Sunday, 7 October 2012
Amul -IMC Plan
IMC plan for Amul
Introduction to the brand :Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India. The word Amul is derived from the Sanskrit word Amulya, meaning invaluable. The co-operative is also sometimes referred to by the unofficial backronym: Anand Milk Union Limited. It was formed in 1946, it is a brand managed by a cooperative body, the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3.03 million milk producers in Gujarat. Amul spurred India's White Revolution, which made the country the world's largest producer of milk and milk products. In the process Amul became the largest food brand in India and has also ventured into markets overseas. Dr Verghese Kurien, founder-chairman of the GCMMF for more than 30 years (1973-2006), is credited with the success of Amul.
Segmentation, targeting , Positioning
Amul is segmented market as kids , women , youth, calorie concious and health concious segment.we can define it as a customer based market segmentation where they have launched a slew of product for each market segment.
Positioning:
Marketing Mix Product: .
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| Figure 1 : customer based market segmentation |
Amul has tried to adopt 'Product for everyone' strategy where they are targeting each and everyone Indian like youth , diabetic patient , youth , urban India , price sensitive India, caloric concious etc
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| Figure 2: product Mix |
Promotion: Amul's desired positioning from long time is to become a brand which caters to entire India.Its slogan "Amul-The taste of India" justifies the same. Amul girl campaign introduces a mascot, which is a cartoon, and hence have an mass appeal. This amul girl has round face which can be converted into Manmohan ji , lord Krishna, Sachine , Mamta banerji or what not . Amul has creatively use this girl in association with the current affairs like cricket world-cup , politics , and movies to market its product.
Its 2012 TV commercial positioned it as a brand who serves a family and is getting happiness out of that.
Bournvita Li’l Champs
Product: Bournvita
Li’l Champs
Target
audience: Children especially in the age group of
2-5 years
Ad
agency: Ogilvy India
Concept:
The TVC opens with a slightly obese man pulling
a little boy’s cheeks and making gibberish baby noises. The man sits down and
asks his mother to get him paranthas with extra butter. Then the
man’s
brother enters and does the exact same thing. The boy is miffed and he asks “Do
you know Hindi?” Both the men reply in the affirmative. The boy then replies “Even
I know Hindi”. Both the men are embarrassed for making those baby noises while pulling
his cheeks. Then the boy’s mother enters and gives him a glass of Bournvita Li’l
Champs and says that kids grow older before you know it and Bournvita Li’l
Champs is specially made for kids in the age group of 2-5 years
Review: In our opinion, this TVC is successful if it makes you smile. All of us
have this natural tendency to make gibberish baby noises when we meet a little
kid. The actor who plays the child is brilliant with his expressions. However
we think it would have been better if there were two ladies instead of the two
men for obvious reasons. Unlike other health drink Ads which talk about all the
nutrient mumbo-jumbo that goes into it or how their health drink helps kids
cope up with peer pressure, this Ad is simple and witty. “A health drink for
kids between 2-5 years because 90% of the human brain develops in this phase”.
TATA Teleservices
Product: TATA Teleservices
Target
Audience: Indian masses specially women
Ad
Agency: Ogilvy India
Concept:
The TV Commercial opens with the scene of
a very interesting “Relocation” buffer that goes on indicating the very crux of
the advertisement. It is followed by a lady unpacking the stuff after shifting
to a new place where her husband enters teasing her to forget the tiff they had
also because she does not have anybody here to rely on, neither the Ramu kaka nor
her Papa. Above all if she does not reconcile soon who would fix up her TATA
Sky connection, but here enters the TATA employee informing her about her TATA
Sky connection set up well.
Review:
This TVC was successful in communicating
the message that TATA SKY intends to as it captures the very motive of the
company to emphasize on the fact that wherever you go and “Relocate” TATA Sky
follows you and provides a full-fledged service of continuous connectivity with
the network through “at your door” convenient service. The commercial is very
well thought out in terms of the generally faced problem by the recently
shifted and that too by the home maker whose most of the time is spent with the
TV back at home.
