Chapter One

INTRODUCTION TO INTEGRATED MARKETING COMMUNICATION

Chapter Objectives
After completing this unit, the student should be able to:
 Define promotion, Promotion Management, and IMC
 List the Promotion Mix
 List Participants in the integrated Marketing communication
 Discuss the relationship between promotion and the marketing environment

1.1. PROMOTION, PROMOTION MIX, PROMOTION MANAGEMENT AND IMC

1.1.1. What is marketing?
Our starting point for learning about marketing is to begin with the basics and that starts
with defining marketing. Since marketing has been an important part of business for a
long time we could consult one of the many hundreds of books written on the subject to
locate a definition. Or, as is more the custom today, we could search the Internet to see
how marketing is defined. Whether we search print or electronic form we will find that
marketing is defined in many different ways.

Some definitions focus on marketing in terms of what it means to an organization, such as

being the key functional area for generating revenue, while other definitions lean more
toward defining marketing in terms of its most visible tasks, such as advertising and
creating new products.

There probably is no one best way to define marketing, however, whatever definition is
used should have an orientation that focuses on the key to marketing success – customers.

For the purpose of this handout we will define marketing as follows:

Marketing consists of the strategies and tactics used to identify, create and maintain
satisfying relationships with customers that result in value for both the customer and the
marketer.

1.1.2. The Marketing Mix

The term marketing mix refers to the four major areas of decision making in the marketing
process that are blended to obtain the results desired by the organization. The four
elements of the marketing mix are sometimes referred to the four Ps of marketing. The
marketing mix shapes the role of marketing within all types of organizations, both profit
and nonprofit. Each element in the marketing mix—product, price, promotion, and place—
consists of numerous sub-elements. Marketing managers make numerous decisions based
on the various sub-elements of the marketing mix, all in an attempt to satisfy the needs and
wants of consumers.

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Product: The first element in the marketing mix is the product. A product is any combination of
goods and services offered to satisfy the needs and wants of consumers. Thus, a product is anything
tangible or intangible that can be offered for purchase or use by consumers. A tangible product is
one that consumers can actually touch, such as a computer. An intangible product is a service that
cannot be touched, such as computer repair, income tax preparation, or an office call. Other
examples of products include places and ideas.

Price: The second element in marketing mix is price. Price is simply the amount of money
that consumers are willing to pay for a product or service. In earlier times, the price was
determined through a barter process between sellers and purchasers. In modern times,
pricing methods and strategies have taken a number of forms.

Promotion: Promotion is the third element in the marketing mix. Promotion is a

communication process that takes place between a business and its various publics. Publics
are those individuals and organizations that have an interest in what the business produces
and offers for sale. Thus, in order to be effective, businesses need to plan promotional
activities with the communication process in mind. The elements of the communication
process are: sender, encoding, message, media, decoding, receiver, feedback, and noise.
The sender refers to the business that is sending a promotional message to a potential
customer. Encoding involves putting a message or promotional activity into some form.
Symbols are formed to represent the message. The sender transmits these symbols through
some form of media. Media are methods the sender uses to transmit the message to the
receiver. Decoding is the process by which the receiver translates the meaning of the
symbols sent by the sender into a form that can be understood. The receiver is the intended
recipient of the message. Feedback occurs when the receiver communicates back to the
sender. Noise is anything that interferes with the communication process.

Place: The fourth element of the marketing mix is place. Place refers to having the right
product, in the right location, at the right time to be purchased by consumers. This proper
placement of products is done through middle people called the channel of distribution. The
channel of distribution is comprised of interdependent manufacturers, wholesalers, and
retailers. These groups are involved with making a product or service available for use or
consumption. Each participant in the channel of distribution is concerned with three basic
utilities: time, place, and possession. Time utility refers to having a product available at the
time that will satisfy the needs of consumers. Place utility occurs when a firm provides
satisfaction by locating products where they can be easily acquired by consumers. The last
utility is possession utility, which means that wholesalers and retailers in the channel of
distribution provide services to consumers with as few obstacles as possible.

