mkt570=integrated media communication · mkt570 – group imc account 3 background integrated...
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MKT570 – Group IMC Account 1 www.loudcommsgurus.wordpress.com
MKT570=Integrated Media Communication
Assignment three: Group IMC Account
Elisha Booth
Catherine Gordon
Jasmine Stone
Fiona Thompson
Due date: 12 September
Submitted: 12 September
Visit the LOUD blog for links and presentation
www.loudcommsgurus.wordpress.com
MKT570 – Group IMC Account 2 www.loudcommsgurus.wordpress.com
Contents
Background ........................................................................................................................................ 3
Introduction to group buying and LivingSocial ................................................................................... 3
Customer initiated communication ..................................................................................................... 4
Social Media – Web 2.0 .................................................................................................................... 5
Citizen journalism ............................................................................................................................ 6
Social media, citizen journalism and LivingSocial .............................................................................. 7
Incentivising to attract consumers and spread the word. .................................................................... 8
The consumer decision making process ............................................................................................... 8
Problem recognition ......................................................................................................................... 9
Information search ........................................................................................................................... 9
Alternative evaluation ...................................................................................................................... 9
Purchase decision ......................................................................................................................... 10
Postpurchase evaluation ................................................................................................................ 10
Conclusion........................................................................................................................................ 10
References ....................................................................................................................................... 11
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Background Integrated marketing communication (IMC) is an extremely interesting area of marketing, particularly with
the changing social and technological environment and introduction of a new communication channels
including social media. The rise of citizen journalism through forums and blogs provide organisations
with a host of new opportunities for reaching target audiences.
With the increasing popularity of social media including Facebook and Twitter, any IMC campaign needs
to consider such outlets as brand touch points. Using social media for IMC is a cost effective option
providing benefits such as increased word of mouth and opportunities for promotion within friendship
groups. Group buying websites like LivingSocial already use social media in their marketing mix, and in
an environment where the customer initiates communication, must understand the consumer decision
making process and how consumers can be reached at each stage in a constantly changing media
landscape.
This report explains the concept of customer initiated communication and the consumer decision making
process, discussing how group buying organisations like LivingSocial can use social media and citizen
journalism to their advantage within a wider IMC campaign.
Introduction to group buying and LivingSocial
Group buying sites, including LivingSocial, Groupon, GrabOne, Jump On It, Cudo and Spreets, are
rapidly expanding into the Australian market. According to Howorth “In just over a year Australia's online
group-buying sector has grown from practically nothing to a $63m business.” (2011, p. 19).
LivingSocial is one of the top four group buying websites in the Australian Market, with 43 million
customers worldwide in 25 countries and 163 markets (LivingSocial Ltd., 2011B). LivingSocial is on
Facebook and Twitter and uses these to promote their daily deals – members have purchased more than
20 million vouchers since 2007.
LivingSocial offers a variety of deals on a daily basis, ranging from experiences to meals, classes,
holidays, beauty treatments and consumer goods (LivingSocial Ltd., 2011A).
group buying explained
“The group-buying model is a fairly conventional one. Sites negotiate special offers from merchants at heavily
discounted prices and advertise these to their consumers, usually via email or social media. The offers are only
honoured, however, should enough subscribers purchase them. This encourages would-be buyers to alert their
friends to the deal, in order to ensure it 'tips! The merchant is guaranteed business, albeit at a heavily discounted
rate, while the group buying service retains a hefty margin, usually around 50%.” (Howorth, 2011, p. 19)
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Customer initiated communication Unlike mass media marketing approaches, IMC is a highly interactive
process between an organisation and its customers, stakeholders and
staff (Belch, Belch, Kerr, & Powell, 2009). In a rapidly changing consumer,
technological and media environment, organisations must take an IMC
approach to effectively respond to customer initiated communication
(Belch et al, 2009). Organisations should consider the benefits of utilising
customer touch points that impact the organisation‟s brand and brand
equity, either positively or negatively (Belch et al, 2009).
