Exploring an IMC Evaluation Model
Testing an IMC evaluation model: The impact of
brand equity and the company's reputation on revenues
Yungwook Kim, Ph. D.
College of Journalism and Communications
PO Box 118400
University of Florida
Gainesville, FL 32611
(H) 352- 846-5152
[log in to unmask]
Submitted to the Advertising Division
The AEJMC Conference, New Orleans
April 1, 1999
Testing an IMC evaluation model: The impact of
brand equity and the company's reputation on revenues
This paper is trying to establish the relationships among variables in
communications, especially between advertising and public relations, and to
evaluation model for integrating the effects of communication activities in the
integrated marketing communication (IMC).
For testing, a new approach for integrating the effects of communication
activities was introduced and the IMC evaluation model was specified. The
proposed model was tested with existing secondary data. The outcomes indicated
that both brand equity and the company's reputation have significant impact on
revenues and showed the positive relationship between brand equity and the
company's reputation in the proposed model to justify the need of IMC in
Integrated Marketing Communications (IMC) and Integrated Communications:
Advertising and Public Relations (ICAP) have been buzz-words of the 90s (Miller
1994). Overheated and somewhat malicious debates have caused deeper
misunderstandings and misinterpretations of IMC.  A so-called "turf war"
relations, advertising, and marketing scholars has obstructed the productive
new trends and the application of new strategic approachs (Duncan, Caywood, &
Newsome, 1991; Ehling, White, & Grunig, 1992; Kotler & Mindak, 1978).
In the advertising literature (Duckworth, 1991), the role of advertising
is clearly said
to manipulate the consumers' perception related to a brand. However, mainly
relations scholars strongly negate the function of manipulating the public. They
manipulation is a one-way communication and only used in the primitive publicity
and the public information stage (Grunig & Hunt, 1984).
In fact, the understanding between advertising and public relations is a
key to the
development of IMC. Advertising and public relations are basically discrepant on
approach the consumer. However, reconciliation becomes possible in the state of
evaluation. Even though strategies and approaches are different, the ultimate
public relations and advertising is the same for the bottom-line impact.
In reality, both types of practitioners have utilized the new approach
services for clients, rather than adhering to a tradition (Niederquell, 1991;
Tortorici, 1991; Novelli, 1990). Thus, IMC has become a far-famed word among
practitioners despite of theoretical debates among academicians. This study is
that aims at the coordination of theory and reality, as well as the search for
reconciliation between both sides.
The purpose of this paper is to clarify the relationships among variables
in IMC and
to establish the IMC evaluation model for integrating the effects of corporate
communication activities. This effort, in the long run, may create the much
cooperation between public relations and advertising.
Advertising evaluation research
Problems in previous research. Previous research in economic efficiency
investigated the direct effect of advertising expenses on sales (Montgomery &
Palda, 1964; Palda, 1964; Simon, 1970; Simon & Arndt, 1980). This early
work commonly lacked the consumers' psychological process, and only dealt with
consumers as an aggregate outside the economic meaning.
The mediating variables in advertising effects (Petty & Cacioppo, 1981)
disregarded in the advertising-company returns response. The explanation of how
advertising prompts sales was always insufficient.
The long-term purpose of advertising may be increasing sales, however,
of advertising campaigns usually lies in increasing awareness, recall,
attitude, and behavior (Belch & Belch, 1995). All short-term objectives are
variables in advertising evaluation and related to increasing brand-related
increasing brand power against consumer choices should be considered as a
variable between advertising expenses and sales.
Despite the early attention on the advertising-sales response function
Telser, 1962; Palda, 1964), research failed to provide any conclusive results
Mediating variables and the company's returns. Among possible processing
variables, brand equity was chosen as the most embracing variable in this paper.
equity has been the focus of marketing research and advertising research (Aaker,
Aaker & Biel, 1992; Cobb-Walgren, Ruble & Donthu, 1995). Brand equity can be
as the "added value" of a brand to a product.
From the consumer's perspective, brand equity is the cumulative image of
in view of consumers. The consumer's attitude is affected by many attributes
company image (Biel, 1992). Also, brand equity includes consumers' brand image,
and all nonconventional asset values. Thus the concept of brand equity embraces
consumers' psychological judgment such as willingness to pay for a branded
all image factors (Biel, 1992). In the broad sense, the company's image and
can go together from the view of the consumer.
Related to psychological proxies for sales, brand equity can be enhanced
"brand association, perceived quality, and use experience" by advertising
& Sullivan, 1993, p. 33). Also, advertising affects consumers' perceptions and
about product (Hoch & Ha, 1986; Aaker & Shansby, 1982), brand preference (Cobb-
Walgren, Ruble, & Donthu, 1995), attitudes (Farguhar, 1989), and intention to
(Nelson, 1974; Cobb-Walren, Ruble, & Donthu, 1995). Advertising activities
value of brand equity through diverse psychological processes.
