Transcript Integrated Marketing & Modern Agencies

Integrated Marketing
and the Modern Agency
Definitions of “Market”
Different uses of the term “market”:
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Region
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Type of consumer
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E.g., Women, Hispanic, Upscale
Type of product
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E.g., Chicago, Midwest, Urban areas
E.g, Tires, Laundry detergents, Athletic shoes
Locus of exchange….
Locus of Exchange
Consumer
Business-to-business
Institutional
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E.g., Government, Schools
Reseller
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E.g., Retailers
The Marketing Concept
Old model:
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Make product => Figure out how to sell it
New model:
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Developed since World War II
Study consumers to identify needs => Make or
modify product to satisfy those needs
Goal: understanding consumers
Strategic communication: relative advantage
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Based on need satisfaction
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Real vs imagined needs
Rational vs irrational needs
The Marketing Process
Discover consumer needs
Develop product to satisfy needs
Emphasizing existing needs is easier
than trying to create them
Ads as information and persuasion
The Marketing Mix
(The Four Ps)
Integrated strategies for:
The Product
 The Price
 The Place (distribution)
 The Promotion
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The Product
Design, development, branding and
packaging
Product life cycle
Introduction
 Growth
 Maturity
 Decline
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Reformulation
Place (distribution
channels)
Moving products to consumers
Channels:
Wholesalers
 Retailers
 Transportation modes
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Place (distribution
channels) continued
Push vs pull marketing
Push: targeting resellers
 Pull: targeting consumers
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Market coverage strategy
Exclusive distribution
 Selective distribution
 Intensive distribution
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Pricing
Sale vs manufacturer price
Psychological pricing
Advertising and price
Promotional costs add to price
 Ads create product legitimacy
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Thereby permitting higher pricing
Promotion
Strategic communication to selected target
audiences
Forms of promotion:
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Personal selling
Advertising
Sales promotion
Public relations
Direct marketing
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e.g., direct mail, telemarketing
Point-of-sale
Principles of the
Marketing Mix
Product drives the marketing mix
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Technical products:
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Low-involvement products:
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emphasize personal selling
emphasize advertising, emotional appeals, and
brand image
High-involvement products
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Advertising can include more information
Stages of Marketing Plan
Research
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Background on product and competition
Strategic
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Formulating campaign strategy
Implementation
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Putting plan into effect
Evaluation
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Evaluating the plan
Marketing Communication
Process
Media
Receiver(s)
Decision
People
Message
Manufacturer
Distributor
Wholesaler
Ad agency
Salesperson
Spokesperson
Promo. Man.
Creative Dir.
Writer
• Copywriter
• Screenwriter
Graphic Artist
Film Producer
(and 5 others)
Media Rep.
Media Owner
Media Buyer
Promotion/Ad
Manager
Target Markets
• Consumers
• Trade
customers
Suppliers
Target Markets
• Consumers
• Trade
customers
Suppliers
Action
Source (s)
Decide Promo.
• Policy
• Strategy
Draft Plans
Manage
Promotion
Create
Message
Fit message to
suitable format
Fit format to
medium
Select media
Coordinate ad
placement
Schedule ads
Supervise
Quality check
Documentation
Perceive
• Medium
• Symbols
• Message
Decode
symbols
Attitudes
toward product
Images of
product
Purchase
IMC - Integrated
Marketing Comm.
Attempt to unify the various marketing
communications approaches into a
seamless whole
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Harmonize
Utilize unique strengths of the different
marketing communication channels in a
coordinated fashion
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Synchronize
The New Normal
The “new normal” in the way marketing
communication is conducted
Merge advertising, public relations,
direct marketing, sales promotion, event
planning, trade communication, retail
marketing, package design and other
marketing communication elements
Why do it?
Whole is greater than sum of its parts
By emitting an united message, you are
more likely to build awareness, raise
recollection, and foster trial
Less likely to confuse consumers with
multiple, potentially contradictory, ideas
Sound easy?
It’s not!
IMC is difficult to install in agencies
because of “functional silos”
Specialists trying to protect their turf,
their autonomy, their data, their budgets
How do you do it?
