Download Integrated Marketing Communication (IMC)

Integrated Marketing
Communication (IMC)
Sport Marketing
USF Sport Management
Dr. J. Andrew Choi
IMC
“A process through which companies accelerate
returns by aligning communication objectives
with corporate goals (Shultz & Schultz, 2003).”
“Strategic marketing initiative focused on onesight, one-sound communication both
internally and externally.”
• A communication tactic developed in the late
80’s and early 90’s.
• TIMES HAVE CHANGED…
Back then…
•
•
•
•
The elder Bush occupied the White House.
China was just opening the doors to the outside.
Internet belonged to “geeks”.
Emails and dot-com’s foreign to many.
• TV advertising – dominant form of commercial
communication.
• Marketers thought in terms of products, not
brands.
• Companies were strictly divided into biz
functions or units, all separate and independent,
and managed from the top down. No crossfunctional teams.
• Integration was a difficult concept.
1990’s
The explosion of technology changed all that and
IMC finally emerged!
• Tumultuous business environment of pro and
anti-integration (“too difficult to implement”,
“take away creativity”…etc)
• A few forward thinking pioneers began to
develop and implement IMC w/in their org.
(Personally lived through this period – “Brand
Management”)
• Today, the IMC has achieved acceptance in
businesses of all types!
Why the new IMC?
WARNING: The “New IMC” will overturn some
traditional marketing principles and concepts!
• Customers now relate to brands, not to the various forms
of marketing or marcomm – branding becomes the basis
of integration.
• A focus on individuals, not market segments.
• Increased focus on measurement and accountability – in
sport industry as well.
• Strategic and value-driven, linked to the short- and longterm goals of the entire org, not just to product sales
objectives! (Strategic issues – “How much to invest, how
much ROI, when will ROI occur?...etc.”)
• A global approach
What DROVE the emergence of the
new IMC?
The Factors…
1. A shift away from the Four P’s:
4 P’s Model:
• The traditional theory base for almost all marketing
education and practice. Governed the manner in which
businesses conducted their marketing activities. “If a
company got each of the Four P’s right, business would
grow and prosper.”
• Only an “internal” orientation w/o the mentioning of
customers or profits!
• Managers managed things they knew and controlled (4P’s)
– selection of products, setting of prices, organization of
distribution channels, implementation of advertising and
promo programs
• Market share was the gateway to profits in the 1980’s
(“outspend, out-promote, out-distribute”)
The Factors…
1990’s – the Fall of the 4P’s Model in America…
• Cost efficiency was critical and this meant
integration of business functions.
• “Category killers” – giant retailers that
consolidated activities for consumers and
dominated suppliers (manufacturers) overnight.
Ex. Wal-Mart, Home Depot, Toys-R-Us, Best Buy
• Manufacturers no longer controlled the
distribution channel (Place) and the other
components of the 4 P’s slipped away.
The Factors…
2. A parallel shift in marketing spending
• From the promo mix of the 80’s (sales force,
media ad, publicity) to a new breed of comm
strategies (sales promo, direct marketing, PR
activities)
• “Below the line” – new promo techniques
(discounts, contests, sponsorships) – “Push”
• “Above the line” – traditional ad building longterm brand image – “Pull”
• More and more marketing $$ were supported to
measurable, incremental, fast-acting solutions –
“below the line” activities.
The Factors…
3. Demand for IMC
• Traditionally, marketing $$ were devoted to ad
media (TV, NPP, magazines, outdoor, radio)
• By 2000, a 50:50 split in ad and promos!
• To protect from decreasing revenue streams, ad
agencies created “one-stop shopping” (ex. The
fall of McCann & emergence event activation
agency).
• 1st attempt at IMC but a shaky one due to lack of
all-around expertise.
The Factors…
4. Growth drivers of IMC
a. Development of digital technology across entire
spectrum of biz operations.
b. Increasing emphasis on branding and
“experiencing” brand as the major competitive
differentiating tool
c. Increasing focus on globalization as marketers
spread across the traditional geographic
boundaries.
d. Accountability and the measurement of financial
returns on marcomm activities.
The new IMC
a. Technology
• Advent of Internet and e-commerce
• IMC now a two-way communication channel
(outbound AND inbound)
• Consumer insights & direct marketing now
more feasible than before thanks to Internet
The new IMC
b. Branding
• From “innovate and grow” to “copy and
improve” – a new breed of competitors emerged.
