CHAPTER 01 – INTEGRATED MARKETING AND COMMUNICATIONS
Learning Objectives:
1. Describe the importance of marketing communication within the marketing mix
2. Identify the content of the promotional mix – advertising, sales promotion, public
relations, direct marketing, digital, and personal selling – and summarize their purpose
3. Illustrate the concept of integrated marketing communications (IMC) by distinguishing its
evolution, renewed perspective, and content
4. Explain the IMC planning process model and express the steps in developing a marketing
communications program
5. Identify how the IMC planning process is continued throughout all chapters
LO1 Marketing Communication
Marketing Communication
• Finding the right approach for marketing communication is a critical decision for small and
large firms, private and public organizations, and those marketing goods, services, or ideas.
- Integrated marketing communications links or connects promotional programs and
communicates with current and prospective customers.
Marketing
• The activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large.
American Marketing Association definition
• Focus is on exchange as a central concept:
- Two or more parties with something of value to one another
- A desire and ability to give up that something to the other party
- A way to communicate with each other
• Marketing facilitates the exchange by examining needs/wants to develop the marketing
mix.
* 1-1 Communicates an important characteristic about A&W’s chicken sandwich. Consumers may conclude that this
product is a healthier choice, and better able to meet their dietary needs, than the competitor’s sandwich.
The marketing function in an organization facilitates the exchange process by examining the
needs and wants of consumers, developing a product that satisfies these needs, offering it at a
certain price, making it available through a distribution channel, and developing a marketing
communication program. These 4 Ps (product, price, place/distribution and promotion) are
known as the marketing mix. The main purpose of the marketing function is to combine these
four decisions into a marketing program that facilitates the potential exchange with consumers
to create value.
Figure 1-1
Communicating Product
• Marketing messages, the promotion element of the marketing mix, needs to communicate:
1. Product Type
2. Product Attributes/Benefits
3. Brand Identity
4. Brand Equity
1. Product Type
• Organization exists because it offers a product to consumers, generally in exchange for
money.
• Offering may come in form of a:
- physical good (pair of jeans, car, a soft drink)
- service (banking, air travel, legal assistance)
- cause (United Way, March of Dimes)
- idea (Don’t Drink and Drive)
- person (professional athlete)
2. Product Attributes/Benefits
• Products are a bundle of benefits
• Advertising and marketing communications draw attention towards these benefits.
- Functional via the product attributes
- Subjective via performance
- Emotional (positive, negative, psychological, social)
* Ad highlights the beverage’s bubbly effervescence with a refreshing visual.
3. Brand Identity
• Identification through its logo, symbol, or trademark
- Reinforced by a tagline or slogan
- Packaging provides economy, protection, storage and identification
• One primary purpose of marketing communication is to present the brand and its
identification in favorable locations, situations, or time frames.
- Allows consumers to be aware of the brand and to think or feel more positively toward it.
* Shows the Heineken brand identity with the label on the bottle, on the bottle caps, beer glass and coaster.
4. Brand Equity
• Is an intangible asset of added value or goodwill.
- Results from the favorable image, impressions of differentiation, and/or strength of
consumer attachment to a company name, brand name, or trademark.
- Provides a competitive advantage by allowing its product to earn greater sales volume
and/or higher margins than it could without the name.
• IMC planning and marketing communication decisions are expected to strongly
generate brand equity.
* Mont Blanc brand name likely conveys a more positive consumer reaction.
• Beyond brand equity, marketers are interested in:
1. Brand experience – receiving messages, shopping behavior, product use leading to a
view
2. Brand attachment – strength of the bond between a brand and oneself.
3. Brand love – abstract notion.
- Passion-driven behaviors, self-brand integration, emotional attachment, anticipated
separation distress, long-term relationship view, positive, and confidently held attitude.
Communicating Price
• The price of a product, usually expressed in a dollar amount, is a signal of a consumer’s
economic cost to purchase a product in exchange for receiving its combined benefits.
