Promotion: From Advertising to IMC - Part 2

Shipra Gupta

Shipra Gupta 

2011PGP041

B.Tech Biotechnology

Apoorva Shukla

Apoorva Shukla

B.Tech Mechanical Engineer

NIT Hamirpur

Work ex - DRDO

Establishing Objectives and Budgeting for Promotion

This chapter emphasizes on the planning and design of IMC program within a stipulated budget. Achieving these goals to reach the objectives, which are defined categorically, is important to survive. To know the degree of achievement one must benchmark.

Promotional mix elements play roles in the marketing program; the success of all develops a campaign which actually sells more products. The most common measure is the sales data, even with the limitations it presents.

The factors which affect allocations relates to interactions in the various departments. The finance department would argue for generating an ROI of the money spent on marketing. Schedules of production may be mightily disturbed with the marketing plans. Budget allocation is considered as a mix of market size and potential objectives may differ for different departments. Sharing objectives in the hierarchy, as the basis for setting goals is done in order move to the views of marketing communications. Zero-based communications planning focuses on tasks that need to be done, which communication functions are to be used.

Zero Based Marketing- How it works

ZBB starts off with practically nothing on which to base one's budget assumptions. This is totally in contrast with the general traditional method,where managers and supervisors calculate their projections using the data from the past. Documentation needed is huge, justification of the cost and the purpose, plus the presentation of alternative course of action, which should be justified in a similar way. 

Communications effects Pyramid: The bottom is the easiest to convert. However as we move up the ladder the frequency of conversion will reduce drastically

Traditional View on Advertising is now experiencing a shift with the process becoming two way and the acting on consumers becoming both ways.

Assessment of DAGMAR

The DAGMAR approach to setting objectives has had considerable influence on the advertising planning process. Many promotional planners use this model as a basis for setting objectives and assessing the effectiveness of their promotional campaigns. DAGMAR also focused advertisers’ attention on the value of using communications based rather than sales-based objectives to measure advertising effectiveness and encouraged the measurement of stages in the response hierarchy to assess a campaign’s impact. Colley’s work has led to improvements in the advertising and promotional planning process by providing a better understanding of the goals and objectives toward which planners’ efforts should be directed. This usually results in less subjectivity and leads to better communication and relationships between client and agency.

The budget is limited with economic models, demonstrating the effects on sales directly however other elements of marketing mix are ignored. The budget appropriation is to tie the measures of effectiveness to communications objectives rather than broader marketing.

The following are the factors needed to be taken in to consideration:

1.       Market size and Potential

2.       Agency Policies

3.       Preferences of management 

Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations - Part 2

In this section we will review the various Ad agencies in detail:

An advertising agency assists the organizations in developing, preparing, and executing their promotional programs. An ad agency is a service organization that specializes in planning and executing advertising programs for its clients. The organizations go for these sorts of agencies because of the expert resources that are available with these agencies as shown in the image. The agencies have access to artists, writers, researchers, analysts, photographers and other skilled personnel who are experts in their own fields and some even for specific industries such as Mentus Inc. is an agency that specializes in integrated marketing communications for the high-technology, e-commerce, and bioscience industries. An outside agency can also provide an objective viewpoint of the market and its business that is not subject to internal company policies, biases, or other limitations. For Example, Crispin Porter + Bogusky advertised the Mini in the following way:

Types of Ad Agencies:

• Full Services Agencies: The full-service agency is made up of departments that provide the activities needed to perform the various advertising functions and serve the client, as shown in the figure.

• Account Services

Account services, or account management, are the link between the ad agency and its clients. Depending on the size of the client and its advertising budget, one or more account executives serve as liaison. The account executive is responsible for understanding the advertiser’s marketing and promotions needs and interpreting them to agency personnel.

