1 Chapter 3 Advertising and the Marketing Process

2 Learning Objectives Learn how advertising relates to marketing. An overview of an IMC planning process. Understand advantages and disadvantages of various forms of marketing communications. Review various positioning strategies.

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 Promotional Mix

6 An Integrated Marketing Communications Planning Model Review of marketing plan Analysis of promotional program situation Analysis of the communications process Budget determination Develop integrated marketing communication program

7 Advertising Direct Marketing Sales promotion PR/ Publicity Message strategy Advertising objectives Direct Marketing objectives Media strategy Direct Marketing strategy Sales Promotion strategy Sales Promotion objectives PR/publicity strategy Personal Selling strategy PR/publicity objectives Personal Selling objectives Personal selling Integrate & implement marketing communications strategies Monitor, evaluate, and control integrated marketing communications program An Integrated Marketing Communications Planning Model (cont’d)

8 EXH 5-9

9 Allocation of Advertising and Promotional Budgets (in percentages)

10 Advertising: Advantages Ability to control message Cost effective way to reach a large target market Ability to create images and differentiate brands Can sometimes strike responsive reaction from customers

11 Advertising: Disadvantages High costs of producing and placing ads Difficult to determine effectiveness Credibility problems Clutter

12 Sales Promotion: Advantages Provides extra incentive to purchase product Way to appeal to price sensitive consumer Can generate extra interest in ads Easier to measure efforts

13 Sales Promotion: Disadvantages Often only has short term impact Often abused Can lead to promotional wars Often does not contribute to brand image

14 Publicity/PR Advantages -- Credibility -- Low cost way to communicate Disadvantages -- Lack of control -- Difficult to get media cooperation -- Can be negative

15 Personal Selling: Advantages Communication flexibility Can communicate complex information Can target to specific markets and customers Direct Feedback

16 Personal Selling: Disadvantages High cost per contract Expensive way to reach large number of customers Difficult to communicate uniform message

17 Direct Marketing: Advantages Changes in society have made consumers receptive to direct-marketed products Allows for more selectivity and target marketing Can customize message

18 Direct Marketing: Disadvantages Consumers and businesses receive too much unsolicited direct mail and phone calls Image problems for direct-marketed products Clutter problems

Breakdown of Spending on Event Sponsorship

20 Most Common Reasons Marketers Sponsor Events 1. Increase awareness of company or product name. 2. Identify with a particular lifestyle. 3. Differentiate product from competitors. 4. Enhance commitment to community or ethnic group. 5. Entertain key clients; business-to-business marketing. 6. Create merchandising opportunities. 7. Shape or reinforce the public’s perception of a product’s attributes 8. Affect the bottom line.

21 How to measure the effectiveness of sponsorship (DDBNeedham) Persuasion Impact = (Strength of the Link) x (Duration of the Link) x { (Gratitude Felt due to the Link) + (Perceptual Change due to the Link)} Strength of the link = % of the target who recognize the link between the sponsoring brand and the event or organization Gratitude = “I feel I am contributing to the event by buying the sponsoring brands”

22 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

23 Positioning Guidelines Marketers can position a product, service, or idea in the following ways: By attribute (Pentium III offers 3-dimensional graphics) By price (Wal-Mart means value) By its ability to surpass the competition (Ford beats Chevy) By application (Tylenol Flu is for flu attacks) By product user (TeenPeople is the favorite magazine of high school students) By product class (Carnation Instant Breakfast is a breakfast food)

24 Review Learn how advertising relates to marketing. An overview of an IMC planning process. Understand advantages and disadvantages of various forms of marketing communications. Review various positioning strategies.