Marketing Process
In
this section of the blog, how marketing strategy is important for promotion of
a product and how the essential elements of marketing strategy are integrated
with elements in the overall marketing program of an organization. We will also
focus on different tools used for promotion of the products to the customers as
well as the channel partners. Marketing strategy is also a critical ingredient
in developing an integrated marketing communication plan.
The
framework shown below states a step-by-step approach in developing marketing
process and thus the plan for promotion which is an input for integrated
communication strategy.
The process
of marketing begins with an in depth analysis of the market, opportunities
available and identification of potential target market for the products of the
firm.
An
opportunity can be defined as an unsatisfied customer need and thus generating
a favorable demand which can fetch company significant amount of money provided
the company can compete effectively in the market for satisfying the unmet
need.
Having
analyzed the current market scenario and identified the opportunities available,
these opportunities can be tapped using different strategies as explained by
Ansoff’s matrix (which is shown in the image below). A company can enter into a new market with a
new product or an existing product or it can do the same for entering an
existing market.
Opportunity
analysis is followed by a competitor analysis. Any marketer must carefully
analyze the competition that his product can face in the marketplace from other
products (product substitutes) or even other products from the same
company/brand (Direct brand competition). Such a scenario is always beneficial for the
consumer since it offers the consumer more choices and thus increases his
bargaining power.
One of the
classic examples of direct brand competition was seen when Lay’s introduced Baked
Lay’s low-fat chips, the product cannibalized sales of the regular Lay’s potato
chip brand.
Amidst the
contemporary business environment which is characterized by very high
competition and reducing loyalty among the consumers, it has become crucial for
the companies to have a competitive advantage. A competitive advantage is something the firm
is best at and gets it an edge over other players in the market. Superior quality
products (which may command a premium price), superior customer service, lowest
product prices (owing to lowest production
costs and economies of scale), or
dominant position in channels of distribution are some of the forms of
competitive advantage of a firm. Companies, these days, are spending enough
money to highlight their competitive advantage and thus differentiate their
products/brands for those of the competitor’s.
Southwest Airlines’ print ad
emphasizing on their fares which were lowest in US aviation industry is an
example of use of explicitly bringing out your competitive advantage through
advertisements.
Also,
it is very important for a company to anticipate and monitor the actions of a
competitor. One has to be very proactive in tackling the attacks from its
competitors otherwise you are bound to lose the customers to other players. Particularly,
a market leader in a product category is often subjected to these kinds of
competitive attacks from other players in the market and thus must defend its
position by being proactive. Competitors might resort to different actions such
as
- Cutting prices
- Increasing expenditure on sales and trade promotion
- Develop new products/brands
- Comparative advertising
Some
of the marketing battles fought through competitive advertising lately are:
rivalry between Samsung (Galaxy SIII) and Apple (iPhone 5), P&G (Tide) and HUL
(Rin), etc. Besides, the war between Coke and Pepsi through comparative advertisements
has been entertaining the customers for a quite a long time now.
“The next big thing is already here” campaign by Samsung
Rin vs Tide: Comparative Ad
“The next big thing is already here” campaign by Samsung
Rin vs Tide: Comparative Ad
Marketers
rarely go after the entire market with one product, brand, or service offering
because it is hardly to meet the needs of all the customers with one
standardized product. Rather, a number of different strategies are made, the market
is split into segments and one or more of these segments are targeted.
The
process is known as target marketing and it involves the following
steps:
- Identifying markets with unfulfilled needs
- Segmenting the market
- Targeting specific segments
- Positioning
According
to Eric N. Berkowitz, Roger A Kerin, and William Rudelius, market segmentation is
“dividing up a market into distinct groups that (1) have common needs and (2)
will respond similarly to a marketing action”.
Segmentation of the
market can be achieved on different bases. A company may use one of these bases
or a combination of approaches. Some of the bases for segmentation are as
follows:
- Geographic Segmentation
- Demographic Segmentation (on the basis of age, sex, family size, education, income, and social class)
- Psychographic Segmentation (on the basis of personality and/or lifestyles)
- Behavioristic Segmentation (on the basis of usage, loyalties, or buying responses to a product)
- Benefit Segmentation (based on specific benefits of the products
The next phase in the
target marketing process involves two steps:
- Determining how many segments to enter
- Determining which segments offer the most potential.
