Shimp (2003): “IMC is a communications process that entails the planning, creation, integration, and implementation of diverse forms of marketing communications (advertisements, sales promotions, publicity releases, events, etc.) that are delivered over time to a brand’s targeted customers and prospects.”
IMC’s Status as a Theory
Some academics (Cornelissen & Lock, 2000) have questioned whether the IMC movement is just another management fad that lacks theoretical content and rigor. But, evidence to the contrary (see Schultz & Kitchen, 1997) suggests that the IMC approach is proving to be a permanent change that offers significant value to marketers and organisations in a rapidly changing communications environment.
Changes that Led to IMC
The marketing environment has developed in the last number of years and the move to IMC reflects an adaption by marketers to a changing communications environment (Lannon, 1996), particularly with respect to media, consumers and technology.
Media
To begin with, mass markets have fragmented due to the continuous explosion of the media mix (Evans & Moutinho, 1999). The once-simple blend of television, print and radio has mushroomed into today’s broad spectrum of electronic options, such as cable television and the Internet. Consequently, the marketing environment is overloaded with commercial message clutter, which has caused a reduction in the impact and credibility of organizations’ marketing message(s) (Kliatchko, 2001). In effect, this has led to the dissemination of formerly concentrated audiences across this spectrum, making it almost impossible to profile and reach a united block of consumers with identical media consumption habits (Shimp, 2003). Moreover, media costs have soared, generating pressure on an organizations’ communications budget and its accountability with respect to its’ return-on-investments and bottom line (Kliatchko, 2001).
These trends have made it both undesirable, and effectively impossible, to reach a given target audience with conventional mass-marketing tactics and has stimulated the search for creating new ways of dealing with fragmented markets (Schusterman, 2002).
Consumers
Second, focus and power has shifted from brands to consumers (Palmer, 2002). With the proliferation of advanced technology such as the Internet to households, consumers are now better informed, more knowledgeable, and more discerning about products/services (Peppers & Rogers, 1995), and have gained power in their negotiations with suppliers through their ability to compare brands (Webster, 1992). The wise saying ‘knowledge is power’ (Evans & Moutinho, 1999) seems to hold true as consumers today are in control. No longer content to accept products/services created for them, consumers increasingly insist on personalizing (or at least influencing) the products/services themselves, in their own images, for their unique needs. This demand for personalization underscores the need for marketers to tailor their marketing efforts so as to reach the desired consumers across the myriad of media channels (Sirgy, 1998).
Technology
Finally, the development of advanced technology has diminished the competitive advantages historically enjoyed by companies. The boundaries that once existed between companies are now blurred. With the development of the Internet, competitors are able to enter and leave markets at will and at relatively low cost (Croix et al, 2002). Webster (1992) suggests that companies need more than just a better product/service to compete; as, the homogenization of products/services obliges firms to differentiate their offerings through other means (Egan, 2001). Berry (1995) and Gronoos (1995) agree that in order to survive such a competitive landscape, organizations must move closer to their customers and suppliers, by focusing their efforts towards relationship building as well as, customer and supplier retention.
As never before, the burden is on the brand to prove its worth, every minute, every day. On the bright side, the improvements in computer and information technology, coupled with the affordability of new database technology, have provided the ability for organizations to reach smaller market segments with tailored messages (Schusterman, 2002).
Key Features of Integrated Marketing Communications (IMC)
IMC + Target Audiences
An IMC campaign acknowledges that every organisation has more than one target or stakeholder audience with whom it must communicate – from employees, suppliers, intermediaries, media, general public, government officials, etc – in order to not only get the product/service to the end consumer (Arens, 1996 cited in Boyd et al, 1998; Rossiter & Percy, 1997; Shimp, 2003). This is particularly true for the AJC, who must communicate with a variety of audiences – including, Race Club Committee Members, Race Club Employees, Race Club Members, Occasional Racetrack Patrons, Non-Racetrack Patrons, Local Community, Food/Beverage Suppliers, Racehorse Breeders, Owners, Trainers, Stablehands, Jockeys, Registered Bookmakers, TAB, Sponsors, and the Media, to name a few – in order to get their product to the end consumer ().
