IMC is Not a Proven Marketing Theory - Essay Example

? IMC is Not a Proven Marketing Theory Table of Contents Table of Contents 2 Integrated Marketing Communication 3 IMC Planning Process 6 Is There anyTheory Behind IMC? 7 Horizontal Communication and Decentralization 9 Budget 9 Integrated Marketing Communications Campaigns 11 Supporter’s View on IMC 12 Conclusion 13 Integrated Marketing Communication Integrated marketing communication has emerged as important ‘magic bullets’ for marketers to gain competitive edge over others. Advertising, Sales Promotions, Direct Response Marketing and Public Relation are four pillars of integrated marketing communication. General Advertising is a form of promotion that helps to create awareness about product or brand and provides information to customers about different aspects of the product system offered by the organization, above the line promotion is used to create product awareness among larger section of consumers but below the line advertising is used to cater small customer segment. Direct Marketing is an approach used to create relationship with customers and delivering information about products to customer, the method is mainly used for selling financial services to customers, direct marketing also helps to close sales cycle within a short time period. Sales Promotion is the process that helps the company to increase brand visibility in point of sales and point of purchases, companies use the technique to increase new product usage ratio among customers, the process also helps to increase customer footfall in the retail stores, companies use loyalty card, discount method, incentive schemes to increase purchase ratio among customers. Public Relation companies can go for organizing public events or news paper editorial about their new product, they use trade shows to increase category visibility among customers, creating good word of mouth about the product is one of the major objectives of public relation (Jones). Many advertising agencies have shifted focus from creating unilateral promotional message to making multidimensional promotional message. Main purpose of IMC is to channelize the promotional message in a unified manner though all promotional medium. David Ogilvy has characterized IMC as one stop solution offered by advertising agencies to companies. Keith Reinhard (CEO of DDB Needham) thinks IMC is an effective way to produce creative brand message. Many research scholars think demassifiction played pivotal role in evolution of IMC. After 1970, media industry started to restructure into smaller operational units. They started giving importance to various promotional medium rather than concentrating on age old advertising model. In this way IMC has emerged as a common platform to integrate various promotional medium (Schultz, Tannenbaum and Lauterborn 6). IMC is a process to align communication objectives of a company with corporate goals to achieve business efficiency. Jerome McCarthy used the concept of four P’s (Product, price, place and promotion) during 1950’s for the first time (Jerome McCarthy used 4P’s concept in his book “Basic Marketing” published in 1960 and he used the concept to explain campaign made by JWT). Philip Kotler and other academicians (in 1965, Philip Kotler described 4P’s as various marketing variables in his article) proselytized the concept in coming years. Four P’s can be described in the following manner. Product- the strategy emphasizes on manufacturing products, maintaining the quality standard of product and optimum utilization of resources during production process. Price- deciding the price of the product in accordance with the demand of the product, setting high price or low price for the product is an important part of pricing strategy. Place- designing distribution network for the product, company creates distribution network to expand the reach of the product, appointing c&f agents, stockiest, wholesalers, retailers are part of distribution strategy. Promotion- companies use direct marketing, sales promotion, and advertising activities to create awareness about the product among people, above the line promotion and below the line promotion are part of advertising strategy. There is no mention of profit or customers in the four P’s model. There are few flaws in four P’s model of marketing. Product strategy, competitive pricing strategy or distributional channel concepts became vulnerable in front of changing consumer behavior with respect to time. A new form of promotional strategy began to take shape in place of traditional promotional mix of 1980’s. Below the line promotion (discounts or various incentive schemes help to increase volume for short time) and above the line (traditional advertising helps to increase brand value for long term period) have emerged as new form of promotional mix. Sales promotional techniques like offering discount on purchase item, weekly luck draw or contests for customers to win gift items, free sample distribution to customers to increase product use ratio, offering loyalty card to customers to increase repurchase ratio, using electronic display in point of sale to influence purchase decision of customers have became popular among marketers to affect purchase decision of customers. Many marketers shifted focus from advertising to sales promotion to increase sales revenue during twenty year time period from 1980 to 2000. They have invested more than seventy percent of promotional budget on sales promotion. The following diagram shows the shift of fund from advertising to promotion (D. Schultz, and H. Schultz 7). Source: (D. Schultz, and H. Schultz 7) IMC is not business model but it’s a strategic communication model. IMC has emerged not because marketers demanded it but to satisfy the greed of advertising agencies. Advertising agencies adopted the technique to