Integrated marketing communications strategy for Nghi Son bag cement

And then, instruments of marketing communications could be executed in a synergic way to enhance the communications efficiently in condition of Nghi Son Cement Company: advertising, poin

TR NG I H C M TP HCM UNIVERSITÉ LIBRE DE BRUXELLES

HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

(PART-TIME)

Advisor: Dr NGUYEN HUU THAN

Ho Chi Minh City

(2011)

UNDERTAKINGS

I certify that master project work titled “Integrated Marketing Communications Strategy for Nghi Son Bag Cement” is my own work The work has not, in whole or in part, been presented elsewhere for assessment Where material has been used from other sources, it has been properly acknowledged/ referred

Signature of student

Do Duc Phuc

ACKNOWLEDGEMENTS

The completion of this thesis would have not been possible without the help of many people I would like to express my sincere thanks to following persons who had great support me in difficult stages

Firstly, I would like to express my deepest gratitude to my advisor - Dr Nguyen Huu Than for his precious support, guidance, share of experience and ceaseless encouragement during this thesis is executed

Secondly, my special gratitude is expressed to say my thank you to my company’s Directors and colleagues in Nghi Son Cement Company who gave me great support and help me in survey process

Specially, my thanks go to contractors who gave valuable time and assisted me in survey process

Last but not least, I am enormously grateful for my beloved parents, my wife for their boundless support and encouragement throughout my period of study

EXECUTIVE SUMMARY

Nghi Son Cement Corporation is one of biggest cement manufacturers in Viet Nam Currently, it holds highest market share in industrial cement segment (bulk cement) but it has low market share in bag cement segment (bag cement) The reason of low market share in bag cement segment has some causes One of reasons is lack of marketing communications strategy

In 2012, Nghi Son Cement will launch up a new bag cement product, named Nghi Son Dan Dung cement, to replace gradually for old bag cement Therefore, marketing communications should be established and put in a critical role that aims to build brand image, product image and quickly boost up for sales

An integrated marketing communications strategy needs criteria such as: awareness of audience’s media habits and preferences; understanding of audience’s knowledge and beliefs about the product; using coordinated media blend linked to a specific objective;

coordinated message and image thrust Basing on above criteria, this final project was

conducted with purpose of building an efficient “Integrated Marketing Communications Strategy for Nghi Son Bag Cement”

This study goes through steps: reviewing literature, analyzing bag cement segment, analyzing opportunities and reviewing marketing communications activities, surveying target customers In the scope of research, this study concentrates on two target consumers who are necessary to communicate: small and medium contractors and house-owners

Finally, this study recommends to raise messages to communicate with consumers: message about product relating “durability” or/and “fine/smooth wall”, message relating

“available cement” for purchase convenience And then, instruments of marketing communications could be executed in a synergic way to enhance the communications efficiently in condition of Nghi Son Cement Company: advertising, point-of –purchase, sales promotion, public relations and sponsorship, e-communications, personal selling and direct marketing

