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The adjustment of advertising


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The adjustment of advertising

  1. 1. International Conference on Revisiting Globalization & Communication in the 2000s Maha Chulalongkorn Bldg., Chulalongkorn University, Bangkok, Thailand August 5-6, 2004 The Adjustment of Advertising Agencies in Thailand to Implement Integrated Marketing Communications: A Content Analysis Kingkarn Pattarathammas Faculty of Communication Arts, Chulalongkorn University Phrayatai Road, Patumwan, Bangkok 10330, THAILAND No editing of abstracts/papers is done. They are printed and published as submitted.
  2. 2. 2 Integrated marketing communications (IMC) is an important concept and provides many benefits to firms implementing it. IMC can assist communication to be more effective especially when the innovative advertising campaign requires comprehensive mixes of communication strategies and presents them in the single positioning concept (one voice and one personality). Moreover, IMC helps reducing the miscommunication problems among different advertising agencies and helps marketers to be on guard against excessive use of communication budget. Advertising agencies in the USA were to first group to agree with the concept of IMC. They viewed that IMC could help increasing the effectiveness of marketing communication plans, creating consistent effects and eliminating any misunderstandings that might arise from the use of different firms providing the services of marketing communication. In addition, IMC could help the clients of advertising agencies to have a better control over communication plans (Kitchen & Schultz, 1999). Later, IMC concept has been widely accepted by advertising agencies in other countries including those in the United Kingdom, New Zealand and India (Kitchen & Schultz, 1999) and Thailand (Anantachart, 2001). For the case of Thailand, the early stage of advertising agencies was in the period during 1943-1974 (Chirapravati, 1996) and there had been gradual development responding to the changing economic and social conditions of that particular period. In 1997, Thailand faced with the Asian crisis and the economic recession had severely negative impacts on all sectors including the advertising industries. In 1998, total expenses in advertising media decreased by 24% to baht 31.68 billion compared to baht 41.59 billion in 1997 (ACNeilsen, 2001). Consumers behavior also changed and the process of consumer thought in this period was different from that in the past (Chaipani, 2002). People are bored with the traditional marketing communication tools, so marketer must search for new tools or strategies to enhance the marketing activities (Siripullop, 2001). Furthermore, information technology in Thailand had been developed in a fast pace (Kitikup,
  3. 3. 3 1997b). With the free trade policy, the competition had also been increased substantially from both local and foreign companies (Thanasarnsin, 2002). Thus, advertising agencies had to look for new marketing strategies in order to help clients with more effective marketing communication campaigns. IMC is one of the new marketing strategies that had been well accepted and implemented in various organizations. Advertising agencies in Thailand were forced to adapt to the changing economic environment and other changing factors by accepting IMC and reorganizing their own firms. Firms that used to provide only single type of marketing communication service became IMC providers. Therefore, it is interesting to see how the advertising agencies made adjustment to implement IMC. This study would provide important foundation for the study of IMC in Thailand by both academics and practitioners in advertising and marketing fields. The results can then be applied to more effective implementation of IMC in the future. The objective of this research is to study how the advertising agencies in Thailand have adapted themselves to implement IMC. To achieve this goal, the followings are research questions: How have the advertising agencies in Thailand adapted themselves to facilitate the implementation of IMC? What are the communication tools used for IMC in Thailand? WHAT IS IMC? An early definition of IMC adopted by the American Association of Advertising Agencies (4As) and developed by Schultz was inevitably focused—correctly for its time (Kitchen, Brignell, Li, & Jones, 2004)—as a concept of marketing communications planning activity that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines (for example, general advertising, direct response, sales promotion, and public relations) and combines them to provide clarity,
  4. 4. 4 consistency, and maximum communications impact (Schultz, 1993). This definition was used as a foundation for the empirical analysis. Moreover, the same definition was used in other IMC studies around the world (Eagle & Kitchen, 2000; Kallmeyer & Abratt, 2001). In the view of 4As, it indicated that IMC requires maintaining a consistent and clear image as well as controlling marketing position, message and theme by guiding them into the same direction via different marketing communication tools. Moreover, this definition focused on strategic participation of different forms of promotion-mix, e.g. advertising, sales promotions, and public relations, and the integration into one in order to send message to the targeted customers (Schultz, 1991). Majority of advertising practitioners in the U.K. agreed with this definition strongly (Kitchen & Schultz, 1998). There are some agreements but no real conviction among advertising practitioners in U.S. From the comments, it appears that, while conceptually most advertising practitioners in U.S. agreed with this definition, they seemed to be looking for an additional input about the measurability and execution: needing ways to operationalize the concept. Some comments implied that the strength of IMC lay in focusing on specific target markets and in its execution, not just planning (Schultz & Kitchen, 1997). Here are some examples of the definitions of IMC from academics, who have done research on IMC. Duncan (2002) defined IMC as the process for managing the customer relationships that drive brand value. In addition, it is a cross-functional process for creating and nourishing profitable relationships with customers and other stakeholders by strategically controlling or influencing all messages sent to these groups and encouraging data-driven, purposeful dialogue with them. Gould (2004) suggested that IMC should be defined in terms of two complementary approaches: (1) as a set of practices and discourses that is employed by marketing communications practitioners, studied by academics researchers, and taught by many of the latter to their students, and (2) as a subject for theoretical analysis that may assess among other things conceptual issues, how IMC functions, and issues of effectiveness.
