Luận văn thạc sĩ further understanding on integrated marketing communication imc essential implications to plan an effective imc campaign in vietnam automobile industry

of “Further understanding on Integrated Marketing Communication TMC-Essential implications to plan an effective IMC campaign in Vietnam automobile industry” expected to ease up above q

DẠI HỌC QUỐC GIÁ HÀ NỘI TRƯỜNG ĐẠI HỌC KINH TẾ

NGUYEN VAN VUQNG

FURTHER UNDERSTANDING ON INTEGRATED MARKETING COMMUNICATION (IMC)-ESSENTIAL

IMPLICATIONS TO PLAN AN EFFECTIVE IMC CAMPAIGN IN VIETNAM AUTOMOBLE INDUSTRY

Chuyên ngành: Quản trị kinh doanh

LUAN VAN TIIAC $I QUAN TRI KINI DOAXH

NGƯỜI HƯỚNG ĐẪN KHOA HỌC: TS Vũ Huy Thông

'Th.S Nguyễn Việt Anh

Hà Nội - 2007

TABLE OF CONTEN

1.2.3, The concept af Integrated Marketing Cowneunication - „24

41.2.5, Major rensons leading te the revalution of TBC 25

1.3 APPROACITOP TMCIN AUTOMORILE, 26

13.2, History af Marketing Communication in Automabite - „26 1.4 THEIMC PLANING PROCESS MODEL

LAL Identifying the target andlence

% Soaree ne a

14.4, Selecting Communication Chanuels

Directed communicution channel (Personul communication phương, a3 '#_- Trdlireet camannnicafio rhanuel (Non-personat caemmunizatian chanwels) ”

14.8 Manage the Integrated Marketing Communications Process a7

‘Sales Promotion type and sales promotien tools

Steps in Sales Promotion Program Development

% Steps in Developing » Direct-Maid Campaign: 4

15.5 Public Relation and Publicity

% Publicity and Public Relation +

1.6.6, Distribution Comp o.oo nice sie

1.7, CONCEPTUALIZATION AND FRAME OF REFERANCE

E72 COMCep BME ALOR esse nin

CITAPTER 3 FINDING AND IMPLICATION

3.1 IMPLICATIONS FOR IMC PLANS OF CM DAEWOD VIETNAM AND FORD VIETNAM 69 3.1L Implications for LMC Planning Processes of GM Daewoo

Vietnam and Ford Vietnam

Implications for existing IMC campaigns of Vietnam automobile ventures

% Demography As A Matter of Cowwmanlcafion

3.1.3, Examples of IMC impacts

'% amexample of IMC impact Ford Vietnam

% — Amexample of IMC Impact GM Daewoo Vietnam

.

Perception of IMC Renefit

Organizations’ (Clients’) perception of IMC benefit

‘The agency's perception of IMC Benefit - - Audiences’ perception of IMC benefit

CONCLUSION

LIST OF REFERENCES

APPENDIX

APPENDIX L, ADVERUISING'S HISTORY AND EVOLUTION

APPENDIX 2, Vierwam Avromoni.y INpusrry

APPENDIX 3 GM Rarwoo’s MEDIA PLACEMENT SCHEDULE

APPENDIX 4 VreTWaM ANTOMOnIT.® PROMOTIONAT ACTIVITES

APPENDIX S INTERVIEW QuESTIONS-IMC PLaNNine Process,

APPENDIX 6, ConsuMEr’s INTERVIEW QUESTION#

APPENDIX 7, A SUCCESSEUL IMC CAMPAIGR 0

APPENDIX 8 LIST OF INTERVIEWEES (HaNo1 Np HOCHIMINH CTLY-EXTRACLEP),

„102 1H T3

118

123

130 131

ADV(S) OR AD(S) ADVERTISING(S)

Exhibil 1 The IMC process model 21

Exhibit 2 he promotional mix model 22

Exhibil 4 Product life cycts and promation tix stralegy 36

Exhibil 6 GM Dacwao's IMC Planing Process 35

Exhibi 8 GM Dacwao's Promotional Stratcgics 36

Exhibil 9 Ford Victarn's TMIC Plaming Process 38

Exhibit 11 Comparison of Kottler’s and GM Daewoo’s IMC Model 6

Exhibit 13, Comparison of Kottler’s and GM Daewoo's IMC Model 6

Exhibit 14, Comparison of GM Dacwoo’s and Ford’s IMC Model o

Exhibit 15 IMC Planning Models Adjusted for GM Daewoo and Ford 7

Exhibit 16-26 Automobile Consumer Survey on IMC T4

Exhibit 28 Top ten adverttsing brands, 2004 80

Exhibit 29 Customer view of GM DAEWOO (1) 8g

Exhibit 31 Client’s Perceived Benefit of IMC 92

Exhibit 32 Agencies Beliefs about IMC Benefit 93

Exhibit 33 IMC Planning Process Proposed for Automobile Ventures 95

INTRODUCTION

1 NECESSITY OF THE THESIS:

Compared with other industries, Vietnam automobile industry is a very fresh one, only over ten-year since foreign ventures jumped into the market Despite of the

fact thai current market size is stall and ccrlain disadvantages, Vietnam aulomobile

market is promising; the industry is predicted to be one of the key industries of the

nation in near future Beside familiar ventures, such as GM Daewoo, BMV,

Mercedes, Ford, and Toyota that operate as different, legal economic entiliss the

market also attracts emerge domestic assemblers

Even though ventures are leading automobile manufactures around the world,

experienced ou different srarkets, they now imecl certain difficullics in Vietnarn-the

market is described as a particular environment How to plan an effective marketing

communicational campaign? How to communicate with consumer in most effective

way? Ts current promotional program spproprimle? These always matler lo

automobile marketers

This thesis was written with the subject of “Further understanding on Integrated

Marketing Communication (TMC)-Essential implications to plan an effective

IMC campaign in Vietnam automobile industry” expected to ease up above questions The thesis parlly fulfills requirements for the degree of master of

business administration

2, PURPOSE

The main purposes of this thesis are: “Further Understanding on Integrated

Marketing Communication” and the exploration of how Integrated Marketing Communication campaigns have been planned and developed by Vietnam