TABLE OF CONTENTS

UNDERTAKINGS i

ACKNOWLEDGEMENTS ii

THE ADVISOR’S COMMENTS iii

EXECUTIVE SUMMARY iv

TABLE OF CONTENTS v

LIST OF FIGURES xi

LIST OF TABLES xii

LIST OF ABBREVIATIONS xiii

INTRODUCTION 1

1 RATIONALE OF THE STUDY 1

2 PROBLEM STATEMENT AND OBJECTIVE OF THE STUDY 2

2.1 Problem statement 2

2.2 Objective of study 4

3 SCOPE AND LIMITATIONS 5

3.1 Scope of study 5

3.2 Limitations of study 6

4 RESEARCH METHOD 6

4.1 Secondary data 6

4.2 Primary data 6

5 STRUCTURE OF THE STUDY 7

CHAPTER 1: LITERATURE REVIEW OF INTEGRATED MARKETING COMMUNICATIONS STATEGY 8

1.1 CONCEPTS OF MARKETING AND MARKETING COMMUNICATIONS 8

1.1.1 Concepts of marketing 8

1.1.2 Marketing and instruments of marketing mix 8

1.1.3 Concepts of integrated marketing communications 10

1.1.4 Integrated marketing communications 11

1.1.5 Benefits of integrated marketing communications 11

1.1.6 Integrated marketing communication and brand equity 12

1.2 TOOLS OF MARKETING COMMUNICATIONS MIX 12

1.2.1 Advertising 12

1.2.1.1 Definition of advertising 12

1.2.1.2 Roles and objectives of advertising in IMCs mix 13

1.2.1.3 Types of advertising 13

1.2.1.4 Advantages and disadvantages of some advertising types 14

1.2.2 Sales promotion 15

1.2.2.1 Definition of sales promotion 15

1.2.2.2 Roles and objectives of sales promotion in IMCs mix 16

1.2.2.3 Tools of sales promotion 16

1.2.2.4 Advantages and disadvantages of sales promotion 16

1.2.3 Sponsorship 17

1.2.3.1 Definition of sponsorship 17

1.2.3.2 Roles and objectives of Sponsorship in IMCs mix 17

1.2.3.3 Types of sponsorship 18

1.2.3.4 Advantages and disadvantages of sponsorship 19

1.2.4 Public relations and publicity 20

1.2.4.1 Definition of Public relations and publicity 20

1.2.4.2 Roles and objectives of public relations and publicity 20

1.2.4.3 Tools and activities of public relations 21

1.2.4.4 Advantages and disadvantages of public relations 22

1.2.5 Direct marketing 22

1.2.5.1 Definition of direct marketing 22

1.2.5.2 Roles and objectives of direct marketing in IMCs mix 22

1.2.5.3 Tools of direct marketing 23

1.2.5.4 Advantages and disadvantages of direct marketing 24

1.2.6 E-communications 24

1.2.6.1 Definition of e-communications 24

1.2.6.2 Roles and objectives of e-communications in the IMCs mix 24

1.2.6.3 Tools of e-communications 25

1.2.6.4 Advantages and disadvantages of e- communications 26

1.2.7 Personal selling 26

1.2.7.1 Definition of personal selling 26

1.2.7.2 Roles and objectives of personal selling in IMCs mix 27

1.2.7.3 Types of personal selling 27

1.2.7.4 Advantages and disadvantages of personal selling 27

1.2.8 Point – of – purchase communications 28

1.2.8.1 Definition of point-of-purchase communications 28

1.2.8.2 Objectives and roles of point-of- purchase communications 28

1.2.8.3 Tools of point-of-purchase communications 29

1.2.8.4 Advantages and disadvantage 29

1.2.9 Exhibitions and trade fairs 29

1.2.9.1 Definition 29

1.2.9.2 Roles and objectives of exhibitions and trade fairs 29

1.2.9.3 Types of exhibitions and trade fairs 30

1.2.9.4 Advantages and disadvantages of exhibitions and trade fairs 30

1.3 FACTORS IN SETTING THE MARKETING COMMUNICATIONS MIX 30

1.3.1 Push versus pull strategy 30

1.3.2 Product life- cycle stage 31

CHAPTER 2: INTRODUCTION TO CEMENT SECTOR AND NGHI SON CEMENT CORPORATION 33

2.1 INTRODUCE TO VIET NAM CEMENT INDUSTRY 33

2.1.1 Introduce to cement product 33

2.1.2 Introduce to Viet Nam cement industrial sector characteristics 33

2.2 INTRODUCE TO NGHI SON CEMENT COMPANY 35

2.2.1 Overview of Nghi Son Cement Company 35

2.2.2 Vision, mission 36

2.2.3 Business results of whole NSCC 36

2.2.4 Introduce to the cement products of NSCC 37

2.2.4.1 Bulk cement of NSCC 37

2.2.4.2 Bag cement of NSCC 38

2.3 INTRODUCE TO NEW BAG CEMENT PRODUCT 39

CHAPTER 3: ANALYZING OPPORTUNITIES 41

3.1 CONSUMER ANALYSIS 41

3.1.1 Objects relating to bag cement consumption 41

3.1.2 Analyzing target consumers 42

3.2 COMPETITOR ANALYSIS 43

3.2.1 Analyzing product, price, place and brand name of NS and dominant competitors 43

3.2.2 Analyzing the marketing communications activities of NS and competitors 45

3.3 MARKET ANALYSIS 47

3.3.1 Macro environment 47

3.3.2 Micro environment 47

3.4 MARKETING COMMUNICATIONS REVIEW OF NGHI SON BAG CEMENT 48

3.4.1 Life cycle of Nghi Son bag cement kinds 48

3.4.2 Business characteristic of Nghi Son bag cement 48

3.4.3 Budget proportion in each tool .49

3.4.4 Advertising 49

3.4.5 Sales promotion 50

3.4.6 Sponsorship 50

3.4.7 Public relations and publicity 51

3.4.8 E-communications marketing 51

3.4.9 Point- of- purchase communications 51

3.4.10 Personal selling 51

3.5 SWOT ANALYSIS OF NGHI SON DAN DUNG CEMENT 52

3.6 ORGANIZATION DIAGRAM OF NSCC’S MARKETING DIVISION 53

CHAPTER 4: SURVEY OF NGHI SON BAG CEMENT 54

4.1 TARGET CONSUMERS NEED TO BE SURVEYED 54

4.2 INTRODUCTION TO RESEARCH PROCESS 54

4.3 FOCUS GROUP OF CONTRACTORS 55

4.3.1 Sampling 55

4.3.2 Questionnaires and data collection 55

4.3.3 Focus group’s result 55

4.3.4 Findings from focus group’s result 57

4.4 QUANTITATIVE STUDY 58

4.4.1 Sampling 58

4.4.2 Data collection and Questionnaires 59

4.4.3 Data analysis 59

4.4.5 Result analysis 59

4.4.5.1 Sample profile 59

4.4.5.2 Finding selected criteria in cement purchase process 59

4.4.5.3 Finding channel information impact on the awareness of consumers 61

CHAPTER 5: SOME SUGGESTIONS OF MARKETING COMMUNICATIONS STRATEGY FOR NGHI SON BAG CEMENT PRODUCT 563

5.1 BUILDING MESSAGE 63

5.1.1 Building message for product 63

5.1.2 Building message for communications program 64

5.2 BUILDING MARKETING COMMUNICATIONS STRATEGY 64

5.2.1 Advertising strategy 64

5.2.2 Point-of-purchase 66

5.2.3 Sales promotion 68

5.2.4 Public relations and sponsorship 69

5.2.5 E-communications 71

5.2.6 Personal selling and direct marketing 73

5.3 BUDGET ANALYZING 74

CONCLUSIONS 64

REFERENCES 82

APPENDICES 83

APPENDIX 1 83

APPENDIX 2 84

APPENDIX 3 87

APPENDIX 4 89

APPENDIX 5 90

APPENDIX 6 90

LIST OF FIGURES

Figure 1.1: Four Ps and C in a marketing mix 9

Figure 1.2: Types of sponsorship 19

Figure 1.3: Pull versus push strategy 31

Figure 1.4: Stages in the product life-cycle and communications objectives 32

Figure 2.1: Constituents of Viet Nam cement market through years 34

Figure 2.2: Cement consumption of 3 regions 35

Figure 2.3: Distribution of sales volume of three regions in 2010 36

Figure 2.4: Bulk cement market share in south market 37

Figure 2.5: Bag cement market share in south market 39

Figure 3.1: Objects in cement consumption process 41

Figure 3.2: Important decision makers in cement selection 42

Figure 3.3: Cement brand awareness 43

Figure 3.4: Core and extended quality of NSDD, NSCN and other cement types 44

Figure 3.5: Life-cycle of NSCC’s cement types 48

Figure 4.1: Tools of MCs should be applied for contractors 58

Figure 4.2: Sample profile 59

Figure 4.3: Criteria in cement selection process 60

Figure 4.4: Information channel impact on the awareness of consumers 62

Figure 4.5: Tools of MCs should be applied for house-owners 62

Figure 5.1: Desired criteria in cement selection 63

Figure 5.2: Information channel using trend through each stage 65

Figure 5.3: Advertising means and coordinated with other communications mix tools 66