  5. 5. 5 However, other academics tried to define IMC in a much clearer view. For example, Nowak and Phelps (1994) divided the definitions of IMC into 3 aspects. The first aspect involved the creation of one voice, e.g. one theme or one total picture. The second aspect is the integration of both product image and relevant aspects of consumer behavior in promotion management as opposed to a focus on only one or the other of these two. The last aspect is the coordinated management and promotion-mix disciplines, which corresponds to 4As’ definition (Gould, Lerman, & Grein, 1999). These definitions reflect a wide range of IMC issues and provide a framework within which to consider many of them. However, they fail to fully reflect the important role of the agency-client relationship in generating effective IMC (Gould, Grein, & Lerman, 1999). The division of IMC definition into three aspects by Nowak and Phelps (1994) can be compared with that of Cathey and Schumann (1996), which analyzed and divided various definitions of IMC into three main categories: (1) definitions stressing on the audiences, (2) definitions concentrating on the integration of messages and media, and (3) definitions aiming on the evaluation of outcomes. The definitions of both works seem to focus on the one- voice communication or one-direction communication. However, Nowak and Phelps (1994) separated the above aspect from the integration aspect. Cathey and Schumann (1996), on the other hand, combined the one-voice communication and integration into one. They also focused on the receiver of message and the results from IMC, while Nowak and Phelps (1994) did not touch on these aspects. In general, Reid (2003) drew some consistent themes from prominent IMC definitions, including (1) a sound knowledge of the organization’s stakeholders, acquired through two- way interaction with these parties, (2) the selection of communication tools which promote the achievement of communications objectives; are reasonable in regard to the organization’s resources, and are favorable to the intended recipient, (3) the strategic coordination of various
  6. 6. 6 communication tools in a manner consistent with the organization’s brand positioning, and which maximizes their synergistic effect so as to build strong brands and stakeholder relationships, (4) the use of appropriate, timely and data-driven evaluation and planning to determine the effectiveness of this process, (5) strong interfunctional and interorganizational relationships with those responsible for implementing marketing communications campaigns, (6) impact on customer relationships, brand equity and sales. From the varieties of IMC definitions as described above, it could be concluded that controversy persists about the definition of IMC (Swain, 2004) and there is no single definition of IMC that is agreed upon among academics and practitioners in IMC (Duncan & Everett, 1993; Kitchen, 1999).This apparent ambiguity has allowed for various interpretations and the loose use of the term IMC and has allowed researchers to choose whichever conceptualization best fits their research agendas at any given time (Cornelissen & Lock, 2000). Thus, there is widely disagreement on the issues about who and how one applies the IMC. This is one of the reasons that slowed down the development process of both research and theories of IMC by academics and practitioners (Schultz & Kitchen, 1997). The “integrated” in IMC today has a deeper and a boarder meaning than it did in the early 1990s. Initially, “integrated” referred primarily to coordinated marketing efforts; then the notion of harmonious activities took center stage with the tighter focus on “one voice” and coherent planning. Today there is an added dimension to the meaning of integrated in the way the IMC concept is discussed and applied, completeness or “holistic” (Cook, 2004). By the way, the researcher tried to synthesize from the collection of definitions of IMC as defined by several academics from the U.S.A. The researcher then summarized all aspects of IMC definitions according to the concept of Cathey and Schumann (1996) as follows (1) Building positive relationships with customers and other stakeholders (e.g., Banayan, 2000; Bertin, 2000; Reid, 2003), (2) Collecting information about customers’ wants and needs (e.g.,
  7. 7. 7 Cooke, 2000; Gonzalez, 2000; Shimp, 2000), (3) The concept of data driven of target customers (e.g., Cooper, 2000; Duncan, 2002), (4) Coordinating all aspects of marketing communications (e.g., G. Belch, & M. Belch, 2004; Bluth, 2000), (5) One voice (e.g., Cook, 2004; 4As, as cited in Schultz, 1993), and (6) Providing maximum impact on both the popularity and profitability of brands (e.g., Schultz, 1993; Whalen, 2000). Therefore, the researcher would like to define IMC as “The implementation of varieties of marketing communication tools to convey brand in one voice. The process starts with the study of raw database and the needs of target customers in order to achieve the maximum benefits in terms of popularity and profitability of the brand.” THE TRADITIONAL ROLES OF ADVERTISING AGENCIES The basic functions of an advertising agency were most frequently described in terms of strategic advertising consultancy within marketing perspective (Helgeson, 1994). Advertising agencies which have been in existence for about a century, offer four basic functions: creative, account management, research, and media. Within the agency, creative works as the heart of the agency, developing the art-work and copy messages to sell the products. The key function of account management is to handle client relations. The agency account management group often offers marketing analysis and advice. Ensuring that the message is properly communicated to the target is the job of the research department. Here, the goal is to learn as much as possible about the prospective consumers for a brand. Where to place the communications to the consumers is the task assigned to the media department, which also purchases space and time from the media and conducts research on how people use media (Salz, 1983; Vanden Bergh & Katz, 1999). By the early twentieth century, agencies that offered advertisers all of these elements—message creation, media placement, research, marketing, and adminitrative
