Strategic Integrated Marketing Communication

II. Table of Content

I. Executive Summary

II. Table of Content

III. Figures

4. Integrated Marketing Communications

5. Marketing communication mix by the example of Lufthansa
5.1. Advertising
5.2. Public Relations
5.3. Sales Promotion
5.4. Personal selling
5.5. Direct marketing

6. SOSTAC and Recommendations
6.1. Situational Analysis
6.2. Objectives
6.3. Strategy
6.4. Tactic
6.5. Action
6.6. Control

VII. Reference List

VII.I. Books

VII.I. Online

VIII. Appendix

VIII.I. Appendix A: SWOT Analysis

I. Executive Summary

In every area of science, economy and industry communication is used to create a significant message and to build relationships between sender and receiver. Especially when it comes to the science of marketing, communication is used in various forms that are managed and channelled consistently by strategic integrated marketing communications (IMC). Primarily introduced in the 1980s as a marketing strategy, IMC today plays a major role in many organisations corporate strategy, including the German company Lufthansa. (Kotler, Armstrong, 2014, p.429) The following essay will outline this marketing strategy by its theory and will apply it to the strategy of Lufthansa in three parts. Thereby the first part will illustrate the theoretical background of IMC regarding to its role and concept and its relations to other areas of marketing and business management. These findings will primarily be based on secondary research of literature from Kotler, Percy and Fill which will be sustained by the work of other authors. The second part of the essay will enlarge this theory by the approach of the communication mix and will transmit it to the practise of the German company Lufthansa. As the company is constituted as the Lufthansa Group and various sub companies the author will concern the business segment of passenger transport that is carried out by Lufthansa Passenger Airlines, in the following named Lufthansa. This business segment will be analysed for its integrated marketing communication strategy “Nonstop you” as part of the “7 to 2-our way forward” marketing program of Lufthansa Group. (Lufthansa Group, 2017) This analysis of the current strategy will lead over to recommendation within the third part of the essay, by providing an additional concept that will be described by the SOSTAC model. Within six elements the author will illustrate a communication strategy for a new target group that creates a message and builds relationship between Lufthansa and the Generation Y.

III. Figures

Figure 1: Communication based Marketing Model

Source: Duncan, T., Moriarty, S.E., (1998) A Communication-Based Marketing Model for Managing Relationships, Journal of Marketing Vol. 62, No.

Figure 2: The triangulation of the 3BPs (Source: Fill, Turnbull, 2016)

Source: Fill, C., Turnbull, S., (2016) Marketing Communications; discovery, creation and conversations (7th ed.) Pearson Education, Harlow

Figure 3: Types of advertsiment

Percy, L., (2008) Strategic Integrated Marketing Communications, Elsevier Inc., Oxford

Figure 4: Lufthansa print advertisment 1

Source: amywerblin.com, (n.d.) Lufthansa (online)

Available at: http://amywerblin.com/LUFTHANSA (Accessed: 11.07.2017)

Figure 5: Lufthansa print advertisment 2

Source: amywerblin.com, (n.d.) Lufthansa (online)

Available at: http://amywerblin.com/LUFTHANSA (Accessed: 11.07.2017)

Figure 6: SOSTAC Model

Source: Sostac.org, (2017) SOSTAC model (online)

Available at: https://sostac.org (Accessed: 11.07.2017)

Figure 7: SWOT analysis Lufthansa

Source: Own creation based on Lufthansa Group (2017) Annual Report 2017 (online)

Available at https://investor-relations.lufthansagroup.com/fileadmin/downloads/en/financial-reports/annual-reports/LH-AR-2016-e.pdf (Accessed: 11.07.2017)

Figure 8: Age segments of Lufthansa (Source: Lufthansa Ambient Media, 2016

Source: Lufthansa, (2016) Media Ambient (online)

Available at: https://ambientmedia.lufthansa.com/wp-content/uploads/2016/07/Lufthansa-Media-Data-2016-EN.pdf (Accessed: 11.07.2017)

Figure 9: IMC_ four stage model

Source: Kitchen, P.J., Schultz, D.E., (2001) Raising the Corporate Umbrella, Palgrave, Basingstoke

4. Integrated Marketing Communications

“Integrated marketing communications is a way of looking at the whole marketing process from the view point of the customer” (Kotler, 2003, cited in Percy, 2008, p. 8)

With this quote the marketing expert Philip Kotler outlines the versatility and profundity of integrated marketing communications (IMC).