The second involves
determining the most attractive segment. The firm should evaluate the segment
for its sales potential, the competition, the opportunities for grow, and its
own ability to compete.
The
next step in developing the integrated marketing plan is positioning.
Positioning is the process by
which companies/marketers try to build an identity/image for its
product, brand or organization in the minds of their potential target
customers. According to Belch, positioning can be defined as
“the art and science of fitting the product or service to one or more segments
of the broad market in such a way as to set it meaningfully apart from
competition.”
For
example, Coca Cola with its “It’s the real thing” campaign tried to build an
image of the only real soft drink with an implicit indication that all the
other brands were only imitation. It was one of the most effective promotional
campaigns ever.
In order to create a
position for a product or service, Al Ries and
Jack Trout suggested that managers must ask themselves six basic
questions:
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| Print Ad: Coca Cola - The Real Thing |
- What position, if any, do we already have in the prospect’s mind? (This information must come from the marketplace (customer’s perceptions), not the managers’ perceptions)
- What position do we want to own?
- What companies must be outgunned if we are to establish that position?
- Do we have enough marketing money to occupy and hold the position?
- Do we have the guts to stick with one consistent positioning strategy?
- Does our creative approach match our positioning strategy?
- Positioning strategies might be based on product attributes and benefits, price, quality, use or application, product class, product user, competitor, cultural symbols, etc.
Example: Positioning by Product attributes
and benefits
Understanding IMC
Understanding Why we do What we do in IMC
Sometimes, companies miss out a
very basic part of a business – Setting objectives. Without a proper direction,
no task can be performed successfully, forget about running a company. It is
specifically true for advertising and promotional functions as these cannot
their function without knowing their objectives. Let us look at some of the
important objectives of advertising and promotion:
- Communication – Ads are mainly designed to communicate product features or a message about the brand. While designing advertisements or defining the activities of the department, this particular objective should be kept in mind
- Planning and Decision making – This also assists in the process of decision making as the planning will be done on the basis of alignment of the firm’s objectives and advertising objectives
- Measurement and Evaluation of benefits – The objectives are measurable and hence, provide benchmark for measuring the actual performance against the desired levels
The objectives of IMC are decided
on the basis of a complete analysis of promotion and advertising objectives.
The marketing objectives are determined as per the situation analysis and the
promotion objectives are determined as per the marketing plan.
DAGMAR – An approach for setting specific and measurable objectives
Rusell Colley developed a model
in 1961 that helps in setting advertising objectives and measuring the results.
DAGMAR model suggests that the ultimate objective of advertising must carry a
consumer through four levels of understanding:
The model also focuses on setting up good objectives, which have the following characteristics:
- Awareness - the consumer must first be aware of the brand or company. The awareness is created, developed, refined or sustained, as the characteristics of the market
- Comprehension - the customer must be able to comprehend as to what the product is all about. This can be done by providing information about key brand attributes differentiating it from its competitors
- Conviction - the customer must be mentally prepares to buy the product. To do this, target customer’s notions about the product can be moulded with the help of messages to demonstrate the product’s superiority or doing more publicity
- Action - finally, the customer actually buys the product. Communication must finally encourage buyers to engage in the purchase activity
The model also focuses on setting up good objectives, which have the following characteristics:
- Concrete and measurable - the communications objective should tell what is the core message that the advertiser wants to communicate to the target audience
- Target audience - a key tenet to this model is that the target audience should be well defined. For example –if the goal was to increase awareness, it is essential to know who all should know about the product or brand
- Benchmark and degree of change sought - A benchmark should be set which measure as to where is the target audience currently i.e. at the beginning of the campaign as against various communication response variables such as awareness, attitudes, knowledge, image, etc.
- Specified time period - With a specific time period, a survey is likely to generate a set of measures that can be properly planned and anticipated
Message Structures
Communicate your messages effectively
As a marketer, you must realize
that your message reaches the target customers and it should be able to
overcome any type or pre-conceived notions that they may already have. While
there may not be a sure shot way of communicating the message in the effective manner,
you should keep some important points in mind:
Order of presentation – You have
the option of placing your message at the beginning, middle and end of the
advertisement. It depends on the marketers’ discretion as to where he/ she
would like to place the message but it is recommended that it should not be
placed in the middle of the ad
For example, the ad below is
about the product ‘Kitkat’ and the product is shown at the beginning and the
message ‘Kitkat Break Banta hai’ is communicated at the end of the ad.
