The Impact of Integrated Marketing Communication on Brand Awareness

Abstract:

The purpose of this study is to examine the relationship between integrated marketing communication and brand equity of the banking sector of Pakistan. For this purpose 100 questionnaires have been filled by the customers and employees of 5 different banks based on 4 variables Brand Equity, TV advertisement, Print media and sales promotion. In this research I tried to find the relationship between IMC and brand equity by considering Brand Equity as dependent variable. After completing the survey the data was filled in SPSS for analysis. Several tests were applied on the collected data with the help of SPSS and significant findings are present. I found that CSR has direct impact on financial performance.

Since no study has been found on the impact of integrated marketing communication on brand equity in the context of Banking sector of Pakistan so this study is expected to contribute to the literature, furthermore this study will prove to the basis of research in this area of research in Pakistan.

Key Words:

Brand Equity, Integerated Marketing Communications,Sales Promotion,Tv advertisement, Print Media.

Chapter 1: Introduction & Background

1.1 Introduction:

Communications professionals are now taking on more responsibilities for their programs and strategies. They are empowered to shape the way in which marketing organizations do business. Managers who take this module will be at the forefront of the important integrated marketing communications (IMC) movement that strives for an integrated brand experience on the part of the customer. This module is designed for managers who will become decision makers in organizations concerned with advertising, public relations, sales promotions, marketing, and product management.

Integrated Marketing Communications is defined by Belch and Belch as a strategic business process used to develop, execute, and evaluate coordinated programs over period of times with stake holders. There is little doubt that IMC as changed over the years. This is neither surprising nor unexpected. Resistance to change almost always occurs, but such changes are inevitable. Advertising used to be the body and soul of promotion. Radio reps hyped up their stations, as did television salespersons. In the pre-computer era the focus was on individual components of the promotion mix, i.e., outdoor firms tried to persuade media buyers to spend money on outdoor. This scenario in Promotion was not unlike the world of Place where systems thinking was limited, and decisions on modal selection, for example, were often made on transportation costs alone. In some cases these routing decisions increased the cost of carrying inventory and sometimes were detrimental to customer service.

In the past few years, IMC as a research study has created a lot of debate, led to rational discourse, and on the whole, has contributed to the development of IMC as a strategic tool that can help organizations to be more effective in understanding their brand communication goals. IMC has a come a lengthy means from being conceptualized as the coordination of communication utensils for a brand (Krugman 1994) to a more planned conceptualization (Duncan 2002; Rossiter, Percy, and Schultz 2004; Elliott 2001). As Grove, Carlson and Dorsch (2003) note, the early conceptualizations of IMC were rather blurred and led to the adoption of different techniques to creating messages. Yet after a decade of research in the IMC field, differences are still there among researchers as to the conceptualization of IMC. Like, Lock (2000) and Cornelissen claimed IMC to be a “management fashion” to a certain extent than a theoretical concept. Kitchen (2000) and Schultz argued that IMC is an emerging paradigm whose succession as a concept and regulation is completely suitable and in accordance with scientific theory. Past studies and as well as experiences from different firms that have embraced the Integerated marketing communication approach.

Advertising is a form of communication used to influence individuals to purchase products or services or support political candidates or ideas. Frequently it communicates a message that includes the name of the product or service and how that product or service could potentially benefit the consumer. Advertising often attempts to persuade potential customers to purchase or to consume a particular brand of product or service.

Brand awareness is an important way of promoting commodity-related products through different means such as television advertisements and print media. This is because for these products, there are very few factors that differentiate one product from its competitors. Therefore, the product that maintains the highest brand awareness compared to its competitors will usually get the most sales. Awareness is a crucial consideration. It may be thought of as a buyer’s ability to identify a brand within a category in sufficient detail to make a purchase. The ultimate goal of most businesses is to increase sales and income. Ideally, you want to attract new customers to your products and encourage repeat purchases. Brand awareness refers to how aware customers and potential customers are of your business and its products. (TARA GUSTAFSON and BRIAN CHABOT,2007,)

The use of marketing information, knowledge, or intelligence by marketing managers is receiving increased research attention in the marketing literature (Dawes,Lee, and Dowling 1998; Li and Calantone 1998; Maltz) Marketing information use leads to organizational learning (Sinkula 1994), a greater degree of market orientation (Jaworskiand Kohli 1993), and enhanced organizational outcomes (Moorman 1995; Slater and Narver 1997). The positive relationship between information use and a firm’s performance is also supported in the organizational literature (e.g., Thomas, Clark, and Gioia 1993). In 2006 more than $280 billion were spent on advertising in the U.S., well above 2% of GDP. By investing in advertising, marketers aim to encourage consumers to choose their brand. For a consumer to choose a brand, two conditions must be satisfied.

