Integrated Marketing Communication - Essay Example

Analysis of the Integrated Marketing Communication Mix Strategies Executive Summary Integrated marketing communication (IMC) mix is a mix of advertising, sales promotion, personal selling, direct marketing and public relation. This report is about the analysis of the integrated marketing communication mix strategies of Apple Inc. It encompasses the elements and types of communication along with the need for integrated marketing communication mix. The report also focuses on the tools and strategies of the IMC mix. Through the external and internal analysis of Apple Inc. such as competitor analysis, company analysis, SWOT and PESTLE analysis some of the problems are recognized. With the help of analysis it is noted that Apple Inc. delivered attractive and best quality product designed for a finest price. Table of Contents Executive Summary 2 Introduction 4 Elements and Types of Communication 5 Elements of Communication 5 Types of Communication 6 Need for IMC 6 Tools of Integrated Marketing Communication Mix 7 Strategies of IMC Mix 7 Branding and Positioning Strategies 7 Apple – Introduction 8 Competitor 8 Company Analysis 9 Quality strategies of positioning 9 Target audience 9 Competitive Positioning Strategies of Apple 9 SWOT Analysis 9 Market Environment Analysis 10 PESTEL Analysis 10 IMC Tools used by Apple 10 Advertising 11 Public Relation 11 Online Marketing 11 Critical Analysis and Discussion 11 Conclusion 11 Recommendation 12 Introduction Integrated marketing communication (IMC) mix is a process, designed for managing the consumer relationships that drive product value. More exclusively, it is defined as cross functional practice for generating and nourishing beneficial relationship with the customers and stakeholders (Koekemoer, 2004). Now the environment of marketing communication is changing: mass markets have been fragmented, thereby, causing marketers to move from mass selling to segment marketing; and shifting from mass media towards focused media. Integrated marketing communication activities entail a forward flow of communications. Producers communicate to the wholesaler, the retailer, and the end consumer. Resellers correspond to customers. Backward communication flow also exists but is crucial to understand markets and customers (Anderson and Vincze, 2006). The main aim of this report is to analyse the integrated marketing communication mix strategies of Apple Inc. Elements and Types of Communication Elements of Communication The main elements of communication procedure are the sender, encoding message, receiver, medium, decoding, and feedback. A clear understanding of all these elements helps to design an effective communication programs (Jacobson, 1999). Sender: Sender is a person who starts the communication process by thinking about the idea to have a conversation with the receiver. During the communication, the body language, vocabulary and the voice tone of the speaker influence how the receiver accepts the message (Jacobson, 1999). Encoding: It is an act of creating an idea reachable to the entire mass. Before the message or an idea could be conveyed to receiver or the people, the sender requires encoding the message in a suitable code (Cleary, 2004). Medium: Once the idea of sender are translated or encoded, they are conveyed in the structure of message. Messages could be carried to the audiences through many channels such as speeches, direct mail, conversation, telephone, exhibits, magazines, newspapers, broadcast reports, news releases and face to face conference (Cleary, 2004). Receiver: The receiver is a person who decodes the information according to his or her understanding of subject, past experience and ability to interpret language. The receiver will make an instant decision about how to respond to the information or message (Fielding, 2005) Decoding: It refers to the method of receiving, constructing and understanding the coded information by the receiver. Apart from just receiving the message, the receiver must have the ability to decode it (Cleary, 2004). Feedback: The response of the receiver towards the message is known as feedback. It is necessary for efficient communication, because it offers for the two-mode flow of message (Cleary, 2004). Types of Communication The different types of communication process include interpersonal communication, intercultural communication, organizational communication, small group communication, public communication and mass communication (Walker and Miller, 2009). Interpersonal communication: It is defined as the interaction among two people. In this situation, communication takes place in a close proximity. The main advantage is that customers can enquire questions, and salesperson gives immediate reaction and modifies the message consequently (Burrow, 2008). Intercultural communication: It takes place among the organisations and people of diverse cultures. The interaction must be concise, clear and constructive (Donaldson and Smit, 2007). Organizational communication: It involves all different types of communication which is used by the company, focused mainly on stakeholders who were not customers (Carroll, 2013). Small Group Communication: It takes place among groups of 3-20 people and the communication which takes place is generally face-to-face. The example of this communication