further understanding on integrated marketing communication imc essential implications to plan an effective imc campaign in vietnam automobile industryf

These always matter to automobile marketers This thesis was written with the subject of “Further understanding on Integrated Marketing Communication IMC-Essential implications to plan a

ĐẠI HỌC QUỐC GIA HÀ NỘI

TRƯỜNG ĐẠI HỌC KINH TẾ

NGUYỄN VĂN VƯỢNG

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

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS Vũ Huy Thông

Th.S Nguyễn Việt Anh

TABLE OF CONTENT

ABSTRACT 1

TÓM TẮT 2

LIST OF ABBREVIATION 3

LIST OF TABLES 4

INTRODUCTION 9

1 NECESSITY OF THE THESIS 9

2 PURPOSE 9

3 KEY RESEARCH AREA 10

4 METHODOLOGY 10

a Research purpose 10

b Research Approach 11

c Research Strategy 11

d Data collection 13

e Sampling 13

f Data analysis method 14

g Validity 15

h Data presentation and data analysis 16

5 CONTRIBUTION OF THIS THESIS 16

6 OUTLINE 16

CHAPTER 1 LITERATURE REVIEW 18

1.1 PRIOR CONCEPTS TO UNDERSTAND INTEGRATED MARKETING COMMUNICATION 18

1.1.1 Market 18

1.1.2 Marketing 18

1.1.3 The Changing Role of Marketing 18

1.1.4 Relationship marketing 19

1.1.5 The marketing mix 20

1.2 INTRODUCTION TO INTEGRATED MARKETING COMMUNICATION 20

1.2.1 The Integrated Marketing Communication Process Model 20

1.2.2 Marketing Communication 22

1.2.3 The concept of Integrated Marketing Communication 23

1.2.4 The revolution of IMC 24

1.2.5 Major reasons leading to the revolution of IMC 25

1.3 APPROACH OF IMC IN AUTOMOBILE 26

1.3.1 The IMC Concept in Automobile 26

1.3.2 History of Marketing Communication in Automobile 26

1.4 THE IMC PLANING PROCESS MODEL 29

1.4.1 Identifying the target audience 30

1.4.2 Determine objectives of communication 30

1.4.3 Design the message 31

 Content 31

 Structure 32

 Format 32

 Source 32

1.4.4 Selecting Communication Channels 33

 Directed communication channel (Personal communication channels) 33

 Indirect communication channel (Non-personal communication channels) 33

1.4.5 Establish the budget 33

1.4.6 Deciding on the Marketing Communications Mix 34

 Selection factors 34

 IMC tools 37

1.4.7 Measure Result 37

1.4.8 Manage the Integrated Marketing Communications Process 37

1.5 MAJOR TOOLS USED IN AN IMC CAMPAIGN 37

Overview of the promotion mix 37

1.5.1 Advertising 38

 Definition 38

 The Five Ms (5Ms) of Advertising 38

1.5.2 Sales promotion 41

 Definition 41

 Sales promotion purposes 41

 Sales Promotion type and sales promotion tools 41

 Steps in Sales Promotion Program Development 42

1.5.3 Direct marketing 42

 Definition 42

 Direct Marketing Tools 42

 Steps in Developing a Direct-Mail Campaign: 43

1.5.4 Interactive/internet Marketing 43

1.5.5 Public Relation and Publicity 44

 Publicity and Public Relation 44

 Publicity 44

 Public relation 45

 Personal Selling 46

1.6 THE IMC SYNERGY MODEL 46

1.6.1 Consistency 46

1.6.2 Interactivity 46

1.6.3 Mission-orientation 47

1.6.4 Audience complexity 47

1.6.5 Product complexity 47

1.6.6 Distribution complexity 48

1.7 CONCEPTUALIZATION AND FRAME OF REFERANCE 48

1.7.1 Conceptualization 48

1.7.2 Frame of Reference 48

CHAPTER 2 CASE STUDIES 50

2.1 DATA PRESENTATION 50

2.1.1 Case 1 The IMC Planning Process in GM Daewoo Vietnam 50

2.1.2 Case 2 The IMC Planning Process Ford Vietnam 57

2.2 DATA ANALYSIS 61

2.2.1 Within Case 1 The IMC Planning Process In 61

GM Daewoo Vietnam 61

2.2.2 Within Case 2 The IMC Planning Process of Ford Vietnam 65

2.2.3 Cross Analysis 67

CHAPTER 3 FINDING AND IMPLICATION 69

3.1 IMPLICATIONS FOR IMC PLANS OF GM DAEWOO VIETNAM AND FORD VIETNAM 69 3.1.1 Implications for IMC Planning Processes of GM Daewoo 69