Seven Ps
As well as the standard four P's (Product, Pricing, Promotion and Place), services
marketing calls upon an extra three, totaling seven and known together as the extended
marketing mix. These are:
People: Any person coming into contact with customers can have an impact on
overall satisfaction. Whether as part of a supporting service to a product or involved
in a total service, people are particularly important because, in the customer's eyes,

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 they are generally inseparable from the total service. As a result of this, they must be
appropriately trained, well-motivated and the right type of person. Fellow
customers are also sometimes referred to under 'people', as they too can affect the
customer's service experience, (e.g., at a sporting event).
Process: This is the process (es) involved in providing a service and the behavior of
people, which can be crucial to customer satisfaction.
Physical evidence: Unlike a product, a service cannot be experienced before it is
delivered, which makes it intangible. This, therefore, means that potential customers
could perceive greater risk when deciding whether to use a service. To reduce the
feeling of risk, thus improving the chance for success, it is often vital to offer
potential customers the chance to see what a service would be like. This is done by
providing physical evidence, such as case studies, testimonials or demonstrations.

1.2. MEANING AND ROLE OF INTEGRATED MARKETING COMMUNICATION

Integrated marketing communication can be defined in the following ways:
A management concept that is designed to make all aspects of marketing communication
such as advertising, sales promotion, public relations, and direct marketing work together
as a unified force, rather than permitting each to work in isolation. A concept of marketing
communications planning that recognizes the added value of a comprehensive plan that
evaluates the strategic roles of a variety of communication disciplines—for example,
general advertising, direct response, sales promotion, and public relations—and combines
these disciplines to provide clarity, consistency, and maximum communications impact.
IMC, thus, calls for a "big picture" approach to planning marketing and promotion
programs and coordinating the various communication functions. It requires firms to
develop a total marketing communications strategy that recognizes what the sum total of a
firm's marketing activities, not just advertising, communicate to its customers. Consumers'
perceptions of a firm and/or brands are a synthesis of the messages they receive from
various sources. These include media advertisement, price, direct marketing efforts,
publicity, and sales promotions, as well as interactions with salespeople and other
customer-contact employees. In a global economy with international markets and
instantaneous communications, no aspect of marketing can be studied in a vacuum or in
isolation if one expects to be accurate and relevant. Marketing tools, used as planned
business-building techniques are more likely to facilitate attainment of organizational goals
than current "silo" approaches.

1.2.1. Reasons for the growth of Integrated Marketing Communication

The integrated marketing communications movement is driven by changes in the ways
companies market their products and services. A major reason for the growing importance
of the IMC approach is the ongoing revolution that is changing the rules of marketing and
the role of the traditional advertising agency.
Major characteristics of this marketing revolution include:

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 A shifting of marketing dollars from media advertising to other forms of promotion,
particularly consumer and trade-oriented sales promotions. Many marketers feel that
traditional media advertising has become too expensive and is not cost-effective. Also,
escalating price competition in many markets has resulted in marketers pouring more
of their promotional budgets into price promotions rather than media advertising.
 A movement away from relying on advertising-focused approaches, which emphasize
mass media such as network television and national magazines, to solve
communication problems. Many companies are turning to lower-cost, more targeted
communication tools such as event marketing and sponsorships, direct mail, sales
promotion, and the Internet as they develop their marketing communication strategies.
 A shift in marketplace power from manufacturers to retailers. Due to consolidation in
the retail industry, small local retailers are being replaced by regional, national, and
international chains. These large retailers are using their clout to demand larger
promotional fees and allowances from manufacturers, a practice that often siphons
money away from advertising. Moreover, new technologies such as checkout scanners
give retailers information on the effectiveness of manufacturers’ promotional programs.
This is leading many marketers to shift their focus to promotional tools that can
produce short-term results, such as sale promotion.
 The rapid growth and development of database marketing. Many companies are
building databases containing customer names; geographic, demographic, and
psychographic profiles; purchase patterns; media preferences; credit ratings; and other
characteristics. Marketers are using this information to target consumers through a
variety of direct-marketing methods such as telemarketing, direct mail, and direct-
response advertising, rather than relying on mass media. Advocates of the approach
argue that database marketing is critical to the development and practice of effective
IMC.
 Demands for greater accountability from advertising agencies and changes in the way
agencies are compensated. Many companies are moving toward incentive-based
systems whereby compensation of their ad agencies is based, at least in part, on
objective measures such as sales, market share, and profitability. Demands for
accountability are motivating many agencies to consider a variety of communication
tools and less expensive alternatives to mass-media advertising.
 The rapid growth of the Internet, which is changing the very nature of how companies
do business and the ways they communicate and interact with consumers. The Internet
revolution is well under way, and the Internet audience is growing rapidly. The
Internet is an interactive medium that is becoming an integral part of communications
strategy, and even business strategy, for many companies.

