Advertising and Marketing

Integrated Marketing (IM) is a management strategy and meta-discipline focused on the organisation-wide optimisation of unique value for stakeholders^[1].

Although closely linked to Integrated Marketing Communications (IMC), it should not be confused with it.

The logic of integrated marketing has been described as the management of three interconnected business drivers^[2]

1. Identification and maintenance of the organisation’s or brand’s coherent identity, which is a reflection of the way it is organised and operated to provide differentiated value. This has also been described as the DNA of the organisation. Influential characteristics of the organisation include the business model, core competencies, positioning, product designs, and brand, as well as the heritage of culture and organisational purpose. In successful organisations, these come together to create differentiated value for customers. Internal characteristics of the organisation lead to external actions that become the basis of the brand, brand equity and market positioning, with consequences for future organisation development.
2. Mobilisation of all employees behind this identity and value, with lean, value-focused processes and appropriate resources. This is essentially a challenge of implementation and performance management, achieving integration, coherence and high levels of performance throughout the organisation. In marketing circles, this has sometimes been described as “living the brand” (ref), but success draws on that subtly modifies such well-established disciplines as lean, balanced scorecard/performance management, service management and internal marketing. It therefore draws on the contributions of HR, operations, organisation development, finance and other groups.
3. Integrated contact management (integrated communications, creating valuable experiences for customers). This is where IMC fits, as well as related concepts such as media neutral planning (MNP) and experience management. Although this is a key area for the marketing team, it typically also depends on the contribution of sales, operational and service management functions and processes.

While ultimately focused on the optimal recruitment and retention of customers, it also explicitly involves and has been shown to benefit employee, shareholder^[3][4] and other stakeholder groups^[5][6]

Although the marketing function and leadership has important role to play, integrated marketing involves all branches of the organisation.

[edit] Relationship to Integrated Marketing Communications (IMC)

As a marketing strategy, Integrated Marketing is closely related to and inter-dependent with Integrated Marketing Communications (IMC). Indeed, many observers use the term integrated marketing when they probably mean integrated marketing communications^[7]. Whereas IMC aims to ensure consistency of message and the complementary use of media^[8], integrated marketing is concerned with the alignment and focus of the whole organisation.

Schultz and Kitchen (2000) identified four stages of IMC concluding with an integrated value-based model^[9]. According to this interpretation, as the organisation becomes more committed to achieving consistency and differentiation across all customer contact points the business management challenge moves from marketing and marketing communication to the whole organisation, requiring a cultural and systemic infrastructure for integration. This in turn calls on new practices and higher-order levels of organisation management. For example, at this point IMC and CRM are effectively merged.

Although Schultz and Kitchen identified that whole organisation was involved at this fourth stage, they did not detail what was necessary to achieve this. In some organisations such as FMCG/packaged goods brands (e.g. chocolate, baked beans), IMC needs little more than marketing communications integration. In others, such as organisations with a high level of service content (e.g. banks, automobile firms and their dealerships, and hotel chains), the challenge becomes much more difficult. It is in this latter case that integrated marketing is most important, providing the contextual platform for stage 4 IMC, implementation of which is also one of its goals.

[edit] History

The History of Marketing in the 20th century and earlier is a complex and still not fully explored subject, mixed up as it is with a history of trade and economics.

The concept of integrated marketing is focused on the creation of value, arguing that the organisation needs to be united in the creation of distinctive or differentiated value in order to achieve productive synergy. At the same time, customer experiences across the range of marketing communications, service interactions and product consumptions need to achieve consistency and congruence. Aspects of these concepts can be related as far back as Plato and Aristotle^[10]. In the 1950s, Wroe Alderson redefined the value-in-use concept in a way that traces back through the ideas of Aristotle, Thomas Aquinas (the leading mediaeval theologian) and a variety of 17th, 18th and 19th century economists^[11]. Also during the 1950s, Theodore Beckman developed an exchange value concept of marketing that traces back through such classical economists as Adam Smith, John Stuart Mill and Alfred Marshall^[12].