counterbalance loss caused due to shift of focus on below the line activity by clients. They tried to create a one stop solution for all types of promotional requirements of client companies. Young and Rubicam’s ‘whole egg’ approach (the concept was introduced by Ed Ney in 1972, agency's attempt to offer integrated promotional services is termed as whole egg by Mr. Ney) and orchestration approach (in 1986, David Ogilvy used the concept to describe integrated approach of communication during his speech on advertising in Paris) of Ogilvy and Mather are few examples of integrated agency models (Wreden 214). IMC Planning Process Marketing communication plan of any organization is developed with respect to product portfolio planning and budget allocated for various marketing plans. Developing and implementing promotional plan is important to achieve strategic objectives of IMC. Planning process can be explained in the following manner. 1. Organizations need to review marketing plan in terms of objective, competitor’s activity, and macro environmental analysis, consumer behavior index of target market (Schiffman and Kanuk 35). 2. They need to analyze required situation to implement successful promotional program. The company needs to evaluate the performance of external advertising agencies to select the right one. Advertising agency’s capability analysis is part of internal mapping process but consumer behavior analysis is part of external mapping strategy adopted by organization. 3. The company needs to identify communication elements like message source, clarity and channels to create dynamic media strategy to plan IMC. They need to analyze the response quotients of respondents with respect to communication message. 4. Company allocates budget for IMC after analyzing the internal and external situation regarding business environment (Ferrell and Hartline 295). 5- Organizations identify various elements of IMC program and create a portfolio. The portfolio might contain elements like advertising, interactive marketing, direct marketing, sales promotion, public relation and personal selling. Advertising agency develops channel strategy and promotional message for every element of IMC. 6- Companies implement the IMC strategy in pilot phase during initial stage but after getting good response from market they can roll out the strategy for larger section of people. Purchasing media time and space is required to implement above the line policy. 7- Companies monitor the efficiency of IMC in terms of sale volume, customer awareness about the product, repurchase cycle volume. IMC is used to increase the brand awareness among customers but companies need to create a link between consumer purchase behavior and promotional technique via strategic restructuring (Belch 36). Is There any Theory Behind IMC? IMC has created a huge amount of interest among research scholars and academicians since its inception. Many market research scholars tend to agree that IMC helps to create promotional budget but they are skeptical about level of integration required to run the program. They think formalization of IMC is necessary to create a successful communication strategy. Industry professionals are skeptical about the objective of IMC because total integration of all promotional mediums is difficult to achieve. Media integration depends on characteristics of target market, thinking process of management team, promotional objectives and creativity required to make the advertisement. They are all very different elements and integration means changing characteristics of each item. Similarly integration of sales promotion depends on clarity of the promotional message, pricing technique, understanding demographics and psychographics of customers. It is very difficult to establish a theory for IMC due to variation in sub elements of each promotional tool. There is no theory regarding benefits of IMC in terms of maintaining synchronization between each sub elements of promotional medium. Some academicians pointed out some serious question about the potentiality of IMC. It is mentioned in the previous section of the study that IMC helps to create promotional budget but this is not a new thing. Promotional budgeting in terms of cost per cluster of customers, reach, selecting media channel, targeting and segmenting is not a new concept. Any standard advertising model gives importance on above mentioned budget techniques. IMC has nothing new to offer in terms of promotional budgeting. Furthermore, it is not desirable to control every aspects of brand but IMC tries to control brand communication by selecting right communication medium. Brand equity is created by people and culture of target market rather than communication channel adopted by marketers. Many marketers use web 2.0 as a platform for interactive marketing to increase customer engagement. Brand equity is created by opening up the communication channel to customers rather than controlling communication medium (Hackley 88-91). IMC is complemented with the elements like public relation, sales promotion, advertising and direct response marketing but each element has more than four sub elements. Marketers need to study each sub element carefully to create a strategic IMC model. This is a daunting task and for this reason no one has succeeded to establish a strong theory for IMC (Fitzgerald and Arnott 25). Many organizations fail to implement IMC due to organizational structure. In 1997, Percy has argued that implementing IMC is not possible due to functional barriers in organization. Functional barriers can be explained in the following manner. Horizontal Communication and Decentralization Implementing IMC in an organization with horizontal structure is not an easy task. Objectives of IMC are needed to clear among each departments connected horizontally. There is hardly any