In contrast to basic communication models, the customer initiated
communication model by Duncan (2005) works in reverse. Inbound
marketing theory, where an organisation focuses on getting found by the
customer, takes a similar approach to Duncan (Halligan, Shah &
Meerman, 2009).
Customer initiated communication is where the customer is the „source‟ or „initiator‟ of the message
(Duncan, 2005). Consumers decide what, when, who and how messages are communicated, unlike in
traditional marketing where organisations send messages to consumers. The organisation „receives‟ the
message and must take action and respond to the customer (Halligan et al, 2010). Examples of ways
customers may contact an organisation include through call centres, social media, mobile internet, sales
kiosks, direct mail or email. Organisations can use this knowledge to develop effective IMC programs,
determining optimal touch points to encourage conversation (Belch et al, 2009).
Figure 1: Customer initiated marketing model (Duncan, 2005, from Belch et al, 2009, p102).
Source Customer or other
stakeholder
Message Question, complaint,
compliment
Channel 1800 number, letter, email,
salesperson, customer service, internet
Receiver Company
Noise
Busy signal, company delays, incomplete information
Feedback – Five Rs
Responsiveness, recourse, recognition, respect & reinforcement
integrated marketing
communication
“a strategic business process
used to develop, execute and
evaluate coordinated,
measurable, persuasive
brand communications
programs over time with
consumers, customers,
prospects, employees,
associates and other targeted
relevant internal and external
audiences.”
(Belch et al, 2009, p. 614)
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Social Media – Web 2.0
Consumer led content or customer initiated communication has increased significantly with the
emergence of social media and other online services, in particular Facebook, Google search and Blogs
(Switched On Media Pty Ltd, 2010). In June 2010, Comscore (Switched On Media Pty Ltd, 2010)
reported that two thirds of Australians visited social media sites and Google search saw over 10 million
visitors, of which 78 per cent were visitors to social networking sites and 16 per cent were heavy social
networkers. Facebook.com ranked as the third most visited site, with 6.1 million visitors.
It is important to note customers are likely to use smartphones to communicate
socially and to make online purchases – a ChoiceStream study found 37% of
smartphone users used their phone to buy merchandise in 2009 (Miller and
Washington, 2011). According to Reed (2011, p. 54), “E-commerce sites need to
be optimised in order to work properly on smartphones, with reduced graphics
and clearer links from the main screen into web pages.” So, organisations will
benefit from the development of optimised mobile websites and linking directly to
social media outlets.
Social media is an interactive process between customers and organisations, and is usually consumer
led. Organisations can benefit by understanding and incorporating customer initiated communication
approaches when developing IMC programs. In group websites like LivingSocial, consumer led content
is extremely important. When organisations send messages, customers pass the messages on to
friends through word of mouth and social media. In the model employed by LivingSocial, the
organisation posts a heavily discounted deal via email or on their website that customers purchase,
based on a set number of buyers required to „activate‟ the deal. To ensure minimum numbers are
reached, customers share the deal with friends, family and colleagues via social media channels such as
Facebook and Twitter to encourage higher involvement. Social media links appear on the „deal‟ webpage
with a tally of deals purchased to keep the word-of-mouth or „buzz‟ alive.
Figure 2: LivingSocial deal page - the homepage provides social media sharing links for customers to drive message to the public who will initiate the communication via word of mouth (LivingSocial Ltd, 2011).
“smartphone noun
a mobile phone with
access to the internet
and the functionality
of a personal
computer.”
(Macquarie Dictionary
Online, 2011A)
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Citizen journalism
Another way consumers are initiating communication messages is through
citizen journalism, evident through articles written by consumer advocates or
representatives about organisations to inform or warn the public and encourage
comment and feedback. This is usually done via websites, blogs and forums.