Conclusion Drawing – Marketing
people should think about whether they should look mention the message clearly
to the people or let them think themselves. This also depends on the level of
complexity of topics as well
This ad of 'The Hindu' shows that there is no
clear message and it is left to the audience to think about what the is saying:
Message Sidedness – You should also
know whether to show only one side i.e. good side of the product or to show
both the positive and negative aspects and leave it to the target market to
take the message the way they wish to.
The one sided ad showing only the
good side of Mac:
Refutation - Refutational
messages may be useful when marketers wish to build attitudes that resist
change and must defend against attacks or criticism of their products or the
company
Verbal versus Visual messages –
An image is equivalent to a thousand words. But if you feel that the message
will not be communicated properly on its own, then verbal communication can be
made.
This Vodafone ad shows the visual
message for marketing:
VALS Framework
Vals which is also known as values attitude and lifestyle is one of the primary ways to perform psycho-graphic segmentation of the consumers.Having an idea about the Values, Attitude and Life style of the consumer will definitely help the marketers and promoters to make products/services what the consumer wants and also communicate to them in a way that would attract the consumer.
The term & framework are coined and designed by Social scientist and futurist Arnold mitchell. Arnold mitchell actually developed the vals framework to determine different classes of people who had varying values, attitudes and lifestyle. These people were determined by the resources they had at their disposal as well as the amount of primary innovation they could accept or create.
As per the framework, there are 8 consumer types characterised as follows:
Innovator: High income and high resource individuals for whom independence is important
Thinker: High resources and are motivated by their knowledge
Believer: Lower resources and are less likely to accept innovation on their own
Achiever: High resource consumers and can adapt a brand faster
Striver: Values similar to achiever but with less resources
Experiencer: High resources but needs a mode of self expression
Maker: Want self expression but are limited by the number of resources they have
Survivor: Least resources and therefore the least likely to adopt any innovation
VALS Framework helps the marketers in the following areas:
- New Product Development
- Targeting: Positioning
- Communications: Channel Planning
VALS types for GROUP-F
As per the survey available on the link: http://www.strategicbusinessinsights.com/vals/ustypes.shtml, Group F's results are is as follows:
The pie chart above shows that Group F has more of Strivers & Experiencer.
Customer Profiles
Strivers are trendy and fun loving. Because they are motivated by achievements, strivers are concerned about the opinions of others. Strivers are active consumers because shopping is both a social activity and an opportunity to demonstrate to peers their ability to buy. As consumers, they are as impulsive as their financial circumstance will allow.
Experiencers are motivated by self-expression. Young, enthusiastic, and impulsive consumers, Experiencers quickly become enthusiastic about new possibilities but are equally quick to cool. They seek variety and excitement, savoring the new, the offbeat, and the risky. Their energy finds an outlet in exercise, sports, outdoor recreation, and social activities.
Hence, to market a product to our group who are primarily Strivers & Experiencer, the marketing strategy to be followed is to motivate us using 'sense of Achievement.'
The following product and marketing strategy would appeal to typical Group-F:
Product Name: Maruti SX4
Promotion Strategy: Promotion of Maruti SX4 shows the sense of achievement by being trendy. Also, the product's advertisements show that the person who is the owner of the car is being held in higher esteem.
How to reach us: In social gatherings, malls, in store promotions.
What can you offer us that appeals to us: Value for money & proof of having the sense of pride & achievement in owning the product
What type is not there in Group-F
Thinker is one type that is not present in Group-F.
Thinkers are motivated by ideals. They are mature, satisfied, comfortable, and reflective people who value order, knowledge, and responsibility. They tend to be well educated and actively seek out information in the decision-making process. They are well-informed about world and national events and are alert to opportunities to broaden their knowledge.
