MKT570: Integrated Marketing Communication - IMC Plan-Billabong - Assessment Answer

February 27, 2018
Author : Ashley Simons

Solution Code: 1AHJD

Question:Integrated Marketing Communication

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Integrated Marketing Communication Assignment

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Integrated Marketing Communication

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IMC Plan-BillabongExecutive Summary

The report presents a comprehensive integrated marketing communications plan for the expansion of Billabong in Canada. Billabong is an Australian firm that offers a wide range of products including snowboards, skateboards, and apparels, accessories etc. related to surfing and has been growing financially. The key IMC objectives that have been taken into consideration at the time of the development of the plan included increase in its brand awareness, sales and also brand loyalty in the Canadian market. Canada being a top surfing destination in North America has been chosen as the target geography for the firm and it has been suggested that the company must adopt a concentrated targeting strategy to target young consumers in the age group of 12-35 years who belong in the high income group of the society and also are fashionable, hip and trendy. And hence, the suggested positioning strategy suggests positioning of Billabong as a cool, young and hip brand that offers trendy and modern sports products.

The message strategy that has been thus been defined focuses on communicating the trendy and modern characteristics of its products and also establishes that none of the competitors of the firm offer the same characteristics. Keeping the target audience and customer group in mind, it has been suggested that the firm must adopt different channels or mediums of communication including advertising, direct marketing and event based promotions. Use of social networking websites and digital media has been suggested as the major touch points because of increasing use of these media channels by the youth. It has been also suggested that within the given budget of AUD56,500, Billabong can also adopt physical presence in college campuses and television series as the media touch points. These strategies are thus expected to be effective in achieving the objectives as defined earlier.

1. Introduction

Integrated Marketing Communications (IMC) is one of the key aspects of strategic decision making of any firm because it helps the firm in deciding upon the strategies and channels that must be adopted for the purpose of communicating its own offerings and characteristics of its products and services to target customers (Yeshin, 2012). American Marketing Association (AMA) has defined IMC as “a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time” (AMA, 2016). The theory of IMC, as defined by Mulhern (2009), suggests that companies can adopt and make use of two practices for IMC, i.e. inside-out and outside-in approach. The inside-out approach requires firms to adopt a single message that is communicated to all customers and in the outside-in approach; firms tend to evaluate needs of consumers before deciding on their marketing initiatives (Mulhern, 2009). Though the process of IMC has been critiqued by Dinnie et al (2010) based on the argument that it makes the marketing process slightly complicated, Yeshin (2012) argues that IMC is integral for organizational strategy because it helps in establishing brand differentiation and also helps in generating higher trust among the consumers. In addition, it also helps firms in identifying the key message that must be communicated for enhancing overall sales and profitability of the firm.

The report thus presents a comprehensive IMC plan for the Australian firm, Billabong. Founded in the year 1973, Billabong International Ltd. is one of the biggest retailers of apparels as well as other sporting goods and accessories such as skateboards and snowboards (Company’s Website, 2016). Some of the key products offered by the firm include shorts, footwear, backpacks, wetsuits, jackets, surfboards etc. Billabong also owns several brands like Element and Von Zipper, targeting male, female, and teenage and children customers. The company is headquartered in Gold Coast in Queensland of Australia and is also trading on the Australian Public Exchange (Company’s Website, 2016). Total revenue of the firm was AS$1.27 billion in 2014, thus indicating a strong financial performance. Further discussions of the report present a complete IMC plan for the firm.

2. IMC Objectives

The first and an extremely important step in the process of IMC planning is that of establishment of IMC objectives. IMC objectives, as explained by Keller (2009), refer to the various objectives and goals that are expected to be achieved with the help of the adopted marketing strategies and initiatives. Keller (2009) explains that IMC planning and establishment of related objectives are both extremely crucial and important for any firm because they help firms in identifying the areas in which they need to focus upon for effectively marketing their products and services to the target audience. Some of the key IMC objectives that can be defined for Billabong are:

  • To increase the brand awareness of Billabong by 20% in one year in a new market, Canada
  • To increase the sales of Billabong by at least 15% in one year
  • To enhance brand loyalty of customers towards the brand

The IMC strategies thus defined further have been formed and developed to help the firm meet and accomplish these objectives.