Automobile ventures From analysis and comparisons, findings and implications are

drawn, these can be references for automobile marketers and marketing

communication agencies as implications to plan an effective integrated marketing commurucalion campaigns

3 KEY RESEARCH AREA

‘This thesis presents basic concepts of Integrated Marketing Communication Especially, the thesis focuses on two automobile ventures, GM Daewoo Vietnam

and Ford Vietnam, which have been chosen as two case studies To affiliate the

studying purpose, it is also essential to see consumer's perception of automobile

IMC campaigns as well as to take a look on Viemam Advertising Industry

Major data in this thesis were collected in the first half of 2005

4 METIIODOLOGY

a Research purpose

Generally, duc to studying purposes, there are three correspond types of techniques

ta carry out a research: Exploratory, Descriptive and Causal’

## Exploralory is especially necessary when don’t understand the issuc at band

very well or there is no clear theory for it Exploratory helps develop ideas,

issues, and possible answers to questions and finally it defines constructs of

interest, The aim of exploratory is to acquire basic knowledge within the problem

+ Descriptive research simply describes, but does not directly link outcomes to particular causes, for oxample 95 percent of online consumers are satisfied with their online shopping experiences

Causal research seeks to relate specific outcomes to the variables that are causal

of the outcomes Three following conditions must be satisfied for a causal research:

» One variable must precede the other in time

> Altemalive explanations (or findings should be ruled out

>» Nomic necessity — The “causal link”: “Do we have reason to believe that the

relationship makes sense”

Duc to the fact that I do not intend to explain reasons behind IMC planning

decisions of Automobile manufactures; instead of that, 1 focus on desenbing haw

‘ Causal sometime called Explanatory

IMC is plamed in some Victnam automobile finns and used it as material to

compare with marketing theories and from that general findings and implications

drawn out As the result, descriptive research is mainly in use This is the

appropriate way to further understand on IMC as presented in introducing page:

“Further understanding on Integrated Marketing Communication (IMC)- Essential implications to plan an effective IMC campaign in Vietnam

automobile industry”

b Research Approach

There are Iwo ways lo address a problem wher conducting a research, they are

qualitative research and quantitative rescarch Accordmg to Yin, the focus of

qualitative research is “not numbers but on wards and observatians, stories, visual

portrayals, meanmglul characterizalions, interpretations and olher expressive descriptions” On the other hand, quantitative research usually used to determine the

quantitative or extension of some phenomena with numbers Qualitative research

uses a voded identifier Lo assist in checking and cleansing the dala sel Codec

responses logically, include codes for non- responses, refusal to answer, and non- applicable

Qualitative “purists” argue that thei: research may be less “precise,” but it increases understanding, allows for complexity and depth

In response, quantitative “purists” find qualitative research to be “fuzzy” and

“subjective”, (Wolfinbargex) In this thesis 1 used both quantitative method and qualitative method, they can support each other to affiliate the researching purpose

and form a data set or grid

Archival Analysis is based on secondary data collected by someone else for other purpose The problem with Archival Analysis is that the data used for other purpose However, Archival Analysis is proven if current research purpose close with previous research purpose or current researcher fairly understand about the previous research

¢ History Analysis is most alike with Archival Analysis because both of them are used historical data but History Analysis use data collected with the same

purpose by some one else The problem with History Analysis is timely issue

aud concerns about the reliability of the research

% For Archival Analysis and History Analysis, there are necessary questions used

to evaluale secondary dala are:

>» Who collected it?

> Why was it collected?

> How was the dala collected?

> What data were collected?

When was the data collected?

vw De multiple sources indicate the same conclusions?

% Case Study is often used when the research less involves in complex objectives and phenomena Case Study let researcher easy to compare among cases to find out the most appropriate solution for the problem However, if the purpose of the research related to a larger field which involves many variables and objects

in differem areas, case study is no longer proven because a case study

considered as a single observation

According to the research purpose, to further understand on IMC Planning Process

im a typical industry like Vietwarn Aulomobile Industry, the appropriate siralegies

for the research are: Case Study and Archival Analysis since the problem addressed

is not complicated and there are only over ten automobile ventures in Vietnam In

addition to thal, 19 fulfill the purpose of the research, ofher strategies also employed

d Data collection

‘There are different sources of evidences for data collection They are: Observation,

Focus Group, In-depth Interview, Projective Techniques, Grooming Study, Survey,

Documentation, Market check, Artifact and Archival Record

Since strategies of the research are mainly Case Study and Archival, appropriate

data collection methods correspondingly are Interview, Archival Record and

Documentation

*# Interview considered as main source of data collection Three common ways to couducl an interview are:

> Opon-end: the respondent frocly answer the question

> Structured interview: Respondents are asked about certain issue

> Foous group: A loosely structured interview conducted by a qualified moderator among, a small number of informants simultaneously ‘here are

often six or more persons involving in a focus group; they freely to talk

aboul an issuc exchanging their ideas for cortain lime and aller thal (hey ean

move to another issue

% Archival record is the data collection method that use data form previous Tescarches as a source for reference This is also reliable sourec but used

selectively

“ Documentation is the data collection method that uses letters, written report, memoranda, articles, news that presented in mass media and internal document The advantages of documentation is the credibility of the source because these

data are posted on mass media which recognized as reliable sources

e Sampling

Sampling will show where and why data are collected Follow the researching

purpose and researching stralegy, samples need lo be taken im relevant sources,

otherwise, it becomes incompatible and unmatched with designing purpose For the purpose of further understanding on IMC Planning Process in Vietnam Automobile

Ventures, samples can be taken from any company In addition lo that, Vicar

automobile has six teen ventures only, therefore, there is no doubt that sampling meet statistical standards After considering researching strategy and statistical standards, my focuses are GM Daewoo Viemam-VIDAMCO and Ford Vietnam the accuracy of sampling is strengthen despite of the fact that both GM