• Price planning involves decisions:
- level, policy, adjustments through discounts/allowances, and flexibility when facing
competition.
• Marketing communication reinforces a consumer’s belief that the price accurately reflects a
product’s benefit or quality.
Communicating Distribution
• Distribution – involves making a product available for purchase, use, or consumption
1. Indirect Channels – network of wholesalers/retailers
2. Direct Channels
• Marketing communication often provides information on where, and how, to purchase a
product.
Communicating Value
• Value is the relative balance or ratio of the benefits (functional, performance, experiential)
consumers “receive” compared to the costs (financial, time, physical effort, social,
psychological) consumers “give” while shopping and/or consuming.
• Marketing communication must signal the benefit to have consumers understand the value
given the cost.
* Apps are a popular digital marketing option to communicate brand value.
• Companies use marketing communication ethically and responsibly to influence and inform
consumers about its brand value
• Messages with unethical and irresponsible characteristics are not legitimate
• Understanding this distinction is a serious challenge for organizations, consumers, regulators,
and critics
LO2 Promotional Mix
• Promotion: is the coordination of all initiated efforts from an identified brand or sponsor that
uses channels of information and distribution to persuade audiences to buy a product.
• Promotional mix decisions are often connected.
Advertising
• Advertising - paid form of non-personal (involves media that transmits a message to a large
groups of individuals) communication about an organization, product, service, or idea by an
identified sponsor.
- Involves media that transmits a message
- No immediate feedback from the message recipient
• Cost-efficient
- A cost-efficient method with large audiences. Ex: during television season, prime-time
network television reached 85% of Canadians daily.
• Cost-effective
- If many viewers watched a TV ad, paid attention during the airing and remember
something about the message. In general, advertising is a cost-effective method for allowing
potential customers to know something about a brand prior to, during or after purchasing a
product.
• Brand Communication Effects
- Directly and indirectly leads to greater firm value due to intangible assets (brand image).
• Brand Interaction
- Ex: As part of its sponsorship with the Canadian Football league, Belairdirect insurance
advertised its contest where consumers would upload a video of themselves in their best
“game face” to win a pair of tickets to the Grey Cup.
• Flexible Application
- Advertising is a flexible approach that is applied across industries (e.g., cars or soft drinks),
market situations (e.g., new product launch or market development for established product),
channel members (e.g., consumers or retailers), and target audiences (e.g., new customers or
loyal customers).
• Multiple Domains
- Different types of advertising occur in multiple domains. Canadian marketers of goods and
services advertise to consumer markets with national or regional brand messages, and in some
cases with messages to international consumer markets. Alternatively, local retailers and other
goods and services providers use advertising for communication purposes to achieve sales
objectives. Also, industry associations, like Dairy Farmers of Canada, advertise extensively to
consumer markets as do all levels of government and non-governmental organizations like
Canadian Blood Services.
Sales Promotion
• Marketing activities that provide extra value or incentive to ultimate consumers, or retailers
and distributors, that influence behavior to stimulate sales.
o Consumer – targeted to the ultimate consumer or end user of the product
Ex: Coupons, samples, premiums, rebates, and contests
o Trade – targeted toward marketing intermediaries
Ex: Allowances, price deals, sales contests, trade shows
* Dare combines its sales promotion (coupon) with its advertising.
* To facilitate usage, the ad indicates that the packaging offers recipes for service ideas.
Public Relations
• A corporate communication program designed to enhance a company’s reputation and/or
earn public understanding and acceptance of a particular issue.
a) Special publications
b) Participation in community activities
c) Fundraising, sponsorship, support for causes
d) Public affairs
Publicity
• Non-personal communications regarding an organization, product, person, or idea not
directly paid for by an identified sponsor.
a) In the news media as a story or editorial.
b) Organization encourages the media to cover a favorable story via news releases, press
conferences, feature articles, and media (these do cost money).
c) Offers credibility à perceived as unbiased.
