Exam 1 Study GuideMarketing Mix includes the Four P’s.Things to know about the four P’s1) Decision about products, price and place precede those pertaining to promotionYou have to know your product first before you can sale it.2) Resource allocation across the elements must achieve a balance between product development and promotionWithout balance this can result in unsatisfied costumersMediaPersonalAdvantages:Control over message, delivery of the message and timing of the messageDisadvantages:High absolute costSituation Analysis – is research based analysis that involves fact finding, gathering information for display all internal and external factors that affects a business/ organization.ConsumerObjectives and PositioningObjectives – Goals the company plans to achieveProduct = Orange juiceBrand equity – The difference in perceived value between the product and the brandHow much is actually worth vs. how much the image of the Brand makes it worthStrategiesA combination of actions that achieve the objectivesTypes of strategiesCreative mediaEvaluationAssesses the success of the campaignDid the campaign achieve the stated objectives?There are three levels of importance of the product to the consumer:1) No involvementNo interest in the product category2) Low involvementProduct is used3) High involvementThe product is usedHierarchy of Effects1st AwarenessKnowledge that the product exists2nd AttitudesOpinions about the product, things they have heard or seen on TV or research they conduct themselves.3rd BehaviorAny action related to the product, this includes if the consumer decides to buy the product or not.Low Involvement Hierarchy1st AwarenessKnowledge that the product exists2nd Trial BehaviorAction related to the product without the formation of attitude.3rd AttitudeThe way the person feels about the product this is usually formed after the trial behavior period.4th Repeat BehaviorSubsequent action based on positive attitudeONE WAY CommunicationStage One: EncodingThe source perceives the problem incorrectly, and then encodes the wrong concept. This is communication problem between the way the message is INTERPUTEDStage Two: SignalThe source understands the problem, but sends a signal that does not communicate the intended message. This is a communication problem between the way the message is SAIDStage Three: DecodingThe receiver misunderstands or misinterprets the message. This is a communication problem between the way the message is PRECIEVED.Stage Four: DestinationThe receiver understands the message but the message is forgotten and ignored. This is a communication problem between the way the message is PRESENTED.Advertising Agency Organization1) Account servicingThe service between the client and the agency2) ResearchInvolved in a project throughout the entire processSituation analysis3) Strategic planningDevelops creative direction of campaign4) CreativeDevelops verbal message (copyright)5) MediaDelivery of the message6) ProductionTranslates the copy and layout into finished form7) TrafficControls the entire process to insure that each department meets deadlinesTypes of Agencies1) Full Service complete advertising service (All the things listed above)One stop for all advertisingPublic relations2) Media buying serviceBuys media in bulk3) Creative BoutiqueCreative work,4) In-HouseMore control over the finish productOverall purpose – Achieve the greatest amount of sales with the least amount of expenseFactors Leading to Segmentation1) Introduction of the marketing conceptDiversity of consumer needs2) Higher standard of livingHigher order needs3) Increased competitionMarketplace creates demand for new products1) Classifying consumers into potentially profitable groupsConsumer ClassificationEnduring variablesStatistical study of population sizeAgeGeographicRegional difference in consumption patterns and brand preference. Think Grits. More common in the south.PsychographicsLifestyleDynamic VariableSpecific to an individual’s relationship with a productHeavy vs. Light Users- 80% of sales come from 20% of customersEarly Vs. Late AdoptersDifferent people try a product for the first time at different point in time based on:YoungerThe use of one brand of product to the exclusion of all others (loyalty)Benefit SegmentationDifferent Consumers seek different primary benefits from the same productSegmentation StrategiesThe elements of the marketing mix do not change for different consumers; all elements are developed for all consumers.2) Partially differentiatedSeveral products/ several distinct market segments3) Wholly differentiatedEntire user population4) ConcentratedSpecific product/media and messageStages of the Life CycleStages are not equal in time2) Goals and philosophyAmount of time for products to become profitable3) Financial ResourcesBudgets determined by financial conditional4) Productions capabilitiesAdvertising that creates demand in excess of production capacity is wasted5) Distribution and the sales forceAdvertising geography6) Product portfolioMix of products the company makesSales of one product eat into the sales of another productMacro issuesLarge scale issues that influence the company1) The EconomyThe economy includes variables such as:Consumer confidence2) Legal IssuesFamiliarity with laws and regulations that affect product3) Size of Market and Growth PotentialBudget should be in line with size of market and growth ratesBaby boomer4) Suppliers and Natural ResourcesLabor disputes5) Societal IssuesWomen6) AdvertisingMinimal7) Sales promotionLow Support8) SeasonalitySeasonal purchasing patternsStrategy should plan around existing patterns9) Secondary researchSales figuresAdvantagesRelatively inexpensiveDisadvantagesRarely fits needs10) Primary ResearchResearch customized by the company accomplishes specific goals.Areas of Primary Research UsefulnessAwarenessConsumer information sourcesDAGMARA type of objective specific to advertisingDefiningPositioningConsumer PerceptionsIf a consumer does not perceive that a brand delivers a benefit, then that brand does not deliver that benefitPositioning that leads to strategiesBy attributeThe two standards require for comparative advertising:The difference has to matter. What’s one more extra mile in gas mileage? Is it enough to make a difference?Endorsements (Sponsorship of products, usually by celebrities)Use the brand, but not exclusivelyMust know about the brand, can’t blind support something without having
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