Daewoo Vietnam and Ford Vietnam are American automobile firms since Daewoo

originally was a Korean automobile firm and GM acquired Daewoo after GM

Daewoo Vietnam had established for years; further, managing philosophy including IMC plannmg of GM Daewoo Vietnam nearly unchanged after the acquisition

Aboul consumer’s sampling as presented in dala collection method above, T used

arcluval record, it means that most data about consumers are collected by the two

companies for the same purpose of exploring consumer’s insight Consumer sampling used [or reference since as said in studying onjective, my focus is how IMC planned in Vietnam automobile ‘To affiliate the purpose of the research, it is

also necessary to take a look on Vietnam advertising industry and media firms

f Data analysis method

According to research purpose, there are two suggested strategies for data analysis relying, on theoretical proposition and developing a case description

+? Relying on theorctical proposition: this strategy is often used when roscarching strategy is to select one or more cases then compare it with theories; in addition

to that, cross comparisons also employed” The main ideas of this strategy are to develop Case Study or collect data form previous studies to make comparisons

As matter of fact, to match with designing study purpose, relying on theoretical

proposition strategy is most appropriate strategy; from comparisons and analysis,

findings and implications will be addressed

‘> An altemative for relying on theoretical proposition is developing a case

rescarch available thus, it leads to develop multiplied full case studies and it focuses on cross analysis rather than relying on theoretical proposition approach

7 In this thesis, different IMC theories of different authors arc employed as a method to enhance validity

14

This strategy is less favorable because it is not cost effective and time consume,

other concern about this strategy is lack of reference source

Due to the superiority of relying on thearetical praposition strategy, in this thesis, it

is mainly in use

g, Validity

Validity is a testing strategy to establish a frame of measurements to reaffirm and

leverage the quality and the reliability of the research Main tasks dealing with validity are to determine the researching methodology then make it more reliable by

making it best fit with statistical standard, theones and empiical evidence There

are four tests to reinforee quality of a rescarch: construct validity, external validity, intemal validity and reliability

Consiruct validity: this straicgy aims al oslablishimg multiple source of

evidences or chains of evidences or having key informants involved In this

thesis, theories of well-known marketers, key informants and data from reliable

source were used as material for study

Internal validity: establishing causal relationship-a result is inferred from other conditions-and/or certain conditions are in use as a base to develop following studying steps Internal validity is not used in descriptive Duc to this thesis is mostly descriptive, this strategy will not be in use

‘> External validity: the strategy uses replication by establishing different case studies in order to show the agreement or common result among those cases This strategy is usually in use when researchers develop full case description In

this thesis, although relying on theoretical proposition is mainly in use, external

validity is also employed as the cross comparisons among case studies

% Reliability: Another way to create reliability for the research is to pave the way

for relaling people use Has material for the work while ensure thal the same

procedure for next rescarch is still corrcet In fact, this studying method is approached by many researchers As mentioned in early, this research can be

reforcnae for automobile companies and advertising agencies in Vietnam

Consulting from this research, other following rescarches can be developed with the same procedure

h, Data presentation and data analysis

Data presentation and data analysis (IMC Plamning Process and Consumer’s perception of automobile IMC campaigns) will be presented in chapter 3 and

chapter 4 of this thesis

5 CONTRIBUTION OF THIS THESIS:

This thesis is written as partial fulfillment of the requirements for the degree of

master of business administration in Hanoi School of Business, Hanot National

University During three months of studying and writing this thesis, I have gained deeper understanding on Integrated Marketing Communication in Vietnam anlomobile industry, expecially in GM Dacwoo Vielnam-VIDAMCO and Ford Vietnam as well as business operation of marketing communication agencies and

media firms in Vietnam It has been also interesting to see how automobile

imarkelors conduct their marketing activities in academic and scientific way

6, OUTLINE

This thesis is presented in three chapters,

Chapter I: Literature Review

Chapter 2: Case Studies- IMC Planning Process in Vietnam Automobile

Chapter 3: Finding and Conclusion

+? ‘he introduction of thesis, which addresses the necessity and the purpose of thesis, key research are, methodology, contribution of the thesis and the outline (presented as above)

Chapter 1 presents baste concepts of Tntegrated Marketing Comruricalion

Planning Process, majar tools of Integrated Marketing, Communication and The

Synergy Model of Integraled Marketiryg Communication

“ Chapter 2 consists of two case studics of IMC Planning Processes in Ford

Vietnam and GM Daewoo Vietnam-two automobile ventures ‘Ihe chapter also

includes analysis aud comparisons

Chapter 3 presents findings and implications for automobile marketers and marketing communication agencies in Vietnam ‘'o support for these conclusion,

current IMC campaigns are also referred’ and a survey’ result presents consumer’s perception of current IMC campaigns of Vietnam automobile

ventures

In this chapter, IMC campaigns just arc extractions; sce more for LMC campaigns of Ford and GM and other assemblers at appendix 3 and appendix 4

CHAPTER 1 LITERATURE REVIEW

1.1 PRIOR CONCEPTS TO UNDERSTAND INTEGRATED

1.1.3 The Changing Role of Marketing

? Simple Trade Era: As specialization developed, lamilics waded or sold their output to local middlemen Local middlemen, in tum, resold these goods to other consumers or more distant middlemen In Simple Trade Fra, the focused role of marketing doscribed as “Sell Surplus”, This early role of marketing, is still the focus much of the marketing activity in the less-developed areas of the world

+* Production Era: During the production era, the company focuses on production

of a few specific products (Increase Supply Period) A production focus is more

common when few produets are available in a given trarkel

Sales Era: As production rises, competition increases as more companies move

to meet demand, the focus shifts to selling, activities to “beat the competition”

and win cuslomners

Marketing Department Era: During this era, all the marketing activities are

improves shorl-un poliey planning by inlegraling and coordinating the [irm’s

activities (Coordinate and Contrel)

