Businesses nowadays use the strategy of integrated marketing communications (IMC) because it gives them the potential to get better results from marketing campaigns and also reduce advertising and promotional costs. Integrated marketing communications is the process of developing and implementing various forms of persuasive communication programs with customers and prospects over time. The aim of IMC is to influence behaviour of the targeted audience. IMC also considers all sources of contacts that a company has had in order to have better communication channels in future. Further, IMC makes use of all forms of communication which are relevant to the customer or prospect, and to which they might be receptive (Schultz, 1993).
3.0. LITERATURE REVIEW
3.1. The Communications Mix
The last component of the marketing mix; Promotions is what we refer to as communications mix. The communications mix consists of advertising, brand activation, public relations, sponsorship, direct marketing, point-of-purchase, personal selling, online communication and exhibitions and trade fairs. Advertising is non-personal mass communication using mass media such as TV or radio (De Pelsmacker, Geuens and Van Den Bergh, 2017), while, brand activation is the integration of all available communications mediums in a creative manner in order to provoke consumers by stimulating interest and eventually resulting them to buy the product (De Pelsmacker, Geuens and Van Den Bergh, 2017). Public relations involve of all the communications a company instigates with its audiences or stakeholders, and on the other hand, sponsorship implies that the sponsor funds, goods, and services and/or know-how (De Pelsmacker, Geuens and Van Den Bergh, 2017). Direct marketing is a personal and direct way to communicate with customer and potential clients (De Pelsmacker, Geuens and Van Den Bergh, 2017). Point-of-purchase communication is done at point of purchase and sales whereas, personal selling is a promotional method where the salesman tries to convince the customer face-to-face to buy the product (The Economic Times, 2018).
3.2. Integrated Marketing Communications
Previous studies refer to the IMC process as a marketing tool because it converts the tangible and intangible inputs into outputs (Luxton, Reid and Mavondo, 2014). Nevertheless, it can be said that IMC is defined as “an on-going, interactive, cross-functional process of communication planning, execution, and evaluation that integrates all parties in the exchange process in order to maximize mutual satisfaction of each other's wants and needs” (Duncan and Mulheron, 2004, p.9). IMC should also replace the narrow marketing instruments and brand management should be utilized to create and maintain long lasting and profitable relationships with the customers (Madhavaram, Badrinarayanan and McDonald, 2005). The development of IMC is shown in the figure 1.1 below.
Figure 1.1 Stages in IMC development (Kitchen, P, and De Pelsmacker, P, 2004).
3.3. The AIDA model and ELM
AIDA model, which is one of the oldest and well-known theories of marketing consists of four distinct components (Lee and Hoffman, 2015). These components are; attention, interest, desire and action (Lee and Hoffman, 2015). The following diagram demonstrates how the AIDA model works in relation with the ABC model (affective,
behaviour and cognitive stage).
Figure 1.2. AIDA model in relation with the ABC model (Bajracharya, 2018).
According to the AIDA model, attention is where the stimuli/product is brought under customers' notice (Lee and Hoffman, 2015). Interest is where the customers' curiosity is raised by highlighting the key features, advantages or unique selling point of the product (Lee and Hoffman, 2015) whereas, desire is stimulating desire and proving how the product is better than that of the competitors (Lee and Hoffman, 2015). Last but not the least, action is implementing calls to action towards purchasing the product (Lee and Hoffman, 2015).
Along with the AIDA model, the ELM (Elaboration-Likelihood Model) can also aid in proposing an effective and integrated marketing communication strategy. The ELM demonstrates how humans process stimuli differently and the outputs on varying attitudes and consequently, behaviour (Geddes, 2016). The following figure displays how the ELM works.
Figure 1.3. The Elaboration-Likelihood Model (Geddes, 2016).
An individual can either undertake the central route or peripheral route during this thought and action process. The central route processing shows high level of elaboration where the user examines the message's contents because of high levels of motivations (Geddes, 2016).
3.4. Segmentation, Targeting and Positioning
Segmentation is the process of dividing consumers into homogenous groups i.e. groups that share needs or react in a comparable way to marketing and communications efforts (De Pelsmacker, Geuens and Van Den Bergh, 2017). The variables of the segmentation process are explored in the following diagram.
Objective Inferred (psychographics)
Demographic (income, gender, age, education, profession, life cycle) Social class
Specific (behavioural) Occasion
Usage rate Benefit
Figure 1.4. Consumer market segmentation variables (De Pelsmacker, Geuens and Van Den Bergh, 2017).
