THE IMC GOLDEN TRIANGLE

LEARNING POINTS:

1. Participants in the IMC process

II. Organizing for advertising and
promotion in the firm
III. Advertising agencies
IV. Agency compensation
V. Evaluating agencies
VI. Specialized services
VII.Collateral services
VIII. IMC Services
 IMC PARTNERS
The Golden Triangle of IMC partners:

Example: Dell is an organization, Young & Rubicam

Pvt. Ltd. is an advertisement agency, Sony Pix TV and
Facebook are the medias.
 IMPORTANT PLAYERS IN ADVERTISING
1
ADVERTISER
(Client Organization)

2 3
Advertising Agency Media Organizations
4 5
Marketing Communication
Collateral services: package
specialists Organization: design, video production,
Direct Marketing Agencies photographers, or printers, etc.
Sales Promotion Agencies
Interactive Agencies
Public Relations Firms
IMPORTANT PLAYERS IN THE ADVERTISING
SYSTEM
1. Clients or advertisers (Those who want
to communicate with the target
audience and provide the necessary
funds for the ads and media purchase
depending on their marketing
programme)
2. Advertising agency (act as partners with
clients for developing the marketing
and promotional programmes)
3. Media organizations (provide
information regarding the right choice
of media for purchase of space or time
and reaching the target audience in a
cost effective manner)
http://www.media-directory.asia/
4.Marketing communication specialists
5.Collateral (specialized Guarantee )
service providers
CLIENT’S OR ADVERTISER’S

ROLE IN ORGANIZING FOR ADVERTISING

Organizing for advertising and

promotion depends on several factors
such as company size, number of
products, role of advertising in the
promotion-mix, the budget, etc.
SOME POPULAR ORGANIZING
SYSTEMS ARE:

Centralised system
Decentralized system
In-house advertising agency
The centralised system
 THE CENTRALISED SYSTEM

 Marketing activities are divided along functional lines such as

advertising, sales, marketing research, product planning, etc.

 The advertising manager looks after all promotional activities

concerned with the company’s products and services.

 Following basic functions are performed by the advertising

department under the centralised system:

*Planning and budgeting

*Administration and execution

*Coordination within the company

*Coordination with ad agencies.
PLACE OF ADVERTISING DEPARTMENT UNDER
A CENTRALISED SYSTEM

COMPANY PRESIDENT

Production Finance Human

Marketing Research
resource
department department department
department department

Marketing Product Advertising Sales

research planning management
management
 Advertising
Department

Planning Administrati Coordination Coordination with

and on and within the ad agency and
Budgeting Execution company services
Planning and Budgeting:
It develops advertising and other promotional
plans in line with the marketing objectives,
strategies, budget of the company and get it
approved by the higher management. The top
management makes the final approval.
Administration and Execution:
The advertising manager works closely with
production,media,copy,art and sales promotion.
Incase of other agency is hired the advertising
manager reviews and approves the prepared
advertising plans.
Coordination within the company: Advertising
Mangers coordinates with other marketing
functions such as marketing research and sales.

Coordination with Ad Agencies: In development of

advertisement ,buying the place for add in suitable
media all is coordinated by advertisement
manager with outside advertising agencies and
decides which service agency to use based on
various factors.
 CENTRALISED SYSTEM …….

 The companies that do not have many

divisions, products ,service lines, or
brands. (ssim)
 This
system makes it easier for the top
management to participate in decision
making.
 Betteroperational efficiency due to
involvement of fewer people in decisions.
 CENTRALISED SYSTEM …….

 On the negative side often it gets difficult

for the advertisement department to
understand the overall strategy for the
brand and response of specific problems
faced by the brand may be slow.
 When companies grow in size beyond a
point Centralised Advertisement Dept.
may be unsuitable and is impractical.
The decentralised system
 THE DECENTRALISED SYSTEM

 Decentralised system is followed in large

corporations with many product lines and
brands, e.g. HUL,P&G,
 The company has many strategic business units
with separate manufacturing, R & D, marketing,
sales, product or brand management
department.
 Each brand manager (product manager) is
responsible for managing the assigned brand
that includes planning, budgeting, sales and
profits.
BRAND MANAGEMENT UNDER DECENTRALISED
SYSTEM

Vice President Marketing

Sales Product management Marketing services

management
Brand manager -1 Advertising Marketing
department research
Ad agency

Sales promotion
Brand manager - 2

Ad agency
Package design

Brand manager - 3 Merchandising

Ad agency
DECENTRALIZED SYSTEM

 Decentralized System is followed in large

corporations with many product lines and
brands. Typically the company has many
strategic units, or divisions with a
separate manufacturing, research &
development, marketing ,sales product or
brand management departments.
BRAND MANAGEMENT UNDER DECENTRALISED SYSTEM

Product management

Brand manager /Product Manager

Detergent Soaps (Tide and Ariel)

 Who is totally responsible for managing

brand, including,planning,budgeting,sales and its profit
performance. Depending on size of department brand
manager has assistant brand managers to help in
planning ,implementation and control of marketing
Programme.
 Under Brand Management systems all
function associated with advertising and
other promotions are the responsibility of
brand manager.