Further, each of these audiences has different message needs (Moriarty, 1997). For example, if the AJC decides to announce a race meeting, then, Race Club Employees must be informed of their employment timetable and agenda for the day. The media, on the other hand, will need to be contacted in order to secure advertising as well as broadcasting arrangements. Similarly, the AJC will have separate communication objectives for Food/Beverage Suppliers, Racehorse Owners, Sponsors, and Local Community etc. IMC ensures that each audience is reached in the most effective and efficient manner (Moriarty, 1997).
IMC + Relationships
For organizations in the sports/entertainment industry, competition for share of consumers’ leisure time is intensifying. To be successful, sporting organizations – specifically the AJC – require the public to attend, participate, and become involved with their club – not other sporting/entertainment activities.
Since the cost of acquiring a new customer is typically five times higher than the cost of retaining one (Aijo, 1996; Palmer, 2002; Gummesson, 2002), success in today’s business world requires relationship building between the brand and customer and is one of the central themes of an IMC campaign (Kotler et al, 1998; Stone et al, 1996; Shimp, 2003). In addition, Shimp (2003) suggests that “Relationships between the brand and customer are nurtured by creating brand experiences that make positive and lasting impressions.”
For the AJC, this means that customers of the horse racing experience must not be considered as short term participants but rather should be concentrated on to make long term repeat purchases, hence the development of a relationship. In other words, the customer that attends one race meeting has to be thought of as a customer who has the potential to attend many more race meetings. Thus, provided the interaction and experience with the AJC and the sporting event was favorable, the spectator is far more
likely to engage in repeat purchase behavior, which can potentially enhance brand awareness and loyalty (Parker, 2000).
Additionally, IMC recognizes the necessity and profitability of building closer relationships with select suppliers and other organizations. By creating strategic alliances, joint ventures, partnerships and networks, the AJC can improve the whole value chain and thus enhance their competitive position (Spekman, 1988, cited in Sheth & Parvatiyar, 1995). Further, IMCs goal in establishing these relationships is to continue to develop the brand outside the company walls in order to reach customers through multiple points of contact.
Schultz (1993) asserts that “while relationship marketing may be the buzzword of the 1990’s, IMC makes relationship marketing possible.”
IMC + Synergy
Synergy implies the working together of various elements into a unified whole; in this case, the working together of different marketing disciplines to form a cohesive marketing thrust. IMC creates many benefits by taking advantage of synergies. For example,
* All of the organizations’ communication messages project a consistent, unified image. This involves a centralized messaging function so that everything a company says and does communicates a common theme and positioning (Belch & Belch, 2004). When customers have to resolve differences between messages, it weakens their confidence in the company. Consistency in slogans, appearance, and other cues serves to strengthen consumer familiarity with the company. Further, since customer and stakeholder audiences do not distinguish between messages intended for them and those intended for other audiences, IMC serves as a mechanism for checking for message conflict (Moriarty, 1997).
For example; The San Miguel Autumn Carnival, held over four days (Derby Day, Doncaster Day, Oaks Day and, Cup Day), is the crown jewel of the AJCs racing season. The carnival features Australia’s record prize pool totalling $8 million (). Some of the highlights of this carnival are the AJCs Lawn Parties on each of these days, featuring marquees and entertainment for pre-purchased ticket holders. If the AJC told its current race club members that the four-day Autumn Carnival is ‘Australia’s richest and most exclusive event of the year’, and at the same time, the local community are hearing that the Lawn Parties are going to be ‘the best deal in town’, then audiences are receiving conflicting messages. One says this event is going to be expensive and for the elite, whereas the other says the event is going to be inexpensive and for the masses. Since stakeholders overlap, it is very likely that some of the local community are also members of the AJC and these conflicting messages will be sent to the same person and will result in confusion and dissonance. IMC is able to manage these issues through synergy (Moriarty, 1997).