Direct Marketing
• Occurs when organizations communicate directly with target audiences to generate a
response and/or transaction
a) Used to distribute directly or through traditional channels.
b) Telemarketing, call centers, direct mail, mail-order catalogues, Internet-order websites,
and direct-response ads in media.
c) Used to distribute samples and promotional products.
d) Extensive direct marketing activities occur with the administration of loyalty programs
e) Can be used as part of public relations program by sending information.
• Need to maintain databases containing contact information, customer profiles, purchase
history, and media preferences
* Marketers can use direct-response advertising, whereby a product is promoted through an ad (e.g., broadcast,
Internet) that encourages the consumer to purchase directly via phone app or website.
Digital
• Interactive media – allow for a back-and-forth flow of information where users participate in
and modify its form and content instantly.
• Can implement a completely digital IMC program.
• Internet is an advertising medium.
• Social media facilitates interaction and communication affect brand
* A shopping app that allows consumers to perform price comparisons and read product reviews.
Personal Selling
• Person-to-person communication in which a seller helps and/or persuades prospective
buyers to purchase the company’s good or service or to act on an idea.
a) Involves direct contact between buyer and seller either face-to-face or through
telecommunications.
b) Gives marketing communication flexibility.
- Advertising agencies:
Firms that specialize in the creation, production and placement of promotional messages, and
may provide other services.
- Media organizations:
Provide information or entertainment to their subscribers, viewers or readers.
- Specialized marketing communication services:
Include agencies for direct marketing (e.g., direct mail), sales promotions (e.g., contests,
premium offers, sampling programs), interactive media (e.g., websites, social media activities),
public relations (e.g., generate and manage publicity), and media buying (e.g., arrange TV ad
placement) who provide services in their areas of expertise.
- Collateral services:
Include marketing research, package design, consultants, photographers, printers, video
production, and event management.
LO3 Integrated Marketing Communications
• Most large and mid-sized companies understand that a brand’s promotional mix requires
coordination and strategic integration to present a consistent image to communicate
effectively with their target audiences.
IMC: Evolution
• Definition: A concept of marketing communications planning that evaluates and combines
the strategic roles of a variety of communication disciplines to provide clarity, consistency,
and maximum communications impact.
• Shift towards IMC began in the 1980s and by 1990s became the “new generation” marketing
approach to better focus their efforts in acquiring, retaining and developing relationships
with customers and other stakeholders.
- Some saw as a fad that merely relied on tactical coordination to make all aspects of the
promotional mix look and sound alike. As IMC evolved, both academics and practitioners
saw a renewed perspective.
Renewed Perspective of IMC
• Became viewed as a strategic business process that identifies the most effective, persuasive
brand communication program over time with customers, prospective customers,
employees, associates, and other targeted relevant external and internal audiences to build
and maintain relationships and achieve financial goals
• Seen by promotional planners as an ongoing strategic business process.
a) Coordinated efforts
b) Minimized duplication
c) Efficient and effective
d) Reflects the emphasis on accountability and measurement of outcomes
Four Communications Characteristics of IMC
1. Unified communications for consistent message and image
2. Differentiated communication to multiple groups
3. Database-centered communication for tangible results
4. Relationships fostering communication with existing customers
IMC: Audience Contacts
• Companies take an audience contact or audience touch-point perspective by evaluating
the potential ways of reaching their target audiences and presenting the brand message
favourably to enhance value for the target audience
• Customer relationship management (CRM) involves creating, maintaining, and enhancing
long-term relationships with individual customers for mutual benefit.
IMC: Paid, Owned, Earned
• Paid Media - Media channel marketer pays for
- e.g., TV, radio, print, outdoor, direct mail and digital advertising (paid search and
display and video ads located on websites and in social media).
• Owned Media - Marketing Communication channel a company controls.
- e.g., website, blog, mobile app, sales promotion and social media channels such as
Facebook, Twitter, Instagram, TikTok and YouTube. It also includes non-digital
communication like a brochure and catalogue.
• Earned – Is exposure for a brand that it did not directly pay for and is generated by entities
beyond the company.
- e.g., social media, word-of-mouth, reviews, public support.
