advertising midterm review (1, 2, 8, 4)

Definition of Marketing

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.

Marketing as an exchange process

Involves two or more parties with:

•       Something of value to one another.

•       Desire and ability to give up something to other party.

•       Way to communicate with each other.

Marketing Mix

The four P’s: product, price, place, and promotion.; The controllable elements of a marketing program.

•       Be knowledgeable about the issues and options of each element.

•       Know how to combine elements to form effective marketing programs.

•       Analyze the market and use data to develop marketing strategy and mix.

To develop an effective marketing mix, marketers must:

 

Promotional Mix

The basic tools used to accomplish an organization’s communication objectives. Coordination of all seller-initiated efforts to:

•       Set up channels of information and persuasion.

•       Sell goods and services or promote an idea.

Promotion

as 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.

While implicit communication occurs through various elements of the marketing mix, most of an organization’s communications with the marketplace take place as part of a carefully planned and controlled promotional program. Promotional mix is the basic tools used to accomplish an organization’s communication.

How does promotional mix differ from the Marketing Mix?

Advertising

Any paid form of nonpersonal communication:

•       About an organization, product, or service.

•       Or an idea from identified sponsor.

The nonpersonal component:

•       Involves mass media.

•       Message transmitted to large groups of individuals.

•       No opportunity for immediate feedback.

 

ability to control message; cost effective way to reach large target market; ability to create images and differentiate brands; can sometimes strike responsive reaction from consumers

advantage of advertising

high costs of producing and placing ads; difficult to determine effectiveness; credibility problems; clutter

•       Disadvantage of advertising

Direct Marketing

Communicating directly with target customers to generate a response and/or transaction.

Involves:

•       Database management.

•       Direct selling.

•       Telemarketing.

•       Direct-response advertising.

•       Encourages consumer to purchase directly from the manufacturer.

Through direct mail, online, and various broadcast and print media.

changes in society have made consumers receptive to direct marketed products; allows for more selectivity and target marketing; can customize message

advantage of direct marketing

consumers and businesses receive too much unsolicited direct mail and phone calls; image problems for direct marketed products; clutter problems

disadvantage of direct marketing

Sales Promotion

Marketing activities that provide extra value or incentives to the:

•       Sales force.

•       Distributors.

•       Ultimate consumer.

Aids in stimulating immediate sales.

provides extra incentive to purchase product; way to appeal to price sensitive consumer; can generate extra interest in ads; easier to measure effects

advantage of Sales Promotion

often only has short term impact; often abused; can lead to promotional wars; often does not contribute to brand image

disadvantage of Sales Promotion

Publicity

Nonpersonal communications regarding an organization, product, service, or idea not directly paid for or run under identified sponsorship.

•       High credibility and low cost.

advantage of publicity

•       Not always under the control of an organization.

•       Negative stories can be highly damaging.

disadvantage of publicity

Public Relations

•       Strategic communication process.

•       Builds mutually beneficial relationships between organizations and their publics.

•       Broader objective than publicity.

credibility; low cost way to communicate

advantage of public relations

lack of control; difficult to get media cooperation; can be negative

disadvantage of public relations

Personal Selling

Person-to-person communication in which seller attempts to assist and/or persuade prospective buyers to:

•       Purchase a company’s product.

•       Act on an idea.

Allows seller to tailor messages to customer’s specific needs or situation.

Involves immediate and precise feedback.

Adv: Communication flexibility; can communicate complex information; can target to specific markets and customers; direct feedback

advantage of personal selling

high cost per contact; expensive way to reach large number of customers; difficult to communicate uniform message

disadvantage of personal selling

Integrated Marketing Communications Management

•       Planning, executing, evaluating, and controlling use of promotional-mix elements to effectively communicate with target audiences.

Integrated Marketing Communications Plan

•       Framework for developing, implementing, and controlling the organization’s IMC program.

Marketing Plan

Describes overall marketing strategy and programs for organization

Elements of marketing plan

•       Detailed situation analysis.

•       Specific marketing objectives with time frame and mechanism for measuring performance.

•       Selection of target market(s) and plans for each element of the marketing mix.

•       Program for implementing the marketing strategy.

•       Process for monitoring and evaluating performance and providing feedback.

Review of the Marketing Plan

•       Understand where the brand has been.

•       Understand brand’s current position in the market.

•       Understand where brand wants to go.

•       Understand how brand plans to get there.

Internal Analysis

Assesses relevant areas involving the product/service offering and the firm itself.

Assessment of:

•       Capability to develop and implement promotional program in-house.

•       Brand image and implications for promotion.

•       A product’s relative strengths and weaknesses.

Reviews previous promotional programs and results.

External Analysis

Assesses characteristics of firm’s customers, market segments, positioning strategies, and competitors, through:

•       Customer analysis.

•       Competitive analysis.

•       Environmental analysis.

Analysis of the Communication Process

Involves analyzing:

•       Receiver’s response processes.

•       Source, message, and channel factors.