* IMC is an effort to provide organisations with optimum value in terms of reach, impact and costs (Businessline, 1998). IMC creates a feeling of continuous linkages with target audiences. As different media are used in conjunction with one another, consumers may relate to the brand more often in terms of brand recall and recognition (Reid, 2002). In addition, synergy means that the AJCs various messages, if coordinated and consistent, add up to communications with more impact than when the tools of promotion are planned and executed independently (Pickton & Broderick, 1995). This theory also holds when planning strategic alliances (Semas, 1999). For example, the AJCs impact will be greater if it aligns itself with a corporate partner whose needs and resources complement their own. Kitchen and Schultz (1999) confirm this theory and state that “providing consistency in method and approach, maximises the communications impact and, therefore, provides a more effective and cost-efficient approach to marketing communications.” Lastly, the synergy that results from genuine integration across multiple media leads to cost savings in terms of marketing dollars saved as well as in the reduction of time spent planning and coordinating separate promotional campaigns (Novelli, 1990).
* IMC emphasizes the benefit of harnessing synergy across multiple media to building brand equity for products/services (Naik & Raman, 2003). Systematic, integrated and relevant messages, communicated on a consistent basis can enhance the AJCs brand’s equity (Shimp, 2003). An organisation with positive brand equity has the potential benefits of increased brand loyalty as well as being less vulnerable to competitor’s marketing actions (Novelli, 1990).
IMC + Marketing Mix
IMC can be seen as a profitable marketing campaign as it coordinates and communicates each part of an organizations’ marketing mix (Burnett & Moriarty, 1998). Today, organizations’ are striving to talk directly to the individual customer or prospect, rather than the end user. The fundamental tenets of marketing have altered to a large degree, from the 1960s' four-Ps (Product, Price, Place and Promotion) to the 1990s' four-Cs (Consumer, Cost, Convenience and Communication) (Egan, 2001). However, the four-Cs is not designed to replace, but rather to refocus, redirect and examine the true market engine; the customer (Reich, 1998).
(1) Instead of Product, Focus on Consumer
Instead of just products/services, IMC focuses on customer’s needs and wants (Kotler et al, 1998). For the AJC, the potential benefits that consumers can derive from the horse racing experience include: an afternoon/evening of entertainment, an opportunity for spectator involvement in a competitive sporting activity, an opportunity for legally sanctioned wagering, possibilities for social interaction with others of like interests, dining facilities, appreciation of thoroughbred racing etc. Although each of these benefits can be derived from other activities, in combination they define the unique appeal and to some extent, value, of the horse racing experience.
(2) Instead of Price, Focus on Cost to the Consumer
Instead of pricing the product/service to make a profit, IMC takes into account what it costs a customer to own/use a product/service (Carson, 1998) For example, the cost of ‘a day at the races’ not only includes the price of entry at the gate of the racetrack or the price into the members stand, but also the ‘hidden’ costs such as the time it took to find an outfit (or a hat to wear) on the day, or the amount of money required to spend on food, drinks and/or wagering.
(3) Instead of Place, Focus on Convenience for the Consumer
Instead of how easy it is for companies to distribute the product/service, IMC focuses on how easy it is for customers to obtain/buy the product/service (Kotler et al, 1998). For the AJC, admission is exceptionally convenient with an entry fee paid at the front gate on the day of the race meeting. Having said that, a member’s stand ticket is a little less convenient to purchase for those who are not members and do not know any existing members.