LO4 IMC Planning
• The process of conceiving, executing, evaluating, and controlling the use of promotional mix
elements to communicate effectively with target audiences
- results in an IMC plan
• IMC Plan - the framework for developing, implementing, and controlling an organization’s
integrated marketing communications program
IMC Plan Framework (from Figure 1-7)
• Review the Marketing Plan: A written document that describes the overall marketing strategy
and programs developed for an organization, a particular product line or brand.
Promotional planners will understand where the company (or brand) has been, its current
position in the market and where it intends to go and how it plans to get there.
o Ensures strategic consistency
• Assess the Marketing Communications Situation: The promotional plan is developed similarly
to the marketing plan and uses its information to understand the situation. IMC strategy
decisions also usually require additional and very specific promotion information to perform
a marketing communications situational analysis.
o Internal and external analyses
• Determine IMC Plan Objectives: Establishing relevant and appropriate objectives is critical
part of promotional planning, especially distinguishing between marketing, communication,
and behavioral objectives. Determining these objectives guides the tentative budget with
respect to two questions: 1. What will the entire promotional program cost? and 2. How will
the budget be allocated?
o Marketing objectives: refer to what is to be accomplished by the overall marketing
program. They are stated in terms of sales, market share pr profitability.
o Communication objectives: refer to what the firm seeks to accomplish with its IMC
program. They are stated in terms of the nature of the message to be communicated or
what specific communication effects are to be achieved, such as awareness.
o Behavioral objectives: in terms of trial purchase or repeat purchase, among others, may
be defined along with the communication objectives.
* Shows an ad where the call to action encourages the reader to visit Beau’s website
• Develop IMC Programs
o From the plan objectives determine types of promotions to use.
o Determine budget, message strategy and tactics, and media selection.
* The multiple images illustrate a variety of product types and many shades to appeal to women with varying skin colors
and tones.
• Implement and Control the Plan
o An evaluation of how well the IMC plan is meeting communication and behavioral
objectives and achieving the brand’s marketing objectives is required to know whether
corrective steps are necessary.
o The final stage is designed to provide continual feedback concerning the effectiveness
of the promotional program which is then used as input into future planning. e.g. Calvin
Klein campaign featuring Jeremy Allen White.
* January 2024 * August 2024
CHAPTER 02 – WORKING WITH AGENCIES FOR IMC
Learning Objectives:
1. Summarize the advertising agency industry
2. Identify the services a full-service advertising agency provides to its clients
3. Describe methods for compensating and evaluating an advertising agency
4. Review the functions of specialized marketing communication organizations
5. Evaluate issues regarding the agency-client relationship
LO1 Advertising Agencies
• Marketing firms work with advertising agencies to achieve their brand objectives
• Selecting the right partner is important
• Advertising agency decision involves selecting:
a) In-house agency
b) Advertising agency (external)
c) Collaboration of both
A) In-House Agency
• Advertising agency that is set up, owned, and operated by the advertiser
- Advertising department
- Structured with a separate identity
• Utilization of in-house:
- Decreases with larger advertising budgets
- Increases with technological intensity, and for creative industries
• Can reduce advertising and promotion costs.
- Provide related work (sales presentations, package design, public relations) at a lower
cost.
• Focus likely on merchandising and sales promotion.
• Time savings, bad experiences with outside agencies, and strong understanding of
marketplace focus here.
• Tighter control and coordination of the process.
• Limitation is personnel may grow stale.
• Strategic brand change decisions could be slower due to lack of flexibility.
• Restricted budgets can move work in-house
- Email, website design, and social media
B) Advertising Agency
• Assists companies in developing, preparing, and executing their promotional programs.
• Employs highly skilled personnel including artists, writers, media analysts, researchers, and
others with specific skills, knowledge, and experience.
• May specialize in a particular type of business or draw broad range of experience working
on diverse problems.
• Association of Canadian Advertisers offer members a guide for selecting a communications
partner
- Initial consideration, preparation, need identification, search criteria, agency list, pitch,
evaluation, financial criteria, final selection, and conclusion.