 Brand manager works with advertising

agencies and all other specialist service
providers as they prepare the promotional
programme.
DISADVANTAGES DECENTRALISED SYSTEM

 In this system the brand managers often

lacks training and experience, hence develop
brand strategy without a deeper
understanding of what the advertising and
promotions can or can not accomplish.
 This system also leads to undesirable
rivalries amongst brand managers, and
disproportionate fund allocations.
 Companies like P& G considered these
problems and switched to category
management system. (See brand portfolio P
&G Fig:3-3)
CATEGORY MANAGEMENT SYSTEM

 Category management includes category managers

,brand managers and advertising managers.
 The category managers oversees the management
of entire product category and focuses on the
strategic role of various brands in order to build
profits and market share.
 The advertising manager may review and evaluate
the various parts of program and advise and consult
with the brand managers.
 The advertising manager may have authority to
override the brand managers decisions on
advertising.
 In large firms Advertising manager may coordinate
with outside agencies.
CATEGORY MANAGEMENT SYSTEM

Vice President

packaged soap and detergent division

Category General Manager,

Category General Manager,
Category General Manager Laundry products Specialty products
Dishwashing products

Advertising Managers
(Each Category General Manager will have One / More advertising
managers reporting for each specific Brand
e.g. Ariel advertising manager ,Tide Advertising Manager

Associate Advertising Managers

Brand Managers

Assistant Brand Managers

In-house advertising agency
 Some large companies own and operate in-house
advertising agency, e.g. Avon,Revlon,Calvin Klein,
Benetton, etc.
 The major considerations for using in-house agency is: To
decreases advertising and promotional costs by
exercising greater control over advertising activities.

 The in-house agency is a setup and given an

identity of its own. Some companies exclusively
use in-house agencies while many are flexible
and combine in-house efforts with those of
independent outside advertising agencies.
CRITICS OF IN-HOUSE AGENCY

 Some critics of in-house agency say:

 It cannot match the exposure, experience
and objectivity of outside agencies.
 In-house system cannot have the range of
activities provided by outside agencies.
 In-house personnel likely to have narrow
perspective and may become stale
working on the same product.
Advertising Agencies.

http://www.purei.com/
ADVERTISING AGENCY

“Advertising agency is an independent

business, composed of creative and
business people ......who develop, prepare
and place advertising in advertising
media for sellers seeking to find
customers for their goods or services.”
ROLE OF ADVERTISING AGENCIES.
 They provide the client with services of highly
skilled individuals who are specialist in chosen
fields. (Artist, Writer, Media Analysts,
Researchers etc….)
 They provide with specialized services in
specific industry
 They bring in broad experience of diverse set of
marketing problems for various clients from
various industries.
TYPES OF ADVERTISING AGENCIES

 Ad agencies can range from a one

or two person operation to large
organizations with over 1000
employees.

 Theservices offered and function

performed will vary.
TYPES OF ADVERTISING AGENCIES
1.Full-service Agencies
2.Specialized Service Agencies
Media Buying Services
Creative Boutiques
Sales Promotion Agencies
Public Relation Firms
Interactive Agencies
1.Full-service Agencies
 Organisation Chart of
Full-service Agency
Board of directors

President

VP, Creative VP, Account VP, Marketing

services Services services VP, Management
& Finance

Print Office
Copywriters/ Media
production Sales Management
Art directors promotion Finance
Account
Supervision
TV production
Research Accounting
Account
Traffic executive Personnel
1 .FULL-SERVICE AGENCIES

 These agencies offer full range of services to their

clients in the area of marketing, communications
and promotions.

 These services include marketing and

advertising planning, creating and producing
the ad, media selection, research, package
design, sales training, sales promotion, event
management, trade shows, publicity and PR.
(ONE STOP SHOP) All industries are working on same
concepts that what are the different services we can
provide to our clients)
 It is composed of various departments responsible to
serve the client by performing various inter-related
functions.

 The agency generally has five functional

areas:
 Account Management
 Marketing / Support Services
 Media Services
 Creative Services
 Management and Finance
FUNCTIONAL AREAS OF A FULL-SERVICE AGENCY

 Account Management (Account Services) – Responsible for

the relationship between the agency and the client.
 Marketing / Support Services – Research department to
gather and interpret data for situation analysis and
developing effective ads.
 Media Services – Responsible for developing a media plan
and buy media that can reach the target audience in a cost
effective manner. (Based on budget ..all combination shall
be worked out to attain the objective and target)
 Creative Services – Responsible for creation and execution
of the ads. ‘Copywriters’ are creative specialists.
 Management and Finance – Responsible for internal
administration, HR, Finance and accounting.
2.Specialized Service Agencies……

Media Buying Services

Creative Boutiques
Sales Promotion Agencies
Public Relation Firms
Interactive Agencies
Direct Response Agencies
MEDIA BUYING SERVICES

Independent companies that specialize

in the planning and purchasing of media
 Specialize in analyzing and buying
media, especially broadcast time
 Agencies and clients may develop media
strategy
 Media buying organizations implement
the strategy and buy time and space
Major Media buying companies in India
• Mindshare, Maxus, MEC-CIA
• Zenith Optimedia
• Madison
• Lodestar
• Universal McCann
• Carat
CREATIVE BOUTIQUES

 Agencies that specialize in the creative process of

advertising
 Provide only creative services
 Other functions are provided by the internal
client departments or outside agency.
 Full-service agencies may subcontract with
creative boutiques
 http://economictimes.indiatimes.com/indias-top-
creative-ad-agencies/slideshow/5343851.cms
SALES PROMOTION SPECIALISTS AGENCIES….

