Literature Review on the role of IMC in building and maintaining brand equity - Article Example

Literature Review on the role of IMC in building and maintaining brand equity Table of Content Serial Number & Topic Page Number 0 Introduction 02 2.0 Overview 04 3.0 Level of Brand 06 4.0 Analysis 06 5.0 References 13 1.0 Introduction Integrated Marketing is an important tool in the success and development of a brand. Integrated Marketing Communication (IMC) is equally important in maintaining stability and bridging the relationship between stakeholders, so essential in the operation of business. In other words, IMC is the well judged and efficient use of product promotional tools that involve the creation and persuasion of ideas so that a far-reaching, explicit and effective message is communicated to the targeted audience. The company invests time and money in designing campaigns and communication strategies based on market trend and analysis. Dawar (2004, p.31) stated: “Advertisement and promotion of brands drive traffic and sales volume; marketing efforts and their outcomes measured and managed at brand level; and brands, central to a firms responses to short-term competitive moves. In effect, brands have become the focal point of many a companys marketing efforts and are seen as a source of market power, competitive leverage and higher returns.” Globalisation has increased the level of competition in the domestic as well as international markets. Though this has improved competition and the quality of products, it has made consumers think twice before investing in a product. This means that consumers have become vary of their needs and selection. Unless a company is able to bring a customer to it, they will end up being sidelined for better known brands. Pickton and Hartley (1998, p. 450) observed that it was difficult to conceptualise the influences that organisations needed to achieve integration. The many levels and dimensions of integration posed individual and collective difficulties. So complex and laborious was the practice, that to implement IMC, it required the dedicated and wholesome involvement of the whole organization, right from its chief executive to their agents and vendors (Luxton, 2005). Considering the complexity of such a study, this paper attempts to elicit the role of IMC in organisations; their market orientation and brand orientation, for they both have an important role in the implementation of IMC. This paper will strive to delve on the finer aspects of the strategic component of IMC; taking into account the cultural and learning requirements of positioning brands, and how they can build a competitive edge through brand equity (Luxton, 2005). In order to understand the concept of IMC in real-life scenario, this paper takes a look at some of the trend-setters in the highly competitive world of fashion. Brand Pyramid Brand Resonance Brand judgement/Feelings Brand Performance/Imagery Brand Salience Achieving Brand Resonance is the dream of all business organisations. It is at this pinnacle that the leader looks down at competition. This is no mean achievement, and even far more difficult to hold on to. Roger Federer is the Brand Resonance of ATP. Through tough and strict regime, he accomplished what others seek to emulate. Holding onto this is far more difficult. In order to sustain himself t the top, Federer has to study and overcome difficulties that other players find hard to overcome. Millions of people watch him play. This is what attracting the audience all is about (Keller, 2003). 2.0 Overview IMC practitioners develop a single, consistent message that is then distributed through multiple communication channels, such as advertising, public relations, direct marketing, and sales promotion to improve their market awareness and access. What better than to develop a strategy that instigates a two-way dialogue? In a world where instant messaging through PDAs, iPods, and blogs have become household names, marketers find innovative methods of messaging that are precise, conspicuous and attract attention. IMC can be conceived at two distinct levels; strategic or tactical (WVU, 2007). In keeping with this evolution, Vargo and Lusch (2004) suggested that IMC should replace the diverse, limited-focus promotional tools, and employ brand management strategies to initiate and maintain a continuous dialogue with their customers for enhancing their warm relationship (Madhavaram et al, 2004). The following figure 1 shows how brand equity is developed. Picture Courtesy: A Framework for Growth: Brand Equity, p.17 Figure 2 shows how a brand equity strategy is developed: Picture Courtesy: Madhavaram (200) Integrated Marketing Communication (IMC) and Brand Identity as Critical Components of Brand Equity Strategy, p.72 One of the most powerful strategies in branding is, ‘brand architecture’ that influence favourable associations. This method helps create a viable platform for marketing efficiency from equities built up in one name and used to create market advantages in others. General Motors is a global name in the automotive industry. Ford is the brand equity, from which the various models of sedans and utility vehicles are marketed. The name is synonymous with reliability and toughness. Here, the master brand, Ford, sells a diverse range of commercial vehicles using the equity built up in the automobile industry. A product has vertical levels of branding; a master brand name like Ford, and a brand name such as Escort, Endeavor, Cortina and so on (Rubinson, 2005, p.16). An aspect of marketing that is often misunderstood and frequently overlooked is product branding. Branding is not just a name, but a powerful marketing tool that strives to reach the conscious of the consumer. Branding is a way to achieve and maintain a loyal customer base in order to achieve the highest possible returns on an investment. Branding incorporates the four ‘Ps’ of marketing, namely, product, price, promotion and place. The four ‘Ps’ attempt to persuade customers that the added values are in more than one way unique to it and thus cannot be imitated easily. Because customers recognise and appreciate uniqueness, they are more than willing to pay a higher price. 