In his conceptualization of customer-based brand equity, Keller (1993)
the effect of brand knowledge on traditional outcome measures such as sales.
knowledge includes brand awareness and brand image. From the consumers'
brand equity as psychological indicators and sales are closely related.
Cobb-Walgren, Ruble, & Donthu (1995) tried to integrate the psychological
physical effects of advertising and other information sources using brand
research related to brand equity has been divided into two methodologies of
brand equity: financial valuation or consumers' psychological features such as
image, brand association, preference, and attitude (Aaker, 1992).
In Cobb-Walgren et. al. (1995), the advertising expense and the level of
showed a positive relationship. However, brand equity was used as a mediating
for measuring brand preference and purchase intention in their study. Their
conceptualization started with the relationship of advertising, brand equity,
and sales, but
did not report the relationship of brand equity-sales in the analysis.
The goal of advertising is to enhance the brand value among consumers or
brand equity (Aaker, 1991; Aaker & Biel, 1992). Also, the direct function
equity and the company's bottom-line could be established because brand equity
both the psychological and economic meanings.
In clarifying the volume of brand equity, advertising texts insist that
usually enhances the effectiveness and efficiency of marketing activities and
margins due to higher perceived quality and brand royalty as its firm-side
(Aaker, 1992; Belch & Belch, 1995).
Also, Kim's (1998) model that described the two-way relationships among
advertising expense, brand equity, and the company's returns was tested and
positive relationship between brand equity and the company's revenues.
Based on previous discussions, a hypothesis is established (see also
H1) The level of brand equity has a positive relationship to the company's
Insert Figure 1
Public relations evaluation research
Public relations goals. Hon (1997a) interviewed 32 practitioners and 10
organization heads and revealed the importance of public relations in the
level. In those interviews, attributes of public relations effectiveness were
defined by risk
management, building relationships, media relations, earning respect, increasing
understanding, goal achievement, affecting legislation, and disseminating
From the results of Hon's (1997a) interviews, this research considers
relationships and earning respect as two major dependent variables for public
effectiveness. In another study conducted by Hon (1997b), the CEOs believed that
ultimate goal in public relations is "communicating the image of the
Grunig (1993) suggests three dependent variables of public relations
image of the public, relationship with stakeholders, and satisfaction with
Because of bad connotative meanings implied in public relations, he replaced
'symbolic relationship.' He used symbolic relationship as the object of
relations, and behavioral relationship as the object of macro-level public
Corporate image represents the summed perception about an organization
1990). Public relations academicians often do not like to use the term 'image'
due to its
manipulative meaning (Grunig, 1993; Cutlip, 1991). Instead, they use
'reputation' as the
better term for corporate image. As one of public relations goals, reputation is
dependent variable of public relations activities (Hon, 1997b: O'Neill, 1984).
The public relations and the organizational goal. L. Grunig, J.
Grunig, and Ehling
(1992) argued communication objectives should be connected to broader
goals. Other researchers and practitioners also agreed on the importance of that
(Bissland, 1990; Hon, 1997b; Newlin, 1991; Webster, 1990). This exploratory
is in line with the emphasis that the public relations goals should be connected
organizational goals to measure the contribution of public relations to the
In the pilot study of 92 companies in 11 industry categories, Kim (1997)
positive relationship between the company's reputation and returns across all
Using economic linear and non-linear models, the considerable amount of the
revenues could be explained by reputation. The most important indication of this
the exhibition of a positive relationship between reputation and revenue.
Assigning an economic value to the company's reputation can be an initial
developing more sophisticated and scientific methodologies of measuring
public relations. However, this study is different from the cost-benefit
directly assigns the monetary value of public relations goals. Assigning the
value, as Grunig (1998) indicated, wholly depends on intersubjective reliability
and is less
than objective. However, coefficients from the economic model testing can
weighted relationship between the company's reputation (the public relations
returns (the organizational goal) in a specific category. These coefficients can
be used in
the next step to assign the monetary value of goal achievement.
The company's revenues are chosen as the organizational goal. The public
goal (reputation) should prove its positive impact on the organization goal.
Thus, the first
hypothesis lies in the relationship between the company's reputation and
Based on previous discussions, a hypothesis is established (see also
H2) The level of the company's reputation has a positive relationship to the
Insert Figure 2 here
Need of IMC
In the vortex of restructuring and re-engineering, corporate
activities are reevaluated by the standard of accountability and bottom-line
(Gonring, 1994). IMC is a new evolution in the alignment of communication
maximizing all resources. Even though there are some disagreements about the
public relations in the context of IMC, IMC seems an inevitable trend especially
corporate communication activities.
Clients. IMC is needed also from the viewpoint of clients (Novelli,
Competitive clients insist the maximized synergy effect of all communication
Advertising and public relations practitioners should at least display their
integration effort upon clients' requests.
