Advertising Principles and Practices Advertising s Role in Marketing WHAT IS ADVERTISING What is marketing What is marketing Traditionally marketing is the way a product is designed tested produced branded packaged priced distributed and promoted An organizational function and a set of processes for creating communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders American Marketing Association Prentice Hall 2009 2 2 Key Concepts Key Concepts The Marketing Concept The Marketing Concept Marketing should focus first on identifying the needs and wants of the consumer rather than building products the consumer may not want Market driven companies include Dell Harley Davidson Intel UPS Two steps of the marketing concept Determine customer needs and wants through research Develop manufacture market and service goods that fill those needs and wants that is create solutions for customers problems Prentice Hall 2009 2 3 Key Concepts Exchange Key Concepts Exchange Exchange is the act of trading a desired product or service to receive something of value money in return Two types of exchange Economic and communication y e n M o Money Goods G o o d s Prentice Hall 2009 2 4 Key Concepts Key Concepts Differentiation and Competitive Advantage Differentiation and Competitive Advantage A brand s competitive advantage is where it s different from its competitors and superior in some way In marketing this concept is called Product Differentiation Areas of differentiation include Price Design Performance Distribution and brand image Reliability Maytag s lonely repairman Prentice Hall 2009 2 5 Key Concepts Added Value Key Concepts Added Value Added value is a marketing or advertising activity that makes the product more valuable useful or appealing to consumers Other ways to add value Convenience Low price Useful features Higher quality Status symbol More knowledgeable employees Prentice Hall 2009 2 6 Key Concepts Branding Key Concepts Branding Branding is the way marketers create a special meaning for a product Brand Image is based on communication and on the consumer s personal experiences with the product Brand Equity refers to the financial value based on the reputation and meaning the brand name has acquired over time Principle Effective branding transforms a product by creating a special meaning based on an emotional connection Prentice Hall 2009 2 7 Types of Markets Types of Markets A market is a particular type of buyer Share of market is the percentage of a product category s total market that buys a particular brand Prentice Hall 2009 2 8 The Marketing Plan The Marketing Plan Steps in the Marketing Process 1 Research the consumer marketplace and competitive marketplace and develop a situation analysis or SWOT analysis 2 Set objectives for the marketing effort 3 Assess consumer needs and wants segment the market into groups target specific markets 4 Differentiate and position the product relative to the competition 5 Develop the marketing mix strategy 6 Evaluate the effectiveness of the strategy Prentice Hall 2009 2 9 The Marketing Plan The Marketing Plan Step 1 Marketing Research Research markets product categories consumers and the competitive situation Planners need to know as much as they can about the marketplace so they can make informed insightful strategic decisions SWOT Strengths Weaknesses Opportunities Threats helps managers turn data into insights Principle Marketing research is about more than just the compilation of information it also produces insights into marketing situations and consumer behavior Prentice Hall 2009 2 10 The Marketing Plan The Marketing Plan Key Strategic Decisions to Effective Advertising Step 2 Marketing Objectives increases sales share of market or broader distribution Step 3 Segmenting Targeting Potential customers constitute the target market Identifying specific groups within the target market whose needs intersect with the product and its features is segmentation A target audience is the audience for a marketing communication message Step 4 Differentiating and positioning The point of differentiation positions the product within the competitive environment relative to consumer needs Positioning is how consumers view the brand relative to the competition in the category Prentice Hall 2009 2 11 Step 5 The Marketing Mix Step 5 The Marketing Mix Prentice Hall 2009 2 12 Step 5 cont Step 5 cont The Marketing Mix Product The Marketing Mix Product Considerations include product design and development product operation and performance branding and physical dimensions of packaging Product design performance and quality are key to a product s success Design is important for fashion and clothing items Performance is important for technical products Ex Automobiles and software Quality is important for up scale brands Prentice Hall 2009 2 13 Step 5 Cont Step 5 Cont The Marketing Mix Distribution The Marketing Mix Distribution The channels used to move a product from manufacturer to buyer Types of distribution 1 Direct marketing to consumer Without the use of a reseller 2 Channel Marketing Indirect Marketing through resellers and retailers Strategic distribution decisions Market coverage strategy Push strategies direct marketing to the resellers Pull strategies direct marketing to consumers Ex Drug commercials on TV Prentice Hall 2009 2 14 Push Pull and Combination Push Pull and Combination Strategies Strategies Prentice Hall 2009 2 23 Step 5 Cont Step 5 Cont The Marketing Mix Pricing The Marketing Mix Pricing Price is based on Cost of making and marketing the product and seller s expected profit level Also based on what the market will bear economic well being of customer value of product and the consumer s ability to gauge the value Pricing strategies Customary pricing uses a single well known price for a long time Ex Movie Theaters Rebates Psychological Pricing for affluent customers Prentice Hall 2009 2 16 Step 5 Cont Step 5 Cont The Marketing Mix The Marketing Mix Marketing Communications Marketing Communications Includes personal selling advertising public relations sales promotion direct marketing events and sponsorships point of sale packaging Personal sales uses face to face customers to create immediate sales An ad or direct mail piece may invite a potential customer to contact the company and the sales staff follows up on the lead Marketing communication is about