Figure 5.4: P.O.P means and coordinated with other communications mix tools 67

Figure 5.5: Sales promotion and coordinated with other communications mix tools 68

Figure 5.6: PR and sponsorship in coordination with other communications mix tools 70

Figure 5.7: Survey on internet users 71

Figure 5.8: E-communications and combination with other tools 72

Figure 5.9: Personal selling, direct marketing and combination with other tools 73

LIST OF TABLES

Table 1.1 Instruments of the marketing mix 9

Table 1.2: Four Ps correspondence to Four Cs 10

Table 1.3: Elements of MCs mix 12

Table 1.4: Types of advertising 14

Table 1.5: Advantages and limitations some major media types 15

Table 1.6: Consumer promotion tools 16

Table 1.7: Roles and objectives of sponsorship 18

Table 1.8: Roles and objectives of PR in marketing and corporate image 20

Table 1.9: Tools of PR in marketing and corporate image 21

Table 1.10: Direct marketing media and tools 23

Table 1.11: Strengths and limitations of direct marketing 24

Table 1.12: Strengths and limitations of internet as e-communications tool 26

Table 1.13: Types of personal selling 27

Table 1.14: Advantages and disadvantages of personal selling 27

Table 1.15: Roles of exhibitions and trade fairs in IMCs mix 29

Table 1.16: Types of exhibitions and trade fairs 30

Table 2.1: Cement output of Viet Nam cement industrial sector through each year 33

Table 2.2: Business result of NSCC 37

Table 3.1: Main points of cement types 44

Table 3.2: MCs activities of NS and competitors 46

Table 3.3: GDP of Viet Nam over years 47

Table 3.4: Budget of promotion program in 2011, excluding sales promotion 49

Table 3.5: SWOT of NSDD cement 52

Table 4.1: Desired criteria in cement purchase process 59

Table 4.2: Mean value of selected technical criteria 61

Table 5.1: Online connection means in Viet Nam 71

Table 5.2: MCs budget including sales promotion for wholesalers and retailers 74

Table 5.3: MCs budget excluding sales promotion for wholesalers and retailers 74

Picture 2.1: Bag cement image ……….39

Diagram 3.1: Structure of Marketing Division of NSCC……… …53

NSCC : Nghi Son Cement Corporation

NSDD : Nghi Son Dan Dung Cement

PCB40 : Portland Cement Blended 40

SMCs : Small and Medium Contractors

SWOT : Strength Weakness Opportunity Threat TCC : Taiheiyo Cement Corporation

Vincem : Vietnam Cement Industry Corporation

INTRODUCTION

1 RATIONALE OF THE STUDY

Changes in business environment have affected substantially ways of doing business, but influence has been directed especially toward sales and marketing

According to Philip Kotler, in respect of marketing, the aim of marketing is to know and understand the customer so well that the product or service fits and sells itself.1 Therefore, the marketer always finds the appropriate ways that could interact efficiently between company and target customers in its sector David Pickson and Amanda Broderick say that the traditional and generalist approach to sales and customer management comprising field sales force, distributors (for smaller accounts), and sales office for order processing and administration seems inappropriate for today’s business environment.2 Furthermore, nowadays marketing communications has mentioned as bridge to connect between an organization and it target customers Philip Kotler judges about the role of marketing communications that it helps the firms to inform, persuade and remind customer–directly or indirectly-about the products and brands they sell In a sense, marketing communications represent the “voice” of the company and its brands and are a means by which it can establish a dialogue and build relationships with consumers.3

The number of communications channels and ways to communicate with customers has increased, but also manner of communications has become more meaningful According

to De Pelsmacker, all the elements of the communications mix have to be carefully planned in such a way that they form a consistent and coherent integrated communications plan.4 Therefore, integrated marketing communications could be seen as

an essential part of company operations And it is significant to study marketing communications in practical case and utilize it for an organization

Nghi Son Cement Company, hereinafter called NSCC, is one of the biggest cement manufacturers in Viet Nam It is recognized to be the strongest manufacturer in bulk cement segment take into account market share on whole of Viet Nam However, it is

1 Philip Kotler and Kevin Lane Keller (2009), Marketing Management, p.5, Pearson Prentice Hall, USA

2 David Pickton and Amanda Broderick (2005), Integrated Marketing Communications, p.280, Prentice

Hall, UK

3 Philip Kotler and Kevin Lane Keller (2009), Marketing Management, p.470, Pearson Prentice Hall, USA

4 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European Perspective,

p.18, Prentice Hall Europe

evaluated to be a weak player in bag cement segment for civil construction both market share and brand name

NSCC realized the problem and has built some marketing programs to boost strongly Nghi Son bag cement In 2012, NSCC will launch new bag cement product for civil construction segment, named Nghi Son Dan Dung cement (NSDD) This bag cement type has high quality, and more suitable quality than existing product This step aims to penetrate deeper and expand wider in the market share of bag cement segment At currently, several marketing communications activities are applying for current bag cement product but NSCC has not built a marketing communications strategy for both new product and old product yet Otherwise, the way of carrying out these activities is not well executed The synergy and coherence among each activity has not concerned, and consequently the strength of marketing communications activities is not high

Backward to development of bag cement, NSCC is lacking a consistent and synergic integrated marketing communications (IMCs) strategy toward to target customers who buy Nghi Son bag cement on the other hand, other competitors are performing professionally and getting huge results Besides, there is little survey mentioning about integrated marketing communications strategy for civil cement segment in Viet Nam Deriving from above necessaries, IMCs activities of NSCC should be researched and formulated into a strategy to apply in future, and especially in the introducing stage of new cement bag product

