Strategic Communications Midterm

What do high-involvement products emphasize?

(Electronics) Personal selling and more information

What do low-involvement products emphasize?

(Toilet paper, detergent) Advertising, emotional appeals and brand image

What should you not do in advertising?

1) Deception 2) "Puffery" 3) Use negative images --> don't reinforce stereotypes 4) Target vulnerable audiences --> children and elderly 5) Make controversial products 6) Invade privacy or be a nuisance

Factors used for segmentation

1) Demographics - age, occupation, gender, income, family status, race/ethnicity, education 2) Geographics -region, population density, city size, population growth 3) Buying behavior -Category and brand consumption Breakfast: Kashi cereal vs. Quaker oatmeal (category) Coffee: Starbucks vs. Fair Trade (brand) 4) Psychographics -Lifestyles

3 advertising acts the FTC regulates

1) Endorsements → endorsers have to use the product they endorse 2) Comparisons → 3) Demonstrations →

What is an in-house agency?

A team within a company that focuses on the advertisement of their own product. Pros: -Save money -Priority service Cons: -Minimum staffing of experts -Possibility of groupthink --> an out of house agency may be able to provide a fresher/new idea on something

What is consent decree?

Advertiser is asked to stop deceptive practice

What is cease and desist?

Advertiser is required to stop by legal order (refusal brings civil trial)

Advertising

Advertising is the literal process of making a product or service known to the audience Using creative positioning, in terms of timing and placement, and deciding when and where to distribute the message

What could be a global issue of IMC?

Arriving at an intended message without cultural distortions or insensitivities Difficulty managing brands globally because the intended message and meaning may change

Corporation with autonomous units (divisions)

Autonomous silos make IMC difficult, but specialization easier

What is the most critical step in the hierarchy?

Awareness

Secondary Research

Background research that uses available published information about a topic

What is there a balance between when it comes to ethical advertising?

Balance between protecting the public and First Amendment rights protecting communicators

What two groups protect the consumer and "let the buyer beware" (caveat emptor)?

Better Business Bureau and Public Citizen

Does IMC focus on short-term or long-term effects?

Both at the same time!

How are agencies paid?

Commission -Standard rate:15% of media buys -Trend toward negotiated commission -Fierce competition among agencies Fees -Negotiated hourly (or monthly) fee -Media buys billed directly to client Incentives -Higher fees for good performance (clients want to see evaluations because they want to know if what the agency is doing is working)

Examples of pricing strategies

Competitive pricing / Price matching → companies price match products similar to their competitors pricing Value based pricing → customer believes product is worth the price Price skimming → high price to start, then lower it Penetration pricing → low price to start, then raise it

Consumer vs. Customer

Consumer - general term for people who buy and use products Customer - someone who has purchased a specific brand

What step utilizes promotional tactics or hands out free samples?

Conviction

Integrated Marketing Communication (IMC)

Coordinates various strategic communications approaches: -Advertising -Public relations -Promotions -Direct response IMC is a process of doing advertising and promotion better and more effectively in the process of building brands "One voice, one look" There's a mutual reinforcement of core themes to create synergy and memorability

Strategic Research

Critical information that becomes the basis for strategic planning decisions for both marketing and marketing communication → collecting all relevant background information needed to make a decision on advertising and marketing communication strategy

What four things is the product defined by?

Design, Development, Branding and Packaging

What does IMC suggest about their audience and media use?

Different audiences, as well as media, need different messages

Push

Directs marketing efforts at RESELLER and the success of the product depends on the intermediaries ability to market it

Pull

Directs marketing efforts at the CONSUMER and attempts to pull the product through the channel by intensifying consumer demand

Wheeler-Lea Amendment (1938) --> major change to the FTC

FTC can initiate investigations, issue CEASE-AND-DESIST orders and fines

Magnuson/Moss Warranty FTC Improvement Act (1974) --> major change to the FTC

FTC can seek consumer redress or corrective advertising

What does the FCC do?

Federal Communications Commission Oversees radio, TV, cable, satellite and other media, concerned with indecency in ads and content

What does the FDA do?

Federal Drug Administration Oversees labels, packaging, ingredient listings of food and drugs

Where is your market?

Fragmentation poses challenges

What is a vendor and what is their role?

Freelancers, consultants, production professionals Role: Help produce visuals, videos, websites, etc. (Famous advertisers sometimes hire a director to help create an advertisement)

What is an agency and what is their role?