• Agency of record (AOR) - Situation where a client works with a primary agency exclusively.
e.g.: The Canadian agency Cossette and McDonald’s have worked together for 40 years.
C) Advertising Agency Industry
• Industry features small and mid-sized domestic firms and large international organizations
with domestic service providers.
- Alignments and acquisitions
• Most major agencies offer specialized services to provide their clients with an ever-broader
range of IMC services.
• Marketing communication agency – a larger multiservice firm.
• Global advertising campaigns are facilitated by using larger international agencies.
* Tag Heurer is an example of a global campaign where the message and the creative concept resonates in many
countries, necessitating and agency with worldwide presence.
LO2 Full-Service Agency
• Offers clients a complete range of marketing, communications, and promotion services
including:
a. planning,
b. performing research,
c. creating the promotional message of the ad campaign,
d. producing the advertising, and
e. selecting media
f.
Account/Client Services
• Link between the ad agency and its clients
• Account executive – responsible for understanding the advertiser’s marketing and
promotions needs and interpreting them to agency personnel.
- May be more than one given size of the client
- Knows a great deal about the client’s business
- Should have a strong marketing background and thorough understanding of advertising
Planning/Research Services
• Research department – gathers, analyzes, and interprets information as input for advertising
decisions.
- Conducts primary and secondary research, and sources syndicated studies.
- May be augmented with services performed by account planners to understand the
client’s target audience, prepare the creative brief, and assess reactions to the creative
Creative Services
• Copywriters – conceive ideas, write headlines, subheads, and body copy.
- Determine message appeal and/or theme and layout
- Video content is usually storyboarded in a sequence of frames
• Once client approves the concept, then likely a team of people will ensure the ideas are
produced.
Digital Creative Services
• Share similarity with creative departments
- Copywriters and specialists with graphics skills
• Personnel with computer technology skills are required for programming interactive features
found in Internet media vehicles.
• Some agencies have moved away from two departments given digital and non-digital
media overlap.
Production Services
• Receive the handoff once copy, layout, illustrations, and mechanical specifications are
completed and approved by the client.
- Most agencies do not produce finished ads but subcontract those services (printers,
engravers, photographers, …)
- May supervise casting and production for video
• Traffic department (manager) – coordinates all phases of production to ensure ads are
completed and transmitted to media on time.
Specialized Services
• Offered by large, full-service agencies:
- Sales promotions
- Merchandising
- Direct-marketing
- Package designers
- PR/publicity and more
Media Services
• Analyze, select, and contract space or time in media that is used to deliver the client’s
message.
• Develop a media plan to reach target audience
- Can be very complex including outdoors, TV, cinema, social media, online news, etc.
- Computerized decision support systems assist.
Organizational System
• Group system – individuals from each department work together in groups to service
accounts.
• Departmental system – each group is headed by an account executive and includes media
planners and buyers, a creative team, and individuals from other departments.
LO3 Agency Compensation and Evaluation
• Agencies select from a variety of compensation methods to charge their clients, depending
on the:
- type of service
- amount of service
Commissions From Media
• Agency receives specified commission (usually 15%) from the media of any advertising time
or space it purchases.
- Critics say agencies can drive up fees buying expensive media or receive more pay than
the value provided due to cost of media.
- Proponents say is simple to manage and keeps the industry competitive.
• Negotiated commission system (average 8-10%) is on a sliding scale becoming lower as a
client’s media expenditures increase.
- Used with expanding IMC programs
Fee Arrangement
• Fixed-fee method – agency charges a monthly fee for all its services and credits client for
any media commissions earned.
• Fee-commission combination – media commissions received by the agency are credited
against the fee.
- Commissions < fee à client charged balance
- Work that does not result in commission is also charged
Cost-Plus Agreement
• Client agrees to pay agency fee based on costs of work plus an agreed-on profit margin.
• Client receives a detailed breakdown of where and how their advertising and promotion.
dollars were spent.
