Breakdown of IMC functions
To meet the IMC strategy 3 specific action plans need to be implemented:
Developing greater brand awareness through Social Networking
This strategy involves putting into action a variety of online marketing campaigns through social networking such as Facebook to increase the number of people that are aware of the HTC brand and what the company’s phones are capable of doing, by implementing such a strategy this in effect allows the company to access millions of internet users thereby resulting in the potential for more sales for the company.
Create better Consumer-Company Engagement through Online Media Sites
Websites such as YouTube have enabled companies to more easily advertise their services to a wide array of potential consumers through the creation of a variety of viral videos that appeal not only to a consumer’s sense of entertainment but also to their desire to learn more about a product. As such, by creating a significant degree of hype through YouTube and holding various contests challenging consumers to show off their use of their HTC phones, this in effect will create a significant degree of consumer-company engagement which should help to drive up sales.
Utilize online sponsorship agreements to increase knowledge about the brand and its products
The last IMC strategy goal to fulfill the objectives is to utilize online sponsorship agreements with a variety of YouTube stars to increase general public knowledge about HTC. Given the popularity of YouTube stars and the millions of views they garner daily, this means that sponsorships through them can in effect reach millions of people within a relatively short period.
As indicated by Verma, Stock & McCarthy (2012), consumers are increasingly relying on online social media as to how they make their purchasing decisions (Verma, Stock & McCarthy 2012, pp. 183-186). While it may be true that traditional methods of advertising through television commercials and print ads will continue to be a vital attribute of modern-day advertising campaigns, online social media has, as of late, risen to the same level or has even surpassed the impact of traditional advertising as a means of reaching out to consumers (Verma, Stock & McCarthy 2012, pp. 183-186). The reason behind this is quite simple, the internet has in effect provided consumers with a vast array of potential tools from which they can make informed business decisions. As evidenced by the case of product reviews on Amazon.com as well as the plethora of technology review blogs, positive online reviews through online social media is now becoming the main means by which consumers decide on what type of product to purchase (Verma, Stock & McCarthy 2012, pp. 183-186).
Not only that, the level of “hype” generated through online viral marketing campaigns and social media sites such as Facebook and Twitter has in effect enabled companies to more easily reach thousands if not millions of possible consumers. (Schelfhaudt 2012, p. 24) Combined with associated online social media services that are unique to particular smartphone brands, such as Instagram for the iPhone and the Blackberry network for RIM, this shows how a company’s utilization, as well as the provision of online social media services in effect, dictates its success in this increasingly connected world where online social media is becoming the dominant form of advertising and communication. It is based on this that HTC should attempt to develop various forms of viral marketing campaigns and promotions that specifically focus on displaying not only the brand’s greater usability as compared to other smartphones but also its ability to provide the kind of social media connectivity that people are after.
For example, various brands such as Lego and Sony have created their own YouTube channels to create not only a certain degree of hype through a variety of funny and unique videos that went viral but they were also able to create a considerable level of online discourse in which people argued either for or against their brand on the YouTube comment section (Pronschinske 2011, pp. 218-219). Since the videos on their channels have reached several million views at only a fraction of the cost of an average advertising campaign, such a strategy shows a considerable level of potential that HTC could similarly utilize with the company’s line of entertaining videos that are not only entertaining but showcase the technological prowess of the company’s smartphones (Pronschinske 2011, pp. 218-219). Combined with a greater online presence through Facebook and Twitter, it can be expected that through such a strategy HTC will be able to reach its target consumers in an efficient, effective, and above all cost-effective fashion which can easily be incorporated into its current marketing strategy.
Part 1 – The major selling point of the marketing strategy that will be utilized will focus on the fact that HTC phones while being more expensive, have better levels of performance and intersystem adjustability as compared to other phones within the market today. What you have to understand is that a lot of smartphone users these days have to choose between a smartphone that has a great deal of functionality but little flexibility in terms of being able to modify its hardware and software (as seen in the case of the iPhone) or great flexibility and adjustability but little in the way of functionality as seen in the case of the smartphones developed by Samsung which rely on the Android operating system which has a considerably lower level of functionality as compared to the IOS software for the Apple iPhone. HTC solves this by utilizing its proprietary software for all its phones which combines the functionality of an IOS interface yet has the flexibility and adjustability of an Android system as seen in the case of the HTC Sense graphical user interface which runs on the Android 4.0 system.
Not only that, it should be that aside from its better level of adjustability, HTC has numerous smartphone models to choose from to suit any manner of the consumer. One of the main problems with phone brands such as Samsung and Apple is that when it comes to smartphone diversity they tend to focus their efforts on developing smartphones that are more toward the higher end of the price spectrum for consumers. While it may be true that HTC also happens to follow a similar strategy, the fact remains that it has a wider variety of different smartphone models that contain its proprietary HTC Sense technology yet at a far cheaper price as compared to smartphones such as the Samsung Galaxy or the Apple iPhone. It is based on this that by marketing the brand’s flexible software system and the fact that there are numerous models to choose from, these two points in effect become the main selling idea that will be focused on during the marketing campaign.