Full-service agencies, creative boutiques, specialty shops, minority agencies, in-house communication departments Role: Create strategy and message to reach goals

Price skimming

High price to start, then lower it

What the 4-step process of IMC?

Identify PROBLEM / OPPORTUNITY that strategic communication can address State OBJECTIVES: what you want to achieve State your STRATEGIES: how you are going to achieve those objectives Plan and execute your TACTICS

What does the new model (developed since World War II) entail?

Identify consumers needs --> Make or modify a product to satisfy those needs

Primary Research and Examples

Information collected for the first time from original sources -Surveys -Focus groups -Interviews -Observation -Expert panels -Diaries

Market Research

Information on product, product category, competitors

Integrated model

Less specialization, more collaboration Everyone works together for the client and not their department → usually makes for the most cohesive message

What step might consider emotions?

Liking

Penetration pricing

Low price to start, then raise it

What was the philosophy of the old marketing process?

Make product --> Figure out how to sell it

Who are clients and what do they do?

Manufacturers, retailers, institutions, people Role: Hire ad agencies to advertise and sell products

Marketing

Marketing is the design, creation, research and data mining about how to best align the idea of a product or service with a specific target audience In many ways, marketing defines the product even more than the actual product does Marketing is about understanding and planning for all aspects of your product or service → Ex. Building relationships between brands and consumers

Advertising Research

Message development research, media planning research, evaluation and information about competitors' advertising

What does the Advertising Self-Regulatory Council do and does it have power?

No real power Investigates complaints and refers cases to the FTC

Does creating one message work?

No. Must tailor messages for different audiences

Price lining

Offering different products at different price points

Psychological pricing

People feel good buying expensive things that they can afford

Consumer Research

People in the market in terms of their characteristics, attitudes, interests and motivations → decides who the target audience for the advertising should be

What step is commonly used to address unique selling points (USP) or to get consumers in?

Preference

What is media and what is their role?

Print (magazine, newspaper), Broadcast (TV, radio), Outdoor (billboard, transit), Direct marketing, Internet and interactive Role: Sell time or space to be vehicle for advertising and promotional messages

Which "P" drives the marketing mix?

Product.

What overlaps price, product and place?

Promotion

Qualitative Research

Provides insight into the underlying reasons for how consumers behave and why

What two types of distribution are there?

Push and Pull

Then?

Puts the research into a SWOT

What's the first thing an agency does?

RESEARCH.

What is a market? (4 common types)

Region -Chicago, Midwest, urban areas Type of consumer -women, Latino, upscale Type of products -snow shovels, surfboards Locus of exchange -

Top-down marketing planning model

Situation analysis Marketing objectives Marketing strategy Marketing tactics Situational analysis Promotional objectives Promotional strategy Promotional tactics

Matrix model

Still some divisions, but there's also some integration

What is promotion all about?

Strategic communication to selected audiences Forms of promotion: -Personal selling -Advertising -Sales promotion -Public relations -Direct marketing (direct mail, telemarketing) -Point of sale

Finally?

Strategic planning starts.. Analyze the results of research and then identify the key issues your brand, product or service must address

Where do complaints regarding deceptive advertising come from?

The FTC monitors advertising, though complaints may also come from the public and competitors

What is the "place" about?

The distribution and moving of products to consumers

What is used to know if advertising works?

The hierarchy of effects

Why does government regulation exist?

There are always bad actors

Why do a lot of advertisers advertise to kids?

They influence parents' purchases

What happens to traditional marketing strategies due to the increase in the surplus of consumers media options?

Traditional strategies decrease in effectiveness

True or False: It's harder to reach large segments of the population with a single media, single channel within a medium or a single message

True

IMC Research

Used to assemble information needed in planning the use of a variety of marketing communication tools → concerned with the interaction of multiple messages from a variety of sources to present the brand consistently

What is the locus of exchange?

Where a transaction happens -Business to consumer exchanges (Mostly what we are talking about) -Business to business exchanges -Institutional markets -Reseller markets

Are Marketing and Advertising different?

Yes.

Are regulations put in place to shield consumers from unfair, deceptive, untruthful or manipulative advertising?

Yes.