Grouped.com.au is a consumer blog focusing on various group buying websites
and informing consumers of the best and worst deals and organisations,
keeping them up to date on the latest industry trends (Grouped, 2011).
Figure 3: Grouped.com is a consumer based blog and website comparing group buying sites (Grouped, 2011).
Additionally, shopping comparison websites and forums are regularly visited by consumers to ask for
feedback about an organisation‟s product or service – further proof that social media and citizen
journalism should be considered by marketers. For example, whirlpool.com.au is a social forum where
customers can gain feedback on, complain about or advocate an organisation. In Figure 4 below, a
potential customer asks Whirlpool members whether an organisation‟s deal is legitimate (Whirlpool,
2010). If this case were referring to LivingSocial, the organisation would have an opportunity to respond
immediately, acquiring the customer and protecting LivingSocial‟s corporate identity – all via a customer
initiated message.
“citizen journalism noun
journalistic reporting by
bloggers who are not
part of the established
media. Also, participatory
journalism.” (Macquarie
Dictionary Online, 2011)
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Social media, citizen journalism and LivingSocial
Organisations are now taking a more consumer-centric approach and adapting their marketing activities
to suit the way customers find out about products and services (Halligan et al, 2009). LivingSocial
generates thousands of leads through inbound marketing via Google search.
Moreover, the LivingSocial Facebook page asks the brand‟s „fans‟ for feedback on deals prior to going
live, or even ideas. Customers can use Facebook to make requests for specific deals in their area, and to
complain about or compliment the organisation. The organisation responds, interacts and collaborates
with the customer to enhance loyalty and advocacy or acquire new customers via word of mouth. Again,
the customer is initiating the message and the organisation responds or actions.
Figure 5: LivingSocial's Facebook page allows the brand to interact directly with consumers (Facebook, 2011).
Figure 4: Organisations can respond to consumers on forums such as www.whirpool.net.au, offering direct communication opportunities (Whirlpool, 2010).
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Incentivising to attract consumers and spread the word.
Successful organisations will incentivise customers to
invite their friends to buy, with the customer driving the
message via social media. For example, group buying
websites such as Groupon conduct „viral‟ marketing
promotions where customers can earn $10 deal
vouchers when they get their friends to join. Here, the
organisation is providing the content to the customer
who then recruits their friends, family and colleagues
via social media channels.
Similarly, websites like GrabOne and LivingSocial
encourage consumers who purchase deals to post a
link to the deal on their Twitter and Facebook accounts
– if three of the consumer‟s friends purchase the deal
using the link provided, the original customer receives
their deal for free.
The consumer decision making process The consumer decision making process is core to strategic marketing plans. Marketers use this process
as a reference point, helping define the space they compete in and identify potential consumer touch
points to plan and implement IMC campaigns.
It is important to consider which communications tools are utilised, and when, to maximise return on
investment and successfully impact and influence consumers‟ attitudes.
The consumer decision making process in its basic form progresses through five stages (Belch et al,
2011):
Figure 8: Basic consumer decision making model (Belch et al, 2009, p127).
Understanding each stage and evaluating potential for communication is critical to the success of a
marketing program. Online shopping and group buying sites such as LivingSocial further expand the
consumer mix as well as threats and opportunities for businesses at each stage of the consumer
decision making process.
Choice magazine explains how group buying sites use the power of group, or bulk-buying to negotiate
discounts with retailers in return for a commission (Choice, 2010). This brings consumers heavily
discounted prices, but limited quantities.
Problem recognition
Information search
Alternative evaluation
Purchase decision
Postpurchase evaluation
Figure 6: Groupon customers refer friends to earn deal vouchers (Groupon, 2011).
Figure 7: LivingSocial users win deals for free if friends buy through social media links (LivingSocial Ltd, 2011A).
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Using LivingSocial as an example, the below outlines how tools within the IMC suite can be utilised
during different stages of the consumer decision making process to achieve optimum results, while still
sharing and communicating the core brand messages.