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1.3. THE PROMOTIONAL MIX ELEMENTS: THE TOOLS FOR IMC
Promotion has been defined as the coordination of all seller-initiated efforts to set up
channels of information and persuasion to sell goods and services or promote an idea.
While implicit communication occurs through the various elements of the marketing mix,
most of an organization’s communications with the marketplace take place as part of a
carefully planned and controlled promotional program. The basic tools used to accomplish
an organization’s communication objectives are often referred to as the promotional mix.

Traditionally the promotional mix has included four elements: advertising, sales
promotion, publicity/public relations, and personal selling. However, in this text we view
direct marketing as well as interactive media as major promotional-mix elements that
modern-day marketers use to communicate with their target markets. Each element of the
promotional mix is viewed as an integrated marketing communications tool that plays a
distinctive role in an IMC program. Each may take on a variety of forms. And each has
certain advantages.

Elements of the promotional mix

Advertising is defined as any paid form of non personal communication about an

organization, product, service, or idea by an identified sponsor. The paid aspect of this
definition reflects the fact that the space or time for an advertising message generally must
be bought. An occasional exception to this is the public service announcement (PSA), who’s
advertising space or time is donated by the media. The non-personal component means
advertising involves mass media (e.g., TV, radio, magazines, and newspapers) that can
transmit a message to large groups of individuals, often at the same time. The non-personal
nature of advertising means there is generally no opportunity for immediate feedback from
the message recipient (except in direct-response advertising). Therefore, before the message
is sent, the advertiser must consider how the audience will interpret and respond to it.
Advertising is the best-known and most widely discussed form of promotion, probably
because of its pervasiveness. It is also a very important promotional tool, particularly for
companies whose products and services are targeted at mass consumer markets.

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Direct Marketing: One of the fastest-growing sectors of the U.S. economy is direct
marketing, in which organizations communicate directly with target customers to generate
a response and/or a transaction. Traditionally, direct marketing has not been considered an
element of the promotional mix. However, because it has become such an integral part of
the IMC program of many organizations and often involves separate objectives, budgets,
and strategies, we view direct marketing as a component of the promotional mix. Direct
marketing is much more than direct mail and mail-order catalogs. It involves a variety of
activities, including database management, direct selling, telemarketing, and direct-
response ads through direct mail, the Internet, and various broadcast and print media.

Sales Promotion: The next variable in the promotional mix is sales promotion, which is
generally defined as those marketing activities that provide extra value or incentives to the
sales force, distributors, or the ultimate consumer and can stimulate immediate sales. Sales
promotion is generally broken into two major categories: consumer-oriented and trade-
oriented activities.
 Consumer-oriented sales promotion is targeted to the ultimate user of a product or
service and includes couponing, sampling, premiums, rebates, contests, sweepstakes,
and various point-of-purchase materials (Exhibit 1–11). These promotional tools
encourage consumers to make an immediate purchase and thus can stimulate short-
term sales.
 Trade-oriented sales promotion is targeted toward marketing intermediaries such as
wholesalers, distributors, and retailers. Promotional and merchandising allowances,
price deals, sales contests, and trade shows are some of the promotional tools used to
encourage the trade to stock and promote a company’s products.