In this research we empirically investigate how advertising affects brand awareness.this will be a large scale consumer survey, in which respondents were asked to indicate whether they were aware of banking products and, if so, to rate them in terms of quality. These data offer the unique opportunity to study the role of advertising for a These two brands across a number of different product categories.

Frequency of advertisement exposure is an important determinant of advertising effectiveness in traditional mass communication such as broadcast and print because most media decisions are based on advertising frequency (Campbell & Keller, 2003; Fang, Singh, & Ahluwalia, 2007; Hitchon & Thorson, 1995). One way of measuring advertising effectiveness is through brand awareness, which is an essential initial step for a communication process to begin; without brand awareness, no other communication effects can occur (Rossiter & Bellman, 2005). That is, at the brand level, brand attitude cannot be formed and purchase intention cannot be made unless consumers are aware of the brand. Therefore, brand awareness is deemed an essential communication objective for every advertising campaign. One way to measure brand awareness is brand recall.

Importance and Value of Research:

This study is noteworthy in number of ways. It will add value to the body of knowledge. Firstly, since this study area is under researched in Pakistan. No study has been found on the impact IMC on brand awareness in the context of banking sector of Pakistan. Consequently this study will help the managers to know the effect of IMC on brand awareness and this will help them to understand what effects their advertisement budget is doing on the mind set of the customers. Secondly, present study will help the organizations to understand the demand of IMC and this will help in increasing the brand awareness. Thirdly, this study will also contribute in the economic development of this country. Employing quantitative research which is not being used in this area will be a considerable methodological advancement.

Purpose of the study:

When it comes to brand awareness in banking sector, we have not seen many researches that are doing an effort to do something extra-ordinary regarding brand awareness and IMC. Even though, we have heard many studies causative a lot in this regard in international context. The purpose of this cross-sectional survey study is to explore effects of advertisement and brand awareness; with the help of SPSS we have tested the hypothesis. The rationale for using quantitative data is very useful research of both the brands.

RESEARCH OBJECTIVES:

The outlined objectives of the research are as follows

To examine how IMC affects brand awareness

To examine effect of TV on brand awareness

To test the hypothesis whether brand awareness and IMC are positively or negatively correlated

Research Questions:

This study was intended to answer the main research question

RQ: Does the IMC help the company to improve brand awareness? Does IMC helps in motivating the customers to purchase the products or services?

Sub Question:

RQ: Does IMC helps in retaining or attracting new customers?

Hypothesis:

H1: Yes, IMC affects the brand awareness

H2: No , IMC have no relationship with brand awareness

H3: Yes, IMC has relationship with advertisements through electronic and print media thus, creates the brand awareness

Domain of Research:

Research Place:

The research is placed in the different branches of banks located in Lahore.

Time Interval:

This research is completed in the months of October 2010 – November 2010.

Summary

In this research the magnitude of IMC is being researched. The results have been Listed Below in this research of the impact of IMC On brand awareness. The research problem has been affirmed and objectives of the research have been defined.

Chapter 2: Literature Review

2.1 Literature Review:

While introducing a new brand, consumer adopts a recognized brand easily than a whole new brand identity. (Aaker 1990, 1991; Smith and Park 1992; Kapferer 1998; and Keller 2003). This result is due to a transfer of positive attitude and effect from the parent brand to the brand conservatory. Though, viewpoint and attitudes could also be transferred in different ways, from extension brand to the parent brand. Preceding study has alert on backfire effect from unsuccessful addition to the parent brand. (e.g. Romeo 1991; Loken and John 1993; Chen and Chen 2000). For instance, Loken and John (1993) originate that extensions that are supposed as inconsistent with the parent brand may decrease evaluations of center brand associations for the parent brand.

