moriarty8e_media_02__Advertising's Role in Marketi

Advertising sRoleinMarketing AdvertisingPrinciplesandPractices QuestionsWe llAnswer Whatismarketingandwhatareitskeyconcepts Whatarethedifferenttypesofmarkets andhowdotheyrelatetothemarketingprocess Whoarethekeyplayersinmarketing Howareagenciesorganized andhowdotheyworkwiththeirclients 2 2 PrenticeHall 2009 Puma sBrandEvolution WhatwerethekeydecisionsbehindPuma sbrandstrategy HowdoesPumacommunicateits cool brandimage VisittheSite 2 3 PrenticeHall 2009 2 4 Whatismarketing Traditionally marketingisthewayaproductisdesigned tested produced branded packaged priced distributed andpromoted Anorganizationalfunctionandasetofprocessesforcreating communicating anddeliveringvaluetocustomersandformanagingcustomerrelationshipsinwaysthatbenefittheorganizationanditsstakeholders AmericanMarketingAssociation WHATISADVERTISING 2 5 KeyConcepts TheMarketingConcept Marketingshouldfocusfirstonidentifyingtheneedsandwantsoftheconsumer ratherthanbuildingproductstheconsumermaynotwant Market drivencompaniesincludeDell Harley Davidson Intel UPS Twostepsofthemarketingconcept Determinecustomerneedsandwantsthroughresearch Develop manufacture market andservicegoodsthatfillthoseneedsandwants solvecustomers problems ExampleofConsumer FirstApproach Doyouthinkthisisabelievablead Doesitringtruetoyou DoyouthinkitworkstoattractnewcustomerstotheDiscovercard 6 2 6 PrenticeHall 2009 Consumervs CorporateFocus 7 2 7 PrenticeHall 2009 2 8 KeyConcepts Exchange Exchangeistheactoftradingaproductorserviceforsomethingofvalue money Twotypesofexchange economicandcommunication 2 9 KeyConcepts DifferentiationnadCompetitiveAdvantage Abrand scompetitiveadvantageiswhereit sdifferentfromitscompetitorsandsuperiorinsomeway Inmarketing thisconceptiscalleddifferentiation Areasofdifferentiationinclude PriceDesignPerformanceDistributionBrandimageReliability Maytag slonelyrepairman 2 10 KeyConcepts AddedValue Addedvalueisamarketingoradvertisingactivitythatmakestheproductmorevaluable usefulorappealingtoconsumers Otherwaystoaddvalue MoreconvenienttobuyLowerpriceMoreusefulfeaturesHigherqualityStatussymbolMoreknowledgeableemployees 2 11 KeyConcepts Branding Brandingisthewaymarketerscreateaspecialmeaningforaproduct Brandimageisbasedoncommunicationandontheconsumer spersonalexperienceswiththeproduct BrandEquityreferstothefinancialvaluebasedonthereputationandmeaningthebrandnamehasacquiredovertime Principle Effectivebrandingtransformsaproductbycreatingaspecialmeaningbasedonanemotionalconnection AMotorcycleisaMotorcycle ButaHarleyisSomethingDifferent VisittheSite 12 2 12 PrenticeHall 2009 2 13 BrandCoca ColaMicrosoftIBMGeneralElectricIntelNokiaToyotaDisneyMcDonald sMercedes Benz MarketValue Billions 67 57 56 49 32 30 28 28 28 22 Table2 1MostValuedGlobalBrands Source InterbrandGroup quotedin BestGlobalBrands BusinessWeek August7 2006 p 54 Reprintedwithpermission IvorySoap It sPureanditFloats HowdidIvorybecomeoneofthemostpowerfulbrandsofalltime WhatroledidresearchplayinbuildingtheIvorybrand VisittheSite 14 2 14 PrenticeHall 2009 2 15 TypesofMarkets Amarketisaparticulartypeofbuyer Shareofmarketisthepercentageofaproductcategory stotalmarketthatbuysaparticularbrand AdsforFourTypesofMarkets Whichiswhich ConsumerBusiness to BusinessInstitutionalChannelHowarethefouradsdifferent Howaretheythesame 16 2 16 PrenticeHall 2009 2 17 TheMarketingPlan StepsintheMarketingProcessResearchtheconsumermarketplaceandcompetitivemarketplaceanddevelopasituationanalysisorSWOTanalysis Setobjectivesforthemarketingeffort Assessconsumerneedsandwants segmentthemarketintogroups targetspecificmarkets Differentiateandpositiontheproductrelativetothecompetition Developthemarketingmixstrategy Evaluatetheeffectivenessofthestrategy 2 18 TheMarketingPlan MarketingResearchResearchmarkets productcategories consumers andthecompetitivesituation Plannersneedtoknowasmuchastheycanaboutthemarketplacesotheycanmakeinformed insightfulstrategicdecisions SWOT Strengths Weaknesses Opportunities Threats helpsmanagersturndataintoinsights Principle