Consumers and publics. IMC is also a need from the viewpoint of consumers
publics (Duncan, & Everett, 1993). IMC is reorganizing communication activities
way consumers or publics look at the activity (Schultz, Tannenbaum, &
1993). Advertising, public relations, sales promotion, and direct mail can be
consumer/public-oriented communication. In fact, consumers or publics see one
picture based on what they feel, see, and hear. In fact, all communication
already unified in consumers or publics' minds.
Messages. In the context of messages, there are four kinds in IMC:
messages, inferred messages, maintenance messages, and unplanned messages
(Moriarty, 1994). The planned messages are the organization's controlled
as advertising, public relations, sales promotion, direct mail and other
activities. However, no one department in the company takes responsibility for
three messages. Instead, IMC integrates all the messages coming out of the
Those integrated efforts increase the synergy of all messages and resolve
marketing communication messages by the consistency and interactivity (Moriarty,
The bottom line impact. The companies' current communication activities
striving for effectiveness and efficiency (Gonring, 1944). Without applying the
criteria applied in other fields, communication activities cannot prove
their contribution to organization goals with the resulting impact for the
brings these perspectives together and displays how to communicate with
publics in an integrated way. Thus, IMC evaluation can be more unified for the
bottom-line than the evaluation of each communication activity and can be
all integrated effects (Gonring, 1994).
The changing role of marketing. The role of marketing has been changed
from the profit maximization paradigm to strategic partnerships with consumers
1992). The differentiation rule of whether its goal is pursuit of profit or not
marketing and public relations has lost its ground. The new marketing activities
emphasize consumer partnership. Relationship and negotiation are definitions,
from public relations (Grunig and Hunt, 1984). Webster (1992) argued the
of marketing at three distinct levels: the corporate, business, and functional
levels. Especially on the corporate level, the role of marketing managers became
that of public relations practitioners.
Social marketing, idea marketing, or cause marketing all represent some
invisible assets. This trend bolsters the promotional needs of invisible assets
company's communication activities. This is in line with the principles of IMC.
integrates all communication efforts with consumers to enhance visible and
of the company (Schultz, Tannenbaum, & Lauterborn, 1993).
Visible and invisible assets. The effects of organizational citizenship
(OCBs) on the evaluation of sales person's performance was investigated to
model between OCBs and the evaluation of performance (Mackenzie, Podsakoff, &
Fetter, 1993; Posdakoff & Mackenzie, 1994). However, the effects of OCBs at the
organizational level have not been investigated because the company's invisible
including the company's reputation and relationship with publics were not the
in marketing research. In fact, OCBs can be enlarged into the overall idea of
relations. However, current IMC evaluation has not integrated the effects from
assets such as OCBs, reputation, and relationships with publics. IMC on the
could not be connected to IMC evaluation. An IMC textbook has just recently
the consumer's behavior or the impact on the behavior of the intended audience
Tannenbaum, & Lauterborn, 1993).
Integration of Advertising and Public Relations Effects
In the context of organization-level evaluation, the ultimate goal of
and advertising is identical, that is, the contribution to the company's
returns. The IMC
approach is seriously needed at this stage. If public relations and advertising
closely related and not independent, each public relations and advertising
should be integrated and analyzed in a concurrent set in the context of IMC.
A nationwide survey showed that a company's reputation and social
significantly influences the consumers' decision-making process (Gildea,
1994-95). It also
shows the significant relationship between a company's reputation and employee
satisfaction, reputation and investment decision, and most importantly
consumer's buying decision. From the outcomes of this survey, the company's
is an influential asset for corporate and brand equity together (Gildea,
reputation has positive relationships with brand equity and the company's
Based on previous discussions, a hypothesis is established in the context
H3) Reputation as the public relations goal and brand equity as the advertising
reciprocal effects between them in the IMC evaluation model.
Other Explanatory Variables
In their meta-analysis of 276 research findings about the market
relationship, Szymansky, Bharadwaj, & Varadarajan (1993) concluded that market
had a positive effect on business profitability. However, they emphasized that
relationship could be changed by model specification errors, sample
Most studies about the relationship between market share and
positive relationships (Aaker & Jacobson, 1987; Farris, Parry, and Webster,
and Reibstein, 1979; Marshall and Buzzell, 1990).
Besides market share as the most important exogenous variable, other
can be considered. Age of brand, order of entry, current and past advertising
competitors' marketing activities have been discussed as other factors (Simon &
1993). However, market share has the sufficient explanatory power for explaining
competitive market situation. Market share only was adopted as an explanatory
for the simplicity of the model. A hypothesis related to market share is
H4) The level of market share has a positive relationship to the company's
To make IMC effective and efficient, clarifying the relationship between
(brand equity) and corporate assets (reputation) is the most imminent task. Even
IMC is the integrated effort of communication activities, each communication
its own intermediate goal. Integrating these intermediate goals into the
ultimate goals such
as profitability or revenue that is the company's goal is the essence of IMC
test all those hypotheses, the IMC evaluation model is specified. The following
proposed model for IMC evaluation (Figure 3).
