Integrated Marketing Communications and the Changing Media Landscape

Integrated Marketing Communications (IMC) and Changing Technology

Organizations must communicate the value and benefits of their offerings to current and potential customers across both business-to-business ( $B2B$ ) and business-to-consumer ( $B2C$ ) markets.
Integrated marketing communications ( $IMC$ ) provide an approach designed to deliver one consistent message to buyers through an organization's promotions across various media channels.
Media types for $IMC$ include television ( $TV$ ), radio, magazines, the Internet, mobile phones, professional selling, and social media.
Consistent messaging helps establish a brand or organization in the minds of consumers and potential customers across target markets.
Campbell's Soup Company Example:
- Uses the "Mm, mm good" slogan in print ads (newspapers, magazines), Internet ads, and commercials ( $TV$ and radio).
- While the message is consistent, variations of commercials are designed to target different consumers.
Importance of $IMC$ encompasses:
- Changes in communication technology.
- Instant access to information via tools like the Internet and social media.
- Social media is defined as online communication among interdependent and interconnected networks of organizations, people, and communities.
- Changing consumer behavior: Consumers use interactive media to collect product information independently, requiring marketers to organize and assemble information to build a relevant and consistent brand message.

The Changing Media Landscape and Millennial Influence

Consumer and business connectivity is shifting from traditional methods to computers and phones, with social and work environments moving toward virtual offices and texting.
Popular social media sites include Facebook, LinkedIn, Pinterest, and Twitter.
Promotional spending shifts: Forecasts indicate companies would spend almost $27\%$ of total promotional budgets, or $\$160\text{ billion}$ , on electronic or non-traditional media by $2012$ .
Millennial Generation Influence:
- College students in the millennial generation drive the change toward new communication technologies.
- Millennials may opt for mobile marketing via cell phones (e.g., location-based store promotions) or mobile gaming devices.
- Facebook advertisements are increasingly popular; a Honda campaign allowed users to use the Honda logo for Valentine's Day virtual gifts, resulting in over $1.5 \times 10^{6}$ participants and views for the Honda Fit.
Media Competition:
- Traditional media (magazines, newspapers, television) compete with the Internet, texting, mobile phones, social media, and user-generated content (blogs, YouTube).
- Out-of-home advertising includes billboards, movable promotions, airplane tray tables, subway cars, trains, buses, and bathroom stalls.
Example: FedEx integrated marketing communications include the "We Understand" tagline launched in $2009$ and the "Solutions that Matter" tagline launched in $2011$ , using consistent messaging across $TV$ , e-mail, social media, mobile marketing, direct mail, and YouTube.

The Components of the Promotion (Communication) Mix

The promotion or communication mix consists of the following types of marketing communications:
- Advertising: Paid dissemination of a message identifying a brand or organization to many people at once. Typical media include $TV$ , magazines, newspapers, Internet, direct mail, radio, mobile devices, and social media (Facebook, blogs, Twitter).
- Consumer Sales Promotions: Short-term incentives such as coupons, contests, games, rebates, and mail-in offers. These are designed to encourage quick action, larger purchases, or repeat purchases.
- Trade Promotions: Sales promotions in $B2B$ marketing targeted to channel members (e.g., trade shows, special incentives for retailers like extra money, in-store displays, and prizes).
- Direct Marketing: Delivery of personalized and interactive promotional materials identifying individual consumers via mail, catalogues, the Internet, e-mail, telephone, and direct-response advertising.
- Professional Selling: An interactive, paid approach involving a buyer and a seller, occurring in person, by phone, or via technology. It focuses on relationship development. Examples include Pampered Chef, Amway, and Mary Kay.
- Public Relations ( $PR$ ): Communication designed to improve and promote an organization’s image and products. Materials include press releases, publicity, and news conferences. It is often perceived as more neutral than other promotions.
- Sponsorships: Financial support for events, venues, or experiences to target specific groups. They enhance company image and generate $PR$ .
- Social Media and Interactive Marketing: Increasingly important components that utilize online networks to engage consumers.

