ADVT 250 1st Edition Lecture 4Outline of Last Lecture I. The Advertising AgencyII. Advertising Agency DepartmentsIII. Agency Compensation IV. Specialized AgenciesOutline of Current Lecture I. Marketing MixII. DemandIII. Offensive Demand StrategiesIV. Defensive Demand StrategiesV. What is a Brand?VI. Benefits of Positive Brad Equity to Consumers/ MarketersCurrent Lecture (Marketing Fundamentals and Advertising)I. Marketing Mix (The 4 P’s)1.) Product- Must have a relevant/ great product.2.) Price- Price it at the right price for that product and that audience. (Doesn’t necessarily mean the cheapest price.)3) Place- Where the product is available. (You don’t want to buy a Louis Vuitton bag at Walgreens)4.) Promotion- You’ve to got be able to talk about it in a relevant way.-Advertising- Primary brand driver. Must have a realistic, true message. II. Demand1.) Demand = Ability + Willingness. You can’t have a demand for a product unless you have people that are willing and able to buy your product. These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.2.) Advertising deals with ‘willingness’ . Advertising is about perception. How people perceive the product. 3.) Credit cards/ mortgages are marketing efforts that play with the ‘ability’ part of demand. Advertising can only impact the willingness aspect. 4.) Category Demand: Refers to a product category. Ex: Toothpaste is a category that is well established, however there are many brands under toothpaste (Colgate, crest, aquafresh, etc). There is a product lifecycle: -Introduction: Advertising will have to do a lot of teaching and explaining about the new product. Ex: when VHS first came out. A NEW category. -Growth: People start adopting the category. Then competitors start to make new products. Lots of brands. Then the advertising becomes brand to brand advertising. -Maturation: Demand has stabilized. For ex: toothpaste. Everyone knows what toothpaste is and there aren’t really any new brands that enter anymore. The category becomesvery hard to upset. There are a few leading brands and they are usually pretty stable. -Decline: Eventually, like with VHS, a new technology might make something obsolete. Sometimes if you are in decline you can try and reboot your category. Ex: Baking Soda: originallyfor baking. But people stopped baking from scratch. So baking soda had many properties. They began making deodorizers, toothpastes, and laundry detergents. 5.) Brand Demand: -Category Leader: Ex: Colgate and Crest are the toothpaste category leaders. - Challenger Brand: Disney is the world leader in theme parks. And Universal Studios is the challenger brand and is trying to become a category leader. The challenger will usually mention the leader and say they are better. - Minor Player: Tab soda- first diet soda. Just because you are a little brand doesn’t mean you are not a profitable brand. - Niche Brands: Highly specialized brands within a category. Originally energy drinks were niche brands under cola, but they have grown into their own category. III. Offensive Demand Strategies- trying to gain users1.) Non- users/users of other categories (market growth) Ex: get non bus riders to ride buses. 2.) Increase rate of use (sales intensification) Ex: get current customers to use the bus more often than they already are. 3.) Change nature of use (sales intensification) Ex: The arm and hammer (baking soda) example. Same product, but use in different way.4.) Change brand sales within a category (market share). Ex: try to get users of Pepsi to drink coke or vice versa. IV. Defensive Demand Strategies: Trying to keep your current customer1.) Market Retention- Keeping current customers. (it is much easier to keep and treat your current customers well than to get new customers.) During the category life style defensivestagey is your only option when in decline. V. What is a Brand?1.) Brand= All meaning (positive and negative) associated with a particular marketer’s product or service. You not only like the product but you also love the brand. 2.) Strong Brands: Relevant/meaningful. There is a positive connection between customers and brand. It is immediately identifiable. Enduring.3.) Brand Equity: Value of Brand = Net total of all assets and liabilities linked to a brand by customers. VI. Benefits of Positive Brad Equity to Consumers/ Marketers Customers 1.) Interpretation/processing of information will happen fast.2.) Confidence with purchase decision. 3.) Satisfaction with product use. Marketers1.) Brand loyalty2.) Efficiency and effectiveness of marketing3.) Price/Margins4.) Brand extensions5.) Competitive advantage6.) Trade leverage. *ADVERTISING = BRAND