ADV Chapters 1-4

Marketing vs Advertising

Marketing = bring in revenue, Adv = inform and persuade into purchasing/acting

Advertising vs PR

Adv = inform and persuade into purchasing/acting, PR = communicate between organization and public

What is IMC and why do companies use it?

Integrated Marketing Communications. Building a profitable relationship between a company and a consumer through coordinated strategic communications. This helps form a consumer-centric perspective in brand messaging

Four sources of brand messages

Planned: ads, publicity releases, LOW impact
Product: selling products, HIGH impact
Service: employee interactions, POS or NEG impact
Unplanned: rumors, news, PR helps with response if neg

Advertising

Persuade and inform

Marketing

Bring in revenue

IMC

Profitable relationship building; Integrated Marketing Communications

Medium

non personal advertising method. Single specific channel delivering message, i.e. radio spot, billboard

Mass media

broad and collective main means of communication, i.e. internet, TV

Consumers

groups of people

Stakeholders

People interested in success/failure/actions of advertising campaign, i.e. employees, press, stockholders

target audience

segment of population (adv)

target market

segment of population (marketing)

What is the importance of relationship marketing?

keep customers coming back to spend more money - it’s easier to keep current customers than get new ones

How does the communication process apply to advertising?

source → encoding → message → channel + noise → decode → receiver -*gives feedback to source*→ source

4 Ps/Elements of marketing strategy

Product: features and benefits or purchasing
Price: emphasize the value
Place: distribution locations
Promotion: communication

Promotion categories

Personal selling: person to person
Product adv: advertise a product
Sales promotion: advertise a sale to gain interest, i.e. BOGO
PR: Communication
Collateral materials: flyers, brochures

What functions does advertising perform in a free market economy?

stimulate economic growth, foster competition, provide information

Brand

differentiate products from each other, helps companies charge more for a product and helps with customer loyalty

Brand vision

describes lasting impact a company wants to make

Brand personality

unique set of human traits/emotions/values

What are the benefits of having a strong brand?

make more money, more successful product, recruit higher talent, customer loyalty

Preindustrial age

FIRST; Chinese invent paper, Gutenberg’s printing press, Ben Franklin

Industrial age

SECOND; mass production, transportation through railroad and steamship, emergence of brands, Volney Palmer, Francis Ayer, catalogs, radio, George Gallup, AC Nielson

Golden age

THIRD; TV, market segmentation, positioning, Bill Bernbach, Mary Wells Lawerence

Postindustrial age

FOURTH; computer, information age, demarketing, internet

Global/interactive age

FIFTH; social media, TV narrowcasting, BK Subservient Chicken, Nike+

Market segmentation

divide potential customers into groups to target, i.e. age, income, location, values, etc.

Positioning

how target consumers perceive a brand/product in comparison to competitors; creating a memorable identity

What are assumptions of free-market economics?

self interest, complete information, many buyers and sellers, no externalities

Economic Impact of ADV

Billiards model: Refer to image
- people pay for ads when paying for products, so adv. adds to value or product
- prices go up because of this
- restricts competition by encouraging brand loyalty
- consumer demand increases when people see others with a product they want
- consumer choice increases because there is so many options

Short term social impacts

deceptive, focus on advertising styles (unfair/deceptive practices)

Long term social impacts

environment, so many people see so many ads, materialism, manipulation, incomplete information, costs

Puffery

exaggerated claims that cant be proven true or false, i.e. “world’s best coffee”

Regulations through levels of government

Local: mayor, police
State/Regional: Attorney general
National: All 3 government branches

FTC

Federal Trade Commission
- protect consumers
- maintain competition and prevent monopolies
- advance organizational performace

FDA

Food and Drug Administration; truthful labeling on food and drugs, including pets

FCC

Federal Communications Commissions
- radio, TV, internet, satelites
- licensing, control profanity

USPTO

US Patent and Trademark Office; intellectual property

LOC

Library of Congress; copyrights, works of authorship

Deception

ad misleads consumer, i.e. Skechers Shape-Ups promising weight loss without exercise

Comparisons

compare product to another, must have data, i.e. 4 out of 5 dentists recommend this toothpaste brand over that one (but this stat must be true)

Endorsements

sponsored person, must be disclosed and honest, i.e. sponsored posts on social media must be clarified

Demonstrastions

honest and real representation, i.e. vacuum videos must be real and not faked

Bait-and-switch

promise you one thing but really sell you another, i.e. $499 sofa that is "sold out" to sell a more expensive one

FTC Consent Decree

first “warning,” document to stop ad

FTC cease-and-assist

second “warning,” prohibit further use of ad

FTC corrective advertising

most extreme warning, put out ad that corrects previous mistake

Advertiser

company being advertised, i.e. Nike, McDonalds, etc

Agencies

create the ad campaigns for advertisers

Suppliers

provide media to agency for ad campaign, i.e. photographers, artists, etc

Media

shares advertising message, i.e. TV, posters, etc

Account Management

core position in ad agency; communicator between the client and the agency, business oriented

Creative

core position in ad agency; come up with ideas for/execute the ads

Media (job position)

core position in ad agency; decides where the ad will run according to what will give best results

Strategy

core position in ad agency; research the consumers, be the voice of them

Production

core position in ad agency; turn ad idea into execution, organize and manage the ad production

Local advertisers

retail, small local stores. Short term thinking, advertise for specific people

Regional/National advertisers

larger chain stores. Long term thinking, advertise for groups of people

Consumer agency

sell to customers, i.e. clothing, food, etc

business-to-business agency (B2B)

sell to businesses, i.e. parts of marchinery, communication tools like slack, etc

3 models for how agencies make money

Media commissions: Agency buys ad for advertiser, agency takes a percent of profit
Markups: Agency buys materials for ad, charge advertiser extra
Fees: fee-commission = monthly fee + commission per ad, straight-fee = monthly fee, commission goes to client

Pros and Cons of an in-house agency

Pros: Cheaper, greater control, more attention to brand
Cons: lower creative quality, less experience + talent, no objectivity (more bias)