#4 Marketing Company Era: At this marketing people develops long-range plans

in addition to short-run marketing planning and the whole company effort is guided by the marketing concept Companies in this era always focus on building “Long-Run Customer Loyalty”

The role of marketing has changed through time As a result, there have been many

definitions of marketing that belonged to different school of thoughts ‘he question involved in explaining the concept of marketing and roles of marketing, Ilere below

are most popular defirilions of marketing

“Marketing is a socictal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.” (Philip Koller) Exchange involves oblaining a

desired product from someone by offering something in retum ‘Lhe exchange

process must satisfy following preconditions: Exist at least two parties: parties are

on their own choice lo parucipate in exchange process; Fach party must have something valuable to exchange and this must be recognized valuable by other parties Parties must announce about the need and value of the deal

A supploment for exchange is the concept of transaction: Transaction involves at least two things of value, agreed-upon conditions, a time of agreement, and a place

of agreement

Another school of thought, the definition of The American Marketing Association (AMA): The AMA managerial definition: “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services lo ercale exchanges thal salisly individual and organizational objectives.”

Therefore, markeling isa vast field and valuable things for exchange is also diverse 1.1.4 Relationship marketing

‘Yoday the competition is getting tougher and tougher On the market, no company

can [rec sland alone as sole player, The unique position ne longer exists in a (roc

competitive environment and customers are key drivers of the market How may way to co-exist with customers? Just one way-satisfy them [low to satisfy them? Tust one way again-Do better than what competitors do Companies nowadays do not foous on beating competition-seek and kill their competitors ‘Lhis is a long way

on a short road because sometimes companies may not identify their competitors

until everything becomes too late It is necessary to shift the thinking and

companies are investing more and more in building relationship with customers Relationship marketing aims to build long-term mutually satisfying relations with

key parties, which ultimately resulis in markeling network between the company

and its supporting stakeholders

1.1.5 The marketing mix

The marketing mix (4Ps)* facilitate the exchange process and the development of marketing relationship by fully examining the needs and wants of customers,

developing products and services that satisfy these needs, offering it at certain price,

imakimg it available through particular place or charmel of distribution, developing a program of promotion or communication to create awareness and interest ‘he marketing mix is a main tool set for companies to position their brands and services

The basic task of marketing is to combine these clements so that it can affiliate the

exchange process with consumers in market place ‘he marketing mix is the most appropriate answer for the question how to satisfy consumers if a company can do this better than its competitors

1.2 INTRODUCTION TO INTEGRATED MARKDTING

COMMUNICATION

1.2.1 The Integrated Marketing Communication Process Model

First of all, we affirm that the process of integrated marketing communication is a

communication process Communication is the trausmission, and understanding

information using verbal ar non-verbal symbols Another definition, communication

“The 4s inelude: produet, pricing, place or distribution, and promotion ‘The 4Vs witl be further discussed

later

is the process by which information (or message) is transferred from a sender to a receiver(s) and it is meaningful to all parties who involve in the process

Exhibit 1 The IMC process model

One hundred percent understanding is the goal of communication but crror can appear any time in the process that may cause by any components

It has been estimated that as much as 70 percent of all organizational

communication [ails to meet its desired goal Thus, in order to pursue the synergy ol! integrated marketing communication process, besides coordinating integrated marketing communication tools, one can improve the efficiency of each component

ot all components in the model above

“+ Lncoding is the mental process of turning an idea into some format that can be

transmitted easily to others, this is the mission of marketer “The encoding

challenge is not only to describe a product's benefit in a way that is understandable and persuasive, but to do so in a way that will attract attention

and make the decoding as easy and enjoyable as possible for the receivers who

are the target audicnces (Dunoan)

Message is the encoded idea the set of symbols that are transferred from

source 1o receivers through commurication charmel Message and charmel is

affected by interforence and distraction called noisc During process from encoding to decoding, the noise can distort the message making it different from

expectation of sondors, commonly cause nogalive results

The manner in which the message is transferred the specific behaviors or artifacts that are used to convey the message called information channels

* Decoding is a memal process within which receivers perceive the message

Keedback is action of receivers after they perceive the message if a promotional message form a company passes through noise with nearly one hundred percent

as it encode, the feedback may be purchasing or any ardering request

1.2.2 Marketing Communication

The concept of Integrated Marketing Communication is developed from previous

concepts of marketing communicalion

In 1992, Wells, Burnett and Moriarty defined marketing communication as “the mechanism for communicating information to consumer” Keller had the same

definition in 2001: “the means, by which firms altempl to inform, persuade, incite

and remind consumers-directly or indirectly-about the brand they sell”, A third

definition of the same concept is “activities that communicates the merits of the

product and persuade target customers to buy il” (Koller and Amrstrong)

It seems that all three definitions jointly agree that marketing communication is a core activity that helps firms deliver massages to consumers in a most effective way Major objectives of Marketing Communication are “to mform”, “to persuade” and

“to remind” firm’s audiences An altemative word for Marketing Communication is

Promotion Mix Process As mentioned in the article 2.1.5, Promotion Mix is one of

elements of Marketing Mix (4Ps) that jointly direct to target market, Promotion Mix itself includes following major tools: Advertising, Personal Selling, Public Relation

and Publicity, Direct Marketing and Sale Promotion

Exhibit 2 The promotional mix model

Personal sclling

TARGET MARKET

1.2.3, The concept nf Integrated Marketing Communication

Vor many years, the promotional function of most companies was dominated by mass media Advertising played a key role in nearly all areas of marketing

communication As tough completion raised, the fragmentation among consumers*

and certain disadvantages of Advertising, marketers realized that they need other

tools maximum communication impact by providing their customers a clear,

consistent message about their companies’ images, products, service and Additional tools were in used to seek for the synergy among various promotional tools by acquiring Public Relation, Direct Markeling, and Sales Promotion often referred as non-advertising tools Advertising agencies have not only provided advertising, services but also supplied others promotional services, they have

considered therm as parated businesses which provided separated budgets and

separated strategies® Ihe reason is that marketers understand the value of

strategically integrating the various communication functions rather than having

them operates autonomously By coordinaling their markeling communication

effort can avoid duplication, take the advantages of synergy among, various communication tools and develop more efficient and effective marketing conununication programs to maximize the rcturn on investment in marketing activities, this marketing expenditure now must be considered as an mvestment rather than an expense, As a result, in 1993, Schultz, Tannenbaum, and Lauterborn

introduced a new concept called Integrated Marketing Communication (IMC) The

IMC was defined as following; “IMC is a concept of communication planning that recognize the added value of the comprehensive plan that evaluated the strategic

tole of a variely of communication disciplines (for example, general advertising,

direct response, sales promotion and public relation ) and combine these

disciplines to provide clarity, consistency, and maxitaumn communication impact”