Thinkers have a moderate respect for institutions of authority and social decorum but are open to consider new ideas. Although their incomes allow them many choices, Thinkers are conservative, practical consumers; they look for durability, functionality, and value in the products that they buy.
Hence, to target these people, marketers should be careful enough to be able to validate and back up every word that is uttered in various communication channels for these consumers.
How to reach them: Through websites, PR activities, referrals, customer review websites.
What to offer to them that appeals them: Value for money, show good use of the product to them, warranty benefits, highlight any user feedback and test results of the product/service.
Examples of these products are: Samsung Galaxy Tab
Thus the vals framework can be used primarily to classify consumers based on their values, attitudes and lifestyle. Once the classification has been done, you know which types of customers you want to target.
Depending on your target customers vals, you can make up your marketing strategy and your promotional message such that it hits your audience at the right spot.
Thinkers are motivated by ideals. They are mature, satisfied, comfortable, and reflective people who value order, knowledge, and responsibility. They tend to be well educated and actively seek out information in the decision-making process. They are well-informed about world and national events and are alert to opportunities to broaden their knowledge.
Thinkers have a moderate respect for institutions of authority and social decorum but are open to consider new ideas. Although their incomes allow them many choices, Thinkers are conservative, practical consumers; they look for durability, functionality, and value in the products that they buy.
Hence, to target these people, marketers should be careful enough to be able to validate and back up every word that is uttered in various communication channels for these consumers.
How to reach them: Through websites, PR activities, referrals, customer review websites.
What to offer to them that appeals them: Value for money, show good use of the product to them, warranty benefits, highlight any user feedback and test results of the product/service.
Examples of these products are: Samsung Galaxy Tab
Thus the vals framework can be used primarily to classify consumers based on their values, attitudes and lifestyle. Once the classification has been done, you know which types of customers you want to target.
Depending on your target customers vals, you can make up your marketing strategy and your promotional message such that it hits your audience at the right spot.
The Amul Girl
ORIGINS
The Amul girl was created as a response to Amul's rival brand Polson's butter-girl. The idea was conceived in 1967 once ASP (Advertising, Sales and Promotion) clinched the brand portfolio from the previous agency FCB Ulka. It was executed by Sylvester Da Cunha, the owner of the agency and his art director Eustace Fernandez on hoardings, painted bus panels and posters in Mumbai. The mascot, since then, has been mobilized to comment on many events of national and political importance like Emergency in India in 1976. Eustace Fernandes was the creative brain behind the popular Amul Girl.
DaCunha, founder-Chairman of DaCunha Communications and Fernandes created the very first hoarding that said: 'Give us this day our daily bread with Amul Butter'. Since then, the Utterly, Butterly Girl has had her say on current affairs topics and even today, continues to win hearts with her tongue-in-cheek humour. As Sylvester DaCunha says, 'The great thing about Eustace Fernandes' girl is the round face that can be adapted to be anybody. With Manmohan Singh, put a turban on her. It can be Indira Gandhi, give her a white streak. So it's a supremely adaptable creation'.
DaCunha, founder-Chairman of DaCunha Communications and Fernandes created the very first hoarding that said: 'Give us this day our daily bread with Amul Butter'. Since then, the Utterly, Butterly Girl has had her say on current affairs topics and even today, continues to win hearts with her tongue-in-cheek humour. As Sylvester DaCunha says, 'The great thing about Eustace Fernandes' girl is the round face that can be adapted to be anybody. With Manmohan Singh, put a turban on her. It can be Indira Gandhi, give her a white streak. So it's a supremely adaptable creation'.
The first of the ads featuring the girl in the polka dotted frock and a matching ribbon were not the huge hoardings that we are more acquainted with, but were put up on a few lamposts in Mumbai.
The first ever hoarding featuring the Amul girl had her saying a bedtime prayer. Interestingly, in her first major appearance the Amul girl wasn’t in her trademark polka-dotted frock.
‘Utterly, butterly, delicious’
The evergreen tagline of Amul was suggested by Nisha daCunha, who was Sylvester Dacunha's wife. Before the 'Utterly' tagline Amul was positioned as ‘processed from the purest milk under the most hygienic conditions by a diary co-operative in Gujarat'.
