Advertising Exam # 1 Chapter 1: y Marketing definition o The activity set of institutions and processes for creating, communicating, delivering,

and exchanging offerings that have value for customers, clients, partners, and society at large. o Value is the customer s perception of all of the benefits of a product or service weighed against all costs of acquiring and consuming it. Integrated Marketing Channel (IMC) definition (in my words) o IMC is the coordination and integration of all marketing communication tools, avenues, functions and sources within a company into a seamless program that maximizes the impact on consumers and other end users at a minimal cost o Value of IMC:  Avoids duplication of marketing efforts  Synergy among promotional tools  More efficient and effective marketing

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Why are marketers decreasing the use of mass media advertising and increasing the use of integrated marketing communications? A) The mass market has become fragmented B) New technologies gave consumers greater control over the communication process C) Use of the Internet and electronic commerce is growing D) Explosive growth in social networking With the aid of promotional mix, IMC positions the brand in a very homogeneous way Promotional mix o Promotion: the coordination of all seller initiated efforts to set up channels of information and persuasion in order to sell goods and services or promote an idea. o Promotional Mix: the basic tool used to accomplish an organization s communication objectives o Advertising

 

Any paid form of non-personal communication(T.V, Radio, Newspaper, magazines) about an organization, product, service or idea by an identified sponsor.  No immediate feedback from audience  Benefits: advertising is the most Cost-effective form to reach Large audiences Direct marketing  In which organizations communicate directly with target customers to generate a response and/or transaction.  Direct mails, catalogs, direct response ads, telemarketing, direct selling, database management, shopping channels, and internet sales.  Direct response advertising encourages consumers to purchase directly from the manufacturer (ex: Dell) Interactive media  Allow for a back-and-forth flow of information whereby users can participate in and modify the form and content of the information they receive in real time.  Internet, Kiosks, Interactive television, Cell phones, Other mobile devices  Activities: Advertise products and services, Link ads and websites to search engines, Offer coupons, contests, sweepstakes, Conduct direct marketing, Do personal selling, Conduct public relations activities, Measure advertising and promotions Sales promotion  Marketing activities that provide extra value or incentives to the sales force, the distributors, or the ultimate consumer and can stimulate immediate sales.  Consumer-oriented sales promotion: is targeted to the ultimate user of a product or service and includes couponing, sampling, rebates, contests, and various point of purchase materials  Trade-oriented sales promotion: is targeted toward marketing intermediaries such as wholesalers, distributors and retailers. Promotional an merchandise allowance, price deals, sales contests, and trade shows are some of the tools. Publicity  Nonpersonal communications regarding an organization, product, service, or idea not directly paid for or run under identified sponsorship.  Not always under company control therefore not always positive (sometimes unfavorable)  A news story, editorial, or announcement to a mass audience which is high credible and has a low cost Public Relations  Occurs when an organization systematically plans and distributes information in an attempt to control and manage its image and the nature of the publicity it receives

The management function which evaluates public attitudes, identifies the policies and procedures of an individual or organization with the public interest, and executes a program of action to ear public understanding and acceptance.  Establish and maintain a positive image of the company among various publics  Uses publicity and other tools such as Special publications, Community activities, Fund-raising events, Sponsorships, Public affairs activities o Personal selling  Person-to-person communication in which a seller attempts to assist and/or persuade prospective buyers to make a purchase or act on an idea.  Involves direct contact between buyer and seller, either face-to-face or through some form of communication. Touch points o A touch point is any type of relationship that a company has with its customers. Therefore, the touch points can be either positive or negative.

Chapter 2 y Competitive advantage o Something special a firm does or has that gives it an edge (advantage) over competitors. o Having quality products that command a premium price, providing superior customer service, having the lowest production costs and lower prices or dominating channels of distribution. o Also it can be created through advertising that creates and maintains product differentiation and brand equity (Ex: Michelin stresses security and performance) o Nike, McDonalds, BMW, etc have competitive advantage in their markets. Target markets o The focus of the firm s marketing effort, and goals and objectives are set according to such market. o Isolate Consumers With Similar: lifestyle, social class, geographic location, economic status, needs, age, marital status, etc. (segmentation) o Dividing a market into distinct groups with common needs who respond similarly to a marketing situation o Selecting a target market: 1) Determine how many segments to enter 2) Determine which segments have the greatest potential for my product o Companies often develop different marketing strategies to satisfy different needs presented by the ultimate consumers. Market segmentation o Broad classes of buyers who have the same needs and will respond similarly to marketing actions. o Five steps:  Groups consumers according to their needs

Group the marketing actions usually the products offered- available to the organization  Develop a market-product grid to relate the market segments to the firm s products or actions  Selecting the target segments toward which the firms directs its marketing actions  Taking actions to reach the target segments Basic ways to segment a market (figure 2-4)

PAGE 50  Analyze adds who and how the add is targeting and segmenting o Prezi folder for examples (http://prezi.com/uohbnw6mdqgz/4650-chapter2/?auth_key=ebb6c718c30f7bfac77433b35d446cfb7921c092) Market Coverage Alternatives o Undifferentiated  Involves ignoring segments differences and offering just one product or service to the entire market. (EX: Ford s black Ford. One Coca-Cola for all the world) o Differentiated  Involves marketing in a number of segments, developing separate marketing strategies for each. o Concentrated  Is used when the firm selects one segment and attempts to capture a large share of this market. (Ex: L Oreal) Positioning understand and justify how a products positions o Fitting the product or service to one or more segments of the broad market in such a way as to set it apart from competition o The position of the product, service, or even store is the image that comes to mind and the attributes consumers perceive as related to it. o Types of positioning strategies: Attributes and Benefits, Price/Quality, Use/Application, Product Class, Product Users, Competitors, Cultural Symbols Repositioning o Occurs because of declining or stagnant sales or because of anticipated opportunities in other market positions.

