Mktg 353 Final

Effect of Advertising on the Value of Products

Gives brands added value (Increase in worth of a product or service) As a result of communication of benefits over and above those offered by the product Better knowledge of a product, increases its desirability Creates opportunities to satisfy wants and needs of consumers by associating the product with a desirable image Higher brand awareness= more desirable

Issues of truthfulness and ethics led to:

Government regulation Pure Food and Drug Act Federal Trade Commission Act Industry efforts at self-regulation Association of National Advertisers (ANA) American Advertising Federation (AAF) Better Business Bureau (BBB) Formulation of consumer rights New consumer movement in the 1970s Sometimes advertising can be misleading or unethical- ads are regulated by different bodies (Industry organizations can't impose fines, but can monitor industry and place pressure on companies)

Problems of group think

Group pressure and conformity -Conformity: adjusting one's behavior of thinking to coincide with a group standard -Solomon Asch Experiment: actors pick the wrong line and then people are coerced by conformity to pick something they know is wrong -Alone: less than 1% made a mistake -In groups: wrong 33% of the time

Advertising attempts to:

Identify products and their source (differentiating the product from others) -Accomplished through branding Can you distinguish between: Gasolines? Soft drinks? Water? Ford Model T- the only choice so customers have to get it in black Attention Economy- 5,000 brand exposures in large cities Toyota+Lexus- made by same manufacturer- about 95% the same- price difference is large though- advertising comes into defining the quality of brands

Promotional Mix

One or more of these communication tools: advertising, public relations, sales promotion, personal selling, direct marketing

Self-interest

Open competition between self-interested sellers advertising to self-interested buyers leads to: -Greater product availability -More competitive prices

Businesses typically organize along 3 broad divisions

Operations (production/manufacturing) Finance/administration Marketing- primary role of bringing in revenue (forward facing; their most important stakeholder is the consumer)

Forms of PRODUCT advertising

Pioneering (informational): Used in introductory stages of product life cycle Competitive (persuasive): Promotes the specific brand's features or benefits Reminder: Used to reinforce previous knowledge of a product

Pretesting and Posttesting

Pretesting -Testing effectiveness of an advertisement for flaws in message content before recommending it to clients (focus groups) Posttesting -Testing effectiveness of advertisement after it has been run -Provides advertiser with guidelines for future advertising

Effect on Consumers and Businesses

Primary demand: Consumer demand for a WHOLE product category (Got Milk?) Secondary/Selective demand: Consumer demand for the particular advantages of ONE BRAND over another

Conducting Primary Research

Primary research: Collecting data directly from the marketplace using qualitative or quantitative methods Qualitative research: Uses small, nonrandom samples to explore behavior, perceptions, needs, and motivations of a target audience Quantitative research: Uses larger, representative samples to quantify hypotheses and measure market variables

Humor Appeals

Work Best for low-involvement, fast moving consumer goods, well known brands (when humor is centered around key benefit) -Wear off fast!

Advertising

non-personal (mass) communication (back-end processes don't count) about an organization, good, service, person or idea, by an identified sponsor that is usually paid for (except PSAs) and usually persuasive (purpose of advertising is to sell, not entertain) in nature

Sex Appeals

used to communicate that if a consumer uses a particular product/service the consumer will become more attractive -Work best when sexuality relates to the product -Less effective for 'functional' products -If overdone, can distract the viewer away from the brand & the advertising message -Can be perceived as exploitative or demeaning specially by women

Fear Appeals

used to communicate that there is a negative consequence to not using a product/service and this consequence can be avoided by the use of this product or service -Make consequence of not taking action severe but not exaggerated -Make the audience feel the problem is relevant for them. -Provide a specific action that the audience can take to prevent the consequence -Ensure that the audience believes that the proposed solution is effective -Portray the solution as something that the audience can do easily

Warrior Role

•Creatives should have a completed message strategy document •Role of creatives: Get the idea approved by the clients; ensure that it is completed, faithful to the concept, on time, under budget, and of the highest quality possible; revert to their Artist roles to finalize the design and copy and produce the ads