* Fragmentation among consumers mminly resulted from the difference of following factors: income, demographic, life atyle shopping patter

* For te corporate goal of a Marcom agency, there still exist interrclationship among promotional services

re bì

(Schultz)

IMC today widely acknowledged as the key to superior brand communication Regarding the comprehensive power of integrated marketing communication-the interactive synergy between advertising and promotion-in 1998, Jobber said that:

“advertising brings the horse to water, promotion makes it drink”

1.2.4, The revolution of IMC

Keller stated that: “Perhaps, no area of marketing has seen more dynamic changes over the years than marketing communication”

Inlegraled marketing has become the approach of choice for most large global

marketers According to marketers, the movement toward integration has been driven by the fragmentation of media usage, the rapid emergence of the Intemet as a viable marketing charmel, and the ever-increasing pressure for marketers lo demonstrate a return on marketing investment

It is helpful in discussing integrated marketing approaches to recognize and

understand Ihrce stages af integrated marketing that have cmerged in recent years + The Translation Stage for integration is the most common form of integrated marketing today The Translation stage focuses on delivering a consistent message and visual identity across marketing channels It has branding as its primary goal With the advent of the Internet, the ‘ranslation stage has extended beyond consistent messaging and visuals to inchide tactics such as including a URL on a print or T'V ad This stage of sensory and messaging consistency across channels seeks to reinforce the desired message and the company’s brand

® The Extension Stage of integration uses secondary channels (Web, direct

marketing) to extend a theme from a primary channel (TV, print), with the parameters of the extension being driven by the core attributes of the chosen

primary channel The goal of the Extension Stage is 1o gel users lo engage will

the brand for an extended period of time and to collect data about the user so that future re-contact and outreach can be made even more targeted and relevant

The primary focus of the [rst lwo stages of inlegralion is lo coordinate elements

of the marketing mix, However, as target audienves have more choices (duc to

the proliferation of media outlets) and more power to avoid ads (via spam filters

on e-mail accounts, online ad-blocking software, and video on demand and personal video recorders), reaching them through message bombardment-even if consistent across mediums-will not be enough to sustain attention or ensure preference for the brand.1

The next evolution of integration, Orchestration, is designed to address this

issue Orchestration is about designing coordinated, sequenced communications

where each charmel has a distincl, unique role in leading the customer Lo acl as

desired The difference betweon this stage and the prior two is that with Orchestration the marketer is using each interaction to build toward a larger goal With Orchestration, the emphasis 1s not so much on consisieney or even expansion but more on the notion of a journey where a clear destination exists

and a dialog with successive communications (based on response) develops

1.2.5 Major reasons leading to the revolution of IMC

> Planning efficiency and effectiveness:

By coordinating marketing communication efforts companies avoid duplication, take advantage of synergy, and develop more efficient and effective programs

+ Consumer adoption of technology and media:

> Consumers’ lifestyles and purchasing behavior are changing as they adapt new technologies

> Traditional media are facing declining audiences and less responsive consumers

> Inmovative marketing prachces

¢ Innovative marketing practices:

® A shifl in marketplace power from manufacturers to retailers,

> A shifting of marketing dollars from media advertising to other forms of promotion

» A movement away [rom relymg on advertising- focused approaches to solve

communication problems

> ‘Lhe rapid growth and development of database marketing

> Demands for greater accountability from ad agencies and changes in

compensation

> Rapid growth of the internet

“% Customer's point of view:

All elements of the promotional campaign have to be carefully linked in some manner so that the message is clear and does not misrepresent the brand

1.3 APPROACH OF IMC IN AUTOMOBILE

1.3.1 The IMC Concept in Automobile

‘As we know, the concept of LMC not until was developed with an official definition

by three scholars: Schultz, Tannenbaum, and Lauterborn in 1993 However, prior concepts of IMC and carly IMC application have existed for years

As matter of fact, up to now there have been no official definitions of IMC in automobile Following is the concept of Integrated Marketing Communication in Automobile which has been totalized from various ideas of scholars and automobile marketers: Integrated marketing communication in Automobile is a process of comprehensive meaningful marketing activities that effectively deliver the messages of aulomobile firms and their responsible subsidiaries lo current consumers and potential consumers in order to raise awareness; maintain or change brand image; persuade for buying actions; and get loyallies of customers

1.3.2 History of Marketing Communication in Automobile

In this part, we take a glance of milestones in automobile marketing communication

during the period from early of previous ccnlury lo now Main discunsion in this

part is about advertising-a major tool of marketing communication

Automobile advertising began from 1900s-the first section covered from 1900 to

1908 since, antomobile production began in the United States in 1896 with the first oar called Duryea which, followed by a number of makes, including Oldsmobile,

Ford, Pierce, Maxwell, Locomobile and Baker Electric At that time, a few cars had

been imported from Europe, where production had started in 1886, by Karl Benz

and Gottlieb Daimler’ Harly automakers had to convince buyers that the automobile would be an improvement over the horse, their real competition

Consumers needed convincing thal these horseless carriages, whether powered by

gasoline, steam or clectric, were safc, reliable and dependable and cost less to

maintain than a horse A major tuming point oocurred in 1908, when Henry Ford introduced Wis Model T and William Durant launched General Mutors Ford's Model ‘I was tough, reliable and affordable and is the car that traly put the United