Customer satisfaction is a core component of competitive strategies and keeping

Consumers happy is significant to long-term business success (Theodore, Patricia J. Daugherty, & Alexander E. Ellinger, 1997). Customer pleasure is the customer’s

after purchase judgment or assessment of a definite product or service (R.L. Oliver in

1981). Customer satisfaction includes service excellence, expectations, disconfirmation,

recital, desires, affect & equity (Churchill & Suprenant 1982; Glenn 1998; Levesque & McDougall 1996; Oliver 1993; Patterson 1997, Szymanski & Henard 2001). Customer satisfaction is usually defined in the marketing journalism as the inconsistency between a customer’s prospect and perceptions (Oliver, 1997). Satisfaction is usually viewed as an encounter-specific assemble (Bitner, 1990). Customers usually go through corroboration of need, research before purchase, and product assessment to make a purchase choice, and the last is a mainly significant factor. Due to the fact so as to There are always risks in any of purchase decision, consumers rely on product in sequence or cues to inferior the risks. Consumers generally judge they can make a Satisfying purchase by selecting well-known brands and also reduces any purchase risks (Nan-Hong Lin, 2007) .

Customer satisfaction is a vital theoretical and practical problem for most marketers

It is paid non personal communication of information about different products or ideas by an identified sponsor from side to side to the mass media in an attempt to persuade or influence purchase behavior (Courtland Bovee, Advertising Excellence international Edition). Advertising is planned to get higher order communication effects in target audiences different to the advocated position (James Nelson, Calvin Duncan and Nancy Frontczak, 1985).

Factors such as high advertising expenses and the increasing opposition for shelf space, it has become harder to succeed with new products (Aaker 1991 & 1996). One of the decisive aims of advertising is to influence con-sumers to buy convinced brands over others. A classical conditioning clarification provided the theoretical foundation for the transference of influence from the ad to the brand or product (Terence Shimp,1981).

To attain this goal, many advertisers use advertisements with a clear termination

(Beardi 2001; Halliday 2000). Advertising would continue to be as powerful if

advertising were also available for the non focal brands (Sirdeshmukh, Daniel Innis 1992). Kamins (1991) establish that subjects viewing a pleased commercial evaluated it more absolutely on various events of advertising efficiency in the context of program content planned and observed to persuade a glad mood. Optimistic advertising effects can be found if the message style of the advertisements is in difference with the environment of the context (Meyers-Levy & Tybout, 1997).

Since the expansion of brand equity in early 80’s, there have been quick developments in the subject. This is due to the truth that branding has been known as an important factor for the achievement of a firm mainly in a very competitive business location.

In different literatures, different expalinatons of brand equity have been given. According to Park & Srinivasan (1994), there is no acceptable definition of brand equity. Farquhar (1989) explained the brand equity as the worth which the brand adds to the core product. For example definitions were gioven by researchers for instance Aaker 1991, Keller 1993, Yoo & Donthun 2001 and, Leuthesser 1998. Aaker (1991) defined the most specific definition of brand equity, he said that brand equity is a set of brand assets and liabilities connected to a brand, its name and symbol, that improves or decrease the worth provided by a product to a firm and to that brands customers”.

Simon & Sullivian (1993) used the phrase “incremental utility” to pass on to brand equity. Park & Srinivasan (1994) pass on to brand equity as the difference between the in general brand favorite and the multi characteristic preference depending on the objectively precise attribute level. Agarwal & Rao (1996) also submit to brand equity as the total excellence and choice meaning. From the greater than it is clear that brand equity has been seen in different ways by different researchers.

Our current study will focal point on consumers based insight. Consumer based brand equity can be alienated into consumer perception For Example (brand awareness, perceived quality, brand association) and consumers behaviors. The consumer’s viewpoint, brand awareness, brand relationship or brand loyalty and perceived quality are the most important measurement.

