INTEGRATED MARKETING COMMUNICATIONS (IMC) ND3 MAY 2024

TEST 1

TIME: 1HR 30MINS SESSION: JULY

YEAR 2024

LECTURER: CHITSAMBA A EC NUMBER: 5201813T

SALES & MARKETING MANAGEMENT DEPARTMENT

COMMERCE DIVISION MUTARE POLYTECHNIC

ANSWER ONLY TWO QUESTIONS FROM THE FOLLOWING QUESTIONS

Question 1

Analyse the five (5) key features of integrated marketing communications (IMC). [25]

Question 2

Describe the promotional budgeting methods which can be used to appropriate marketing
communication resources. [25]

Question 3

Explain the basic model of communication clearly illustrating how this can help marketers in
their communication decision making. [25]
Marking guide for Test 1 ND3 MAY 2024 (IMC)

Question 1

Analyse the five (5) key features of integrated marketing communications (IMC). [25]

The key features of IMC are:

 Clearly identified marketing communications objectives which are

consistent with other organisational objectives;
 Planned approach which covers the full extent of marketing
communications activities in a coherent and synergistic way.
(Synergy)
 Range of target audiences – not confined just to customers or
prospects nor just to imply end customers but include all selected
target audience groups. These may be any specified ‘public’ or
group of ‘publics’ – stakeholders (e.g. employees, shareholders,
suppliers), consumers, customers and influencers of customers and
consumers, both trade and domestic.
 Management of all forms of contact which may form the basis of
marketing communications activity. This involves any relevant
communication arising from contact within the organisation and
between the organisation and its publics. (Customer-centric)
 Effective management and integration of all promotional activities
and people involved. (integrated effort)
 Incorporate all product/brand (‘unitized’) and ‘corporate’ marketing
communications efforts.
 Range of promotional tools – all elements of the promotional mix
including personal and non-personal communications.
 Range of messages – brand (corporate and products) propositions
should be derived from a single consistent strategy. This does not
imply a single, standardized message. The integrated marketing
communications effort should ensure that all messages are
determined in such a way as to work to each other’s mutual benefit
or at least minimise incongruity.
  Range of media – any ‘vehicle’ able to transmit marketing
communication messages and not Just mass media.

The key features of IMC can be summarized in terms of the 4Es and 4Cs

The 4Es of integrated marketing communications are:

 Enhancing – improve; augment; intensify marketing effort;

 Economical – least cost in the use of financial and other resources;
not wasteful.
 Efficient – doing things right; competent; not wasteful.
 Effective – doing the right things; producing the outcome required;
not wasteful.

The 4Cs of integrated marketing communications are:

 Coherence – logically connected; firmly stuck together.

 Consistency – not self-contradictory; in agreement, harmony,
accord.
 Continuity – connected and consistent over time.
 Complementary communications – producing a balanced whole;
supportive communications

The integration of these features creates the major feature of IMC which is
synergy

Question 2

Describe the promotional budgeting methods which can be used to appropriate marketing
communication resources. [25]

Learners are expected to identify five advertising budgets methods and explain in detail
their use in resource appropriation

There are several types of IMC budgets:

1. Objective and Task Method:

This method involves defining specific objectives, determining the tasks needed to achieve
these objectives, and estimating the cost of each task. Objective task marketing follows
several steps. The first thing is to identify and rank specific objectives that a business wants
to accomplish through advertising. For example, you may wish to increase sales revenue by
5%. Next, the objective and task method requires leaders to determine how they will meet
their objectives, and which tasks it will require. For example, one task may be to run a
targeted Facebook campaign. Finally, based on estimates for the cost of performing these
tasks, leaders can allocate money within the marketing budget to each task that seeks to
fulfil an objective.

2. Percentage of Sales Method:

Here, the budget is set as a fixed percentage of past or anticipated sales. procedure used to
set advertising budgets, based on a predetermined percentage of past sales or a forecast of
future sales. This method of budget allocation is popular with advertisers because of its
simplicity and its ability to relate advertising expenditures directly to sales. Management
usually determines the budget's percentage figure, which is based on the industry average
or the company's historical or previous year's advertising spending. For example, a firm
expecting to do $50 million worth of business next year and choosing to allocate 5% of their
sales to the advertising budget, would propose a $2.5 million advertising budget. A similar
decision may be based on market share, with $2 million being allocated for every share
point a brand holds. Many advertisers, however, shun this method because it is based on
the theory that advertising results from sales, while the converse is true, that is, that sales
result from advertising. In other words, advertisers feel that advertising communicates to
prospective buyers the features and benefits of a product that are necessary to generate
sales. In addition, the method does not recognize that as conditions change, advertising
expenditures should change with them. Finally, using this method may erroneously lead to
excessive spending for large established brands and inadequate budgeting for products that
may profit from additional advertising, such as new or repositioned brands.