communication between various functional departments and for this reason IMC might fail to help organization during internal brand auditing. Although decentralization empowers employees to respond customer needs but creates a barrier for implementing IMC. Fragmentation in organizational structure is derivative of decentralization process. Fragmentation of employees is not desirable while implementing IMC. Budget In 1995, Cleland suggested that budget plays a crucial role for not adopting integrated marketing communication strategy. Interdepartmental competition for financial resources is a common thing in any multi layered organization. As a result amount of cooperation required between various departments is not sufficient to implement IMC successfully. Investment required to implement IMC is huge due to its variability in terms of time frame and emphasis on every promotional medium. Companies do not need to invest huge amount on a particular promotional medium in contrast to IMC. Diversity in promotional elements creates the barrier for IMC to be implemented. Promotional Medium Time period for Cost Benefit analysis Sales Promotion Immediate Advertising Long Direct Marketing Long Public Relation Long Allocating budget for every elements of IMC is a byzantine task. For this reason many organizations avoid IMC (Ranchhod 159-161). Some scholars suggested that there is no theory behind IMC. According to them IMC is just a short lived management fashion. Brand managers fail to identify linkage between contemporary theory and external suppliers of marcom activity. IMC is more business process specific rather than achieving business objectives. IMC concept is more applicable for marketing of services, B2C markets rather than product marketing. Too many conjunctions of sub elements create the structural barrier for IMC process. Supporters of IMC give importance on various examples rather than creating strong theoretical back ground (Shimp 9). In 2003, Cornelissen and Lock contended that IMC is not a proven marketing theory. There is no universal agreement about the definition of IMC. They have dissected the concept of IMC into two parts. 1. IMC is a process oriented perspective. 2. IMC is a content oriented perspective. Some anecdotal comments are used to define IMC rather than creating strong theoretical definition. So called IMC practices are nothing more than exercising communications mix in coordinated manner. IMC communication message is nothing more than traditional inside-out approach. Integrated Marketing Communications Campaigns In 1999, NSPCC (UK based nonprofit organization) launched ‘full stop’ campaign to end cruelty against child. They used television commercial and posters to create awareness among people. Third edition of the campaign was supported by The Sun and Alliance & Leicester. They used cause related marketing to nourish promotional effort of NSPCC. The Sun published at least one child abuse story everyday during the time period and Alliance & Leicester paid certain percentage of new business contacts to NSPCC. The campaign was successful. NSPCC got forty two days of free publicity and collected donation of more than 1 million pound (Kitchen 62). Many retailers use IMC techniques according to the demand of customers. They modify integrated communication model in accordance with the geographic location, customer preference and traditional beliefs of society. Office depot launched Hispanic focused IMC campaign in the year 2003. Target customers were Hispanic community in this promotional model. Retailers invest huge amount of money to build brand equity but many of the times they fail to identify loop holes of existing promotional model. General Motor used the concept of integrated retail management to open new retail outlet at Detroit airport in the year 2002. They combined the concept of IMC with integrated retail management. The shop was offering various merchandises like clothing items, die cast equipments to customers. They used digital marketing to promote the retail store and took help of below the line promotion to create brand awareness (Ogden 355). Supporter’s View on IMC IMC is still a relatively new concept to many organizations. Advertising techniques differ according to the requirement of customers in a particular country. Personal selling is showing a declining trend with respect to other three pillars of integrated communication strategy. Maintaining sales force is associated with huge amount of capital investment (Yeshin 7). Digital marketing means using social media as advertising medium. Marketers are trying to integrate interactive marketing with IMC to increase the reach of promotional message. Digital marketing helps to increase customer engagement index for marketers (Keillor 25). IMC helps to create competitive advantage over other competitors. Integrated model of communication helps consumer to take purchase decision quickly with respect to single frame communication model. Unified message of IMC is more effective with respect to discrete message created by other promotional tool (Smith and Taylor 16). Most of the marketers use IMC as part of operational objective. Sender, encoding, decoding and receiver are four important elements of any communication process. IMC emphasizes on the sender approach to create a suitable message delivery process. Encoding part is important to prepare a creative communication strategy. Encoding is an integrated part of IMC and marketers use it to add wow factor in promotional message (Clow 29). Conclusion There is no theoretical background for integrated model of communication. Academicians need to develop strong theoretical framework for IMC to increase the popularity among market leaders. They need to distinguish IMC from combined promotional mix. Works Cited Belch, George. 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