IMC – Session 6,7,8

Learning Objectives

LO1 – Concepts of STP , Identification of Target Audience

LO2 – Establishment of Marketing Communications Objectives

LO3 – Setting Marketing Communications Budget

LO4 – Organizing for Marketing Communications

Role of Ad agencies and other Marketing Communication
Organizations
Client Agency Relationship
 LO1 – Session 6,7,8
HUL Brands
Personal Wash
Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears, Rexona
Laundry Skin Care
Surf, Rin, Wheel Fair & Lovely, Ponds, Vaseline
Hair Care Oral Care
Sunsilk, Clinic Pepsodent, Closeup
DeoD Color Cosmetics
Axe, Rexona Lakme
Ayurvedic Tea
Ayush Brooke Bond, Lipton
Coffee Foods
Bru Kissan, Annapurna, Knorr
Ice Cream
Quality Walls
 LO1 – Session 6,7,8
Definition

Dividing a market into distinct groups

with distinct needs, characteristics or
behavior who might require separate
products or marketing mixes.
 LO1 – Session 6,7,8
Consumer Market Segmentation

1. Geographic Segmentation

Dividing a market into different geographical units such as nations,

states, regions, counties, cities or neighborhoods

Reasons:

1. Customization of products as per local needs

e.g. McDonalds – No beef, Cheaper menus, McAloo Tikki,
Chicken McGrill

2. Exploit untapped territory – All intermediate halts on major

traveling routs

3. Distribution needs of an organization

 LO1 – Session 6,7,8
Consumer Market Segmentation

2. Demographic segmentation

Dividing a market into groups based on demographic variables

such as age, gender, family size, occupation, education, income,
religion, race, generation and nationality
Reasons:

1. Needs, wants and usage rate are closely associated with

demographic variables

2. McDonalds’ first worldwide campaign ich liebe es (I’m lovin’ it)

launched in Sept 2003 (Age group 15-24)
LO1 – Session 6,7,8
Consumer Market Segmentation

2. Demographic segmentation

An appealing ad from
the campaign
 LO1 – Session 6,7,8
Consumer Market Segmentation

3. Psychographic segmentation

Dividing a market into groups based on social class, lifestyle or

personality characteristics

Reasons:

1. Two people from same geographic and demographic segment

can vary on these bases

2. E.g. Sober or Flamboyant personality

 LO1 – Session 6,7,8
Consumer Market Segmentation

3. Psychographic segmentation

Macho image created by

‘The Marlboro Man’
 LO1 – Session 6,7,8
Consumer Market Segmentation

4. Behavioral segmentation

Dividing a market into groups based on occasions, benefits, user

status, user rates, readiness stage

Occasions – Regular, Special

Benefits because of the product

User status – First time, regular, non-user, ex-user, potential user

User Rates – Light user, medium user, heavy user

Readiness stage – Aware, unaware, informed, interested

 LO1 – Session 6,7,8
Business Market Segmentation

1. Demographic segmentation

Dividing a market into groups based on Industry, Company Size

Industry – What type of industry will by the product? E.g. SAP

Advanced Planner and Optimizer (APO), Business Information Warehouse
(BW), Customer Relationship Management (CRM), Supply Chain Management
(SCM), Supplier Relationship Management (SRM), Human Resource
Management Systems (HRMS), Product Lifecycle Management (PLM), Exchange
Infrastructure (XI), Enterprise Portal (EP) and SAP Knowledge Warehouse
(KW)

What size of company we should focus on?

 LO1 – Session 6,7,8
Business Market Segmentation

2. Operating variables

Dividing a market into groups based on Technology and User

status
Technology

e.g.
GSM Network - Groupe Spécial Mobile (Global System for Mobile Communication)

CDMA – Code Division Multiple Access (Higher bandwidth than data)

What size of company we should focus on?

Small, Medium, Large
 LO1 – Session 6,7,8
Business Market Segmentation

3. Purchasing approaches

Dividing a market into groups based on Purchasing Approaches

Centralized or decentralized purchase

Existing customers only or new customers

Leasing, Service contracts, sealed bidding or outright purchase

How do they purchase – Quality, Price, Service

 LO1 – Session 6,7,8
Business Market Segmentation

4. Company Characteristics

Dividing a market into groups based on personal characteristics of

controlling authorities

Risk taking buyer or risk avoiding buyer

How loyal is the company with earlier suppliers

Companies having similar values and people

 LO1 – Session 6,7,8
Target Consumer
Segment Selection Criteria

Target consumer is formed by multiple segmentation factors. One

or more segments can be chosen for marketing purpose.