2 PROBLEM STATEMENT AND OBJECTIVE OF THE STUDY

2.1 Problem statement

Before starting the objective of the study, it is worth to go through the brief introduction

on NSCC It is established in 1995 by a joint-venture between Vietnam Cement Industry Corporation (Vincem) and two multinational groups of Japan (Taiheiyo Cement - TCC and Mitsubishi Material - MMC) NSCC is one of the leading cement manufacturers in Viet Nam that covers the market from the north to the south So far, NSCC had only one kind of cement PCB40 and it supply for both segments: bulk cement for industrial segment and bag cement for civil segment

At moment, NSCC is the share market leader in industrial cement segment which is

called “bulk cement” take into account in southern and central region However, in civil

cement segment, NSCC has just been a follower The main strong point of NS bag cement is its high quality but the weak point is low awareness of customers

One critical reason that could explain for low awareness of customer is lack of investment in marketing communications Historically, due to productivity capacity limitation before 2010 and middle of 2011, in some stages, NSCC did not have enough cement to supply for market even though for industrial cement segment Thus, bag cement segment, including marketing activities, was not paid enough attention to develop

At moment, NSCC should invest and enhance the marketing communications activities because NSCC is bearing high pressure from external and internal factors

 Regarding to external factors, some new competitors and dominant cement brand names have launched up with many communications campaigns and tried to increase their brand awareness, kept share of market and share of voice Moreover, cement sector has tendency being redundant because of gloomy real estate market and low cement demand All cement manufacturers are in the stage of keen competition NSCC has to communicate with customer to gain market share

 Regarding to internal factors, NSCC finished the second product line which boost the cement volume doubly, from 2.15 million ton/year to 4.3 million ton/year from middle of 2011 Consequently, sales volume pressure will be higher from 2012 Nghi Son Dan Dung cement will be launched up as solution for the situation However, NSDD cement is born in not good period of time when cement consumption is being shrunk Reviewing current marketing activities, there are four Ps of marketing mix: product, price, place, and promotion NSCC is well practicing with other two tools, except for the third P – place and fourth P- promotion Nowadays, promotion term is used interchangeably with marketing communications Over recent years, “marketing communications” has become the favorite term among academics and some practitioners to describe.5

5 David Pickton and Amanda Broderick (2005), Integrated Marketing Communications, p.27, Prentice Hall,

UK

Through low cognition of consumers toward NS cement product, cement volume pressure, and for success of new cement product, NSCC need an integrated marketing communications strategy to deliver its message through appropriate tools in marketing communications mix, increase the brand awareness, sales volume and gain a strong position in future

On the other hand, this study aims to place integrated marketing communications strategy

of NS bag cement into the overall strategy of the company toward the overall company objectives

The research objectives are:

 To review the current marketing communications activities of the NSCC in the scope

of bag cement

 To identify selection criteria of target consumers and understand information channel urge to use cement

 Evaluate the survey results and raise comments

 To develop a new integrated marketing communications strategy for cement bag product of NSCC

 To recommend management board for future marketing communications activities

Research questions: with purpose of understanding consumer preferences and build the

efficiently marketing communications for NSCC, the survey intends to approach and answer below questions:

 How are consumer’s awareness and knowledge about cement brand name in cement market?

 What are consumer’s selection criteria about cement products?

 Which is information channel that consumers are desired to get information about cement?

3 SCOPE AND LIMITATIONS

The rest is house-owners and contractors Contractors have repeat demand and they could decide cement up to 25% Special characteristic of house owners is to have none repeat demand but they are main decision makers to choose cement for their houses up to 65%.6

In summary, this study will survey two objects:

 House-owners who are using or already used cement for houses

 Contractors have small and medium size.7

Although Nghi Son cement is distributed nationwide now, the primary data collection is conducted mainly in Ho Chi Minh City area which is the most important market of NSCC Besides, it is due to limitation of time and budget

6 Masso Consulting survey report(2010), Current Situation Of Viet Nam Cement Distribution Channel

7 Small and medium size is defined as the definition of NSCC: correspondingly to number of employee to under 10 and under 50 people

This study only focus on bag cement, does not concentrate on bulk cement And this study mentions several famous brand names in bag cement segment in Ho Chi Minh City

4 RESEARCH METHOD

In the scope of this study, the information was collected though secondary and primary data

4.1 Secondary data

Secondary data are desk research information that was collected from sources:

 External: data of macro economy environment, industrial and civil cement segment, competitor’s product and promotional activities

 Internal: sales volume, product information, marketing communications activities of NSCC

4.2 Primary data

Primary data was executed by two field study methods (quantitative survey and qualitative survey) Due to limitation of time and budget, this study surveyed though method:

 Quantitative survey was applied for house-owners

 Qualitative survey (focus group) was applied for contractors

Respondents have age over 18 who are living in Ho Chi Minh City

In respect of quantitative survey, the survey questions were sent to 15 people to pilot survey and after that questionnaires were modified and used for survey

The software is used to analyze the result to be SPSS package version 11.5

5 STRUCTURE OF THE STUDY

This research is structured into:

 Introduction: introduce about this research

 Chapter 1: Review literature of integrated marketing communications strategy This chapter will review the marketing and integrated marketing

communications strategy theory, instruments and factors affect to integrated marketing communications strategy

 Chapter 2: Introduction to Nghi Son Cement Company This chapter will

introduce to PCB40 cement product, characteristics of Viet Nam cement industrial sector, overview of NSCC, business results of Nghi Son bulk and current bag cement, new bag cement product for civil segment

 Chapter 3: Analyzing opportunities This chapter will analyze the

opportunities for Dan Dung Cement in severe competition situation Besides, it will analyze consumer’s behavior, competitor, market and segment In the internal factor, this chapter will review marketing plan, analyze SWOT