Insert Figure 3
By measuring the impact of public relations and advertising expense to
relations goal (reputation) and the advertising goal (brand equity), we can
finally infer the
comprehensive model of the IMC evaluation. In this study, only the relationship
the public relations goal (reputation) and the advertising goal (brand equity)
company's returns (revenues).
The model testing was reduced from the proposed model due to the
getting data related to public relations expense. However, the relationship
equity and reputation inside the proposed model functions in the same way
the proposed model. Thus, this testing model is a subsidiary of the full IMC
model. Public relations expense and advertising expense were not included and
reputation and brand equity that were originally dependent variables were dealt
independent variables (see Figure 4). In the testing model, the relationship
share and reputation was included because the market share data were calculated
company's total revenue, not from the brand's revenue as explained in the
Tested companies could be categorized into two groups: Group 1 (the
over 50 % brand/sale ratio) and Group 2 (the companies below 50 % brand/sale
One criticism that could be suggested in the IMC evaluation model is the
between the public relations data and the advertising data. It can be assumed
companies with the strong dominance of one brand and companies with the weak
dominance of one brand have different interaction between the company's
brand equity. For example, Nike (company name: Nike) has closer relationship
the company's reputation and brand equity than Tide (company: P & G) has. Based
this assumption, further hypotheses were established.
H5) Companies with the strong dominance of one brand (Group 1) will have a
better fitting model than companies with the weak dominance of one brand
H6) This IMC evaluation model will follow the same dynamics in the companies
50 % brand/sale ratio (Group 2) as in the companies over 50 % brand/sale
Insert Figure 4
Samples. The model was tested with 76 companies and brands. Only 76
and brands equipped with both brand equity and reputation data in 1995. As an
exploratory data analysis, only one year data were used in this study. Among 77
companies and brands, 37 companies and brands had over 50 % brand/company ratios
and 39 companies and brand had below 50 % brand/company ratios.
Operationalization and data collection. All data were collected from
publications. Reputation data was collected from the results of Fortune's annual
corporate reputation survey (Fisher, 1996). For measuring returns to the
there are two options: profitability and revenue. Revenue is chosen for
company's bottom-line impact. For the revenue data, increasing rates compared to
previous year's revenue were collected. Revenue data were collected from The
500 (1996). Brand equity is measured from the incremental cash flows of the
nonbranded products. The brand equity data will be collected from the results of
magazine Financial World's annual brand equity research (Badenhausen, 1996).
As an explanatory variable, the market share was chosen. Market shares
calculated from The Fortune 500 (1996). As an explanatory variable, the market
chosen. It is impossible to conceptualize all the explanatory variables. Also,
possible explanatory variables is not recommended at all in the modeling (Farris
Buzzell, 1979). In the promotional elasticity modeling, market share is the most
explanatory variable. This study used Farris and Buzzell's operational
definition of market
share: "market share is the ratio of each business unit's dollar sales to the
total size of its
served market (p. 115)." Szymanski, Bharadwaj, and Varadarajan (1993) divided
definition of market share into absolute market share (ratio compared to total
sales in the
served market) and relative market share (the ratio compared to the largest
This research is the integration of both methods because the average number of
category was more than nine. Total size and market shares were calculated from
Data analysis. The data were analyzed using the structural equation
testing. The essence of the structural equation model is search for the fitting
can explain the variance and covariance of sample data. By using the structural
model, theory testing and establishing causality become possible. For (H5) and
multiple-group method was used because data were categorized into two groups by
brand/sale ratio: Group 1 (above 50 % brand/sale ratio) and Group 2 (below 50 %
brand/sale ratio). The multiple-group method in SEM enters two-group data
decides whether the model is applicable to multiple groups by the difference of
In Table 1, the correlations of the overall group, Group1, and Group 2
Group 1 indicated the close relationship between brand equity and the company's
reputation. Generally, Group 1 showcased the variables in model are more related
other than those in Group 2. Even in Group 2, the relationship between brand
the company's reputation showed a negative relationship.
Insert Table 1 here
The proposed model (Table 2) produced a chi-square of 0.059 (df=1,
indicating a suitable model fit. The model fitting index also indicated the
fitting (GFI=1.000, RMSEA=0.000). The modification indices did not show any
improvement by freeing any parameters. And critical difference did not show any
restriction for the model. Squared multiple correlation (SMC) for the company
was 0.243. A dependent variable's SMC is the proportion of its variance that is
by its predictors. Thus, 24.3 % of the company's revenue were accounted for by
Insert Table 2
Based on the model fit, each hypothesis was tested. Hypothesis 1 and 2
supported. Table 2 shows the parameter estimates of the proposed model. Brand
also is positively related to revenues (0.281, CR=3.445) and the company's
positively related to revenues (3.398, CR=2.997). Both coefficients showed
significant results. Hypothesis 3 also was supported. The relationship between
equity and the company's reputation showed a positive relationship (0.784,
This result justified the IMC argument. Public relations and advertising are
related in the context of corporate communications. However, hypothesis 4 was
Market share is negatively related to company returns (-0.199, CR=-2.788).
