1 Chapter 3 Advertising and the Marketing Process

2 What is Marketing? The American Marketing Association Defines Marketing as the Process of Planning and Executing the Conception, Pricing, Promotion, and Distribution of Ideas, Goods, and Services to Create Exchanges That Satisfy the Perceived Needs, Wants, and Objectives of the Customer and the Organization.

3 Research Stage Analyze Marketing Environment Strategic Stage Develop Objectives and Strategies Tactical Stage Specific Tools Are Selected Implementation Stage Coordinate Strategy With Marketing Activities Evaluation Stage Assess How Well Objectives Were Achieved The Marketing Plan A Marketing Plan is a Blueprint of Planned Marketing Activity That Strives to Create a Competitive Advantage for an Individual Product, a Product Line, or an Idea.

4 Advertising’s Role in the Marketing Plan (Fig. 3.1) Advertising is One of Several Marketing Communication Options.

5 The Four Main Types of Marketing (Fig. 3.2)

6 Undifferentiated Approach Develop One Marketing Strategy That Will Appeal to As Many People as Possible. (i.e. Gasoline, White Bread) Undifferentiated Approach Develop One Marketing Strategy That Will Appeal to As Many People as Possible. (i.e. Gasoline, White Bread) Type of Buyer Consumer Characteristics Consumer Characteristics Market Segmentation Approach Divide the Entire Heterogeneous Market Into Segments That Are More Homogeneous, Then Focus on Specific Target Markets Based on Groupings Such As: Market Segmentation Approach Divide the Entire Heterogeneous Market Into Segments That Are More Homogeneous, Then Focus on Specific Target Markets Based on Groupings Such As: Benefits Sought From Product Benefits Sought From Product Approaching the Market

7 A Competitive Marketing Strategy Designed to Create Product Differences in the Eyes of the Consumer. A Competitive Marketing Strategy Designed to Create Product Differences in the Eyes of the Consumer. Intangible Differences Image That Implies Difference such as Status, Enjoyment or Masculinity Intangible Differences Image That Implies Difference such as Status, Enjoyment or Masculinity Tangible Differences Product Features, Color, Size, Quality of Performance, Options or Price Tangible Differences Product Features, Color, Size, Quality of Performance, Options or Price Product Differentiation

8 Marketing Concept The marketing concept suggests that marketing should focus first on the needs and wants of the customer, rather than finding ways to sell products that may or may not meet customers’ needs. Step 1. Determine what the customer needs and wants. Step 2. Develop, manufacture, market, and service the goods and services that fill those particular needs and wants.

9 Integrated and Relationship Marketing Integrated marketing has emerged as the strategic approach with the greatest potential to implement the marketing concept. Relationship marketing identifies high-value customers and prospects and bonds them to the brand through personal attention. Advertising, along with other communication tools, can play an important role in maintaining relationships.

10 Four Tools of Marketing

11 Product Branding Brand Name, Term, Design, Symbol, or Any Feature That Identifies the Goods, Service, Institution, or Idea Sold by a Marketer. Brand Name, Term, Design, Symbol, or Any Feature That Identifies the Goods, Service, Institution, or Idea Sold by a Marketer. Brand Name Part That Can be Spoken Brand Name Part That Can be Spoken Brand Mark Logo Brand Mark Logo Trademark Legally Protected Through Registration Trademark Legally Protected Through Registration Brand Equity Reputation that the Name or Symbol Connotes Brand Equity Reputation that the Name or Symbol Connotes

12 Market Coverage? Push, Pull or Combo Strategy? Channel Direct or Indirect? Channel of Distribution Influencers  Exclusive Distribution: Only one distributor is allowed to sell the brand in a market area. i.e.Ethan Allen  Selective Distribution: Increased number of outlets, but limit number to most profitable. i.e. Timex  Intensive Distribution: Places product in every possible outlet. i.e. soft drinks  Direct Marketing: Companies that distribute products without the use of a reseller.  Indirect marketing: product is distributed through a channel structure that includes one or more resellers.  Push Strategy: Directs marketing efforts at resellers.  Pull Strategy: Directs marketing efforts to the ultimate consumer.  Combination Strategy: Most often used and combines push and pull strategies.

13 Customary or Expected Pricing Customary or Expected Pricing Psychological Pricing Psychological Pricing Price Lining Price Lining Pricing Strategies Pricing Strategies Pricing The Price a Seller Sets for a Product is Based Not Only on the Cost of Making and Marketing the Product, But Also on the Seller’s Expected Profit Level.

14 Packaging Advertising Public Relations Public Relations Point-of- Sale Point-of- Sale Personal Selling Personal Selling Direct Marketing Direct Marketing Sales Promotion Sales Promotion How the Marketer May Communicate With Target Markets. How the Marketer May Communicate With Target Markets. Marketing Communication Mix

15 Marketing Communication Personal Selling Face-to-face contact between the marketer and a prospective customer. Most important for companies that sell products requiring explanation, demonstration, and service. Advertising Has a greater ability to reach a larger number of people simultaneously. Has less ability to prompt an immediate change in behavior. Sales Promotion Communication devices offered for a limited period of time to generate immediate sales.

16 Marketing Communication Public Relations Set of activities intended to enhance the image of the marketer to create goodwill. Direct Marketing Interactive system that allows two-way communication. Provides a mechanism for the prospect to respond. Can occur at any location. Provides a measurable response. Requires a database of consumer information. Point-of-Sale/ Packaging All the communication devices and marketing messages found at the place where the product is sold.

17 Why Hire an Agency? Hiring an agency can result in several benefits: Offer objective advice. Draw on the collective experience and training of its staff. Provide people and management skills to accomplish advertising objectives. Provide supportive environment for professional advertising people.