States - and the world - an wheels

Durant's manipulations and gambles in the market produced the largest auto company in the world and its executives spawned numerous other brands, such as

‘Nash and Chrysler

Mere than 15 million Model T Fords were built during its production run from 1909

to 1927 Many years, the Model ‘f outsold all other brands combined But during that period, many other firms were launched and flourished, such as GM the Dodge Brothers, Hudson, Nash, Chrysler Corp., Hupmobile, Aubum, Studebaker, Willys,

Stutz, Packard, Peerless, Pierce-Arrow, Winton, and hundreds of others The field

was getting crowded, but these companies were still basically trying in their ads to

compete with the horse

By the next section, 1927-41, just about everyone who wanted a car had one and

iow the compelilion was not the horse but other automobiles Now we begin lo see

ads, which stress styling, value and dreams, or image In 1927, the first car designed

by a new profession, the automobile stylist, was built by GM ‘The car was the

7 hese were lwo separale firms, allhough they would merge in 1926

tệ 3

LaSalle and the stylist was Harley Earl, Soon all important makers had stylists and

the looks of an automobile became more important than how well it ran

Alfred P Sloan, legendary chief executive officer of GM introduced the concept of annual model changes and the use of styling to gain a competitive edge Advertising boasted of new improvements and new styling of each model year

After the bombing of Pearl Harbor brought the United States into World War IE in

1941, the auto industry began converting its lines to production of war materials and Detroit became "the Arsenal of Democracy.” Car production ceased in early 1942

and did nol to resume again until 1945 The manufacturing might of America's auto

industry was a major factor in the eventual victory of the Allies

Car makers produced tanks, bombers, artillery shells, guns, ammunition, Jeeps, machine guns, borubsights, airerall engmes and thousands of other products [or the military Advertising was designed to keep the familiar nameplates familiar and to

keep interest alive until the resumption of car production after the war But it was

also mrended Lo tell the story of the mdustry's contribulion to the war effort and the

role it played in victory

After the war, Detroit entered a golden age, the greatest sellers’ market of all time Milhons of returning servicemen wanted cars and Detroit gave thom just what they wanted - big, powerful and covered with chrome Design was influenced by the

combat aircraft of World War Il and the 18 Cadillac touched off one of the

strangest styling crazes ever with its small, tasteful tailfins inspired by the P-38 fighter plane Before the craze ran its course in 1959, tailfins would soar to gigantic

proportions and critics would brand Detroit's products as "insolent chariots.”

However, Americans loved them and mest of the millions of cars sold in the '50s were American cars

Advertising was direcled to self-satisfied family values And the markelers meant

two cars for every family, big cnough to take everyone to sec the U.S.A all at once and in living-room comfort

Thalso drove home the message that a big, powerful car meant the owner was big

and powerful - clearly a success

With the muscle cars of the '6Us, automotive marketers discovered the power of

youth - both ta buy the inexpensive, powerful cars and to become a life-long loyalist to the brand These young buyers proved to be less than loyal, however, and the muscle-car era was followed by rapid growth of imported cars, which paraded

different values During the '60s, auto advertising moved into a new era where full-

color photography rather than artwork reigned supreme

The muscle-car era was the last blast from Detroit before fuel economy, air quality

and safely regulalion and gains by imported cars puta damrper on the parly

In 70s and 80s there was a new trend in socicty emerged as a cultural icon and when women and minorities adopted new roles and there was new trend of hedonistic

values, aulomobile adverlising, are more focuses on these allribulos by sharply portraying the value of life style of consumers; technical argument must be

communicated In marketing language, the term “unique selling proposition” had

omerged, showing the produc!'s advantage over rivals

From 90s to now, the concept of LMC was introduced with support of information technology and mass media, marketers need ta find mare ways to communicated with consumers As a result, the synargy among marketing tools was scriously taken

under consideration (‘I'his will be further discussed in chapter 3)

1.4 THE IMC PLANING PROCESS MODEL

‘The function of IMC is to coordinate the various promotional elements with other marketing activities so that it could help firms communicate with their consumers

effectively at a specific cost Although there are different schools of thoughts of

IMC Plarming Process, the TMC Plarming Provess prosented below is based on marketing theory of Phillip Kotler The process inchides following steps:

Identify largel audience

+ Determine objectives of communication

$$ Design the message

Select commumicalion charmels

} Establish the budget

% Select the marketing communications mix

% Measure results

© Manage the LMC process

1.4.1 Identifying the targct audience

Audiences of an IMC campaign are people or organization that the firm wants ta

send the message to ‘They could be ultimate end user, middleman, partner, government, and competitors Generally, audiences are firm’s stakeholders IMC

plarmers need to specify larget audiences {o focus on This will result im

communication impact as well as media cost The more precise audienco is described the more communication impact and the fewer media expense Tdentilying the targel audicnce alsa involves in assessing (he audicnce’s pereeplions

of the company, product, and competitors’ company/product image

*% Review of firm or brand image and implications for promotion

Review of relative strengths and woaknesses of product/service

“+ Review of competitor’s brand image, strengths and weaknesses of product and

service

1.4.2 Determine objectives of communication

Some people are mistaken between marketing objective and marketing communication objective Marketing objective belongs ta marketing and economic category; the common denominator of marketing objective usually is sales or

market share For example, within half of year, sales will reach 1 billions or the firm

will become the market leader in heurious sedan segment Marketing objective is

only determmed based on marketing strategy of the firm aller considering various factors and analysis from macro analysis, industrial analysis, assessment of strength,

weakness, opportunity and threat as well as compelitive advantages Rather,

marketing communication objective belongs to markcting and communication category; the common denominator of marketing communication objective usually

reach and coverage, consumer's Toeognilion, altitude, and behavior For example,

30

within half of year, the firm will inform to 1 million targct consumers in key cities about a new brand of Ford locus In general, marketing communication objective is the derivative of marketing objective

Marketing Communication Objectives are divided into two kinds:

* Communicational objectives: claim, reinforce and change brand positioning and/or