Promotion communicates the value proposition to the customer. The promotional mix includes advertising, direct, sales promotion, public relations, publicity, and experiential contact like events, sponsorships and trade shows. Advertising is a paid-for form of non-personal communications by an identified sponsor. Business firms, politicians, non-profit, and government agencies all engage in advertising. The public relations (PR) mix includes publications, events, news, speeches, and others. These programs are designed to promote a company’s image or products. PR can affect public awareness and because of its credibility, it can often be more effective and efficient than advertising, often at a fraction of the cost of advertising. Brand publicity consists of nonpaid media messages designed to deliver information that creates a positive influence on customers and prospects. (Duncan, 528) .

Direct marketing is an interactive, database-driven IMC process that uses a range of media to motivate a response from customers and prospects. (Duncan, 560) Tom Duncan points out that direct marketing has drastically changed with the advent of new communication and information technology. (Duncan, 558) Sales promotion includes incentives designed to stimulate purchasing of products or services. Coupons, free samples, cents-off, are tools used for consumer promotion. Trade shows, sales contests, specialty advertising, are tools used in business promotion.

Personal selling is interpersonal, face-to-face promotion where the exposure is usually done on a voluntary basis and the feedback comes quickly. The use of personal selling is an important ingredient in promotion, but perhaps more important in the industrial goods segment. (Engle, 42).

Different concepts of brand equity have been considered by various researchers. Aaker (1991) explains brand equity as a multidimensional idea which is made up of perceived qualities and brand awareness. According to aaker, Brand loyalty has to work with the level of fidelity of a consumer has to a brand. It has to do with the ability of a possible buyer to recognize a brand among a product group. Perceived quality deals with the consumer’s insight of the brands total excellence or superiority. Brand association is anything that is associated in a consumer’s reminiscence of a brand. A similar conceptualization was planned by Keller (1993). According to Keller (1993), customer based brand equity contains two magnitude, brand knowledge and brand awareness.

Cob-Walgreen (1995) rely their study on customer based perception measure of brand equity. Their study adopted 3 of Aaker (1991) perceptual part of brand equity for example brand awareness, brand association & perceived quality. They experienced whether brand equity has an influence on brand perception. The conclusion of their study initiate out that brand equity has result on perception, intention and approach.

Low & lamb (2000) and Prasad & Dev (2000) also adopted 4 of Aaker (1991) constituent For example brand awareness, perceived quality and brand loyalty and brand association. Yoo (2000) accepted 3 of Aaker (1991) component. Which were perceived quality, brand association and brand loyalty. Their study recommended and experienced a model and the result discovered that these magnitudes contribute to brand equity.

Yoo & Donthun (2001) employed 4 of Aaker’s constituent of brand equity for examples. Brand awareness, brand loyalty and perceived quality restricted of proprietary assets measurement as it is not imperative in the size of customer based brand equity.

Despite the large number of option planned in the knowledge, no single measure is model. Simon & Sullivan (1993) maintain that the best method for assessing brand equity relies on the objective market based data and information which give room for evaluation overtime and crosswise firm. Using preferences and consumers behavior is wrong as a consequence of their individual prejudice. Farquhar 1989 & Criminis (1992) affirmed that some marketers also accomplished that while brands do increase the values of various components. Consequently, for the reason of our study, consumer based brand equity will be relying on Aaker (1991 1996) conceptualization. Brand association here is defined as brand image.

In addition, references to marketing achievement based on synergy, steadiness, and complimentarily (Park & Zaltman, 1987) have tended to hold a deeper appreciative of the primary components of goods, and have awakened marketing people to endurance opportunities in a period of flat markets, increasing expenses, and higher international competition. The journalism on brand equity displays two major focuses. Some authors have paying attention on the financial aspects of brand. Others have focused on the consumer behavior possessions exact to a particular brand. For marketers, the consumer things are the suitable focus and include cognitive effects.

Brand awareness can be explained as the degree of consumers’ experience with a brand. Aaker (1991) & Keller (1993) affirmed that brand awareness is a very important element of brand equity. Rossiter & Percy (1987) expalins brand awareness as the ability of consumers to differentiate a brand amongst other brand. Keller in (1993) conceptualized brand awareness as comprise of brand recall and brand recognition. Keller (1993) said that “brand recognition may be more significant to the point that product decisions are to be made in the store”. Rossiter (1991) resulted that brand attitude and decision to purchase a product can only be urbanized through brand awareness.