Once the segmentation process has been conducted, their attractiveness is assessed. Segment attractiveness will depend on the size and predicted evolution of sales, buying power and the amount of competition targeted at the same segment. After analysing the attractiveness, the marketer selects a target group to focus on, this is referred as targeting (De Pelsmacker, Geuens and Van Den Bergh, 2017).
Kotler and Keller define brand positioning as an attempt of designing the company's products in such a way that they appear to be distinct in the eyes of the target market (Kotler and Keller, 2006). A vital factor regarding a brand's position in a product category is that how similar or different the brand is perceived by customers' from that of the competitors' (Sujan and Bettman, 1989). In order to position a brand, a marketer has to take on varying strategies (Sujan and Bettman, 1989). The marketer can either choose to position the brand within the overall market as a “differentiated” product; or, create a separate niche market for the newly established brand (Sujan and Bettman, 1989).
According to the American Marketing Association, brand can be a name, logo, image or design or all of these used to identify the goods or services and make them distinctive form those of competitor (Ama.org, 2018).
2.5.1. Brand equity
Developing a strong and dynamic brand creates a foundation for your business. Brand equity means the public's valuation of a brand (Forbes, 2018). Keller highlights in his book Strategic Brand Management that in order to create brand equity, you have to analyse how consumers think and feel about your product (Keller, 2008). The following diagram illustrates the components of consumer brand equity.
Figure 1.5. Components of consumer brand equity (Your Article Library, 2018).
2.5.2 Brand equity components and branding benefits
The following table shows how using the appropriate branding strategies can help marketers reap the benefits of branding.
Brand equity components Benefits
Brand awareness • Brand in evoked set
• Influence on attitude and perceptions
• Anchor for associations
• Signal of substance/commitment
Perceived quality • Price premium
• Reason to buy
• Channel member interest
• Brand extension potential
Brand association • High price premium
• Memory retrieval potential
• Reason to buy
Brand loyalty • Reduced marketing costs
• Trade leverage
• Attracting new customers
• Time to respond to competitive threats
Figure 1.6. Brand equity components and branding benefits (De Pelsmacker, Geuens and Van Den Bergh, 2017).
2.5.3 Marketing communications and brand equity
Marketing communications are the voice of a brand. A number of communications tools can be used to build and reinforce brand equity (De Pelsmacker, Geuens and Van Den Bergh, 2017). A modern marketing communications program might consist of television, radio, magazine, and newspaper advertising, point of purchase, sponsorship and public relation activities (Keller, 1994). They are very useful tools in composing the branding strategies however, marketers need to draw close attention while using these tools as at times they can differ on a number of dimensions as well (Keller, 1994). To make the most of the marketing communication strategies and to get fruitful results of brand equity, businesses should consider the ELM and AIDA models which have been discussed in the report earlier.
3.0. MARKET ENVIRONMENT REVIEW
The UK based company that has been chosen for this report is a British clothing retail company, Ted Baker, which was found in 1988. They have their headquarters in London, England and, offers menswear, womenswear and related accessories
(Owler, 2018). After conducting a brief competitive analysis, it has come forward that one of the biggest rivals of Ted Baker is Paul Smith who have their headquarters in New York. They generate 1.70% of Ted Baker's revenue (Owler, 2018). The second competitor is Reiss, which is a private clothing company based in London, England and operates in the Apparel retail industry (Owler, 2018). The third rival of Ted Baker is BOX8 which was founded in Bangalore, Maharashtra and operates in Food Distributors industry (Owler, 2018).
3.1. Situational Analysis
3.1.1. SWOT Analysis
In order to obtain greater detail of the market overview for Ted Baker, it is essential that a SWOT analysis is conducted. A SWOT analysis is a technique of highlighting the internal and external factors that may or may not affect the business through the identification and examination of its strengths, weaknesses, opportunities and threats (Kotler and Armstrong, 2011). The following diagram demonstrates what each component of the SWOT analysis holds.
Figure 1.7. SWOT analysis and components (Lincoln, 2018).
Based on the research, the strengths (internal factors) of Ted Baker are as follows:
• The consistency of quality that the company has to offer has allowed them to move forward based on the demand trends of their products (Fern Fort University, 2018).
• They have engaged in synergies and mergers. They have successfully integrated with various technology firm to construct a reliable supply chain (Fern Fort University, 2018).