(ex. Private Brands everywhere)
• No longer a battle of products, but of BRANDS
(or “brand power”) and what they meant to
consumers.
• From the battle of the “tangibles” (products) to
“intangibles” (brands)
The new IMC
c. Globalization
• E-communication enabled companies to operate
real-time, 24/7, around the globe  “Growth of
multinationals” seeking new market
opportunities in the 90’s
• New communication strategies required –
“Create a unified, consistent, and integrated
brand strategy while remaining responsive to the
unique needs of individual markets and cultures”

“Global strategies, local executions” = “Think
globally, act locally”
Case Study
“Intel Inside” IMC campaign
8 Guiding principles of IMC
1. Become a customer-centric organization
Top Management
Operations
Operations
Logistics
R&D
Marketing
Finance/Acct.
Finance/Accounting
Customers & Prospects
Marketing
Logistics
Traditional Organization
Products
Integrated Organization
8 Guiding principles of IMC
Outside-in planning
2. Use outside-in planning
Retain
Present
Customer
$$
Inside-out planning
Dollar or volume objectives
Costs
Migrating
Customer
Groups
$$
Grow
Present
Customer
$$
Contribution margin
Marketing funds
Lapsed
Customer
$$
Emerging
Customer
$$
Allocation against prospects
Communication choices
Marketing organization
New
Prospect
$$
8 Guiding principles of IMC
3. Focus on the Total Customer Experience
“How the product or service performs in the
marketplace, how it is obtained, the capability of
channel members to provide products in a timely
and efficient manner, how customer service is
delivered, and what type of social impact the
firm makes in the community it inhabits.”
“Create Brand Touch Points”
8 Guiding principles of IMC
4. Align consumer goals with corporate objectives
The IMC objectives must do one of the following:
•
•
•
•
Generate short- and long-term cash flow increases greater than
the cost of the marketing and communication program used to
achieve them
Accelerate cash flows – move the flow of income from customers
and prospects forward in time, or increase the speed with which
those cash flows are acquired.
Stabilize on-going cash flows – smooth out cash flow fluctuations
Build shareholder value by increasing the equity of the firm or
the brand. Strong brand equity is recognized by the financial
market and commonly increases the share price of the firm, both
of which will provide value for shareholders. (ex. Wharton article
on stock investment)
8 Guiding principles of IMC
5. Set customer behavior objectives
The 4 outcomes IMC marketers desire:
• Acquire new customers
• Retain and maintain present customers
• Retain and grow sales volume or profit from
existing customers – make them buy more.
• Migrate existing customers through the firm’s
product or service portfolio – to higher priced or
higher-margin products
Sound familiar? Remember the 4 STRATEGIES?
8 Guiding principles of IMC
6. Treat customers as assets.
“Customer - the primary unit that generates
income flows for the org.”
• Marcomm managers are “asset managers” (I
LOVE THIS CONCEPT!) -- Should be responsible
for the initiation, continuation, and maintenance
of customers
8 Guiding principles of IMC
7. Streamline functional activities
Too many silos within the marketing function
create unnecessary battles for turf and budget! –
no relevance to the customer needs!
Customer’s view on marcomm comes down to
only one of the two– “Messages and incentives”
•
•
“Messages” – brand concepts, ideas, associations, values, and other
perceptions the firm wants customers and prospects to store away in
memory (= Pull Marketing = “Above the Line”)
“Incentives” – short-term offers or rewards for doing something the firm
believes will be of value to both itself and the consumer or customer.
(= Push Marketing = “Below the line”)
Simplify and aggregate accordingly!
8 Guiding principles of IMC
8. Converge marcomm activities
“The blending of traditional marcomm with
electronic marketing and communication
activities.”
Now, the customers who see the brand’s TV
commercials are, for most part, the same ones
who are accessing websites and shopping online.
Convergence will occur sooner than expected.
8 Guiding principles of IMC
Extra:
“COMPENSATION” for your employees – a key
driver in how well the firm can integrate, how
well it can become customer focused, how well it
can develop and deliver on customer wants and
needs…etc.
Reward system must be consistent with its
integrated approach – how well they serve
customers (not how many!)
IMC: a 5-step process
1.
Identify customers
& prospects
2. Valuation of
customers/
prospects
5. Budgeting,
allocation,
& evaluation
IMC
4. Estimating return
on
Customer
investment
3. Creating &
delivering
messages &
incentives