Both these theories have their part to play in integrated marketing since it explicitly argues for unique differentiation and enhancement throughout the communication-transaction-usage cycle. Without consciously recognising the antecedents in both these schools of economics, Wroe Anderson also rejected the idea that different aspects of utility should be attributed to production and marketing^[13], providing a further basis for the concept of integration. Integrated marketing also takes note of the recent understanding of emotion ^[14] in the development of value, shifting the emphasis from a largely cognitive psychology bias to a more integrated psychology of value.

This leads logically to the notion of Positioning^[15], a marketing concept that has also contributed significantly to the development of integrated marketing. Positioning is concerned with creating differentiation in the market and this has been conflated with the idea of strategy, for example by Michael Porter, one of the most influential business and marketing thinkers of the late 20th century, who argued that “strategy rests on unique activities” and that “a company can outperform rivals only if it can establish a difference that it can preserve”^[16]. He concluded that positioning is the essence of strategy and that “at general management’s core is strategy: defining a company’s position, making trade-offs and forging fit among activities”.

Robert Bartels’ seminal study of the development of marketing thought is one of the most comprehensive overviews of the development of marketing as a discipline during the 20th century^[17],^[18]. He described the period 1920–1930 as The Period of Integration. In this case he was referring to the process of a systematic integration of methods and marketing disciplines. Nevertheless, this demonstrates an ongoing need by practitioners and theorists to find a more comprehensive approach to marketing success. This is echoed in the work of Wroe Alderson, recognised as a leading marketing theorist, who exemplified the interdisciplinary thinking and practice Integrated Marketing espouses.

The role of marketing as value creator and as an integral element of both society and commercial organisation has been shown to date back to Plato^[19]. Marketing should not therefore be seen as an activity independent or isolated within the organisation but as an overall goal and purpose of the organisation, although the strategies and methods for achieving this will vary widely. On this basis the integration of the process of marketing within the entire set of business processes is a well accepted idea. For example, Theodore Levitt argued in his seminal Marketing Myopia paper for a new way of understanding organisational purpose related to the creation of customer value. In his 1975 discussion of this in Harvard Business Review he said that

The entire corporation must be viewed as a customer-creating and customer-satisfying organism. Management must think of itself not as producing products that is providing customer-creating value satisfactions. It must push this idea (and everything it means that requires) into every milk and cranny of the organisation. It has to do this continuously and with the kind of flair that excites and stimulates the people in it. Otherwise the company will be merely a series of pigeonholed parts, with no consolidating sense of purpose or direction.

Integrated marketing follows directly from this provocation emphasising the congruence of value satisfactions and the tools to support execution.

Similarly, Peter Drucker argued that

“Every organisation, whether business or not, has a theory of the business. Indeed, a valid theory that is clear, consistent and focused is extraordinarily powerful.”^[20]

According to Drucker, the Theory of the Business consists of assumptions about the environment of the organisation (society, its structure, the market, the customer and technology), the specific mission of the organisation (which we can also now relate to the concept of positioning) and assumptions about the core competencies needed to accomplish the organisation’s mission. This is entirely consistent with Integrated Marketing, and the endeavour of the whole organisation. Indeed, IM thinkers such as Jenkinson and Sain^[21], Sumatra Ghoshal and Christopher Bartlett have argued that ideas, which are embedded in policies, values and culture, in the design principle behind processes, structure and product design, in business decisions and choices, in strategies and brand, are the design tools of leadership, enabling governance and enabling organisation and communication alignment, while also encouraging empowerment.

Organisation development, as a means of achieving coherent change across an organisation, and the quality movement, as an organisation-wide systemic approach to improving quality, also contribute to the thinking behind integrated marketing. For example, in the highly influential book by W. Edwards Deming, Out Of the Crisis (1982), he begins with a system-wide flow diagram of the organisation as a process of value creation flowing towards consumers. In his view, production and marketing work together to achieve an overall optimisation of the organisational system.

In 1987, in what may be the first use of the term “integrated marketing”, Davison revised his 1972 study to argue for marketing as an integrated, organisation-wide enterprise^[22]. As understood by Davison, integrated marketing meant an approach to marketing that permeates the business, with every part combining to satisfy consumer needs at maximum profit.