  8. 8. 8 services (O’Guinn, Allen, & Semenik, 2000; Vanden Bergh & Katz, 1999)—came to be known as full-service agencies. Full-service agencies organize their accounts by putting together creative, media, research, and account management personnel to work on a specific brand. This is consistent with the structure of advertising agencies as described by Capon and Scammon (1979), which stated that advertising agencies comprised of four basic departments as above. Major client contact is performed by a group of account executives, who report to account supervisors. The account supervisors may themselves act as the major contact points for very important clients. Creative matter within the agency are handled in three separate units; print media matters are the responsibility of a senior art director, who is assisted by a staff of art directors, and a copy director who is assisted by a staff of copywriters, while TV and radio advertisements are the responsibility of the broadcast director to whom personnel in various support functions (e.g., casting) report. The research director heads a research department, which is available for consultation and performs research projects for creative departments as well as the account executives and supervisors. Finally, media scheduling and buying are performed by the media director, who is assisted by staffs of media buyers. Although the above four departments are considered the basic departments for advertising agencies in general, other departments can be included if necessary. For example, Na, Marshall and Son (1999) studied the structure of advertising agencies in South Korea and found that the representative departments for providing service are account service, creative service, media service, marketing research and promotion service—an addition to the first four basic departments. Bursk and Sethi (1976), on the other hand, stated that the major advertising functions covered—manager, creative director, media planning and buying, art, copy writing, and production. However, the smaller in-house agency companies purchase creative and media services from outside sources. This is consistent with Kallmeyer and
  9. 9. 9 Abratt (2001), which stated that the traditional advertising agencies focused only on advertising and creative services. This means that the main roles of advertising agencies were the creative and media services not the integrated marketing communications. Before the implementation of IMC, some advertising agencies in the past viewed the clients as “accounts” rather than as “partners”. Clients planned the marketing strategies and let the advertising agencies implement the plans. Most advertising agencies also tended to advise clients to utilize only the tools that the agencies are familiarized with (Gronstedt, 1996). This resulted in the role of advertising agencies in the past focusing on the advertising services only—especially in account service, creative service, media service, and marketing research – rather than offering other tools in the integrated marketing communications. METHODOLOGY This quantitative research used content analysis to study the contents of articles and news related to integrated marketing communications as appeared in newspapers and magazines. Data Source The first data set composed of all IMC related news and articles published in business newspapers, which had the three highest readership in Thailand in 2003 according to the Optimum Media Direction (OMD), a well-known advertising media agency. The researcher covered the three business newspapers published from January 1999 until December 2003. This would result in the initial database of 522 newspapers from Thansettakij Newspaper, 262 newspapers from Poojadkarn Weekly Newspaper and 522 newspapers from Prachachart Turakij Newspaper for the total of 1,306 newspapers. Moreover, the second data set composed of all IMC related and articles published in marketing magazines, which had the three highest readership in Thailand in 2003 according
  10. 10. 10 to OMD. The researcher covered the three marketing magazines published from 1993 until 2003. This would result in the total database of 226 magazines, which consist of the followings: (1) BrandAge magazine started from the first issue in May 2000 until December 2003 (2) MBA magazine started from the first issue in April 1999 until December 2003 (3) Marketeer magazine started from the first issue in March 2000 until December 2003 (4) Khookhang magazine starting from January 1993 until the last issue in April 1999 were also included since the Brandage and Marketeer magazines were first published in 2000 and MBA magazine was first published in 1999. Khookhang magazine had the highest circulation in 1994 (Chirapravati, 1996) were included to increase the data set. Coding Procedure There were two coders in this study. They both received the coding form and the coding manual, which are the tools for the coding procedure. There was no study on the adjustment of advertising agencies to implement IMC to be followed as a concept guideline during the design process of for this research questionnaire. The researcher, therefore, designed