Vietnam and Ford Vietnam 69

3.1.2 Implications for existing IMC campaigns of Vietnam automobile ventures 73

 Media As A Matter of Communication 79

 Advertising As A Matter of Communication 82

 Demography As A Matter of Communication 84

3.1.3 Examples of IMC Impacts 86

 An example of IMC impact-Ford Vietnam 86

 An example of IMC Impact-GM Daewoo Vietnam 87

3.2 IMPLICATION FOR EXISTING THEORY 90

 Perception of IMC Benefit 90

 Organizations’ (Clients’) perception of IMC benefit 91

 The agency’s perception of IMC Benefit 92

 Audiences’ perception of IMC benefit 93

CONCLUSION 97

LIST OF REFERENCES 98

APPENDIX 99

APPENDIX 1 A DVERTISING ’ S HISTORY AND EVOLUTION 99

APPENDIX 2 V IETNAM A UTOMOBILE I NDUSTRY 102

APPENDIX 3 GM D AEWOO ’ S M EDIA P LACEMENT S CHEDULE 111

APPENDIX 4 V IETNAM A UTOMOBILE P ROMOTIONAL A CTIVITIES 113

APPENDIX 5 I NTERVIEW Q UESTIONS -IMC P LANNING P ROCESS 118

APPENDIX 6 C ONSUMER ’ S I NTERVIEW Q UESTIONS 125

APPENDIX 7 A SUCCESSFUL IMC C AMPAIGN 130

APPENDIX 8 LIST OF INTERVIEWEES (H ANOI AND H OCHIMINH C ITY - EXTRACTED ) 131

LIST OF ABBREVIATION

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

AIDA AWARENESS, INTEREST, DESIRE AND ACTION

AMA AMERICAN MARKETING ASSOCIATION

CKD 1 COMPLETE KNOCKDOWN KITS, TYPE 1

U.S OR USA UNITED STATE OF AMERICA

IMC INTEGRATED MARKETING COMMUNICATION

MARCOM MARKETING COMMUNICATION

LIST OF TABLES

Exhibit 4 Product life cycle and promotion mix strategy 36

Exhibit 11 Comparison of Kottler’s and GM Daewoo’s IMC Model 61

Exhibit 13 Comparison of Kottler’s and GM Daewoo’s IMC Model 65 Exhibit 14 Comparison of GM Daewoo’s and Ford’s IMC Model 67 Exhibit 15 IMC Planning Models Adjusted for GM Daewoo and Ford 72

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 that current market size is small and certain disadvantages, Vietnam automobile 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 entities…the market also attracts emerge domestic assemblers

Even though ventures are leading automobile manufactures around the world, experienced on different markets, they now meet certain difficulties in Vietnam-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? Is current promotional program appropriate? These always matter to automobile marketers

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

Marketing Communication (IMC)-Essential implications to plan an effective IMC campaign in Vietnam automobile industry” expected to ease up above

questions The thesis partly 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 communication 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 Vietnam Advertising Industry

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

4 METHODOLOGY

a Research purpose

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

 Exploratory is especially necessary when don‘t understand the issue at hand 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 example 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

 Alternative explanations for findings should be ruled out

 Nomic necessity The ―causal link‖: ―Do we have reason to believe that the relationship makes sense‖

Due to the fact that I do not intend to explain reasons behind IMC planning decisions of Automobile manufactures; instead of that, I focus on describing how

1 Causal sometime called Explanatory

IMC is planned in some Vietnam automobile firms 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 two ways to address a problem when conducting a research; they are qualitative research and quantitative research According to Yin, the focus of qualitative research is ―not numbers but on words and observations, stories, visual portrayals, meaningful characterizations, interpretations and other 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 coded identifier to assist in checking and cleansing the data set Code responses logically, include codes for non- responses, refusal to answer, and non-applicable

