The role of marketing communications

At last year's Executive Licensing Conference of LIMA in Palm Springs, California, the President of Design Plus, Meyer Janet, explained:

The marriage between licensing and marketing has proven difficult because of the different origins of their management culture and because the true value of licensing as an instrument for the generation of brand awareness has never been realized or valued. This often results in the licensing department being left out of the marketing loop with regards to information and budget. Marketing departments have no problem spending millions on advertising programs, but hesitate to invest in the tools that make licensing campaigns successful because up until now there has been no way to measure their effectiveness (LIMA, 1999b).

Since increased awareness, goodwill created by the campaign, and consumer association of a property or brand are hard to measure, it is still difficult to quantify the results and effectiveness of licensing economically. Despite these kinds of uncertain elements, today this attitude has slightly changed in the heads of marketing professionals: For many companies, commercial partners, licensees and retailers alike in numerous businesses, categories, and trade channels, licensing is no longer a sideline business: it has become an important part of overall marketing strategies. Especially in marketing communications, licensing plays an important role, as this approach to business is one of the most powerful and cost-effective marketing tools available today (Battersby/Grimes, 1999, p. 190).

Definition of marketing communications

There is no generally applicable definition of the term . marketing communications. and although many interpretations of the subject exist, for a large part of marketers, DeLozier. s (1976) definition is of particular importance and is also used by The Chartered Institute of Marketing:

The process of presenting an integrated set of stimuli to a market with the intent of evoking a desired set of responses within that market set [...] and [...] setting up channels to receive, interpret and act upon messages from the market for the purposes of modifying present company messages and identifying new communication opportunities.

Most marketing practitioners and academics agree on the fact that realizing the complexity of transmission processes and in particular the concept of exchange is essential for the understanding of marketing communication processes (Berndt/Hermanns, 1993, p. 21). For an exchange to take place there must be at least two parties who are willing to participate in the exchange process and who can offer something of value to one another (Fill, 1995, p. 1). Thus marketing communication is a sharing of experience between the source or sender of a message and the recipient of that message. Due to the fact that communication gives companies the opportunity to provide their potential customers information, to make them aware of offers, as well as to remind long-standing customers of the benefits of past transactions, communication is of vital importance in all of these exchange processes. Another advantage of marketing communications is that through the images it creates, it may dissociate one brand from another. This is of particular importance in markets where there is little to separate competing products and brands (Fill, 1995, p. 2).

Traditionally, the tools of marketing communications consist of four elements: advertising, sales promotion, public relations and personal selling. However, new communication approaches have been developed in response to changing market conditions, and different tools are being used (Fill, 1995, p. 6). From the perspective of consumer-based brand equity this growth of non traditional marketing activities makes sense, since for example tools as promotional licensing are a extremely cost-effective way to affect brand knowledge and thus, ultimately, sales (Keller, 1998, p. 73).

Marketing communications, promotional licensing and brand equity

Apart from product, price, and place, promotion is one of the elements of the marketing mix, the so-called 4Ps. Without denying that there is also important communication that takes place through the other elements of the marketing mix, in this chapter the main stress is placed on promotional licensing, because of its outstanding ability to affect brand equity through brand associations, and perceived quality (Keller, 1998, p. 221).

The effects of marketing communication actions (e.g. promotional licensing) on brand equity (adapted from Keller, 1998, p. 502).

The role of marketing communications is to contribute to brand equity by establishing the brand in memory and linking strong, favorable, and unique associations to it. (Keller, 1998, p. 73). Promotion is a means to communicate the marketing offer to certain target groups, and thus, to build brand awareness and brand image (Fill, 1995, p. 4). Brand equity is the final result of this knowledge structure network built by marketing and promotional activities. These knowledge structure network can be illustrated as above.

One implication that can be drawn from this model is that through promotional licensing, consumers. may be more likely to react to measures of marketing communications and respond favorably (Keller, 1998, p. 64). In general, the number of benefits of a strong brand are obvious. Apart from greater revenues and lower costs, a brand. s ability to attract new customers, to resist competitive activity, to introduce line extensions, and to cross international borders, are the most important (Keller, 1998, p. 53).