(4) Instead of Promotion, Focus on Two-Way Communication with the Consumer
Instead of one-way communication of ‘telling and selling’, IMC focuses on two-way communication with customers – ‘listening and learning’ (Kotler et al, 1998). For example, in order to maintain and build relationships and/or obtain certain information about customers such as how they perceive their costs or the value of the horse racing experience is by communicating with them, which involves a two-way dialogue in some way, even if it is a survey.
IMC + Outside-In Planning
IMC is driven by an outside-in approach to marketing communication (Schultz, 1994). Outside-in thinking is integral to IMC as it begins with an understanding of the needs, wants and behavior(s) of the target audiences based on consumer feedback, and works backwards to the brand (Shimp, 2003). Under this approach, the target audience is the starting point, rather than top management; as promotional planners study the various media the target audiences’ use, and when the marketer’s messages are likely to be the most relevant and receptive for the target audiences (Schultz, 1993b).
According to Schultz (1993a), “IMC considers all sources of brand or company contacts which a customer or prospect has with the product or service as potential delivery channels for future messages.” Additionally, IMC acknowledges that every aspect of an organisation communicates something to its target audiences; thus, every action of an organisation is a marketing action as well (Schusterman, 2002). This statement implies that IMC is not solely limited to the marketing and promotional departments of the AJC but concerns itself with every aspect of business, from top management down to secretarial and support staff. All people within the AJC, along with the product/service it offers, are responsible for delivering
messages to their target audiences. These indirect messages are among those that an IMC campaign seeks to integrate (Schusterman, 2002).
Correctly implemented, the IMC program is a continuous cycle of gathering data and implementing response-generating marketing communications which are based on previously gathered consumer data (Schultz et al, 1993). With the advent of sophisticated marketing databases (Vavra, 1994) the AJC is better equipped then ever before to implement and practice an outside-in approach to marketing communications. Maintaining an efficient customer database will provide the AJC with comprehensive information about their consumers and prospects buying habits and will also assist in building and maintaining relationships with their target audiences (Evans & Moutinho, 1999).
Lastly, an outside-in approach to marketing communications (derived from consumer need), can build perceived value into the AJCs brand, and separate it from the competition in the minds of their customers and prospects (Schultz et al, 1993).
IMC + Integration
Integration of marketing communication involves integration of all different stages. Sirgy (1998) suggests seven levels of integration that an organization goes through in order to achieve fully integrated communications. These levels are:
(1) Awareness of the Need for Integration
Firstly, Sirgy (1998) suggests that “IMC can be simply marketers’ awareness, or recognition of the need to integrate marketing communications.” For the AJC, this awareness and/or recognition comes from changes in the business environment – such as the media, technology and consumers (discussed earlier) – and the benefits that IMC can offer in such a challenging marketing landscape.
(2) Image Integration
Image integration ensures a consistent brand image is conveyed in terms of message and media consistency (Sirgy, 1998). For example, the AJC may want an image of ‘Sydney’s premiere racecourse and entertainment venue where social interaction, dressing up, personal involvement, appreciation of thoroughbred racing are the fundamental ingredients of the experience.’ Thus, this image must be synergistic in all communication mediums to all target audiences.
(3) Functional Integration
Functional integration requires the grouping of all marketing communication activities into one department/ branch (Sirgy, 1998). The aim of IMC is to provide a consistent message across all communication mediums, which would therefore require meticulous coordination. The AJC employs several external agencies to assist
them in various aspects of marketing communications. However, as Cleland (1995, cited in Shimp, 2003, pg. 16) pointed out, providing a consistent message whilst using several external agencies would be extremely complicated especially when agencies operate separately of one another. Thus, in order to keep all marketing communications consistent and synergic with one another, the AJC might attempt to find a single agency to handle all elements of a particular campaign. If this is not viable, Schultz et al (1993, cited in Shimp, 2003, pg. 16) suggests that the organisation “…might need to create a key organizational position responsible for all forms of marketing communication…” with whom the external agencies can liaison with.
