PROMOTION: PULL STRATEGY AND INTEGRATED MARKETING COMMUNICATION

CONCEPTS OF PROMOTION, PULL STRATEGY AND INTEGRATED MARKETING COMMUNICATION

(IMC)

Pull Marketing Strategy And Integrated Marketing Communication (IMC) With Its Heavy Reliance On
Advertising

PULL MARKETING STRATEGY

-​ also called a pull promotional strategy, refers to a strategy in which a firm aims to increase the
demand for its products and draw (“pull”) consumers to the product
-​ Pull marketing strategies revolve around getting consumers to want a particular product
-​ A pull marketing strategy can be used by itself or in conjunction with a push marketing strategy
-​ In a pull marketing strategy, the goal is to make a consumer actively seek a product and get
retailers to stock the product in response to direct consumer demand
-​ A pull strategy stimulates demand and motivates customers to actively seek out a specific
product. It is aimed primarily at the end users. A strong and visible brand is needed to ensure the
success of a pull strategy. The different ways a company can use a pull strategy to promote a
brand include:
●​ Advertising strategies that include mass media promotion of a product
●​ Customer relationship management that makes existing customers aware of new
products that will fill a specific need
●​ Referrals
●​ Sales promotions and discount

Other Examples:
In a pull marketing strategy, a firm markets its product directly to consumers. The consumers then seek
out the products to purchase. There are several pull marketing methods available today, including:
●​ Social media networks
●​ Word of mouth
●​ Media coverage
●​ Sales promotions and discounts
●​ Advertising
●​ Email marketing

Using these strategies will create a demand for the product. With that demand, retailers will be
encouraged to seek out the product and stock it on their shelves. For instance, Apple successfully uses
pull strategies to launch iPhones or iPads. Likewise, music has also fallen under pull strategies due to
digitization and the emergence of social networking websites. Music platforms such as iTunes,
Grooveshark and Spotify are reflective of the power shift from providers to consumers. Merchants must
adapt their strategies to pull in demand, rather than push products--in this case, music--to consumers.

Illustration of a Pull Marketing Strategy

As illustrated, a pull marketing strategy involves a business using marketing activities to pull consumers to
its products. With reference to the illustration, for example, a production company runs marketing
campaigns directly to consumers. Due to the marketing campaigns, consumers seek out a particular
product and go to retailers looking to purchase the product. Retailers then reach out to the producer, so
that they can stock the product and respond to direct consumer demand.

Advantages
●​ Able to establish direct contact with consumers and build consumer loyalty
●​ Stronger bargaining power with retailers and distributors
●​ Focuses on creating brand equity and product value
●​ Consumers are actively seeking out the product, which removes much of the pressure of
conducting outbound marketing
●​ Can be used to test a product’s acceptance in the market and obtain consumer feedback on the
product

Disadvantages
●​ Usually works effectively only when there is high brand loyalty
●​ Lead time is long, as consumers are comparing alternatives before making a purchase
●​ Requires creating a high demand for a product, which can be difficult in a highly competitive
marketplace landscape
●​ Requires strong marketing efforts to convince consumers to actively seek out the product (they
may, instead, just decide to settle for whatever similar product a retailer has in stock, rather than
insisting on getting your product)

Example Company
●​ Apple Company adapting Pull Strategy

A few years ago, Apple was most aggressive with products capable of making technology more relevant
and personal (iPhone and Apple Watch). The Apple Watch and iPhone were Apple’s clear priorities while
the iPad, Mac portables, and Mac desktops ended up facing a battle for management attention as if they
were located at the end of the rope that Apple management was pulling. Apple changed from a “pull”
strategy in which some products like the iPad and Mac seemed to be having a hard time keeping up to a
push strategy characterized by every major product category moving forward simultaneously. This shift
appears to have been born in 2017, which would explain why we are still seeing the initial fruit of the
effort. The iPad and Mac product categories have benefited the most from this revised “push” product
strategy with more frequent and noteworthy updates.

INTEGRATED MARKETING COMMUNICATION (IMC)

In today’s marketing environment, promotion involves integrated marketing communication (IMC). In a
nutshell, IMC involves bringing together a variety of different communication tools to deliver a common
message and make a desired impact on customers’ perceptions and behavior. As an experienced
consumer in the English-speaking world, you have almost certainly been the target of IMC activities.
(Practically
every time you “like” a TV show, article, or a meme on Facebook, you are participating in an IMC effort!)