What is "puffery"?

a promotional statement/claim that expresses subjective rather than objective views, which no "reasonable person" would take literally **Don't praise a product with subjective claims without facts to back it up

Branding and Positioning

-Build visibility, trust and loyalty through the creation and reinforcement of a clear identity -Companies cannot copy INTANGIBLE BRANDING -Identity, position, promise (good for long term branding with customers) -Brand name Kleenex dominates the tissue product category

Remedies continued.. Consumer redress

-Demand advertiser pay consumption to make up for deception

Segmentation

-Different kinds of people have different wants, needs and preferences -Segmentation is slicing the population into different segments based on certain characteristics to guess what their needs and wants are -May require separate products

The Marketing Process Strategic Decisions

-Discover consumer needs -Develop a product to satisfy needs -Emphasizing existing needs is easier than trying to create them -Advertising functions as a way of providing information or persuading a consumer

Who is the first line of defense when it comes to ethical advertising?

-Establish personal codes used by communicators -Some parts of the industry have their own codes of conduct

Remedies continued.. Corrective ad

-New ads correct the misleading ones -FTC may order when false beliefs persist

Cheetos Story

-Stopped advertising their junk food to children due to the rising obesity rate -Researched their prospective target audiences and started advertising to adults "Rejuvenile" → not much of the campaign focused on the actual product, but focused on creating mischievous fun among adults -Stayed true to their brand and repositioned it for a new target market and their sales nearly doubled

Relationship marketing

-Strategies to deal with market complexity through messaging -Build visibility, trust and loyalty through the creation and reinforcement of a clear identity -Differentiates your brand from competitors' brands

Database marketing

-Technology allows narrowcasting and micro-marketing to individuals -Grounded in synthesis of purchasing and media consumption behaviors -Use all the opportunities of the Internet

Creative Boutique Agencies

-Usually small -Staffed by writers and artists -Focus on creative execution -Specialize in producing ads -Serve companies directly or contracted by full-service agencies CHALLENGE: often have a short life span

The hierarchy of effects

1) Awareness → Most crucial step. Starting point for any purchase 2) Knowledge → Evaluate product against other brands. Need positive knowledge 3) Liking → Might consider emotional benefits here 4) Preference → How can you get consumers in. Highlight unique selling points 5) Conviction → Promotional type stuff. Free samples. Will customer stick to your brand? 6) Purchase → Very crucial for sales

4 remedies for deceptive advertising CONCLUSION

1) Consent decree 2) Cease and desist 3) Corrective ad 4) Consumer redress

What are the two remedies for deceptive advertising?

1) Consent decree If there's no agreement on consent decree... 2) Cease and desist order

4 things to remember about IMC

1) Data-driven process 2) Requires harmony and synchronization of messages 3) Must be consistent and complementary 4) Uses a mix of multiple approaches at various levels, but each one should count

The 4 Principles of IMC

1) Everything communicates -Everything in the marketing mix can send a message -Everything a brand does, and sometimes what it doesn't do, can send a message 2) A brand is a unified vision (the art) and a complex system (the science) 3) Brand relationships drive brand value 4) You can't be integrated externally if you are not integrated internally

According to the Association of Advertising Agencies Code of Ethics, advertisements cannot contain?

1) False or misleading statements or exaggerations, visual or verbal 2) Testimonials that do not reflect the real opinion of the individual involved 3) Misleading price claims

Criteria for Evaluating Deception

1) High probability of deception 2) Standard of "reasonable consumer" 3) Results in material injury

4 Critical Steps for a Strategic Communicator

1) Identify the audience and its media environment 2) Select a price media to target the audience 3) Promote IMC to fit the audience 4) Craft campaign message to fit the audience

Product Life Cycle

1) Introduction -Building awareness of product in market(s) 2) Growth -Product increasingly gains acceptance among consumers 3) Maturity -Product is mature and well-known within its market 4) Decline (or reformation) -May go back to core best sellers in order to make a profit

What are the 3 types of agency models?

1) Old (silo) 2) Matrix 3) integrated

Maslow's Hierarchy of Basic Needs

1) Physiological (most important) → Medicine, staple items 2) Safety → Insurance, investments 3) Belonging → Wants, clothing, grooming products 4) Esteem → Cars, furniture, liquor 5) Self-Actualization → Hobbies, travel, education, morality

The Marketing Mix: the 4 (5) Ps

1) Product 2) Place 3) Price 4) Promotion 5) Positioning

Stages of the marketing process

1) Research --> Background on product and competition 2) Objectives 3) Strategy --> Assess consumer needs, differentiate the product, develop marketing mix 4) Implementation 5) Evaluation

What does the FTC do and when was it established?

1914 Regulates advertising and unfair competition

Quantitative Research

numerical data