Integrated Organisational Communication - Essay Example

Marketing Communication Introduction The combination of marketing and marketing communication is changing. Every aspect of marketing is concerned with communication with customers. Marketing communication is essentially defined as the process by which communication is established with consumers and customers. Marketing strategy has a very simple and clear-cut objective. Marketing strategy is made with the purpose of deciding the kind of customers to whom marketer wants to sell a particular product. In broader term, such range of customers forms the target market and a marketer’s job is to create awareness in the target market regarding the product and to make the product accessible to the customers. Usually, target markets are set based on their “geographic location, their demographic and psychographic characteristics” (Koekemoer, 2004, p.1). Previously, different aspects of marketing communication like selling activities, direct marketing, sales promotion, Internet advertising etc were handled by experts of the respective fields. This generated lack of coordination and frequent inconsistency resulting in reaching target below the optimum level. Today, integrated marketing communication (IMC) is emerging where all kinds of communication and messages are properly coordinated with each other. Basically, IMC is proper integration of all communication tools to make them perform in harmony. Marketing communication Understanding consumer behavior is the primary objective of all marketers. Demand is created when consumers recognize need of a product and change of demand occurs when opportunities change. For instance, a person may prefer superior brands after a job promotion. After recognizing a brand, a consumer then looks for alternatives which may always be price based. For instance, a consumer may prefer quality over price. Consumers of products and services, and business customers all over the world are becoming increasingly accessible (Rosenbaum-Elliot et al., 2011, pp.6-8). Today, the management system is moving from tier system with managers becoming independent and without supporting services. This means managers today need to have full knowledge of marketing which is an ever changing process. The focus of marketing has shifted from acquiring new customers or retaining customers for life to selecting the right kind of customers. The emphasis is on discarding unprofitable customers while at the same time attracting and retaining the more profitable customers. There are many customers who do not remain loyal to any specific brand as they shift to other brands as soon as the brands provide special offers or other attractive schemes. Such customers can prove to be extremely unprofitable. According to PA Consultants in 2003, only 17 percent of companies remain aware of their most valuable customers. It has been estimated that dealing with old and loyal customers can be five times more profitable than selling products to new customers. Therefore, it is very important that marketing managers focus on giving special attention to loyal and profitable customers. Most customers who are loyal to a particular brand remain so since they prefer that brand or they do not want to experiment with other brands. There are still other customers who are willing to spend more, make timely payments and make less use of services. Michael Dell who is the CEO of Dell has said “that his most valuable customers are not his biggest or his most profitable ones, but those that teach him the most” (Smith & Taylor, 2004, p.4). Although it is needed that strategies be made to bring back lost customers, it is nevertheless considered that some of the lost customers are not worth saving. In order to approach the selected target market, the marketer combines the four variables known as Ps of marketing: Product, Price, Place and Promotion. In every business, these four elements need to be blended efficiently in order to persuade customers to buy the concerned product. The final product of any business should be created within the framework of pre-planned and effective marketing strategies. According to the strategies, price of the product needs to be determined and mode of distribution needs to be selected (Young & Pagoso, 2008, p.129). The fourth element which is promotion is establishing communication with customers or in other words marketing communication. It has six elements which are “advertising, personal selling, sales promotion, direct marketing, public relations and sponsorship” (Koekemoer, 2004, p.2). In order to reach the optimum level of IMC, it needs to pass through four stages. Stages one is tactical coordination of different elements of marketing communication like advertising, promotion, direct marketing, public relations and special events. For this, a high level of communication needs to be established between all the elements as any kind of formal planning will not be enough in stage one. In stage two, communication is made to understand a consumer’s perspective regarding a product. Also, in this stage internal communication is established between employees, suppliers and business partners. Moreover, primary and secondary researches are conducted to study the behavioral patterns as well as demand pattern of target customers. Stage three is concerned with studying the influence of integrated external and internal communication on target customers. For this, information technology is effectively applied to maintain database in order to recognize and monitor the influence of marketing communication on customers. In stage four financial strategies are designed with less emphasis on skills and techniques and more focus on information about customers. Planning is made to assess market expenditures and financial measures are based on return-on-customer investment measures. Other than these four stages, there is another important component which is coordination of internal communication, i.e. communication to employees, suppliers and business partners, and external communication with customers. Such coordination needs to be in alignment with the general brand image of the business organization (Barker & Angelopulo, 2005, p.156). Marketing communication can be developed by adopting advertising route or name route. In the former case, advertisements are designed in the manner that consumers can relate with the brands. Advertisements can have both emotional and rational messages to enhance preferences among consumers. In the name route, every aspect of promotions like packaging, mass media advertising can be used to enforce brand association (Fill, 2003, pp.56-57). Coca-Cola