Long-term Profit Impact Of Integrated Marketing Communications Program
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Kalyan Raman
The concept of Integrated Marketing Communications (IMC) emphasizes the role of synergy, which arises when the combined effect of multiple activities exceeds the sum of their individual effects. In this paper, we investigate the effects of synergy on the profitability of IMC programs in uncertain markets. We develop a dynamic multimedia model that incorporates both synergy and uncertainty, and use it to determine the optimal IMC program. Our results generalize previous findings to uncertain markets, illuminate the profit implications of IMC programs, and explain the catalytic effects of synergy in IMC contexts. Specifically, we find that the expected long-term profit of the advertised brand increases as synergy increases. Furthermore, managers should allocate a non-zero budget to a catalytic activity even if it is completely ineffective. Finally, these findings continue to hold in an uncertain duopoly market.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Articles in the same Issue
- Article
- Assessing Heterogeneity in Discrete Choice Models Using a Dirichlet Process Prior
- Durable Good, Extended Warranty and Channel Coordination
- The Relationship between Market Share and Information in a High-Tech Industry
- Product Entry Timing in Dual Distribution Channels: The Case of the Movie Industry
- Holding Company Cost Economies in the Global Advertising and Marketing Services Business
- Buyer Shopping Costs and Retail Pricing: An Indirect Empirical Test
- A New Approach for Capturing and Potraying the Competitive Structure of a Market: An Application To The Bush-Kerry-Nader Presidential Contest
- Long-term Profit Impact Of Integrated Marketing Communications Program