-Greatest customer value profitability

-Sustenance over a period of time

 LO1 – Session 6,7,8
Target Marketing Defined

The process of evaluating each market

segment’s attractiveness and selecting
one or more segments to enter and to
concentrate marketing efforts on.
 LO1 – Session 6,7,8
Target Marketing strategies

Undifferentiated or Mass Marketing

-The focus is to target an entire market rather than specific

segment

-Earlier generation marketers made use of it

-Not very popular amongst marketing managers

e.g. Hoardings
 LO1 – Session 6,7,8
Target Marketing strategies

Differentiated Marketing

-Selecting smaller segment of market

-Large scale reach is expected

-Several segments can be selected

-e.g. Surf, Wheel, Rin

 LO1 – Session 6,7,8
Target Marketing strategies

Concentrated (Niche) Marketing

-Popular strategy when resources are limited

-Segments are large and niches are smaller

-Specialization of product possible due to minute knowledge of niche

 LO1 – Session 6,7,8
Target Marketing strategies

Micro Marketing (Local / Individual)

-Tailoring products as per needs of individuals or a small group

e.g. Fashion Designing, Personalized products

 LO1 – Session 6,7,8
Target Marketing strategies

Undifferentiated or Mass Marketing Broad Targeting

Differentiated Marketing

Concentrated (Niche) Marketing

Micro Marketing (Local / Individual)

Narrow Targeting
 LO1 - Market Positioning

Product position is in the mind of a customer and not on the

shelf of a shop.

It is customers perception about the product.

Marketers induce to create this position.

 LO1 - Market Positioning
Choosing a positioning strategy

1. Identify possible competitive advantage

2. If there are more than one choose the correct one to cash on

Make a value proposition

Developing a positioning statement

 LO1 - Market Positioning
Choosing a positioning strategy

3. Make a value proposition

Price

More The Same Less

More More More

More For For For
Benefits

More The Same Less

The Same
The Same
For
Less
Less for
Less
Much
Less
 LO1 - Market Positioning
Choosing a positioning strategy

4. Developing a positioning statement

Positioning Statement More car per car

Muzme star jagaye
Ye dil maange more
Ye pyaas hai badi
Thanda matlab
Taste the thunder
Made FOR India
Jiyo mere laal
Spoil yourself
Accha dikhe Accha likhe
Utterly Butterly delicious
Give me Red
Hungry kya?
Lets Go
More smiles per hour
The Complete Man
 LO1 - Market Positioning
Choosing a positioning strategy

4. Developing a positioning statement

Product Positioning Tata Indica More car per car

Statement
Tata Indigo Spoil yourself
Lux Soap Muzme star jagaye
Lexi pens Accha dikhe Accha
Pepsi Ye dil maange more likhe
Ye pyaas hai badi
Amul Butter Utterly Butterly
Coca cola Thanda matlab Coca delicious
cola
Eveready Give me Red
Thums up Taste the thunder Batteries
Nokia 1100 Made FOR India Dominos Hungry kya?
Brooke Bond Red Jiyo mere laal Maruti Alto Lets Go
Label
TVS Victor More smiles per hour
Raymonds The Complete Man
LO1 - Market Positioning
Market Segmentation

Target Marketing

Market Positioning (Using Differentiation)

 LO1 - Differentiation
Definition

The process of adding a set of meaningful

and valued differences to distinguish the
company’s offerings from competitors’
offerings.
 LO1 - Differentiation
Criteria for good Differentiation

Important – The difference delivers highly valued benefit to sufficient

number of buyers e.g. Sony Sound and Camera systems

Distinctive – The difference should be delivered in a distinctive way e.g.

Pop Tate’s (The Unrestaurant)

Superior – The difference is superior than other ways of obtaining the

benefit e.g. DVD Recorder = +8,000 DVD Player = 3,000 and Writer =
1,400
 LO1 - Differentiation
Criteria for good Differentiation
Continued…….

Preemptive – The difference cannot be easily copied by competitors e.g.

Nokia

Affordable – The difference should be affordable to buyer e.g. McDonalds

(offers burgers just above markets rates)

Profitable – The introduction of difference is profitable to the company e.g.

Delivering Indian food at speed of McDonald’s won’t be profitable
 LO1 - Differentiation
Variables for Differentiation

Product – Design, Features, Performance, Durability, Reliability, After Sales

Service, Style

Services – Service Conditions, Service Delivery, Ordering Ease,

Personnel – Competence, Courtesy, Responsiveness, Communication

Image – Symbols, Media, Events

 LO2 – Session 6,7,8
Establishment of Marketing Communications Objectives
Necessity for Objectives

Clarity of communication between company and Ad / PR agency

Effective planning and decision making

Measurement and evaluations of the results

 LO2 – Session 6,7,8
Establishment of Marketing Communications Objectives
Factors influencing sales
Major Problem:

Carryover effect:-
Monies spent on advertising
do not necessarily have an
immediate impact on sales.
Advertising may create
awareness, interest, and/or
favourable attitudes toward a
brand, but these feelings will
not result in an actual
purchase until the consumer
enters the market for the
product, which may occur
later.
 LO2 – Session 6,7,8
Establishment of Marketing Communications Objectives
Communications Objective
 LO2 – Session 6,7,8

Establishment of Marketing Communications Objectives

Communications Effects Pyramid
 LO2 – Session 6,7,8
Establishment of Marketing Communications Objectives
Factors influencing sales
Russell Colley prepared a report for the Association of National Advertisers
in 1961, titled “Defining Advertising Goals for Measured Advertising Results
(DAGMAR)”. This eventually became logical basis for advertising goals and
objectives against which success or failure should be measured.