Further, the dynamics of moving to IMC often requires changes in the organisation of the business; and, this change will generally be met by some resistance. Issues such as information sharing, leadership, infringement issues and management integrity can arise (Shimp, 2003). Shimp (2003, pg. 16), states that the “…successful practice of IMC requires top-level organizational commitment.” This requires organizational policy decisions; the fostering of teamwork including close coordination between departments and cross-functional meetings to develop strategy as well as camaraderie and understanding between departments; and offering rewards or incentives to departments or individuals practicing and achieving results. (PR News, 2002)
(4) Coordinated Integration
Coordinated integration refers to the process of selecting and implementing the right mix of marketing communications tools – advertising, sales promotions, direct marketing, personal selling, public relations etc – in order to meet specified marketing goals, such as sales and market share (Sirgy, 1998). For example, the AJC may decide they want to increase overall race meeting attendance by 5 percent. With this marketing goal in mind, various communications tools will be chosen and coordinated, with the objective of increasing target audience participation, and thus will contribute to profit (Sirgy, 1998).
(5) Consumer-based Integration
Consumer-based integration involves understanding customers’ needs and wants, and effectively positioning the product to meet these needs and wants (Sirgy, 1998). The AJC, for example, may research customers and prospects who have children (using a sophisticated marketing database) and find out that these customers find it difficult to come to a race meeting because they have children. Thus, the AJC may decide to position their brand for this selected customer audience by linking this customer need with certain entertainment activities for children at the racecourse such as pony rides, jumping castles, free sausage sizzles, and possibly childcare services.
(6) Stakeholder-based Integration
Stakeholder-based integration necessitates that organizations’ must also communicate with internal and external audiences of the business (Sirgy, 1998). This feature was discussed earlier in the report under the heading of IMC + Target Audiences.
(7) Relationship Management Integration
Finally, the development of IMC must consider developing relationships with not only their internal and external customers but all parties related to the organisation. Sirgy (1998) states that to enhance these relationships, “the firm has to develop management strategies within each functional unit (manufacturing, engineering and R&D, marketing, finance, accounting, human resources etc) that reflect coordination among the various functional units.” This feature was also discussed earlier in this report under the heading of IMC + Relationships.
In addition, Schultz (1997) endorses the value of integration across the business for the following reasons:
(1) Technology
The impact of advanced technology has changed the marketing and communications landscape forever and has driven “the need to integrate, consolidate, and merge existing internal data and enhance that with external data” (Schultz, 1997).
(2) The Interactive Marketplace
The Internet and World Wide Web are only previews into the marketplace of the future. Developments in new forms of electronic commerce and communication, combined with the effects of consumer access to information, have made integration across the organisation paramount (Schultz, 1997).
(3) Financial Requirements
Top management are increasingly demanding accountability, and marketers can expect the same return-on-investment demands placed on manufacturing, human resources, operations etc. Schultz (1997) suggests that “to provide proper analysis of marketing and communication investments, measurable integrated systems will be necessary.”
(4) Global Brands
Globalization has increased the absolute level of competition present in most marketplaces, and this is not expected to cease. Today, marketers must compete with organizations around the world, regardless of their operational reach. Thus, Schultz (1997) suggests that “everything must work together, fit together, and appear together for the consumer.”
Conclusion
The key in marketing today is integration. Integrating the AJCs marketing communications is simply a process of coordinating several marketing tools that in many cases are already in place. They just need to be integrated.
Definitions of IMC reflect the need for a more holistic, professional, and integrated approach to the management of marketing communications. It is clear that IMC is not a management fad, but is a fundamental and marked shift in the thinking and practice of marketing communications.
The report discussed six key features of IMC, which provide the rationale for the adoption of such a campaign by the Australian Jockey Club (AJC). IMC acknowledges that the organisation has more than one target or stakeholder audience with whom it must communicate – and is able to reach these audiences more efficiently and effectively. This is important since the AJC must communicate with many stakeholders in organising its race meetings. IMC also recognises the necessity and profitability of building closer relationships with these target audiences and stakeholders. In doing this, the AJC can potentially enhance brand awareness and loyalty amongst its customers, and can improve the whole value chain creating a competitive advantage.