Insert Table 3
Hypothesis 5 was supported. As shown in Table 3, both Group 1 (companies
over brand/sale ratio) (GFI=0.987, RMSEA=0.000) and Group 2 (companies with
brand/sale ratio) (GFI=1.000, RMSEA=0.000) showed the perfect fit. Goodness of
(GFI) index "1" and RMSEA "0" indicate the perfect fit. As shown in regression
estimates, estimates in Group 1 showed the statistically significant results in
the level of
.05. However, estimates in Group 2 did not show any significant result and even
negative regression estimates. This means the proposed model can explain better
situation of Group 1 than in Group 2. Intuitively, companies with one dominant
interact effectively to increase the company's revenue by integrating
activities such as advertising and public relations.
Insert Table 4
Nested SEM models can be statistically compared using the difference of
values (34.942, df = 8) (See Table 4). The hypothesis that the constraints
imposed on the
proposed models are valid can be rejected. Model A is a better model than Model
explain the proposed model. This means that the parameters should be estimated
independently and each group has different parameter estimates. Hypothesis 6 was
rejected. This IMC evaluation model did not follow the same dynamics in the
with below 50 % brand/sale ratio as in the companies with over 50 % brand/sale
Generally, the outcomes of testing the proposed SEM was encouraging. The
proposed model showcased an appropriate model fit of the conveniently sampled
The proposed model that integrates public relations and advertising effects
indicated a new
direction for IMC evaluation. However, the companies with below 50 % brand/sale
did not indicate hypothesized relationships. This result appeared to come from
problem. In fact, the comparability between brand equity and the company's
can be obtained when brand equity is discussed in the aggregated company level.
companies with over 50 % brand/sale ratio were analyzed, this argument could be
satisfied. Companies with below 50% brand/sale ratio could not completely
comparability demand. However, the perfect fit with companies over 50 %
indicated the feasibility of the proposed model for future study.
This study proposed a methodology for measuring IMC evaluation. In the
organizational level, public relations and advertising effects can be integrated
into the same
goal of contribution to the organizations without much conflict. Integration is
only in view of the organizational goal. Thus, public relations dominance or
dominance using the IMC concept impairs the full function of effective
activities in the organization. Public relations and advertising have their
reputation and brand equity in this research. When each domain of communication
activities can keep up their original goals, communication activities in the
would be optimized and maximize the bottom line impact. The proposed model
this basic idea in the context of IMC evaluation.
Despite of the practical need of IMC in reality, the integration between
relations and advertising should be proceeded in a more cautious way.
essence of IMC is to maximize the organizational goal keeping the independence
communication domain such as advertising and public relations. The proposed
indicates how to evaluate IMC activities in this regard. The discussion about
organizational structures should be continued to solve the structural problem in
organization. Teaming a task force for IMC or horizontal integration could be
In any way, reconciliation among communication domains in the organizational
be the first step for this development.
As limitations of this study, first of all, this results cannot be
generalized into all the
companies in the U.S. As an exploratory study to show the possibility of the
model, this study only chose only one year data that had existing reputation and
equity data as the sample. The model analysis ignored the longitudinal nature of
The total effect of advertising and public relations over time (or lagged
effects) and halo
effects (Stone & Duffy, 1993) were not considered in this stage. The data
explains this problem to some extent. Thus, future study should be equipped with
company data and analyzed over more than one year to increase generalization.
development of databases that contain brand equity data in the company level is
for future study. Accumulating reliable data is a prerequisite for the
development of IMC
Aaker, D. A. (1991). Managing Brand Equity. New York: The Free Press.
Aaker, D. A. (1992). The value of brand equity. Journal of Business Strategy,
Aaker, D. A., & Biel, A. (Eds.) (1992). Building Strong Brands. Hillsdale, NJ:
Aaker, D. A., & Shansby, G. (1982). Positioning your products. Business Horizons
Aaker, D. A., & Jacobson, R. (1987). The role of risk in explaining differences
profitability, Academy of Management Journal, 30, 277-296.
Badenhausen, K. (1996). Blind Faith. Financial world (July 8), 50-65.
Balasubramanian, S. K., & Kumar, V. (1990). Analyzing variations in advertising
promotional expenditures: Key correlates in consumer, industrial, and
Journal of Marketing, 54 (April), 57-68.
Belch, G. E. ,& Belch, M. A. (1995). Introduction to Advertising and Promotion:
Integrated Marketing Communications Perspective. Chicago, IL: IRWIN.
Biel, A. L. (1992). How brand image drives brand equity. Journal of Advertising
Research, 32(6), RC6-RC12.
Bissland, J. H. (1984). How opinion surveys can help pubic relations strategy.
Relations Strategy. Public Relations Review, 10, 3-12.
