MCOM 214 Exam #2

segmenting

dividing the market into groups of people who have similar characteristics in certain key product related areas

-demographic

-psychographic

-benefits sought

-geographic

-behavioral

targeting

Identifying the group that might be the most profitable audience (best fit with the market's product)

Niche Markets

tighter sub segments of a more general market segment

ex. young teen pregnant women in 3rd trimester

segmentation categories

demographics

psychographics

geographics

behavioral characteristics

benefits sought

GEO-demographic segmentation

combining demographics with geographic segmentation to select target markets in advertising

-people in the same neighborhood tend to be demographically similar

-Geographically separated neighborhoods can be placed in the same category based on similar population characteristics

segmentation by life cycle stage

Newly Married Couple

Full Nest I- youngest child under 6

Full Nest II- youngest child 6 and over

Full Nest III- older married couples with dependent children

Empty Nest I- older married couples, no children living with them

Empty Nest II- older married couples, retired, no children living at home

Solitary Survivor I- in labor force (still working)

Solitary Survivor II- retired

VALS system

categorizes consumers according to Primary motivation & Resources

(8 categories)

innovators

thinkers

believers

makers

experiencers

achievers

strivers

survivors

primary motivation

The pattern of attitudes and activities that help people reinforce, sustain, or modify their social and self-image.

An understanding of the primary motivation of individuals helps advertisers promote and sell goods and services.

resources

the range of psychological, physical, demographic, and material capacities that consumers can draw upon, including education,

income, self-confidence, health, and eagerness to buy

thinkers and believers

motivated by ideals

achievers and strivers

motivated by achievement

Experiencers and Makers

motivated by self-expression

innovators

First adopters of new products

-high resources

-high innovation

survivors

Low resources, low innovation

-does not adapt to new innovations/technology

Product Life Cycle (PLC)

the course of a product's sales and profits over its lifetime

1. intro

2. growth

3. maturity

4. decline

positioning strategy

Determining what image or perception a

product should occupy in a consumer's mind

(3 stages)

brand positioning

A branding strategy in which marketers create a certain image or impression of a brand as compared to those of competitors' brands.

Position a brand in consumers' minds: where the product or

brand stands in comparison to the competition.

first stage of brand positioning

1. Product features and attributes (tangible and intangible)

- Feature analysis is used to assess features relative to competitors' products (e.g., size, color, ease

of use, quality, status, value)

second stage of brand positioning

2. Competitive advantage is

(1) Product's strong feature (where the competition is weaker).

(2) also in an area that is important to the target

third stage of brand positioning

3. Differentiation is a strategy that focuses attention to product differences that distinguish the company's product from all others in the eyes of consumers.

what is the goal of positioning

to establish a product in the consumer's mind based on its features and advantages relative to its competition.

repositioning

Changing a brand's original position to a different

one, still related to the brand's core concept.

-The role of advertising: to relate the new position

to the target market's life experience and

associations

brand equity

the added value a brand name gives to a product beyond the functional benefits provided

"added value" of a brand

what makes strong brand equity?

Successful brands:

Are distinctive

Create an association

Offer a benefit

Carry a heritage

Are often based on a distinctive graphic:

a logo, trademark, character or other visual cue

Cause-related marketed (CRM)

when a private corporation publicly supports a non-profit org.

-effort to increase revenue for NPO

-associated with corporate philanthropy, altruism, and corporate responsibility

-NOT a direct corporate donation

-associated with institutional advertising

Types of distrubution

1. intensive

2. selective

3. exclusive

intensive distribution

Making a product available to consumers at every possible location so the consumer can buy with minimum effort

selective distribution

limiting the distribution of a product to select outlets in order to decrease distribution and costs

cooperative distribution

"Co-op advertising"

manufacturers and retailers share advertising costs together

exclusive distribution

distribution rights to a wholesaler/retailer in one region

-force manufacturers and retailers to cooperate closely

different user groups categorized by usage rates

1. sole users

2. semisole

3. discount users

4. aware nontriers

5. trial/rejectors

6. repertoire users

push strategy

where businesses attempt to take their products to the consumers; where marketers are "pushing" the products to consumers

pull strategy

a marketing strategy that stimulates consumer demand to obtain product distribution