the questionnaire by dividing the adjustment of advertising agencies in Thailand to implement IMC into 5 broad categories, i.e. establishing new departments or team to provide extended services, reorganizing firm structures, establishing new firms, forming business alliances, and taking over other firms, based on preliminary study and added a choice as other (please specify) in case that the coders disagreed with other available choices determined by the researcher. The researcher made sure that both coders understand all the issues under analysis and take them into consideration during the coding process. Each coder then analyzed news and articles separately without consulting each other. After that, the researcher tested the intercoder reliability by using formula from Hosti (1969, cited in Wimmer & Dominick, 1994) and calculated the intercoder reliability coefficient that each coder chose the
  11. 11. 11 same choice for each issue under analysis. The intercoder reliability coefficient was at 0.87, implying that the intercoder reliability was quite high. Then, any disagreements in coding were resolved by the discussion among the two coders. Moreover, the information on advertising agencies implementing IMC in Thailand was gathered together with the various communication tools offered by the agencies. This would bring the better understanding of the changes in the working styles and structures of the advertising agencies. FINDINGS From the study of all 1,532 newspapers and magazines, the researcher found that there were 190 articles about IMC covering contents about advertising agencies implementing IMC, the adjustment of advertising agencies to implement IMC and the application of IMC tools as the followings: Advertising Agencies Implementing IMC in Thailand Most advertising agencies in Thailand, both international advertising agencies from the U.S and Japan as well as local advertising agencies, had put their focus on the expanding of the IMC service to respond to the growing needs of clients. The results from the research showed that there were 19 advertising agencies in Thailand implementing IMC, 10 of which were international advertising agencies and the other 9 were local advertising agencies (see Table 1). The details are as follows: (1) International advertising agencies in Thailand that implementing IMC (1.1) Leo Burnett implemented IMC in 1993 and called it as “Total Brand Supporting” (Wongmontha, 1997). Leo Burnett was obviously one of the pioneers implementing IMC by restructuring their organization in 1993. All of their services including
  12. 12. 12 advertising, public relations, sales promotion and direct marketing (“Agency khuern...,” 1997). Moreover, Leo Burnett renamed its IMC service as “Integrated Brand Communication” in 2003 (Rojmetha, 2003). IMC of Leo Burnett originated from its Chicago Headquarter by developing Integrated Planning and Communication (IPAC) to be used by its branches and affiliates worldwide. The objective was to help the communication plans of clients with the most effectiveness method regardless of there the clients are located. This service focused on the cooperation among departments including event marketing and public relations departments. Table 1: Advertising Agencies Implementing IMC in Thailand Advertising Agencies Year Leo Burnett 1993 DY&R 1994 Lowe Limited 1995 Thai Image 1996 Siam Vision 1996 Better Impact Communication (BIC) Before 1997 Integrated Group 1997 Netscop 1997 Grey Worldwide: Thailand 1998 Ogilvy & Mather 1998 J.Walter Thompson 1999 Euro RSCG 1999 Spa Advertising 1999 CVT & Bercia 2000 Siamese D’Arcy 2000 TBWA (Thailand) 2001 Creative Juice/G1 2001 Dentsu (Thailand) 2001 Flagship 2003 Total n =20 In addition to the advertising via different media of Leo Burnett worldwide, the services in direct marketing and sales promotion departments was also improved (Wongmontha, 1996).
  13. 13. 13 (1.2) DY&R started implementing IMC during 1994-1995 and called it “Effective Brand Communication” (Wongmontha, 1997). They set up a department called “Total Communication” responsible for the coordination of all departments such as graphic design, public relations, sales promotion, event marketing, database, accounting, finance and “Total Media”. They also utilized the information and data from other research firms in the group, such as Wonderman (Thailand) and Burson Marstellar. They used three-dimensional situation analysis to plan and implement IMC to be consistent with the existing market situations to deliver the best possible plan to both domestic and foreign clients (“Agency khuern...,” 1997). (1.3) Lowe Limited implemented IMC in 1995 when Mr. Wichai Supasomboon was the Executive Chairman. They had continued to follow the policy of implementing IMC ever since despite the major change in the top management level (“Agency khuern...,” 1997). (1.4) Grey Worldwide: Thailand implemented IMC in 1998 during the time of economic recession. Grey started a new company to provide IMC service since clients needed more full service from their agencies (Lumliengpol, 2000). This changed their role from advertising agency to become IMC agency (Rosenkranz, 2002). (1.5) Ogilvy & Mather implemented IMC in 1998 and then re-launched the whole Ogilvy Group by organizing the “360 Degree Brand Building” team again in 2000 (Thanapaisarnkij, 1999). (1.6) J. Walter Thompson implemented IMC in 1999 by dividing departments to be consistent with the IMC strategy and to service their clients (Capra, 1999a, 1999b, 1999c). (1.7) Euro RSCG implemented IMC in 1999 and called it “Integrated Marketing Service” (Waiyakornwilard, 2003). This was to provide value added to clients in addition to the advertising creative (Howell, 2001).