3. Segmentation and Target Market Analysis

Segmentation, targeting and positioning (STP) is the first step in the definition of marketing plan and initiatives for any given firm. Kotler (2012) explains that this process or approach helps firms in being able to understand the characteristics of target consumers and also allow them to develop a suitable strategy that can communicate the firm’s message catering to the needs of target consumers. First stage of segmentation requires companies to define and divide the entire population into different segments based on similar characteristics (Kotler, 2012). Once segmentation is done, companies are required to identify the market segment that is most attractive for them to achieve their objectives, which then helps them in identifying their target market (Hassan and Craft, 2012). The final step in the STP process is positioning, wherein the company decides the key message to be communicated to its target customers for achieving higher sales (Hassan and Craft, 2012). The segmentation and targeting for Billabong are given below.

3.1 Market Segmentation Analysis

3.2 Target Market

Surf industry has been massively growing across the world and has become a part of the lifestyle of young people who young and hip and hence the demand for associated products has also increased considerably. The West Coast of Canada is extremely famous and preferred for surfing purposes and Tofino was rated as the best destination for surfing in North America by CNN and hence the target market of Canada has been chosen (Sotomayor and Barbieri, 2016). According to the data presented by Sotomayor and Barbieri (2016), the key surfers in Canada include rich male and female youngsters in the age range of 12-35 and hence the target market must adopt the concentrated strategy, wherein rich young consumers in the age group of 12-35 years can be targeted. The concentrated targeting strategy thus requires Billabong to focus only on one specific group of customers and hence this would define and affect the marketing mix strategies because the defined marketing mix needs to be developed in a way that it would cater to and attract the selected audience. The positioning strategy that must be hence defined for the firm is being described below.

4. Positioning Strategy

As discussed earlier, the positioning strategy of a firm helps in communicating the key offerings and benefits offered by the brand to its customers and are hence extremely important for its overall success. Some of the key approaches that can be adopted for positioning include focusing on the key characteristic or benefits of the products being offered by the firm, highlighting the price or quality of the brand’s offerings, promoting the product’s application and usage or the competitor approach wherein the way the brand is better than its competitors is defined in the positioning statement (Akaka and Alden, 2010). It has been found that Billabong would be targeted primarily at the rich, young consumers who like sports and also have a hip and chilled lifestyle. The positioning of the brand must hence be efficient to motivate these consumers to purchase the products offered by the firm (Akaka and Alden, 2010).

Positioning strategy of the brand can hence be written as: Billabong is a young and cool brand that defines the modern needs of hip consumers by offering trendy yet reliable surf and other sports products and accessories.

This positioning hence helps in creating a trendy, modern and hip brand image of Billabong in front of the target consumers, thus motivating them to purchase its products. Further discussions explain and analyze the key creative idea that must be adopted for the IMC strategies of the firm.

5. Creative Idea

5.1 Message Strategy

Message strategy is an integral part of the IMC strategies or plan of a given company or brand because it helps in delivering the key point of communication that the firm wants to convey to purchasers. Percy (2014) explains that the message strategy of a firm must be defined in a way that it result into change in attitude of customers, thus affecting their purchase decisions and activities. Three commonly used message strategies are cognitive, affective and conative. Cognitive message strategy is focused on affecting the overall trust of consumers, whereas the affective strategies are focused on increasing sales by affecting feelings as well as emotions of buyers and lastly the conative strategies are focused on changing the behavior of consumers (Percy, 2014).

It can be suggested that Billabong must make use of the cognitive message strategy, wherein the customers’ attitude, trust and knowledge regarding the brand tends to get changed. Hinz et al (2011) have supported the use of cognitive message strategy by modern firms by arguing that the modern customers tend to make informed decisions and usually gather complete knowledge and information about the firms before making their purchase decisions and hence the cognitive messages tend to resonate with them. The example of Pepsi’s cognitive message, “Live for Now” demonstrates the way these messages tend to deliver a specific message of enjoying every moment of life to youngsters, thus affecting their purchase decision (Hinz et al 2011). Hence, Billabong must also focus on using a cognitive message as its core message for attracting higher number of customers.

However, this is not enough. Winston and Weinstein (2016) define and explain that the message strategies of any firm or brand must be based on the strategic triad, which establishes connection between the customer, product and competition. Winston and Weinstein (2016) discuss that the IMC message adopted by a firm must sell something that is desired by the consumers to ensure that a connection between the product and buyers is established. While experts highly promote the need of having a strong correlation between customers and the offered products in the conveyed message, Zvobgo and Melewar (2011) argue that the companies not only need to address customers’ needs via their IMC message, but also must give a reason as to why they are better than their competitors. Similar discussions by West et al (2015) also establish that since there are multiple companies in every industry, a firm’s communication message must convey the way a brand is better than its competitors. Hence, the core message that must be focused upon by Billabong for marketing its products to target customers in Canada can be:

The Only Trendy and Fashionable Option that makes you Look Good even While Surfing

This key message thus not only conveys the key offerings and characteristics of the products offered by Billabong, but also demonstrates that it is the only brand that is trendy and can make the buyers look trendy even while surfing. Since the selected target market for the brand is rich, young surfers, this message can help in enhancing the knowledge and trust of buyers.

