Integrated Marketing Communication (IMC)

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Integrated Marketing Communication (IMC)

• Sport Marketing
• USF Sport Management
• Dr. J. Andrew Choi

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IMC

• A process through which companies accelerate
  returns by aligning communication objectives with
  corporate goals (Shultz Schultz, 2003).
• Strategic marketing initiative focused on
  one-sight, one-sound communication both
  internally and externally.
• A communication tactic developed in the late 80s
  and early 90s.
• TIMES HAVE CHANGED

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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-coms 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
  cross-functional teams.
• Integration was a difficult concept.

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1990s

• 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 creativityetc)
• 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!

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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 long-term 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

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• What DROVE the emergence of the
• new IMC?

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The Factors

• 1. A shift away from the Four Ps
• 4 Ps 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 Ps 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
  (4Ps) 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
  1980s (outspend, out-promote, out-distribute)

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The Factors

• 1990s the Fall of the 4Ps 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 Ps slipped away.

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The Factors

• 2. A parallel shift in marketing spending
• From the promo mix of the 80s (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
  long-term brand image Pull
• More and more marketing were supported to
  measurable, incremental, fast-acting solutions
  below the line activities.

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The Factors

• 3. Demand for IMC
• Traditionally, marketing were devoted to ad
  media (TV, NPP, magazines, outdoor, radio)
• By 2000, a 5050 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.

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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.

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The new IMC

• 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

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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)

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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 90s
• 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

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Case Study

• Intel Inside IMC campaign

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8 Guiding principles of IMC

• 1. Become a customer-centric organization

Top Management
Operations
Finance/Acct.
Finance/Accounting
Operations
Marketing
Logistics
R D
Customers Prospects
Marketing
Logistics
Traditional Organization
Products
Integrated Organization
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8 Guiding principles of IMC

• 2. Use outside-in planning

Outside-in planning
Lapsed Customer
Retain Present Customer
Inside-out planning Dollar or volume
objectives Costs Contribution
margin Marketing funds Allocation against
prospects Communication choices
Migrating Customer Groups
Grow Present Customer
New Prospect
Emerging Customer
Marketing organization
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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

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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)

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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 firms
  product or service portfolio to higher priced
  or higher-margin products
• Sound familiar? Remember the 4 STRATEGIES?

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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

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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!
• Customers 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!

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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 brands TV
  commercials are, for most part, the same ones who
  are accessing websites and shopping online.
• Convergence will occur sooner than expected.

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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
  needsetc.
• Reward system must be consistent with its
  integrated approach how well they serve
  customers (not how many!)

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IMC a 5-step process

1. Identify customers prospects

2. Valuation of customers/ prospects
5. Budgeting, allocation, evaluation
IMC
3. Creating delivering messages
incentives
4. Estimating return on Customer investment