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Literature
Review

Integrated Marketing Communications

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In the recent times marketing communications has become
‘the favoured term among academics’ instead of other ‘commonly used names such
as ‘advertising’ or promotions.'(Pickton and Broderick, 2004.) It’s used to
‘communicate elements’ which a company offers to their audience. It could be
either a product or a service.(Fill and Turnbull,2016) A single definition for
this term still couldn’t be agreed however some define it as ‘communication with
target audiences on all matters that affect marketing performance’. However Jerry
Kliatchko proposes that the IMC is an audience-driven business process of
strategically managing stakeholders, content, channels and results of brand
communication programs.(Kliatchko, 2008) IMC is a ‘marketing strategy which has
emerged in the recent past.’ (The Balance, 2017)  It is an idea to combine both ‘modern and
traditional marketing strategies'(The Balance, 2017) efficiently in order to
communicate with the desired stakeholders.

 

There a few different theoretical
models like AIDA and ELM.

AIDA
stands for Awareness, Interest, Desire and Action. This is an important model
which ‘describes four stages that drives the consumers into.’ Going from the
top to the bottom ‘starting with awareness’ and finally reaching the marketers
goal which is Action. (Alina Irina GHIRVU, 2013)The model is clearly
demonstrated in figure 1.  The first hierarchy
of effects model goes back as far as 1897 however included ‘initially 3 steps
that a sales person should lead his client.'(Alina Irina GHIRVU, 2013) Later
the fourth step has been added which is action.

A stands for attention and it aims to ‘capture the reader’s
attention’.(Forbes) To do that firms need to start with a concept thats somehow
relevent to the target audience. This stage should present something that will
shock the audiance like a fact. The headline is very important and for example
if youre trying to target teens that play video games, you should include terms
relevenet to them like ‘gaming’ or ‘multiplayer’. This way its much easier to
attract their attention.

In the second stage, when you finally attract the target
markets attention, you want to make sure that you keep them interested. You
need to help them see ‘how well you understand their problem.'(Forbes) Its necessery
to use persuasion techniques.

Thirdly, the Desire stage, is about showing the audiance ‘how
your product can solve their problem.'(Chron) Very commonly used technique by
advertisers is called ‘before and after’. For example cleaning products are
advertised to show how a material looked before the cleaning product was used
and after to show the difference. If this step is implemented well, the
customer created a will to buy the item.

Lastly like the word suggests, this final stage is about the
customer taking action. Its about using a ‘powerful call to action'(Forbes) The
advert should contain statements like ‘buy it now’ or ‘sign up for more’ You
should aim to show what the reason is for the advert. Without a call for
action, the consumers mgiht forget about it.  

Moreover
the Elaboration likelihood model (ELM) is a model of ‘persuasion and
attitude change’ developed by Richard Petty and John Cacioppo. According to
them there are two routes to persuasion. First one is a ‘central route, which
relies on ‘argument’ and ‘peripheral route’ which relies on less central
factors. (Chandler, Daniel, and Munday, 2016) This model suggests that when a
message is presented to an audience ‘a level of elaboration results.’ Its how
much ‘effort’ the audience has to use to process the given message.(Interaction
Design,2016)

 Our brains have been designed to focus on things that matter to us the
most whereas things with less significance to us will receive less attention.
In the Central Route the message requires a high level of engagement. The
person reads the message closely with more detail ‘because of high motivation level’
(Interaction Design,2016). The figure on the right shows both routes that the
message being received is going through.

 

Central route

In the Central route there is a lot of careful detail. When
an audience goes through this route they go carefully through the message
examining it because of their ‘high motivation level.’ (Interaction Design
Foundation, 2016) Therefore if an individual has been persuaded using this
route then it means that he/she has focused on the message and its strength.
They can either agree or disagree with the message also they are ‘more likely
to focus and ignore’ any distractions around the message such as
pop-ups.(Interaction Design Foundation, 2016)

Peripheral Route

Peripheral Route however involves much lower level of
detail in the message being presented. An example of an advertisement which
goes through this route would include things like humour, fear or desire. The
person receiving the message is likely to be less motivated. Products used by
people on daily basis with ‘very little brand differentiation'(Chandler and Munday,2016)  would most be suitable for a peripheral
route. For example products like soap, butter or toothpaste. Moreover products which
are ‘evaluated by personal preference’ instead of actual quality also are very
suitable for peripheral route(Chandler and Munday,2016). This includes items
like designer clothes and perfume.