 Chapter 4: Survey of Nghi Son bag cement.This chapter will clarify the objects, method and research stages After that, focus group survey result on contractors and quantitative survey on house-owners is represented

 Chapter 5: Some suggestions of integrated marketing communications strategy for Nghi Son bag cement product.Base on the finding result, each appropriate marketing communications tool is formulated and combined together in suitable way to reinforce the effectiveness

 Conclusions and recommendations This chapter provides conclusions and

recommendations of the study

CHAPTER 1: LITERATURE REVIEW OF INTEGRATED MARKETING COMMUNICATIONS STATEGY

This chapter aims to introduce the literature review of some concepts, definition of marketing and integrated marketing communications (IMCs) Sequentially, each instrument of marketing communications (MCs) will be presented through order: roles and objectives, tools of marketing communications (MCs), advantages and disadvantages Finally, pull and push strategy, product life - cycle’s stage

1.1 CONCEPTS OF MARKETING AND MARKETING COMMUNICATIONS

1.1.1 Concepts of marketing

According to Philip Kotler, marketing is “a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others”.8 This definition derives from important terms: needs, wants and demands, products, value and satisfaction, exchange, transactions and relationships, and market

According to The American Marketing Association: “marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”9 This definition mentions about creating and communicating value to target groups

Therefore, one of the important purposes of marketing is to communicate and deliver the value toward customers

1.1.2 Marketing and instruments of marketing mix

McCarthy classified instruments of marketing mix into four broad groups, called four Ps

of marketing: product, price, place, and promotion And the customer should be the target

of all marketing efforts Figure 1.1 shows that the C stands for some specific the target market and is placed in the center of diagram.10

customers-Philip Kotler defined each concept of Four Ps as below:11

8 Philip Kotler, Gary Amstrong and Co-authors (2010), Principle of Marketing, p 9, Prentice Hall Europe

9 New definition of American Marketing Association (2008), www.marketingpower.com

10 William D Perreault and E Jerome McCarthy(2002), Basic Marketing: A Global -Managerial

Approach, p.48, Mc Graw Hill

11 Philip Kotler, Gary Amstrong and Co-authors (2010), Principle Marketing, P110, Prentice Hall Europe

 Product: Anything that can be offered to a market for

attention, acquisition, use or consumption that might satisfy a

want or need

 Price: The amount of money charged for a product or

service, or the sum of the values that consumers exchange for

the benefits of having or using the product or service

 Place: All the company activities make the product or

service available to target customers

 Promotion: activities that communicate the product or service and its’ merits to target customers and persuade them to buy

Four Ps represent the sellers’ view of marketing tools that are available for influencing buyers According to De Pelsmacker, tools of marketing mix include detail as below, shown in table 1.1

Benefits List price Channels Advertising

Features Discounts Logistics Public relations

Options Credit terms Inventory Sponsorship

Quality Payment periods Transport Sales promotions

Design Incentives Assortments Direct marketing

Table 1.1 Instruments of the marketing mix12However, Robert F Lauterborn proposed a four Cs classification in 1993 that concentrates the concern on the buyers Sellers’ four Ps correspond to the customer’s four

12 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective, p.18, Pearson Prentice Europe.

Figure 1.1: Four Ps and

C in a marketing mix

Cs as table 1.2 The Four Cs model is more consumer-oriented and attempts to better fit the movement from mass marketing to niche marketing

Table 1.2: Four Ps correspondence to Four Cs13Promotion or MCs are the fourth and most visible instruments of the marketing mix They involve all instruments by means of which the company communicates with its target groups and stakeholders to promote its products or the company as a whole.14

1.1.3 Concepts of integrated marketing communications

According to Pickson and Broderick, MCs is “all the promotional elements of the marketing mix which involve the communications between an organization and its target audiences on all matters that affect marketing performance”.15

The integration of the various instruments of the communications mix is favourably influenced and necessitated by a number of important trends in marketing today Unfortunately, many companies still reply on one or two communications tools

The American Association of Advertising Agencies summarized and defined IMCs as below: “Integrated marketing communications is a concept of marketing communications planning that recognizes the added value of a comprehensive plan Such a plan evaluates the strategic roles of a variety of communications disciplines — for example, general advertising, direct response, sales promotion and public relations and combines these disciplines to provide clarity, consistency, and maximum impact through the seamless integration of messages.”

13 Philip Kotler, Gary Amstrong and co-authors (1999), Principle Marketing, P111, Prentice Hall Europe

14 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective, p4, Prentice Hall Europe

15 Pickson and Broderick( 2008), Integrated Marketing Communications, P.4, Prentice Hall Europe

1.1.4 Integrated marketing communications

Pelsmaker pointed out that good marketing is integrated marketing Two important principles when designing and implementing a marketing mix are consistency and synergy.16

 The first important principle is consistency: Marketing instruments have to be combined in such a way that the company’s offering is consistently marketed In other words, all marketing instruments have to work in the same direction and not conflict with each other

 The second important principle is synergy: Marketing mix instruments have to be designed in such a way that the effects of the tools are mutually reinforcing

1.1.5 Benefits of integrated marketing communications

IMCs plays roles to inform, persuade, and remind consumers – directly or indirectly – about the products and brands that they sell In a sense, MCs represent the “voice” of the brand and are a means by which it can establish a dialogue and build relationships with consumers.17

Integration is not easy to achieve but when it is achieved, the 4Es and 4Cs of IMCs create the synergistic benefits of integration 18

The 4Es of integrated marketing communications are:

 Enhancing – improve; augment; intensify

 Economical – least cost in the use of financial and other resources; not wasteful

 Efficient – doing things right; competent; not wasteful

 Effective – doing the right things; producing the outcome required; not wasteful The 4Cs of integrated marketing communications are:

 Coherence – logically connected; firmly stuck together

16 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective, p4, Prentice Hall Europe