  14. 14. 14 (1.8) CVT & Bercia implemented IMC in 2000 and also provided marketing consulting at the same time (Nithiwannakul, 2000). Its policy was to expand the effectiveness of IMC by designing the concept and controlling the work. It integrated all the works into one, which is easier to control and to evaluate (Watcharathanont, 2001). (1.9) TBWA (Thailand) implemented in 2001 to provide other services in addition to advertising (“TBWA...,” 2001). (1.10) Dentsu (Thailand) implemented IMC in 2001. Their policy was to build company image as a first class” company and to provide full service in professional way (Nobuta, 2001). (2) Local advertising agencies in Thailand that implementing IMC (2.1) Thai Image implemented IMC in 1996 with the focus as a marketing agency. They applied all marketing strategies to fully service their clients in all aspects (Wongmontha, 1996). (2.2) Siam Vision implemented IMC in 1996 by positioning themselves not as advertising agency or PR agency but as IMC agency. They produced each work in the form of circular connecting each work together without focusing on any particular aspect in order to send messages to the target group with the highest efficiency and the lowest budget since the cost of media kept on rising (Wongmontha, 1996). (2.3) Better Impact Communication (BIC) implemented IMC several years before1997. Belonged to Mr. Seri Wongmontha, they were a medium-sized advertising agency providing only IMC service and tried to focus on its professional service on IMC (“Agency khuern...,” 1997). (2.4) Integrated Group implemented IMC in 1997. As a medium-sized advertising agency, they positioned themselves as IMC provider with the focus on teamwork (Rattananakin, 1997).
  15. 15. 15 (2.5) Netscop implemented IMC in 1997. As a small-sized advertising agency, they differentiated themselves by offering unique and outstanding strategies (Kitikup, 1997a). (2.6) Spa Advertising reorganized the management structure to implement IMC in 1999 (Chumpunpong, 1999). (2.7) Siamese D’Arcy implemented IMC in 2000 in order to expand their business (Suphasomboon, 2000). (2.8) Creative Juice/G1 implemented IMC in 2001 by setting up a new firm, Emerald Biz to provide IMC service. Their rationale was that due to the existing marketing condition, advertising alone could not help the sales of clients but the inclusion of marketing service could help on that. This was also consistent with the trend of that particular period (Boonyoungyuen, 2001). (2.9) Flagship implemented IMC in 2003 since the advertising business was required to provide more IMC service to clients. In the past, they tried to provide IMC service but they failed to achieve it and admitted that they were outstanding in creative only. This became their weakness when they had to pitch their work against other international advertising agency (Waiyakornwilard, 2003). The Adjustment of Advertising Agencies in Thailand to Implement IMC Due to the changing market situation, it was necessary for the advertising agencies in Thailand to make adjustment from the offering of only advertising service in the past to the new IMC service. There were 6 major methods that advertising agencies in Thailand adapted themselves to implement IMC as follows: establishing new departments or team to provide extended services, reorganizing firm structures, establishing new firms, forming business alliances, taking over other firms, and merging with other firms (see Table 2).
  16. 16. 16 For establishing new departments or team to provide extended services, the research found that there were 10 advertising agencies or 35.7% of total that followed this strategy. DY&R, implemented IMC by setting up a department called “Total Communication” responsible for the coordination of all departments such as graphic design, public relations, sales promotion, event marketing, database, accounting, finance and “Total Media”. The “Total Media” department was responsible for the planning and the selection of in-house services in order to facilitate the planned IMC and coordinate with strategic planning department to achieve the IMC target (“Agency khuern...,” 1997). Ogilvy & Mather set up the “360 Degree Brand Building” team in 1998 (Thanapaisarnkij, 1999) and the Interactive Group in 1999 in order to integrate the media (Pongtharanont, 1999). J. Walter Thompson formed several departments, i.e. Thompson Connect providing direct marketing service, Thompson Interactive providing new types media and Digital Media, e.g. CD-Rom, multimedia and web sites, etc., Thompson Pro Mor providing concept design in sales promotion, Thompson Design, and Thompson Impact. These five departments were set up in 1999 and managed independently to provide full services responding to the needs of clients (Capra, 1999a, 1999b, 1999c). In 2001, it formed 2 new departments, i.e. Thompson Expresso providing web-site design and Thompson Public Relations providing PR service (Capra, 2001). Moroever, in 2000, J. Walter Thompson brought senior manager responsible for IMC in Australia to be in charge of IMC in Thailand (Capra, 2000). McCann-Erickson provided new service—Interactive in 2000 (“Agency tuen...,” 2000). Grey Worldwide: Thailand set up Strategic Planning team to strategically plan brand building via IMC in 2000. Better Impact Communication (BIC) created a new position called “IMC Strategic Director” in 2000 (Techakana, 2000).
