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What is IMC? The practice of unifying all marketing communication efforts so they send a clear, consistent, persuasive message to target audiences. Book IMC Example http://thedarkknight.warnerbros.com/ Advertising Paid, sponsor-identified, nonpersonal (media) communications. Advantages Low cost per contact High degree of control Best differentiation tool Best brand equity builder Disadvantages Very high overall cost Difficult to determine effectiveness Credibility problems Clutter Sales Promotion Uses Introduce new products Get existing customers to buy more Attract new customers Combat competition Maintain sales in off season Increase retail inventories Tie in advertising & personal selling Enhance personal selling efforts Sales Promotion Advantages Response is more immediate than advertising. Appeals to price sensitive consumers Generates extra interest in advertising Easy to measure effects High control Disadvantages Short term impact Often abused Promotion wars Negligible brand image effect Publicity Non-paid, unsponsored, nonpersonal (media) communications. Advantages Most credible Low cost mass communication Disadvantages Very little control Requires media cooperation. Can be negative. Personal Selling Advantages Low overall costs Best for complex info Very specific targeting Direct feedback Flexible message Disadvantages Very high cost per contact Difficult to communicate a uniform message Medium level of control IMC Players Advertiser or Client Advertising Agency AAAA; AAF; ARF Media Organizations Marketing Communications Specialists Direct Marketing Agencies Sales Promotion Agencies Interactive Agencies Public Relations Firms Collateral Services Namelab; Strategic Name Development Reasons for Using an Agency Obtain services of highly skilled specialists Artists Writers Media analysts Researchers Others with specific skills Obtain an objective point of view Free of internal policy constraints and biases Broad range of experience, having worked with: Diverse marketing problems Various types of clients Full-Services Agencies Full Range of Marketing, Communication and Promotion services Planning, creating, producing advertising Performing research Selecting media Non-Advertising Services Strategic market planning Sales promotion and sales training Production of trade show materials Package design Public relations and publicity Agency Services Account services The link between agency and client Managed by the Account Executive Marketing services Research department may design and execute research programs Media department may analyze, select and contract media resources Creative services Creation and execution of ads Copywriters, artists, other specialists Other Agencies and Services Creative Boutiques Provide only creative services Other functions provided by the internal client departments Full-service agencies may subcontract with creative boutiques Other Agencies and Services Media Buying Services Specialize in buying media, especially broadcast time Agencies and clients develop media strategy Media buying organizations implement the strategy and buy time and space Direct Response Agencies Data Base Management Direct Mail Research Media Services Creative Production Sales Promotion Specialists Contests Sweepstakes Refunds and rebates Sampling programs Incentive programs Public Relations Firms Strategy Development Program Planning Generating Publicity Lobbying Public Affairs Image portrayal Damage control Interactive Agencies Interactive Media Creation Web sites Web banner ads CD-ROMs Kiosks Digitized Content Audio Video Animation Agency Compensation The Commissions Method Agency usually receives 15 percent Commissions are paid by the media Commission system is controversial System is becoming less common Fee Arrangements Fixed fee method Fee-commission method Cost-Plus Agreements Incentive-Based Compensation Percentage Charges Marketing Strategy The Marketing Concept What is Marketing Strategy? Providing superior customer value. What is value? The marketing Strategy Process: Opportunity Identification / Situation Analysis S-T-P Marketing mix Segmentation, Targeting, and Positioning Market Segmentation 1. Identify segmentation variables and segment the market 2. Develop profiles of resulting segments Market Targeting 3. Evaluate the attractiveness of each segment 4. Select the target segment(s) Product/Service Positioning 5. Identify possible positioning concepts for each target segment 6. Select, develop, and communicate the chosen positioning concept Segmentation Segmentation is a concept that recognizes the diversity in the marketplace. The process of segmenting the market produces clusters of people who enjoy similar product features. Segmentation Goal: Identify segments that seek different benefits and, therefore, will be responsive to different positionings of the product/offerings. Means: Link benefits sought to characteristics that make customers readily identifiable and accessible. For example: User status, Demographics, Media exposure patterns, … Caution: Avoid over-segmenting; make sure that each segment is substantial enough to justify a unique positioning effort. Market Segmentation Bases for Segmentation Usage Non-users vs. Category users Competitor users vs. Own brand users Geographic Zip Code Analysis Regional Analysis Demographic Age Gender Income Others Benefit Sought Psychographic Market Segmentation Usage Segmentation •Category Usage Colas Hair Spray Nonuser s (%) Light Half %pop %use Heavy Half %pop %use 22 39 10 39 90 52 24 13 24 87 48 13 48 87 Cereal 4 Heavy users: Efficiency /Profit Caution: Majority Fallacy •Brand Usage •$ to Sales - Target people/companies with profile of current user •$ to Opportunity - Target users of competitive brands or nonusers Market Segmentation Geographic Segmentation •Zip Code Analysis •Regional Analysis Demographic Segmentation http://www.census.gov/cgi-bin/gazetteer •Age •Gender •Income •Others Volkswagen Ads: 5-second-rule.mov Flirting.mov Synchronicity II.mov Turbonium.mov Smarter Looking.mov Market Segmentation Psychographic Segmentation •Lifestyles •Values •Attitudes •Interests •Opinions www.claritas.com Market Segmentation Criteria For Segmentation Identifiable Accessible Responsive Significant Capturing Segments Instruments Available Price Product Distribution Promotion Common Positioning Errors Positioning in a crowded market space Positioning on an unimportant attribute Positioning Positioning requires designing a company and product image and developing a marketing mix to promote the image to the target segment(s). Positioning Statement The key concept of an idea to be communicated to a target market via elements of the marketing mix. Elements: Target Concept (Frame of Reference) Point of Difference Communications Objectives Messages are designed to achieve specific strategic goals. The “BellSouth Yellow Pages” campaign’s four objectives: Introduce the new brand name and achieve 50% unaided brand awareness 80% aided brand awareness Exceed unaided ad recall norm of 14% Improve consumer usage share above 85% Increase revenues by 2.6% Product Decisions A product is a bundle of benefits or values Product symbolism refers to what a product or brand means to customers Product quality, branding, packaging, and company name contribute to product image BRANDING: Brand name communicates attributes and meaning Advertising creates and maintains brand equity PACKAGING: Packaging has become increasingly important It is often the customer’s first exposure to product Pricing Decisions Price must be consistent with perceptions of the product Higher prices communicate higher product quality Lower prices reflect bargain or “value” perceptions A product positioned as high quality while carrying a lower price than competitors will confuse customers Price, advertising and distribution be unified in identifying the product position Distribution Channel Decisions Channel decisions involve: Selecting Managing Motivating Independent intermediaries: Wholesalers Distributors Brokers Retailers