What Is Marketing Communication?

-​ Marketing communication includes all the messages, media, and activities used by an
organization to communicate with the market and help persuade target audiences to accept its
messages and take action accordingly
-​ Marketing communication refers to activities deliberately focused on promoting an offering among
target audiences. Example was the price placed on a product communicates something very
specific about the product .A company that chooses to distribute its products strictly through
discount stores sends a distinct message to the market

Integrated marketing communication

-​ is the process of coordinating all this activity across different communication methods.
-​ Effective marketing communication is goal directed, and it is aligned with an organization’s
marketing strategy.
-​ It aims to deliver a particular message to a specific audience with a targeted purpose of altering
perceptions and/or behavior.
-​ Integrated marketing communication (IMC) makes this marketing activity more efficient and
effective because it relies on multiple communication methods and customer touch points to
deliver a consistent message in more ways and in more compelling ways.
-​ involves the idea that a firm’s promotional efforts should be coordinated to achieve the best
combined effects of the firm’s efforts.
-​ Resources are allocated to achieve those outcomes that the firm values the most. Promotion
involves a number of tools we can use to increase demand. The most well-known component of
promotion is advertising, but we can also use tools such as the following:

a.​ Public relations (PR)

The purpose of public relations is to create goodwill between an organization (or the things it
promotes) and the “public” or target segments it is trying to reach. This happens through unpaid
or earned promotional opportunities: articles, press and media coverage, winning awards, giving
presentations at conferences and events, and otherwise getting favorable attention through
vehicles not paid for by the sponsor. Although organizations earn rather than pay for the PR
attention they receive, they may spend significant resources on the activities, events, and people
who generate this attention.

b.​ Personal selling

Personal selling uses people to develop relationships with target audiences for the purpose of
selling products and services. Personal selling puts an emphasis on face-to-face interaction,
understanding the customer’s needs, and demonstrating how the product or service provides
value

Note that a central theme of this definition is persuasion: persuading people to believe something,
to desire something, and/or to do something.

c.​ Sales promotion

Sales promotions are marketing activities that aim to temporarily boost sales of a product or
service by adding to the basic value offered, such as “buy one get one free” offers to consumers
or “buy twelve cases and get a 10 percent discount” to wholesalers, retailers, or distributors.

d.​ Direct marketing

This method aims to sell products or services directly to consumers rather than going through
retailers. Catalogs, telemarketing, mailed brochures, or promotional materials and television
 home shopping channels are all common traditional direct marketing tools. Email and mobile
marketing are two next-generation direct marketing channels.

e.​ Digital marketing

Digital marketing covers a lot of ground, from Web sites to search-engine, content, and social
media marketing. Digital marketing tools and techniques evolve rapidly with technological
advances, but this umbrella term covers all of the ways in which digital technologies are used to
market and sell organizations, products, services, ideas, and experiences.

f.​ Guerrilla marketing

This newer category of marketing communication involves unconventional, innovative, and
usually low-cost marketing tactics to engage consumers in the marketing activity, generate
attention and achieve maximum exposure for an organization, its products, and/or services.
Generally, guerrilla marketing is experiential: it creates a novel situation or memorable experience
consumers connect to a product or brand.

Objectives of Marketing Communication

The basic objectives of all marketing communication methods are
a.​ to communicate,
b.​ to compete, and
c.​ to convince

In order to be effective, organizations should ensure that whatever information they communicate
is clear, accurate, truthful, and useful to the stakeholders involved. In fact, being truthful and accurate in
marketing communications is more than a matter of integrity; it’s also a matter of legality, since fraudulent
marketing communications can end in lawsuits and even the criminal justice system.

Ideally, marketing communication is convincing: it should present ideas, products, or services in

such a compelling way that target segments are led to take a desired action.

The ability to persuade and convince is essential to winning new business, but it may also be
necessary to re-convince and retain many consumers and customers. Just because a customer buys a
particular brand once or a dozen times, or even for a dozen years, there is no guarantee that the person
will stick with the original product. That is why marketers want to make sure he or she is constantly
reminded of the product's unique benefits.