Branding o Goals: 1)Build & maintain brand awareness and interest 2) Develop & enhance attitudes toward the company, product, or service 3) Build & foster relationships between the consumer and the brand o Brand name communicates attributes and meaning o Advertising creates and maintains brand equity which can be thought of as an intangible asset of added and/or the strength of consumer attachment to a company name, brand name, or trademark. o Brand equity creates competitive advantage for a company as well as creating higher margins and greater sales.

Chapter 3 y Advertising agency o An outside firm that specializes in the creation, production, and/or placement of the communication message and that may provide other services to facilitate the marketing and promotions process. o Reasons for using an ad agency: Highly skilled specialists, Specialization in a particular industry, Objective viewpoint of the market, Broad range of experience Agency structure systems o Centralized

 

 

The advertising manager controls the entire promotions operation, including budgeting, coordinating creation and production of ads, planning media schedules, and monitoring and administering the sales promotions programs for all the company s products or services. Pros: better communication, fewer personnel, staff continuity, more top management involvement. Cons: Hard to understand the overall marketing strategy, longer response time, Impractical for multiple brands, products, divisions

Decentralized

 

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Large corporations with multiple divisions and many different products, it is very difficult to manage all the advertising, promotional, and other functions through a centralized department. (ex: P&G, Nestle) Pros: Concentrated managerial attention, Rapid problem and opportunity response, increased flexibility. Cons: Ineffective decision making, internal conflicts, misallocation of funds, lack of authority, internal focus.

Brand manager o Is responsible for the total management of the brand, including planning, budgeting, sales, profit performance. In-house agency o To reduce costs and maintain control over the agency, some companies have set up their own agencies internally. An in-house agency is an advertising agency that is set up, owned, and operated by the advertiser o More closely tie the marketing function to top management o Reduce advertising and promotions costs o In-house agencies are more stable o Tighter control over agency processes o Pros: cost savings, more control, increased coordination, stability, access to top management o Cons: less experience, less objectivity, less access to top creative talent, less flexibility Full service Agency o Full range of marketing communication and promotion services including planning, creating, and producing the advertising; performing research, and selecting media. May offer non-advertising services such as strategic market planning, sales promotion, direct marketing, and interactive capabilities, package design, and public relations and publicity. Account executive

Is responsible for understanding the advertiser s marketing and promotions needs and interpreting them to agency personnel. o Coordinates agency efforts in planning, creating, and producing ads. o The link between agency and client Creative boutiques o Are small ads agencies that provide only creative services and have long been an important part of the advertising industry o Provide only creative services o May subcontract from full-service agencies o Strength is turning out creative work quickly Direct marketing agency o Provide a variety of services including: Database management, Direct Mail, Research, Media services, Creative and Production capabilities. Sales promotion agency o Develop and administer programs such as: Promotional planning, Creative Research, Tie-in coordination, Fulfillment, Premium design and manufacturing, Catalogue production, refunds and rebates, sampling programs, Contest/sweepstakes management. Public relations firms o Develops and establishes programs to manage the organizations: Publicity, image and affairs with shareholders. o Analyze the companies relationships and establishes and Strategy development to: Generating publicity, Lobbying, Public affairs, News releases, communication, Research, Special events, Managing crisis, Coordination with promotional areas Interactive agency o Specialize in the development and strategic use of various interactive marketing tools such as: Websites, Banner ads, Search engine optimization, Mobile marketing, Social media campaigns, Digital media Media specialist o Are companies that specialize in buying media, especially broadcast (radio and television)time o Agencies and clients develop media strategy o Media buying organizations implement strategies, and buy time and space o

Chapter 4 y Consumer behavior o The process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services Decision process (figure 4-1)

Sources of Problem Recognition: out of stock, dissatisfaction, new needs or wants, related product purchases, market-induced recognition, new products Maslow s hierarchy of needs how adds appeal to their markets

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o Culture how it affects consumer behavior Subculture how it affects consumer behavior Post-purchase evaluation Satisfaction Consumer Learning o Learning is the process by which consumers acquire consumption-related knowledge and experience that they apply to future behavior Shaping o Is the reinforcement of successive acts that lead to a desired behavior pattern

Chapter 5 y Communication process

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Source (sender) Decoding Receiver Encoding  Verbal  Musical  Graphic  Animation o Channel o Noise  Anything that can distort or interfere with the reception of a message. o Field of experience o Feedback Personal channels o Word of mouth, personal selling Non-personal channels o Print media, broadcast media AIDA model (attention, interest, desire, action) Test to see how an add is doing (figure 5-4) o o o o

o Alternative response (figure 5-5)

o FCB Planning model (figure 5-6)