Judge Role

•Creatives should help produce good ideas, not to revel in criticism •Considerations for creatives: Initial reaction to the idea, Pros and cons, Risks, Biases, road blocks while evaluating the idea

Value-based thinking

•Decisions are based on intuitions, values, and ethical judgments •Produces ads that are metaphorical, subtle, soft or intuitive

Fact-based thinking

•Fragments concepts for analysis •Analyzes situations to discover one discover one best solution •Produces straight-forward layouts, fact-based appeals, and lots of data

Product advertising

Designed to promote the sale of a SPECIFIC product/service

Integrated Marketing Communications

Designing marketing communications programs that COORDINATE all promotional activities to provide a CONSISTENT message across all audiences

Exploratory Research

Gathers preliminary info that will help define problem and suggest hypotheses -Understand differences in the lifestyles/needs/aspirations of Mac vs. PC users?

Interpreting and Reporting the Findings

-Technical jargon should be avoided -Descriptions of the methodology, statistical analysis, and raw data should be confined to an appendix -Report should: State problem and research objective, summarize findings and draw conclusions, be discussed in a formal presentation and make recommendations for management action -Understanding if advertising has shifted attitudes can be a predictor of awareness and purchase intention

Advertising Research

-Type of marketing research -Perceptions of products/completion/credibility/appeal -Systematic gathering/analysis of info to facilitate the development/evaluation of: advertising strategies, ads/commercials, media campaigns

Type of advertising depends on the marketing strategy

-Who the targets of ads should be -What markets the ads will appear in -What goals the ads should accomplish In turn, the advertising strategy: -Refines the target audience -Defines the desired audience response

Considerations in ConductingPrimary Quantitative Research 2

Data tabulation and analysis -Collected data must be validated, edited, coded, and tabulated -Answers must be checked to eliminate errors or inconsistencies -Data must be summarized Surveys are used as a representative of population -Illustrates how larger population is likely to behave Test to assure information being collected is desired and accurate

Advertising Research Categories

-Advertising Strategy: defines product concept, assists in selection of target market/advertising message/media -Creative concept: measures target audience acceptance of different creative ideas during conceptual phase- diagnose possible communication problems before campaign begins -Pretesting tries ads on sample audience, post-testing determines effectiveness of (evaluates) campaign after running -Ch. 6, Slide 8

Advertising Strategy Research

-Comprised of Creative & Media Strategy -Helps to gain an understanding of: Product concept (qualities/values, shape position/image over time. Marketers need to know how consumers perceive their brands and what qualities lead to initial purchases and eventually brand loyalty), target audience selection (profile of users of product category, ensures that message is delivered to most people with least amount of waste- Targeting involves choosing market segment to which marketing will be directed) -Media selection: Media research (gathering/analysis of information on reach/effectiveness of media vehicles, syndicated services- Neilson, Arbitron for data), message element selection (studies consumers likes/dislikes in relation to brand/product), Creative Concept (develops creative efforts for ads)

Establishing Research Objectives

-Concise statement of research problem/objectives should be formulated (Statement must be specific and measurable, Decision point must be clear and the questions must be related and relevant) -Research results should provide the information required to decide on a new positioning strategy -Will include info about current market share, objectives, statement of problem

Marketing Research

-Defining a marketing problem and opportunity -Systematic gathering/analysis of info to help managers make marketing decisions- recommend actions to client -reduce risk and uncertainty in decisions -Identifies consumer needs and market segments -Helps develop new products -Helps devise marketing strategies -Assesses effectiveness of marketing activities/promotions -Useful in financial planning, forecasting, & quality control -Broader than advertising research

Advertising & Marketing Research

-Ensures companies invest in effective advertising -Determines effectiveness of previous programs/campaigns -Info drives advertising decision making -Eliminates guesswork/reliance on intuition

Step 5: Take Marketing Actions

-Make recommendations on action (Spell out conclusions in clear, specific and actionable terms; Acknowledge limitations) -Implement the action recommendations -Evaluate the results (Evaluating the decision itself, Evaluating the decision process used)

Collecting Primary Data inInternational Markets

-No economies of scale -Translating questionnaires to the local languages is a difficult task -Some cultures are not open to advanced methods of research -Lack of adequate facilities -Internet can be used to conduct foreign market research -Helps cut costs and save time

