BUAD 471 Exam #1 Bambach

Omnichannel retailing

a strategy whereby companies sell their products through multiple distribution channels including retail stores, online, catalogs, and mobile apps

Marketing plan

a written document that describes the overall marketing strategy and programs developed for an organization, a particular product line, or a brand

National advertising

done by large companies on a nationwide basis or in most regions of the country; mostly well-known brands with ads on prime-time TV

image and reputation

most effective way for a company to gain recognition; awards, achievements, etc.

promotional push strategy

moving the product through the channels of distribution by aggressively selling and promoting the item to the resellers, or trade; used to save money

Social media

online means of communication and interactions among people that are used to create, share and exchange content

specialized marketing communication services

organizations that provide marketing communication services in their areas of expertise including direct marketing, public relations, and sales promotion firms

Personal selling

person-to-person communication in which the seller attempts to assist/persuade prospective buyers to purchase the company's product/service

Company-created touch points

planned marketing communication messages created by the company -advertisements, websites and social media sites, news/press releases, packaging, brochures and collateral material, sale promotions, and point-of-purchase displays along with other types of in-store décor -company-created touch points account for a large part of an IMC program and have the advantage of being under the control of the marketer.

Positioning by Product Class

positioning oneself against another product category ex. airlines competing with trains or buses

how agencies gain clients

referrals, solicitations, presentations, public relations, image and reputation

Customer-oriented sales promotion

targeted to the ultimate user of a product or service and includes couponing, sampling, premiums, rebates, contests, sweepstakes, and various point-of-purchase materials

Trade-oriented sales promotion

targeted toward marketing intermediaries such as wholesalers, distributors, and retailers

Marketing (textbook definition)

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Billings

the amount of client money agencies spend on media purchases and other equivalent activities

when to use a centralized system

when a company doesn't have many divisions

When to use a decentralized system

when a large company has many different divisions

Pros of IMC

-Considered a more efficient use of organization's communication efforts -Consistency of messages: one voice -Easier to show bottom-line results. -More convenient for the client to coordinate all of its marketing efforts through one agency

Participants in the IMC Process

-advertisers or clients -advertising agency -media organizations -specialized marketing communication services organizations -collateral services organizations

Promotional Mix Elements (6)

-advertising -personal selling -public relations/publicity -sales promotion -direct marketing -digital/internet marketing

Cons of IMC

-become involved in political wrangling over budgets -do not communicate with each other as well and as often as they should/do not achieve synergy -agencies' efforts to control all aspects of the promotional program are nothing more than an attempt to hold on to business that might otherwise be lost to independent providers

disadvantages to a decentralized system

-brand managers often lack training/experience -individual brand managers often end up competing for management attention, money, and other resources -can fail to provide brand managers with authority over the functions needed to implement and control the plans they develop

IMC Audience Contact Tools

-broadcast media (TV/radio) -print media -public relations/publicity -digital (internet/social media/mobile) -direct marketing -sales promotion -product placement/branded entertainment -events/sponsorships -word of mouth -point-of-purchase (displays/packaging) -personal selling -out-of-home media

Direct marketing methods

-direct mail -mail-order catalogs -database management -direct selling -telemarketing -direct-response advertising through direct mail, online, and various broadcast and print media

Advantages of a centralized system

-facilitates communication regarding the promotions program, making it easier for top management to participate in decision making -may result in a more efficient operation because fewer people are involved in the program decisions

types of segmentation

-geographic -demographic -psychographic -behavioral

Disadvantages of in-house agencies

-not as wide range of services -not as much experience/objectivity -less creative talent/media experience -less outside perspective -less flexibility -personnel may become narrow or grow stale while working on the same product line

Why agencies lose clients

-poor performance or service -poor communication -unrealistic demands by the client -personality conflicts -personnel changes -changes in size of the client or agency -conflicts of interest -changes in the client's corporate and/or marketing strategy -declining sales -conflicting compensation philosophies -changes in policies -disagreements over marketing and/or creative strategy -lack of integrated marketing capabilities

Advantages of in-house agencies

-saves money and time -prevents bad experiences with outside agencies -increased knowledge and understanding of the market -companies can maintain tighter control over the process