Additionally, IMC creates benefits for the AJC by taking advantage of synergies. These include: maintaining a consistent, unified brand image; reducing message conflict and duplication; providing optimum value in terms of reach, impact and economic saving; building brand equity thereby enhancing customer loyalty and reducing competitors’ marketing actions.
Further, IMC coordinates and communicates each part of the marketing mix by combining the 1960s four-Ps (Product, Price, Place, and Promotion) with the 1990s four-Cs (Consumer, Cost, Convenience, and Communication). In doing this, the AJCs marketing communications will effectively reach the target audience thereby building profitable customer relationships and brand name awareness.
Moreover, IMC is driven by an outside-in approach to marketing communications by starting with an understanding of the target customers and recognising that everyone associated with the organisation is responsible for communicating with the target audiences. This outside-in approach can build perceived value into the AJCs brand, and separate it from the competition in the minds of their customers and prospects
Lastly, IMC can occur in different forms at different levels of development. Seven levels of development were identified for the AJC including awareness of the need for integration, image integration, functional integration, coordinated integration, consumer-based integration, stakeholder-based integration and relationship management integration.
By adopting the new mindset and principles of IMC, the AJC can craft the right balance of media investments – quickly, profitably and continuously. The net effect is that the AJCs brand communications achieve their desired objectives despite the fragmented media landscape, radical consumer change and technological advancements.
References
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Parker, R. 2000, Problems in the marketing of spectator sports. The Mid-Atlantic Journal of Business, 36 (1), pg 37.
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Peppers, D. and Rogers, M. 1995, A new marketing paradigm: Share of customer, not market share. Planning Review, 23(2), pg 14.
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Pickton, D. and Hartley, B. 1998, Measuring integration: an assessment of the quality of integrated marketing communications. Internal Journal of Advertising, 17 (4), pg 447.
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Reid, M. 2002, Building strong brands through the management of integrated marketing communications. International Journal of Wine Marketing, 14 (3), pg 37.
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Reich, K. 1998, IMC: Through the looking glass of the new millennium. Communication World, 15 (9), pg 26.
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Semas, J.H. 1999, Winning insights. Association Management, 51 (5), pg 49.
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Schultz, D.E. 1993b, Integration helps you plan communications from outside-in. Marketing News, 27 (6), pg 12.
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Schultz, D.E. 1994, Traditional marketers have become obsolete. Marketing News, 28 (12), pg 11.
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Schultz, D.E. 1997, Integration is critical for success in 21st century. Marketing News, 31 (19), pg 26.
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Schultz, D.E. and Kitchen, P.J. 1997, Integrated marketing communications in U.S. advertising agencies: an exploratory study. Journal of Advertising Research, 37 (5), pg 7.
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Schusterman, K. 2002, How to create a successful integrated marketing campaign. Franchising World, 34(8), pg 12.
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Sheth, J. and Parvatiyar, A. 1995, The evolution of relationship marketing. International Business Review, 4(4), pg 397.
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Stone, M., Woodcock, N., and Wilson, M. 1996, Managing the change from marketing planning to customer relationship management. Long Range Planning, 29(5), pg 675.
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Vavra, T.G.1994, The database marketing imperative. Marketing Management, 2(1), pp. 47-57.
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Webster, Jr, F.E. 1992, The changing role of marketing in the corporation. Journal of Marketing, 56(4), pp. 1-17
Magazines
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November, 5, 1998. Synerging marketing communication. Businessline, Islamabad.
Websites
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Australian Bureau of Statistics:
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Australian Jockey Club:
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NSW Thoroughbred Racing Club:
Student Name: Laura Hughes
Student Number: 94083572 Page