Introduction to IMC

1. BBA / MBA
SUMMER 2012
Institute of Business Management

2. …a process of integrating
marketing communications
activities across relevant
audience points to achieve
greater brand coherence.

3. ...a process of aligning
brand communication
objectives with corporate
goals, thereby achieving
accelerated returns on
investments.

4. 1980sConcept evolved during the
1980s…
Most companies were NOT
Ready…!
…structured by Departments,
operating “independently” of each
other.

5. 1980sA regimen of command & control,
operated “top-down”.
BUT… businesses was good!
Shareholder value was growing…
Result: Belief in the “functionally
segregated” business model
remained strong.

6. 1980s
In the US, business was content with
the classical/ segregated
organizational model.
Management consultants Edwards
Deming, Joseph Juran & others
urged corporate America to change.

7. 1980sIn Japan & parts of Europe,
business was on the right
track…
Organizational integration was
already in practice.
TQM (pioneered by Edwards Deming
& Joseph Juran in Japan) had become
the “buzz-word”.

8. 1980s“Four Ps” concept of Marketing, fitted
in well with functionally structured,
mass production oriented “silo
organizations”.
“New products, new markets,
higher prices” seen as the obvious
strategy for “profit maximization”!

9. 1980sThe popular belief: “If a company
got their Four Ps right, business
would grow & prosper.”
What was or is wrong with
4Ps?
4Ps: “inwardly focused”
approach.
Manufacturers - NOT
Consumers - drive the business.

10. 1980sSales Promotion, Direct Marketing, PR
activities part of the promotional mix
Concept of ATL & BTL media applied
as a
“two-part” approach to promotions.
Advertising agencies offered o
become “one-stop-shops” for both
“ATL” & “BTL”.
Companies opted for “specialization
of services”.

11. 1990sProduct differentiation was
diminishing.
Global competition was intensifying.
Business focus remained on “Building
& protecting market share at any
cost” was becoming costlier!
Companies’ strategic focus:
Out-maneuver, Out-promote
competition!

12. 1990sDespite focus on the Four Ps,
companies fell short of target &
profitability suffered.
Four Ps unable to deliver results!
“Cost-efficiencies” & “economies of
scale” NOT higher marketing spend,
became the NEW route to “mass
market penetration”.

13. 1990sBig retailers (Wal-Mart, Toys ‘R’ Us &
Best Buy) drove out smaller
competition & also “dictated terms”
to manufacturers.
“Private labels” sales grew from
$41.5 billion in 1998 to $51.5 billion in
2002, in the US.
Manufacturers no longer controlled
distribution...

14. Three major external factors started
influencing markets:
1. Digital technology: spread across
business operations;
2. Brands & branding became the
major competitive differentiating tool;
3. Globalization & regionalization
became the favored MNC strategy.

15. A fourth major shift soon followed:
Demand for Value-based, &
Accountability-based business.

16. Computer technology became a major
enabler & equalizer for business.
Technology made better
identification & understanding of
customers (& their motivation to buy)
possible.
Impact of promotional activities also
could be better measured.

17. Was Direct Marketing (DM) a source
of learning for IMC? WHY?
DM focused on customer
identification, contact & measurement
(of response)!
DM began in the 1960s - matured into
Database Marketing (in the 1990s).
Internet marketers (banks, auto
dealers, retailers) started using DM +
Technology for “broad scale
marketing”.

18. From 1950s until 1990s: new products/
new technologies, & innovations
remained the preferred “theme” for
business. “Innovate & grow”!
TV, Microwave, Computers,
Walkman – companies brought
innovation to market & created new
segments.

19. Japanese companies did not
innovate - preferred to copy &
improve new technology - at much
lower cost.
“A whole new breed of
competitors emerged in the
marketplace”.
Private labels sales in US grew from
$41.5 billion in 1998 to $51.5 billion
in 2002.

20. Come the NEW millennium, market
dynamics changed. Innovators
again became leaders!

21. Investment firms in the 1980s
first to discover the value of
Brands.
Saw brands as a cache of loyal
customers - a means of generating
income flows into the future.

23. 1990s: New trading blocs - similar to
ASEAN – emerged: European Union &
MERCOSUR (in Latin America).
Eastern Europe also underwent
restructuring.
Companies started adopting more
unified, consistent, & integrated
brand strategies (balancing later with
unique needs of individual markets).

24. Global, cross functional teams
started to replace “departmental”
structures.
Companies set about integrating
communication – role of ad
agencies became weaker!
Brand essence became the basis
for integration & alignment of
marketing activities.

25. IMC evolved from being a
communications tool into a key
component of overall business
strategy.
IMC shifted focus from “one-way” to
“two-way, interactive”
communication.
Internet & e-commerce became “the
game changers” with “real-time,
buyer-seller” interactions.

26. Role of IMC changed from
coordinating outbound communication
to integrating outbound & inbound
communication.
Organizations started rallying around
a single factor: wants & needs of
the customer.
Satisfaction of customers’ wants &
needs, became the basis for VALUE
CREATION.

27. Major companies adopted IMC as their
basic business philosophy:
Dow Chemical,
CIGNA Insurance,
Kraft,
FedEx,
IBM,
Dell,
Hyatt International.

28. TODAY, IF A FIRM CANNOT:
Master communications,
Use it to influence & bind customers,
Build on “brand relationships as the
basis of sustainable competitive
advantage”,
Find ways to use communication for
building long-term brand loyalty…
…THAT FIRM WILL NOT
SURVIVE!