Advertising to business and professional markets

1. Business-to-Business Advertising 2. Professional Advertising 3. Trade Advertising

Target marketing process

1. Identify markets with unfulfilled needs 2. Determine market segmentation 3. Select a market to target 4. Position through marketing strategies

Positioning by Price/Quality

1. ads that reflect the image of a high-quality brand where cost, while not irrelevant, is considered secondary to the quality benefits derived from using the brand (premium brands) 2. focus on the quality or value offered by the brand at a very competitive price

positioning strategies

1. attributes and Benefits 2. Price/Quality 3. Use or Application 4.Product Class 5. Product User 6. Competitor 7. Cultural symbols

2 steps of selecting a target market

1. determine how many segments to enter 2. determine which segments offer the most potential

2 approaches to positioning

1. focus on the consumer 2. focus on the competition

marketing process of an organization

1. marketing strategy analysis 2. target marketing process 3. marketing planning program and development 4. promote to target market

Advertising to consumer markets

1. national advertising 2. retail/local advertising 3. primary/selective demand advertising

5 main departments of outside agencies

1. research 2. media 3. art 4. production 5. traffic

Integrated Marketing Communications (IMC) planning model

1. review of marketing plan 2. analysis of promotional plan 3. analysis of communication process 4. budget determination 5. develop integrated marketing communications program 6. integrate and implement marketing communications strategies 7. monitor, evaluate, and control integrated marketing communications program

3 market coverage alternatives (how to determine how many market segments to enter)

1. undifferentiated marketing 2. differentiated marketing 3. concentrated marketing

direct-marketing agency

A company that provides a variety of direct-marketing services to their clients, including database management, direct mail, research, media service, creative, and production.

IMC plan

A document that provides the framework for developing, implementing, and controlling an organization's integrated marketing communications program.

incentive-based system

A form of compensation whereby an advertising agency's compensation level depends on how well it meets predetermined performance goals such as sales or market share.

direct channel

A marketing channel where a producer and ultimate consumers deal directly with each other

fixed-fee method

A method of agency compensation whereby the agency and client agree on the work to be done and the amount of money the agency will be paid for its services.

Cost-plus system

A method of compensating advertising agencies whereby the agency receives a fee based on the cost of the work it performs plus an agreed-on amount for profit.

commission system

A method of compensating advertising agencies whereby the agency receives a specified commission (traditionally 15%) from the media on any advertising time or space it purchases.

negotiated commission

A method of compensating advertising agencies whereby the client and agency negotiate the commission structure rather than relying on the traditional 15 percent media commission.

demographic segmentation

A method of segmenting a market based on the demographic characteristics of consumers (age, gender, income, race, etc.)

marketing channels

A set of interdependent organizations involved in the process of making a product or service available to consumers

Integrated Marketing Communication (IMC)

A strategic business process used to plan, develop, execute and evaluate coordinated, measurable, persuasive brand communications programs over time with consumers, customers, prospects, employees, associates and other targeted relevant external and internal audiences. The goal is to generate both short-term financial returns and build long-term brand and shareholder value

undifferentiated marketing

A strategy in which market segment differences are ignored and one product or service is offered to the entire market; often used to save a company money

Direct marketing

A system of marketing by which an organization communicates directly with customers to generate a response and/or transaction.

fee-commission combination

A type of compensation system whereby an advertising agency establishes a fixed monthly fee for its services to a client and media commissions received by the agency are credited against the fee; If the commissions are less than the agreed-on fee, the client must make up the difference

concentrated marketing

A type of marketing strategy whereby a firm chooses to focus its marketing efforts on one particular market segment.

differentiated marketing

A type of marketing strategy whereby a firm offers products or services to a number of market segments and develops separate marketing strategies for each.