17 Philip Kotler and Kevin Lane Keller ( 2011), Marketing Management, P.470, Prentice Hall, USA

18 Pickson and Broderick (2008), Integrated Marketing Communications, P.27-29, Prentice Hall Europe

 Consistency – not self-contradictory; in agreement, harmony, accord

 Continuity – connected and consistent over time

 Complementary communications – producing a balanced whole; supportive communications

1.1.6 Integrated marketing communication and brand equity

MCs are the voice of a brand Although advertising is the key tool of MCs when it comes

to building and sustaining strong brands, a number of other communications tools can be used and mixed carefully to build and reinforce brand equity

However, if we do not well manage the tools, it could be harmful for brand.19

 High advertising spending

 Directly mailing used in a “junk mail”, types of immediate material incentives reduce the quality perception of premium brands

1.2 TOOLS OF MARKETING COMMUNICATIONS MIX

Literature provides slightly different views on how the various means of communications should be categorized, and which instruments from the marketing communications

Del Pelsmacker divided elements of MCs mix into as below table:

Table 1.3: Elements of MCs mix 20

1.2.1 Advertising

1.2.1.1 Definition of advertising

Advertising is ranked into one of the oldest, most visible and most important instruments

of the MCs mix It is a good MCs tool to inform and persuade target groups

19 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective, P.72-75, Prentice Hall Europe

20 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective, p.4, Prentice Hall Europe

Personal selling Point- of

purchase

Direct marketing E-communications

Exhibitions and trade fairs

Many authors defined advertising as any paid, non-personal communication through various media by an identified company, non-profit organization or individual. 21

1.2.1.2 Roles and objectives of advertising in IMCs mix

Effective management of advertising starts with clear and measurable objectives Advertising objectives must be compatible with overall marketing objectives, which themselves must be consistent with overall corporate objectives 22

Philip Kotler says that an effective advertising should be: Creative, hard-hitting, memorable, clear, informative, and distinctive Advertising objectives can be classified according to whether their aim is to inform, persuade, remind, or reinforce These goals correspond to different stages: 23

 Informative advertising aims to create brand awareness and knowledge of new products or new features of existing products

 Persuasive advertising aims to create liking, preference, conviction, and purchase of

a product or service

 Reminder advertising aims to stimulate repeat purchase of products and services

 Reinforcement advertising aims to convince current purchasers that they made the right choice

1.2.1.3 Types of advertising

There are many types of advertising as table 1.4, based on characteristic of product or services and advertising goal, one or combine kinds of advertising can be chosen

21 De Pelsmacker, Geuens, and Van den Bergh (2010), Ibid, p.213

22 Philip J Kitchen and Patric De Pelsmacker (2004), Integrated Marketing Communications: A primer,

Routledge, P.41,London and New York

23 Philip Kotler and Kevin Lane Keller ( 2011), Marketing Management, P.499, Prentice Hall, USA

Traditional media Note

 Directory advertising (e.g “Yellow pages”)

 Some forms of outdoor signage ( e.g static hoardings)

non-commission bearing-now usually negotiated

on a fee for service basis

 Direct mail

 Sales promotions ( although this may involve using other

media forms)

 Brochure, flyers ect

New media forms

 Event signage ( including computer-generated ‘virtual’

signage and holograms)

 Flexible forms of outdoor signage such as advertising on

cars, taxis, yacht sails, balloons

Table 1.4: Types of advertising24

1.2.1.4 Advantages and disadvantages of some advertising types

Advertising has trend to move from mass media to other types that allow more precise targeting and greater cost efficiency However, each type of advertising has it own advantages and limitations To limit disadvantages of adverting, one of the methods is to combine with other tools of communications mix to expand its effectiveness, such as: sales promotion, public relations, sponsorship, ect… Advantages and limitations of major types are mentioned as table 1.5

24 Philip J Kitchen and Patric De Pelsmacker (2004), Integrated Marketing Communications: A primer,

Routledge, P.33,London and New York

Medium Advantages Limitations

 Newspaper Flexibility; timeliness; good local

market coverage; broad acceptance;

high believability

Short life; poor reproduction quality; small “pass-along” audience

 Television Combines sight, sound, and motion;

appealing to the senses; high attention;

high reach

High absolute cost; high clutter; fleeting exposure; less audience selectivity

 Direct mail Audience selectivity; flexibility; no ad

competition with the same medium;

personalization

Relatively high cost; “junk mail” image

demographic selectivity; low cost

Audio presentation only; lower attention than television; nonstandardized rate structures; fleeting exposure

 Magazines High geographic and demographic

selectivity, credibility and prestige;

high quality reproduction; long life;

good pass-along readership

Long ad purchase lead time; some waste circulation; no guarantee of position

 Outdoor Flexibility; high repeat exposure; low

cost; low competition

Limited audience selectivity; creative limitations

 Newsletters Very high selectivity; full control;

interactive opportunities; relative low

costs

Cost could run away

 Brochures Flexibility; full control; can dramatize

messages

Overproduction could lead to runaway costs

possibilities; relatively low cost

Relatively new media with a low number

of users in some countries

Table 1.5: Advantages and limitations some major media types 25

1.2.2 Sales promotion

1.2.2.1 Definition of sales promotion

Unlike many other tools of communications mix, sales promotions are category of techniques aimed to increase sales in the short run Therefore, it is mostly used for a short period of time

Sales promotion is defined as a variety of short-term incentives to encourage trial or purchase of a product or service.26

25 Philip Kotler and Kevin Lane Keller (2011), Marketing Management, P.507, Prentice Hall, USA

26 Philip Kotler and Kevin Lane Keller (2011), Ibid, P 499

1.2.2.2 Roles and objectives of sales promotion in IMCs mix

According to Kitchen and Pelsmacker, sales promotion is most effective when it is integrated in overall MCs effort Manufacturer can support his brands by means of advertising in which consumer promotions are highlighted; marketing publish relations events can be used for the distribution of samples or organization of contests, coupons can be inserted in advertisements or direct mailings; promotion offers can be put on company’s website and advertising campaigns can draw attention to the website and promotion,… 27