Public Relations: It is important to recognize the distinction between publicity and public
relations. When an organization systematically plans and distributes information in an
attempt to control and manage its image and the nature of the publicity it receives, it is
really engaging in a function known as public relations. Public relations , is defined as
“the management function which evaluates public attitudes, identifies the policies and
procedures of an individual or organization with the public interest, and executes a
program of action to earn public understanding and acceptance. Public relations, generally
has a broader objective than publicity, as its purpose is to establish and maintain a positive
image of the company among its various publics. Public relations uses publicity and a
variety of other tools—including special publications, participation in community
activities, fund-raising, sponsorship of special events, and various public affairs activities—
to enhance an organization’s image. Organizations also use advertising as a public relations
tool.

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Traditionally, publicity and public relations have been considered more supportive than
primary to the marketing and promotional process. However, many firms have begun
making PR an integral part of their predetermined marketing and promotional strategies.
PR firms are increasingly touting public relations as a communications tool that can take
over many of the functions of conventional advertising and marketing.

Personal Selling: The final element of an organization’s promotional mix is personal

selling, a form of person-to-person communication in which a seller attempts to assist
and/or persuade prospective buyers to purchase the company’s product or service or to act
on an idea. Unlike advertising, personal selling involves direct contact between buyer and
seller, either face-to-face or through some form of telecommunications such as telephone
sales. This interaction gives the marketer communication flexibility; the seller can see or
hear the potential buyer’s reactions and modify the message accordingly. The personal,
individualized communication in personal selling allows the seller to tailor the message to
the customer’s specific needs or situation.

Personal selling also involves more immediate and precise feedback because the impact of
the sales presentation can generally be assessed from the customer’s reactions. If the
feedback is unfavorable, the salesperson can modify the message. Personal selling efforts
can also be targeted to specific markets and customer types that are the best prospects for
the company’s product or service. In developing a promotional strategy, a company
combines the promotional mix elements, balancing the strengths and weaknesses of each,
to produce an effective promotional campaign.

1.4. THE IMC PLANNING PROCESS

The marketing communications program of an organization is generally developed with a
specific purpose in mind and is the end product of a detailed marketing and promotional
planning process that shows the sequence of decisions made in developing and
implementing.

As with any business function, planning plays a fundamental role in the Development and
implementation of an effective Promotional program. The individuals involved in
promotion design a promotional plan that provides the framework for developing,
implementing, and controlling the organization’s integrated marketing communications
programs and activities, promotional planners must decide on the role and function of the
specific elements of the promotional mix, develop strategies for each element, and
implement the plan. Promotion is but one part of, and must be integrated into, the overall
marketing plan and program.

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A model of the IMC planning process is shown in Figure 1-4; the remainder of this chapter
presents a brief overview of the various steps involved in this process.
1. Review of the Marketing Plan
2. Promotional Program Situation Analysis
3. Analysis of the communication process
4. Budget Determination
5. Developing the integrated Marketing Communications Program
6. Monitoring, Evaluation, and Control
1.4.1.1. Review of the Marketing Plan
The first step in the IMC planning process is to review the marketing plan and objectives.
Before developing a promotional plan, marketers must understand where the company (or
the brand) has been, its current position in the market, where it intends to go, and how it
plans to get there. Most of this information should be contained in the marketing plan, a
written document that describes the overall marketing strategy and programs developed
for an organization; a particular product line, or a brand. Marketing plan can take several
forms but generally include five basic elements:
A detailed situation analysis that consists of an internal marketing audit and review
and an external analysis of the market competition and environmental factors.
Specific marketing objectives that provide direction, a time frame for marketing
activities, and a mechanism for measuring performance.
A marketing strategy and program that include selection of target market (s) and
decisions and plans for the four elements of the marketing mix
A program for implementing the marketing straggly, including determining specific
tasks to be performed and responsibilities
A process for monitoring and evaluating performance and providing feedback so
that proper control can be maintained and any necessary changes can be made in the
overall marketing strategy or tactics.
For most firms, the promotional plan is an integral part of the marketing strategy. Thus, the
promotional planners must know the roles advertising and other promotional-mix
elements will play in the overall marketing program. The promotional plan is developed
similarly to the marketing plan and often uses its detailed information. Promotional
planners focus on information in the marketing plan that is relevant to the promotional
strategy.