Establishes communication goals and objectives.

Marketing objectives:

•       Determine what is to be accomplished by overall marketing program in terms of sales, market share, or profitability.

Communication objectives:

•       Determine what the firm seeks to accomplish with its promotional program.

•       Nature of the message to be communicated.

Specific communication effects to be achieved.

Budget Determination

•       Set tentative marketing communications budget.

•       Allocate tentative budget across different media, geographic markets, and time periods.

•       Budget may not be finalized until specific promotional-mix strategies are developed.

Developing the Integrated Marketing Communications Program

Involves deciding role and importance of each promotional-mix element.

Aspects of an advertising program include:

creative strategy and media strategy

Creative strategy

Determining the basic appeal and message to be conveyed to target audience.

Media strategy

Determining which communication channels to use to deliver the message.

Monitoring, Evaluation, and Control

Determining how well program is:

•       Meeting communication objectives.

Helping the firm accomplish its overall marketing goals and objectives

Evaluating promotional program results/effectiveness.

Taking measures to control and adjust promotional strategies.

Most companies use analytics to measure effectiveness.

internal analysis

Assesses relevant areas involving the product/service offering and the firm itself.

Assessment of:

•       Capability to develop and implement promotional program in-house.

•       Brand image and implications for promotion.

•       A product’s relative strengths and weaknesses.

Reviews previous promotional programs and results.

external analysis

Assesses characteristics of firm’s customers, market segments, positioning strategies, and competitors, through:

•       Customer analysis.

•       Competitive analysis.

•       Environmental analysis.

SWOT/Situation Analysis

Strength - internal

Weakness - internal

Opportunities - external

Threats - external

Strategic Marketing Plan

Guides allocation of organization’s resources.

Guides specific marketing programs and policies.

Evolves from organization’s overall corporate strategy.

Allows for understanding of market opportunities, competition, and market segments.

Market segments

Target markets the company wishes to pursue.

Opportunity Analysis/market opportunities

areas where:

•       There are favorable demand trends.

•       Customers’ needs and opportunities are not being satisfied.

•       A firm can compete effectively.

Steps to identify market opportunities:

•       Examine the marketplace.

•       Observe demand trends and competition in various market segments.

Competitive analysis

Analyzing competition in the marketplace and searching for competitive advantage.

Competitive advantage

•       Attributes that give a firm an edge over competitors.

•       Quality products that command premium price.

•       Superior customer service.

•       Lowest production costs and lower prices.

•       Dominating channels of distribution.

Target Market Selection

•       Done after evaluating market opportunities and doing a competitive analysis.

•       Can select one or more target markets.

•       Has direct implications on firm’s advertising and promotional efforts.

•       Strategies vary depending on market approach.

Steps to identify market opportunities:

•       Examine the marketplace.

•       Observe demand trends and competition in various market segments.

Identifying markets with unfulfilled needs

Determining market segmentation

Selecting a market to target

Positioning through marketing strategies

Identifying markets with unfulfilled needs

•       In this step, consumers with similar lifestyles, needs, and wants are isolated and increases the marketers knowledge of their specific requirements.

Determining market segmentation

•       In this step, a market is divided into distinct groups that have common needs and will respond similarly to a marketing action.

Selecting a market to target

•       This step determines how many segments to enter, and which segments offer the most potential.

Positioning through marketing strategies

•       This step determines the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it apart from the competition.

 

Identifying Markets

•       Marketer identifies specific needs of groups of people (or segments).

•       Selects one or more of these segments as a target.

•       Isolates consumers with similar lifestyles, needs, and the like.

•       Increases marketer’s knowledge of consumers’ specific requirements.

What is segmentation? What are the 5 steps involved in this process?

Dividing a market into distinct groups with common needs, who respond similarly to a marketing situation.

1. review of marketing
   plan

2. analysis of promotional program situation

3. analysis of
   communication proces

4. budget determination

5. and develop integrated marketing communications program

Geographic, Demographic, Psychographic

Bases for segmentation

Geographic

Dividing market on basis of region, city size, metropolitan area, and/or density.

Ex: Cheerwine, targets southern states

Demographic

Dividing market on basis of age, sex, family size, marital status, etc.

Ex: IKEA’s demographic is 70% women, products geared towards women; WomensHealth Magazine

Psychographic

•       Dividing market on basis of personality, lifecycles, and/or lifestyles.

 Ex: Nike = athletic

Undifferentiated Marketing

A strategy in which market segment differences are ignored and one product or service is offered to the entire market. Ex: when Henry Ford released only the Black Ford; when Coca Cola only offered one type of drink

Differentiated Marketing

A type of marketing strategy whereby a firm offers products or services to a number of market segments and develops separate marketing strategies for each. Ex: Marriot offering variety of services to customers besides hotels, business, vacation, long or short stay

Concentrated Marketing

A type of marketing strategy whereby a firm chooses to focus its marketing efforts on one particular market segment. Ex: Volkswagen in 1950s when they were the only automobile company competing in economy-car segment

 

positioning

Fitting product or service to one or more segments of a broad market to set it meaningfully apart from the competition.

approaches:

•       Focus on consumer

•       Focus on competition

Focus on consumer

Linking product with benefits consumer will derive

Focus on competition

•       Positioning product by comparing benefit it offers to the competition.