Benefits of Incorporating an Integrated Marketing Communications (IMC) Strategy In Your Business

1. Improved Efficiency
Adopting an IMC strategy will improve efficiency by providing a streamlined process. It ensures
that the company's harmonious message is carried across various channels and time isn t wasted on
repetitive messages or communicating with others for information.
IMC is not just for your consumer; it is also beneficial for effective internal communications with
your team. Internal collaboration across the business including customer service must use the same tone
of voice, style and convey a consistent message.
Before any business content is launched you want to be on the same page as your team,
maintaining consistent communication and distributing a clear message to the public. This can be
achieved by using an integrated communication platform such as Slack to centralize all messages and
making sure everyone understands the brand and follows a set guideline.

2. Accessibility to Larger Audiences

Using a range of communication channels allows your company access to a larger audience and
widens your reach. This means there is a higher probability of reaching your target audience and
attracting the right consumers to your brand. However, remember it is important to maintain a consistent
target audience and key message throughout your channels.

3. Cost-effective
Distributing content across numerous channels can be a costly process. By adopting an IMC
strategy, this removes the need for replication of content, saving you both time and money by adopting
the same images across your website and multiple social media profiles.

4. Builds Trust
Implementing an IMC strategy builds consumer trust and allows for brand recall as messaging is
consistent and integrated amongst several channels. A consumer will begin reigniting with a brand when
these three criteria are satisfied:
●​ Reaches the intended target audience
●​ Consistent messaging
●​ Across various channels
If key messages aren t communicated consistently across channel s, the consumer will receive a
disjointed brand experience and will less likely build trust and consumer confidence.

Drawbacks of IMC
●​ It is not easy as you will have to think of various marketing techniques as different terms.
●​ You will have to work in close coordination with your web analytics and design teams.
●​ A lot of homework has to be done to identify potential customers and they find it motivating.

How Organizations Use IMC To Support Their Marketing Strategies

Determining which marketing communication methods and tools to use and how best to combine
them is a challenge for any marketer planning a promotional strategy. To aid the planning process,
marketing managers often use a campaign approach. A campaign is a planned, coordinated series of
marketing communication efforts built around a single theme or idea and designed to reach a particular
goal. For years, the term campaign has been used in connection with advertising, and this term applies
equally well to the entire IMC program.

For example, when Disney released a new movie property they would unleash a marketing juggernaut
across their business empire. Ads and trailers for the new movie would be run on Disney T.V. channels
and Disney movies currently in theaters. Posters and merchandise would populate Disney theme parks-
even new rides would be constructed with the new property theme. Videos would be run in Disney retail
stores with posters and merchandise available for purchase. Disney licensees would partner with large
national retailers to coordinate the movie release with in-store promotions and displays. Utilizing T.V.,
movies, retail stores, theme parks, and national retail promotion, it is easy to see why the Walt Disney
Company has been so successful with its marketing efforts.

Organizations may conduct many types of IMC campaigns, and several may be run concurrently.
Geographically, a firm may have a local, regional, or national campaign, depending upon the available
funds, objectives, and market scope. One campaign may be aimed at consumers and another at
wholesalers and retailers.

Different marketing campaigns might target different segments simultaneously, delivering messages and
using communication tools tailored to each segment. Marketers use a marketing plan (sometimes called
an IMC plan) to track and execute a set of campaigns over a given period of time.

Example Company:

Apple Company: Integrated Marketing Communication Strategy Apple Inc. uses different communication
channels to popularize its iPhones. The objective of using an integrated marketing communication is to
reach many customers and boost the sales volume. The company uses promotional and advertising
instruments to draw the attention, desire, and interest of the clients (Holm, 2006). Besides, Apple posts
sleek images of iPhones on its website to attract customers. According to Holm (2006), Apple uses print
and broadcast media to market iPhones. Other communication strategies that the company uses include
digital media, point-of-purchase, direct marketing, personal selling, sales promotion, and public relations
among others.