Interactive media

A variety of media that allows the consumer to interact with the source of the message, actively receiving information and altering images, responding to questions, and so on.

programmatic buying

A wide range of technologies that have begun automating the buying, placement, and optimization of advertising media time and space

digital/interactive agencies

Agencies that specialize in the development and strategic use of various digital and interactive marketing tools such as websites for the Internet,, banner ads, search engine optimization, mobile marketing, and social media campaigns.

in-house agency

An advertising agency set up, owned, and operated by an advertiser that is responsible for planning and executing the company's advertising program.

financial audit

An aspect of the advertising agency evaluation process that focuses on how the agency conducts financial affairs related to serving a client.

qualitative audit

An audit of the advertising agency's efforts in planning, developing, and implementing the client's communications programs.

public relations firm

An organization that develops and implements programs to manage a company's publicity, image, and affairs with consumers and other relevant publics.

sales promotion agency

An organization that specializes in the planning and implementation of promotional programs such as contests, sweepstakes, sampling, premiums, and incentive offers for its clients.

decentralized system

An organizational system whereby planning and decision-making responsibility for marketing, advertising, and promotion lies with a product/brand manager or management team rather than a centralized department.

media department

Analyzes, selects, and contracts for space or time in the media

market opportunities

Areas where a company believes there are favorable demand trends, needs, and/or wants that are not being satisfied, and where it can compete effectively.

Brand identity

Combination of name, logo, symbols, design, packaging, and performance of a product or service as well as the image or type of associations that come to mind when consumers think about a brand

When to emphasize a push strategy

Companies that have favorable channel relationships to work closely with channel members to encourage them to stock and promote their products; good for a firm with a limited budget

What are consumer's perceptions of a company a combination of?

Consumers' perceptions of a company and/or its various brands are a synthesis of the bundle of messages they receive or contacts they have, such as media advertisements, price, package design, direct-marketing efforts, publicity, sales promotions, websites, point-of-purchase displays, and even the type of store where a product or service is sold

Sustainability

Development that meets the needs of the current generation without compromising the ability of future generations to meet their own needs.

psychographic segmentation

Dividing the product on the basis of personality and/or lifestyles.

Relating Price to Advertising and Promotion

Factors such as product quality, competition, and advertising all interact in determining what price a firm can and should charge -high relative ad expenditures should accompany premium prices, and low relative ad expenditures should be tailored to low price

research department

Gathers, analyzes, and interprets useful information

communication objectives

Goals that an organization seeks to achieve through its promotional program in terms of communication effects such as creating awareness, knowledge, image, attitudes, preferences, or purchase intentions.

Marketing objectives

Goals to be accomplished by an organization's overall marketing program such as sales, market share, or profitability.

market segments

Identifiable groups of customers sharing similar needs, wants, or other characteristics that make them likely to respond in a similar fashion to a marketing program.

The process of segmenting markets

Marketers attempt to determine as much as they can about the market by asking 1. What needs are not being fulfilled? 2. What benefits are being sought? 3. What characteristics distinguish among the various groups seeking these products and services?

Sales promotion

Marketing activities that provide extra value or incentives to the sales force, distributors, or the ultimate consumer and can stimulate immediate sales.

Media Organizations

One of the four major participants in the integrated marketing communications process whose function is to provide information or entertainment to subscribers, viewers, or readers while offering marketers an environment for reaching audiences with print and broadcast messages.

Positioning by Product User

Positioning a product by associating it with a particular user or group of users ex. Vans are associated with skateboarding

Mobile marketing

Promotional activity designed for delivery to cell phones, smartphones, tablets, and other handheld devices that includes apps, messaging, commerce, and customer relationship management.

Business-to-business advertising

Targets individuals who buy or influence the purchase of industrial goods or services for their companies

Trade advertising

Targets marketing channel members, encouraging them to stock, promote, and resell the manufacturer's branded products to their customers

Professional advertising

Targets professionals (doctors, lawyers, professors, etc.), encouraging them to use a company's product in their business operations

Marketing mix

The controllable elements of a marketing program; 4 P's 1. product 2. price 3. promotion 4. place

Promotion

The coordination of all seller-initiated efforts to set up channels of information and persuasion to sell goods and services or to promote an idea.

account planner

The individual who gathers information that is relevant to a client's product or service and can be used in the development of the creative strategy as well as other aspects of an IMC campaign.

IMC management

The process of planning, executing, evaluating, and controlling the use of various promotional-mix elements to effectively communicate with a target audience.

account executive

The individual who serves as the liaison between the advertising agency and the client. The account executive is responsible for managing all of the services the agency provides to the client and representing the agency's point of view to the client.

brand equity

The intangible asset of added value or goodwill that results from the favorable image, impressions of differentiation, and/or the strength of consumer attachment of a company name, brand name, or trademark.