The concept of integration also arises as a result of recognition of disintegration, especially in the field of communication. Integrated marketing communications (IMC) developed during the 1990s as an endeavour to achieve consistency across marketing communications disciplines and media that had become fragmented over time through the cultivation of individual disciplines, competition and the development of independent communication objectives^[23]. By 2000, it was recognised that there was a logical and practical need in what was called stage for IMC for this to be extrapolated across all organisational contact with customers and therefore across the entire organisational business processes^[24].

Focus on IMC led to a realisation that there were serious dysfunctions in the planning of marketing communications as a result of the lack of standardisation in planning methods, thinking and objectives^[25].

A parallel and simultaneous development of Relationship Marketing and Customer Relationship Management (CRM) led to an attempt to achieve integration across direct customer contacts, or touch points. The reverse efforts to find ways to integrate across advertising media, service, direct selling and personal selling channels, and it was accelerated with the growth of online and digital channels. A parallel explosion in media increased difficulties for marketers^[26].

Another important theme in the development of integrated marketing is the increasing understanding of the importance of the brand in consumer attitudes and the growth of brand management. The essential idea here is that the brand provides a unifying understanding of the kind and nature of value being provided. Acting as a trust mark, consumers are able to trust their expectations, increasingly not only about functional quality but also about the broader personality of the organisation, product or service being consumed. As the value of brands has increased, the importance of managing corporate and brand identity has become a major issue in the boardroom. This has led in some circles to the idea of “living the brand”, the idea that the whole organisation is espoused the cause of the brand and to the cultivation of its unique value for customers^[27].

In 1988, Sumatra Ghoshal and Christopher Bartlett published an influential book on how “great companies are defined by purpose, process, and people”^[6]. In it they said “At all levels of the organisation, managers are overwhelmed and confused. They certainly don’t need another rallying cry to transform their organisations; they need to know “Into what?” Neither do they need more slogans about reinventing management; they want to know how.” In their text they developed a set of integrated ideas for an “individualized organisation” with a new moral contract among employees, companies and society. Such organisations inspire individual creativity and initiative, build an integrated process of organisational learning and continually renew themselves. Their theory therefore is based on cultivating the individualized capabilities of the individuals within the organisation are based on a unifying and inspiring purpose. Integrated marketing draws on these principles and supplements the framework that they produced with new tools.

[edit] Benefits

Research by the Centre for Integrated Marketing determined that the typical scale of benefit for marketers adopting Integrated Marketing was a 10 – 25% enhancement in business performance^[28]. This gain is achieved from a number of inter-related factors:

• Improvements in customer attitudes and behaviours arising from improved and more consistent experiences of brand value.
• Synergy and multiplier effects on profitability from improvements in customer attitudes and behaviours
• More efficient (and effective) media choices and mixes as well as better deployment of communication disciplines
• More flowing, efficient (and effective) business processes, creating higher added value.
• Substantially enhanced evaluation and improved applied learning across the brand organisation
• Improvements in staff morale, work rate, cohesion, stress and creativity
• Reduced employee replacement costs, employee cost/benefit synergies and an enhanced employee cost/customer value ratio.
• Reduction in internal fragmentation and cost holes
• More cost effective use of agencies and business partners with better team results
• Cost effective synergies

[edit] Implementation

According to Jenkinson, Sain and Bishop^[29], successful integrated marketing requires management of three business drivers:

1. Identity, which is seen as the core strategic element of differentiated value
2. Development and alignment of organizational culture and mobilisation all employees behind authentic identity and unique value, with lean, value-focused business processes and good resources. Shared learning is an important element of success.
3. Integrated contact management (integrated communications, creating valuable experiences for customers).

The essential identity of the firm needs to be melded and harmoniously operationalized in a coherent brand/company-wide strategy, through quality of ideas, technology, processes, human resources and leadership. This identity expresses itself in different forms, including:

• Vision, cultural values, unique, competence, purpose
• Positioning, brand essence, brand personality
• Product/service design values, business model, integrated scorecard
• Governing idea and customer satisfiers/values
• Marketing communications and media] mix.