  17. 17. 17 Table 2: The Adjustment of Advertising Agencies in Thailand to Implement IMC Total Type of Adjustment by Advertising Agencies to Implement IMC Year n (%) Establishing new departments or team to provide extended services. DY&R established Total Communication department 1994 Ogilvy&Mather established “360 degree Brand Building” team 1998 Ogilvy&Mather established interactive group 1999 J. Walter established new departments: Thompson Connect, Thompson Interactive, Thompson Promor, Thompson Design, and Thompson Impact 1999 J. Walter Thompson brought senior manager responsible for IMC in Australia to be in charge of IMC in Thailand 2000 J. Walter established new departments: Thompson Expresso and Thompson 10 Public Relations 2001 McCann provided Interactive service 2000 (35.7) Grey Worldwide: Thailand established Strategic Planning team 2000 BIC appointed IMC Strategic Director responsible for IMC 2000 Lowe established new departments: Consumer Activation and Corporate Communications 2001 TBWA (Thailand) established new departments: Taquilar and Interactive 2001 CVT&Bercia appointed 2 senior managers responsible for IMC 2001 Leo Burnett established new departments: Leo Activition Promotion, Leo Activition PR, and iLeo 2003 Reorganizing firm structures. Leo Burnett reorganized its organization 1993 DY&R reorganized its organization 1994 5 Spa Advertising changed from vertical-styled to horizontal-styled management 1999 (17.9) TBWA (Thailand) invested more in technology and personnel 2001 Lowe Limited reduced work forces 2002 Establishing new firms. BIC established BIP and BIB 1997 Grey Worldwide: Thailand established new firms: Grey Direct Interactive, 4 MediaCom and Witch Bank Art 1998 Creative Juice/G1 established Emerald Biz 2001 (14.3) Euro RSCG established Euro RSCG Public Relations and a new firm providing marketing communications service 2001 Forming business alliances. Netscop worked with outside supporting team 1997 CVT&Bercia allied with small advertising agencies 2000 4 Creative Juice/G1 allied with media house and production house 2001 (14.3) DY&R allied with Nine East 2001 Taking over other firms. Euro RSCG took over Direct Impact and Strike Force 1999 Saatchi&Saatchi took over other agencies specialized in each field 2003 4 Ogilvy&Mather took over other agencies specialized in each field 2003 (14.3) DY&R took over other agencies specialized in each field 2003 Merging with other firms. 1 Euro RSCG announced the merger with Flagship 2003 (3.6) 28 Total n (%) (100.0)
  18. 18. 18 Moreover, Lowe Limited set up two new departments, Consumer Activation and Corporate Communications in 2001. Consumer Activation department provided strategic planning service in sales promotion activities and advertising, while Corporate Communications department provided communication service for image building. The new departments generated up to 20% of total revenues while the remaining revenues still came from advertisings (Vanasin, 2003). TBWA (Thailand) provided new customer relation service under the name “Taquilar” and interactive business in 2001. Taquilar provided other services in IMC, which advertising could not deliver, e.g. activity-based marketing, sales promotion and database marketing (“TBWA...,” 2001). With the aim to increase the effectiveness of IMC implementation, CVT & Bercia had two senior managers responsible for this service. This would raise the effectiveness of IMC by integrating all the services to be responsible by a couple of senior management, which is easier in terms of control and evaluation (Watcharathanont, 2001). Leo Burnett created three new divisions called Leo Activition Promotion, Leo Activition P.R. and iLeo. Leo Activition Promotion was responsible for sales promotion and marketing activities, and Leo Activition PR was responsible for strategic PR service, while iLeo provided CRM service (Rojmetha, 2003). This research also found that there are 5 advertising agencies or 17.9% of total samples that reorganized their firm structures. Leo Burnett reorganized their organization in 1993 by providing services in advertising, public relations, sales promotion and direct marketing (“Agency khuern...,” 1997). DY&R made major organization restructure and Mr. Dolachai Boonyarattawej was promoted to be the Chairman of DY&R group and Mr. Parames Rajchaiboon became the Executive Chairman of DY&R group (“Agency khuern...,” 1997).