What does the IMC approach seek?

The integrated marketing communications approach seeks to have all of a company's marketing and promotional activities project a consistent, unified image to the marketplace; It recognizes that every customer interaction with a company or brand across a host of contact points represents an opportunity to deliver on the brand promise, strengthen customer relationships and deepen loyalty

Public relations

The management function that evaluates public attitudes, changes policies and procedures in response to the public's requests, and executes a program of action and information to earn public understanding and acceptance.

percentage charges

The markups charged by advertising agencies for services provided to clients.

Product symbolism

The meaning that a product or brand has to consumers.

departmental system

The organization of an ad agency into departments based on function: account services, creative services, marketing services, and administration.

brand manager

The person responsible for the planning, implementation, and control of the marketing program for an individual brand (decentralized system)

External analysis

The phase of the promotional planning process that focuses on factors such as the characteristics of an organization's customers, market segments, positioning strategies, competitors, and marketing environment.

Internal analysis

The phase of the promotional planning process that focuses on the product/service offering and the firm itself, including the capabilities of the firm and its ability to develop and implement a successful integrated marketing communications program.

80-20 rule

The principle that 80 percent of sales volume for a product or service is generated by 20 percent of the customers. ex. The majority of purchases of many products (e.g., soaps and detergents, shampoos, cake mixes, beer, dog food, colas, bourbon, and toilet tissue) are accounted for by a small proportion of the population

Exchange

Trade of something of value between two parties such as a product or service for money; the core phenomenon or domain for study in marketing

presentations

a presentation given to examine the client's marketing situation and proposes a tentative communications campaign that includes creative ideas

When to emphasize a pull strategy

When the demand outlook for a product is favorable because it has unique benefits, is superior to competing brands, or is very popular among consumers, a pull strategy may be appropriate

advertising agency

a firm that specializes in the creation, production, and placement of advertising messages and may provide other services that facilitate the marketing communications process

Direct-Repsonse Advertising

a form of advertising for a product or service that elicits a sales response directly from the advertiser

indirect channel

a marketing channel where intermediaries are inserted such as wholesalers and retailers are utilized to make a product available to the consumer

behavioristic segmentation

a method of segmenting a market by dividing customers into groups based on their usage, loyalties, or buying responses to a product or service

geographic segmentation

a method of segmenting markets by geographic regions based on the shared characteristics, needs, or wants of people within a region

benefit segmentation

a method of segmenting markets on the basis of the major benefits consumers seek in a product or service

Retail/local advertising

advertising done by retailers or local merchants to encourage consumers to shop at a specific store, use a local service, or patronize a particular establishment; usually direct-action advertising to increase foot traffic

trade advertising

advertising targeted to wholesalers and retailers

public relations

agencies participating in civic and social groups and work with charitable organizations pro bono (at cost, without pay) to earn respect in the community

collateral services

agencies that provide companies with specialized services such as package design, advertising production, and marketing research

Superagencies

alarge external agencies that offer integrated marketing communications on a worldwide basis

full-service agency

an advertising agency that offers clients a full range of marketing and communications services

creative boutique

an advertising agency that specializes in and provides only services related to the creative aspects of advertising

centralized system

an organizational system whereby advertising along with other marketing activities such as sales, marketing research, and planning are divided along functional lines and are run from one central marketing department

category management system

an organizational system whereby managers have responsibility for the marketing programs for a particular category or line of products

Advertising

any paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor; non personal means mass media

salient attributes

attributes considered important to consumers in the purchase decision process

Publicity

communications regarding an organization, product, service, or idea that are not directly paid for or run under identified sponsorship

Media Specialist Companies

companies that specialize in the buying of advertising media time and space, particularly for radio and television

Owned media

company controls the channel -websites -mobile apps -social media -blogs -brochures -in-store displays

Paid media

company pays to leverage their channel -TV/radio -magazines/newspapers -outdoor/direct mail -in-store media -online banner ads/videos -paid search -social media ads