Various objectives of sales promotion can be pursued: attracting new customers, making existing ones loyal, increasing market size, reinforcing other communications tools and rewarding loyal customers.28

1.2.2.3 Tools of sales promotion

There are there basic categories can be distinguished: monetary incentives, prize and product promotions as table 1.6

 Price cut on the shelf  Contests  Sampling

 Coupons  Sweepstakes and lotteries  Free in mail

Table 1.6: Consumer promotion tools 29

1.2.2.4 Advantages and disadvantages of sales promotion

Various studies lead to the conclusion that, although sales promotion can lead to increased sales, market share and more customer interest in the short run but they lead to

no effects or negative effects in the longer run In long term, sales promotion can be

27 Philip J Kitchen and Patric De Pelsmacker (2004), Integrated Marketing Communications: A primer,

Routledge, P.59, London and New York

28 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective, p.430, Prentice Hall Europe

29 De Pelsmacker, Geuens, and Van den Bergh, Ibid, P.412

harmful for the brand image There is a risk that product or company will get cheap image if marketer has too often sales promotion or company will get cheap discounts or price reduction campaigns.30

1.2.3 Sponsorship

1.2.3.1 Definition of sponsorship

Sponsorship is an increasingly important instrument of marketing communications The company promotes its interests and brands by linking them to a specific and meaningful event or cause

Sponsorship can be defined as an investment in cash or kind in an activity, in return for access to the exploitable commercial potential associated with this activity.31

1.2.3.2 Roles and objectives of Sponsorship in IMCs mix

Sponsorship is a very flexible communications tool that can be used to achieve both marketing (awareness and image building about product or brand) and corporate communications objective (promoting corporate image and increasing goodwill with a variety of target groups)

Sponsorship has been defined as advertising, as public relations, and as sales promotions Types of sponsorship are closely related to public relations because they mainly support the image of the company as a whole towards a variety of stakeholders

The nature and objectives of marketing-related sponsorship are closer to advertising than

to any other marketing communication instrument However, sponsorship is a potentially more powerful image builder than advertising; qualified as a “cheap alternative to advertising” in terms of the cost of creation and exposure On the other hand, sponsorship

is less flexible than advertising because it is often less suited to show products or give information about product characteristics and product usage

Table 1.7 gives an overview of the two categories of objectives In each of the categories

a distinction can be made between type of target group and/or the type of objective

30 Philip J Kitchen and Patric De Pelsmacker (2004), Integrated Marketing Communications: A primer,

Routledge, P.59 & P.94, London and New York

31 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective,4th edition, p.369, Prentice Hall Europe

Corporate

communications

objectives General public

 Increase general public awareness of company

 Promote or enhance corporate image

 Alter public perception of company

 Involvement with the local community Channel

members and trade relations

 Build trade relations

 Corporate hospitality

 Demonstrate trade goodwill

Employees

 Enhance employee relations and motivations

 Assist staff recruitment

 Facilitate prospecting for the sales force

Opinion-formers and decision-makers

 Increase media attention

 Counter adverse publicity

 Build goodwill

 Reassure policy-holders and stockholders

 Personal objective of senior managers Marketing

communications

objectives Awareness

building

 Increase awareness with actual customers

 Increase awareness with potential customers

 Confirm market leadership

 Increase new product awareness Brand image  Alter perception of brand

 Identify brand with particular market segment Sales/market

share

 Induce trial of new product

 Increase sales/market share

Table 1.7: Roles and objectives of sponsorship32

32 De Pelsmacker, Geuens, and Van den Bergh (2010), Ibid, p.377

33 De Pelsmacker, Geuens, and Van den Bergh (2010), Ibid, p.382

Broadcast or sponsorship program are a more recent phenomenon A brand can sponsor

for a sport program, weather forecast

Cause- related sponsorship may be the oldest form of sponsorship, or rather charity

 MUSH: stands for Municipal, University, Social, Hospital sponsorship

Figure 1.2: Types of sponsorship 34

 Transaction- based sponsorship: is a type of sponsorship in which the company

invests a pre-specified amount of money every time a consumer buys one of the

company’s products

 Value marketing: can be defined as a strategy in which a company links its

activities to a philosophy of general societal interest

 Ambush: parasitic marketing is a planned effort by a company to confuse the consumer regarding its affiliation status and to associate indirectly with an event in order

to gain some of the recognition and beneficial associated with being an official sponsor

1.2.3.4 Advantages and disadvantages of sponsorship

One of important advantages of sponsorship is less cluttered and financially more

attractive Besides, it can be considered a cheap form of advertising However, the

disadvantages are less control over sponsorship, which makes their messages more

indirect and implicit

34 De Pelsmacker, Geuens, and Van den Bergh (2010), ibid, p.378

Sponsoring as many other marketing communications instruments is not as effective as possible if used alone Supporting activities and linkage to other instruments strengthen influence of intended messages.35

1.2.4 Public relations and publicity

1.2.4.1 Definition of Public relations and publicity

Public relations (PR) are considered to be a bridge connecting the gap between the company’s point of view and media coverage of the company’s activities Thanks to PR, goodwill of company and product marketing are promoted It also plays a vital role in integrating the company’s communications effort

Public relations and publicity are defined as a variety of programs designed to promote or protect a company’s image or its individual products 36

1.2.4.2 Roles and objectives of public relations and publicity

According to Del Pelsmacker, public relations are the management of reputation It is about building and maintaining long-term goodwill Vis - à- Vis a large variety of audiences and stakeholders Importance of public relations is expressed through objectives and task as below:

Information Impact of trends Information Information New productsTraining Public visibility Credibility Opinions Sponsorship

34 De Pelsmacker, Geuens and Van den Bergh (2010), Ibid ,p.369-374

36 Philip Kotler and Kevin Lane Keller ( 2011), Marketing Management, P 472, Prentice Hall, USA

37 De Pelsmacker, Geuens, and Van den Bergh (2010), opcit, p346

A specific task of PR is communicating in times of crisis Building goodwill by means of pre-crisis PR is essential to limit the fallout of a crisis situation, although PR activity during the crisis is equally important