5.2 Execution Framework

Next step or stage in the IMC process is the execution of the selected IMC messages, wherein the brands are required to identify their advertising appeal and execution. Advertising appeal as defined by Wang et al (2013), refers to the key content in terms of not only message, but also images, colors etc. that is shown in the advertisement of the brand. Some of the key execution frameworks that can be adopted by a firm include animation, slice-of-life, authoritative, demonstration, informative or testimonial. Billabong can make use of the demonstration framework for execution, wherein a rational approach is adopted so that the benefits of products can be communicated via effective demonstrations that explain the way products and services offered by the fir are expected to be used. Though Wang et al (2013) have argued that slice-of-life execution framework is much more effective and relatable as compared to the demonstration framework, it can be argued that there is no specific problem that Billabong aims at resolving via its products and services and hence the use of demonstration based execution can help in conveying the earlier defined message (Dens and De Pelsmacker, 2010). The company can thus make use of actual young, trendy and hip people using the brand’s products, which would then help the customers in identifying with these people demonstrated in the ads, thus leading to higher purchase motivation. Next part of the report presents the communication and media mix for the brand to ensure that the IMC objectives are met adequately.

6. Communication and Media Mix Strategy

Innovations and developments that have taken place in the world have led to the development of several different mediums and channels that can be used by companies for communicating or conveying their messages to different stakeholders. The theory of integration suggests that companies need to integrate all these channels and media together in a way that the customers tend to get a seamless and uniform experience (Webb et al 2014). Hence, use of similar and consistent message and a consistent brand image is a must so that the customers receive the same message from all channels and feel more connected to the brand. Though it has been argued by Danaher and Rossiter (2011) that companies must not adopt multiple channels for promoting their products because of higher complexity and also because of difficulty in attributing customer response to different touch points, Berger and Iyengar (2013) argue that different people tend to make use of different channels in different ways and also different channels can be used to convey different types of messages such as textual, image or video. Hence, the use of multiple channels is essential and necessary. The communication and media mix and their benefits for reaching the target audience are described below.

6.1 Communication Mix

  • Advertising: The discussions presented by Shimp and Andrews (2012) reveal that advertisements are extremely effective in Cana because they help in informing buyers regarding the brands and their offerings, thus motivating them to purchase the products and services offered by them. In addition, study by Gao et al (2010) suggest that advertising helps in increasing brand memorability among young consumers and hence is preferred by brands targeting the youth. Hence, the communication mix for Billabong must make use of advertisements for targeting the Canadian youth consumers.
  • Event Based Marketing: According to Crowther (2011), one of the most effective communication strategies for the sports related products and services is the event based marketing, wherein a brand can either sponsor an existing sports event or can organize a specific event of its own. Crowther (2011) explains that event based marketing is essential because it helps in targeting a specific group of consumers and also helps in enhancing the overall engagement between the sellers and buyers. Crowther (2011) also argues that the event based marketing helps customers in establishing an association between the product and the event, thus leading to higher sales. Since Billabong aims at targeting young surfers in Canada, it can either sponsor or host inter-college surfing competitions or events to increase its sales.
  • Direct Marketing: Another commonly adopted communication element or method is direct marketing, wherein companies tend to directly sell their products and services to the customers either via a sales-force or by their physical presence. Armstrong et al (2012) explain that direct marketing is extremely beneficial for communicating with a concentrated target segment because it helps in establishing a relationship between the brand and buyers, thus making customers feel special. Since the chosen targeting strategy for Billabong is concentrated marketing or targeting, direct marketing can be extremely effective for communicating its offerings and messages to buyers.

The key media channels and touch points that can be hence adopted by Billabong for communicating with target audience are discussed below.