3. Competitive Parity Method:

This method involves setting the budget to match competitor's spending. Competitive parity
is a method of allocation of promotional or advertising budget which is at par with the
budget expense of its competitors. The adoption of this method is based upon the
optimality of market competition. Companies deviate from their status quo budgeting in the
apprehension of trailing in the competition. The relative study of merits and demerits of
using this method will be more explanatory.

Competitive parity can expand to overall spending at part with competitors in all the aspects
of business also like strategy, IT, finance and other aspects of business but mainly it is used
in context of promotion and advertising.

4. Affordable Method:
The budget is determined based on what the company thinks it can afford. This advertising
budgeting method is based on what a company thinks it can afford to spend on marketing.
This method is often used by small businesses or startups that may have limited financial
resources, focusing on spending whatever remains after meeting operational costs. The
challenge with this approach is that it may lead to inconsistent advertising efforts, as
budgets can fluctuate significantly from period to period based on overall financial health.
Because it's not based on a specific goal or any underlying data, the affordable method can
be unreliable, leading to too much or too little being spent relative to returns.

6. Return on Investment Method

The return on investment (ROI) method is a strategy that devises a promotional budget by
balancing the amount of advertising to the profits generated from advertising. To be
successful, this method depends on the company's ability to correlate profits to specific
advertising efforts.

The company can implement tracking methods (such as tracking codes) that will help it see
which ad campaigns are the best at generating profits. The company can then appropriate
more advertising funds to those efforts.

Question 3

Explain the basic model of communication clearly illustrating how this can help marketers in
their communication decision making. [25]

Learners are expected to highlight and explain the key communications model elements
such as the sender, message, channel, receiver, encoding, decoding and feedback. Learners
may include a diagram.

The basic communication process has ‘nine’ constituents (elements) with a sequence such
as source, encoding, message, media, decoding, receiver, response, feedback, and noise.
Each constituent (element) is discussed below.

1. Source (Sender): The source is an entity that generates the idea which is communicated
to the customer or public. Source is the sender which can be marketing department, ad
agency or sponsor. Usually an ad agency generates the message that would be passed on to
the target audience, but in marketing communications context, a source is considered to be
the sponsor who pays the agency for developing the message. The sponsor can be the
company, retailer, marketing department or a service provider.

2. Encoding: When the source selects words, symbols, sounds, pictures that represent the
message that will be delivered to the customer, it is called ‘encoding’. Encoding is the
process of putting ideas into symbolic form.

3. Message (Advertisement): Message makes the encoding process into a meaningful format
so that the receiver decodes the message. The message may be verbal or non-verbal, oral or
written, or symbolic and should be transmittable in a chosen media. For example, ‘sounds’
are used in a meaningful format to air on radio. Message can be an ad copy that is run on
television.

4. Channel (Media): The channel uses any media to transfer the encoded message to the
receiver. Marketers use various media such as TV, radio, the print media, outdoor media,
social media, or word-of-mouth to communicate with their target audience.

5. Receiver (Customers): Receivers are the target audience of marketing communications.

The target audience can be either customers, or potential customers, or stakeholders of the
company, or public who receive the product, service or idea.

6. Decoding (Interpretation): Decoding is the process by which the receiver assigns meaning
to the sender’s transmitted symbols. The interpretation of the advertisement by a receiver
is known as decoding. Different people may decode the same message in different ways
based on his psychological state. A message is deemed to be effective at the receiver’s end
when it is able to bring necessary changes in the knowledge, attitude and behavior of the
receiver.

7. Response: Response is the immediate activities of the receivers after they have decoded.
Receivers’ response may be non-observable actions like storing information in the memory
or taking a decision to purchase a product. Response is nothing but possible reactions in a
receiver which can be exhibited outside or not.

8. Feedback: Feedback is that part of receiver’s response which is communicated back to the
sender. Companies are more interested in monitoring the response of the receiver whether
he has understood or not. The effectiveness of the message is known through feedback
which is given by the receiver to the sender about the interpretation of message. Feedback
completes the communication loop and the sender takes necessary measures to fine-tune
the message so as to get the desired response from the receiver i.e. customer or public.

9. Noise (Barriers to Communication): Noise is the distortion of message that can happen at
any stage between the sender and the receiver. Noise can be any unplanned physical or
psychological disturbance which distorts the message sent by the sender. Disturbance of the
message can happen at the encoding stage if the sender does not use appropriate symbols
while designing his message. Disturbance can be during transmission phase due to improper
selection of a media to disseminate the message. Distortion at decoding stage may happen
if target audience has a different psychological state of mind. Competitive ads may create
confusion and clutter while decoding the message by receivers.