1.2.4.3 Tools and activities of public relations

Public relations professionals use a multitude of instruments and channels to reach their objectives The instruments used may be similar for different target groups and objectives but some of them are specifically suited for specific target groups and objectives

Depending on the nature of these stakeholders, different types of public relations can be distinguished

placement Open-door policies Annual report Annual report Press release Product eventsInternal

Social activities Newsletters

Direct mailing Flyers, brochures

House style material

Table 1.9: Tools of PR in marketing and corporate image38

 Marketing PR is targeted at commercial stakeholders, such as distributors, supplier, competitors and potential customers, and can be defined as being more in direct support

of marketing communications

38 De Pelsmacker, Geuens, and Van den Bergh (2010), ibid, p.351

 Corporate PR, such as public affairs, financial and media PR, supports corporate image and corporate reputation It mainly aimed at maintaining good relations and creating goodwill with all kinds of audiences who may be important for the company in the long run

 A special type of PR activity is internal PR by means of which employees and shareholders are informed and/or motivated to co-operate in achieving the goals of the marketing and corporate communications plans

1.2.4.4 Advantages and disadvantages of public relations

There are some advantages of Public relations could be recognized: credibility, avoidance

of clutter, good citizenship, ability to reach specific groups, cost-effective, crisis management, message flexibility, image building

However, the most disadvantages relate to the lack of the user’s control over it; effectiveness is hard to measure; depend on journalists

1.2.5 Direct marketing

1.2.5.1 Definition of direct marketing

It is said that keeping existing customers loyal is far less expensive than gaining new customers Hence, using direct marketing techniques become increasingly important Direct marketing is defined as “use of mail, telephone, fax, email, or internet to communicate directly with or solicit response or dialogue from specific customers and prospects.” 39

1.2.5.2 Roles and objectives of direct marketing in IMCs mix

Contrary to mass communications, direct marketing aims at creating one-to-one personalized and therefore persuasive interaction with (potential) customers In that respect, it is similar to personal selling However, if carefully managed, direct marketing can substitute some of the tasks of the sales force much more cost-efficiently

According to Del Plesmacker, direct marketing can serve a number of objectives.40

39 Philip Kotler and Kevin Lane Keller ( 2011), Marketing Management, P 472, Prentice Hall, USA

 Direct sales

 Sales and distribution support

 Customer loyalty and retention

Therefore, direct marketing is essentially transaction-oriented, to build and maintain long-term relationships

1.2.5.3 Tools of direct marketing

Basic idea of direct marketing is to communicate individually with customer or potential customer Characteristic of direct marketing is bidirectional communication that is usually offers receiver a possibility to communicate back Therefore, direct marketing could become essential factors for relationship development.41

Direct marketing uses a multitude of tools and media Some of them are non-addressable mass media instruments, such as direct response print and television ads and teletext Others are addressable or personalized, such as direct mail, telemarketing and catalogues

A prerequisite for successful direct MCs is building, maintaining and managing a marketing database which enables the company to collect individualized information on all its customers and prospects

40 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective, p.467, Prentice Hall Europe

41 De Pelsmacker, Geuens, and Van den Bergh (2010), ibid, p.354-377

42 De Pelsmacker, Geuens, and Van den Bergh (2010), ibid, p 472

1.2.5.4 Advantages and disadvantages of direct marketing

Besides personal selling, direct marketing is the communication tool that is the best suited to build the relationship between the customers and the brand However, it also has some limitations and strengths as table 1.11

 Build relationships

 Persuasive

 Personalized and interactive

 Leads to behavior response

 Convenient for customer

 Improved service

 Flexible and precise targeting

 Effects easily and precisely measurable

 Cost per prospect can be high

 Clutter (‘junk mail’)

Philip Kotler called the marketing through electronic tools is interactive marketing

However, De Pelsmacker distinguished and separate into e-communications

E-communications is defined as “using the internet, mobile phones, interactive television, and other electronic media in marketing communications campaigns” 43

1.2.6.2 Roles and objectives of e-communications in the IMCs mix

Going along with explosion of internet, mobile phone and other electronic media, marketers have more chance and instrument to interact and communicate with target customers

Characteristics, useful objectives of e-communications are summarized as below: 44

43 Philip J Kitchen and Patric De Pelsmacker (2004), Integrated Marketing Communications: A primer,

Routledge, P 110, London and New York

 Generating brand awareness: putting or reinforcing the brand in the evoked set of consumers

 Shaping brand image and brand attitudes: defining, reinforcing or changing the set

of associations that differentiate the brand from competing products and improve consumers’ knowledge and judgment about a brand

 Generating trial: attracting new buyers to the brand by attracting brand switchers or consumers who has never tried the product category before

 Creating loyalty: influencing consumers’ buying behavior in the sense of increasing the number of satisfied and committed buyers

1.2.6.3 Tools of e-communications

According to De Pelsmacker, e-communications offer new ways to communicate interactively with different stakeholders

 The internet, together with e-commerce, combines communications with selling

 Mobile marketing uses the possibilities of text, video and sound transfer to mobile phones

 Interactive digital television has the potential to transform traditional advertising into interactive communication on television

In addition, marketing communications in the internet could be divided into fields that are more specific The heart of internet communication is company, product or brand websites, which could be seen as marketer’s home in the internet Besides websites marketer can utilize among others various ways of web advertising, search engine optimization, viral marketing, social medium, networks, online events, blogs, wikis, podcasts, feeds, etc All of these channels could be utilized both to offer and to gather information.45

44 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective, p 561, Prentice Hall Europe

45 De Pelsmacker, Geuens, and Van den Bergh (2010), Marketing Communications: a European

Perspective, p 562-682 , Prentice Hall Europe