Problem recognition
LivingSocial positions its products in two main ways – for gifts and personal use at a discounted rate
(LivingSocial Ltd., 2011A).
To ensure consumers consider LivingSocial, the brand must
have resonance in the problem recognition phase. For online
shopping this will mean an integrated mix of online and offline
brand advertising in a way that appeals to potential online
shoppers. Print and radio advertising should align with events
such as Father‟s Day and Christmas, ensuring the site falls into
the consumer‟s consideration set. Messages should promote the benefits of shopping online as well as
the value for money the site represents during expensive and ongoing gift giving periods.
Information search
Ensuring LivingSocial is identified during the information search phase is essential to the consumer
following through with a purchase. Search engine optimisation (SEO) involves positioning the site as a
top option when specific searches occur such as “gift” or “online shopping”. SEO coupled with targeted
online advertising through mechanisms such as Google Ads ensures the site is front of mind during every
day browsing.
Dejanseo (2011) state that 47 per cent of internet access is mobile. A mobile optimised site or application
will ensure LivingSocial is user friendly in all purchase environments, increasing the likelihood of the
consumer further exploring the site in their information search.
Alternative evaluation
A good shopping experience will increase positive word of mouth
promotion. Advertising LivingSocial‟s benefits over those of other group
buying sites is important in winning the consumer during the alternative
evaluation phase. This requires a range of quality products for the target
market – something the site advocates.
Website presentation and supporting social media promotion are also
important. A Twitter feed and Facebook page with supporting online and
telephone customer service allow LivingSocial to answer consumers‟
questions in a timely way, assisting the brand to stand out in the evaluation
search.
Figure 9: Event targeted promotion encourages purchase (LivingSocial Ltd, 2011A).
Figure 10: Clear processes promote site benefits (LivingSocial Ltd, 2011A).
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Purchase decision
Haubl and Trifts (2000) highlight the unique characteristic of online versus offline shopping that allows
retail interfaces with highly interactive and personalised features to act as interactive decision aids. This
includes mechanisms that show what other products the consumer may be interested in as well as
prepopulating the consumers‟ location to highlight deals for their area.
Postpurchase evaluation
Both online and offline communications are important in the postpurchase evaluation phase. Firstly the
packaging and returns policy of online products needs to be appropriate and clear. A printed flyer should
be included in any packaging or on coupons as well as the receipt.
Feedback channels should be outlined to ensure the consumer has a positive experience from purchase
through to use, also allowing the vendor to ensure the deal provider followed through on their products
for future reference. Feedback channels should be outlined when the product is delivered and through
the online receipt delivery. Online response to Twitter and Facebook comments will also be important to
ensure consumer satisfaction.
Beyond this, ongoing communications should be utilised to keep the brand top of mind during the
consumer decision process for the next time a service like LivingSocial is required. This would include
electronic direct mail newsletters and special offers that can also be executed via Facebook and Twitter
to provide the consumer with a feeling of exclusivity.
IMC plays a key role in each phase of the consumer decision making process. Employing appropriate
tools and messages to strategically capture consumers at each stage is vital to a successful marketing
strategy and tactical execution.
Conclusion After reviewing the consumer decision making process, along with Duncan‟s customer initiated
communication model, with a focus on LivingSocial, it is apparent that both models have particular value
to the group buying websites.
Opportunities to communicate directly with the consumer have been pin-pointed for each stage of the
customer decision making process and through a variety of channels. Two-way communication is key,
and can be achieved through active monitoring of, and participation in social media, blogs and forums.
With the rise of citizen journalism and an increasingly online shopping environment, group buying
websites can continue to grow with the right IMC mix and offerings.
The ever evolving media and technology landscape make this an exciting time for marketers, reinforcing
the notion that any successful marketing campaign should have a focus on IMC, with the added bonus
that using social media, blogs and forums is a cost effective way to promote the brand.