Company: Marketing operations Coca-Cola Company which is a beverage manufacturer based in Georgia, United States invests in marketing in order to increase consumer awareness of its product along with increasing consumers’ demand for the product. By engaging successful marketing investments, the company can increase its production level, consumption among consumers, and can also increase their share in the global market for beverages. The company establishes communication with its bottling partners and sales agencies in order to integrate both local, national and international marketing programs so as to enhance product awareness among consumers and increase the sale of their beverage. As part of its strategy to create a brand image, the company “conducts product and packaging research, establishes brand positioning, develops precise consumer communications and solicits consumer feedback” (Coca-Cola Annual Report 2013, p.32). The company performs variety of integrated marketing services like advertising, point-of-sale merchandising and sales promotion. The major objective of the company is to increase its share in the global consumer market and for that it plans its marketing strategies to introduce its product in promising markets, enhance its brand image in developing markets and increasing share of profit in developed markets. In a promising market, where the company’s beverage is gaining recognition its goal is to invest in infrastructure in order to reach out to larger number of consumers. In a developing market a consumer base is already established and so the focus remains on differentiating their brands. In developed market, since the product is already well established and has high demand therefore the company focuses less on infrastructure and emphasizes more on increasing their gross profit. Coca-Cola Company focuses on designing its marketing strategies to make its product affordable to a large consumer base keeping in view the current global economic condition. Coca-Cola has a system of millions of customers who act as direct selling agents to the consumers. The company focuses on increasing product values of these customers and helps in finding approaches regarding how to further develop their beverage business. For this purpose, the Coca-Cola Company gives equal importance to grievances and feedbacks of each customers irrespective of whether they have a booming business in a developed market or they own a kiosk in a potential market. The company also takes care to ensure that all customers have access to the right kind of product according to their market along with appropriate packaging and promotional techniques so that they can increase their sales and thus can prove themselves beneficial to the company. Also, Coca-Cola Company strives to build new beverage consumption in their customers’ outlet “through unique and innovative consumer experiences, product availability and delivery system, and beverage merchandising and displays” (Coca-Cola Annual Report 2013, p.32). The company also gets involved in practices concerned with building brand images jointly with its customers in order to gauge their preference for the brand. As part of its position of leadership in the global beverage market, the company contributes towards increasing the retail business of its customers by designing effective strategies that can enhance execution of sales activities (Coca-Cola Annual Report 2013, p.32). Coca-Cola Company also strives to develop its relationship with its franchises so that its bottling partners can acquire “the ability to grow together through shared values, aligned incentives and a sense of urgency and flexibility that supports consumers’ always changing needs and tastes” (Coca-Cola Annual Report 2013, p.32). Coca Company’s success depends to a large extent on the financial growth of its bottling partners and hence to enhance the performance level of its bottling partners, the company strives to achieve high scale of sales and efficiency level. The company along with its bottling partners makes all efforts to adopt best practices for enhancing sales. With cooperation from its bottling partners, the Coca-Cola Company selects differentiated products and packaging that will meet the needs of specific consumer markets. The company also designs “sparkling and still” beverages for appropriate markets and shares values of the products appropriately with its bottling partners. The ultimate goal of the company’s marketing communication is “to build a supply chain network that leverages the size and scale of the Coca-Cola system to gain a competitive advantage” (Coca-Cola Annual Report 2013, p.32). Coca-Cola Marketing Communications Coca-Cola uses different forms of media to establish communication with its consumers. Media being the most effective way of promoting goods and services, Coca-Cola Company makes optimum use of it. It uses print media like newspapers, magazines and the Internet to place its Coca-Cola advertisements. Magazines are selected based on their target readers. Visual or aural media forms like television, radio, billboards are broadly used by the company to promote its product. Even in many movies, Coca-Cola has been featured prominently like leading characters drinking the beverage to attract the attention of the viewers. Billboards featuring Coca Coca are placed in highways, rural areas also play an important role in promoting the beverage. The principle objective of Coca-Cola Company’s marketing campaign is to maximize their profits. The company has adopted eight major ways to enhance their profit. Firstly, the company strives to increase awareness of its products among consumers around the globe. However, Coca-Cola today is reputed brand name that has gained strong foothold in the global market and therefore this objective is secondary for Coca-Cola marketing campaigners. The second objective is to educate the consumers about the product. Again, this objective is not a strong one since there is nothing to inspire consumers with regard to Coca-Cola’s nutritional value. The third objective is the strongest as it is creating greater demand of Coca-Cola over its closest competitors. Since beverage is a highly competitive industry hence marketing communication for this aspect is extremely intensive. The fourth objective is to run trials of Coca-Cola among new consumers; however this is not very important for this beverage since it is already popular globally. The fifth objective is to focus on short term seasonal sales. This objective is strongly pursued by Coca-Cola Company and accordingly communicated to potential and existing consumers. The sixth objective pursued by