Principles of AD Exam 1 Notes Marketing concept a business philosophy where the organization determines the needs of the target market and satisfies those needs at a profit Marketing Mix The 4 Ps or service credit time gas etc 1 Product the bundle of attributes the consumer receives in a transaction Good 2 Price what the consumer must give up in order to receive the product Cash 3 Place All issues related to the system of distribution Manufacture Final Sale 4 Promotion All methods used to inform and persuade the target market about products that are available at some price in sme place Decisions about product price and place precede those pertaining to promotion It s not wise to market an unfinished product Resource allocation across the elements must achieve a balance between product development and promotion Customer dissatisfaction is caused by D S shortage or D S surplus Promotions Mix A model of communication alternatives Media VS Personal Communication Paid VS Free Communication Paid Provides Control Free Provides Credibility Different companies use differing levels of each part of mix Media Advertising Free Publicity Personal Social Media Paid Sales Advertising No such thing as free advertising Any PAID NONPERSONAL communication from an identified sponsor that INFORMS PERSUADES and or REMINDS Advantages Control of o Message not the whole truth o Delivery of the message o Timing of delivery of message Low cost to reach each person Disadvantages High absolute cost Low credibility Public Relations Develops understanding and goodwill In many cases absence of rapid feedback delayed response Publicity rule Any publicity is good publicity but no control over message Media time and space that the organization does not pay for o Can backfire BP Oil Spill Sales personnel representing the organization who are in direct communication with potential customers Personal Selling Face to face sales rep o Lacks Credibility Social Media Various online technology tools that allow people to connect via the internet to share info and resources Communicate with brand promote specials reviews o Facebook twitter etc Decision Sequence Model The process used in advertising as a way to guide the creative process toward effective strategy and execution 1 Situation Analysis a research based analysis of all the internal and external factors that affect the organization Consumer Competition Product Category Company Macro Environment large scale issues 2 Objectives and Positioning Objectives goals the company plans to achieve Positioning the way a consumer perceives the brand Brand All of the intangible attributes attached to the product o Brand NIKE Just Do It celebrity endorsements negative publicity o Product Shoe the brand Brand Equity the difference in perceived value between the product and 3 Strategies A combination of actions that achieve the objectives Types of strategies o Creative o Media delivery promotion o Sales Promotion coupons 4 Budget Setting allocation of funds needed to implement the strategies 5 Implementation putting the strategies into action putting into marketplace 6 Evaluation Assesses the success of the campaign Did the campaign achieve the stated objectives Levels of Involvement How we look at products The relative importance of the product to the consumer 1 No involvement snow mobile in FL No interest in product category No purchase behavior 2 Low Involvement Milk care more about expiration date than brand Product is used Careful brand evaluations are not made Not much risk is involved 3 High Involvement Car computer shoes etc The product is used Consumer engages in careful brand evaluation prior to purchase i High price low price non drowsy medication fashion etc Hierarchy of Effects The series of stages a consumer passes from unawareness to brand loyalty High Involvement Repeat Behavior Behavior Trial Behavior Attitude Awareness Attitude Awareness Low Involvement High Involvement Hierarchy Awareness basic knowledge of a product Knowledge that the product exists Attitude Opinions about the product Could be positive negative or neutral Social media reviews etc affect attitudes Behavior Any action related to the product test drive Like another product more can t afford product don t need product o Positive Attitude Behavior Low Involvement Hierarchy Popcorn Awareness Acknowledgement Trial Behavior action related to product without the formation of an attitude Attitude Like don t like Repeat Behavior Subsequent action based on positive attitude Purchase again try new brand Schramm s Model of ONE WAY Communication Source Encodes Decodes Destination Signal Message Advertiser puts together ad which is understood by the target market Advertiser Ad Viewer Listener Reader Potential Problems with ONE WAY Communication Encoding the source perceives the problem incorrectly then encodes the wrong concept EX Taco Bell diet ad Signal the source understands the problem but sends a signal that does not communicate the intended message Ad comes out wrong delivering a joke incorrectly EX Burger King character ads VS Taste is King Ad Decoding the receiver misunderstands or misinterprets the message EX JCPenny Auction Ad lost customers had to apologize Destination The receiver understands the message but forgets or ignores Advertising Agency Organization Account Servicing Liaison between agency and the client Often involved with new business development Strategy Development Research Involved in a project throughout the entire process First people to be involved with a project o Situation Analysis o Concept Testing o Evaluation Strategic Planning Develops creative direction of campaign Based on consumer research findings Creative communication strategy Develops verbal message copy Develops visual message layout art direction Delivery of message Striving for most efficient use of money Translates the copy and layout into finished form Media Production Traffic Controls the entire process to insure that each department meets deadlines Types of Agencies Full Service Complete Services Research Creative Media Other Potential Services PR Sales Promotion Social media Media Buying Service Media buying only Specialists Often purchase in bulk pass savings to client Creative Boutique Small specialty agency Print broadcast Internet digital radio jingles etc Sometimes just concept development In House retail sales Agency operated within the corporation Some functions outsourced More control over work Cheaper
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