Role of Management Accountant In Formulating Advertising Budgets, Budget Models, Controlling

Advertising Outlays And Evaluating Advertising Effectiveness

The management accountant's job entails gathering, recording, and reporting financial data from
various units within a business, as well as observing and analyzing their budget and recommending
funding and allocation. This comprises cost estimates for raw materials, labor, production, sales and
advertising, social media networking, lobbying, and internal firm costs.
A management accountant must work with all relevant departments to provide an overall study of
the company's operating capital and cash flow, and then present the findings to senior management and
the board of directors. As a result, a CFO is a source of information that boards and CEOs need to make
choices.
Budgeting is the primary function of management accounting. Budgets serve as a roadmap for all
spending in a small business. Every year, small business owners set a budget to determine their
expenses for each activity, such as operation and production costs, as well as future investment. As a
result, a management accountant must evaluate previous data in order to provide an accurate forecast of
a year's spending. The budget guarantees that the entrepreneur and his staff work together to carry out
all of the year's plans.

Budgeting is necessary for three reasons:

-​ demonstrating the financial implications of plans,
-​ identifying the resources needed to carry out plans and obtaining evaluation measures,
-​ monitoring and regulating the outcomes in relation to the plan's goals

Advertising is a legitimate company expense that should be shown on your income statement.
The amount of that account entry is determined by how much money you anticipate you can spend on
advertising. If you spend too much, you will squander money; if you spend too little, you will lose clients.
Managerial accounting can assist you in making a decision by gathering information to forecast future
demand and market share, as well as the implications of reducing or raising your advertising budget. A
solid accounting report can help you understand the risks and benefits of various solutions. An advertising
budget is a forecast of a company's promotional spending over a given period of time. More crucially, it is
the amount of money a firm is ready to invest in order to achieve its marketing goals.

One of the goals of managerial accounting is to identify the revenue-generating profit centers in
your company. You can use this data to inform your advertising selections, whether you're trying to raise
sales in underperforming categories or investing more in your winning campaigns. Managerial reports can
also warn you if your advertising costs suddenly climb due to a change in the cost of air time or another
circumstance.

Advertising has the power to persuade, the power to influence the mind, and the power to shape
destiny. It has the power to change markets and improve profit margins. Advertising has short-term power
(conveying new information, building awareness, enhancing credibility, etc.) and long-term power
(conveying brand image, attaching emotional values to the brand, building positive reputation, etc.).
Advertising effectiveness helps brands determine if their ads are hitting the mark with their audience, and
whether they're getting the best returns. This enables them to measure the strengths, weaknesses and
ROI of specific campaigns, so they can adjust accordingly.

A management accountant must be aware of everything, including market conditions, inflation,

other market exposures, competition, labor costs, raw materials, internal operations, coordination among
different departments within a company, and the company's interaction with the rest of the business world
and social media. As a result, he should be in charge of everything. To prepare his company for a
financial crunch or any other danger, he must list obstacles ahead of time. He must notify the company's
owners ahead of time so that they may make financial decisions based on available cash and
requirements.

Advertising Budget
-​ It is an amount set aside by a company planned for the promotion of its goods and
services. Promotional activities include conducting a market survey, getting
advertisement creative made and printed, promotion by way of print media, digital media
and social media, running ad campaigns etc.
Importance of Advertising Budget
-​ Advertisement helps a company to reach out to larger audiences and introduce them to the
company's products and services. Because of this, the sales increase, which enables the
company to earn more profits. It is important that before setting the advertising budget, the
company's objective is understood.

Advertising Budget Basis

The advertising budget of a company is based on the following factors:
●​ Type of advertising campaign that it intends to run
●​ Selection of target audience
●​ Type of advertising media
●​ Company's objective of advertising Process of Formulating Advertising Budget

Process of Formulating Advertising Budget

Setting advertising goals based on the company's objectives.
Determine the activities that are required to be done.
Preparing the components of the advertising budget;
Getting the budget approved by management;
Allocation of funds for activities proposed under the advertisement plan;
Periodically monitoring the expenses being incurred on the advertising process.

Budget Model
-​ A budget model is a framework for how the company creates and manages its budget.

Types Of Budget Models

1. Zero-Based Budget
-​ is where the company starts the budget with a clean slate each year. Every department has a
starting budget of zero, and management decides how much they need based on their priorities
and goals for the year. Essentially, the entity builds a new budget from scratch every year. Every
expense needs to have a justification based on how it'll help achieve the annual goals.

Pros :
 -​ It makes the company think carefully about any new expenses.
-​ The company's budget is tied to outcomes.
-​ Each department needs to be hands- on in the process so it's more collaborative.

Cons :
-​ It takes a lot of time to develop since you are rebuilding the budget each year.
-​ There is less flexibility for the budget throughout the year.