[edit] Performance measures

A research study amongst UK businesses showed that the following characteristics are associated with integrated marketing success^[30],^[31]:
1. Customers feel that all their brand experiences come from one identity
2. Customers trust the brand’s promises (and pass them on through word of mouth)
3. The brand treats different kinds of customers in ways appropriate to them
4. Whenever appropriate, the brand recognises individual customers wherever they interact or do business
5. Customers are happy with the brand experience
6. There is a service-oriented ideal that encourages aligned commitment across the organisation
7. Everyone nurtures what the brand means to committed customers
8. Future vision is consistent with core truths of the brand
9. The values we experience in our company culture support the values we express in the brand
10. The brand organisation is excellent at realising high value propositions from idea to implementation
11. Quality is understood as that which is good for the customer, employee(s) and company
12. (All business) Objectives are coherent with our [brand/company’s] competence
13. There are no silos (across the organisation)
14. Practices ensure shared learning across the organisation
15. The organisation works in effective partnership with the members of its value stream
16. The culture encourages people to release their creative potential
17. Business processes are actively aligned to the brand value position
18. Quality customer information is available in a timely way at every point of need
19. Leaders promote what they practice
20. The Marketing function is organised primarily around customer groups with their different needs and opportunities, not marketing disciplines
21. Senior marketing people are skilled in multiple communication disciplines
22. Customer management focuses on the value of customers over their lifetime
23. All communication to all constituencies at all touchpoints uses the same planning and evaluation framework
24. The company and agencies all work together in partnership
25. Communication is creatively aligned through “big media neutral ideas”
26. Evaluation is managed as a learning discipline across the participants
27. The key evaluation processes are primarily designed to increase knowledge about what most efficiently creates value for customers
28. Local and international marketing management collaborate effectively

[edit] Connections to other marketing and business disciplines and tools

Integrated marketing is a strategy, deployment of which is leading to the interconnection or evolution of a number of contemporary management disciplines. For example, it incorporates advanced Positioning (marketing), brand, brand management and corporate identity management objectives.

It is also associated with a number of other business tools/methods, with a keen interest in breaking down the barriers between them, while providing tools or extensions to support their implementation:

• Business Strategy and the Business Model, with IM operating as a differentiation strategy focusing and exploiting the gearing in the business model
• Lean^[32], which is an advanced approach to process and organisation quality improvement pioneered by Toyota and drawing on the techniques of W. Edwards Deming and originally applied to lean manufacturing. The lean approach aims to integrate and enhance the entire organisational value stream towards the elimination of waste and the creation and distribution of value to customers. Integrated marketing practitioners can apply this methodology while adding value to lean deployment by enhancing decisions about what constitutes value and supporting broader organisational integration, e.g. in organisational culture.
• CRM, which aims to manage contact relationships with customers. Integrated marketing supports and deploys CRM/customer management just as it does with IMC.
• Knowledge management, systems thinking and Organizational learning strategies are a collection of techniques associated with such thinkers as Peter Senge and Reg Revans. Integrated marketing is a systemic discipline with a substantial interest in knowledge sharing across the organisation.
• Internal marketing, organizational culture management and organisation development. These disciplines are all involved in developing the organisation and the people within the organisation in the way that they connect to the organisation strategy and purposes, collaborate, work and make decisions.
• IM tools help new product development (NPD) initiatives create differentiated value experiences, and apply and develop services marketing practice.
• IM tools help to focus Balanced Scorecard (BSC) and other performance management (PM) methods be emphasising differentiated, non-generic aspects of the organisation’s evaluation regime
• IM tools are extremely useful in mergers and acquisition, assisting in the development of fit. • OODA concepts of team operation and deployment. These ideas, which were developed by Col John Boyd of the U.S. Air Force, encourage agile local decision-making within a framing purpose.

[edit] External links

• Centre for Integrated Marketing: www.integratedmarketing.org.uk
• For a broader discussion of the concept of integrated marketing and its relationship to different business practice domains, see also Jenkinson, A., Sain, B. (2004). Integrated Marketing: a new vision, in Marketing Mind Prints edited by Philip Kitchen, Palgrave-Macmillan, Basingstoke UK/New York N.Y

[edit] References