According to Aaker (1991), there are 3 levels of brand awareness:

Brand awareness contains brand recall and brand recognition. Brand remember means when customers see a product category, they can remember a brand name exactly, and in other way brand recognition means customers has facility to classify a brand when there is a brand signal. That is, customers can tell a brand correctly if they see or heard it. Furthermore, Hoeffler and Keller (2002) pointed that brand awareness can be notable from depth and width. Depth signify how to make customers to recall or recognize brand easily, and width shows infers when customers purchase a product, a brand name will reached to their minds immediately. If a product owns brand profundity and brand width at the same time, customer will think of a precise brand when they want to purchase a product or service. That is, the product or service has higher brand awareness. likewise, brand name is the most central element in brand awareness (Davis, Golicic & Marquardt, 2008). As a result, brand awareness will influence purchase choice from side to side brand association, and when a good or service owns a positive brand image, it will assist in marketing activities. A brand name tells a symbol that can help consumers to recognize service providers and to expect service results (Herbig and Milewicz, 1993; Janiszewski and Van Osselaer, 2000; Turley and Moore, 1995).

Brand awareness does an important role on purchase decision because consumers are disposed to purchase a common and famous product or service (Keller 1993; Macdonald and Sharp, 2000). Brand awareness can enable consumers to distinguish a brand from a product category and create purchase decision (Percy and Rossiter, 1992). Brand awareness has a vast power on selections and can be a former thoughtful base in a product category (Hoyer and Brown, 1990). Brand awareness also shows as a dangerous factor in the consumer buying intention, and certain brands will build up in consumers’ mind to pressure consumer purchase decision. A service or product with a increased level of brand awareness will get higher consumer preferences due to higher market share and quality assessment (Dodds 1991; Grewal, 1998).

Grewal, Krishnan, Baker & Borin (1998) wrap up that brand awareness and apparent quality have a significant link in a bicycle brand study. Many researches and founders also conclude that the higher brand awareness will result higher perceived quality (Monore, 1990; Lo, 2002.Kan (2002) further suggests that the more the brand awareness is, the more the consumers’ quality evaluation is. More to the point, Aaker and Keller (1990) elaborated that a brand with increased awareness and good image in the market can endorse brand loyalty to consumers, and the moer the brand awareness is, the more brand trust and purchase meaning are to consumers. Peng (2006) narrates that brand awareness has the maximum total effects on brand loyalty.

When businesses build up different new products or a new product market, they be supposed to endorse their brand awareness in turn to receive the most excellent result because brand awareness is significanlty related to brand loyalty (Aaker and Keller, 1990; Peng, 2006; Wu, 2002;). Parasuraman & Grewal (2000) suggest that the more significant the customer transaction perceptions are, the higher the customer loyalty would be.

Sirdeshmukh, Sigh & Sabol (2002) also think that value will transport a positive influence toward consumers. Wu (2007) shows that the perception of customers will cause increase or decrease in brand loyalty. Judith &Richard (2002) further identify that perceived quality and perceived brand loyalty have a positive connection, they will positively manipulate purchase attitude. Chi, Yeh and Chiou (2009) a original sight and proof to the study of brand shows that customer perceived quality will manipulate brand trust and brand influence, and further to sway brand attitude and purchase intentions. Hence perceived quality and brand loyalty are significantly co-related, and brand loyalty will cause increased perceived quality.

Customers will have an advanced purchase intention with a known brand (Kamins & Marks, 1991). Similarly, if a product has increased brand awareness it will have a increased market share (Dodds, 1991; Grewal, 1998). A famous brand will have an increased buying intention than a less famous brand (Hsu, 2000). Garretson & Clow (1999) recommend that perceived quality will manipulate consumer purchase intention, and Monore (1990) results that perceived quality will completely influence purchase intention through perceived value. In addition, Chang (2006) & Wu (2006) results that perceived quality & purchase intention are significantly related. Brand loyalty is a repurchase assurance that promises customers will repurchase their brands in the coming future, and they will not change their faithfulness under any conditions (Oliver, 1999).