is media conference (Donaldson and Smit, 2007). Public communication: It includes social marketing, public relations, research and political communication and it takes place in the public places. (Donaldson and Smit, 2007). Mass communication: Under mass communication the particular targeted people is not recognized, in spite the information is directed at public groups (Crew and Kleindorfer, 2012). One example of mass communication is television advertising and it is regarded as an attractive method because it reaches the large population cheaply and quickly (Smith and Taylor, 2004). Need for IMC The need for IMC originated because contradictory messages from various sources and promotional approaches could confuse the industry or brand image. The problem is prevalent when the functional experts handle individual structures of the marketing communications independently. The web only cannot be utilized in order to build brands because the brand awareness prospective is limited (Graduate, 2014). With IMC, the organization carefully coordinates and integrates its communications channels in order to deliver a consistent, clear, and convincing message about the company and also about its product and services (Washington, 2014). Five main shifts in the context of marketing, advertising and media have led to the need for integrated marketing communications. These include: a move from traditional advertising to digital media, mass media to specialized media, low agency responsibility to high agency responsibility, traditional compensation to presentation-based compensation and inadequate internet access to widespread internet access (Wvu, 2014). Integrated marketing communication mix is also called as promotion mix. Tools of Integrated Marketing Communication Mix The tools of integrated marketing communication mix comprises of advertising, sales promotion, personal selling, direct marketing and public relations (Shufe, n.d.). Advertising: It is main tool of integrated marketing communications. Through advertising, company reaches large and geographically dispersed population with high rate of occurrence (Shimp and Andrews, 2013). Personal Selling: It is the most efficient tool for constructing buyer’s preferences, actions and convictions. The personal interaction with the consumer permits for feedback and modification. It is regarded as relationship oriented tool of IMC. Sales Promotion: It makes the use of different types of formats such as coupons, premiums and contests. This strategy is usually targeted at the ultimate consumer. It enhances sagging sales and also stimulates immediate response from customers (Shufe, n.d.). Public relations: It dramatizes company and product. Though it is regarded as highly credible but is also the most underutilized tool in the integrated marketing communication mix. Direct Marketing: It can be done through direct mail, telephone marketing and online marketing. It is properly suited to highly target selling attempts (Shimp and Andrews, 2013). Strategies of IMC Mix Integrated marketing communication mix comprises two types of strategies i.e. the push strategy and pull strategy. Push strategy: Under the push strategy, manufacturers use personal selling attempts and trade promotions in order to convince the retailer or wholesaler to sell the manufactured goods through distribution channels. This strategy is called push strategy. The wholesaler then push the goods forward by convincing the retailer in the direction of handling the goods to customers. The retailer uses advertising and different forms of promotion technique to induce the consumer to purchase the “pushed” goods (Lamb, Hair and McDaniel, 2011). Pull strategy: Under pull strategy, rather than selling to wholesaler, the manufacturer’s uses sales promotions, consumer relationship management strategy, referrals, and advertising in order to create strong customer demand for the products (Koekemoer, 2004). Branding and Positioning Strategies Branding and positioning strategy is required to make the product successful in the market so that it can be well accepted by the customers. Branding strategy includes much further than just developing a brand name and distinctive brand mark. In order to be really effective, the brand should capture the offerings of product in such a way that it should be capable to answers the question which comes in the mind of customers (Ferrell and Hartline, 2007). The advantages of strong brand is that: it gives the company value and also separates it from its competitors; improved perceived value permits for increased pricing and protects from the price competition; branding also grant protection during the time of harmful press (Thomas, 2012). Other branding strategy is flanker brand strategy which signifies that the related product is introduced with a dissimilar but correlated brand name for example coca cola has done with the diet coke (Rogers, 2001). Positioning is defined as a process through which marketer ascertain in the psyche of customer, consumer, prospect or client by creating a distinctive niche for the product that would be significant to such person. Positioning strategy includes themes or particular idea that should be communicated efficiently if marketing program has to be booming. The essential elements of positioning strategy are: deliver the promise, consistency over time, make