Factors Influencing the Selection of the Promotion Mix

A variety of factors dictate the components of a firm's promotion mix:
- Budget Available: Determines reach (number of people exposed) and frequency (how often they are exposed). Smaller companies may lack funds for high-exposure slots like the Super Bowl.
- Stage in the Product Life Cycle: Introductory stages require significant promotional spending to build awareness and trial. Higher communication is needed at the beginning.
- Type of Product and Purchase Decision: Technical or expensive products (high involvement) often require professional selling. Convenience goods (low involvement) rely more on advertising.
- Target Market Characteristics: Includes consumer readiness to purchase, purchasing frequency, and media usage patterns (e.g., college students preferring online and mobile marketing).
- Regulations: Laws may restrict advertising, such as the prohibition of tobacco advertising on $TV$ in the U.S. or alcohol advertising during "Golden Time" (prime time) in some Asian countries.
- Competitors and Environmental Factors: Strength of the economy impacts spending. In weak economies, companies may use more sales promotions (coupons), risking consumer reliance on discounts.
- Availability of Media: Top-rated shows and Super Bowl slots sell out quickly. Magazines have long lead times, while radio and online media provide immediate placement.
- Uncontrollable Events: Natural disasters can lead $TV$ stations to cut advertisements for news coverage, forcing marketers to pivot to other media.

The Communication Process and Perceptual Interpretation

The Perceptual Process: How an individual decides what to pay attention to and how to interpret/remember information. Selection of media (magazines, shows) does not guarantee attention, retention, or correct interpretation.
The Communication Process Model:
- Source (Sender): Encodes (translates) a message appropriate for the channel (e.g., print ad, $TV$ commercial).
- Message Channel: The medium used to relay the message.
- Receiver (Consumer): Decodes (interprets) the message. Effective communication occurs if the receiver interprets the message as intended.
- Feedback: Provided by purchasing a product, using a coupon, or through market research and warranty registration.
Message Problems and Interference:
- Interference (Noise): Distortions such as poor reception, poor print quality, server problems, or low battery. Distractions during transmission (e.g., talking while studying) prevent message retention.
- Redundancy: Advertisers repeat messages to increase retention but must avoid negative effects from consumer fatigue.
- Relevance: Consumers are more likely to remember information relevant to their personal situations or beliefs.

Advertising Media and Specific Vehicles

Advertising is paid promotion with an identified sponsor reaching many people at once.
Super Bowl Advertising Economics:
- Super Bowl XLII ( $2008$ ): A $30\text{-second}$ ad cost $\$2.7 \times 10^{6}$ . With $97.5 \times 10^{6}$ viewers, the cost per viewer was less than $3\text{ cents}$ .
- Super Bowl XLVI ( $2012$ ): A $30\text{-second}$ ad cost $\$3.5 \times 10^{6}$ for approximately $111.3 \times 10^{6}$ viewers.
Media Pros and Cons:
- Mobile Phones: Continuous access, but varying reception.
- Radio: Portable, multiple ownership per household, but lacks visuals and often serves as background for other activities.
- Television: Allows visual demonstration; however, consumers often change channels (zap) or leave the room during commercials.
- $FTC$ Regulation ( $2010$ ): Prohibits advertisers from artificially increasing commercial volume level to be louder than regular shows.
- Print (Magazines/Newspapers): Magazines have high longevity; newspapers suffer from declining readership due to the Internet. Local retailers benefit from cheaper local newspaper rates.
Media Vehicles: The specific means within a medium used to reach a target.
- Example: Medium = Television; Vehicle = CW’s Gossip Girl.
- Example: Medium = Magazine; Vehicle = Sports Illustrated.
- Sports Illustrated utilizes SI.com and SIVault (archived content since $1954$ ).

Direct Marketing and Telemarketing

Direct marketing allows for targeting specific customers, measuring Return on Investment ( $ROI$ ), and testing strategies. It is intrusive but can be personalized with a call to action.
Telemarketing: Direct marketing by phone. It is effective for charities and service firms but often viewed negatively by consumers.
National Do Not Call List ( $DNCL$ ):
- Launched in Canada in $2008$ .
- Administered by the Canadian Radio-Television and Telecommunications Commission ( $CRTC$ ).
- Allows individuals to opt out of receiving telemarketing calls.
Direct Response Advertising: Includes an offer and a call to action (e.g., "Call now and receive a bonus package"). The Internet is currently the preferred direct response medium due to lower costs.