Many researchers and people have seen brand awareness as a constituent that plays an important role in customer’s choice of brand. In Lin &s Chang (2003), the result of their study recognized that brand awareness had the most dominant influence on consumers purchase intentions.

Hoye & brown (1990) as narrated by Lin & Chang (2003) their study concluded the significance of brand awareness in customers decision process and they originate that brand awareness was a main factor. Also Jiang (2004) found out in his research that brand gratitude influences costumer’s choice.

Sutton’s (1991) bounds on industry attentiveness in large markets unreservedly suppose that advertising increases customer’s willingness to pay by changing quality perceptions. While profits are higher in perceived quality, they may decrease the brand awareness (Fershtman & Muller 1993; Boyer &Moreaux 1999), thus stalling the competitive acceleration in advertising at the core of the endogenous sunk cost theory. Furthermore, Doraszelski & Markovich (2007) reveal that even in small markets industry can be very different depending on the scenery of advertising.

As the Internet matures into a feasible profitable medium, many web sites (for example Lycos, google, Yahoo!) rely on advertising to finance their workings. The entice of advertising is such that few companies provide users with free Internet hours (e.g., NetZero.com, FreeI.com) and some provides even free computers in swap(Berst 1999). This ought to not come as a revelation as advertisers have long used every imaginable vehicle to show their messages in front of the thousand eyes of potential customers.

Keller 1993 narrated brand equity as the different result of brand knowledge on consumer answer to the marketing of the brand. And it also affirmed that brand knowledge as the core of the definition of brand equity it also defines brand knowledge in term of brand consciousness and brand image keller conceptualizes the brand awareness as the power of brand equity. Others have tried to further expand brand equity by including constructs said by (Aaker, 1991; Keller, 1993).From the opinion of Aaker that brand equity can carry value change for both customer & manufacturers. From the 5 assets of brand equity brand loyalty is more vital and it is regarded as main base of brand equity said by (Aaker, 1991; Keller, 1993).

Customers responds powerfully and decide to purchase only recognizable, well-established brands (Jacoby,Syzabill and Schach, 1977; Roselius, 1971). Less involvement in decision settings or a minimum level of brand awareness may be enough for product choice, even in the nonattendance of a well-formed attitude (Betteman and Park 1980; Hoyer and Brown 1990; Park and Lessig, 1981). Using amplification likelihood model (Petty and Cacioppo, 1986) propose that customers may base choices on brand awareness decisions when they have low involvement in it, which could result from either a be short of of Consumer incentive or lack of consumer ability. A brand with high consciousness and with positively unique associations will have a high value addition for consumers (Riezebos, 2003).

The Internet Advertising Bureau (IDB1999) reports in year 1998 online advertising expenses of 1.92 billion dollars, more than double than year 1997 revenues. The bulk of this cost is allocated to banner adv. Banner advertisements typically consist of rectangular images showed at the top of web pages and have the ad message that the advertiser wants to send to web surfers.(Hamilton 1998).

Much of the existing knowledge uses cross-sectional information to find a relationship

between advertising costs and perceived quality (Kirmani

&Wright 1989; Kirmani 1990; Moorthy & Zhao 2000; Moorthy & Hawkins 2005) in an effort to test the thought that customers assume inferences about the brand excellence from the amount that is exhausted on advertising it (Nelson 1974). To resolve the problem we use the lively panel data methods urbanized by Arellano & Bond (1991) and Blundel Bond (1998). The core lead is that these ways do not rely on the availability of severely exogenous descriptive variables or instruments. This is an attractive methodology that has been extensively applied (Acemoglu & Robinson 2001; Durlauf 2005; Zhang & Li 2007) because suitable instruments are frequently hard to come by In deriving the balance advertising strategies, Dube (2005) use a legit demand model that accounts for the lively property of advertising.

One of the compensation of this demand system is the aptitude to explain the advertising strategies. Though, the suppleness of the logit model imply that one cannot obtain diagnostic solutions, especially for closed-loop equilibrium. (Dyson, Farr, & Hollis, 1996), banner ads can have an collision on consumers’ behavior toward a brand sovereign of click-through advertising. Though, TV & magazine advertising produced greater incentives than online advertising. The contact of magazine advertising may owe, in part, to the size of magazine adverti