* Behavior effect: expected to change consumer's behavior and decision

Communicational effective is much easier than behavioral effectives Behavioral effective function is “persuading” ralher an “informing” when fin pursue to change consumers’ behaviors looking for the their final decisions which relating to trial or request or buying,

There is a model called ATDA used 1a describe and evaluate the process of a buying

decision According to the model, a buying devision process is developed through

four stages: Awareness, Interest, Desire and Action First, consumers are aware

about produvls and services; aller thai, they feel a litle bil attractive with these; later they like them and want to possess them, finally, they will buy those products and services An alternative for AIDA Model is Behavioral Sequence Model is also usually in use by marketers

1.4.3 Design the message

Message is encoded ideas firms want to talk with their audiences Messages should

be developed in one or two short sentences, easy to remember so it that can clearest convey the idea of marketers while ensure the artistry, suitability to consumer's value, culture, psychology as well as timely and spatial communication Considerations of designing messages include: Content, Structure, Formal, and Source

perceive when they possess a product For example, “Matiz Color-Delighted your lives”

> Emotional appeals: Usually use certain emotions such as: delighted, fear, safety, humorous that related to product service offered For example, the obsession of accident in big cities of Vietnam may induce consumer by

Toyota Land Cruiser-a selective brand-sustainable and safety

> Moral appeals: A ozone whole and the future images of the earth may be accompanied with a message “Toyota hygiene engine saving the earth”

% Structure

Message structure must be logic, consistent and persuasive There are three

determinations relating to message structure:

> Clearly state or let consumer judge the theme

> Demonstration can be taken right at the moment or leave it until latter

> Message type can be one-side or two-side*

% Format

Message format decisions vary with the type of media, but may not limited from followings:

> Graphics, visuals

} Lleadline, copy or script

> Sound effects, voice qualities

> Shape, scent, texture of package

Suitable message format can increase communication impact since it can

combine voice, image and movement

Source

Message source characteristics can influence audience attention and recall

Factors underlying perceptions of source credibility

> Expertise

* Consider to address sofntions for consumers as “should do” only, or both “should do” and “should not do”

inthe message

32

> Trustworthiness

> Liability

1.4.4 Selecting Communication Channels

Commutucation channel decision is based on characteristics of audience and communication chamnel itself Marketers must know what communication channel

audience usually access; otherwise communicating effort is not significant

Communication channel is subdivided into two types

“ Directed communication channcl (Personal communication channels)

This communication channel type proves effective because sender likely receive

feedback from audicnee so that they can quickly bring those ideas into fact There are several methods of stimulating personal communication channels exist

> Devoting extra effort to influential individuals or companies

> Creating opinion leaders

> Working through influcttial community members

> Using influential people in testimonial advertising

> Developing advertising with high “conversation value”

> Use viral marketing

> Lstablishing an electronic forum

> Developing word-of-mouth referral channels

Tndireet communication channel (Non-persunal communication channels)

Influence derives from two-step flow-of-communication process The feedback

of audience recalled through one mare step that by other information channel or

by different expression For example, (cedback for TV Advertising may be expressed in request, vehicle or sales

1.4.5 Establish the budget

Basic tasks of budget determmation arc to define the fimding source and define

budget setting method ‘here are many methods to set budget for a promotional

program such as

Fach method has disadvantages and advantages marketers need to select

appropriate methods so that they closest reflect the benefit of the IMC campaign Tor example, Percentage of Sales, the advantage of this method is easy to calculate

bul the disadvantage of this method is subjective because budget determination is

based on assumption of sales, which in tum, result from the IMC campaign

1.4.6 Deciding on the Marketing Communications Mix

There are two main considsralions for markcling commumicalion mx: selection

factors and LMC tools ‘Ihis is crucial for meeting, communicating goals designed

Arousal, Information Search and Evaluation, Purchase and finally Usage

In Need Arousal Penod, markelcrs need inform consumers abouL

product/service by advertising To create goodwill in Information Search

and Evaluation, markelers need lo compare product/service with that of

competitors

= Market area: Personal Selling is suitable with small market and

advorlising and mass Media is likely 10 use it large market

34

= Consumer: Different consumer groups require different promotional toals and different combination among promotional tools

= Consumer desperation: If consumers disperse, advertising and mass Medias are likely to use Contrarily, if consumers concentrate, personal selling is likely to use

» Characteristics of product/service

= Unit cost: If product and service are low value items aiming at mass matket then advertising is appropriate On the other hand, if

producl/service are high value ilems (hen personal selling is suitable

" Product/sorvice particular: Advertising is suitable with standardized product/service, personal selling is suitable with custemized

product/service

" Hefore and After Sales Service: ‘Ihe more proportion of this service

required, the more likely personal selling will be in use

> Product life cycle

Product life cycle is an economic term describing a cycle from a product was

introduced to market until it was taken out of market Lach kind of products has

their own life cycles and in cach product lite aycle stage, there are different

promotional strategies:

Inthe graph below, Stage 1 denotes introducing stage

Stage 2 denotes developing stage Stage 3 denotes maturity stage, and

Stage 4 denctes declining stage

Exhibit 3 Product life cyele

Stage] Siage2 Stage3 Slage 4 Time

35

Exhibit 4, Product life cycle and promotion mix strategy

Product life cycle Promotion mix Strategy

Tafonm consumers aboul product and the benefit, i could

bring to customers Provide consumers with guiding

: information Promote y need and want by exposin,

core bonelits of product Major promotion mix tools used

in this stage are: Adverting (inform), exlubition, trial, personal selling, direct marketing

Promote the demand for selective brands In this stage, advertising and point of purchase are powerful tools to Develop Stage

allracl customers In his stage, company can ask

intermediaries to share promotional fee Malurily Stage | Focus on incentives promotion, discount, sale-off

> Budget: Budget is one of important factors to consider TMC campaign If

adequate budgct, firms usually use advertising if it is necessary On the other hand, firm is likely to use personal selling or share advertising expense when ihcy are insufficient budget (Sce more about budgel-solting method in arlicke 24.5)