Marketingresearchisaboutmorethanjustthecompilationofinformation italsoproducesinsightsintomarketingsituationsandconsumerbehavior 2 19 TheMarketingPlan KeyStrategicDecisionsObjectives increasessales shareofmarket orbroaderdistributionSegmentingandtargetingPotentialcustomersconstitutethetargetmarket Identifyingspecificgroupswithinthetargetmarketwhoseneedsintersectwiththeproductanditsfeaturesissegmenting Atargetaudienceistheaudienceforamarketingcommunicationmessage DifferentiatingandpositioningThepointofdifferentiationpositionstheproductwithinthecompetitiveenvironment relativetoconsumerneeds Positioningishowconsumersviewthebrandrelativetoothersinthecategory 2 20 TheMarketingMix 2 21 TheMarketingMix Product Considerationsincludeproductdesignanddevelopment productoperationandperformance branding andphysicalpackaging Productdesign performance andqualityarekeytoaproduct ssuccess DesignisimportantforfashionandclothingitemsPerformanceisimportantforcarsandcomputersQualityisimportantforupscalebrands 2 22 TheMarketingMix Distribution Thechannelsusedtomoveaproductfrommanufacturertobuyer Typesofdistribution DirectmarketingtoconsumerChannelmarketingthroughresellersandretailersStrategicdistributiondecisions MarketcoveragestrategyPushstrategiesdirectmarketingtotheconsumerPullstrategiesdirectmarketingtoresellers Push Pull andCombinationStrategies 2 23 PrenticeHall 2009 2 24 TheMarketingMix Pricing Priceisbasedon Costofmakingandmarketingtheproductandseller sexpectedprofitlevelAlso basedonwhatthemarketwillbear competition economicwell beingofcustomer valueofproduct andtheconsumer sabilitytogaugethevaluePricingstrategies Customarypricing e g movietheaters Psychologicalpricingforaffluentcustomers 2 25 TheMarketingMix MarketingCommunications Includespersonalselling advertising publicrelations salespromotion directmarketing eventsandsponsorships pointofsale packagingPersonalsalesusesface to facecontactwithcustomerstocreateimmediatesalesAnadordirectmailpiecemayinviteapotentialcustomertocontactthecompanyandthesalesstafffollowsuponthe lead Marketingcommunicationisabout BigIdeas Creativeconceptsthatgetattentionandstickinmemory 2 26 KeyPlayers Marketer Theadvertiserorclientthatisthecompanyororganizationwhoproducesandsellsthebrand ThemarketingfunctionisusuallyhandledbyamarketingdepartmentheadedbyaVPordirectorofmarketing Somecompanieshaveaproductorbrandmanagerwhohandlesmarketingandmakesallstrategicdecisionsaboutdesign manufacture andthemarketingmix e g Procter Gamble 2 27 KeyPlayers SuppliersandVendors Theyprovideorproducethematerialsandingredientsthataresoldtomanufacturerstomakeproducts Thisnetworkofsuppliers vendorsisthesupplychain Intheory everymemberofthesupplychainaddsvalue Inpractice everymemberofthesupplychainisapartnerincreatingtheproductandmarketingthebrand Ingredientbrandingacknowledgesasupplier sbrandasaproductfeature 2 28 KeyPlayers DistributorsandRetailers Thedistributionchainorchannelofdistributionreferstoallthecompanieswhohelpmoveaproductfrommanufacturertobuyer Wholesalersusepersonalselling directmail tradepapers andcatalogsRetailerstrytodrawtheircustomersthroughadvertising Thetradereferstoupstreamplayers suppliersandvendorsinthesupplychain anddownstreamplayers companiesindistributionchain 2 29 KeyPlayers MarketingPartners Suppliers distributors andmarketingcommunicationagenciesarepartnersinsupportingthebrandandmaintaininggoodcustomerrelationships Affiliatemarketingisapartnershipinwhichonecompanydrivescustomerstoanothercompanyandmaygetacommissionfordoingso AebayBarnes Noble 2 30 HowAgenciesWorkwithClients Agenciesandagencynetworks holdingcompanies Companieshaveinternaladvertisingdepartmentswhoactasaliaisonbetweenthemarketingdepartmentandadvertisingagency ies AlsocalledmarketingservicesAdvertisersmayhaveoneagencyofrecord AOR orseveralagenciesAgenciesofferclients SpecializedservicesObjectiveadviceExperiencedstaffingManagementofalladvertisingactivitiesandpersonnel 2 31 MarketingOrganizationOmnicomGroupWPPGroupInterpublicGroupPublicisGroupeDentsuHavasAegisGroupHakuhodoDYHoldingsaQuantiveAsatsu