Goal: get the consumer to come to you

"pulling" customers in

brand differentiation

where your brand is set apart from competition by associating a superior aspect of your brand with multiple consumer benefits

communication process

source

encoding

message

channel (noise)

decoding

receiver

feedback (process starts over)

brand communication process

source- advertiser

message- encoding (by agency)

media mix-channels

NOISE- internal or external

receiver- consumer reception and response

internal noise

perceived needs

info. processing

attitudes and opinions

other noise

external noise

public opinion

marketing strategy

competition

other noise

decision making process

1. problem recognition

2. info. search

3. evaluation and selection

4. store choice/purchase

5. post-purchase behavior

interpersonal factors

1. family:

-starts at an early age

-affects one's socialization as consumers

2. society:

-people in the same social class tend toward similar attitudes, status symbols, and spending patterns

3. culture/environment:

group with the same set of beliefs, attitudes, and ways of doing things

-passed down generation to generation

Subculture: segment within a culture that shares a set of meanings, values, or activities diff. from those of the overall culture

non-personal factors

time

place

environment

**factors outside of the consumers control

personal factors

perception

learning

persuasion

motivation- underlying drives that stem from the conscious or unconscious needs of the consumer

low involvement decision making

1. need recognition

2. evaluation of alternatives

3. purchase decision

4. post-purchase evaluation

**use for daily items

ex. shampoo

high involvement decision making

decision making process

(5 steps)

ex. buying a car, apartment, etc.

reference groups

groups we use for models for behaviors to get info., frame of reference, guidance, etc.

ex. teachers, greek life, politicians, etc.

opinion leader

someone whose beliefs/attitudes are respected by people who share similar interest in some specific activity

-many diff. opinion leaders

Maslow's Hierarchy of Needs

1. Physiological Needs- medicines, stable items, generics

ex. Nyquil

ex. breakfast cereal

2. Safety and Security- insurance, alarm systems, investments, retirement

ex. Firestone

ex. tires

3. Love and Belonging- clothing, grooming products, clubs, drinks

ex. USO

ex. jewelry

4. Esteem- cars, furniture, credit cards, stores, country clubs, etc.

ex. Diesel

ex. luxury car

5. Self Actualization- hobbies, travel, education

ex. Hallmark

ex. graduate degree

cognitive theory of learning

learning as a rational application of knowledge to practice problem solving

-deliberate/thoughtful efforts

-high involvement process

conditioning theory of learning

-"stimulus-response theory"

-learning as trial-and-error

-simple, basic, less conscious, less effort

-motivated by stimulus, not cognitive process

-low involvement

the elaboration likelihood model

(theory of persuasion)

2 diff. ways to persuade

1. central route to persuasion: Consumers motivated to pay attention to product-related attributes and comprehend the ad-delivered information at deeper, more elaborate levels

ex. laptop

2. Peripheral route of persuasion:

Low consumer involvement with a product or message and little reason to pay attention or comprehend the central message of the ad, but might attend to some peripheral aspects for entertainment value.

ex. soft drink

**mostly used by advertisers

cognitive dissonance theory

the theory that we act to reduce the discomfort (dissonance) we feel when two of our thoughts (cognitions) are inconsistent.

ex. avoiding situations that made you feel uncomfortable

primary research

research info. gained directly from the marketplace

-expensive

-time consuming

Two types:

1. Qualitative

2. Quantitative

secondary research

collection of data from second-hand sources

-we do this first

-less expensive

-can be gathered quickly

Quantitative Research

research that collects and reports data primarily in numerical form

-observation

-experimental

-test market

-survey

-content analysis

Qualitative Research

informal research methods, including in-depth interviews, focus groups, and ethnography

strategic research

to build effective brand communication campaigns and find better/relevant approaches