 

 

positioning by attributes & benefits

A common approach is setting the brand apart from competitors on the basis of specific characteristics or benefits. Marketers attempt to identify salient attributes, which are important to customers when making purchase decisions.

positioning by price/quality

Price is used as a characteristic of the brand. If a product is positioned as high quality, price may be a secondary consideration. Another option is to focus on product quality or value offered at a competitive price.

positioning by use or application

This strategy associates the brand with a specific use. This approach can be an effective way to expand usage of a product.

positioning by product class

This strategy positions the product against a product in another category, rather than against a competitor. For example, positioning frozen orange juice against fresh oranges

positioning by product user

This strategy associates a brand with a type of person or group that uses a product or service.

positioning by competitor

This strategy positions a company or brand against a competitor. Often another form of positioning is used to differentiate the brand.

positioning by cultural symbols

This strategy uses a cultural symbol to differentiate a product from competitors (e.g. Keebler elves, the Jolly Green Giant, Tony the Tiger).

repositioning

Altering a product’s or brand’s position due to:

•       Declining or stagnant sales.

•       Anticipated opportunities in other market positions.

Difficult to accomplish because of entrenched perceptions and attitudes toward the product or brand.

perceptual map

a visual tool that plots brands, products, or services on a graph based on how customers perceive them across key attributes like price, quality, or innovation. This chart provides a quick visual summary of customer perceptions, allowing marketers to understand their brand's competitive position, identify market gaps, and inform strategies for product development and messaging. 

Axes of perceptual map

the two key attributes that you/management believe consumers use to make a purchase decision in that product’s product category relative to the competition.

repositioning questions

1.     Are you choosing a new target market(s) for the product?

2.     Are you choosing to use different media for advertising than in the product’s past? Why?

3.     Are you choosing to use different positioning strategies alone or in combination than in the product’s past strategy & advertisements? If yes, why?

4.     Are you choosing to re-position for some type of combination of 1-3?

 

To Determine the Positioning Strategy:

Identify competitors

Assess consumers' perceptions of competitors

Determine competitors' positions

Analyze consumers' preferences

Make the positioning decision

Monitor the position

product symbolism

•       What a product or brand means to consumers.

•       What consumers experience in purchasing and using a product.

Product planning

•       Design and quality.

•       Service and warranties.

branding

Brand name and package design.

•       Builds and maintains brand awareness and interest.

•       Develops and enhances attitudes toward company or product.

•       Builds relationships between consumer and brand.

•       Brand identity:

•       Combination of name, logo, symbols, design, packaging, image, and associations held by consumers.

•       Brand equity:

Intangible asset of added value.

Packaging

•       Traditionally provided functional benefits—economy, protection, and storage.

•       Role and function have changed:

•       Self-service emphases of many stores.

•       More buying decisions at point of purchase.

•       Used to communicate with consumers and create an impression of the brand.

Price variable:

What consumer must give in exchange for purchase.

Factors that determine price:

•       Costs.

•       Demand factors.

•       Competition.

•       Perceived value.

•       Product quality.

•       Advertising.

Marketing channels:

Interdependent organizations involved in making a product or service available for use.

Direct channels:

Directly deal with customers.

•       Driven by direct-selling programs, direct-response ads, telemarketing, Internet.

•       Used when selling expensive and complex products.

Indirect channels:

Network of wholesalers and/or retailers.

Promotional Decisions

Programs designed to persuade resellers to stock, merchandise, and promote a manufacturer’s products.

Push product through channels of distribution.

Trade advertising:

•       : Used to motivate wholesalers and retailers to purchase products for resale.

 

Promotional Pull Strategy

Spending money on advertising and sales promotion efforts directed toward the ultimate consumer.

Goals:

•       Create demand among consumers.

•       Encourage consumers to request product from retailer.

Promotional Push Strategy

Programs designed to persuade resellers to stock, merchandise, and
promote a manufacturer’s products.
• Push product through channels of distribution.
• Trade advertising: Used to motivate wholesalers and retailers to
purchase products for resale.

Creative Strategy

Determines what the advertising message will say or communicate.

•       Creative tactics:

•       Determine how the message strategy will be executed.

•       Big idea: central theme of campaign.

Advertising Campaign

Set of interrelated, coordinated marketing communications activities that center on a single theme or idea.

•       Appear in different media across specified time period.

Campaign theme:

•       Central message communicated in all advertising and promotional activities.

•       Expressed through a slogan or tagline.

•       Summation line that briefly expresses company or brand’s positioning and the message it is trying to deliver to the target audience.

Developing the Major Selling Idea

Most creative ideas try to dramatically and effectively convey the key benefit claim.