it dissimilar simply (O’Guinn, Allen and Semenik, 2008). The branding and positioning strategy helps the company to launch the new products cost effectively and more quickly. It also helps to reach sustainable and favourable competitive position in the market (Franzen and Moriarty, 2008). Apple – Introduction Apple is considered as one of the most admired brand in terms of Smartphone. The introduction of Apple iPhone in 2007 revolutionise the Smartphone market across the world (Egan, 2014). The consumer electronics involve personal computers, mobile phones, peripherals, and portable music devices, etc. In the UK market it had launched the 3G iPhone in 2008 that had not snapped up 1st release of its phone a year ago. So, Apple adopted the marketing campaign in order to promote its handset through various advertising method which shows the simplicity of use of product which also reveals that, how the use of iPhone could improve the life of its possessor in an easy way. It focused mainly on how internet can be easily used on the Smartphone (Brooks et al, 2010). Competitor The main competitor of Apple is Samsung. Samsung copied the same technologies and Apps of Apple and featured it in their Smartphone. Samsung offered its product at lower price than Apple in order to capture the large market share and to acquire more customer base. But in spite of all these effort, Samsung loses its market share towards Apple in the Smartphone market. Samsung is facing increased pressure after getting beaten up by the cheaper Chinese competitors, and also by Apple. Apple’s app store provides more than 3.5 Lakh apps to the users of iPod touch, iPhone, and iPad in the 90 countries across the world. The customers of app store can select from a variety of apps in twenty categories, including business, games, sports, news, reference, health and travel (Pan, 2010). Company Analysis From the very beginning the marketing strategy of Apple was to distinguish its iPhone from other handsets in the market (Egan, 2014). Quality strategies of positioning Quality strategy means the quality of particular brand must be superior to its competitors. Most of the customers opt for high quality alternative. Apple had made its handset in such a way that it can last for 20 years (Brooks et al, 2010). The superior quality of Apple added costs to its company. The high quality offered by Apple Smartphone forced people not to shift their preference from Apple to any other brand irrespective of its high cost. Target audience The principal target audience of Apple were the middle upper earning professionals who lead a high lifestyle and therefore they need a personal digital help device, in order to co-ordinate their hectic schedules. Their secondary target customers were the students of university, college and high school (Egan, 2014). So, overall the target audience are the people, who are not more sensitive about the price of product, rather they focus on the feature and quality of product. Apple put itself challenging objectives. In the first year, the objective was to acquire 2% shares of the market in terms of sales in the UK and USA, growing to 10% during the second year. Their strategy to achieve this increasing rate of market share was by collaborating with the service suppliers of big mobile phone and also planned to adopt aggressive marketing. For the Apple iPhone advertising was done through TBWA/Media Arts Lab (Egan, 2014). Apple’s app stores have shown how the software is formed, discovered, distributed and sold. While the competitors tried to copy App store, Apple continues to provide the customers and developers the most inventive experience (Pan, 2010). Competitive Positioning Strategies of Apple Competitive positioning means how the company will differentiate its product from the competitor as well as generate value for its product. Apple is recognised as a premium trade name offering premium product. It does not lower its product value because it will hamper its brand image and also challenge the internal activities and company’s culture. Competitive positioning strategy includes the “swot analysis” to analyse the strength, weakness, opportunities and threat of the company SWOT Analysis Strength: The advertising and marketing capabilities of the company; strong distribution channel; and reputation and brand awareness. Weakness: Apple depends mostly on the sales of its iPad and iPhone; lack of offerings at dissimilar price points; and lack of innovation due to the increase in company size. Opportunities: Acquisition of costly companies and wearable gadgets. Threats: It faces more competition from other Smartphone companies because they provide same features at less price and lawsuits above patent infringements (Jackson, 2006). Market Environment Analysis PESTEL Analysis The review of market environment can be done through the PESTLE (political, social, economical, environmental, technological, legal) analysis of Apple Inc: Political factor: In order to cut the operating cost, Apple outsourced in various countries such as Czech Republic, China, Ireland, Cork, and Korea. If the above countries will face some political instability it will led to ruin the likeliness of Apple (Atif, 2013). Economic factor: Nowadays the economic conditions of the world are improving and Apple Inc has procured itself overseas currencies, so its revenue has enhanced