3.0 Level of brand Brands encapsulate a whole range of complex and multi-faceted information to bring to consumers, through a name and logo, underpinning images. Simply put, there are five levels to the development of a brand. Primarily, a brand is an identifying mark to distinguish one product from another. This level is characterized by a simple implicit statement of a product specification, such as Player’s is a favourite among the young. And so on. 4.0 Analysis One company, the Imperial Tobacco Limited (ITL), Canada’s largest tobacco manufacturer, successfully applied three critical IMC practices to effectively construct brand imagery of its flagship cigarette trademark, Player’s with a strong brand equity leading to a stronger shareholder value. The practices included: 1. Strategically consistent brand communication 2. Cross-functional planning and monitoring 3. Data-driven targeting and communication During the First and Second World Wars, the company came up with a patriotic theme in support of the Canadian soldiers, an apparent way of communicating the company flagship brand, Player’s, show of patriotism, dependability, and strength of reputation. Of late, the company has linked its Player’s trademark with images of youthfulness, masculinity, independence, freedom, tradition, and modernity, juxtaposing the company’s identification with the nation’s youth population. The target consumer for Player’s have consistently been identified as males less than 25 years old, with the company relating its brand with sports and adventure, to communicate brand imagery and appeal to its core consumers. This was a major strategy employed by ITL to identify itself with its targeted audience (Dewhirst and Davis, 2005, p.81-82). The idea of studying an industry like the tobacco industry is all the more appropriate in the current situation as it falls under the so-called category of, sin industries. This is so because of the hostile attitude of socialites and health organisations. Some other industries that are labeled under this category include, gambling and pornography. Therefore, despite their magnitude, they have received little attention by IMC researchers to date. Also, these industries operate in environments where all their advertisements become critically important and are actively monitored by rights groups. For company’s like ITL, relationship building is considered critical and requires delicate tactical navigation against hostile social attitudes and restrictive legislation. Decision to segment brands, market positions, and then address these market positions in terms of priority of opportunity by developing a marketing plan were based on consumer research conducted by ITL (1989, p. 595). During testimony at the Quebec Superior Court trial in 2002, ITL’s Ed Ricard, the director of the Marketing Strategy and Development Group for ITL, said that the marketing responsibilities within the current structure of the firm were divided into: 1. Market Strategy and Development 2. Market Research 3. Supply Chain 4. Communications Ricard (2002)1 said that for ITL’s improved market share, two key factors were involved: 1. ITL recognizing a more cross-functional strategic approach was necessary for brand building and support, moved from brand management process to brand planning 2. The firm developed a strong product positioning and image positioning strategy (Dewhirst and Davis, 2005, p.83-82) ITL’s internal marketing documents showed that the company had done its homework in selecting the media and brand message through its intense study of consumer attitudes and clarity in targeting. The primary target audience for Player’s promotions has been male youths who aspired to be masculine, independent, self-reliant, and modern. Creative Research Group (1988, 1990 and 1991), behind the propaganda strategy, researched males and females age 13 to 24, assessed their attitudes, values, lifestyle interests, media preference, purchase patterns, and income to come up with a strategy that earned the company 39% of the Canadian cigarette market. ITL’s, Player’s became the most popular brand among Canadian smokers aged 18 to 24.2 The primary target market of Player’s has remained constant for over 30 years. From 1990 to 1994, Continuous Market Assessment (CMA) revealed that Player’s retained its market share with the 25–34 age bracket, confirming ITL’s relationship building strategy (Dewhirst and Davis, 2005, p.86-87) Strategy is necessary for brands, especially those which are niche, or those facing large, entrenched, competition. The case of Snapple shows what happens when firms fail to understand the need to decouple, to support their positioning around ‘authenticity’ and values. Customers show solidarity to brand and brand image, and if this is removed, the product will in all probability crash in the market. When Snapple was taken over, the new managers replaced the existing ad hoc low-key marketing approach, which was consistent with the brand. Consumers of Snapple rejected it because of the new management’s overt commercialisation. The authenticity was replaced by commercialisation, which did not go well with the brand’s supporters. The company could have engaged in market-oriented practices consistent with their brand, and expressing its brand extensions were created for non-marketing reasons. This would have been much better for the brand and the company. The flaw was enough to damage the credibility of the company and its brand. Thus IMC plays a vital role in the success of brand equity. When a few consumers were asked about the essence of brand, most of them were unanimous in their response, saying that they were intensely passionate about their brands. “We feel we must live up to the brand that has been gifted to us, and pass it on to the next generation,” was how they summed up the importance of brand. Firms thus, deliberately decouple their projected images from internal operations to create powerful brand images (Beverland and Buxton, 2005). Considering that consumers have begun to take the initiative to decide for themselves on what and where they should purchase their necessities, there is a whale of change taking place on the strategies employed by