AN INTRODUCTION TO INTEGRATED MARKETING

1-1 Copyright © 2018 McGraw-Hill Education. All rights reserved.No reproduction or distribution without the prior written consent of McGraw-Hill Education.

CHAPTER 1

AN INTRODUCTION TO INTEGRATED MARKETING

COMMUNICATIONS

Chapter Overview The purpose of this opening chapter is to provide the student with an overview of the field of advertising and promotion and its role in the marketing process. We introduce the concept of integrated marketing communications (IMC), its evolution, and examine how various marketing and promotional elements must be coordinated to communicate effectively. We also discuss the reasons for the increasing importance of the IMC perspective in planning and executing advertising and promotional programs. Marketers understand the value of strategically integrating the various communication functions rather than having them operate autonomously. The move to integrated marketing communications also reflects an adaptation by marketers to a changing environment, particularly with respect to consumers, technology, and media. The various elements of the promotional mix are introduced in this chapter along with a brief discussion of these basic tools of IMC. We discuss how many companies are taking an audience contact or touch point perspective in developing their IMC programs and consider four basic categories of touch points. This chapter also examines the various tasks and responsibilities involved in advertising and promotion management and a model of the integrated marketing communications planning process is presented. Lastly, we give an overview of the perspective and organization of the rest of the text.Learning Objectives 1.Describe the role of advertising and other promotional elements in marketing.

2.Discuss the evolution of the integrated marketing communications (IMC) concept.

3.Explain the increasing value of the IMC perspective in advertising and promotional programs.

4.Identify the elements of the promotional mix.

5.Identify the contact points between marketers and their target audiences.

6.Describe the steps in the IMC planning process.Advertising and Promotion An Integrated Marketing Communications Perspective, 11e George Belch Michael Belch (Instructor Manual All Chapters, 100% Original Verified, A+ Grade) 1 / 4

Chapter 01—An Introduction to Integrated Marketing Communications 1-2 Copyright © 2018 McGraw-Hill Education. All rights reserved.No reproduction or distribution without the prior written consent of McGraw-Hill Education.Chapter and Lecture Outline

I. INTRODUCTION TO ADVERTISING AND PROMOTION

The chapter begins with a brief discussion of the changing roles of advertising and promotional strategy in modern marketing. Instructors should note the role and importance of an organization’s promotional efforts in various industries and markets. These might include the automotive market, the beer industry, soft drinks, and consumer electronics. The opening vignette on Charmin provides a very good overview of this how various IMC tools are used by major marketers to communicate with their target audiences.

II.THE GROWTH OF ADVERTISING AND PROMOTION

Advertising and promotion are integral parts of our social and economic systems. Advertising has evolved into a vital communication system for both consumers and businesses. In market-based economies, consumers rely on advertising and other forms of promotion to provide them with information they can use in making purchase decisions. Corporations rely on advertising and promotion to help them market their products and services.Evidence of the increasing importance of advertising and promotion in the marketing process comes from the growth in expenditures in these areas over the past decade. In 1980, advertising expenditures in the U.S. were $53 billion and $49 billion was spent on sale promotion. By 2016, total marketing communications expenditures in the United States were estimated to be nearly $571 billion, with $127 billion being spent on traditional media advertising (television, radio, magazines, newspapers outdoor, cinema), $68 billion going to digital/online advertising, $51 billion going to direct mail and other forms of direct marketing such as e-mail marketing, $25 billion spent on sponsorships and experiential/event marketing, and the remaining $300 billion being spent on consumer and trade promotion. Advertising expenditures outside of the U.S. increased from $55 billion in 1980 to an estimated $382 billion by 2017.Billions more are spent by both domestic and foreign companies in other promotional areas such as direct marketing, event sponsorship, interactive marketing, sponsorships and public relations. The tremendous growth in expenditures for advertising and promotion reflect the growth of the U.S. and global economies. Expansion-minded marketers are taking advantage of growth opportunities in various regions of the world and taking advantage of integrated marketing opportunities through methods such as event sponsorship and the use of the Internet. Particularly noteworthy is the increase in the amount of marketing communications dollars being spent online. Total spending on digital advertising by U.S. marketers is expected to reach $100 billion by 2020 and represent 45 percent of all media advertising spending.Spending on Internet advertising – which includes mobile, social, display, and search ads – is growing rapidly and is expected to account for 41 percent of advertising expenditures by 2019.Professor Notes 2 / 4