Systems model for integrated marketing communication

As already mentioned, the benefits that result from creating brand awareness and a positive brand image can be seen on the basis of consumer response to marketing communications. One way to illustrate this response to marketing communications is the . hierarchy of effects model.

Hierarchy of effects sequence (taken from Lavidge/Steiner, 1961, p. 61)

According to Fill (1995) this model assumes that consumers move through a series of mental states, from awareness to actual purchase, on the basis of a marketing communication. The condition is that a series of mental effects must occur with the necessary fulfillment at each stage, before progress to the next stage is possible (p. 230).

The obvious difficulty in creating a successful marketing communication program lies within the fact that for a consumer to be persuaded, there cannot be any failure in any step along the way. As a result, marketers must attempt to increase the likelihood that each one of the six steps occurs (Keller, 1998, p. 220). But how is this to be achieved? As a matter of fact a marketing communications program for a brand with greater deal equity is processed differently by consumers, because it has already created some knowledge structures in consumers. minds (Keller, 1998, p. 64). This implies that by virtue of the awareness, recognition, exposure, goodwill, and strong, favorable, and unique association that an established brand, name, logo, copyright, or any other intellectual property comprise, promotional licensing is extremely valuable, as it increases the likelihood that consumers will pass through various stages of the hierarchy. It additionally has the ability to target and deliver to a particular customer, as well as to attract new customers (Battersby/Grimes, 1999, p. 190).

Developing integrated marketing communications programs

There are a number of means of creating integrated marketing communications programs. Most importantly, the entire marketing program should be designed to build a consistent and complementary brand image. This implies that any integrated marketing communications program should be evaluated along two dimensions, namely consistency and complementarity. Consistency demands that the different communication options used for creating a knowledge structure network are consistent and thus mutually reinforcing. Complementarity considerations relate to the fact that different communications options have different strengths, can accomplish different objectives, and may target different market segments (Keller, 1998, p. 257). However, the communication options should be designed such in a way such the strength of one option makes up for the disadvantages of another option. Thus, . the ideal communications program would have a large number of communication options sharing some core meaning but differing in a way to capitalize on the advantages but compensate for the disadvantages of each option. (Keller, 1998, p.  257). This is why marketers, when considering marketing communication strategies to improve brand awareness, should evaluate all possible communications options available to create knowledge structures in customers. minds.

For the strength of brand associations, the manner in which the brand elements are integrated in the various marketing communications is extremely important  (Keller, 1998, p. 74). What does that mean for implementing or managing a licensing program? By explicitly linking marketing communications to a licensed property,  stronger associations may be created. Through licensing, identifiable characters, labels, brands, names, slogans or trademarks placed in or on product packages or places of business can serve as cues or reminders to communication effects; thus consumers will pay more for a licensed product because of this recognition and image lent by the trademark, character or other identifying feature (Keller, 1998, p. 65).

Licensing programs vary depending on the property type, the goals of the licensor, the target audience as well as the available resources. Before embarking on a licensing effort, the participants should develop a certain strategy to promote or rather communicate the property to the target customers. The promotional support, which can occur at any time during the life circle of the property, can include a wide range of components, but the main element is the property itself. To succeed, the promotional tie-in should be innovative and unique. Strong promotional elements help to drive sales of licensed merchandise and help to build awareness for the property. Promotional tools (as for example promotions with packaged goods) or the use of entertainment vehicles (such as in-store concept shows, live events or personal appearances by a celebrity endorser or a costumed character) are particularly important at a property launch in order to maximize the visibility of the property (Raugust, 1995, p. 147). As these promotional tie-ins emphasize the property, they also serve to maintain its longevity by keeping consumer awareness (Raugust, 1995, p. 73). It is their advantage that they do not only retain the interest of the property. s customers, but also attract new fans. Promotional tie-ins can be appropriate for both long- and short-term properties, and will often target consumers and the trade at the same time, as it promises major advantages for both. For licensors, promotional licensing adds value to their property by generating income and by providing the property with additional exposure. For licensees, the major benefit of additional promotion of the property lies within the generation of consumer awareness and greater revenues (Raugust, 1995, p. 145).

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