Coca-Cola is to integrate consumption of the beverage with the lifestyle of consumers so as to ensure lifelong loyalty from the consumers (Dudovskiy, 2012). Marketing failure Failures of marketing communication indicate how even the best marketers can prove to be disastrous for the product. One of the biggest marketing failures has come from Coca-Cola which is considered as having one of the best marketing strategies. The introduction of the new Coke by replacing its traditional beverage has proved to be a complete failure for the company in recent times. In 1985, the Coca-Cola Company launched its New Coke to replace its century old Coke. The marketing failure of New Coke has brought to the forefront the limitations of expert market researchers’ knowledge about consumer preferences. Based on the marketing research conducted by the company, it was concluded that 68 percent of US customers preferred the new taste. Following the research result the company launched the New Coke in the summer of 1985 which was soon after rejected by the consumers. The rapid decline of consumer preference of the New Coke is regarded as the biggest marketing blunder by the company (Saxena, 2010, p.105). The emotional attachment of the US people towards the older version of Coca-Cola was so strong that “some people likened the change in Coke to trampling the American flag” (Ross, 2005). Market researchers most of the times rely on “here and now situation” and ignore the long term perspective of the market. They often ignore the root of the problems and come up with solutions which prove to be highly ineffective. In this case if they would have considered the strategy that worked for their century old Coke and monitored consumer preferences in every store by keeping the New Coke along with the old Coke on the shelves, then probably the New Coke would not have failed to make its mark in the market (Saxena, 2010, p.105). It is true that the questions formulated by market researchers to gauge consumer preferences are contributors to the decision making by the management body. Most often the management depends on the productive questions that will yield useful answers, but many times questions formed do not test the psychological attachment of consumers to a specific brand. In the case of New Coke, the management failed to understand the emotional meaning of the century old Coke among consumers. For them, it is only a beverage and not brand while consumers often associate a brand with their lifestyle. The management focused on the taste of New Coke which was very similar to its nearest competitor Pepsi. There was considerable evidence that showed consumers preferred Pepsi over the New Coke. Since the focus was on taste, management launched New Coke based on this evidence. However, consumers were not clearly told that the New Coke is replacing the old one. If they would have properly informed, it was likely that most consumers would not have agreed to the complete departure from the old formula. Thus, the major reason behind the failure was that researchers focused on the taste properties than on reputation of the old formula (Zikmund & Babin, 2006, p.105; Turner, 2011). Management admitted that the loss was most prominent in the Indian market where they incurred $400m worth of assets (Gregory, 2000). After only 77 days of New Coke’s launch, the company’s chief marketer Sergio Zyman was left with the option of either changing the product or to changing advertisements (Zmuda, 2011, p.14). In some cases, marketing communication to consumers can be harmful. Recently in 2013, Coca-Cola promoted its product as guide to fight obesity. In order to reverse the declining sale of Diet Coke, the company adopted deceptive means to convince consumers that aspartame which is an artificial sweetener used in Diet Coke is healthier than sugar. However, studies have shown that aspartame contributed towards weight gain by increasing appetite. Such marketing campaigns can be harmful especially for people who are weight conscious (Paul, 2013). Recommendations for a future marketing communications campaign Marketing communications can become effective only by proper timing and relevance of the contents. Since Coca-Cola is a cold drink, it is most preferred during the summer. Therefore, the summers will be the best time to promote the product through advertisements in television, radio, newspapers and magazines. The contents of advertisements need to be relevant to the product and kind of false propaganda can only create aversion in the minds of consumers. The best time for making strong emotional connection with consumers can be during sports or entertainment seasons. For instance, during world cup sports consumers can be convinced that they can enjoy Coca-Cola in the sports venues. Since the beverage industry is intensely competitive, the closest rival being Pepsi, therefore planning the budget for marketing should be made keeping in mind the need of intensive campaigns. After deciding the marketing budget, the next step is to divide it among various marketing communication channels like visual media, print media and aural media. Depending on the financial parameters of the Coca-Cola Company, budget can be made after considering last year’s sales or an assumed increase of marketing budget from previous year. Budgeting also depends on the selection of media form like television, radio, magazines, newspapers, billboards etc. Media needs to be selected based on marketing communication planning, and according budget needs to be planned as each form of media varies in costs. Also, budget planning needs to be made after considering last year’s most effective advertising investments. Conclusion Marketing is one of the most important elements for the financial success of a company, and its significance has grown in this era of globalization when competition is becoming intense in the global market. However, marketing is not the same thing as selling a product or making plans for marketing of a product. Marketing is essentially an integrated form of several activities of a business enterprise. With the advent of the 21st century, marketing communication is gaining prominence with new insights, new technologies, new prospects and new challenges. Understanding consumer behavior is the primary objective of all marketers. References Barker, R. & Angelopulo, G.C. (2005) Integrated Organisational Communication, Juta and Co. Ltd. Coca-Cola Annual Report 2013, Available at: http://assets.coca-colacompany.com/d0/c1/ 7afc6e6949c8adf1168a3328b2ad/2013-annual-report-on-form-10-k.pdf [Accessed May 21, 2014] Dudovskiy, J. 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