Bocoman, R. (1989, July). Sales promotion. Marketing & Media Decisions, 24,
Botan, C. (1993). Introduction to the paradigm struggle in public relations.
Relations Review, 19(2), 107-110.
Campbell, J. P. (1977). On the Nature of Organizational effectiveness, In P. S.
and J. M. Pennings (Eds.). New Perspectives on Organizational effectiveness
248). San Francisco, CA: Jossey-Bass.
Caro, F. G. (1977). Readings in Evaluation Research. New York; Russell Sage
Cobb-Walgren, C. J., Ruble, C. A., & Donthu, N. (1995). Brand equity, brand
and purchase intent. Journal of Advertising, 24(3), 25-39.
Cutlip, S. M. (1991). Cutlip tells of heroes and goats encountered in 55-year PR
O'Dwyer's PR Services Report 5 (5): 12, 51-56.
Donohew, L. & Palmgreen, P. (1981). Conceptualization and Theory Building. G.
Stempel and B. Westley (eds.). Research Methods in Mass Communication (p.
47). Englewood Cliffs, N. J.: Prentice-Hall.
Dozier, D. M. (1984). Program evaluation and the roles of practitioners. Public
Review. 10(2), 13-21.
_______, & Ehling, W. P. (1992). Evaluation of public relations programs: What
literature tells us about their effects. In J. Grunig (Ed.), Excellence in
and Communications Management, pp. 159-184. Hillsdale, NJ: Lawrence Erlbaum
Duckworth, G. (1991). Brands and the role of advertising. D. Cowley (Ed.).
Understanding Brands. London: Kogan Page, 59-81.
Duncan, T. and Everett, S. (1993). Client perceptions of integrated marketing
communications. Journal of Advertising Research, 33, 30-39.
Duncan, T. Caywood, C., & Newsom, D. (1991). Preparing advertising and public
relations students for the communication industry in the 21st century. A
presented to the annual conference of the AEJMC, Kansas City.
Ehling, W. P. (1992). Estimating the value of public relations and communication
organization. In J. Grunig (Ed.), Excellence in Public Relations and
Management, pp. 617-638. Hillsdale, NJ: Lawrence Erlbaum Associates.
Ehling, W. P., & White, J., Grunig, J. E. (1992). Public relations and marketing
In J. Grunig (Ed.), Excellence in Public Relations and Communications
Management, pp. 357-393. Hillsdale, NJ: Lawrence Erlbaum Associates.
Eisenhart, T. (1989, July). Playing together: Marketing and communications catch
team spirit. Business Marketing, 41-57.
Farquhar, P. (1989). Managing brand equity. Marketing Research, 1(3), 24-33.
Farris, P. W., & Buzzell, R. D. (1979). Why advertising and promotional costs
cross-sectional analyses. Journal of Marketing, 43, 112-122.
Farris, P. W., Parry, M. E., & Webster, F. E. (1989). Accounting for the market
ROI relationship. Report No. 89-118, Marketing Science Institute.
Farris, P. W. & Reibstein, D. J. (1979). How prices, ad expenditures, and
linked. Harvard Business Review, 59, 173-184.
Fine, S. H. (1981). The Marketing of Ideas and Social Issues. New York: Praeger.
Fisher, A. B. (1996). Corporate reputations. Fortune (March 6). 90-96; F1-F7.
Geduldig, A. (1986). Measure for measure. Public Relations Journal, 42(4), 6-7.
Gildea, R. L. (1994-1995, Winter). Consumer survey confirms corporate social
affects buying decision. Public Relations Quarterly, 20-21.
Gonring, M. P. (1994). Putting integrated marketing communications to work
Public Relations Quarterly, 39(3), 45-48.
Grunig, J. E. (1993). Image and substance: From symbolic to behavioral
Public Relations Review, 19(2), 121-139.
Grunig, J. E., Dozier, D. M., Ehling, W. P., Grunig, L.A., Repper, F. C., &
(1992). Excellence in public relations and communication management.
Lawrence Erlbaum Associates.
Grunig , J. E. & Hunt, T. (1984). Managing public relations. New York: Holt,
Grunig, J. E. & Grunig, L. A. (1998b, in press). The relationship between public
and marketing in excellent organization: Evidence from the IABC. A
manuscipt for the
special edition of the Journal of Marketing Communications.
Grunig, L. A., Grunig, J. E., & Ehling, W. P. (1992). What is an effective
Grunig (Ed.), Excellence in public relations and communications management
90). Hillsdale, NJ: Lawrence Erlbaum Associates.
Hoch, S., & Ha, Y. (1986). Consumer learning: Advertising and the ambiguity of
experience. Journal of Consumer Research, 13, 221-233.
Holmes, P. A. (1996, April 18). What is more important than who. Inside PR, 2.
Hon, L. (1997a). What have you done for me lately? Exploring effectiveness in
relations. Journal of Public Relations Research, 9(1), 1-30.