Account Planner

-Person at advertising agency responsible for account planning -Represents consumer (advocate during meetings with advertiser) -Ensures advertising strategy/executions are relevant to target audience -Put consumer in center of process- focus on relationship between consumers/brands -Comes up with consumer insights

Testing

-Primary tool to evaluate advertising spending -Prevent costly mistakes in judging effectiveness -Measures campaign value -Attempts to create best possible campaign -Reduces communication gaps (ad should be well understood)

Types of sampling

-Probability sampling: Each member of population has an equal/known chance of being selected (Simple random sample, Systematic sample) -Non-probability sampling: Some members of population have a greater/unknown chance of being selected than others (Convenience sample, Self-selected internet sample)

Advertising helps create strong brands...

-helps charge a premium for brand vs. generic brands (Great Value not advertised compared to national brand) -allows having different products in the product line with MINIMUM CANNIBALIZATION (laundry detergents- all heavily advertised, different market segments- less competition/cannibalization- P&G wins) -helps introduce a new product that carries the name of 1+ existing products: lowers cost of advertising and faster acceptance of new product by customers and channel intermediaries (Apple- already established strong brand through advertising- new iPhones don't need as much advertising because they're already anticipated) -facilitates promotional efforts (the same promotion applied to a weaker brand don't excite consumers as much as to a stronger brand) -helps foster brand loyalty helping to stabilize market share (results in stability in supply chain)

Types of Primary Data

1) Observational Data: watching how people actually behave -Mechanical observation: Eye-tracking analysis while subjects watch ads, Nielsen box- tracking TV station watching -Personal observation: Mystery shopper (someone acts as customer, actually working for management), Ethnographic research (Haier in rural China- potato washer) 2) Questionnaire Data: obtained by asking people about their attitudes, awareness, intentions and behaviors -Individual Interviews and depth interviews, Focus Groups, Survey, Mall intercept interviews

Step 1: Define the Problem

1) Set the research objectives: Goals which should be specific and measurable (Ex. What is consumers' response to a possible Ad?) 2) Identify marketing actions: Come from measures of success. (Marketing Action: place an Ad on TV or not, Measure of Success: reactions to Ad- unprompted ad awareness; convincingness)

Advertising Trends

1. End of the desktop (except at work) 2. Real time marketing ("newsjacking" a current story to tweet about your brand)- Oreo- dunk in the dark- power shutdown at super bowl- tweeted quickly 3. Wearable tech (google glass, Smart Watches) 4. "Dark assets" - watching you in stores, geolocation, surveillance...its there but will marketers use it? 5. Content marketing - is it an article/movie or ad? 6. Ethnographic research - asking people, not their phones 7. More meet and greets - face to face, no hiding online 8. Brand co-creation - embrace consumer experience. 9. No more banner ads (really?) - more video

Marketing Research's process

1. Problem definition 2. Developing the research plan 3. Collect information 4. Develop findings 5. Take marketing actions

Industrial Age

1900-1970 Marked by: Growth of the U.S. industrial base Development of new brands of consumer packaged goods Consumer packaged goods: Everyday-use consumer products packaged by manufacturers and sold through retail outlets Product differentiation: Portraying one brand as different and better than similar competitive products Unique selling proposition (USP): Distinctive benefits that make a product different than any other As more consumer packaged goods were developed and competing, differentiation became more important Market segmentation: Identifying groups of people or organizations with shared needs and characteristics Aggregating the groups into larger market segments according to their mutual interest in the product's utility Not treating all consumers as the same- break up market into different groups

Postindustrial Age

1980 through new millenium Demarketing Global economy and agency consolidations Boomers and the "Me" generation Dot com rise and fall Rise of sales promotion 1980s: direct marketing, TV/cinema, radio, press, posters/billboards Period of cataclysmic change, from 1980, when people became aware of the sensitivity of the environment Positioning: Association of a brand's features and benefits with a particular set of customer needs, differentiating it from the competition Demarketing: Coined during the energy shortage of the 1980s when advertising was used to slow the demand for products Differentiation is a MEANS to positioning