organisations to attract consumers to their brand. The changes in the global marketplace has necessitated more effective marketing communications strategies be affected, if a firm’s message is to influence purchase decisions. Integrated marketing communications (IMC) approach allows organisations to coordinate their marketing communications efforts to reach diverse audiences with a consistent message, resulting in optimal market coverage and greater impact on the target market on a minimal investment. The importance of integrating relational and transactional data into the development of interactive IMC programmes in a business-to-business setting has received relatively little research attention. Customers seek different types of relationships with service providers; relationships that are segmented using relational and transactional data, where, relational data explains the success (Peltier et al. 2006). Apple has been doing relatively well in South Africa since 2001, when their computers began seeing a 50% year-on-year sales growth. The success is attributed to the way the company has strategically brought the brand closer to the public. Van Spaandonk, Apple’s IMC MD, however says that the company didn’t see Apples expanded retail presence steal sales from its already existing channels. Because of its new stores opened over the past year, existing stores didn’t register any sort of drop in sales. This may be true for the present, but the truth of that will only be tested once its density of stores increases. Part of Apples success is attributed to its massively popular iPod music player. An informal research conducted by the company showed that the majority of people switching to Apple had been impressed by its iPod and wanted to see the rest of its product range. Thus, we see that despite competition from within, customers were brand loyal and stuck to the emergence of new markets from Apple (Kelly, 2006). In recent years IMC has made a great impression by entering the mainstream of marketing literatures, according to Duncan and Caywood (1996), Nowak and Phelps (1994). Schultz (2003), Schultz and Kitchen (1997, 2000b), and Zahay et al. (2004). This phenomenon has caught the imagination of marketers as well as consumers, though in reality, there is no universally agreed upon definition of IMC, according to Cornelissen and Lock (2000), Kliatchko (2005), Schultz and Kitchen (1997), and Stewart (1996). IMC appears to be an evolving concept says, Duncan, Schultz and Patti (2005). While a working definition of integrated marketing communication is hard to define (Schultz, Tannenbaum, and Lauterborn 1993, p. xv), a fact remains that IMC acts as a coordinator for communication tools of brand (Krugman et al. 1994). The concept of IMC revolves around the development of an effective communication carried through by various communication techniques of advertising, publicity, sales promotion, and so forth (Nowak, Cameron, and Delorme, 1996). A well devised IMC can generate information that can be used to identify and target different types of consumers with customised communication (Schultz 1997), leading to sales growth and brand development. Such moves will only help strengthen the strong relationship between the consumer and the company (Duncan 2002). As Roznowski, Reece, and Daugherty (2002), and Schultz, Tannenbaum, and Lauterborn (1993) said; IMC involves a process that is circular in nature, a two-way communication between an organization and its potential customers, where communication and information received by companies are used effectively to target consumers in future (Grove et al. 2007). Organisations need to carefully position the idea of brand among internal stakeholders and market. Employees must be informed about where the organisation is going and how it plans to get there. But more importantly, it is they who will have to done the role of making others understand what their brand is. Without this knowledge, brand is nothing, but a series of posters, video presentations, or a workshop. It remains a programme which employees perceive as just another motivational technique rolled out by the management to improve production and quality. In a hospital for example, administrators to nurses and support staff, are all at one level or the other, an employee. A one more feel-good programme isn’t going to instigate them any further, nor is it what they crave for. Every individual of an organisation needs to recognise the fact that, building a highly differentiated and well-executed brand is critical to the success of their organisation. Another feature is trying to bring together the core ‘brand champions’ to work alongside C-level executives, to implement the desired change. Therefore, organizations must craft a comprehensive plan and carry out their strategy effectively. An ongoing commitment from both, management and her employees is necessary for a brand to be integrated into all facets of the organisation, and the market (Murphy, 2007). 5.0 References Luxton Sandra (2005), The relationship between Integrated Marketing Communication, market orientation, and brand orientation, Product management (Research), Marketing communications (Research), Publication: Journal of Advertising, http://www.allbusiness.com/management/860627-1.html West Virginia University (WVU), 2007, what_is_imc, Life_integrated, http://www.imc.wvu.edu/theimcprogram/aboutimc.php Rubinson Joel (2005), Learn to Live the Brand Strategy to Build Better Brands: A Framework for Growth, 2005, Market Research, American Marketing Association Keller K.L (2003), Strategic Brand Management, Building, Measuring, and Managing Brand Equity, Page 72, Second Edition Peltier J, Schibrowsky J A, Schultz D E and Zahay D, (2006), Interactive IMC: The Relational-Transactional Continuum and the Synergistic Use of Customer Data, Kelly B, Finweek, 2006, Business Strategy, Retail, Apple plans assault Aiming to raise profile and market share Stephen J. Grove, Les Carlson, and Michael J. Dorsch, 2007, Comparing the Application of Integrated Marketing Communication (IMC) In Magazines Ads across Product Type and Time Murphy R, 2007, Built Brand Tough: A strong internal rollout takes just five steps. Read More