• Highly skilled workforce through training and development programs (Fern Fort University, 2018).
• Strong distribution network (Fern Fort University, 2018).
• Good returns on capital expenditure (Fern Fort University, 2018).
• High level of customer satisfaction (Fern Fort University, 2018).
Below are the weaknesses (internal factors) of Ted Baker:
• Need to invest more in new technologies. Currently, the investment in technologies is not at par with the vision of the company (Fern Fort University, 2018).
• Not very successful at integrating different departments with varying work conditions and cultures (Fern Fort University, 2018).
• Need to put more effort in forecasting the demand of the desired products- they have missed many opportunities to the competitors as a result (Fern Fort University, 2018).
• They need to do effective and reliable financial planning. The current asset ratio and liquid ratios determine that the cash at the business can be used more efficiently (Fern Fort University, 2018).
The opportunities (external factors) of Ted Baker are shown below:
• The new taxation policy can help Ted Baker improve their profitability (Fern Fort University, 2018).
• Economic uplift and consumer spending can help Ted Baker capture new customers and increase their market share (Fern Fort University, 2018).
• Opening up new markets due to government agreements (Fern Fort University 2018).
• New opportunity horizons opened due to online shopping (Fern Fort University, 2018).
• The market development will lead to an increase in its competitiveness in comparison to other competitors (Fern Fort University, 2018).
• New trends in the consumer behaviour can open up new markets for Ted Baker (Fern Fort University, 2018).
Following are the threats (external factors) to Ted Baker:
• Changing consumer buying behaviour due to online shopping can be a possible threat (Fern Fort University, 2018).
• Increasing prices of raw material can affect the profitability of the business (Fern Fort University, 2018).
• Stability of profits has invited many competitors to enter the market (Fern Fort University, 2018).
• Lack of skilled labour in global market also indicates a threat to the company and can hinder the growth of the company in those markets (Fern Fort University, 2018).
3.1.2 PEST Analysis
It is also essential to conduct the PEST analysis for Ted Baker in order to have a clearer picture of the market environment. It is a technique used to examine the external environment in which a company operates. PEST is an acronym for Political, Economic, Social and Technological factors (Post, 2018).
The political factors that impact Ted Baker are below:
• Danger of military interference (Fern Fort University, 2018).
• Intellectual property protection (Fern Fort University, 2018).
• Wage policies- minimum wage and overtime (Fern Fort University, 2018).
• Compulsory employee benefits (Fern Fort University, 2018).
• Intervention in personal and household goods by the government (Fern Fort University, 2018).
Following are the economic factors that may have an impact on Ted Baker:
• The type of economic system in countries where the firms operate (Fern Fort University, 2018).
• Labour costs and wage rates in the countries of operation (Fern Fort University, 2018).
• Economic growth rate (Fern Fort University, 2018).
• Unemployment rate (Fern Fort University, 2018).
• Inflation rate (Fern Fort University, 2018).
• Interest rate (Fern Fort University, 2018).
• Currency rate (Fern Fort University, 2018).
Further on are the social factors that might affect Ted Baker:
• Demographic and skill level of the population (Fern Fort University, 2018).
• Hierarchy and power structure in the society (Fern Fort University, 2018).
• Education level (Fern Fort University, 2018).
• Culture (Fern Fort University, 2018).
• Leisure interests (Fern Fort University, 2018).
The following are the technological factors that may affect Ted Baker:
• Technological impact on the product offerings by Ted Baker (Fern Fort University, 2018).
• Technological developments by Ted Baker's competitors (Fern Fort University, 2018).
• Rate of technological diffusion (Fern Fort University, 2018).
• Impact on cost structure (Fern Fort University, 2018).
4.0. COMPANY STRATEGIES
The online marketing channel is fundamentally different from the traditional and direct marketing tools; consumers can go all the way from attention to interest to desire to action, all within the same medium and within the same session (De Pelsmacker, Geuens and Van Den Bergh, 2017) which Ted Baker recently used to interact with their targeted audience (Gilliland, 2016).
Ted Baker has been famous for always coming up with creative and inspiring campaigns, and for their spring/summer 2017 campaign, they pushed the boundaries further by introducing the ‘Keeping up with the Bakers' (Gilliland, 2016). It was a sitcom divided into eight parts and was uploaded episodically on Instagram. This was a strategy to keep the viewers engaged and bring them back daily to their Instagram channel to participate in the challenges that unfolded with each episode (Gilliland, 2016). Furthermore, they also launched a 360-degree stoppable video which enabled the viewers to browse the Baker's home and purchase items discovered there (Gilliland, 2016).
