Advertising’s Role in Marketing

Agenda Advertising’s Role in Marketing Key Concepts Key Players & Markets Marketing Process How Agencies Work Changing Trends in Marketing

Marketing Definition An organizational function and a set of processes for creating, communicating & delivering value to customers & for managing customer relationships in a way that benefits the organization & its stakeholders Marketing objective  To Sell (product, service or idea) Advertising

Key Concepts Marketing Concept Concept of Exchange Concept of Branding Concept of Added Value

Marketing Concept Customer focus vs. Product focus Examples Dell Computers (www.dell.com) Dood Application in Advertising Focus of Ad Historically.. Make product then find market Marketers add customers in the process of product design & Development Marketing concept… solutions to customers’ problems…2 steps first find customers’ needs and wants second develop, manufacture, market and service goods that fill those particular needs and wants Dell computers customer focus Dood product focus 2 ads are to be shown

Concept of Exchange The act of trading a desired product to receive something of value in return Application in Advertising Information exchange (communication)

Concept of Added Value Value comes from: Brand Better P’s of marketing Better business practices (Ex: Dell exchange offer) Brand Image Brand A distinctive name, term, design, or symbol that identifies the goods, services, institution, or idea sold by a marketer and differentiates it from other products Brands Examples Marketing and advertising add value to product for both marketer and customer Advertising makes product valuable, useful and appealing Brand image is a psychological value

Concept of Added Value Brand Image: Application in Advertising Impression in the consumers' mind of a brand's total personality Communication + Experience Application in Advertising Showcases value Adds value Example: Nike Branding is the process of creating a special meaning for a product, one that makes it distinctive in the market place and in its product category. Branding transforms a product into the brand We buy familiar brands Brand equity is the reputation, meaning and value that brand name or symbol has acquired over time. It measure the financial value the brand contributes to the company.

Key Players Marketer Suppliers & Vendors Distributors & Retailers Agencies

Marketer Organization, company, manufacturer producing the product & offering it for sale Top Marketers 3 organizational structures Skill-centric Product-centric Market-centric Marketing department manages brands, products and products’ lines, marketing services like research companies, marketing communication agencies P&G established the concept of brand management concept Brand manager is responsible for all the strategic decisions relating to product design and manufacture as well as pricing, distribution and marketing communication

Skill-Centric Product-Centric Market-Centric Marketing Director Manager (Research) Manager (Sales) Manager (Advertising) Manager (CRM) Skill-Centric Marketing Director Brand Manager (Confectionaries) Brand Manager (Dairies) Brand Manager (Toiletries) Brand Manager (Baby Products) Product-Centric Marketing Director Manager (Corporate) Manager Consumer) Manager (Affluent) Manager (Agriculture) Market-Centric

Suppliers / Vendors Network of suppliers producing materials, ingredients used in producing the product Add Value Determine product quality Determine product price Partners in communication Ingredient branding Acknowledging a supplier’s brand as an important feature Ex: Intel

Distributors & Retailers Distribution Chain Network of companies involved in moving product from manufacturer to buyers Add value Marketing & Advertising Example: Wal Mart Also called Resellers or intermediaries Distribution chain- distributor, whole sellers, brokers, dealers and retailers. Dealers and retailers are capable of influencing, supporting and delivering advertising messages. Cable ads of retailers even makro Wholesalers use direct mail, trade papers, or catalogues

Types of Markets Market Market Share 4 types of markets Buyer Groups of people or organizations Market Share 4 types of markets Different advertising needs Examples Professional & trade advertising Institutional Consumer B2B Reseller Market broad meaning: particular set of buyer Youth market, motorcycle market Share of market refers to the % of the total market in a product category that buys a particular brand Marketing strategist refers markets to group of people or organizations Mass media for consumer market Trade journals, professional magazines and direct mail. Consumer Advertising

Advertising’s Role in Marketing

Marketing Process Situation Analysis  SWOT/PO Analysis Set Objectives Identify Needs/Wants, Segment & Target Product Differentiation & Positioning Marketing is a process for doing business Research the consumer market and the competitive marketplace and develop situation analysis (consumer behavior) Set objectives for marketing efforts

Marketing Process Develop Marketing Mix (the P’s) Product Place (Market Coverage, Push/Pull) Price (Customary/Psychological) Promotion (Ad, PR, SP, PS, DM) Evaluate Effectiveness

How Agencies Work Why Hire Agency? Creative & artistic expertise Dedicated workforce Media contacts & knowledge Objective advice Saves money

How Agencies Work Geographic Presence / Size / Specialization Full-Service Specialized Agencies Creative Hotshops Media Buying Agencies Activation Agencies Outdoor Media Sellers Digital Media Agencies Production Companies Every Marketing communication tool like Personal Selling, PR, Outdoor etc has separate and special/dedicated agencies Specializations may be in terms of industries these agencies serve, markets (consumer, B2B), audiences (youth, minorities)

Agency Departments Account Management Creative Department Agency-Client liaison Relationship & project management Business acquisition & retention Creative Department Inspire, write, design Participate in production Make or break an agency

Agency Departments Media Planning & Buying Account Planning Plan, negotiate, buy & do research Targets of media PR efforts Account Planning Strategic specialists / Researchers Consumer-Brand relationship Market & consumer insights Communication Brief

Organizational Structure CEO Directors Account Director Creative Director Media Head Planning Head Operations Head Group Account Managers, NBD Managers Art Directors, Creative Group Heads, Traffic Manager Media Planners, Buyers, Researchers Account Planners / Strategists Finance, Admin, HR Account Managers, Account Executives, AAE Copywriters, Visualizers, Mechanical & Digital Artists, Illustrator Media Assistants, Dispatchers Research Assistants, Junior Planners Executives & Assistants

The Hiring Process Newspaper Ad / Contacts / Referrals Pitch (creative/Strategy/IMC) Shortlisting Final pitch Selection Contractual Agreement (AoR)

Agency Compensation Commission % Tariff Retainer Combination 15% ? 12.5% creative vs. 2.5% media Tariff Retainer Combination % of Client Sales

Trends in Modern Marketing Increase in international brands International advertising Standardization vs. Adaptation debate Economies of Scale, consistent message, safeguard global image  Standardize Culturally congruent advertising, Less cultural blunders, less hierarchy in decision making  Adapt Affects agency selection

Trends in Modern Marketing New Marketing Concepts Integrated marketing Relationship marketing Permission marketing

Funny Blunders Coors Beer in Mexico KFC in China Coca Cola in China Actual  Turn It Loose Spanish  Suffer From Diarrhea KFC in China Actual  Finger lickin’ good! Translated  Eat your fingers off! Coca Cola in China Pronounced Ke-kou-ke-la  Bite the wax tadpole Changed later to ko-kou-ko-le  Happiness in the mouth Back

Brand We Pay For

Electronics Watches Shoes

Top 10 Global Marketers Advertising Age – Global Marketers 2008 Back

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