Advertising’s Role in

Marketing

Chapter 2
 Chapter Outline
I. Chapter Key Points
II. What is Marketing?
III. The Key Players and Markets
IV. The Marketing Process
V. How Agencies Work
VI. International Marketing
VII. The Dynamics of Modern Marketing

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 Key Points
• Define the role of advertising within marketing
• Explain how the four key concepts in marketing
relate to advertising
• Identify the key players in marketing and how the
organization of the industry affects advertising
• List and explain the six critical steps in the marketing
process
• Summarize the structure of the advertising agency
industry
• Analyze the changes in the marketing world and what
they portend for advertising
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 What is Marketing?
• The way a product is designed,
tested, produced, branded,
packaged, priced, distributed, and
promoted

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 Key Concepts in Marketing
• The marketing • Marketing should focus
first on identifying the
concept needs and wants of the
customer
• Exchange • To compete effectively,
• Branding marketers must focus on
the customers’ problems
• Added value and try to develop
products to solve them

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 Key Concepts in Marketing
• The marketing • The act of trading a
desired product or
concept service to receive
something of value in
• Exchange return
• Branding • Money is exchanged for
goods
• Added value

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 Key Concepts in Marketing
• The marketing • The process of creating
a distinctive and special
concept meaning for a product
• Brand equity is
• Exchange reputation, meaning,
• Branding and value that the brand
name or symbol has
• Added value acquired over time

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 Key Concepts in Marketing
• A marketing or
• The marketing advertising activity
concept makes a product more
valuable, useful, or
• Exchange appealing

• Branding
• Added value

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 The Key Players and Markets
• The organization,
• The marketer company, or
• Suppliers and manufacturer producing
the product and offering
vendors it for sale
• The advertiser or client
• Distributors (from the agency’s point
and retailers of view)

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 The Key Players and Markets
• The marketer • Other companies that
manufacture the
• Suppliers and materials and
ingredients used in
vendors producing the product
• Distributors
and retailers

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 The Key Players and Markets
• The marketer • Various companies that
are involved in moving
• Suppliers and a product from its
manufacturer to the
vendors buyer
• Distributors
and retailers

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 Types of Markets
• Market
– Where the exchange
between buyer and seller Business-to-
Consumer
takes place business
– A particular type of
buyer
• Market share
– The percentage of the
total market in a product Institutional Channel
category that buys a
particular brand
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 Types of Markets
• Consumer
• Business-to-business (Industrial)
• Institutional
• Channel

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 The Marketing Process
1. Conduct research and develop a situation
analysis
2. Set objectives for the marketing effort
3. Assess consumer needs and wants
4. Differentiate and position the product
5. Develop the marketing mix strategy
6. Evaluate the effectiveness of the strategy

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 Marketing Mix Strategies
• The product is both the
• Product object of the advertising
• Place and the reason for
marketing
• Price • Product category
– A class of similar
• Promotion products

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 Marketing Mix Strategies
• The channels used in
• Product moving the product
• Place from manufacturer to
buyer
• Price
• Promotion

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 Marketing Mix Strategies
• Based on the cost of
• Product making and marketing
• Place the product and on
expected profit
• Price – Customary
– Psychological
• Promotion

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 Marketing Mix Strategies
• Use face-to-face contact
• Product between marketer and
• Place prospective customer
• Used to create
• Price immediate sales

• Promotion

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 How Agencies Work
Full-Service Agencies Specialized Agencies
• Include the four major • Specialize in certain
staff functions functions, audiences,
– Account management industries or markets
– Creative services – Creative boutique
– Media planning and – Media-buying services
buying
– Account planning
• Also have accounting,
traffic, production, and
HR departments
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 How Agencies Work
Account Management Creative Development
• Acts as a liaison • People who write
between the client and • People who design ideas
the agency for ads and commercials
• Responsible for • People who convert
interpreting the client’s these ideas into
marketing strategy commercials

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 How Agencies Work
Media Planning/Buying Account Planning
• Recommends to the • Gathers all information
client the most efficient on the market and
means of delivering the consumers and acts as
message the voice of the
• Responsible for buying, consumer
planning, and research • Prepares comprehensive
recommendations

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 How Agencies Work
Internal Agency Services Revenues and Profits
• Traffic department • Commission
• Print production • Fee
department • Retainer

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 International Marketing
• An international brand is available virtually
anywhere in the world
• The shift requires new tools for advertisers,
including one language, one control
mechanism, and one strategic plan
• The choice of an agency depends on the
decision to standardize messages or localize
them to accommodate local cultures

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The Dynamics of Modern Marketing
• Integrated marketing
– All areas of the marketing mix work closely together to
present the brand in a coherent and consistent way
• Relationship marketing
– Marketing that considers all the firm’s stakeholders
• Permission marketing
– Inviting prospective customers to self-select into a brand’s
target market in order to receive marketing communication

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