Figure 1.8. Keeping up with the Bakers (Stevens, 2018).
This made the viewers enter a visual store where they could shop the items they discovered in the video. Although, online marketing is comparatively cheaper and cost effective than other channels of advertisement, it has its own cons. While, Ted Baker was successful in conveying their message to a huge number of audiences through a large platform, the face-to-face contact has been limited (Saulnier, 2018). It can be said that the company has failed to create contact; and, maintain a rapport with their current and potential customers through this campaign.
Not only this, Ted Baker launched an ad campaign to celebrate their 30th anniversary and laid major emphasis on the brand's “quirky, irreverent take on life” (Brownsell, 2018). Their ads were run in print, social media and also displayed on buses, taxis and London Underground network (Brownsell, 2018). This strategy also has its drawbacks. Using print media is not always reliable. Audience nowadays has this perception that the information in print media may be twisted or distorted hence they may not believe it (Site Title, 2017). It is also not cost effective (Site Title, 2017). Moreover, print media also has short life span as readership only lasts less than a day (Site Title, 2017). The downsides of social media advertising have been discussed earlier in the report.
Ted Baker is also launching “Grab Your Coat” campaign which is a raffle-style competition through the consumers will get an opportunity to buy the new wrap coat (Brownsell, 2018). Despite creating a buzz in the market by this strategy and also encouraging a word-of-mouth advertising, it may have caused a devaluation of their own product as the coat may not seem as valued in the eyes of the potential buyers (Strickland, 2014) This may also create fair promotion friends who will only interested in the brand whenever they are giving out anything for free (Strickland, 2014).
To begin with, the first recommendation to be given is that Ted Baker should use the integrated marketing communications strategy where they incorporate various tools of marketing so that a clear and well-defined message is sent to all audiences. Merely relying on the social media or other sources of online marketing will make Ted Baker lack the long-term profitable relationships with their current and potential buyers which they are basically aiming.
Ted Baker can undertake the approach of cause marketing (Woschnick, 2018). This is a collaboration between a for-profit and a non-profit organization to mutually promote and benefit from social and charitable causes (Woschnick, 2018). In this way the customers will have the confirmation that the company is trying to make this world a better place (Woschnick, 2018).
Furthermore, they can also use the direct marketing and selling tool (Woschnick, 2018), the salesperson is able to create a face-to-face interaction and relationship by demonstrating how the product is used (Woschnick, 2018). Not only this, but direct selling and marketing will help Ted Baker create customer loyalty.
Additionally, Ted Baker can practice the Point-of-Purchase Marketing (POP) as well (Woschnick, 2018). It is for customers who are in the store and ready purchase the product (Woschnick, 2018). The outlook of the product, the benefits being told and the offer itself is made as such that the buying decision of the buyer turns out to be positive and they end up buying the product (Woschnick, 2018).
Also, Word of Mouth advertising can be very effective for Ted Baker (Woschnick, 2018). This is an organic and unpaid form of advertising (Woschnick, 2018). When a buyer has a good experience with the product or the brand itself, they will spread out the word and give recommendations to their friends and family (Woschnick, 2018). It should be noted that Word of Mouth advertising is not only done verbally, online reviews and opinions come under this tool as well.
As discussed in the literature review, for the effective management of all the tools of IMC, it is essential that Ted Baker considers the AIDA model as well as ELM. The AIDA model is a sequence events that leads to the purchase of a product while, the ELM which shows how people in different categories are persuaded to change their attitude or behaviour (Maharjan, 2018).
Moreover, as mentioned in the literature review, to make the most of the IMC plan, and to ensure that it is being implemented effectively, conducting a SWOT and a PEST analysis is an imperative part of devising an IMC plan. Where the SWOT analysis is a detailed examination of all the internal and external factors that may affect a company's strategies, PEST analysis takes a deeper look at the external environment which the company operates in. These tools help create an applicable and successful IMC plan.
As the report is being concluded, it can be said that Integrated marketing communications is a marketing tool that incorporates the various channels of marketing to send out a clear and consistent message to the audience. Ted Baker should make an effective IMC plan in order to create an impact on the audience and persuade them to eventually buy their products.
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