2. Static Budget
-​ The company sets a budget and it stays static throughout the year regardless of external factors
or company's performance. Similar to a zero -based budget, static budgets are based on the
desired outcome or expected results.

Pros :
-​ It makes the company more conscious about how they spend their budget since they know the
amount they can spend won't change until the next period.
-​ There is less maintenance and upkeep. Once the budget is set, it is set.
Cons :
-​ The company can stunt growth by not adjusting your budget based on their actual performance
throughout the year.
-​ It can be too rigid, particularly for early-stage start-ups.
-​ The ability to reach goals is heavily dependent on whether or not it was budgeted enough at the
beginning of the year.

3. Flexible Budget
-​ With this model, the budget varies depending on the sales performance throughout the year. Your
fixed expenses like office space, insurance, or utilities will stay the same. But variable expenses
directly tied to sales like your cost of goods sold (COGS) and advertising, are based on a
percentage of your sales for the year.

Pros:
-​ Gives companies a more realistic forecast of the costs associated with growth.
-​ Flexibility is built directly into the budget.
-​ The budget becomes somewhat automated since the expenses are tied to revenue.

Cons:
-​ There isn’t always a 1:1 correlation between revenue and variable expenses, so the budget won't
always be accurate.

4. Rolling Budget
-​ With a rolling budget (also known as a continuous budget) the company adds a new budget
period at the end of the most recent period. As a result, the budget always looks 12 months out.
The benefit of a rolling budget is that it takes into account the most recent actuals to forecast the
future budget.

Pros:
-​ The budget is based on recent data rather than just speculation.
-​ It gives the company more flexibility and control over their budget.
Cons:
-​ It requires more attention since they are updating the budget more frequently.

5. Incremental Budget
-​ An incremental budget adds or subtracts from the previous year's actuals. This is arguably the
simplest budget model to use because it does not require much maintenance and you re starting
from the previous year's numbers.

Pros:
-​ It's the easiest budget model to implement.
-​ There’s very little maintenance involved.
-​ It can work well for companies that have fairly static expenses.

Cons:
-​ It can lead to inefficient spending.

Advertising Outlays
-​ An advertising outlay is the amount of money set aside for the purposes of marketing and
advertisements

Importance of Advertising Outlays

-​ Controlling advertising outlays is important because it is effective in achieving marketing
objectives in time and continuous development. Controlling mechanisms can prevent mistakes
from occurring and also help rectify mistakes, if any

Importance of Evaluating Advertising Effectiveness

-​ It aids in predicting the outcome in order to avoid total loss. The effectiveness of an
advertisement may be assessed in terms of its communicative impacts on the target customers or
audience; this helps companies decide if their advertisements are hitting the mark with their target
audience and if they are receiving the greatest returns. This allows them to assess the strengths,
weaknesses, and ROI of certain campaigns and make adjustments as needed.

Role Of Management Accountant In Formulating Advertising Budgets & Budget Models

The role of management accountant includes collecting, recording and reporting financial data from
several units of an organization, observing and analyzing their budget and suggesting their funding and
allocation. This includes estimation of cost of raw material, labor, manufacturing, sales and advertising,
social media networking, lobbying and company s internal operation cost.

1.​ Management accountant needs to coordinate with all concerned departments to make an overall
analysis of the company's functioning capital and availability of funds and then he or she has to
report all the information to senior management and board of directors.
2.​ Management accountants have to review historical data to prepare an accurate prediction of a
year's future expenses. Budget ensures coordination between the entrepreneur and his
employees in implementing all the plans for the year ahead.
3.​ Management accountants have to make predictions, budgets and reports within a stipulated
period so that they can be implemented at the time of need.
4.​ Management accountant has to ensure accuracy of all information gathered to help in correct
decision making. The budget need is according to the available working capital and exposure to
market risks thus a certain amount of accuracy is very necessary.
5.​ Management accountant has to suggest and ensure the best budget model that will help the
company reach its goals. Choosing the appropriate budget model enables the company to
provide structure, allocate resources, measure performance and predict cash flow.
6.​ Management accountants need to be aware of everything, be it political situations that affect
market, inflation, other exposures in the market, competition, cost of labor, raw material, internal
operations, coordination among different departments within a company as well as its interaction
with the rest of the business world and social media.