Hon, L. (1997b, July). Demonstrating effectiveness in public relations: Goals,
and evaluation. Paper presented at the Association for Education of
Mass Communication, Chicago.
Keller, K. L. (1993). Conceptualizing, measuring, and managing customer-based
equity. Journal of Advertising, 57, 1-22.
Kim, Y. (1997, November). Measuring efficiency: The economic impact model of
reputation. A paper presented to the Public Relations Society of America
Kim, Y. (1998, March). Advertising expenditure, brand equity, and returns: The
integration between psychological effectiveness and economic efficiency. A
presented to the American Academy of Advertising Conference, Lexington,
Kirban, L. (1983). Showing what we do makes a difference. Public Relations
Kotler, P., & Mindak, W. (1978). Marketing and public relations: Should they be
or rivals. Journal of Marketing, 42, 13-20.
Kotler, P., & Zaltman, G. (1971). Social Marketing: An approach to planned
change. Journal of Marketing, 35, 3-12.
Lindeborg, R. A. (1994, Spring). The IABC Excellence Study: Excellence
communication. Public Relations Quarterly, 5-11.
Lindenmann, W. K. (1988). Research, evaluation and measurement: A national
perspective. Public Relations Review, 16(2), 3-16.
Luck, D. (1974). Social marketing: Confusion compounded. Journal of Marketing,
Mackenzie, S. B., & Podsakoff, P. M., & Fetter, R. (1993). The impact of
citizenship behavior on evaluations of salesperson performance. Journal
Marken, G. A. (1990). Corporate image - We all have one, but few work to protect
project it. Public Relations Quarterly (Spring), 21-23.
Marshall, C. T., & Buzzell, R. D. (1990). PIMS and FTC line-of-business data:
A comparison. Strategic Management Journal, 11(May-June), 269-282.
McElreath, M. P. (1977). Public relations evaluative research: Summary
Relations Review, 3(4), 129-136.
McKenna, R. (1991). Marketing is everything. Harvard Business Review, 69, 65-79.
Miller, D. A., & Rose, P. B. (1994, Spring). Integrated communications: A look
instead of theory. Public Relations Quarterly, 13-16.
Montgomery, D. B., & Silk, A. J. (1972). Estimating dynamic effects of market
communications expenditures. Management Science, 18(10), 485-501.
Moriarty, S. E. (1994, Fall). PR and IMC: The benefits of integration. Public
Narasimhan, C., Neslin, S. A., & Sen, S. K. (1996). Promotional Elasticities and
characteristics. Journal of Marketing, 60, 17-30.
Narkra, P. (1991, Spring). The changing role of public relations in marketing
communications. Public Relations Quarterly, 42-45.
Neisser, D. (1997). Integration: Myth and necessity, integrated communications.
Brandweek, 38(8), 26-28.
Nelson, P. (1974). Advertising as information. Journal of Political Economy, 82,
Newlin, P. E. (1991, Spring). A public relations measurement and evaluation
finds the movement of the needle. Public Relations Quarterly, 35-36, 40-41.
Nickels, W. G. (1976). Marketing Communications and Promotion. Columbus, OH:
Niederquell, M. O. (1991). Intergrating the stratefic benefits of public
relations into the
marketing mix, Public Relations Quarterly, 23-24.
Norton, A. (1977). Measuring Potential and Evaluating Results. New York;
for Public Relations Research and Education, Inc.
Novelli, W. D. (1989-1990, Winter). One-stop shopping: Some thoughts on
marketing communications. Public Relations Quarterly, 7-9.
O'Neill, H. W. (1984). How opinion surveys can help public relations strategy.
Relations Review. 10. 3-12.
Palda, K. S. (1964). The Measurement of Cumulative Advertising Effects.
Cliffs, N. J.: Prentice-Hall.
Petty, R. E.,& Cacioppo, J. T. (1981). Attitudes and Persuasion: Classic and
Contemporary Approaches. Dubuque, Iowa: Wm. C. Brown.
Posdakoff, P. M., & Mackenzie, S. B. (1994). Organizational citizenship
sales unit effectiveness. Journal of Marketing Research, 31, 351-363.
Rossi, P. H., & Freeman, H. E. (1993). Evaluation: A systematic approach.
Schmalensee, R. (1972). The Economics of Advertising. Amsterdam: North Holland.
Schultz, D. E., Tannenbaum, S. I., & Lauterborn, R. F. (1993). Intergrated
Communications: Pulling It Together & Making It Work. Lincolnwood, IL: NTC
Scriven, M. (1967). The methodology of evaluation, in Perspectives of Curriculum
Evaluation. American Educational Research Association Monograph Series on
Curriculum Evaluation. Chicago: Rand McNally, pp. 39-83.
_____. (1991). Evaluation Thesaurus, Fourth Edition. Newburry, CA: Sage.
Seashore, S. E., & Yuchman, E. (1967). Factorial analysis of organizational
Administrative Science Quarterly, 12, 372-395.