In keeping with the company’s catchphrase of “quietly brilliant”, the execution technique must emphasize such a concept while at the same time attempt to attract consumers into buying an HTC phone. Based on the earlier emphasis on utilizing online social media, the execution technique when it comes to meeting the IMC objectives will focus on an appeal to the desire for consumers to patronize a phone brand that can be easily modified as need be while at the same time being functional and having multiple different types of models to suit the needs of a variety of consumers. As such, this message execution strategy will not focus on an appeal to aesthetic qualities as seen in the case of Apple, nor will it be an appeal towards flexibility as seen in the case of Samsung, rather the main focus of the message will indicate that HTC phones have a greater deal of functionality and adaptability as compared to their other smartphone counterparts. What you have to understand is that a large percentage of the smartphones found in the market today cannot be both functional and adaptable.
It is usually either one or the other wherein there are considerable constraints placed on the phone to be able to sell it at a lower price. HTC on the other hand does not advocate for such a strategy and, as such, this will be emphasized in the message that it will relay to consumers wherein the company will indicate that whenever a consumer buys an HTC smartphone they will be getting their money’s worth since not only does the company not limit the features found in the phone, it allows users to customize their experience however way they want for free unlike with other brands where consumers have to pay considerable sums to merely change the wallpaper on their phone (i.e. Apple). As such, from a certain perspective, it can be stated that the main theme of the message that this marketing strategy is attempting to convey is an appeal towards value wherein the company is telling consumers that out of all the other smartphones out there, and HTC smartphone will give them the most value for the money spent (Shu-Chuan & Yoojung 2011, pp. 47-75). This is quite true when examining the various awards and positive reviews the company has garnered over the past few years as a direct result of the innovations it placed within its devices (Shu-Chuan & Yoojung 2011, pp. 47-75).
Part 1 – The primary media type that will be utilized within this study will consist of online social media. As explained earlier, due to the ubiquitous nature of social media and the fact that it has increasingly become the primary means by which consumers communicate online, it shows great potential as a means of easily reaching large consumer groups (Hanna, Rohm, & Crittenden 2011, pp. 265-273). It should also be noted that utilizing online social media is far cheaper as compared to the millions usually spent on television commercials and print ads. Not only that, when taking into consideration the fact that printed materials are increasingly being replaced by digital content shows how online media is the new wave of the future in terms of access to both data and consumers (Hanna, Rohm, & Crittenden 2011, pp. 265-273). The advantage of online social media over other forms of marketing is directly related to the fact that its effectiveness can be measured through a wide variety of online measurement tools that allow companies to view the impact of online marketing campaigns in real-time (Hanna, Rohm, & Crittenden 2011, pp. 265-273).
For example, on YouTube the website provides not only the number of views for particular videos but even allows users to determine where the most views originate from, what time are they viewed the most, and whether or not audiences generally like the content being shown to them as evidenced by the “like” button on all the videos on the site (Chena, Fay, & Qi 2011, pp. 85-94). Such attributes are not limited to YouTube alone but also happens to encompass a wide variety of similar tools that can be placed on online social networking campaigns which in effect enables a company to quickly adjust an online marketing campaign as necessary based on the overall reactions garnered from the campaign (Chena, Fay, & Qi 2011, pp. 85-94). Online social media tools give companies an unprecedented level of control wherein they can effectively end campaigns as fast as they start them based on initial reactions. As a result, this helps to limit the potential damage ill-thought out marketing campaigns could have on a corporation’s reputation and, as such, shows the advantage this particular method has over other forms of marketing.
As explained earlier, the primary means by which this plan will try to connect with the target audience of HTC is through online social media and various methods of internet viral marketing. To accomplish this, a distinct focus will be placed on developing an online presence on YouTube wherein HTC will showcase a variety of funny yet insightful videos that depict the use of HTC phones which subsequently follow the creative strategy outlined earlier that focuses on the phone’s flexibility and as well as the variety of smartphones available. The main goals of this type of marketing tactic are not only to make sure that the videos go viral but also to create a community of followers by holding weekly contests in which the company challenges people to make their own unique yet funny videos that build upon the video content created by the company earlier. This can be accomplished by viewers submitting their videos to the company which will be subsequently posted on the company’s YouTube channel to be judged by other viewers based on the number of views each video garners. By rewarding winners with either cash prizes or free HTC phones, this would encourage a significant degree of interest in the videos on the company’s YouTube page which would result in a considerable level of publicity.