Earned media

company's customers or media become the channel -word-of-mouth -social media interactions (comments/mentions) -shared videos/pictures -posts/reposts -online reviews -online communities -media coverage

traffic department

coordinates all phases of production to see that the ads are completed on time and that all deadlines for submitting the ads to the media are met

Advantage of publicity over other forms of promotion

credibility

Positioning by cultural symbols

cultural symbols are used to differentiate brands; when it is associated with a meaningful symbol, the brand is easily identifiable and differentiated from others ex. Ronald McDonald/Tony the Tiger

Primary-demand advertising

designed to stimulate demand for the general product class or entire industry; usually used when a brand dominates a market and can benefit most from market growth

Market segmentation

dividing a market into distinct groups that have common needs and will respond similarly to a marketing action -the more marketers segment the market, the more precise is their understanding of it -the more the market becomes divided, the fewer consumers there are in each segment

Advantages of a decentralized system

each brand receives concentrated managerial attention, resulting in faster response to both problems and opportunities -the brand managers have full responsibility for the marketing program and is more flexible

Selective-demand advertising

focuses on creating demand for a specific company's brands

storyboards

for TV ads- sequence of frames or panels that depict the commercial in still form

layouts

for print ads- drawings that show what the ad will look like and from which the final artwork will be produced

copywriter

individual who helps conceive the ideas for ads and commercials and writes the words or copy for them

Customer-initiated touch points

interactions that occur whenever a customer or prospect contacts a company; usually inquiries or complaints

intrinsic touch points

interactions that occur with a company or brand during the process of buying or using the product or service such as discussions with retail sales personnel or customer service representatives; often not under the direct control of the marketing department or IMC program

Touch points (audience contact)

refers to each and every opportunity the customer has to see or hear about the company and/or its brands or have an encounter or experience with it; range simply seeing or hearing an ad for a brand to actually having the opportunity to use or experience a brand in a retail store or interacting with the company during a sales transaction or service encounter

Price variable

refers to what the consumer must give up to purchase a product or service; while price is discussed in terms of the dollar amount exchanged for an item, the cost of a product to the consumer includes time, mental activity, and behavioral effort (marketing manager is usually concerned with pricing)

art department

responsible for how the ad looks; provide layouts/storyboards

production department

responsible for managing the steps that transform creative concepts into finished advertisements and collateral materials

Positioning by attributes and benefits

setting the brand apart from competitors on the basis of the product's specific characteristics and benefits offered

Positioning by competitor

similar to positioning by product class, although in this case the competition is within the same product category ex. Avis positioned themselves as competitors of Hertz stating "we're #2 so we try harder"

competitive advantage

something unique or special that a firm does or possesses that provides an advantage over its competitors

promotional pull strategy

spending money on advertising and sales promotion efforts directed toward the ultimate consumer

Positioning

the art and science of fitting the product or service to one or more segments of the broad market in such a way as to set it meaningfully apart from competition; the image of the product and/or brand relative to competing products or brands

repositioning

the changing of a product or brand's positioning

Value

the customer's perception of all the benefits of a product or service weighed against the costs of acquiring or consuming it

advertising manager

the individual in an organization who is responsible for the planning, coordinating, budgeting, and implementing of the advertising program (centralized system)

group system

the organization of an ad agency into a number of little agencies or groups, each with the various people required to meet the needs of the particular clients being served by the group

clients

the organizations with the products, services, or causes to be marketed and for which advertising agencies and other marketing promotional firms provide services

Strategic marketing plan

the planning framework for specific marketing activities

target marketing

the process of identifying the specific needs of segments, selecting one or more of these segments as a target, and developing marketing programs directed for each

American Marketing Association (AMA) marketing definition

the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives

Promotional mix (definition)

the tools used to accomplish an organization's communications objective

reasons for using outside agencies

they provide the client with the services of highly skilled individuals who are specialists in their chosen fields

Positioning by use or application

to associate the product with a specific use or application

unexpected touch points

unanticipated references or information about a company or brand that a customer or prospect receives that is beyond the control of the organization; most influential is word-of-mouth messaging

referrals

when existing clients recommend agencies to new clients

solicitations

when the agency requests a company work with them; responsible for writing letters, making calls, and following up