Chapter Two

The IMC Planning

Process

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FIGURE 4.1
The IMC Planning Process

Target
Budget
Market

Context
Customers Objectives
Competitors
Communication

Product IMC
Positioning Component

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 Customers
The IMC Planning Process

• Current customers
• Former customers
• Potential new customers
• Competitors’ customers

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 Competition
The IMC Planning Process
• Identify major competitors.
• Identify communication strategies and
tactics of each competitor.

Sources of information
• Primary research
• Secondary data
• Research what others say

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 Communications
The IMC Planning Process

• Company communications
• Industry communications
• Competitor communications

• The 3rd component of the analysis is examining communications. It is important to know

what the company is communicating to customers, channel members, employees and
other stake holders about the brand. A further focus should be on the communications
used in the industry and by competitors. All of this information provides guidance to
marketers in developing an integrated marketing campaign.

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 Target Markets
• Selection of target markets
• Market segmentation approaches
• Product positioning strategies

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Tests to Determine if a Particular
Market Segment Is Viable
• The individuals or businesses within the segment are
homogeneous.
• The market segment is different from the population as a
whole and distinct from other market segments.
• The market segment is large enough to be financially
viable to target with a separate marketing campaign.
• The market segment must be reachable through some
type of media or marketing communications method.

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FIGURE 4.2
Methods of Segmenting Consumer Markets

• Demographics
• Psychographics
• Generations
• Geographic
• Geodemographics
• Benefits
• Usage

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 Gender
Segments Based on Demographics

• Gender based products

• Gender difference in communications
• Female consumers
• Control 66
66%% of spending ($
($12
12 trillion)
• Involved in purchasing high-
high-priced electronics (90%)
90%)
• Deal with financial advisors (90%)
90%)
• Buy and sell stocks (80%)
80%)
• Household’s primary accountant (70%) 70%)

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 Age
Segments Based on Demographics
• Target specific age group
• Combine with other demographic variables
• Children attractive group
• Spend $30
$30 billion
• Influence $500
$500 billion

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Psychographic Segmentation

• Describe consumers
• AIO measures
• Activities
• Interests
• Opinions
• Combined with demographic profiles

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 VALS 2
Psychographic Segmentation
• Innovators – successful, sophisticated – upscale products
• Thinkers – educated, conservative, practical – durability, value
• Achievers – goal
goal--oriented, conservative, career, and family

• Experiencers – young, enthusiastic, impulsive, fashion, social

• Believers – conservative, conventional, traditional
• Strivers – trendy, fun-
fun-loving, peers important

• Makers – self
self--sufficient, respect authority, not materialistic

• Survivors – safety, security, focus on needs, price

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TAB LE 4 . 1
Characteristics of Generation Segments

Segment Year of Birth Characteristics

Generation Y 1978-2992 Clothes, autos, college, televisions, stereos
Generation X 1965-1977 Focus family and children
Younger boomers 1954-1964 Focus family and home
Older boomers 1945-1953 Upgrade home, children’s education, luxury
items
Seniors Up to 1945 Fixed income, health care

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Benefit Segmentation

Fitness Industry
• Winners
• Dieters
• Self
Self--improvers

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Usage Segmentation
• Usage or purchase history
• Create clusters
• Target specific clusters
• Create marketing programs for each cluster
• Measure growth and migration

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 Product Positioning
• Is the perception created in the
consumer’s mind regarding the nature of
the company and its products relative to
the competition?
• Positioning is created by factors such as
product quality, prices, distribution, image,
and marketing communications.

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FIGURE 4.3
Product Positioning Strategies

• Product Attributes
• Competitors
• Use or application
• Price/quality
• Product user
• Product class
• Cultural symbol

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Elements of Positioning
• Never completely fixed
• Applies to business-to-business also
• International positioning important
• Critical component of image and
brand management

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 Marketing
Communications Objectives
Target
Organization Markets
Positioning
Context

Communications
Objectives

Budget IMC Components

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FIGURE 4.7
Communication Objectives

 Develop brand awareness

 Increase category demand
 Change customer beliefs and attitudes
 Enhance purchase actions
 Encourage repeat purchases
 Build customer traffic
 Enhance firm image
 Increase market share
 Increase sales
 Reinforce purchase decisions

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• Increase good/service category demand
• Build customer traffic
• Increase market share
• Reinforce purchase decisions

IMC Dr. Nariman Ammar

4-21
 Enhance firm
image

IMC Dr. Nariman Ammar

4-22
 Marketing
Communications Budget
• Budgets based on
• communication objectives
• marketing objectives
• Budgets vary from consumer to B B--to
to--B markets
• Unrealistic assumption to assume direct
relationship between advertising and sales

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Factors Impacting Relationship
Between Promotions and Sales

• The goal of the promotion

• Threshold effects
• Carryover effects
• Wear
Wear--out effects
• Decay effects
• Random events

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• A number of factors influence the relationship between promotions
and sales. The goal of the promotion may be to increase brand
awareness or build brand image. If so, there will be less impact on
sales than with some of the other objectives. Threshold effects are
present at the point where the advertising or communications begins
to affect consumer responses in a positive direction. Carryover
effects refer to an ads message being remembered or carried over
to the time when the product is needed and the consumer is thinking
about the purchase. Wear
Wear--out effects happen when an ad or
message becomes old and stale and the consumer no longer pays
attention to it. Decay effects occur when a company quits
advertising and the brand name begins to fade in people’s
memories. Sales can also be impacted by just random events, such
as a major snow storm.

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4-25
FIGURE 4. 8
A Sale-Response Function Curve Combined with the
Downward Response Curve and Marginal Analysis

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FIGURE 4.9
A Decay Effects Model

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FIGURE 4 . 10
Methods of Determining Marketing Communication Budgets

• Percentage of sales
• Meet-
Meet-the
the--competition
• “What we can afford”
• Objective and task
• Payout planning
• Quantitative models

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Types of Budgets
• Percentage of Sales
• Sales of current year, or next year
• Simple
• Tends to work in the opposite direction
• Does not meet special needs
• Meet the competition
• Seeks to prevent market share loss
• Highly competitive markets
• Dollars may not be spent efficiently
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Types of Budgets
• What we can afford
• Set after all other items budgeted
• Not understand importance of marketing
• Objective and task
• Budgets determined by objectives
• Best method of budgeting
• Used by 50% of firms

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 Types of Budgets
• Payout planning
• Ratio—advertising to sales or market share
• Larger percent at product launch
• Lower percent when brand established
• Based on threshold effect
• Quantitative models
• Computer simulations
• Develop models based on historical data

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