Not only that, by encouraging the development of a community of viewers towards the company’s YouTube channel by posting weekly videos that showcase a variety of interesting activities utilizing an HTC phone such as traveling to distant locations, being used in exciting events as well as other such memorable experiences that highlight the phone’s use in smart and interesting ways, the company will be able to subsequently take advantage of the development of this community by directly advertising to them through the videos which should result in increased sales. Other strategies involving online social media will take the form of providing popular review sites with models of HTC phones that are about to be released at least 2 weeks before the release date. Having these sites review the phones enables consumers to better understand what they are getting from the perspective of other consumers. Studies such as those by Chung & Austria (2010) have indicated consumer decisions for electronic goods have increasingly started to rely on online reviews as the primary method by which they make buying decisions (Chung & Austria 2010, pp. 581-586).
This is not only due to the increased popularity of online social media but by the sheer fact that consumers wish to know more about a particular product from the perspective of other consumers before purchasing it themselves (Chung & Austria 2010, pp. 581-586). It is based on this that having online review sites examine the products of the company is essential in “spreading the word” so to speak to create significant levels of interest in purchasing the phone. The last strategy involves a distinct focus on creating a more established presence for HTC on various social networking sites such as Facebook and Twitter. Various studies have shown that people increasingly rely on Facebook and Twitter to receive news and information. (Dewan & Ramaprasad 2012, p. 70) As such, by positioning the company in such a way that it is in the direct line of sight of consumers since the company would be within their online social network, this increases the likelihood of product patronage due to constant exposure to the company’s various social networking posts.
Another potential online social networking strategy that will be utilized is to focus on utilizing YouTube stars (i.e. prominent members of the YouTube community). It can already be seen that popular YouTube shows such as the Philip DeFranco Show, Epic Meal Time, as well as FPS Russia all, have considerable advertising deals with various companies such as Netflix. The reason behind this is quite simple; these shows garner millions of views per video and can in effect target a large portion of the online internet population. Not only that, when comparing the amount paid for advertising on a YouTube show as compared to what a company would normally pay if they utilized an advertisement on TV, it can be seen that advertising through YouTube stars is not only cheaper but more effective in reaching the target demographic that a particular company is going after. By combining all the methods that have been elaborated on so far with the regular marketing campaigns of the company, it can be expected that HTC could develop a considerable market advantage over its competitors who are not attempting the same marketing approach.
Year 1 estimate along with costs for an online marketing plan
|Summary of Financial plan|
|Annual unit sales||16,000,000 or more|
|Average Price Per Product||$ 200.00|
|Variable cost P/Unit (production and sales)||$ 0.97|
|Fixed costs (machine rent, maintenance, etc.)||$ 20,000|
|One-time start-up costs for filming studio (equipment, marketing, legal, etc.)||$ 300,000|
|Working capital required (receivables, inventory, etc.)||$ 20,000|
|Estimated Annual Gross Revenues and Income:|
|Annual Costs||$ 300,000|
|Annual variable costs||$ 6,000|
|Annual contribution margin||$ 12,124|
|Contribution margin per unit||$.10|
|Annual break-even quantity||10,000,000 items sold|
|The ratio of break-even to expected quantities||5%|
|Starting-up the business:|
|Total up-front funds required for promotion||$300,000|
|Additional units to cover up-front funds||$30,000|
|Break-even quantity with up-front funds||10,000,000|
|The payback period for start-up funds (in days)||375|
|Annual return on start-up investment||30%|
|The variable cost to price ratio||35.3%|
|Contribution margin ratio||58.0%|
The basis of the budget created is that at an annual cost of $300,000 and an initial upfront cost of $300,000 as well for the construction of a studio, filming equipment, and the hiring of personnel necessary for the YouTube videos, the result should be a considerable contribution towards the sale of 16 million handsets on an annual basis. After a brief calculation, it was estimated that a marketing cost of 10 cents added to the price of the phone should be more than enough to meet the budget necessary to create a constant stream of videos and online social media marketing campaigns. The contingency amount necessary for this amount is $300,000 with an initial fixed cost of $20,000 for the office equipment and computers with the remaining cash going into salaries, fees, and miscellaneous costs. All in all, $300,000 a year is a relatively modest sum when compared to the nearly $1 billion a year that companies such as Apple and Samsung have for their marketing budgets. This is indicative of the level of efficiency of online marketing campaigns that focus on the use of social media since not only can such campaigns operate with relatively few staff but they can function on a low budget allotment.
To determine whether the IMC plan and objective was a success it would be important to determine 3 specific aspects:
degree of market penetration
This aspect refers to the target market that the marketing campaign attempted to penetrate. As such, to determine how well a market was penetrated, it would be important to examine the brand knowledge, and the overall outlook consumers have towards the HTC brand.
This aspect refers to an increase in sales as a direct result of marketing efforts to increase the level of brand awareness for the company’s products.
examining demographic data
It is quite interesting to note that when it comes to online social media-based methods of marketing you can determine the level of success of a particular campaign by merely examining the number of views, re-tweets, and shares a particular video has. It is usually the case that the more views a video has, the more likely it is that it was able to reach the target demographic that the company was attempting to penetrate.
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