Evaluative Research

research that measures how well a program or project works in relation to its goals; enables marketers to evaluate a campaign after it runs (outcome)

reliability

test must be repeatable, producing the same result each time it is administered

validity

it must reflect the true status of the market and be free of bias

account planner

the individual in an adv. agency responsible for account planning

-represent the CONSUMER in the process

**VOICE OF CONSUMER

Qualitative Research Methods

focus groups

in-depth interview

ethnography

Quantitative Research Methods

Observation (monitor reactions/look for patterns)

Experiment (cause and effect relationships)

Survey

Adv. strategy research

used to help define the product concept or to assist in the selection of target markets, ad messages, or media vehicles; build effective brand communication; comprised of creative/media strategy

creative concept research

Evaluates the target audience's acceptance of different creative ideas at the concept stage

pretesting

Testing the effectiveness of an advertisement for gaps or flaws in message content BEFORE recommending it to clients, often conducted through focus groups.

posttesting

testing the effectiveness of an advertisement AFTER it has been run

-"ad tracking"

survey

A basic method of quantitative research.

To get people's opinions, surveys may be conducted in person, by mail, on the telephone, or via the Internet.

focus group

6 or more people, typically of the target market, are invited to a group session to discuss the product/service, or the marketing situation for an hour or more; similar to in-depth interview

-qualitative

in-depth interview

Qualitative

an exploratory research technique in which trained researchers ask questions, listen to and record the answers, and then pose additional questions to clarify or expand on a particular issue

-expensive

-takes a longer time

-can be very rewarding

observation

a method of research used when researchers monitor people's actions

content analysis

analyzing the content in advertising messages

able to find a theme/approaches used in advertising

example from class: LGBT poster for joint checking account

ethnography

intensive research technique that involves trying to understand behavior and culture by living in the lives of the people being studied

Got milk campaign

used market search

-deprivation strategy

three tiered advertising process (big picture)

business plan -

marketing plan -

advertising plan

advertising plan

1. situation analysis

2. key strategic decisions

3. message strategy

4. media strategy

5. other marcom tools

6. campaign management (budget/measure of effectiveness)

situation analysis

a factual statement of the organization's current situation and how it got there:

Environmental analysis, company analysis, product analysis, consumer analysis, competitive analysis

SWOT Analysis

Strength (internal)

Weakness (internal)

Opportunity (external)

Threat (external)

strategy

a plan of action or policy designed to achieve a goal/objective; means, design, plan

tactic

the carried out plan to achieve the designed goal/implementing/execution; make the plan come to life

objectives

specific, measurable, short-term expectations/goals you want to accomplish

SWOT analysis

uses the facts contained in the situation analysis to point out strengths, weaknesses, opportunities, and threats for the brand

key strategic decision stage

1. marketing/adv./IMC objectives

2. target audience selection

3. brand position (competition)

4. brand image/personality

plans book

written proposal that an agency prepares to show client

-client accepts/rejects/bargains

marketing objectives

Goals of the marketing effort that may be expressed in terms of the needs of specific target markets and specific sales objectives; specific SALES goals

ex. increase market share from 3 to 5%

advertising objectives

communication effects, such as brand awareness, brand recognition, brand preference, and brand loyalty

ex. increase brand awareness from 50 to 70%

SMART

specific

measurable

achievable

realistic

timely

three different methods to set budgets

1. percentage of sales method

2. share of market/share of voice method

3. objective/task method

percentage of sales method

A method of advertising budget allocation based on a percentage of the previous year's sales, the anticipated sales for the next year, or a combination of the two.

-EASIEST method

-simple

-free

share of market/share of voice method

determining a firm's goals for a certain share of the market and then applying a slightly higher % of industry advertising dollars to the firm's budget

objective/task method

1. defining objectives

2. determining strategy

3. estimating cost

-makes companies think in terms of achieving goals

posttesting methods

attitude tests- measure effectiveness of ad

recall tests- measure how much people watched ad

inquiry tests-count customer responses to an ad for info

sales tests- compare how many sales were generated after a campaign