Global Interactive Age

2005 to present Growth of media delivery systems Digital technologies Interactive revolution Recession of 2008-2010 Decline of old media Relationship marketing and IMC Foursquare, facebook check-ins Recession had large impact on mindsets of consumers Advertising today: social media, online video, and so much more Coke "chok"- engaging, interactive- win prizes, fun #McDStories For a better relationship marketing, companies must... -be consistent with what they say and do -integrate their marketing communications with what they do -listen & respond Jeff Jarvis- Dell Hell- other bloggers join- pick up media attention- Dell stock plummeted within one year Dave Carroll- Canadian musician- United Airlines- required him to check his guitar rather than take it on plane- guitar was broken, wanted United to reimburse him- came up with song "United Breaks Guitars"- stock price of United decreased by 2% ($15-20 million)

Posttesting Methods

Attitude tests: Measure the effectiveness of an advertising campaign in creating a favorable image for a company, its brand, or its products Recall tests: Determine the extent to which an advertisement and its message have been noticed, read, or watched Inquiry tests: Consumer responses to an ad for information or free samples are tabulated Sales tests: Useful when advertising is the dominant element, or the only variable, in the company's marketing plan

Social Impact of Advertising

Deception in advertising- Puffery: Exaggerated, subjective claims that cannot be proven true or false. *Not illegal, as it is interpreted at face value and not factual Subliminal advertising myth- Subliminal advertising: Advertisements with messages embedded in illustrations below the threshold of perception Advertising and our value system- Advertising promotes a materialistic way of life

Complete information

Access of buyers and sellers to all information at all times leads to: -Greater competition -Lower prices for all

Strategic relevance

Ad should be in alignment with the sponsor's strategy (resonance alone does not equal great advertising)- strategic fit with creativity and message (Pampers)

Selecting the Right Medium/Media

Advertising Media: TV, Radio, Print (newspapers, magazines), Outdoor, Internet - Target Audience - Budget - Maximizing exposure, minimizing cost - Does medium match company/product image? - How complex is the message?

4 P's- Promotion

Advertising is one activity that falls under the promotion component of the marketing mix -As a marketing manager, you may use different strategies (Integrated Marketing Communication- marketing acts in sync) to PROMOTE your product

Forms of INSTITUTIONAL advertising

Advocacy Ads: State position of a company on an issue Pioneering Ads: Announcements about what a company is, what it can do or where it was located Competitive Ads: Promote the advantages of one product class/company in general over another Reminder Ads: Brings company's name to the attention of a target market

Abundance Principle

An economy produces more goods and services than can be consumed Purposes of advertising in this economy: keep consumers informed of alternatives and allow companies to compete more effectively for consumer money Ford Model T- only offered in black- NOT in economy with abundance principle

Step 4: Develop findings

Analyze the data: Frequency distributions, means, year-over-year comparisons, regression analysis Present the findings: Clear and understandable, Lead to actions

Marketing communications

Anything that can be used to communicate with customers (even product packaging)

Dimensions of Great Advertising

Audience resonance: Surprise element that gets audiences' attention/imagination -Informational ads: Promising benefits that will offer relief from an undesirable situation/condition, address negatively originated purchase motive to provide solutions (problem avoidance) -Transformational ads: Promising benefits that will reward consumers, address positively originated purchase motives to make people feel happier (gratification or approval)

Effect of Advertising on Competition

Big advertisers have limited effect on competition or small businesses Large companies outspend small business One advertiser is not large enough to dominate national advertising Regional businesses can advertise heavily Freedom to advertise encourages more sellers to enter the market Non-advertised store brands compete with nationally advertised brands

Creativity

Combining 2+ previously unconnected objects/ideas into something new Role in advertising -Helps inform: Attracts attention, maintains interest, stimulates thinking- Visual clues can aid in communicating ideas) -Helps persuade: Reinforcing an ad's verbal message by creative use of nonverbal elements -Helps remind: Transforms boring reminders into interesting, entertaining advertisements (Innovation)- brands at the top of consumers' minds sell more -Helps with boom factor: Good punchlines come from taking an everyday situation and delivering it creatively