Therefore, it seems necessary to define IMC from its early beginnings to understand this profound concept, role and relations within the transformation from a company’s marketing tool to a management tool “from the view of the customer” (Kotler, 2003)

IMC was primary introduced as a marketing strategy in 1980, as a rapid development of mediums began to challenge the dominant role of advertising within marketing communication. (Kitchen, DePelsmacker, 2004, p.6) Thereby the American Association of Advertising Agencies (4 A’s) started IMC as “a concept of communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of disciplines […] and combines these disciplines to provide clarity, consistency and maximum communication impact.” (1989, cited in Percy, 2008, p. 5) At that time the 4 A’s realized the significance of general advertising, direct marketing, sales promotion and public relation for delivering a consistent message to the consumer. (Bdelage, 2014) Primary viewed as disparate functional activities, Schultz introduced an integrated approach to this concept as “the whole”. He announced IMC as “the process of developing and implementing various forms of persuasive communication programs with customers and prospects over time. The goal of IMC is to influence or directly affect the behaviour of the selected communications audience. IMC considers all sources of brand or company contacts that a customer or prospect has with the product or service as potential delivery channels for future messages […].” (1993)

With this definition, the author expanded the assumptions of the 4 A’s by emphasising the need of an overall communication planning as a process “that starts with the consumer” (Schultz, 1993 cited in Percy, 2008, p. 6)

This approach remained until today’s perspective on IMC that is now regarded in the terms of consumer relationship. (Percy, 2008, p. 8) Thereby the development of new technologies gave strategists a new opportunity of data acquisition to understand and influence consumer needs by communication. As result, IMC today focuses on building a dialogue and relationship between the consumer and the brand by “strategically controlling and influencing all messages communicated to this group and encouraging data-driven, purposeful dialogue with them.” (Duncan, 2002, cited in Percy, 2008, p. 8)

This development of approaches identifies four major elements of the concept of IMC: process, planning, communication and consumer focus. (Sunderland, 2014, p. 26) Within IMC as a cross functional process it is vital to include all parts to an organisation’s overall communication and relationship strategy. Thereby the basic principle regards to planning as the heart of IMC. With the development and planning of an integrated communication program, organisations are enabled to communicate a consistent message from the centre of all operations and to meet the audience’s needs in an interactive dialogue. (Percy, 2008, p. 8; Fill, Turnbul, 2016, p. 19)

Therefor IMC truly is the “way of looking at the whole marketing process from the view point of the consumer” (Kotler, 2003) and a strategic business process that relates to other areas of marketing and business management.

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This relationship is portrayed by the ´Communication based Marketing Model´ of Duncan and Moriarty (1998). (Figure1)

This model considers brand messages from all internal sources at the levels of corporate, marketing and marketing communications to its audience. Thereby Duncan and Moriarty claim that each department and function in the organisation has a communication dimension that contributes brand messages in interaction. This interaction regards to the various stakeholders and to the various message sources based on a cross functional process. Within this process the walls between the conceptual and organisational elements of each level are broken down and relationships are built to the customers. As a result, communication and its management is not only the heart of IMC but also the key element in every company function that in interaction leads to brand relationships and drives brand value. (Duncan, Moriarty, 1998, pp.8)

This approach was adopted by Fill and Turnbull in the model of the three BPs. (Figure2) Thereby the authors identified three core brand elements and centralized communications within their interaction that results in brand value. Thereby communication relates to the promise as constantly delivered through messages, the resulting positioning of the brad within the market and the overall brand performance that is encouraged and realised by it. (Fill, Turnbull, 2016, p.290)

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Figure 2: The triangulation of the 3BPs (Source: Fill, Turnbull, 2016, p. 290)