in the international market (Atif, 2013). Social factor: As the consumer’s purchasing power has gone up in different markets so, the buying of the luxury products has also risen. Possessing luxury items are deemed as the status symbols which has augmented the sales of its products (Atif, 2013). Technological factor: The Company has invested mostly in the field of research & development and therefore its products ranks at the top among the innovative products (Atif, 2013). Legal factor: A new law has been brought out by the department of Chinese State and therefore Apple Inc meets additional risks than it faced previously and this has influenced the sales of its products in China (Chsnenu, 2011). Environmental factor: The Company has found various means to reduce the carbon footprint and also disposes its electronic tools at the completion of its practical life. Thus, it takes a broad approach towards environmental responsibility (Chsnenu, 2011). IMC Tools used by Apple Apple has an outstanding operating system and due to its functional and operational excellence most of the customers turn out to be a life-long follower. It is an extremely innovative company along with counter-cultural business ethic (Ranchhod, 2012). Advertising Apple used unique advertising method. It chose trendy magazines and the magazines which are linked to fashion instead of the normal computer magazines. It was considered as unique method because the other companies of IT have never even considered of doing this. The other advertising methods include television commercials and the billboards for the UK market. It captures the interest and attention of the consumer by innovating and providing smooth images of the products on its official website. According to the “Forbes” iPhone 4S was sold over 4 million units in its first weekend and the profits was even more than expected. Public Relation There is also a yearly conference often held by the company where dissimilar new edition of the products of Apple are unveiled. This is generally a type of public relationship conference with the consumers. Apple also forward weekly newsletters for those subscribers who were connected with their products. By using advertising, consumer relationship management, and commercial strategies; Apple effectively applies pull strategies in order to launch its iPads and iPhones. Online Marketing One of the marketing tools used by Apple is online marketing. The website of Apple is itself a great marketing tool and also a source for Apple. It provides information about the new products, video lessons about how to make use of new gadgets, contact information of customer service, etc. Apple is claimed of having the powerful product line (Curwen and Whalley, 2012). Critical Analysis and Discussion By analysis of the Apple Inc. it was found out that the current challenges which the company is facing are the competition from other Smartphone companies because they provide same features at less price and lawsuits above patent infringements. It had to make incessant improvement in its product in order to attain the top ranking among the innovative products. It is examined that most of the people are brand conscious resulting in the increased sales of Apple Inc. products instead of its premium price. The superior quality offered by Apple Smartphone forced the users not to shift their preference from Apple to any other brand. The promotion strategies of the company are different from its competitors. It has chosen trendy magazines instead of the normal computer magazines and also the television commercials and the billboards to advertise its products. The company takes a complete approach towards the environmental responsibility by finding various ways in order to lessen the carbon footprint in its products. The advertising and marketing capabilities as well as its premium pricing strategies made Apple Inc the most admired brand in terms of Smartphone. Conclusion The paper has focused on the elements and types of communication and the need for IMC. Further, it also lays emphasis on the different tools and strategies of IMC mix and explains how Apple have used these tools and strategies in making itself a successful company. Apple is regarded as a global brand which has innovated yet made easier technological devices especially for its customers. Acquiring the consumer in order to buy the offerings is really something the Apple Company does an immense job at. The promotion strategies used by Apple are advertisement which involves magazine, commercials and billboards, press release and internet. Products of premium price give reflection of durability and quality. With its success Apple has became the most desired brand. The noncompeting companies were also asking to connect their brands and products with Apple image (Pride and Ferrell, 2006). Recommendation Apple is recognized for its egotism towards its strategies of pricing. It has constantly delivered best quality product designed for a finest price. There are several ways through which it can do its pricing promotions with no hurting of brand image. During long term, being obstinate with price may be advantageous for this brand, but considering in short term, it may be harmful because economic crisis could change the verdict of purchasing the products of Apple. 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