DK WorldwideRevenues millions 11 376 9 10 819 6 6 190 9 5 872 0 2 950 7 1 841 0 1 825 8 1 337 0 442 2 430 0 Table2 2Top10AgencyNetworks Source AgencyReport World sTop25MarketingOrganizations AdvertisingAge April30 2007 S 2 Agencieshavetheirownstyleandphilosophy InthesethreeadsfortheNavy Army andAirForce canyouperceiveadifferenceinapproach style andstrategy Whichdoyouthinkwouldbemosteffectiveinrecruitingvolunteers 2 32 PrenticeHall 2009 2 33 AgencyDentsu Dentsu McCannEricksonWorldgroup Interpublic BBDOWorldwide Omnicom DDBWorldwideCommunications Omnicom Ogilvy MatherWorldwide WPP Young RubicamBrands WPP TBWAWorldwide Omnicom JWT WPP WPP PublicisWorldwide Publicis LeoBurnett Publicis Headquarters 06Revenue billions Tokyo 2 49NewYork 2 13NewYork 2 10NewYork 2 08NewYork 1 71NewYork 1 59NewYork 1 52NewYork 1 50Paris 1 24Chicago 1 19 Table2 3Top10ConsolidatedAgencyNetworks Source AgencyReport TopTenConsolidatedAgencyNetworks AdvertisingAge April30 2007 S 4 2 34 TypesofAgencies Full serviceAgenciesOfferaccountmanagement creativeservices mediaplanning accountplanning accounting traffic production andHRSpecializedby Function copy art media Audience minority youth Industry healthcare computers agriculture Market minoritygroups CreativeBoutiquesSmallagenciesfocusedonthecreativeproductMedia buyingServicesFocusedonpurchasingmediaforclients 2 35 HowAgencyJobsAreOrganized AccountManagementServesasaliaisonbetweentheclientandagencyThreelevels managementsupervisor accountsupervisor accountexecutiveAccountPlanningandResearchActsasthevoiceoftheconsumerCreativeDevelopmentandProductionPeoplewhocreateandpeoplewhoinspireCreativedirectors copywriters artdirectors producersMediaPlanningandBuyingRecommendmostefficientmeansofdeliveringthemessageInternalAgencyServicesTraffic printproduction financialservices humanresources 2 36 HowAgencyArePaid CommissionsApercentageofthemediacostFeesHourlyfeeorrateplusexpensesandtravelRetainersAmountbilledpermonthbasedonprojectedamountofworkandhourlyratechargedPerformance basedBasedonpercentageofsalesormarketingbudgetProfit basedGreaterriskifcampaigndoesn thavedesiredimpactValueBillingBasedonvalueofcreativestrategyorideas 2 37 Accountability Seniormanagerswantmarketingmanagerstoprovethattheirmarketingiseffectivebasedon SalesincreasesPercentageshareofthemarketthebrandholdsReturnonInvestment ROI Agenciesarecreatingdepartmentstohelpmarketersevaluatetheefficiencyandeffectivenessoftheirmarketingcommunicationbudgets 2 38 Integrated Holistic Marketing FocusedonbettercoordinatingallmarketingeffortstomaximizecustomersatisfactionAllareasofthemarketingmixworktogethertopresentthebrandinacoherentandconsistentway Thegoalistomanageallthemessagesdeliveredbyallaspectsofthemarketingmixtopresentaconsistentbrandstrategy 2 39 EmergingMarketingStrategies RelationshipMarketingPermissionMarketingExperienceMarketingGuerillaMarketingDigitalMarketingViralMarketingMobileMarketingSocialNetworkMarketing 2 40 GlobalMarketing Mostcountrieshavelocal regional andinternationalbrandsrequiringinternationaladvertisingtopromotethesamebrandinseveralcountries Companiesmayhaveseveralinternationalregionalofficesand oraworldcorporateheadquarters Agenciesmustadaptwithnewtoolsincludingonelanguage onebudget andonestrategicplan Thechoiceofanagencyforinternationaladvertisingdependsonwhetherthebrandmessagewillbestandardizedorlocalized DiscussionQuestions 2 42 DiscussionQuestion1 Lookthroughtheadsinthistextbookandfindanexampleofanadthatyouthinkdemonstratesthemarketingconceptandanotheradthatyouthinkdoesnotrepresentaneffectiveapplicationofthemarketingconcept Comparethetwoandexplainwhyyouevaluatedthemasyoudid 2 43 DiscussionQuestion2 Coca Colaisthemostrecognizablebrandintheworld Howdidthecompanyachievethisdistinction Whathasthecompanydoneinitsmarketingmixintermsofproduct price distribution andmarketingcommunicationsthathascreatedsuchtremendousbrandequityandloyalty Howhasadvertisingaidedinbuildingthebrand 2 44 DiscussionQuestion3 Imagineyouarestartingacompanytomanufacturefudgebasedonyourfamily soldrecipe Considerthef