Other Services Provided:

Other lesser known type of agencies:

Creative Boutiques: A creative boutique is an agency that provides only creative services. These specialized companies have developed in response to some clients’ desires to use only the creative talent of an outside provider while maintaining the other functions internally. The client may seek outside creative talent because it believes an extra creative effort is required or because its own employees do not have sufficient skills in this regard. The special features are: 

• Provides only creative services
• May be sub contracted by the full service agencies
• Ability to turn out inventive creative work quickly

Media Specialist Companies:

• Specializes in buying media, especially broadcast time
• Agencies and clients develop media strategies
• Media buying agencies are responsible for implementing the strategy and buying time and space

Methods of compensation for agencies:

There are three major mechanisms for compensating an agency which are:

Losing Clients?

The following are some of the reasons that result in ad agencies losing out clients:

 Gaining New Clients:

Activities performed by Specialist Marketing Firms:

Should you go for integrated communication services then?

Pros

• Greater synergies
• Convenience
• Single unified image for product and service

Cons

• Budget Politics
• Poor communication
• Lack of synergy 

Why are companies unable to implement an IMC plan properly? 

Organizing for Advertising and Promotion: The Role of Ad Agencies and Other Marketing Communication Organizations

"Advertising is the greatest art form of the 20th century." - Marshal McLuhan

Advertising is fast becoming a tool that is being used not only to promote the product but also to differentiate it from the horde of other similar products. It entails knowledge of the industry, of the structure and the functions of the organizations involved in the process.  Of late, there has been a change in the way advertisers communicate with the target market as they search for better ways to catch and hold the attention of the consumers.

This section deals with the various agencies involved in the process of IMC as well as their roles, responsibilities and relation to each other which will be explained using the example of the IMC methods followed by the international brand Nike.

Participants in the IMC Process:   

1. Clients: Clients are the key participants in the IMC process since it is their product/service or idea which is to be marketed and also since it is their funds to be utilized for the advertising and the promotions.  They are also the final authority on the marketing plan as well as the final advertising and promotional programs to be employed.
2. Advertising agency: it is the specialist, external agency employed for the creation, production and/or the placement of the communication message for the promotion or advertising of the product or service in question. It is a common practice for  big firm to have multiple

Media Organizations: These organizations play an important role by way of providing an apt environment for the firms marketing message.  For example, in the case of the SX4 ad that wanted to target specifically men, the following print ad was used. The medium’s primary objective is to sell itself for companies to reach their target markets with their messages effectively. This was done effectively by the said ad.

Specialist Marketing Firms: They include direct-marketing agencies, sales promotion agencies, interactive agencies, and public relations firms. These organizations provide services in the areas of their expertise.

Collateral Services: These are organizations that provide support services to the advertisers, media organizations and the specialized marketing firms.

Who performs the Marketing Activities?

In the current organization, we see everyone from the finance to the IT department is responsible for the marketing activities. But traditionally, there are 3 kinds of organizational systems under which the marketing activities can be performed.

Centralized System is characterized by division of the work along functional lines where advertising is placed within the marketing domain alongside sales, promotion, research and product planning. In such organizations, the marketing manager will control and monitor the entire promotion operation including budgeting, creation, production, placement of ads, media schedules and sales promotion plans for all the products and services of the company.

The specific activities are:

• Planning and Budgeting
• Administration and execution
• Coordination with other departments
• Coordination with outside agencies and services

Advantages and Disadvantages of centralized system are shown in the diagram

Decentralized system on the other hand is more suitable for companies having a diverse portfolio of products and services which are of different kinds and hence a single manager cannot effectively communicate the brand message for all of the products. Such organizations have different product managers for each of the products who handle all of the activities of the marketing department for that product. Examples are Proctor and Gamble, Nestle and Gillette where it is also observed that the products of the same company compete with their own products. This is possible only because each of the products has its own product manager and its own team for advertising and promotion.

Some organizations also include a category management system placed above the brand managers which is responsible for collating and managing the data of all the products. The diagram is an example of the category management system being used at Proctor and Gamble.

Advantages and Disadvantages of Decentralized system:

In-house agencies are the third kind of marketing system that an organization could have. It is a characteristic of organizations that want to save costs by setting up their own advertising agencies internally. It is an agency that is set up, owned and operated by the advertiser and is generally given a separate identity. Examples of such organizations are The Gap, Avon, Calvin Klein and Benetton. Some companies use in house agencies in tandem with the external agencies.

Advantages and Disadvantages of using this format are: