Because learning changes everything.

CHAPTER 2
The Role of IMC
in the Marketing
Process

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
 Learning Objectives

LO2-1 Describe the role of advertising and promotion in an

organization’s integrated marketing program.

LO2-2 Define target marketing.

LO2-3 Discuss the role of market segmentation in an IMC

program.

LO2-4 Describe positioning and repositioning strategies.

LO2-5 Identify the marketing-mix decisions that influence

advertising and promotional strategy.

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 Figure 2-1 Marketing and Promotions Process Model

Access the text alternative for slide images.

© McGraw Hill 3
 Marketing Strategy and Analysis 1

Strategic Marketing Plan

• Guides allocation of organization’s resources.

• Guides specific marketing programs and policies.

• Evolves from organization’s overall corporate strategy.

• Allows for understanding of market opportunities, competition, and

market segments.

• Market segments: Target markets the company wishes to pursue.

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 Marketing Strategy and Analysis 2

Opportunity Analysis
Opportunity analysis is the careful analysis of the marketplace that
can lead to alternative market opportunities.
• Market opportunities are areas where:
• There are favorable demand trends.
• Customers’ needs and opportunities are not being satisfied.
• A firm can compete effectively.

• Steps to identify market opportunities:

• Examine the marketplace.
• Observe demand trends and competition in various market segments.

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 Exhibit 2-1

The Milk Processor

Education Program saw
the growing demand for
sports drinks and seized on
that marketing opportunity.
This promotion suggests
that chocolate milk is a
natural option for athletes
to "Bounce Back" after a
hard workout.

© McGraw Hill Source: American’s Milk Companies 6

 Marketing Strategy and Analysis 3

Competitive Analysis
• Analyzing competition in the marketplace and searching for
competitive advantage.
• Competitive advantage: Attributes that give a firm an edge over
competitors.

• Quality products that command premium price.

• Superior customer service.

• Lowest production costs and lower prices.

• Dominating channels of distribution.

• Advertising.

© McGraw Hill 7
 Exhibit 2-3

Growth in the
bottled water
market pushed
SoBe to offer
different product
varieties and
created direct
brand competition.

© McGraw Hill Source: Steve Cukrov/Alamy Stock Photo 8

 Marketing Strategy and Analysis 4

Competitive Analysis continued

• Competitive market is constantly changing.
• Brands don’t adapt to market conditions.

• Once-popular brands make a comeback.

• Competitor’s marketing programs affect strategy.

• Growing number of foreign companies.

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 Marketing Strategy and Analysis 5

Target Market Selection

• Done after evaluating market opportunities and doing a competitive
analysis.

• Can select one or more target markets.

• Has direct implications on firm’s advertising and promotional efforts.

• Strategies vary depending on market approach.

© McGraw Hill 10
 Figure 2-2 The Target Marketing Process

Access the text alternative for slide images.

© McGraw Hill 11
 The Target Marketing Process 1

Identifying Markets
• Marketer identifies specific needs of groups of people (or segments).

• Selects one or more of these segments as a target.

• Isolates consumers with similar lifestyles, needs, and the like.

• Increases marketer’s knowledge of consumers’ specific requirements.

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 The Target Marketing Process 2

Market Segmentation
• Dividing a market into distinct groups with common needs, who
respond similarly to a marketing situation.
• Bases for segmentation:
• Geographic: Dividing market on basis of region, city size, metropolitan
area, and/or density.

• Demographic: Dividing market on basis of age, sex, family size, marital

status, etc.

• Psychographic: Dividing market on basis of personality, lifecycles, and/or

lifestyles.

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 Exhibit 2-9

AARP, The Magazine

targets the 50+
segment. The magazine
continues to offer
editions and is now
available online.

© McGraw Hill Source: AARP 14

 The Target Marketing Process 3

Market Segmentation continued

• Behavioristic segmentation:

• Dividing consumers into groups according to usage, loyalties, or buying

responses to a product.

• 80-20 rule: 20 percent of buyers account for 80 percent of sales volume.

• Benefit segmentation:

• Grouping consumers on basis of attributes sought in a product.

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 The Target Marketing Process 4

Market Segmentation continued

• The process of segmenting a market.

• Marketers determine as much as they can about the segment.

• Companies offer research services to define markets and develop

strategies targeting them.

• VALS and PRIZM systems.

• Clusters consumer households into distinct “microgeographic”

segments.

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 Exhibit 2-10 Segment Profiles

PRIZM segment profiles like this provide marketers with insights into
consumer lifestyles.

© McGraw Hill Source: Claritas, LLC; wavebreakmedia/Shutterstock; levgen Chapil/Alamy Stock Photo 17
 The Target Marketing Process 5

Selecting a Target Market

• Determine how many segments to enter.

• Undifferentiated marketing: Offering just one product or service to entire

market.