- Allocation of overhead
- Mark-ups
• Offers transparency
Incentive-Based Compensation
• Agency’s compensation level depends on how well it meets predetermined performance
goals.
• Objectives of promotional plan are compared to actual measured performance.
• Summary of approach in Canada is provided to member of Association of Canadian
Advertisers.
• Specific application of approach known as performance by results (PBR)
Benefits of PBR System
1. Greater efficiency and accountability
2. Achievement of cost efficiencies
3. Higher productivity
4. Fewer barriers of self-interest
5. Stronger mutual understanding
6. Improved retention of creative talent
7. Increased agency strategic input
8. Improved client–agency communication
Three Groups of Performance Measures in PBR System:
• Overall Business Performance
- Sales
- Market share
- Profit
- Margins
• Marketing Communication Effectiveness
- Brand awareness
- Brand image ratings
- Likability of advertising
• Agency Process Evaluation
- Concerns the services provided and overall management
Evaluation of Agencies
• Financial Audit - focuses on how the agency conducts its business.
- Verify costs, expenses, personnel hours, payments made
• Qualitative Audit - focuses on agency’s efforts in planning, developing, and implementing
the client’s advertising programs and considers the results achieved.
LO4 Specialized Services
• Specialist agencies work with advertising agencies on big accounts or their own accounts.
1. Creative Boutiques
2. Media Buying Services
3. Sales Promotion Agencies
4. Public Relations Firms
5. Direct-Response Agencies
6. Digital Agencies
1. Creative Boutiques
• Provides creative services like developing new and exciting brand messages or conceiving
the theme for a new advertising campaign.
- Employ creative personnel
- Small organizations
- Can be subcontracted by full-service agencies
- Often independent
2. Media Buying Services
• Independent companies that specialize in media buying which requires:
- substantial analysis
- specific purchasing procedures of advertising time and space
• Interacts at the senior level with the ad agency and client to ensure optimal expenditures to
achieve brand objectives.
3. Sales Promotion Agencies
• Specializes in developing and administering sales promotion programs
Contests/sweepstakes, refunds/rebates, premiums, and sampling
• Most are independent
• Work with client’s other IMC agencies to coordinate
• Develop direct/database marketing
• Generally compensated on fee basis
4. Public Relations Firms
• Develops and implements programs to manage the organization’s publicity, image, and
affairs with consumers and other relevant publics (employees, suppliers, shareholders,
government, labour groups, citizen action groups, and public).
- Analyzes relationships
- Determines policies and actions
- Develops strategies and programs
- Evaluates their effectiveness
• Activities include:
- Planning PR strategy and program
- Generating publicity
- Conducting lobbying and public affairs efforts
- Becoming involved in community activities and events
- Preparing news releases
- Performing research
- Promoting and managing special events
- Managing crises
5. Direct-Response Agencies
• Develop and administer direct marketing programs for companies communicating directly
with consumers through direct response media (e.g., mail, television, Internet, phone)
- Database and/or mailing list management
- Analytics and research
- Media services
- Creative and production capabilities
6. Digital Agencies
• Specialize in designing and developing communication programs for clients’ Internet
communications.
- websites, display ads, video ads, search engine optimization (SEO), and social media
campaigns
• Provide full service and expertise in technology, creativity, database management, digital
media, and customer relationship management
LO5 IMC Planning: Agency Relationships
• Companies decide whether to use specialized organizations for each marketing
communications function or to consolidate them with one agency that offers all services.
Integrated IMC Services
• Offers three benefits:
1) Clients maintain control of the promotional planning and achieve greater synergy among
the communications program elements
2) More convenient
3) Can create a single image of the client’s brand
• Critics claim full services are neither sufficiently staffed nor fully cognizant of multiple target
markets
Agency-Client Responsibility
• Both advertisers and agency executives consider IMC important to their organizations’
success.
• Agencies view themselves as strategic and execution partners and are offering their clients
a full line of services.
• Marketers want to set the strategy for their IMC campaigns and seek specialized expertise.