  19. 19. 19 Spa Advertising, a local advertising agency, used to have a vertical-styled management, which had several layers of management resulting in a slow decision process unable to cope with the fast changing competitive environment. The new structure was a horizontal-styled management, which had top executive working directly with customer services department and creative department (Chumpunpong, 1999). In order to implement IMC in 2001, TBWA (Thailand) reorganized its structure by expanding business and investment in terms of technology and personnel (Chumpunpong, 1999). On the other hand, Lowe Limited focused on the reduction of work forces. In 2002, it reduced its work forces by 15% from the existing 200 persons and made their staffs working more closely with clients (Vanasin, 2003). For the firms that established new firms to implement IMC, there were 4 advertising agencies or 14.3% of total samples that followed this strategy. BIC set up two new subsidiaries--Better Impact Presentation (BIP) in television business and Better Impact Broadcasting (BIB) in radio business, in order to support clients (“Agency khuern...,” 1997). In the middle of 1998, Grey Worldwide: Thailand established Grey Direct Interactive, MediaCom, and Witch Bank Art. (Lumliengpol, 2000). Creative Juice/G1 established Emerald Biz to provide IMC service (Boonyoungyuen, 2001). In 2001, Euro RSCG created Euro RSCG Public Relations responsible for public relations and another company responsible for marketing communication service (Howell, 2001). There were 4 advertising agencies or 14.3% of total samples that formed business alliances. Netscop, a small-sized advertising agency, worked with outside supporting team (Kitikup, 1997a). CVT & Bercia allied with small advertising agencies (Nithiwannakul, 2000). Creative Juice/G1 worked with several business alliances including media house and production house to support their business base and provide a full service more effectively in 2001 (Boonyoungyuen, 2001). DY&R provided IMC service to the Stock Exchange of
  20. 20. 20 Thailand by working with its alliance called Nine East in 2001 (The Stock Exchange of Thailand, 2001). There were 4 advertising agencies or 14.3% of total samples that took over other firms. In 1999, Euro RSCG took over Direct Impact, a specialist in direct digital and database marketing (Howell, 2000, 2001). Moreover, major advertising agencies like Ogilvy & Mather, DY&R, and Saatchi&Saatchi also took over other agencies specialized in each field since major clients usually hired experts from various fields to work with their product managers in each brand. Those experts usually had limited knowledge about other communication tools that they hardly used (Wattana, 2003). Only 1 advertising agency or 3.6% of total samples merged with other firms. Euro RSCG announced the merger with an advertising agency called Flagship in order to integrate the strong points of both firms and provide a true full service (Waiyakornwilard, 2003). Applications of IMC Tools in Thailand This researcher divided communication tools to implement IMC in Thailand into 9 major categories as the followings: advertising, public relations, direct marketing, event marketing, sales promotion, in-store marketing, word of mouth, personal selling, and packaging. This research found that advertising agencies utilized advertising and public relations the most. There were 11 firms or 100% of total samples that used advertising and public relations and 8 firms or 73% of total also used “direct marketing” tool. There were 7 firms or 64% of total samples that used event marketing and sales promotion and 3 firms or 27% of total also used “in-store activities” tool. For word of mouth, personal selling, and packaging, only 1 firm or 9% of total samples applied these tools, which considered not as commonly used as other tools as can be seen in Table 3.
  21. 21. 21 Table 3: Application of IMC Tools in Thailand IMC Tools Advertising Agencies Public Direct Event Sales In-store Word of Personal Advertising Packaging Relations Marketing Marketing Promotion Activities Mouth Selling Ogilvy&Mather Lowe Limited Grey Worldwide: Thailand TBWA (Thailand) Leo Burnett Euro RSCG J.Walter Thompson CVT&Bercia DY&R Integrated Group Netscop n 11 11 8 7 7 3 1 1 1 (% of total numbers of advertising (100) (100) (73) (64) (64) (27) (9) (9) (9) agencies)
  22. 22. 22 Furthermore, the researcher had gathered information on media used for marketing communication tools in Thailand in details to show the board pictures of individual tools as the followings: “Advertising” tools in Thailand composed of advertising through different media including TV commercial, radio, newspaper, magazine, theater, internet, cut- out (at BTS—an electric train), bus-body, bus-back, bus-side, bus station, billboard, building ad or sky ad, front of elevator ad, mirror ad in the toilet, CD, multimedia, upcountry open-air cinema for selling products, postcard, leaflet or brochure. On-line advertising could also be used by advertising in the special section of famous web sites, e.g. Yahoo, via banner ads located on web page, roadblocks that internet users had to pass through in order to get to other pages, push program that showed advertising to users while the server transmitting data, interstitial and interstitial ad that put advertising between the two web pages or pop-up interstitial that pop-up and then disappeared after 5-15 seconds. Public relations means the creation of activities to support or maintain the good image of products and send message to target group in the form of news without paying for it such as press release, lobbying, press conference, academic conference and scholarship hand-out ceremony. “Direct marketing” or one-to-one marketing in Thailand includes direct- response advertising and direct selling or direct sales with personal sales or door-to- door sales. There are two types of telemarketing or telemarketing catalogs, which are in-bound telemarketing that clients call the firms to order and out-bound telemarketing that firms contact clients or target group to persuade them to order (tele-sales). The out-bound telemarketing can be done via call center or hotline to answer questions, sending direct mail, fax, voice mail, email, sending catalogs in