• Differentiated marketing: Developing separate marketing strategies for

different segments.

• Concentrated marketing: Attempting to capture a large share of one

market segment.

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 The Target Marketing Process 6

Selecting a Target Market continued

• Determine which segments offer potential.

• Select most attractive segment through:

• Sales potential of segment.

• Opportunities for growth.

• Competition analysis.

• Ability to compete.

• Ability to market to this group.

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 The Target Marketing Process 7

Market Positioning
• Positioning: Fitting product or service to one or more segments of a
broad market to set it meaningfully apart from the competition.

• Approaches:

• Focus on consumer: Linking product with benefits consumer will derive.

• Focus on competition: Positioning product by comparing benefit it offers to

the competition.

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 Developing a Positioning Strategy 1

Positioning by Product Attributes and Benefits

• Sets brand apart from competitors on basis of
specific characteristics or benefits offered.
• Salient attributes: Important to consumers and are
basis for making a purchase decision.

Burt’s Bees uses a

benefits positioning
strategy promoting itself
as safe, effective, natural.

© McGraw Hill Source: Burt’s Bees 21

 Developing a Positioning Strategy 2

Positioning by Price/Quality
• Cost is secondary to quality.
• Quality or value at a very competitive price.

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 Developing a Positioning Strategy 3

Positioning by Use or Application

• Used to enter market or expand
usage.

Arm & Hammer baking soda

demonstrates numerous product uses
from baking to heartburn relief to
eliminating odors.

© McGraw Hill Source: ZikG/Shutterstock 23

 Developing a Positioning Strategy 4

Positioning by Product Class

Positioning by Product User

In this ad, how does the California

Avocado Commission use
positioning to effectively market
California Avocados?

© McGraw Hill Source: California Avocado Commission 24

 Developing a Positioning Strategy 5

Positioning by Competitor
Positioning by Cultural Symbols
• Makes the brand easily identifiable
and differentiated from others.

Tony the Tiger has become a

cultural symbol.

© McGraw Hill Source: Sheila Fitzgerald/Shutterstock 25

 Developing a Positioning Strategy 6

Repositioning
• Altering a product’s or brand’s position due to:

• Declining or stagnant sales.

• Anticipated opportunities in other market positions.

• Difficult to accomplish because of entrenched perceptions and

attitudes toward the product or brand.

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 Developing the Marketing Planning Program 1

Product Decisions
• Product symbolism:

• What a product or brand means to consumers.

• What consumers experience in purchasing and using a product.

• Product planning

• Design and quality.

• Service and warranties.

• Brand name and package design.

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 Developing the Marketing Planning Program 2

Product Decisions continued

• Branding
• Builds and maintains brand awareness and interest.

• Develops and enhances attitudes toward company or product.

• Builds relationships between consumer and brand.

• Brand identity:

• Combination of name, logo, symbols, design, packaging, image, and

associations held by consumers.

• Brand equity:

• Intangible asset of added value.

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 Exhibit 2-21

Rolex has built a strong

brand equity through its
favorable image in the
industry. It commands a
premium price based on
this equity.

© McGraw Hill Source: Rolex SA 29

 Developing the Marketing Planning Program 3

Product Decisions continued

• Packaging
• Traditionally provided functional benefits—economy, protection, and
storage.

• Role and function have changed:

• Self-service emphases of many stores.

• More buying decisions at point of purchase.

• Used to communicate with consumers and create an impression of the

brand.

© McGraw Hill 30
 Exhibit 2-22

This ad for WD-40

demonstrates how
packaging can be used
to show the many uses
of the product.

© McGraw Hill Source: WD-40 31

 Developing the Marketing Planning Program 4

Price Decisions
• Price variable: What consumer must give in exchange for purchase.

• Factors that determine price:

• Costs.

• Demand factors.

• Competition.

• Perceived value.

• Product quality.

• Advertising.

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 Developing the Marketing Planning Program 5

Distribution Channel Decisions

• Marketing channels: Interdependent organizations involved in
making a product or service available for use.

• Direct channels: Directly deal with customers.

• Driven by direct-selling programs, direct-response ads, telemarketing,

Internet.

• Used when selling expensive and complex products.

• Indirect channels: Network of wholesalers and/or retailers.

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 Developing the Marketing Planning Program 6

Promotional Push Strategy

• Programs designed to persuade resellers to stock, merchandise, and
promote a manufacturer’s products.

• Push product through channels of distribution.

• Trade advertising: Used to motivate wholesalers and retailers to

purchase products for resale.

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 Developing the Marketing Planning Program 7

Promotional Pull Strategy

• Spending money on advertising and sales promotion efforts directed
toward the ultimate consumer.

• Goals:

• Create demand among consumers.

• Encourage consumers to request product from retailer.

© McGraw Hill 35
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