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III.THE ROLE OF MARKETING

A.Many students may already have had a marketing course; however, it is still helpful to define marketing and stress that it involves more than just selling or other promotion functions. For more than two decades, the American Marketing Association, the association that represents marketing

professionals in the United States and Canada, defined marketing as:

the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.This definition of marketing focused on exchange as a central concept and the various activities involved in the marketing process. Many experts argue that exchange is the core phenomenon or domain for study in marketing. The discussion can focus on the nature of exchange and what is needed for this process to occur including: two or more parties with something of value to one another; a desire and ability to give up their something of value to the other party; and a way for the parties to communicate with one another.B.Revised Definition of Marketing—In 2007 the AMA adopted a revised definition of marketing: Marketing is the activity, set of institutions, and processes for creating, communicating, and delivering exchange offerings that have value for customers, clients, partners and society at large.This definition of marketing is more reflective of the role non-marketers to the marketing process.It also focuses on the important role marketing plays in developing and sustaining relationships with customers and delivering value to them.Value is the customer’s perception of all of the benefits of a product or service weighed against all the costs of acquiring and using it. Benefits can be functional, experiential or psychological.Costs include the money paid for the product or service as well as other factors such as acquiring information, making the purchase, learning how to use a product/service, maintaining, and disposing of it.C.The Marketing Mix—The four elements of the marketing mix (product, price, place, and promotion) can be introduced and the task of combining these elements into an effective marketing program for facilitating exchange with a target audience should be noted. The instructor should point out that while this course focuses on the promotion element of the marketing mix, the promotional program must be part of a viable marketing strategy and coordinated with other marketing mix variables. This leads into a discussion of the concept of integrated marketing communications.

Professor Notes: 3 / 4

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IV.INTEGRATED MARKETING COMMUNICATIONS

• The Evolution of IMC—In the past, many marketers built strong barriers around the various

marketing and promotional functions, planning and managing them separately with different budgets, different views of the market and different goals and objectives. In the 1990s, however, many companies began moving toward the concept of integrated marketing communications (IMC), which involves coordinating the various promotional elements along with other marketing activities that communicate with a firm’s customers. As marketers embraced the concept of IMC, they began asking their ad agencies to coordinate the use of a variety of promotional tools rather than relying primarily upon media advertising. A number of companies began looking beyond traditional advertising agencies and using other types of promotional specialists to develop and implement various components of their promotional plans. As the advertising industry recognized that IMC was more than just a fad, terms such as new advertising, orchestration and seamless communication were used to describe the concept of integration. A task force from the American Association of Advertising Agencies (4As) developed one of the first definitions of integrated

marketing communications defining it as:

A concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines—for example, general advertising, direct response, sales promotion, and public relations- and combines these disciplines to provide clarity, consistency, and maximum communications impact.Integrated marketing communications calls for a “big picture” approach to planning marketing and promotion programs and coordinating various communication functions. With an integrated approach, all of a company’s marketing and promotional activities should project a consistent and unified image to the marketplace. However, advocates of IMC have argued for an even broader perspective that considers all sources of brand or company contact that a customer or prospect has with a company, product or service.

• A Contemporary Perspective of IMC—As IMC evolves and becomes marketers develop a better

understanding of the concept, they are recognizing that it involves more than just coordinating the various elements of the marketing and communications program to reflect “one look, one voice.” IMC is being recognized as a business process that helps companies identify the most appropriate and effective methods for communicating and building relationships with customers and other stakeholders. Don Schultz of Northwestern University, who has been one of the major proponents and thought leaders in the area, developed a new definition of IMC which is as

follows:

Integrated marketing communications is a strategic business process used to plan, develop, execute and evaluate coordinated, measurable, brand communications programs over time with consumers, customers, prospects, employees, associates and other targeted relevant external and internal audiences. The goal is to generate both short-term financial returns and build long-term brand and shareholder value.

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