Personal moral philosophy

Comes down to the person in the end. All of the factors influence it. moral idealism- individual rights or duties, regardless of outcome (violate one person's rights, you violate them all) Utilitarianism- greatest good for the greatest number. If the overall good outweighs the overall bad then it is ethical (positives > negatives) Nicotine patch- helps smokers stop smoking but also causes skin irritation, headaches, weight gain, etc. Fair and lovely- perpetuating stereotype

For a given brand, advertising also strives to:

Communicate information about it Induce consumers to try or reuse it Stimulate distribution Increase its use Build value, preference, and loyalty Lower the overall cost of sales

Ethics of Advertising

Components Traditional customs and principles of society Attitudes, feelings, and beliefs that form a personal value system Singular ethical concepts relative to situation Advertisements are reviewed and modified to create complete information and to reduce unwanted externalities

Constructing a questionnaire

Constructing a questionnaire: must be pretested -Effective survey questions have focus, brevity, and clarity -Types of questions - Open-ended, dichotomous, multiple choice, and scale -Testing questionnaires on small subsample helps detect any confusion, bias, or ambiguities

Explorer Role

Creatives: -Examine the information -Review creative strategy and marketing/advertising plan -Study the market, product, and competition -Seek additional input from the agency's account managers and from people on the client side -Develop an insight outlook -Start working on the message strategy to define what they are looking for -Brainstorm to get lots of ideas and inspiration (2+ people get together to generate new ideas)

The Creative Team

Creatives: Work in the creative department, regardless of the specialty -Copywriter: Creates words/concepts for ads -Art director: Determines how ads verbal/visual symbols fit together -Creative director: Head of creative team of copywriters and artists, responsible for form the final ad takes

Advertising and materialism

Culture of buying things to show to other people Is advertising promoting this? Should there be limits on advertising?

Descriptive Research

Describes things- Not causal but may be correlational -What is the market potential for our product?

Institutional advertising

Designed to promote a firm/industry/geographical location/concept/idea/philosophy

Artist Role

Develop the big idea -Review the information gathered before -Visualization- Task of: analyze the problem, assemble any/all pertinent information, develop some verbal or visual concepts of how to communicate what needs to be said -Techniques for manipulating ideas (Adapt, imagine, reverse, connect, compare, eliminate, and parody) -Creative blocking occurs when: •People in the agency start thinking like the client (fact-based thinker) •Agency has served for a long time and all the fresh ideas have been worked/reworked •Inspiration is lost due to the rejection of a series of concepts -Best way to incubate a problem is to do nothing to it for a while- helps with perspective and generating new ideas upon return to the task Implement the big idea -Art shapes the advertising message into a complete communication that appeals to the senses and the mind -Art direction: Managing the visual presentation of an ad or commercial -Balance, proportion, and movement are guides for uniting words, images, type, sounds, and colors into a single communication

Sales Promotion

Direct inducement to accelerate the movement of the product from the producer to the consumer Chosen by clients to be cost-effective as the U.S. economy slowed down Rather than invest in advertising (which is long-term brand-building), offer sales promotion as quick way to boost sales -typically cheaper than advertising

Pretesting Methods

Direct questioning: Elicits a full range of responses to the advertising, Effective for testing alternative advertisements in early stages of development Central location tests: Videotapes of test commercials are shown to respondents on a one-to-one basis, in shopping center locations Clutter tests: Commercials are grouped with noncompetitive control commercials, Shown to prospective customers to measure their effectiveness in gaining attention, increasing brand awareness and comprehension, and causing attitude shifts

Social Impact of Advertisingin Perspective

Encourages development and speeds the acceptance of new products and technologies Promotes higher standard of living / creativity Consumers have a wider variety of choices Helps keep prices down through mass production Promotes healthy competition between producers Enables freedom of press Disseminates public information on social issues PUR water purifier packet

Advertising serves social needs

Encourages increased productivity Primary income for many media Facilitates freedom of the press and promotes complete information Public service announcements (PSAs) Promote growth and understanding of social issues and causes -help people understand social issues

Social Responsibility and Advertising Ethics

Ethical advertising: Doing what the ADVERTISER and advertiser's PEERS believe is right in a given situation Social responsibility: Doing what SOCIETY views as best for the WELFARE of the people