Simon, J. L. (1970). Issues in the Economics of Advertising. Chicago, IL:
Simon, J. A., & Arndt, J. (1980). The shape of the advertising response
of Advertising Research, 20(4), 11-28.
Simon, C. J., & Sullivan, M. W. (1993). The measurement and determinants of
equity: A financial approach. Marketing Science, 12(1), 28-52.
Strenski, J. B. (Spring, 1991). Marketing public relations sells case studies
Public Relations Quarterly, 25-26.
Schultz, D. E., Tannenbaum, S. I., & Lauterborn, R. F. (1993). Integrated
communications: Pulling it together & making it work. Lincolnwood, IL: NTC
Szymansky, D. M., Bharadwaj, S. G., & Varadarajan, P. R. (1993). An analysis of
market share-profitability relationship. Journal of Marketing, 57, 1-18.
Telser, L. G. (1962). Advertising and Cigarettes. Journal of Political Economy,
Tichenor, P. J., Donohue, G. A., & Olien, C. N. (1977). Community research and
evaluating community relations. Public relations review, 3(4), 96-109.
Tortorici, A. J. (1991). Maximizing marketing communications through horizontal
vertical orchestration. Public Relations Quarterly, 36(1), 20-22.
Webster, F. E. (1992). The changing role of marketing in the corporation.
Marketing, 56, 1-17.
Weiss, C. H. (1972). Evaluation Research: Method of Assessing Program
Englewood Cliffs, N. J.: Prentice-Hall.
West, D. C. (1985). Advertising expenditures by industries: A long-run
International Journal of Advertising, 4, 32-339.
Advertising Brand (H1)
expenses (X1) equity (Y1) +
Figure 1. A model showing the relationships between advertising expenses,
brand equity, and the company's returns.
Public relations Reputation (H2)
Figure 2. The process of public relations evaluation in the organizational level
PR Expense Reputation
Advertising Brand (2
Figure 3. The proposed model for IMC evaluation
Note. ------- : testable relationships.
Market share Revenues
Figure 4. The simplified model for testing
The sample correlation of overall group, group1 (over 50% brand/sale ratio), and
group2 (below 50% brand/sale ratio)
Overall group Reputation Brand equity Market share
Brand equity 0.029 1.000
Market share 0.521 -0.028 1.000
0.372 0.163 1.000
0.577 0.024 1.000
Revenue 0.192 0.366 -0.154 1.000
0.375 0.555 -0.172 1.000
The results of the SEM testing with overall companies (n=76)
Brand equity ( Revenue 0.281 3.445
Reputation ( Revenue 3.398 2.997
Market share( Revenue -0.199 -2.788
Brand equity ( Reputation 0.784 4.012
Market share ( reputation 12.472 0.446
Brand equity 211.160 6.124
Reputation 1.508 6.127
Market share 378.388 6.124
Error1 105.386 6.124
Degree of freedom 1
Squared multiple correlation 0.243 (24.3%)
Note. Other possible alternative models such as the relationship between market
and brand equity were tested after checking the modification indices
difference indices. However, no other models showed better model fits
proposed model and those results are not reported here.
1 Critical ratios are calculated by (estimate / Standard deviation).
ratios bigger than 1.96 are statistically significant in the level of
The results of the SEM testing with Group 1 (over 50 % brand/sale ratio) and
Group 2 (below 50 % brand/sale ratio)
Group 1 (n=37) Group 2 (n=39)
Brand equity ( Revenue 0.425* -0.002
Reputation ( Revenue 4.119* 1.635
Market share( Revenue -0.455* -0.089
Brand equity ( Reputation 4.167* -1.403
Market share ( reputation 4.900* 14.616
Brand equity 261.030* 133.216*
Reputation 1.516* 1.217*
Market share 135.381* 524.442*
Error1 87.129* 97.552*
Chi-square 0.967 0.022
Degree of freedom 1 1
Probability 0.325 0.882
Squared multiple correlation 0.527 0.032
GFI 0.987 1.000
AGFI 0.869 0.997
RMSEA 0.000 0.000
Note. * Statistically significant at the 0.05 level.
The multiple-group SEM analysis of Model A1 and Model B2
Estimates Model A
Chi-square 0.990 35.083
Degree of freedom 2 11
Probability 0.610 0.000
GFI 0.993 0.843
AGFI 0.934 0.715
RMSEA 0.000 0.172
Difference of Chi-square 34.048
Difference of df 9
Note. 1 Model A assumed that Group 1 and Group 2 have different parameter
Thus, Group 1 and Group 2 have different parameter estimates as shown
2 Model B assumed that Group 1 and Group 2 have same parameter
The parameter estimates indicated the same pattern with the Model A
Regression weights and variances of Model B were not reported here.
 IMC represents both IMC and ICAP. However, the integration of advertising
and public relations is dealt with mainly in this paper for the simplicity of
model development even though all communication and marketing activities are
mentioned in literature review. Advertising denotes all marketing activities.