In conclusion both models are based on Duncan’s assumption that everything in a company sends a message and additionally on the role of IMC as the management tool of it. (Duncan, Moriarty, 1998, pp. 8) As a result IMC not only relates to all areas of marketing and business management on an internal and external perspective. It also shapes the core of all interactions between the three levels by corporate communication to strengthen companies, brands and brand equity with its concept and role “from the viewpoint of the consumer”. (Percy, 2008, p.78)

5. Marketing communication mix by the example of Lufthansa

Simultaneously to the development of the definitions of IMC, its tools changed likewise to various ways of communication within the promotional mix. (Fill, Turnbull, 2016, p. 25) Thereby McCarthy defines the marketing communication mix as a “specific combination of instruments” (McCarthy, 1998, cited in Todorova, 2015, p.369) regrading to its major methods: advertising, public relations, sales promotion, personal selling and direct marketing. Within this heterogeneity, companies tend to mix these elements together in various combinations and different degrees of intensity to deliver messages to the audience, shape relationships and built brand value. (Fill, Turnbull, 2016, p. 25) Within the travel industry, the German company Lufthansa provides an ideal example for a successful implementation of an IMC strategy. Thereby Lufthansa is ranked under the top 20 Airline Brands of the world and continuously increases its brand value. (Rankingthebrands, 2017; Reidel, 2017) With its current campaign “Nonstop you” Lufthansa communicates its corporate values (quality, reliability, innovation) as the fundamentals of each business segment in a consistent message by the 5 elements. (Lufthansa, 2007)

5.1. Advertising

Advertising is defined as a “paid, non-personal communication from an identified sponsor using mass media to persuade or influence an audience.” (Fill, Turnbull, 2016, p.362). This communication form aims to “turn the customer’s mind towards the advertised brand” (Percy, 2008, p.82) by raising awareness and building a positive brand attitude. Thereby Percy defined four different types of advertisement: consumer-orientated brand advertising (COBA), Retail, B2B and Corporate advertising. (Figure 3) (Percy, 2008, p.84)

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Regarding to Lufthansa’s current strategy, COBA and corporate advertising are the dominant forms of advertising. Thereby “Nonstop you” places the consumer in the center as the major advertising medium and applies this to the COBA strategy and its major components of TV-spots and print media. As the two illustrations of print advertisements show, Lufthansa

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clearly emphasize on the individual desires and stories seen from the customers point of

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view. With campaigns like this Lufthansa visualizes situations from the everyday life to create personal identification and an emotional response and thereby creates brand awareness through consumer orientated advertising. (Lufthansa Group, 2012)

To strengthen this awareness Lufthansa implements sport sponsorship as the major medium of its corporate image advertising strategy. Sponsorship can either be advertisement or public relation but is here used to strengthen the corporate image and values. (Full, Turnbull, 2016, p.443)

Thereby Lufthansa is the national supporter of the German Sports Aid Foundation, partner of the German Olympic Sports Confederation (DOSB) and the official carrier for the German Olympic and Paralympic Team. Additionally, Lufthansa enlarged its partnership recently to football and became co-partner of the German Football Association (DFB) as well as the sponsor and official carrier of FC Bayern Munich. (Lufthansa Group, n.d.a) With this strategy, the company links the values of sports (fair play, team spirit, performance) to Lufthansa and its corporate image. (Lufthansa Group, n.d.b)

5.2. Public Relations

Public Relations (PR) is an interactive system of communications between an organization and its publics’ that develops relations, visibility and positive attitudes towards the brand. (Todorova, 2015, pp.371) As Fill and Turnbull explain: PR is the tool of developing and communicating “the corporate and competitive strategy” (2016, p. 391) through various activities. These activities regrade to media relations, corporate communications, sponsorship, events and publicity. (Percy, 2008, pp.139)

Combined in a Marketing PR strategy, an integrated aspect of PR to an organization’s marketing Lufthansa implements activities of event as well as internal and external communication to target especially employees and consumers. (Percy, 2008, p.141)

Thereby Lufthansa uses external media relations and publicity by offering content of their growth, innovation and achievements in combination with the internal Newsroom. (Lufthansa Newsroom, 2017)

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