  23. 23. 23 printed format, CD, VDO or internet. Websales can be done through corporate web site or marketing web site created to bring clients close to the sales or other marketing benefits in the forms of online-marketing or E-commerce and E-marketing. IMC strategists interested in direct marketing must study and consider the differences in data before the data can be used effectively. Marketing database is the interactive direct marketing approach via any media or channels to reach target group with individual characteristics effectively. Marketing database usually composes of demographic data geographical data, psychological data, life styles and historical purchasing pattern of target group (Lohthongkum, 2002). Event marketing or event sponsorship can focus on product, corporate and community events. Event marketing means the use of special event or activity to create the center of attention and the opportunity to expose to the product as well as the connection between brand and target group. There are two main methods in event marketing which are created events such product launching and anniversary celebration of corporate or product and participating events, which are organized by others such as trade show, or expo that many firms bring their products to participate in such events. Both methods can lead to three objectives which are product events, corporate events, and community events (Lohthongkum, 2002). Event marketing brings brand into customers’ life styles and share the same experiences between target group and brand, so sometimes it is called Life style marketing or the special event (Lohthongkum, 2003). Sales promotion is the use of short-term activities to attract target group to try the product or service. The objective is to increase sales or market shares. This can be done in various forms with customers, sales staffs or stores such as discount
  24. 24. 24 coupons, special discounts, testing booth, product samples, premiums, sweepstakes and contests. “In-store activities” include the design of show rooms or points of sale and point of purchase (POP) communication by using poster, symbol, indoor and outdoor banner, shelf-talker, counter card, and display, shopping-cart advertising, P-O-P radio, case header, computerized consumer interactive displays, concept shop, stickers attaching to different places, product demonstration, TV media at P-O-P, uniform, door and window interior, double faced headers, dump bin for sales items, figures, flagging devices, mascot, product jumbo, product miniature, sign lighted indoor and outdoor, super graphic, table tents, wobbles, merchandising, and moving media, e.g. umbrella, cap, key chains and bags. “Word of mouth” is the personal communication channel, which includes direct communication between 2 persons or more, public speech, telephone conversation or e-mail (this channel is effective when there is an opportunity to present and have personal feedback), advocate channels that sales staffs make contacts with target group, expert channels that independent experts give speech to target group, and social channels that include friends, neighbors, and family members talking to target group. Buzz is the power to stimulate communication channels through social group to introduce product and service. Personal influence can be effective in 2 situations. The first situation is when the product is expensive, high risk or regularly used since buyers need to get very detailed information. The second situation is when the product is associated with status and personal taste of customers, so the buyers need to consult with others to avoid losing face (Wattana, 2003). Personal selling is done by sales staffs or sales promoters using their personal persentation. Sales staffs need to be trained in terms of personal communication skills
  25. 25. 25 to persuade target group to buy or try using the product. Last, packaging has also been used as one of the tool to implement IMC in Thailand. SUMMARY AND DISCUSSION IMC has been popular with advertising agencies in Thailand. IMC was first introduced in Thailand by international advertising agencies, e.g. Leo Burnett and DY&R during 1993-1994. This could be due to the fact that Thai advertising was closely similar to, and heavily influenced by, American advertising in terms of how agency professionals in both countries work and manage their occupations (Punyapiroje, Morrison, & Hoy, 2002). In 1998, after the Asian Crisis that hit Thailand severely in terms of economic recession and the total advertisings expenses by the large advertising agencies decreased by 17% as compared to those in 1997 (Mahamontri, 1999). This situation forced both international and local advertising agencies to make adjustment by implementing IMC following the world trend. Moreover, the top three advertising agencies in 2002 in terms of revenues were Lowe Limited, Ogilvy & Mather, and McCann (The Advertising Association of Thailand) were all found to have implemented IMC. The traditional advertising always focus only with advertising related to creating, producing and placing advertisements. On the contrary, in order to implement IMC effectively, modern advertising agencies have made 6 major adjustments to enhance their services. Majority of them (35.7% of total) chose to establish new departments or team to provide extended services to complete the IMC. 17.9% of them chose to reorganize firm structures. The other three adjustments were establishing new firms, forming business alliances, and taking over other firms. The merging with other firms was used the least or accounted for only 3.6% of total firms.
  26. 26. 26 The results were consistent with the research on the adjustment of advertising agencies to implement in South Africa by Kallmeyer and Abratt (2001) that most of advertising agencies had experienced organizational changes within the past five years. The differences were that most advertising agencies in South Africa or 17% of the total samples formed international alliances, another 17% were organized into account teams, 15% were affected by an acquisition and 14% increased the number of departmental specialists. 13% of the total samples outsourced a number of activities, 10% merged with another agency, 8% downsized, and 6% unbundled departments. However, it should be noted that major advertising agencies in Thailand, e.g. DY&R, Ogilvy&Mather, Grey Worldwide: Thailand, Lowe Limited, TBWA (Thailand), Euro RSCG, BIC, CVT Bercia, and Creative Juice/G1 used more than one method in the adjustment process. The researcher also found that advertising agencies applied “advertising” and “public relations” activity as the main IMC tool. Every firms used advertising in all forms of TV commercial, radio, newspaper, magazine, theater, internet, cut-out (BTS—an electric train), bus-body, bus-back, bus-side, bus station, billboard, building ad or sky ad, front of elevator ad, mirror ad in the toilet, CD, multimedia, upcountry open-air cinema for selling products, postcard, leaflet or brochure, and on- line advertising. For public relations, agencies used press release, lobbying, press conference, academic conference, and scholarship hand-out ceremony. Furthermore, IMC tools in Thailand included direct marketing, event marketing, sales promotion, in-store activities, word of mouth, personal selling, and packaging. Most of the tools are below the line activities. However, the below the line activity could continue to have high growth in the future since more firms have found this to be a good
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