Agencies that specialize in developing and

administering sales promotion programs.
Services includes
 Promotion Planning
 Creative
 Research
 Design and Production
 Contests/sweepstakes
 Refunds and rebates
 Sampling and incentive programs
 PUBLIC RELATIONS FIRMS
Firms that develops and implement programs to manage
organization’s publicity, image and affairs with
consumers and publics.
Services includes
 Strategy Development
 Program Planning
 Generating Publicity
 Lobbying
 Public Affairs
 Image portrayal
 Damage control
http://www.adfactorspr.com/home.aspx
http://www.madisonindia.com/units/pr-consultant-firms.html
INTERACTIVE AGENCIES
Agencies that specialize in the development
and strategic use of various interactive
marketing tools

Services include:
 Development of strategy for Internet
and other interactive marketing tools
 Interactive Media Creation
 Web sites
 Web banner ads

 Digitized content (audio, video, animation)

The Future- http://vimeo.com/10251808

DIRECT RESPONSE AGENCIES
Agencies that specialize in providing direct
marketing services to their clients………

Services include:
 Data Base Management
 Direct Mail Programs
 Research
 Media Services
 Creative
 Production
AGENCY Methods of Compensation:
1. Commission – The agency receives fixed commission
from the media on any advertising space or time
purchased for the advertiser.(15%) (10%) (5%)
2.Negotiated fee – Agencies and their clients negotiate some
type of fee system or cost-plus arrangement for
compensation. Some also use an incentive-based
system combining the fee.
3.Percentage charges (Trader)– When various services are
purchased by the agency from outsider, a mark-up of
percentage charges is added to the bill to cover up for
the administrative costs and for a reasonable profit. (for
any services provided)……..(Keep in mind the levels )
EXAMPLE OF THE COMMISSION SYSTEM
MEDIA AGENCY ADVERTISER
ADVERTISING AGENCIES (ANY)

 Gaining  Loosing
Clients Clients.
Gaining Clients

 Referrals
 Solicitations (asking their services)
 Presentations
 Public Relations
 Image and Reputation
LOOSING CLIENTS BY (CLIENT OR
AGENCY)
 Poor performance
 Poor communication
 Unrealistic demands
 Personality conflicts
 Personnel changes
 Changes in size
 Conflict of interests
 Changes in strategy
 Declining sales
 Payment conflicts
 Policy changes
5.COLLATERAL (SPECIALIZED SECURED
GUARANTEED SERVICES)
 Marketing Research Firms
 Package Design Firms
 Video Production Companies
 Photographers
 Printers
 Event Marketing Companies
Adverting Agency Evaluation
 ADVERTING AGENCY EVALUATION

 Financial assessment – focuses on how the

Agency conducts its business vis-à-vis costs
and expenses.
 Qualitative assessment – explores the
Agencies efforts devoted to planning,
developing and implementing the advertising
campaign and its achievements.
 Different companies use Both formal and
informal methods of evaluation for their
advertising Agencies.
INTEGRATED MARKETING COMMUNICATION
SERVICES

 A significant trend in the advertising industry

is to combine all of the above services under
one roof.
 One-stop service agencies bring together
service providers so that the client needs only
their firm to receive all of the marketing
support they requires.
Integrated marketing communication
WHY IMC?
services

Need for Image

Need for
Reputation
WHAT ARE SPECIFIC ADVANTAGES AND DISADVANTAGES :

1.Advantages of integrated services

 Greater control of the promotional process allows for more synergy among
each of the communication program elements

 Convenient for clients to coordinate all promotional efforts with one

agency

 Agencies with IMC capabilities can create a single image for the client

2.Disadvantages of integrated services

 Synergy and economies of scale are often not achieved by a single agency
handling all communication areas

 Internal conflicts often arise within various departments within a

large agency over areas such as advertising, PR or sales promotion

 Limits client’s ability to take advantage of specialists in various IMC areas

FINAL NOTE:

IMC is driving the need for closer

agency-client relationships
• Fallout: some marketers are
consolidating their relationships with
fewer agencies
• IBM cut 70 agencies from its
$500 million account
http://www.youtube.com/watch?v=vLqXgEpLSw4

http://www.youtube.com/watch?v=3HkqrW1cTwY
THE END:

"Never worry about numbers. Help

one person at a time, and always
start with the person nearest you."
- Mother Teresa