 

 

 

 

IMC
TOOLS

Both models can be applied to the Integrated marketing
communication tools. Those tools are Advertising, Sales Promotion, Direct
Marketing, Personal selling and public relation activites.

Advertising- This form of promotion helps companies ‘reach
wider audiance within the shortest possible time frame'(ManagementStudyGuide)
This IMC tool is very important as it doesnt just increase sales but also
creates ‘brand awarness amon customers.’

Direct Marketing- This tool helps firms to contact and
advertise straight with the customers. An example of direct marketing is
’emails, text messages, catalogues and brochures’

Sales Promotion-Organisations can also advertisie ‘through
discount coupons, loyalty clubs and membership coupons.(ManagementStudyGuide)
Sales Promotions just like advertising, builds brand awarness and ‘encourages
repeat buying’

Branding

According to Oxford Reference, Branding can be defined as the
marketing process by which a company,product or a service acquires a
distinctive identity in the minds of the consumers.(Oxford Reference,2017)

Good product branding can allow your product ‘to stand out
against what a competitor offers.'(Shopify) There are few different components
that build good product branding for example; logos,design and packaging. Adding
them together, it creates ‘an emotional connection for the customer.'(Shopify)

Corporate Branding however is a type of branding which
focuses on linking the ‘name of the corporation with the overall advertising
efforts’ in the eyes of the customers.  Companies want people to associate them with
positive things. An example of a good corporate branding is done by CocaCola.
They have a ‘powerful corporate brand which focuses on the strength as much as
the features of the products’ (Bizfluent) Corporate branding can ‘increase the
firms visibility, recognition and reputation’ much more than product branding.
(Balmer, J.M.T. and Gray, E.R, 2003)

 

 

 

 

 

 

 

 

Market
Environment Review

Next is a British multinational fashion retailer with over
500 stores in the UK and 200 in Europe and Asia. It is the Largest retailer in
the country by sales. The company was founded in 1864, over 150 years ago in
Leeds. The firm introduced online shopping in 1999 and their ‘entire book
became available to shop from on the internet, page by page.’ (Next,2017)

Next plc’s biggest competitors currently in the market
include companies like Primark, H&M and Marks & Spencer’s. Additionally
Arcadia group ltd is also a competition to Next. Arcadia is a multinational
company with a few subsidiaries which the firm owns. This includes ‘Burton,
Dorothy Perkins, Topman and Topshop.’ (Arcadia Group)

The Internet Strategy

Next plc will currently focus on increasing their online
selling, ‘with the company planning to invest £10 million’. This investment
will go towards improving their website (making it more accessible and adding a
range of features to it) and towards ‘online marketing’.(Passport,2017) This decision
has been made by the company due to changing trends. In the year 2015 Next plc
saw ‘95% of online orders in value terms from desktop computers’, however this percentage
dropped by 35% making ‘smartphones and tablets more relevant.’ (Passport,2017)
The investment has been therefore partially used towards developing and
improving mobile apps which would make online shopping easier to the customer.
Applications have been launched for both Android and IOS devices.

According to Mintel the UK Clothing market is valued at
£48.66 billion. Since 2008 it has grown by £11.4 billion however the value
growth has decreased to 1.6%. (Mintel,2017) 
From the total Market size, Women’s sections seems to be the biggest
with a total of £27.25 billion comparing to Men’s clothing valued at just
£14.48 billion.

Next Plc is the market leader in the UK with 6.7% market
share. There has been a decrease of 0.2% since last year. However they still
managed to keep the first place with Marks & Spencer’s coming second with
6.1% of the total market share.(Mintel,2017)

The table on the left presents the UK’s leading fashion
companies with their total market share percentage. In the third place
Associated British Foods plc which owns Primark. This cheap fashion retailer is
popular amongst UK customers.

 

 

 

 

PESTEL Analysis for Next plc

For the purpose of this marketing review i have selected 3
factors; Technological, Legal and Social factors.

Technological- Due to the increasing development and
popularity of the world wide web, firms such as Next were able to expand into
online retialing. The UK online retail ‘witnessed a strong double digit growth
in the past few years.’ (Business Source Premier, 2016) Next is already
‘planning to invest 10 million pounds’ into online retailing and mobile apps
which would include marketing. (Passport,2017) In 2019, the UK online retail
sector ‘is forecast to have a value of $125.4 billion.’Thanks to increasing
number of customers shopping online, there are less people shopping in-store.