1.4.1.2. Promotional Program Situation Analysis

After the overall marketing plan is reviewed, the next step in developing a promotional
plan is to conduct the situation analysis. In the IMC program he situation analysis focuses
on the factors that influence or are relevant to the development of a promotional strategy.
Like the overall marketing situation analysis, the promotional program situation analysis
includes both an internal and an external analysis.

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Internal Analysis
The internal analysis assesses relevant areas involving the product/service offering and
the firm itself. The capabilities o the firm and its ability to develop and implement a
successful promotional program, the organization of the promotional department, and the
successes and failures of past programs should be reviewed. The analysis should study the
relative advantages and disadvantages of performing the promotional functions in house
as opposed to hiring and external agency (or agencies). For example, the internal analysis
may indicate the firm is not capable of planning, implementing, and managing certain
areas of the promotional program. If this is the case, it would be wise to look for assistance
from an advertising agency or some other promotional facilitator. If the organizations
already using an ad agency, the focus will be on the quality of the agency, the focus will be
on the quality of the agency’s work and the results achieved by past and/or current
campaigns.

In this handout we will examine the functions ad agencies perform for their clients, the
agency selection process, compensation, and consideration in evaluating agency
performance. We will also discuss the role and function of other promotional facilitators
such as sales promotion firms, direct-marketing companies, public relations agencies, and
marketing and media research firms.

Another aspect of the internal analysis is assessing the strengths and weaknesses of the
firm or the brand form an image perspective. Often that image a firm brings to the market
will have a significant impact on the way the firm can advertise and promote itself as well
as its various products and services. Companies or brands that are new to the market or
those for whom perceptions are negative may have to concentrate on their images, not just
the benefits or attributes of the specific product or service, on the other hand, a firm with a
strong reputation and/or image is already a step a head when it comes to marketing its
products or services. The internal analysis also assesses the relative strengths and
weaknesses of the product or service; its advantages and disadvantages; any unique selling
points or benefits it may have; its packaging, price, ad design; and so on. This information
is particularly important to the creative personnel who must develop the advertising
message for the brand. Addressing internal areas may require information the company
does not have available internally and must gather as part of the external analysis.

External Analysis
The external analysis focuses on factors such as characteristics of the firm’s customers,
market segments, positioning strategies, and competitors, as shown in Figure 1-5. An
important part of the external analysis is a detailed consideration of customers’

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characteristics and buying patterns, their decision processes, and factors influencing their
purchase decision. Attention must also be given to consumers’ perceptions and attitudes,
lifestyles, and criteria for making purchase decisions. Often, marketing research studies are
needed to answer some of these questions.

A key element of the external analysis is an assessment of the market. The attractiveness of
various market segments must be evaluated and the segments to target must be identified.
One the target markets are chosen, the emphasis will be on determining how the product
should be positioned. What image or place should it have in consumers’ mind?
This part of the promotional program situation analysis also includes an in-depth
examination of both direct and indirect competitors. While competitors were analyzed in
the overall marketing situation analysis, even more attention is devoted to promotional
aspects at this phase. Focus is one the firm’s primary competitors: their specific strengths
and weaknesses: their segmentation, targeting, and positing strategies: and the
promotional strategies they amply. The size and allocation of their promotional budgets,
their media strategies, and the messages they are sending to the marketplace should all be
considered. The external phase also includes an analysis of the marketing environment and
current trends or development that might affect the promotional program.

1.4.1.3. Analysis of the communication process

This stage of the promotional planning process examines how the company can effectively
communicate with consumers in its target markets. The promotional planner must think
about the processed consumers will go through in responding to marketing
communications. The response process for products or services for which consumer
decision making is characterized by a high level of interest is often different form that for
low involvement of routing purchase decisions. These differences will influence the
promotional strategy.

Communications decisions regarding the use of various source, message, and channel
factors must also be considered. The promotional planner should recognize the different
effects various types of advertising messages might have on consumers and whether they
are appropriate for the product or brand. Issues such as whether a celebrity spokesperson
should be used and at what cost may also be studied. Preliminary discussion of media-mix
options (print. TV, radio, newspaper, direct marketing) and their cost implications might
also occur at this stage.