Message Strategies: Unique Selling Propositions and Objectives

Unique Selling Proposition ( $USP$ ): The specific benefit consumers will remember about a product.
- Domino’s Example: "Pizza delivered in $30\text{ minutes}$ or it’s free."
- Nike Example: "Just Do It" (global slogan).
Promotion Objectives:
- Building Primary Demand: Stimulating demand for an entire product category (e.g., orange juice).
- Building Selective Demand: Stimulating demand for a specific brand (e.g., Tropicana).
- AIDA Model: Attention, Interest, Desire, Action. Steps intended to build awareness, persuade preference, and drive purchase.
Creative Appeals:
- Humorous: Entertaining and memorable, though firms must ensure the brand is remembered over the joke.
- Emotional/Rational (Informative)/Environmentally Conscious.
- Fear (Frightening): Must be used carefully. Reebok once discontinued a bungee jumping ad that implied a jumper fell to his death because it alarmed consumers.
Message Structure:
- Open-Ended Message: Allows consumers to reach their own conclusions (common in perfume/cologne ads).
- Closed-Ended Message: Draws a logical conclusion for the consumer.
- One-Sided vs. Two-Sided: One-sided stresses only positives. Two-sided shows both benefits and negatives/side effects (common in pharmaceuticals where legal warnings are required).
Order of Presentation: The beginning and end of a message (primacy and recency effects) are the strongest sections where the brand name should be prominently included.
Slogans, Characters, and Jingles:
- Campbell’s: "Mm, mm good" used since the early $1900s$ ; Campbell Soup Kids created in $1904$ . Despite a slogan change in $1998$ , "Mm, mm good" remains dominant.
- Mascots: Jolly Green Giant, Pillsbury Doughboy (Poppin' Fresh).
- Oscar Mayer: "The Oscar Mayer Wiener Song" ( $1963$ ) and "The Oscar Mayer Bologna Song" are recognized across ages and translated into multiple languages. Oscar Mayer also uses the Wienermobile for national tours.

Determining the Promotion Budget

Percentage of Sales Method: Simplest method, using a percentage of last year's sales or next year's projected sales. It ignores market changes.
Affordable Method: Used by small businesses based on what they think they can afford. It often leads to budget shortfalls if costs are underestimated.
Competitive Parity: Keeping promotional spending comparable to competitors to maintain brand awareness. Kmart maintained Sunday newspaper advertising inserts ( $FSI$ ) during bankruptcy to stay competitive.
Objective and Task Method: The most rational approach. Managers set specific objectives, identify necessary tasks, and research costs to build the budget.

Mobile and Non-Traditional Media Trends

Spending Shift: Non-traditional media budgets continue to grow while traditional media spending declines.
Mobile Marketing Exposure ( $2009$ ):
- Over $1/3$ of cell phone users were exposed to mobile advertising.
- $16\%$ of those exposed responded via text messaging.
- Younger people are the most accepting of mobile ads.
Spending Growth: Mobile search (driven by Google) is helping ad spending grow $80\%$ from $\$1.45\text{ billion}$ in $2011$ to $\$2.61\text{ billion}$ in $2012$ .
Global Mobile Internet Usage: Over half of Internet users in China, Korea, India, and Thailand access social media through phones rather than computers.

Questions & Discussion

Questions from Review Sections:
- Explain the concept of integrated marketing communications ( $IMC$ ).
- How is the media used by organizations changing? What age group is driving the change?
- What factors are causing the media landscape to change?
- What are some different types of online media? Which types are most popular with college students?
- Define each component of the promotion mix.
- Why is public relations considered a key part of the promotion mix?
- Explain the communication process and factors that can interfere with interpretation of messages.
- What is the perceptual process and how does it relate to promotion?
- What is the difference between encoding and decoding a message?
- What is the difference between a medium and a vehicle? Give examples of each.
- Why is direct marketing successful even though some consumers may not like it?
- Identify the different promotion objectives companies may use.
- What are the differences between open-ended and closed-ended messages?