05 May 2010

NAME: Phan Ngoc Anh Thu

STUDENT ID: S3160793

TUTOR: Mr. Graeme Domm

Mr. Lukas Parker

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Topic: The media environment has changed vastly in the past decade, and this has left
many clients wondering how best to allocate their resources: More advertising? Less
advertising? More PR? Less PR? More online presence? What kind of online presence?
How best to integrate advertising, PR and marketing efforts so that they better reflect the
changing environment? What considerations should a client keep in mind when deciding
on these kinds of issues - and if you are advising a client, what kind of advice do you give
about how to make such decisions?

Abstract
In the last 20 years, the integrated marketing communications (IMC) has been seen as
one of the most remarkable break-through marketing approaches, which is used by many
companies to better develop the efficiency of marketing plan and adapt to the recent
changes of media environment. However, to allocate the resources accurately and
reasonably, the company needs to take the related elements including budget, corporate
objectives, product or service, market and target publics into consideration. They
allocation may vary under different circumstances.

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 Table of Content

I. Introduction..................................................................................................................3
II. Literature Review........................................................................................................4
III. Recommendation.......................................................................................................7
IV. Conclusion...............................................................................................................10
V. Reference List:..........................................................................................................11

I. Introduction

Marketing is essential for the development of every organization. In the competitive

environment, it is the key factor to decide the organization’s success by increasing brand
awareness, sales revenue or market share. Therefore, many companies pay a huge budget
to promote their product or service; for example, P&G spent $4,898 millions in 2006 for
advertising only in the United States (Advertising Age 2007, cited in Belch & Belch
2009). However, with the remarkable emergences of sales promotion, Internet marketing
and public relations (PR), they began challenging the dominant role of advertising in a

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marketing plan. It led to an alteration in utilizing the resources among online marketing,
advertising and PR.
During the 1908s, many companies realized the need for a strategic integration of
promotional tools and they moved to implement the model of IMC. This process
coordinates closely the various promotional elements and marketing activities to obtain
maximum communication impact (Belch & Belch 2009). Nevertheless, it is a complex
decision in determining how best to allocate those resources and integrate them for
making the most effective outcomes.
This research report will firstly give you previous studies regarding each element of
the promotional mix and the recommendations from a client’s perspectives to the
companies in handling the allocation of IMC’s resources.

II. Literature Review

The media environment has changed vastly in the past decade. It is essential for
every organization to adapt that change by moving to IMC. According to Hartley and
Pickton (1999, p. 101), there are two aspects of marketing communications that the
company needs to consider when adopting IMC approach. It includes classifying the
methods available for communicating to target publics and managing their integration as
well as the interaction with other marketing tools. In fact, the consistent, smooth
coordination can help the organization to avoid duplication, exploit the synergy among
promotional tools and improve the efficiency of communication plan (Belch & Belch
2009).

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 Generally, in most of companies, marketing department is responsible for allocating
the resources and budgets for the communication plans, which help selling product or
service. The marketers often consider PR, advertising and Internet marketing as the
integral components and play distinctive roles in an IMC plan. They are referred as the
promotional mix, which often contribute to achieve the communication objectives of
many organizations (Belch & Belch 2009). However, in order to manage those tools well
and reasonably, the marketers have to clearly understand them first. It requires solid
knowledge and rich experiences because each element of the promotional mix has a
different role and outcome. It may take on a variety of forms and have certain advantages
as well as limitations.
• Advertising
The major role of advertising is to use persuasion to sell, inform, educate, and
remind the target publics about a product or service. Some of the most distinctive
advantages of advertising include reaching a huge number of target publics in a given
geographic area, large exposure and wide availability. Therefore, advertising is often the
best media option for new product launches, more homogenized products, fast moving
consumer goods (FMCG) or the companies targeting at mass consumer markets
(Blakeman 2007). Nowadays, besides the traditional paid adverting vehicles (TV,
newspapers, direct mail, poster, flyers, etc.), Callen (2010) states that almost everything
can be turned into an advertising medium to foster the maximum extent of reach and
frequency including guerrilla marketing or imprinted products called advertising
specialties (key chains, pens, mugs, etc.)
Besides, a creative advertising campaign can also help the company to increase its
market share and enhance corporate image. For example, Dove’s global campaign,
named Campaign for Real Beauty, published print posters featuring real women, not
model. Immediately, it made a strong impact to its target consumer when going against
advertising tradition by using women of varied sized to deliver the message. This
campaign had changed the current perceptions of consumers towards the brand and
generated many good responses from them. As a result, their sales volumes and market
shares were increased significantly (Blakeman 2007).