Roles of Art Director and the Copywriter in the Creative Process

Explorer: searches for new information, paying attention to unusual patterns Artist: experiments and plays with a variety of approaches, looking for an original idea Judge: evaluates the results of experimentation and decides which approach is most practical Warrior: overcomes excuses, setbacks, and obstacles to bring a creative concept to realization

Creative Strategy

Guides the creative team in writing/producing an ad -Decides the who, what, when, where, and why Elements involved while writing the creative strategy -Problem the advertising must solve -Advertising objective: Task an advertising campaign should accomplish for a specific target audience Definition of the target audience Benefits to communicate (Benefit statement: Describes what product/service does to provide a benefit to the consumer) Support for the benefits (Support statement: Provides information about product/service that will convince the target audience that the key benefit is true) Brand personality: Describes a brand in terms of human characteristics Special requirements: Unique characteristics that should be considered during the creative development process (Characteristics of advertiser, brand, target audience, media, competition, budget) -Creative process: Step-by-step procedure used to discover original ideas and reorganize existing concepts in new ways Target (expect more, pay less)

Message Strategy

Helps media planners determine how messages will be delivered to consumers Components: Verbal, Nonverbal, Technical (Mandatories: Specific requirements for every ad- addresses, logos, slogans)

Issues in Advertising

Highly visible activity - Companies risk public criticism if: An advertisement is offensive Products do not measure up to the advertised promises Influence on the economy Costs & competition Societal effects Materialistic influence, unneeded sales Nivea- "Re-civilize yourself"- offensive People who don't have these products feel left out Unneeded sales- the products don't actually provide much utility (Potty Putter)

Advertisers' Social Responsibility

Influences a society's stability and growth Creates entertainment events, drawing fans Affects the outcome of political elections Need to maintain ethical standards Buy, create, produce, and sell advertising to contribute to the society and economic system

Types of Secondary Data

Internal Secondary Data: Budgets, sales figures, profit and loss statement, previously conducted research reports, sales calls reports External Secondary Data: Census of population, trade association reports, business press publications, e.g. Wall Street Journal, Business Week (Be wary of internet websites!)

Internal Validity vs. External validity

Internal: Have we really measured if X causes Y? (brand manager of Haagen-Daz- change packaging of premium ice-cream in April 2010 and find sales in May 2010 have gone up- conclude that new packaging has caused sales to go up. Is there an issue with internal validity?) -Remedy: randomly assigning people to control group vs. experimental group. External: Are our results generalizable to the 'real world'? Can I generalize my results based to outside my sample? -Remedy: Representative sample

Many buyers and sellers

Many sellers: Ensure competition to meet customer needs by producing more market-responsive products Many buyers: Ensure that sellers can find customers interested in their unique, fair-priced products

Marketing

Marketing is a function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in a beneficial way

Basic Methods of Qualitative Research

Projective techniques: Asking indirect questions to consumers to understand underlying feelings/attitudes/opinions/needs/motives Intensive techniques: Probing deepest feelings, attitudes, and beliefs of respondents through direct questioning -In-depth interview (IDI): Uses planned but loosely structured questions -Focus group: 4+ people discuss product/marketing situation for an hour or more Ethnographic research or ethnography: Trying to understand behavior and culture by going out and talking to people wherever they are, while they're doing whatever it is they do Observation method: Researchers monitor people's actions -Universal Product Code (UPC): Identifying series of vertical bars with a 12-digit number present on consumer packaged goods Experimental method: Researcher alters the stimulus received by a test group and compares the results with a control group -Test market: Isolated geographic area used to test the effectiveness of a product or campaign, prior to a national rollout Survey: Getting people's opinions in person, by mail, on the telephone, or via the Internet

Social Impact of Advertising

Proliferation of advertising: Too much exposure to advertisements in all media Stereotypes in advertising: Insensitivity to minorities, women, immigrants, persons with disability, elderly, and other groups Offensive advertising: Offended consumers can boycott a product Marketplace veto power - Campaign will falter if the ads do not pull in audiences Metropolitan city- 5,000 ads per day H&M controversy- offensive stereotypes