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References Belch, G., Belch, M., Kerr, G., & Powell, I. (2009). Advertising and Promotion: An integrated marketing
communication perspective. Sydney: McGraw Hill.
Choice. (2010, November 25). Group Buying Websites. Retrieved August 31, 2011, from Choice:
http://www.choice.com.au/reviews-and-tests/money/shopping-and-legal/shopping/coupon-
websites.aspx
Dejanseo. (2011, April 22). Online Shopping Statistics 2011. Retrieved August 30, 2011, from Dejanseo:
http://dejanseo.com.au/online-shopping-statistics-in-2011/
Duncan, T. (2005). The New Principles of Advertising and Promotion (2nd ed.). New York: McGraw-
Hill/Irwin.
Facebook. (2011). LivingSocial. Retrieved September 9, 2011, from Facebook:
http://www.facebook.com/LivingSocial
Grouped. (2011). Grouped - All Your Favourite Daily Deals, Scoopon, Spreets, Cudo, OurDeal, Jump On
It, LivingSocial, Catch of the Day... And More! Retrieved September 8, 2011, from Groupon:
http://grouped.com.au/about
Groupon. (2011). How Groupon Australia works. Retrieved September 8, 2011, from Groupon:
http://www.groupon.com.au/how-does-groupon-work
Halligan, B., Shah, D., & Meerman, D. S. (2009). Inbound Marketing: Get Found Using Google, Social
Media and Blogs. Wiley, Hoboken.
Haubl, G., & Trifts, V. (2000). Consumer Decision Making in Online Shopping Environments: The effects
of interactive decision aids. Marketing Science, 19(1), 4-21.
Howorth, B. (2011, March 18). What's the big deal? B and T, 18-23.
LivingSocial Ltd. (2011A). How it Works - LivingSocial. Retrieved September 5, 2011, from LivingSocial:
http://livingsocial.com/deals/how_it_works
LivingSocial Ltd. (2011B). LivingSocial by the numbers. Retrieved September 8, 2011, from LivingSocial:
http://livingsocial.com/bythenumbers
LivingSocial Ltd. (2011C, September 7). The Best Daily Deals in Sydney - Greater West. Retrieved
September 7, 2011, from LivingSocial: http://livingsocial.com/cities/847-sydney-greater-west/
Macquarie Dictionary Online. (2011). Macquarie Dictionary: citizen journalism. Retrieved September 8,
2011, from Macquarie Dictionary Publishers Ltd.:
http://www.macquariedictionary.com.au/[email protected]@9190833615573/-
/p/thes/article_display.html?type=title&first=1&mid=3&last=3¤t=1&result=1&DatabaseList=dictbig
mac&query=citizen%20journalism&searchType=findrank
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Macquarie Dictionary Online. (2011A). Macquarie Dictionary: smartphone. Retrieved September 8, 2011,
from Macquarie Dictionary Publishing Ltd.:
http://www.macquariedictionary.com.au/[email protected]@9190833615573/-
/p/thes/article_display.html?type=title&first=1&mid=2&last=2¤t=1&result=1&DatabaseList=
dictbigmac&query=smartphone&searchType=findrank
Miller, R. K., & Washington, K. (2011). Entertainment, Media & Advertising Market Research Handbook.
Richard K Miller & Associates.
Reed, D. (2011, January). E-commerce moves closer to mobile pay day. Data Strategy, 52-54.
Switched On Media Pty Ltd. (2010). Australian Social Media Statistics: 2 million more. Retrieved
September 7, 2011, from Switched On Media: http://switchedonmedia.com.au/australian-social-
media-statistics-2-million-more/
Whirlpool. (2010, June 26). Crowdmass.com.au group buying site. - Shopping - On the internet.
Retrieved September 7, 2011, from Whirlpool: http://forums.whirlpool.net.au/archive/1473147