Though the Amul girl has been a cute adorable girl talking about the latest news, events and controversies, it has had had its own share of controversies. One of the most controversial Amul butter ads of all time was perhaps the one after incidents of UK authorities conducting virginity tests on Indian women arriving at London airport in 1979. The text said “Indian virgin needs no urgin’!” Following protests Amul came up with another billboard apologising for the ad
Though the Amul girl has been a cute adorable girl talking about the latest news, events and controversies, it has had had its own share of controversies. One of the most controversial Amul butter ads of all time was perhaps the one after incidents of UK authorities conducting virginity tests on Indian women arriving at London airport in 1979. The text said “Indian virgin needs no urgin’!” Following protests Amul came up with another billboard apologising for the ad
Also during the "Satyam Scam" Amul came out with a print ad quoting "Satyam, Sharam, Scandalam". This drew ire of the Satyam board. They went to the extent of threatening that the Satyam employees would quit consuming Amul products.
Advertising Agencies
Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations
Integrated marketing communication process involves majorly five Major groups, the clients i.e. the advertisers, Advertising agency, media organization which is responsible for creating modes for communicating the advertising message, specialized marketing communicating services which provide services in the area of the expertise and the collateral services who helps in planning and the execution.
Advertising agency, an outside firm that specializes in the creation, production, and/or placement of the communications message and that may provide other services to facilitate the marketing and promotions process. For example, Kraft Foods uses as many as 8 advertising agencies for its various brands, while Procter & Gamble uses 12 ad agencies and 2 major media buying services companies. Advertising agency has its both pros and cons. It’s an added expertise to any organization which adds media knowledge and eases the administration system. Apart from quality control and effective media buying it also helps in time and cost saving. The communication factor for the client to communicate properly and clearly to the ad agency else it may cause a big hindrance in effective creativity work.
Types of advertising agencies:
Service agencies: A full service ad agency is one that provides a range of marketing services. A full services agency provides services that are directly related to advertising such as copy writing, artwork, production of ads, media planning etc.
Modular agencies: This sells services on piece-meal basis.
In-house agency is completely owned by advertisers. It performs almost all functions that an outside advertising agency would perform and that’s why some people refer to it as full-service advertising department of the advertiser. However, the difference between an in-house agency and an advertising department is that the in-house agency can undertake to serve several other clients, if the owner so desires.
Creative boutiques provides creative function instead of full service, their functions include copywriting, artwork and production of ads.
Specialist agencies: There are some agencies who undertake advertising work only in certain areas. There are agencies that specialize only in financial services oronly in publicity or only in point-of-purchase material etc. for instanceSoubhagya advertising agency concentrate on specialized in financialadvertising
Top 10 ad agency in India
- Adbur Pvt Ltd
- Akshara Advertising
- Mudra communication ltd
- Chaitra Leo Burnett Pvt Ltd
- Contract Advertising (India) Ltd
- Crayons Advertising and Marketing Pvt Ltd
- Creative Advertising
- Enterprise Nexus Communications Pvt. Ltd
- Euro RSCG Advertising Pvt Ltd
- Everest Integrated Communications
Limited Advantages of using marketing agency
- Added Expertise
- Media Knowledge and Unbiased Advice
- Easier Administration
- Media Buying
- Quality Control
- Information
- Fending off the media
- And when things go wrong
- Cost Saving
- Time Saving
These agencies pitch in to the clients by using referrals, direct solicitation, and effective presentation, through it PR relations and their branded image & reputation. In addition to these Advertisement agencies other marketing communication specialists are also like direct marketing agencies (basically responsible for funding database management, direct mail, research, media services, and creative and production capabilities), Sales Promotion agencies, PR firms or interactive agencies. The role of the marketer is very important here in selecting the proper communication mix based on the requirement of the firm and thus subsequently deciding the strategy for their organization build an effective marketing communication plan.
Agency Compensation: The traditional method of compensating agencies is through a commission system, where the agency receives a specified commission (usually 15 percent) from the media on any advertising time or space it purchases for its client. (For outdoor advertising, the commission is 16 / 3percent.) This system provides a simple method of determining payments, as shown in the following example.