Shift in attention to more subtle problems

Puffery Advertising to children Advertising of legal but unhealthful products Advertising ethics

Qualitative vs Quantitative

Qualitative offers more insight than "yes/no" questions (In-depth conversation about subject) Quantitative assesses specific measurements, such as consumer awareness of a product or service

Challenges of Posttesting

Recall tests only measure what respondents noticed and remembered (fail to measure whether they intend to buy the product) Inquiry tests may not reflect a sincere interest in a product (Responses may take months to receive) Sales tests are costly and time-consuming

Secondary Data vs. Primary Data

Secondary Data: Data which is already available -Pros: Less cost, Less time -Cons: May be out of date, may not be specific enough Primary Data: Data which has to be specifically collected for the investigation at hand -Pros: Up to date, more specific -Cons: More time, More cost

Marketing strategy comes first (discusses all 4 P's)

Segmenting- DIVIDING market into GROUPS (target audiences) Ariel Gold- focus on product users- regular detergent and bar soap- focuses on TOUGH STAIN removal Julie- very effective ad- consumer insight: the teenager accidentally killed someone they loved (rather than use just fear- teenagers think they are invincible)- you have to think about the ones you love, not just yourself IKEA- Americans have emotional attachment to their furniture- have to change the way Americans think about their furniture

Effect of Advertising on Prices

Small part of a product's cost Enables mass-production, which lowers the cost per unit of a product Regulated industries see no price increase associated with advertising Retailing - Advertising contributes to both higher and lower prices Competition = lower prices Quality and features = higher prices Increase price of products to pay for advertising (consumers pay for advertising) Price transparency in competition- higher knowledge of prices by consumers

Advertisers face a variety of economic/social/ethical/legal issues

Society determines what is: offensive/excessive/irresponsible Government determines what is: deceptive/unfair

Step 2: Develop the Research Plan

Specify constraints: Restrictions on the way research is conducted (time, money, scope)- one constraint has effects on other constraints

Use of celebrities

Spokesman's image may change and be inconsistent with the brand. Less trustworthy source versus 'real life' people. Consumers may focus more on celebrities in the Ad and miss out the brand or key message. Are they worth the millions of $ they charge?

Ads promote a variety of things

Tangible goods: oranges, iPods, automobiles Services such as banks, bike repair shops Ideas, whether political, religious, or social

Absence of externalities

Taxes/regulations compensate for/eliminate the externalities Externalities: Benefit/harm caused by the sale/consumption of products to people who are not involved in the transaction Positive externality: your consumption of that product has benefits for me (vaccines- more people vaccinated (herding effect), less chance of disease being spread) Negative externality: your consumption of that product harms other people who are not consuming the product (cigarettes smoking, increase healthcare costs for everyone) Role of government: can decrease consumption of negative externality products/services by increasing TAXES of products and services to reduce consumption Positive externalities- increase consumption of products/services by providing subsidies- reduce price of products

Causal Research

Tests hypotheses about cause-and-effect relationships. -Would the new packaging cause an increase in consumers' willingness to pay?

Sampling

The process of drawing out, conducting research on and drawing inferences from a SUBSET of the total population -Cheaper and faster than census

Challenges of Pretesting

There is no best way to pretest advertising variables Respondents' answers may not reflect their real buying behavior -Assume the role of expert or critic -Invent opinions to satisfy the interviewer -Be reluctant to admit they are influenced -Vote for the ads they think they should like -Social desirability

Experimental Research

Tries to explain cause-and-effect relationships. Involves: selecting matched groups of subjects, giving different treatments, controlling unrelated factors, checking differences in group responses -Independent Variable (a cause- marketing drivers- marketing mix element) to Dependent Variable (the result)

Ads reach audiences via a medium

Tv, radio, newspaper, internet, etc.

Considerations in ConductingPrimary Quantitative Research

Validity: For a test to be valid, it must reflect the true status of the market, free of bias Reliability: For a test to be reliable, it must be repeatable, producing the same result each time it is administered Sampling methods: Research should reflect the universe of prospective customers (Universe: Entire target population) -Sample: Portion of the population selected to represent the appropriate targeted population (Probability samples + Nonprobability samples)