6.2 Media Mix

  • Social Networking Websites: According to Evans (2012), the most effective media channel for communicating with today’s youth is social media because teens spend almost 8-9 hours every daily browsing social media. Hence, the social networking websites like Facebook, Twitter etc. must be used by Billabong for advertising and also for communicating and engaging with target customers. Statistics reveal that the number of social media users in Canada is expected to rise to 20 million by 2018 and hence the use of social networking website as media can be beneficial for Billabong (Statista, 2016). It can make use of Facebook and Twitter marketing and can also make different handles on these websites for customer engagement
  • Digital (Mobile and Web): Data reveals that the millennial generation of the country spends most of their time surfing the internet, hence suggesting the effectiveness of the digital media for promotional purposes. Also, Emarketer (2015) argues that more than half of the population of Canada makes use of smartphones, which thus makes mobile advertising a lucrative media channel and option for firms promoting in Canada. Hence, digital media channels that are anyways considered to be extremely lucrative can be adopted and used by Billabong for achieving its marketing objectives. Advertising on related websites such as TSN, SportsNet, ESPN and also lifestyle websites like Canadian Health & Lifestyle and Healthy Living and also on mobile apps that are most frequently used by the younger generation can help the firm in not only achieving higher sales objective as defined earlier, but would also help it in increasing brand awareness.
  • Physical Presence in College Campus: According to the discussions by Xiaoling (2011), an effective media channel that can be used for communication or marketing of a brand to youth or college students is via college festivals and campus presence because young consumers tend to attend a lot of these events and summer festivals. Hence, direct selling in different college campuses in Canada and also during some of the most famous summer festivals like Pride, Fringe Festival etc. can increase sales and loyalty of customers because summer is also the key season of surfing (Xiaoling, 2011). Thus, direct marketing and event based marketing both can be achieved via this media channel.
  • Television: Discussions presented by Bociurkiw (2011) reveal that TV series are highly preferred by Canadian consumers, especially the young consumers over film and cinema. Hence, Billabong can choose to advertise during these television series to connect with the target audience. Though this media channel or element can be expensive, it has been proven to be extremely effective in the past and would increase brand awareness, loyalty and sales.

7. Budget

Budget for an IMC plan refers to the amount of money that is decided upon by the marketers to be spent on adopting the defined IMC plan so that the identified goals and objectives can be met adequately. While Valos et al (2010) argue that the budget cannot be pre-decided and would change with every activity adopted, Yeshin (2012) states otherwise. According to Yeshin (2012), an IMC budget is essential so that the companies can plan their operations and marketing priorities for achieving the desired objectives in specified budget. Belch et al (2014) explain that the definition of marketing budget helps in effective allocation and division of the defined money for different communication and marketing practices.

The budget allocate for the IMC of Billabong in Canada for the first year is given in appendix I. Maximum budget has been allocated for advertisements. Web advertisements cost on an average $5 for 1000 views and mobile advertisements around $1 for 100 views and hence assuming that the company wants 100,000 views on both web and mobile, monthly budgets of $500 and $100 are allocated respectively. The television advertisements have been allocated around $5000, wherein 10 second advertisements during non-prime hours would be shown. Since television advertising is expensive, a quarterly budget of $5000 has been allocated. Similarly, the sponsorship of events has also been given a quarterly budget because too much sponsorship can have negative impact on buyers. It was proposed earlier that Billabong can host surfing events to increase its sales but since surfing is primarily a summer sports and the summer months of Canada include June to August, budget for this element has been allocated for only these three months. Hence, a total annual budget of around AUD $56,500 is required by Billabong to be able to achieve its IMC objectives in Canada.

8. Evaluation Metrics

Companies often tend to make use of evaluation metrics and methods for measuring the effectiveness of the IMC or marketing plans adopted by them. As discussed by Schultz (2011), measuring an IMC plan is extremely important because it helps companies in understanding the media and communication channels and elements that have been most effective for the firm in achieving its marketing objectives and hence the firms can devise their strategies based on these measurements. In addition, the process of measuring IMC plans has been also supported by (), who argues that the measurement helps firms in evaluating and comparing alternative marketing and communication strategies, thus being able to make more effective and profitable decisions and outcomes (Schultz, 2011). However, this process has been highly criticized by Zahay et al (2014), who argue that the scales that have been built for IMC measurement cannot be kept the same for a long time and it hence becomes challenging for firms to keep changing these scales from time to time to get effective results and outcomes. Another shortcoming of measuring IMC plan as identified by Zahay et al (2014) is that the effectiveness of the adopted plan would differ from firm to firm and would depend on the defined objectives. Some of the generic tools that can be used by Billabong for measuring its IMC plan are defined below.

Conclusion

The discussions as presented above define the IMC plans and strategies that can be adopted by the Australian retailer, Billabong for expanding its market presence and increasing sales in a new market, Canada. Since the products of Billabong are primarily utilized and used by young consumers, who are trendy and hip and believe in using fashionable and trendy products, the report suggests that the company must target young, modern consumers in Canada. Also the fact that surfing has become a preferred sport in the country and is largely preferred by the youth makes Canada an attractive market. Hence, the defined and selected communication and media strategies and elements can help Billabong in achieving its IMC objectives, including higher brand awareness, higher sales and also higher brand loyalty.

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