Qualitative ―purists‖ argue that their 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‖, (Wolfinbarger) In this thesis I used both quantitative method and qualitative method, they can support each other to affiliate the researching purpose

c Research Strategy

Strategy is the way to conduct the research There are many research strategies; according to marketing statisticians, these following strategies are often in used: Experiment, Survey, Archival Analysis, History and Case Study

 Experimental research systematically changes the level of one or more independent variables and seeing the impact on the outcome variables

 Survey are the same information (variables) collected from a number of cases

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 and concerns about the reliability of the research

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

to evaluate secondary data are:

 Who collected it?

 Why was it collected?

 How was the data collected?

 What data were collected?

 When was the data collected?

 Do 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 different 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

in a typical industry like Vietnam Automobile Industry, the appropriate strategies 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 that, to fulfill the purpose of the research, other 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 conduct an interview are:

 Open-end: the respondent freely answer the question

 Structured interview: Respondents are asked about certain issue

 Focus group: A loosely structured interview conducted by a qualified moderator among a small number of informants simultaneously There are often six or more persons involving in a focus group; they freely to talk about an issue exchanging their ideas for certain time and after that they can move to another issue

 Archival record is the data collection method that use data form previous researches as a source for reference This is also reliable source 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 strategy, samples need to be taken in 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 to that, Vietnam

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 Vietnam-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 planning of GM Daewoo Vietnam nearly unchanged after the acquisition About consumer‘s sampling as presented in data collection method above, I used archival 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 for 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 theoretical proposition: this strategy is often used when researching strategy is to select one or more cases then compare it with theories; in addition

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 alternative for relying on theoretical proposition is developing a case description This strategy is usually implemented when there is no previous research available thus, it leads to develop multiplied full case studies and it focuses on cross analysis rather than relying on theoretical proposition approach

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

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 theoretical proposition 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, theories and empirical evidence There are four tests to reinforce quality of a research: construct validity, external validity,

internal validity and reliability

 Construct validity: this strategy aims at establishing 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 Due 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 relating people use it as material for their work while ensure that the same procedure for next research is still correct In fact, this studying method is approached by many researchers As mentioned in early, this research can be reference for automobile companies and advertising agencies in Vietnam

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

h Data presentation and data analysis

Data presentation and data analysis (IMC Planning 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, Hanoi National University During three months of studying and writing this thesis, I have gained deeper understanding on Integrated Marketing Communication in Vietnam automobile industry, especially in GM Daewoo Vietnam-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 marketers conduct their marketing activities in academic and scientific way

6 OUTLINE

This thesis is presented in three chapters,

Chapter 1: Literature Review

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

Chapter 3: Finding and Conclusion

 The 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 basic concepts of Integrated Marketing Communication Planning Process, major tools of Integrated Marketing Communication and The Synergy Model of Integrated Marketing Communication

 Chapter 2 consists of two case studies of IMC Planning Processes in Ford Vietnam and GM Daewoo Vietnam-two automobile ventures The chapter also includes analysis and comparisons

 Chapter 3 presents findings and implications for automobile marketers and marketing communication agencies in Vietnam To support for these conclusion,

consumer‘s perception of current IMC campaigns of Vietnam automobile ventures

3 In this chapter, IMC campaigns just are extractions; see more for IMC 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, families traded or sold their

output to local middlemen Local middlemen, in turn, resold these goods to other consumers or more distant middlemen In Simple Trade Era, the focused role of marketing described 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 products are available in a given market

 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 customers

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

brought under the control of one department When executed well, this improves short-run policy planning by integrating and coordinating the firm‘s

activities (Coordinate and Control)

 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 The question involved in explaining the concept of marketing and roles of marketing Here below are most popular definitions of marketing

―Marketing is a societal 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 Kotler) Exchange involves obtaining a desired product from someone by offering something in return The exchange process must satisfy following preconditions: Exist at least two parties; parties are

on their own choice to participate in exchange process; Each 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 supplement 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 to create exchanges that satisfy individual and organizational objectives.‖

Therefore, marketing is a vast field and valuable things for exchange is also diverse