Legal- Rising Laber wages. The laber costs keep increasing
every year. In 2014 the minimum wage was just £6.50 however 3 years later in
increased by a pound to £7.50. Those rising wages ‘increase the operational
costs and reduce profitability’. (Business Source Premier, 2016) According to
Financial Times the rising minimal wage ‘could cost a total of about £80’ extra
in the following five years. (FT,2015)  Furthermore
risk of VAT rising would affect the company negatively. In 2011, when Vat has ‘risen
from 17.5% to 20%'(BBC,2011) the prices in shops had to automatically increase
too. However according to Theresa May, VAT increase has been ruled out ‘before
2022′(Telegraph,2017) meaning that the retailer doesnt have to worry about it
for now.

Thirdly Social-Cultural Factor may have an impact on the
British fashion retailer. Any changes in Fashion and lifestyle will have be
either a threat or a opportunity for Next to use. Back in 2008, the retailer,
purchased a fashion brand for younger demographics called ‘Lipsy’ for a huge
£17 million.(Guardian,2008)  This has
been done to take advantage of the changes in their demographics. Moreover the
increasing cultural diversity in the country means that Next has to allign
products specifally to suit those different cultures.In 2014, ‘a total of
560,000 immigrants arrived’ in the UK. According to the National Statistics,
its a ‘rise of 68,000’

 

 

Company
Strategies

Brand Positioning- 
Next has a wide variety of consumers who they target. It varies from
different ages and genders. They are targeted through the use of Internet
(Their own website) , advertising, direct marketing and sales promotions. Their
target market are young adults aged between 18-45 both men and women.(Verdict,2017)
The younger customers are being targeted by the use of internet and social
media. Next’s customers are early trend adopters who are socially active and
have families. According to Passport research from 2017, the British retailer
positions itself between middle and high end pricing.This can be seen in the
image below. The firm is positioned with ‘strong British heritage’. The clothes
offered to the consumers are of classic design with a focus on ‘office wear,
events dressing and casual.'(Passport,2017)

Positioning maps help
to show how the customers see the comapny. Next is seen as quiet fashionable
and not high in price. The positioning map for Next is presented in the figure
on the right. The key competitors are Zara, Debenhams and Asos.

 

 

Nexts
IMC tools include Advertising, Direct marketing and
sales promotion.

Advertising- This tool is used in order to
send a message to a wide reaching audiance. Next plc launched an advert in 2007
to celebtrate its 25th anniversary. The advertising campaign starred
a well known ‘supermodel Alessandra Ambrosio.’ (Youtube,2008) This advert has
been released in order to make the audiance aware of the new collection which
will be available in stores. The use of a supermodel was intened to attract a
wide audiance and to ‘increase consumption’ of the new collection and ‘create
brand awarness'(Management Study Guide)

 Furthermore Next
chose the use of billboards to advertise the same collection. Those bilboards
were placed in busy places visited by thousands of people everyday. For example
the image on the right presents one of the many billboards used by the reailer.
It was located in Oxford Street, which is known for being Europes busiest
shopping street according to Rough Guides. With approximetely half a million
visitors every day, this place was perfect for a billboard advertisement.

3 Years later another advert was filmed by the company with
the help of Ben Watts who previously shot ‘advertising campaigns for Nike, Polo
Ralph Lauren, Gap, Apple’ and many more. (BenWatts) This showed that Next was
looking to make the best quality advertising campaign possible. The advert
filmed in an iconic location, right in front of the Eiffel Tower, starred
Brazillian supermodel Emanuela De Paula and Spanish actor Jon Kortajarena.
(Youtube, 2010)

 

 

 

Direct Marketing- For few years Next decided to turn off direct
mail to their customers as they found it ‘innafective’.(Marketing Week,2014) This
was because the quantity being sent was too high. However Lord Wolfson siad
that Next decided to “Turn it back on” after a couple of years. This has helped
to ‘increase sales in the UK’ which shows that they have effectively used this
IMC tool. According to the Chief executive of Next, the more mail there is sent
out, the “less effective it becomes”.(Marketing Week, 2014) The UK retailer saw
an increase of sales up by 10.3% which shows that Direct Marketing has been
used successfully. 

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