An important part of this stage of the promotional planning processes is establishing

communication goals and objectives. In this text, we stress the importance of distinguishing
between communication and marketing objectives. Marketing objectives refers to what is

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to be accomplished by the overall marketing program. They are often stated in terms of
sales, market share, or profitability.

Communication Objectives refers to what the firm seeks to accomplish with its
promotional program. They are often stated in terms of the nature of the message to be
communicated or what specific communication effects are to be achieved. Communication
objectives may include creating awareness or knowledge about a product and its attributes
or benefits: creating among: or developing favorable attitudes, preferences, or purchase
intentions. Communication objectives should be the guiding force for development of the
overall marketing communications strategy and of objectives for each promotional mix
area.

1.4.1.4. Budget Determination

After the communication objectives are determined, attention turns to the promotion
budget. Two basic questions are asked at this point: What will the promotional program
cost? How will the money be allocated? Ideally, the amount a firm needs to spend on
promotion should be determined by what must be done to accomplish its communication
objectives. In reality, promotional budgets are often determined using a more simplistic
approach, such as how much money is available or a percentage of a company’s or brand’s
sales revenue. At this stage, the budget it’s often tentative. It may not be finalized until
specific promotional-mix strategies are developed.

1.4.1.5. Developing the integrated Marketing Communications Program

Developing the IMC program is generally the most involved and detailed step of the
promotional planning process. As discussed earlier, each promotional-mix element has
certain advantages and limitations. At this stage of the planning process, decisions have to
be made regarding the role and importance of each element and their coordination with
one another. Each promotional-mix element has its own set of objective and a budget and
strategy for meeting them. Decisions must be made and activities performed to implement
the promotional programs. Procedures must be developed for evaluating performance and
making any necessary changes.

For example, the advertising program will have its own set of objectives, usually involving
the communication of some message or appeal to a target audience. A budget will be
determined, providing the advertising manger and the agency with some idea of how
much money is available for developing the ad campaign and purchasing media to
disseminate the ad message.

Two important aspects of the advertising program are development of the message and the
media strategy. Message development, often referred to as creative strategy, and involves

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determining the basic appeal and message the advertiser wishes to convey to the target
audience. This process, along with the ads that result, is to many students the most
fascinating aspect of promotion. Media strategy involves determining which communication
channel will be used to deliver the advertising message to the target audience. Decisions
must be made regarding which types of media will be used (e.g. newspapers, magazines,
radio, TV billboards) as well as specific media selections (e.g., a particular magazine or TV
program). This task requires careful evaluation of the media options advantages and
limitation, costs, and ability to deliver the message effectively to the target market.

Once the message and media strategies have been determines, steps must be taken to
implant them. Most large companies hire advertising agencies to plan and produce their
messages and to evaluate and purchase the media that will carry their clients as they
develop the ads and select media, because it is the advertiser that ultimately approves (and
pays for) the creative work and media plan.

A similar process takes place for the other element of the IMC program as objectives are
set, an overall strategy is developed, message and media strategies are determined, and
steps are taken to implement them. While the marketer’s advertising agencies may be use
to perform some of the other IMC functions, they may also hire other communication
specialists such as direct-marketing and interactive and /or sales promotion agencies, as
well as public relations firms.

1.4.1.6. Monitoring, Evaluation, and Control

The final stage of the promotional planning processes is monitoring, evaluation, and
controlling the promotional program. It is important to determine how well the
promotional program is meeting communication objectives. The promotional planner
wants to know not only how well the promotional program is doing but also why. For
example, problems with the advertising program may lie in the nature of the message or in
media plan that does not reach the target market effectively. The manager must know the
right steps to correct the program.

This final stage of the process is designed to provide mangers with continual feed back
concerning the effectiveness of the promotional program, which in turn can be used as
input into the planning process. As Figure 1-3 shows, information on the results achieved
by the promotion program is used in subsequent promotional planning and strategy
development.

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