Chapter 1 Advertising Today? William F. Arens Michael F. Weigold Christian Arens McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Overview Stresses the importance of IMC to relationship marketing; introduces advertising and distinguishes it from other forms of marketing communication.

Chapter Objectives Define integrated market communications (IMC) Explain the importance of relationship marketing Explain how the basic human communication process is useful in advertising communication Define advertising and distinguish it from other forms of marketing communications

Chapter Objectives Define marketing and identify the 4 elements of marketing strategy Illustrate advertising’s role in marketing strategy Identify important categories under promotion: the communication element of strategy

Hillary Clinton Election Ad McCain/Obama Debate

Q. 1. Define Relationship Marketing.

Relationship Marketing Relationship marketing – creating, maintaining, and enhancing long term relationships with stakeholders that result in exchanges of mutual value

Relationship Marketing Goals Manage customer/ company contacts Maximize value of profitable customers Use data to know customer

Q. 2. Why is it important for organizations to build relationships?

Importance of Relationships Cost of lost customers Lifetime Customer Value (LTCV) Cost of acquiring new customers Value of loyal customers

Q. 3. What are the five levels of relationships?

Relationship Levels Transactional Reactive Accountable Proactive Partnership

Customer/Profit Relationships Profit Margins Number of Customers High Medium Low Many Accountable Reactive Transactional Proactive Few Partnership

IMC Tactics Mass media Target messages Consumer data Expectations Less advertising in mass media Target messages Heavier reliance on targeted messages Consumer data Increased use of consumer data Expectations Changed expectations for marketing communication suppliers

Affects on Customer View IMC helps company manage customer perceptions News Word of mouth Web Expert opinion Gossip CEO personality Financial report Product view

Dale Peterson Political Ad

Q. 4. What are the four sources of brand messages?

4 Sources of Brand Messaging 1. Planned messages (advertising, publicity releases) Low impact 2. Product messages (product, price, packaging) Great impact 3. Service messages (employee interactions) Positive or negative 4. Unplanned messages (news stories, rumors, competitors remarks, disasters) Company can influence

Dimensions of IMC The Integration Triangle Say Do Confirm Planned messages Unplanned messages Product, service messages

Q. 5. Define Advertising.

What is Advertising? Structured, composed communication Directed to groups Paid for Usually persuasive About products Identified sponsors Transmitted through a communication medium

Dimensions of Advertising Communication Economic Marketing Social/Ethical

Q. 6. What are the four kinds of advertising media?

Communication Channels Mass Newspapers & Magazines Radio & TV Billboards

Communication Channels Mass Addressable Direct Mail E-Mail

Communication Channels Mass Addressable Interactive Billboards Newspapers & Magazines Radio & TV Direct Mail E-Mail Mobile Online

Communication Channels Mass Addressable Interactive Non- traditional Billboards Newspapers & Magazines Radio & TV Direct Mail E-Mail Mobile Online Shopping Carts Tattoos Blimps

Hudson Taylor (1832-1905)

Q. 7. What are the various elements in the human communication process?

Human Communication Process Noise Source Encoding Message Channel Decoding Receiver Feedback

Interactive Communication Model Encoder Source Decoder Message Receiver Feedback

Stern Communication Model

Q. 8. What three literary forms are used in advertising messages?

Communication: Message Dimensions Autobiography “I” tell a story about myself to “you,” the imaginary audience Narrative Third person persona tells a story about others to imagined audience Drama Characters act in front of imagined empathetic audience

Q. 9. Who are the sources and receivers in a message according to the Stern model?

Communication: Source Dimensions Sponsor Legally responsible Has a message Author Copywriter, art director, creative group Invisible to audience Persona Within the text Lends voice or tone to ad Real or imaginary spokesperson

Receiver Dimensions Implied consumers Every ad or commercial assumes an audience of ideal consumers Sponsorial consumers Decision makers at the sponsor’s organization They decide if the ad will run Actual consumers People in the real world who comprise the target audience

Feedback and Interactivity Redeemed Coupons Feedback & Interactivity Survey Responses Phone Inquiries Increased Sales Visits to Web site Visits to a store Lets sender know if message received, understood Sender can tell when communication breaks down

The Marketing Dimension Business Functional Divisions Operations Finance & Admin Marketing Defines advertising’s role in business Only marketing has revenue generation as primary role

What is Marketing? The process of planning and executing… Concepts, pricing, distribution, and promotion of Ideas, goods, and services To create exchanges that… Satisfy the perceived needs, wants, and objectives of individuals and organizations

Advertising Classifications Target Audience Geographic Area Medium Purpose

Target Markets and Audiences Consumer Markets Retail & Public Service Business/Industrial Markets Trades, Professions, & Agriculture

Q. 10. How are the 4Ps related to advertising strategy?

Marketing: The 4 Ps Categories of goods or services Product Price Strategies for competitive pricing Place Distribution and geography Promotion Communication channels

Product Types of Marketing Communication Consumer High-Tech Goods Advertising High-Tech Advertising Service Advertising

Price Types of Marketing Communication Image Advertising Loss-Leader Regular Price-line Advertising Sales and Clearance Advertising

Place Types of Marketing Communication Local Advertising Global Regional Advertising International Advertising National Advertising

Promotion Types of Marketing Communication Collateral Materials Product Advertising Personal Selling Sales Promotion Public Relations

Marketing: IMC Integrated Marketing Collateral Materials Sales Promotion Product Advertising Personal Selling Public Relations

Frank Caliendo-Impressions of Bush and Clinton