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 However, advertising still has some limitations including expensive, clutters from
competitive product/service and negative attitude of audiences towards the credibility of
advertisement and its repetition over time. Last but not least, advertising is just one-way
communication, company-to-consumer (Scott 2007)

• Public Relations
The major purposes of public relations are to establish, maintain the positive image
of the company and build relationships with both internal and external audiences
(Blakeman 2007). Generally, PR uses publicity and a variety of tactics including media
release, media kits, press conference, events, celebrity endorsement, sponsorship,
participation in community activities and so on (Belch & Belch 2009). The key success
of PR is to make other people spread words in a positive manner about the company’s
product or service instead of complimenting itself. Therefore, consumers would tend to
be more persuaded and believe in the information, messages they have been exposed.
Besides, PR is very effective as a marketing tool in launching a new product or
service, enhance the brand image and inform consumers for a very little money. PR is
also able to position or reposition a product or service and reach specific target groups.
As a two-way communication medium, PR allows the company and its representatives to
interact with consumers and encourage them to actively participate in the marketing
campaigns. Moreover, the ongoing relationship with the press gives PR good media
coverage, which is not available with any other communication approaches (Blakeman
2007).
Crisis communication is also the dominant function of PR. Crisis can happen any
time and out of expectation. Communication in early phases of crisis along with wise
actions will help to protect the organization’s reputation and avoid many potential
damaging outcomes (Callen 2010). For example, in 1995, 550 tons of heavy fuel oil of
BHP Transport bulk carrier Iron Baron was spilled into the sea and became the biggest
oil spill case in Australian history. The company managed this crisis very well thanks to
its prior crisis preparation including writing response plans for before, during and post
response of crisis phases, training crisis teams and allocating their roles, responsibilities.
Moreover, when the crisis “oil pill” happened, the public affairs team quickly controlled

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the agenda and responded to the interest from media around the world as well as
monitoring the accuracy of what media were reporting (Galloway and Kwansah-Aidoo
2005). Therefore, with those efforts of the company to solve the crisis, its reputation was
not damaged and in contrast, improving its responsible image in publics’ minds.

• Online marketing
Based on Belch and Belch (2009), online marketing, also known as e-marketing is
now the fastest growing communication area due to the advances in technology and rapid
development of Internet. The interactive nature of Internet is one of its major advantages.
It allows marketers to collect valuable personal information of consumers as well as
measuring the outcomes of advertising and other promotional activities. The Internet is
also low cost, highly targeted to mass audience, global and available to consumers all the
time. According to Callen (2010), Internet presence is often the first point of customer
contact because it is free and more convenient when they spend most of their time on
Internet. The penetration of Internet also enables the company to spread widely its
advertising and easily catch attention of audiences through search engine marketing,
online banner ads, email marketing, etc.
Especially, social networking should be also taken into account due to its
popularity. It is essential that the organizations should monitor blogs to find out what
people are saying about them. If one person likes a product and spreads the word to their
friends, it would lead to free publicity that reaches more people with greater persuasive
impacts than an expensive advertisement (Callen 2010). For instance, to deal with the
criticisms like contributing to American’s obesity or other societal ills, McDonald’s
launched Open for Discussion, a blog that focuses on social responsibility of the
company. It is well written and updated frequently. Furthermore, McDonald’s also
created a series of video podcasts to highlight its interest in food quality and community
benefits, named The McDonald’s You Don’t Know, available from McDonald’s websites
via RSS and also via Apple’s iTunes store, Youtube.com and Google Video (Scott 2007).