Need specialists to share information
and ideas with one another
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Open lines of communication
Must adopt open decision making
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Great ideas can come from anyone
Requires a commitment to coordination
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Must share work and responsibility
Techniques in IMC
Mass marketing vs. “market-driven” approaches
 “Micro-marketing” and “Point-casting”
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“Data mining”
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Building information profiles of consumers
“One-to-one targeting”
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Speak to specialized market segments
create over-time ties with consumers
“Consumer-initiated”
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customers begin communication process
Bridging the Divide
These are the techniques; must be
pulled together into a plan or system
Integrate various communication
strategies at individual execution and
campaign-wide levels
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theme, timing, goals
The IMC Landscape
Limited effects of advertising and PR
compelled many marketers to look to
consumer sales promotion and direct
response for “fast” results
However, these “limited time offers”
don’t help build a brand image -- too
much and brand equity is sacrificed
The Solution
Integrate the behavior-oriented efforts of
sales promotion and direct response
with the image-oriented efforts of public
relations and advertising
Tactically-oriented -- “Integrated”
communication executions
 Strategically-oriented -- “Coordinated”
communications campaigns
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Model of IMC
A Cyclical Process
Issues of Structure
Agencies have tried many methods to get
disciplines to work together
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Bring in external specialists shops
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Centralize power under an account executive to
coordinate different departments/specialties
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70s and 80s - Merger Mania
Early 90s - Large Agencies
Change structure of the agency itself
Merge job descriptions -- “generalize” tasks
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Late 90s - Smaller Agencies
Organization of
Agencies
Organized around departments
Organized around clients
Organized around tasks
Organized by ownership
Organizing Agencies
Tradeoffs in Agency
Organization
Agency Assignment
Get in your agencies and decide what
structure you want to adopt
Greater integration usually results in more
coherent campaigns
 More need to negotiate decisions - share
responsibilities for sections
 Be realistic about level of integration
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Agency Name
And Finalize Your Name:
Agency Name Generators: Use at your own risk!
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http://adage.com/agency-name-generator/index.php?
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https://us.copify.com/silly-agency-name-generator-game
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http://www.adweek.com/adfreak/40-strangest-agencynames-and-where-they-came-136533?page=4
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http://blog.act-on.com/2014/10/the-wild-and-woolly-world-ofmarketing-agency-names/
The Full-Service Agency
Major staff functions:
Research and account planning
 Account management/client service
 Creative services
 Media planning and buying
 Pubic relations
 Promotions and event planning
 Direct response
 Interactive
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Services Provided
Analysis of marketing and cultural data
Formulation of core strategy and tactics
Recommendation of creative direction
Production of brand messages - Ad/PR
Create promotions and databases
Placement in print, broadcast & Internet
Verification of message placement
Creative Boutiques
Small agencies focus on creative
Specialize in producing ads
Little staff for research, strategy, media
planning, or public relations
Sub-contract for creative work from fullservice agencies
Often have short life spans
Digital Shops
52% of CMO’s believe traditional ad agencies
are ill-suited to conduct online marketing
Specialize in web design, e-mail drops, blogs,
peer reviewing, social media, and viral video
Less siloed and more nimble about new media
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Few mid-level managers who are over-specified
More open to experimentation and innovation
Medical/Political Shops
Entirely service specialized clients
Specialized knowledge of category
Provide full-service functions
Minority Agencies
Often full-service agencies
Specializing in campaigns that target
minorities/specialized populations
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Blacks, Hispanics, Asians, Gay/Lesbian
In-house Agencies
Owned and supervised by company
Reasons for in-house agencies:
Savings
 Specialization
 Priority service
 But, minimum staffing of experts and
possibility of “group-think”
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Media Buying Services
Original format of ad agencies
Sole function is media buying
Growing complexity of media buying
Buying media in bulk
How Agencies are Paid
The Commission System
The Fee System
Incentive-based Systems
The Commission System
Standard rate: 15% of media buys
Trend toward negotiated commission
Fierce competition among agencies
The Fee System
Negotiated hourly fee
Media buys billed directly to client
Hourly rate rule of thumb:
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3 x hourly salary of each employee
Employee hourly salary =
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Salary / Hours worked per year
Incentive-based
Systems
Higher fees for good performance
Incentives negotiated in advance
Pay per performance system