1.1.4 Relationship marketing

Today the competition is getting tougher and tougher On the market, no company can free stand alone as solo player The unique position no longer exists in a free

competitive environment and customers are key drivers of the market How may way to co-exist with customers? Just one way-satisfy them How to satisfy them? Just one way again-Do better than what competitors do Companies nowadays do not focus on beating competition-seek and kill their competitors This 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 results in marketing network between the company and its supporting stakeholders

1.1.5 The marketing mix

marketing relationship by fully examining the needs and wants of customers, developing products and services that satisfy these needs, offering it at certain price, making it available through particular place or channel of distribution, developing a program of promotion or communication to create awareness and interest The marketing mix is a main tool set for companies to position their brands and services The basic task of marketing is to combine these elements so that it can affiliate the exchange process with consumers in market place The 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 MARKETING

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 transmission, and understanding information using verbal or non-verbal symbols Another definition, communication

4 The 4Ps include: product, pricing, place or distribution, and promotion The 4Ps will 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

One hundred percent understanding is the goal of communication but error 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 fails to meet its desired goal Thus, in order to pursue the synergy of integrated marketing communication process, besides coordinating integrated marketing communication tools, one can improve the efficiency of each component

or all components in the model above

 Encoding 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 audiences (Duncan)

 Message is the encoded idea … the set of symbols that are transferred from source to receivers through communication channel Message and channel is affected by interference and distraction called noise During process from encoding to decoding, the noise can distort the message making it different from expectation of senders, commonly cause negative results

Feedback Noise

Encoding

Message

Information channel (TV, print, mail…)

Exhibit 1 The IMC process model

 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 mental process within which receivers perceive the message

 Feedback 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 ordering request

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 inform‖, ―to persuade‖ and

―to remind‖ firm‘s audiences An alternative 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

Marketing Mix

Product Price Distribution Promotion

Exhibit 2 The promotional mix model

1.2.3 The concept of Integrated Marketing Communication

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

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 Marketing, 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 them as separated businesses which provided separated budgets and

strategically integrating the various communication functions rather than having them operates autonomously By coordinating their marketing communication effort can avoid duplication, take the advantages of synergy among various communication tools and develop more efficient and effective marketing communication programs to maximize the return on investment in marketing activities; this marketing expenditure now must be considered as an investment 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 role of a variety of communication disciplines (for example, general advertising, direct response, sales promotion and public relation…) and combine these disciplines to provide clarity, consistency, and maximum communication impact‖

5 Fragmentation among consumers mainly resulted from the difference of following factors: income, demographic, life style shopping pattern…

6 For the corporate goal of a Marcom agency, there still exist interrelationship among promotional services

(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‖

Integrated 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 Internet as a viable marketing channel, and the ever-increasing pressure for marketers to demonstrate a return on marketing investment

It is helpful in discussing integrated marketing approaches to recognize and understand three stages of integrated marketing that have emerged 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 Translation stage has extended beyond consistent messaging and visuals to include tactics such as including a URL on a print or TV 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 to get users to engage with 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 first two stages of integration is to coordinate elements

of the marketing mix However, as target audiences have more choices (due 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 channel has a distinct, unique role in leading the customer to act as desired The difference between 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 is not so much on consistency 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 adopt new technologies

 Traditional media are facing declining audiences and less responsive consumers

 Innovative marketing practices

 Innovative marketing practices:

 A shift in marketplace power from manufacturers to retailers

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

 A movement away from relying on advertising- focused approaches to solve

communication problems

 The 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 IMC not until was developed with an official definition

by three scholars: Schultz, Tannenbaum, and Lauterborn in 1993 However, prior concepts of IMC and early 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 automobile firms and their responsible subsidiaries to current consumers and potential consumers in order to raise awareness; maintain or change brand image; persuade for buying actions; and get loyalties 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 century to now Main discussion 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, automobile production began in the United States in 1896 with the first car 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

automobile would be an improvement over the horse, their real competition Consumers needed convincing that these horseless carriages, whether powered by gasoline, steam or electric, were safe, reliable and dependable and cost less to maintain than a horse A major turning point occurred in 1908, when Henry Ford introduced his Model T and William Durant launched General Motors Ford's Model T was tough, reliable and affordable and is the car that truly put the United States - and the world - on 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

