments and back orders out of stock items. The shipped items generate shipping and billing documents that will be distributed to various departments. Accuracy and rapidity is key because customers will favor firms that quickly deliver their services.

Marketing managers need real time and accurate reports on current  sales, and sales data must be carefully interpreted so as not to draw the wrong conclusions. Such timely and accurate information helps managers make evidence based decisions.

Companies organize information into customer, product and salesperson databases. Data warehouses are then created which contain personal information of customers such as their past transactions, demographics and psychographics (activities, interests, and opinions). The data is mined and it garners fresh insights into neglected customer segments, recent customer trends, customer loyalty and other important and useful information.

I want to conclude that the advances in information technology and innovation in marketing systems are boosting the ability of marketing managers by giving them an opportunity to react much faster to their customer needs and end up with closing the sale successfully and customer satisfaction.  Gone are the days when the marketing manager had to wait for weekly reports from sales manager.

Chapter 4

Companies use information about customers to enact precision marketing designed to build strong, profitable long-term relationships.  Customer relationship management (CRM) is the process of carefully managing detailed information about individual customers and all customer touch points to maximize loyalty.  

A touch point is any occasion on which a customer encounters the brand and product from actual experience to marketing communications to casual observation. For example for hotels the touch points include reservations, check-in, and checkout, frequent –stay programs, room service, business services, exercise facilities and restaurants.

CRM enables companies to provide excellent real time customer service through the effective use of individual account information. Based on what they know about each valued customer, companies can customize market offerings, services, programs, messages, and media. CRM is important because a major driver of company profitability is the aggregate value of company’s customer base. Don Peppers and Martha Rogers outline a framework for one- to- one  marketing that can be adapted to CRM marketing as follows:

Identifying prospects and customers:  building individual relations is key, maintaining, and mining a rich customer database with information from all the channels and customer touch points.

Differentiating customers in terms of: (1) their needs and (2) their value to the company. Spend proportionately more effort on the most valuable customers. Calculate customer lifetime value and estimate net present value of all future profits from purchases, margin levels, and referrals, less customer-specific servicing costs.

Interact with individual customers to improve knowledge about their individual needs and build stronger relations. Facilitate customer interaction through the company contact center and website.

Customer products, services and messages to each customer are customized and personalized.

In my view companies are now moving away from wasteful mass marketing to more precision marketing designed to build strong customer relationships. Today’s economy is supported by information businesses. Information has the advantages of being easy to differentiate, customize, personalize, and dispatch over networks at incredible speed.

Blog 1 (Chapters 1, 2, 3)

Chapter 1

The holistic marketing concept looks broadly on how to develop, design and implement marketing programs, processes and activities and their interdependence. With Holistic marketing everything matters in marketing and that a broad, integrated perspective is often necessary. Relationship marketing, integrated marketing, internal marketing and performance are the components that characterize holistic marketing.

I will talk about one characteristic which is relationship marketing.  Relationship marketing purposes to build strong, mutual, long-term relationships with key constituents in order to earn and retain the business. The key constituents are: customers, employees, marketing partners (channels, suppliers, distributers, dealers, agencies), and members of the financial community (shareholders, investors, and analysts).

In the end the company will profit highly by gaining a marketing network out of its constituents with whom it has built mutually profitable business relationships.

My take on this is that relationships are so important for any unit to exist and thrive. A holistic approach to marketing is more intriguing.

According to (http://en.wikipedia.org/wiki/Relationship_marketing), relationship marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages.

With the growth of the internet and mobile platforms, relationship marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels. This includes tools for managing relationships with customers that go beyond simple demographic and customer service data. Relationship marketing extends to include inbound marketing efforts, (a combination of search optimization and strategic content), PR, social media and application development.

         

Chapter 2

A marketing plan summarizes what the marketer has learned about the market place and indicates how the company plans to attain its marketing objectives. Each product level whether product line or brand has to design a marketing plan for achieving its goals. Marketing conditions are dynamic and they change rapidly so planning and adapting to the changes is crucial and indispensable. Today marketing plans have their own flaws, such as lack of realism, insufficient competitive analysis and a short-run focus.

Firms make marketing plans on a yearly basis, the plan defines how progress toward objectives will be measured so management can assess the results and evaluate the effectiveness and efficiency of the organization’s marketing.

Returns on marketing investments are not easily measured because outcomes such broader brand awareness, enhanced brand image, greater customer loyalty, and improved new product prospects takes months or even years to manifest themselves.

I do think that although a marketing plan has its own flaws, it is an important tool that a firm cannot forego. A plan keeps your marketing efforts aligned with corporate goals and objectives; A good marketing plan will help determine what should be done and what should be left out. This will keep the team focused on work that matters—work that accomplishes the company’s goals and objectives.

A plan puts the firm on the same perspective, companies suffer from a lack of unity. Everyone has different goals and objectives and has an opinion on what the company should do and how it should be done. A good plan will help get the team in agreement on your problems, challenges, goals, objectives, strategies and tactics, ultimately getting everyone aligned and contributing.

A plan helps capture sight of the big picture, a lot of the tactics we engage in these days tend to be very specialized and focus on the small picture. Twitter, for example, is a micro-exchange between you and your audience, 140 characters at a time. It’s a powerful tool, but one that’s very much about the moment. A good plan will the company keep sight of the big picture so it does not get lost in the weeds and miss out on opportunities.

Chapter 3

Marketing research is a process of systematically designing, collecting and reporting of quantitative and qualitative data and findings that are relevant to a specific marketing situation that faces the firm. Marketing Research in big companies has a dedicated department meaning that it is of utmost importance for a company to channel resources in order to study and understand the industry, competitors, and audiences.

Marketing research starts by defining the problem and the objectives. The problem is well defined and specified because it aims at addressing a marketing challenge. The objective responds to the possible questions that align to the problem definition. Developing a research plan is equally important, it is the way forward for gathering the needed information, data sources, research methodology, tools, sampling plan, and contact methods. The process involves collecting the information, analyzing the information, presenting findings and making decisions.

In my view, for any business whether startup stage or expansion phase; for it to be successful it has to regularly undertake market research in order to stay tuned to changing market trends and to retain competitive edge.

Market research is vital for understanding the critical characteristics of the target market to increase sales revenue, profit, ROI and overall business success.