Midterm 1 Flashcards
Integrated Marketing Communications
- Contrasts with practices from the past in which ad agencies created campaigns without thinking how advertisements worked with other marketing communications
- Integrates the customer into the design of the product
- A systematic process for interaction that will create substance in the relationship
Components of Promotion
Sales promotions: discounts, gifting, coupons, free trials, etc
Personal selling – door-to-door salesmen
Direct marketing- catalogs, mailers and fliers, junk mail, email with link, removing the middleman
Public relations is a strategic communication process designed to influence a relationship with key stakeholders across a myriad of platforms in order to shape and frame the public perception of an organization.
Goals of Advertising
- Introduce a product or brand
- Call to action
- Create desire or awareness
- Positioning
- Acquire customers
- Increase sales or profit
- Differentiation
- Brand building
Market Segmentation
- Identifying groups with shared needs and characteristics
- Aggregating (combining) the groups into larger segments through a marketing mix
This process should result in market segments that are large enough to target and reachable through a suitable mix of marketing activities—including advertising.
4Ps & 4Cs of market segmentation
P’s: Product (or service, packaging), Price, Promotion and Place
C’s: Consumer wants and needs, Cost (not only the price), Convenience, Communication
Categories of Market Segmentation
Demographic
Behavioristic
Geographic
Psychographic
Product life cycle
Intro (push and pull)
Growth: A period in a product life cycle marked by market expansion as more and more customers make their first purchases while others are already making their second and third purchases
Competitors jump into the market, but the company with the early leadership position reaps the biggest rewards.
Individual firms realize first substantial profits.
Maturity: The market has become saturated with products, the number of new customers has diminished, and competition is most intense
Profits diminish.
Selective demand: consumer demand for the particular advantages of one brand over another
Sales increase at expense of competitors.
Market segmentation, product positioning, and price promotion become more important.
Decline: Sales begin to decline due to obsolescence, new technology, or changing consumer tastes
Cease promotions
Phase out the product
Minimal to no advertising
Difference between old and new advertising models
Old model:
- A distinct and separate function in the company, usually subordinate one
- Identify groups of potential customers
- Convince them to buy product or service
- Engage in image-making
Project a false sense of the company and its offerings
- Lure the customers into the company’s grasp
- Sell mass-produced goods to a mass market via mass media
New model:
-Is not a function of a separate department, it’s a way of doing business
- Not a new ad campaign or promotion
- A tool in the Marketing Communications toolbox
- All pervasive, part of everyone’s job description
- Neither to fool the customer, nor to falsify the company’s image
High skim and low penetration pricing
High skim pricing: a pricing strategy that sets new product prices high and subsequently lowers them as competitors enter the market
Low penetration pricing:
a marketing strategy used by businesses to attract customers to a new product or service by offering a lower price during its initial offering
Push and pull strategies
Pull: marketing, advertising, and sales promotion activities aimed at inducing trial purchase by consumers (early adopters)
Consumer demand will “pull” the product through the distribution chain
Push: marketing, advertising, and sales promotion activities aimed at dealers, retailers, and salespeople
Encourage distributers to stock, display and advertise the product
Branding and product positioning
Branding: Marketing function that identifies products and their source and differentiates them from all other products
Positioning : the way in which a product is ranked in a consumer’s mind by the benefits it offers, the way it is classified or differentiated from the competition, or by its relationship to certain target markets
Position helps consumers remember the brand and what it stands for.
The Values and Lifestyles Classification system (VALS)
System is based on-
Primary motivation: the pattern of attitudes and activities that help people reinforce, sustain, or modify their social and self-image
Ideals
Achievement
Self-expression
Resources: the range of psychological, physical, demographic, and material capacities that consumers can draw upon, including education, income, self-confidence, health, and eagerness to buy
Organizations in advertising: Centralized
Centralized organization: the chain of command
A staff of employees, usually located at the corporate headquarters, responsible for all the organization’s advertising.
Many departments within the department, often structured by product, advertising subfunction, end user, media, or geography.
Control, But: people at lower levels can’t take important decisions
Decentralized organization types
Functional structure:
Establishment of advertising departments by products or in various divisions, subsidiaries, countries, regions, or other categories that suit the firm’s needs, which operate with a major degree of independence
Gives significant authority to the individuals responsible for each brand (brand managers)
More flexible than centralized organization
But, may lead to inter-departmental conflicts over objectives and resources
Matrix organization:
- People report to more than 1 superior
- Ideas can move around faster
- But: matrices involving several departments may become complex – need to give one department priority in decision-making
Teams:
- Wholly autonomous, temporary groups that are responsible for the entire project
- They split up as soon as the project is completed
- But: need a strong leader, not as good in decision making
Tasks performed in an agency
Advertising production
Production department: responsible for managing the transformation of creative concepts into finished advertisements and collateral materials
Traffic management
Traffic department: coordinates all phases of production and ensures completion before the deadline
Traffic is often the first stop for entry-level college graduates and an excellent place to learn about agency operations.