III. Recommendation

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 The above literature reviews can help the organization to understand the functions
and advantages as well as the limitations of each element in the promotional mix. It is the
key requirement in order to allocate the resources effectively and reasonably in an IMC
plan. However, in order to make good integration of PR, advertising and online
marketing, it requires a complex decision process based on many crucial components
involving budget, company’s corporate objectives, the nature of product or service, its
market and target audience.
- Budget: the allocation of resources may vary on the size of
company’s marketing plan or campaign and the limitation of its
budget. Big corporations like P&G or General Motors spend over
$2 billion per year in using advertising, PR to obtain their desired
objectives (Belch & Belch 2009). In contrast, there are many
companies having limited budget to execute their marketing
communications. In this case, advertising on TV or newspaper
should be taken less and focus more on online marketing and
some of PR tactics such as press release, editorial or celebrity
endorsement. Because these approaches are cheaper than
advertising but still be able to generate good outcomes.
- Company’s objectives: the orientation of company or the
purpose of the IMC plan may directly influence where the money
should be spent. If the company’s objective is to generate high
reach, brand awareness of consumers, they should pay more
budgets on advertising (print, broadcast and online) and
promotional programs like events, contest, road show, etc.
Meanwhile, if the company wants to increase frequency, brand
recognition or recall, all of promotional mix elements are
necessary to accomplish them (Callen 2010). The specific
amount of each depends on the capability of budget.
Besides, return on investment (ROI) is also an important thing the firm needs to take into
consideration when allocating the budget. The levels of executing advertising and
promotion depend on the expected ROI amount that the company wants to receive back.

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 - Company’s product or service: their nature is important to
decide the different methods of IMC plan. For example, FMCG
or homogenized product requires repetitive advertising and PR
activities to maintain the brand recall of consumers. But unique
product or service does not need to do much advertising in mass
vehicles like TV or newspapers because it already has the
dominant benefit in the product/service’s features. Also, the
luxurious product or service just often place advertisements on
some specific magazines and special events only for high-class
consumers.
Besides, according to Belch and Belch (2009), new launched product or service generally
demands higher-than-average advertising and PR support. Then, when they reach the
maturity stage, the amount of advertising and promotional programs can be reduced. For
the well-known brands, it may be possible to decrease marketing expenditures but still
maintain the market share. On the contrary, smaller brands have to continue to maintain
the expected share of voice.
- Market size and target public: in smaller markets, it is often
easier and less expensive to reach the target audience and vice
versa. In fact, advertisements and PR activities should be used
less to promote the product or service in a small market.
Therefore, the company needs to define its market size first in
order to make effective communication decisions (Belch &
Belch 2009).
On the other hand, the demographic factors of target consumers including geographic,
occupation, age and so on are also really essential in allocating IMC’s resources. For
instance, online marketing can be more effective in reaching the targets as the youth and
white-collar but it is limited when the target market is the rural areas.

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 IV. Conclusion
The move of organization to implement the ICM approaches has reflected its
flexibility to adapt the vast changes of media environment. In the competitive market and
the stricter selection of consumers in exposure to marketing activities, the integration of
advertising, PR and online marketing is crucial to achieve the company’s objectives,
goals and build, maintain positive brand images. Before deciding the utilization of those
resources, the firm is strongly recommended to understand the roles and benefits of each
component and then, considering clearly these following factors including budget,
company’s corporate objectives, the nature of product or service and its market, target
audience. The allocation may vary in different marketing campaigns and IMC plan but it
needs to be consistent among the promotional mix tools to draw a united theme for the
entire plan and create strong impression.

Word Count: 2,104

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 V. Reference List:

Belch, G and Belch, A 2009, Advertising and promotion an integrated marketing

communications perspective, 8th edn, McGraw-Hill Irwin, New York.
Blakeman, R 2007, Integrated marketing communication creative strategy from idea to
implementation, 1st edn, Rowman & Littlefield Publishers Inc., USA.
Callen, B 2010, Manager’s guide to marketing, advertising, and publicity, 1st edn,
McGraw-Hill, Inc., USA.
Galloway, C and Kwansah-Aidoo, K 2005, Public relations issues and crisis
management, 1st edn, Thomson/Social Science Press, Australia.
Hartley, B and Pickton, D 1999, ‘Integrated marketing communications requires a new
way of thinking’, Journal of Marketing Communications, vol. 5, pp. 97-106
Scott, D 2007, The new rules of marketing & PR how to use news releases, blogs,
podcasting, viral marketing, & online media to reach buyers directly, 1st edn, John Wiley
& Sons, Inc., New Jersey.

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