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

to 1927 Many years, the Model T 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, Auburn, 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 now the competition was not the horse but other automobiles Now we begin to 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

These were two separate firms, although they would merge in 1926

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 II 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 not 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, bombsights, aircraft engines and thousands of other products for 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 intended to tell the story of the industry's contribution 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 Millions of returning servicemen wanted cars and Detroit gave them just what they wanted - big, powerful and covered with chrome Design was influenced by the combat aircraft of World War II and the '48 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 most of the millions of cars sold in the '50s were American cars

Advertising was directed to self-satisfied family values And the marketers meant two cars for every family, big enough to take everyone to see the U.S.A all at once and in living-room comfort

It also 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 '60s, automotive marketers discovered the power of youth - both to 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 safety regulation and gains by imported cars put a damper on the party

In 70s and 80s there was a new trend in society emerged as a cultural icon and when women and minorities adopted new roles and there was new trend of hedonistic values, automobile advertising are more focuses on these attributes by sharply portraying the value of life style of consumers; technical argument must be communicated In marketing language, the term ―unique selling proposition‖ had emerged, showing the product's advantage over rivals

From 90s to now, the concept of IMC was introduced with support of information technology and mass media, marketers need to find more ways to communicated with consumers As a result, the synergy among marketing tools was seriously taken under consideration (This 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 Planning Process, the IMC Planning Process presented below is based on marketing theory of Phillip Kottler The process includes following steps:

 Identify target audience

 Determine objectives of communication

 Design the message

 Select communication channels

 Establish the budget

 Select the marketing communications mix

 Measure results

 Manage the IMC process

1.4.1 Identifying the target audience

Audiences of an IMC campaign are people or organization that the firm wants to send the message to They could be ultimate end user, middleman, partner, government, and competitors Generally, audiences are firm‘s stakeholders IMC planners need to specify target audiences to focus on This will result in communication impact as well as media cost The more precise audience is described the more communication impact and the fewer media expense Identifying the target audience also involves in assessing the audience‘s perceptions

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

 Review of firm or brand image and implications for promotion

 Review of relative strengths and weaknesses 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 to 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 luxurious sedan segment Marketing objective is only determined based on marketing strategy of the firm after considering various factors and analysis from macro analysis, industrial analysis, assessment of strength, weakness, opportunity and threat as well as competitive advantages Rather, marketing communication objective belongs to marketing and communication category; the common denominator of marketing communication objective usually reach and coverage, consumer‘s recognition, attitude, and behavior For example,

within half of year, the firm will inform to 1 million target consumers in key cities about a new brand of Ford Focus 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‖ rather than ―informing‖ when firm pursue to change consumers‘ behaviors looking for the their final decisions which relating to trial or request or buying…

There is a model called AIDA used to describe and evaluate the process of a buying decision According to the model, a buying decision process is developed through four stages: Awareness, Interest, Desire and Action First, consumers are aware about products and services; after that, they feel a little bit attractive with those; 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, Format, 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

 Format

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

followings:

 Graphics, visuals

 Headline, 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

 Trustworthiness

 Liability

1.4.4 Selecting Communication Channels

Communication channel decision is based on characteristics of audience and communication channel 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 channel (Personal communication channels)

This communication channel type proves effective because sender likely receive feedback from audience 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 influential community members

 Using influential people in testimonial advertising

 Developing advertising with high ―conversation value‖

 Use viral marketing

 Establishing an electronic forum

 Developing word-of-mouth referral channels

 Indirect communication channel (Non-personal communication channels)

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

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

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

1.4.5 Establish the budget

Basic tasks of budget determination are to define the funding source and define budget setting method There are many methods to set budget for a promotional program such as

1.4.6 Deciding on the Marketing Communications Mix

There are two main considerations for marketing communication mix: selection factors and IMC tools This is crucial for meeting communicating goals designed

 Selection factors

According to marketers, there are five major impacts on IMC; those are target market, characteristics of product/service, product life cycle, budget and Consumer vs business market

In Need Arousal Period, marketers need inform consumers about product/service by advertising To create goodwill in Information Search and Evaluation, marketers need to compare product/service with that of competitors

 Market area: Personal Selling is suitable with small market and advertising and mass Media is likely to use in large market