» Consumer vs business market

= Consumer Market-Promotional Pull Strategy

‘The goal of promotional pull strategy is to create demand among consumers and encourage them to request products/services from retailers,

distibutors Marketers usually use advertising and sales promotion

efforts directed toward the ultimate consumers

«Business market-Promational Push Strategy

36

In Promotional Push Strategy, marketers design programs to porsuade the trade to stock, merchandise, and promote a manufacturer's produots The goal of Promotional Push Strategy is to push the product though distribution channels by aggressively selling and promoting items to the resellers, or trading (Discount, Rebate are likely in-use)

Recognition, recall, attitudes, behavioral responses and corresponding sales

Measure result of IMC campaign is very important for control; it helps markelers drawing out lessons for next campaigns It not only essential to measure the result

of the whole IMC campaign but it is also important to evaluate the effectiveness of

cach tool of the IMC tool sct

1.4.8 Manage the Integrated Marketing Communications Process

During the period of launching IMC campaign, marketers always keep eyes on the process, any exror will be quickly examine and necessary adjustments will keep following actions on the right track Common adjustments are

» Provides stronger message consistency and greater sales impact

> Improves finns’ ability to reach right customers al ight time with right

message

1.5 MAJOR TOOLS USED TN AN IMC CAMPAIGN:

Overview of the promotion mix

‘The last element of marketing mix-promotion-sometimes referred as “promotion

mux” because (his element includes other sub-clemerts, they are Adverlising, Direet

matketing/Interactive (internet) Marketing, Sales promotion, Publicity/Public Relations, Personal Selling and other activities such as: Packaging, Point of Purchase, Word of Mouth These are major tools to construct an IMC campaign

It is necessary to examine IMC tools to see the role of each to IMC and latter we

will examine the combination of them as a component set that decide the success of

an IMC campaign

1.4.1 Advertising

Definition

Advertising is defined as “Any paid form of non-personal communication about

an organization, product, service, or idea by an identified sponsor” (Belch)

Three criteria must be met for a communication to be classified as advertising

are: The commurtication must be paid for, the communication must be dehvered

through mass media; the communication must be attempting to persuade Kor

many years, mass media advertising dominates promotional programs of many

" Inform Advertising often announces consumers about new

product/service or new product/service features

" Porsuade Advertising always conlains markeler’s effor to induse consumer to buy product/service Message always show the unique

selling poms or superior allributes of product/service in comparison will

that of competitors

= Remind Advertising aims at verifying main characteristics or benefit of

* Sec more about advertising in appendix 1 Advertising’s cvolution-history-audience-agency

38

product/service to consumer to maintain the image of the brand in

consumer mind

" Reinforce Advertising attempts to stimulate the brand's equity, engrave the brand’s image in consumer’s mind in order to pursue customer's loyalty

> Money

Money is the expenditure spent for advertismg, Factors to consider

advertising budget are:

"Stage of product life cycle

= Market share and consumer base

= Competition and clutter

= Advertising (requeney

* Product substitutability

Advertising expense is actively correlative with Advertising frequency,

Markel share, Competition, Audience Clulter and Product, substilutability

‘The more market share pursued, the more competition, the more audience

clutter, the more threat from substitutions the more advertising investment

(copy, arca, media, frequency ) As a result, the more advertising investment the more advertising expense Advertising expense also depended

on product life cycle!

> Message

Message designation is carefully presented in article 2.4.3 including five

principals: Content, Structure, Format, and Source Here is the process from

generating lo exceuling a message: Message generation, Message evaluation and selection, Message execution and Social responsibility review

= Message generation is crealive process of generating ideas about

‘9 See more about budgel setting method in article 2.4.5 and advertising budgel determination for product

life cycle in article 2.4.5)

39

mossage’s content, structure and format In this step, designer can have different ideas and different messages

= Message evaluation and selection aiming at choosing the best message from different preparations which are the results of message generation step

= Message execution is final step; it is a process when designer start to

make and complete the copy

"Social responsibility review, durmg the process from message generation

lo message execution, markelers need to review sovial responsibilily

issue to ensure the message is not against advertising law children care, containing violence

> Medial

Strategies for media involve:

" Deciding on reach, frequency, and impact

* Selecting media and vehicles

= Determining media time

= Deciding on geographical media allocation

Depending on communication purpose (mission), marketers will decide the reach, frequency and level of impact after that he need to select media and

vehicle in order to fulfill that demand Media only reached by audiences when they access those on suitable time; therefore media time must taken into account, marketers have to decide media schedule: Continuity,

concentration, flighting, and pulsing scheduling options Audience clutter

will require suilable intermediaries; as a result, marketers have to consider geographical media allocation

There are different media types: Newspapers, Television, Direct mail, Radio,

Magazines, Outdoor, Yellow pages, Newsletters, Brochures, Tolephone,

Internet

\\-This approach also used for media consideration for other IMC Tools

40

“Sales Promotion is marketing activilies that provide extra value or incentives Lo

the sales force, distributors, or ultimate consumers and can stimulate unmediate

sales”-(Advertising and promotion-Belch P17) Sales promotion also is described as “Techniques and devices commonly in a Lemporary basic, 10 make goods and service more attractive to distributors or final customers by providing

them with some additional benefit or inducement (incentive) or the expectations

of such a benefit, whether i cash in kind (nature) and/or services whether

immediately or a later time, whether freely or conditionally” (Boddewyn and Leardi, 1989)

+> Sales promotion purposes

Sales promotion aims at raising traffic in short-term Regarding to sales promotion purpose, marketers stated that advertising offers the reason to buy and Sales promotion helps them to buy

>» Attract new triers or brand switchers

> Reward loyal customers

> Increase repurchase rates

{ Sales Promotion type and sales promotion tools

Sales promotion is divided into two types based on the expression and, there are mumber of sales promotion tools correspondingly

>> Customer-oriented (Consumer promotion) targeted to the ultimate users of a

product or service: Coupons, sampling, premiums, rebales, corilests,

4L