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Lecture Takeaways•Understand promotions as a element of marketing and the rising importance of advertising and promotion tools in a company’s marketing programme.

•Appreciate the concept of IMC, its evolution and significance in bringing together individual promotion tools.

•Realise how various communication tools work together in a coordinated manner to communicate effectively.

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Lecture 1

• Marketing

• Relationship Marketing

• Marketing Mix

• Promotion Communication

• Why IMC?

• Reasons for Growing Importance of IMC

• Role of IMC in Branding

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Marketing

• American Marketing Association defines

In order to create Exchange that satisfy

individual and organisational objectives

Marketing

Planning

Execution

ConceptionPricing

PromotionDistribution

IdeasGoods

Services

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Marketing involves various activities• Inbound marketing activities

– Market Research

• Outbound marketing activities– Advertising and Promotion– Sales– Public and Media Relations– Customer service– Customer satisfaction

There is interdependence of these activities.

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Relationship Marketing• Today most marketers are seeking more than just one

time exchange or transaction with customers.• Customers desire superior customer value

– Quality product and services

– Competitively priced

– Convenience to purchase

– Timely delivery

– Excellent customer service

– Personalised products and service

Mass Customisation – Computers, Clothing, Cosmetics, Jewelry.

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Relationship Marketing cont…

• It is often more cost effective to retain customers than to acquire new one.

• Lifetime Value of customers

Reducing customer defections by just 5 percent can increase future profit by as much as 80 to 90 percent.

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Marketing Mix• Product • Price • Place• Promotion

– Combine these four elements into a marketing programme to facilitate the potential of exchange with customers in the market place.

– Marketer must be aware how each of these elements can be combined to provide effective marketing programme.

– Eg:-failures Kellogg’s cornflakes

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Marketing Communication• MC involves all activities concerned with

effectively communicating product information to selected target audience.

• All MC is done with a purpose.

• The prime Purpose of communication is to seek a Cognitive, Affective and Behavioural response whatever the desired response may be.

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The growth of advertising & promotions (India)

Year Advertising expenditure (Rs. Crores)

% Growth over last year

2008 21,000 20.0

2007 17,690 22.0

2006 14,505 21.7

2005 11,915 15.1

2004 10,354 10.9

2003 9,329

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Marketing Mix:•Product or Service

•Pricing

•Channels of Distribution

•Promotion

Promotional Mix:•Advertising

•Direct Marketing

•Interactive/internet marketing

•Sales Promotion

•Publicity/Public Relations

•Personal Selling

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Corporate Level Message Sources

Administration Manufacturing/ Marketing Finance Human Legal

Operations Resources

Cross-Functional Brand Equity (IM) Team

Marketing Level Message Sources

Product Price Marketing Distribution Mix Mix Communication Mix

Cross-Functional IMC Team

Marketing Communication Level Message Sources

Personal Adver- Sales Direct Public Pack- EventsSales tising Promotion Marketing Relations aging

Interactivity

Other StakeholdersEmployeesInvestorsFinancial CommunityGovernmentRegulators

CustomersDistributorsSuppliersCompetition

ConsumersLocal CommunityMediaInterest Groups

Communication-Based Marketing Model

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High controlMessage

Low controlMessage

AdvertisingSales-PromotionDirect Marketing

Special EventsPublicity

PRCrisis Management

Employee-Behaviour

Consumer WOM

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Evolution of IMC• American Association of Advertising Agencies

defines IMC as

“a concept of marketing communication planning that recognises the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication discipline- for example general advertising, direct response, sales promotion,and public relations and combines these disciplines to provide clarity, consistency and maximum impact.”

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Integrated communication for Incredible India

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IMC called by different names…

• New advertising

• One-to-one marketing

• Whole egg

• Orchestration

• 360 branding

• Total branding

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Evolution of IMC condt…

• Concept of IMC was first germinated in 1980

• Communication originating from watertight compartments overlapped, managers competed internally for resources and the common goal of the organisation was sidelined in the bid to secure maximum resources.

• Hence IMC was born…to look at the common organisation goal

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Shift in the agencies too

• Eg- Ogilvy & Mater (O&M) now offers 360 degree communication option to the clients– Ogilvy Activation for out-of-home communication– Ogilvy Interactive for online marketing– Ogilvy Live for events and promotions– Ogilvy PR for public relations– Ogilvy One for one-to-one marketing– Ogilvy Signscapes for retail design solutions.

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Reasons for growing importance of IMC

• Decreasing impact of tradition advertising• Proliferation of new ways to reach consumers• Demand greater accountability• Growth in database marketing• Growth of international marketing• Emphasis on relationship marketing• Tighter control over communication• Changing compensation structure of agencies• Need for single brand custodian• Need for creating brand identity

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Branding and Brand equityBrand-is a collection of images and ideas regarding a

productor company. More particularly it refers to the concrete symbols such as brand name, logo, slogans, signs, symbols and design schemes.

Brand recognition- is the result of awareness regarding a brand in the marketplace and is created by direct experiences with a product or through other communications

Brand equity- is the power and value of a brand in the marketplace. It is based on brand loyalty, brand awareness, perceived quality, strong brand associations, patents, trademarks etc.