 Consumer: Different consumer groups require different promotional tools 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 market then advertising is appropriate On the other hand, if product/service are high value items then personal selling is suitable

 Product/service particular: Advertising is suitable with standardized

product/service

 Before and After Sales Service: The 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 Each kind of products has their own life cycles and in each product life cycle stage, there are different promotional strategies:

In the graph below, Stage 1 denotes introducing stage

Stage 2 denotes developing stage Stage 3 denotes maturity stage, and Stage 4 denotes declining stage

Time Stage 1 Stage 2 Stage 3 Stage 4

Exhibit 3 Product life cycle

Exhibit 4 Product life cycle and promotion mix strategy

Product life cycle Promotion mix Strategy

Introduction Stage

Inform consumers about product and the benefit it could bring to customers Provide consumers with guiding information Promote primary need and want by exposing core benefits of product Major promotion mix tools used

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

Develop Stage

Promote the demand for selective brands In this stage, advertising and point of purchase are powerful tools to attract customers In this stage, company can ask intermediaries to share promotional fee

rebuild a renaissance

 Budget: Budget is one of important factors to consider IMC campaign If adequate budget, firms usually use advertising if it is necessary On the other hand, firm is likely to use personal selling or share advertising expense when they are insufficient budget (See more about budget-setting method in article 2.4.5)

 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, distributors Marketers usually use advertising and sales promotion efforts directed toward the ultimate consumers

 Business market-Promotional Push Strategy

In Promotional Push Strategy, marketers design programs to persuade the trade to stock, merchandise, and promote a manufacturer‘s products 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)

 IMC tools

IMC tool decision is one of the two considerations of Deciding on The Marketing Communications Mix Due to its crucial role to IMC campaign, IMC tools will be carefully presented in article 2.5 as a separated section including decisions for Media

1.4.7 Measure Result

After launching an IMC campaign, marketers usually conduct a market survey to measure the result of the IMC campaign Different parameters will be in use: Recognition, recall, attitudes, behavioral responses and corresponding sales Measure result of IMC campaign is very important for control; it helps marketers 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 each tool of the IMC tool set

1.4.8 Manage the Integrated Marketing Communications Process

During the period of launching IMC campaign, marketers always keep eyes on the process, any error 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 firms‘ ability to reach right customers at right time with right message

1.5 MAJOR TOOLS USED IN AN IMC CAMPAIGN

Overview of the promotion mix

The last element of marketing mix-promotion-sometimes referred as ―promotion mix‖ because this element includes other sub-elements; they are Advertising, Direct

marketing/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

1.5.1 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 communication must be paid for; the communication must be delivered through mass media; the communication must be attempting to persuade For many years, mass media advertising dominates promotional programs of many

 Inform Advertising often announces consumers about new product/service or new product/service features

 Persuade Advertising always contains marketer‘s effort to induce consumer to buy product/service Message always show the unique selling points or superior attributes of product/service in comparison with that of competitors

 Remind Advertising aims at verifying main characteristics or benefit of

9 See more about advertising in appendix 1 Advertising‘s evolution-history-audience-agency

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 advertising, Factors to consider advertising budget are:

 Stage of product life cycle

 Market share and consumer base

 Competition and clutter

 Advertising frequency

 Product substitutability

Advertising expense is actively correlative with Advertising frequency, Market share, Competition, Audience Clutter and Product substitutability The more market share pursued, the more competition, the more audience clutter, the more threat from substitutions the more advertising investment (copy, area, media, frequency…) As a result, the more advertising investment the more advertising expense Advertising expense also depended

 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 to executing a message: Message generation, Message evaluation

and selection, Message execution and Social responsibility review

 Message generation is creative process of generating ideas about

10 (See more about budget setting method in article 2.4.5 and advertising budget determination for product life cycle in article 2.4.6)

message‘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, during the process from message generation

to message execution, marketers need to review social responsibility issue to ensure the message is not against advertising law , children care,

containing violence…

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 suitable 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, Telephone, Internet

11 This approach also used for media consideration for other IMC Tools

of such a benefit whether in 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 number of sales promotion tools correspondingly

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

product or service: Coupons, sampling, premiums, rebates, contests,