Fee, Cost, and Incentive-Based Systems:
Fee Arrangement
1 Fixed free system: the agency charges a basic monthly fee for all of its services and credits to the client any media commissions earned
2 Fee-commission combinations: The media commissions received by the agency are credited against the fee. If the commissions are less than the agreed-on fee, the client must make up the difference. If the agency does much work for the client in non -commissionable media, the fee may be charged over and above the commissions received.
Cost-Plus Agreement Under : the client agrees to pay the agency a fee based on the costs of its work plus some agreed-on profit margin (often a percentage of total costs). This system requires that the agency keep detailed records of the costs it incurs in working on the client’s account. Direct costs (personnel time and out-of-pocket expenses) plus an allocation for overhead and a markup for profits determine the amount the agency bills the client.
Incentive-Based Compensation: The basic idea is that the agency’s ultimate compensation level will depend on how well it meets predetermined performance goals. These goals often include objective measures such as sales or market share as well as more subjective measures such as evaluations of the quality of the agency’s creative work. Companies using incentive-based
Percentage Charges: Another way to compensate an agency is by adding a markup of percentage charges to various services the agency purchases from outside providers. These may include market research, artwork, printing, photography, and other services or materials. Markups usually Range from 17.65 to 20 percent and are added to the client’s overall bill.
In addition to using ad agencies, marketers use the services of other marketing communication specialists, including direct-marketing agencies, sales promotion agencies, public relations firms, and interactive agencies. A marketer must decide whether to use a different specialist for each promotional function or have all of its integrated marketing communications done by an advertising agency that offers all of these services under one roof.
IMC Introduction
Growing need and importance of advertising for companies: The world is changing, the environment around the consumer is changing so does the consumer is changing and this change is what forces marketers to change its communication tool to elicit the desired response from consumer. The marketers are more focused on choosing multi-channel marketing and promotion to target customer.
The U.S. Army and thousands of other companies and organizations recognize that the way they must communicate with consumers and promote their products and services is changing rapidly .The fragmentation of mass markets, the explosion of new technologies that are giving consumers greater control over the communications process, the rapid growth of the Internet and electronic commerce, the emergence of global markets, and economic uncertainties are all changing the way companies approach marketing as well as advertising and promotion. Developing marketing communications programs that are responsive to these changes is critical to the success of every organization. However, advertising and other forms of promotion will continue to play an important role in the integrated marketing programs of most companies.
Definition of marketing (AMA): The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
There is a greater focus on the exchange that occurs between two parties with something valuable to exchange. Advertising and promotion play an important role in the exchange process by informing consumers of an organization’s product or service and convincing them of its ability to satisfy their needs or wants.
Marketers seeks more than one time exchange with the customer and that is why they adopt relationship marketing where Marketers want a long term sustainable relationship with the customer as well as with other stakeholder for mutual benefits. Customer are increasingly becoming more demanding they want a customized product ,with ease of purchase and after purchase services.
Marketers are focused on Life time value of the customer because they have recognized that it is cost effective to maintain old customer than acquiring new customer
Marketing Mix: Marketing facilitates the exchange process and the long term relationship by carefully examine the needs and want of the customer, developing the product to satisfy those needs and want ,offering at a certain price , making it available at place and developing a program of promotion or communication to create awareness and interest.These four Ps—Product, Price, Place (distribution), and Promotion—are elements of the marketing mix. The basic task of marketing is combining these four elements into a marketing program to facilitate the potential for exchange with consumers in the marketplace.
Integrated Marketing Communications:
Evolution of IMC:
• Integrated marketing communications (IMC)
• new advertising
• orchestration
• seamless communication
• all sources of brands or company contact
Reasons for the Growing Importance of IMC:
- A shifting of marketing dollars from media advertising to other forms of promotion, particularly consumer and trade-oriented sales promotions.
- A movement away from relaying on advertising-focused approaches, which emphasize mass media such as network television and national magazines, to solve communication problems.
- A shift in marketplace power from manufacturers to retailers
- The rapid growth and development of database marketing
- Demands for greater accountability from advertising agencies and changes in the way agencies are compensated.