Colley proposed that the communications task be based on a hierarchical

model of the communications process with four stages:

Awareness—making the consumer aware - brand & / or company.

Comprehension—developing an understanding about the product & utility.

Conviction—developing a temperament in consumer to buy the product.

Action—getting the consumer to purchase the product.

 LO2 – Session 6,7,8

Establishment of Marketing Communications Objectives

Characteristics of DAGMAR Objectives
 Concrete, Measurable Tasks

 Target Audience

 Benchmark and Degree of Change Sought

 Specified Time Period

 LO2 – Session 6,7,8

Setting Marketing Communications Budget

Budgeting Approaches
Top-Down Budgeting Bottom-Up Budgeting
 LO2 – Session 6,7,8

Setting Marketing Communications Budget

Budgeting Approaches
The Affordable Method
Arbitrary Allocation
Percentage of Sales
Competitive Parity - The managers establish budget amounts by
matching the competition’s percentage-of-sales expenditures.
Return on Investment (ROI) - Advertising and promotions are
considered like investments, like plant and equipment leading to certain
returns.
Objective and Task Method
(1) Defining the communications objectives to be accomplished,
(2) determining the specific strategies and tasks needed to attain
them,
(3) estimating the costs associated with performance of these
strategies and tasks.
The total budget is based on the accumulation of these costs.
 LO4 – Session 6,7,8
Organizing for Marketing Communications
Role of Ad agencies & other Marketing Communication Organizations

Advertiser (Client) Participants in IMC

Advertising agency

Media organizations Direct- Sales

response promotion
agencies agencies

Marketing communications
specialist organizations

Public
Interactive
relations
agencies
firms
Collateral services
 LO4 – Session 6,7,8
Organizing for Marketing Communications
Role of Ad agencies & other Marketing Communication Organizations

 PPT “Session 6,7,8 LO4” for reading and reference

 LO4 – Session 6,7,8
Case Study - McDonalds
History

 Richard and Maurice McDonald began their life as movie set

handymen at Hollywood in the late 1930s
 There father started a small food stand by the name “The
Airdrome”
 In 1940 Richard and Maurice hired an entire building and shifted
the restaurant there and renamed it “McDonald’s Bar-B-Que”
 In 1948 they simplified the menu to few items and closed the
carhop drive-in to speed up the service and concentrate only on
profitable item like hamburger
 Kitchen was setup like an assembly line to maximise efficiency
 In December 1948 it was renamed as “McDonald’s”
 LO4 – Session 6,7,8
Case Study - McDonalds
History

 In 1952 they got a new building designed and the “Golden

Arches” were born
 In 1954 Ray Kroc, seller of Milkshake machines visited the
restaurant and realised that it is a key to success
 Kroc offered them to set up franchisee business, which they were
skeptical about
 He got the rights for setting up franchisee business throughout
the country
 Kroc’s first franchisee opened near Chicago, now redone by
McDonald’s in 1990 and setup a Museum of McD History
 By 1958 there were 34 restaurants, in 1959 Kroc opened 68 more
 LO4 – Session 6,7,8
Case Study - McDonalds
History

 In 1960 McD first undertook nationwide ad campaign “Look for

the Golden Arches” which boosted sales
 In 1961 Kroc bought McD for $2.7 million
 In 1962 “Golden Arches” became Logo of McD
 In 1963 company sold its millionth burger and Ronald McDonald
was also born in the same year
 In 1965 McD went public
 100 shares bought for $2,250 today will be worth over $8 million
 In 1967 first McD outside USA opened in Canada
 In 1968 McD opened it’s 1,000th restaurant
 In 1969 second major campaign “You deserve a break Today”
 In the same year McD reached all 50 states in USA
 LO4 – Session 6,7,8
Case Study - McDonalds
History

 In 1972 McD crossed $1 billion in sales

 Breakfast Menu started in 1972 after Market Research emphasized
it’s need
 By 1976 $3 billion
 By 1987 one fourth of total breakfast eaten outside home was
eaten at McDonalds
 In 1975 first drive-thru opened
 In 1976 McD opened in New Zealand
 In 1979 Happy meal with a toy started
 In 1980 McChicken was introduced
 In 1991 first McD express location started
 LO4 – Session 6,7,8
Case Study - McDonalds
History

 By early 1990s McD was present in 58 nations

 Started in India in 1996
 Company’s first global Campaign started in 2003 from Germany
under the name ‘I am lovin’ it’