- 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 Role of IMC in Branding
One of the major reasons for the growing importance of integrated marketing communications over the past decade is that it plays a major role in the process of developing and sustaining brand identity and equity.
As branding expert Kevin Keller notes, Building and properly managing brand equity has become a priority for companies of all sizes, in all types of industries, in all types of markets.´
With more and more products and services competing for consideration by customers who have less and less time to make choices, well-known brands have a major competitive advantage in today’s marketplace.
Building and maintaining brand identity and equity require the creation of well-known brands that have favorable, strong, and unique associations in the mind of the consumer.
Brand identity is a combination of many factors, including the:
• Name
• Logo
• Symbols
• Design
• Packaging
• Performance of a product or service
• Image or type of associations that comes to mind when consumers think about a brand
It encompasses the entire spectrum of consumer’s awareness, knowledge, and image of the brand as well as the company behind it.
It is the sum of all points of encounters or contact that consumer shave with the brand, and it extends beyond the experience or outcome of using it. These contacts can also result from various forms of integrated marketing communications activities used by a company, including mass-media advertising, sales promotion offers, sponsorship activities at sporting or entertainment events, websites on the Internet, and direct-mail pieces such as letters, brochures, catalogs, or videos. Consumers can also have contact with or receive information about a brand in stores at the point of sale; through articles or stories they see, hear, or read in the media; or through interactions with a company representative, such as a salesperson.
Marketers recognize that in the modern world of marketing there are many different opportunities and methods for contacting current and prospective customers to provide them with information about a company and/or brands. The challenge is to understand how to use the various IMC tools to make such contacts and deliver the branding message effectively and efficiently.
A successful IMC program requires that marketers find the right combination of communication tools and techniques, define their role and the extent to which they can or should be used, and coordinate their use. To accomplish this, the persons responsible for the company’s communication efforts must have an understanding of the IMC tools that are available and the ways they can be used.
The Promotional Mix: The Tools for IMC Advertising:
Advertising is a message designed to promote a product, a service, or an idea. The purpose of advertising is to sell products or services. Advertising reaches people through various forms of mass communication. These media include newspapers, magazines, television, radio, the Internet, direct mail, outdoor signs, transit signs, window displays, point-of-purchase displays, telephone directories, novelties. Advertising is designed to inform, influence, or persuade people. To be effective, an advertisement must first Attract attention and gain a person’s Interest. It may then build Desire for a product and provide a method for them to take Action. Advertisers research the unique features of the product to determine the USP (unique selling proposition) and the big idea—the simple message that will be used to communicate the USP to the target audience.
Direct marketing:
Direct marketing is the use of consumer-direct channels to reach and deliver goods and services to customers without using market middlemen. It is a One-on-one communication in which offers are tailored to the needs of narrowly defined segments. It seeks a direct, immediate, and measurable consumer response. There are various advantages of Direct Marketing like it is a Powerful tool for building customer long-term customer relationships, it enables “true micromarketing” efforts, it can can reach prospects at just the right moment and it can Provides access to buyers unreachable through other channels.
Interactive marketing: Interactive marketing is a one to one marketing process that reacts and changes based on the actions of individual customers and prospects. This ability to react to the actions of customers and prospects means that trigger based marketing is dramatically more effective than normal direct marketing. Interactive marketing is typically 2-12 times more effective than traditional direct marketing.
Sales Promotion:
Whereas advertising gives a reason to buy, SP gives an incentive to buy’. It is at the last point where the consumer is often at the point of buying, the additional incentive makes a last ditch effort to convert the customer on to the incentivize brand. It is of two types Trade and Consumer. Trade promotion helps in liquidating heavy inventories and persuades retailers to carry stock, carry more than usual stock. Consumer promotion stimulates purchase, Induces trials, create new users, increase repurchase from occasional customers and Reward loyal customers.
Publicity/ public relations:
A 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 have a broader objective than publicity, as its purpose is to establish and maintain a positive image of the company among its various public 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.
Personal selling:
Personal selling refers to personal communication with a an audience through paid personnel of an organization or its agents in
such a way that the audience perceives the communicator’s organization as being the source of the message. Personal selling helps employing firm to generate revenue and market research and customer feedback about the product and services.
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