Adv318j Exam 1: Chapter 1

Advertising can help create pricing flexibility by....

(1)contributing to economies of scale and (2)helping create inelasticity (insensitivity) of demand to price changes.

Psychographics

(attitudes, beliefs, personality, lifestyle, and values)

Demographics

(such as age, marital status, education, gender, and income)

How advertising play a role in helping create economies of scale

Advertising contributes to DEMAND STIMULATION by communicating to the market about the features and availability of a brand. This, in turn, contributes to the process of creating these economies of scale, which ultimately translates into higher profits per unit for the organization.

Direct - Response Advertising

Advertising that asks the receiver of the message to act immediately. All those ads you see that suggest you "call this toll-free number" or "click here to order NOW" are examples of ________________________________ In most cases, ____________________________ is used for products that consumers are familiar with, that do not require inspection at the point of purchase, and that are relatively low cost. However, the proliferation of toll-free numbers and websites or mobile marketing campaigns that provide detailed information and direct online ordering, coupled with the widespread use of credit cards and mobile payment methods like Apple Pay, have been a boon to direct response for higher-priced products as well.

Delayed - Response Advertising

Advertising that relies on imagery and message themes to emphasize the benefits and satisfying characteristics of a brand. Rather than trying to stimulate an immediate action from an audience, ________________________________ attempts to develop awareness and preference for a brand over time. In general, ______________________________________ attempts to create brand awareness, reinforce the benefits of using a brand (i.e., brand loyalty), develop a general liking for the brand, and create an image for a brand. When a consumer enters the purchase process, the information from_______________________ comes into play. Most advertisements we see on television and in magazines are of the ________________________________

Integrated Marketing Communications (IMC)

Beginning in about 1990, the concept of mixing various promotional tools was referred to as.... The process of using promotional tools in a unified way so that a synergistic communications effect is created for a brand. Organizations of all types are not interested in merely communicating with potential and existing customers through advertising and promotion. They want to build brand awareness, identity, and preference through advertising and promotion.

Institutional Advertising

Corporate advertising that takes place in the trade channel. This form of advertising is used most prominently by retailers. Retailers such as Nordstrom, The Home Depot, and Walmart advertise to persuade consumers to shop at their stores or buy on their websites. Although these retailers may feature a particular manufacturer's brand in the advertising (Nordstrom often features Clinique cosmetics, for example), the main purpose of the advertising is to attract shoppers.

Advertising effects on competition

Critics point out that the amount of advertising dollars needed to compete effectively in many industries can act as a barrier to entry. In other words, a firm may have the capability to compete in an industry in every way except being unable to afford the advertising expense needed to really compete. Thus, some argue that advertising can decrease competition.

Advertising's effect on prices

Different products and different market conditions demand that firms spend different amounts of money on advertising. These same conditions make it difficult to identify a predictable relationship between advertising and sales.

Role of advertising in marketing

Helping create sales to generate revenue advertising communicates persuasive information to audiences based on the values created in the marketing mix related to the product, its price, or its distribution. This advertising communication then highlights brand features—performance, price, emotion, values, or availability—and then attracts a target market.

Distinction between IBP and IMC

IMC emphasizes the communication effort per se and the need for coordinated and synergistic messages. IBP retains the emphasis on coordination and synergy of communication but goes beyond the parameters of IMC. In IBP, the emphasis is on the brand and not just the communication. With a focus on building brand awareness, identity, and ultimately preference, the IBP perspective recognizes that coordinated promotional messages need to have brand-building effects in addition to the communication effects

purpose-driven marketing

Marketing (including advertising and IBP) that helps the organization achieve its long-term social purpose. Unilever is taking concrete steps, through its brands and through corporate actions, to save the planet. This social purpose appeals to consumers interested in environmental causes. "For our brands, we are seeing particular growth in sales for those that have built purpose and sustainability into their brand mixes," confirms Unilever's chief marketing and communications officer. Another business benefit of ________________________________________ is the ability to recruit and motivate talented employees. A Unilever sustainability executive explains, "We know that one reason young people want to join us is that we are a business with a clearly defined purpose," as reflected in the company's advertising and IBP messages.

Mobile Marketing

Marketing messages transmitted via wireless technology

Example of advertising creating a distinctive position, both internally and externally.

One P&G brand is advertised as being effective on kids' dirty clothes, whereas another brand is portrayed as effective for preventing colors from running.

Retargeting

Onscreen ads that seem to "magically" appear for things you really are interested in because you have searched online for them before It is common with digital marketing and web and mobile platforms for brands such as Nordstrom to employ ________________________ based on previous online consumer behavior. Eyeballs and clicks represent money as advertising incorporates innovative pricing models based on bidding wars for key search words and cost-per-click models as well as those still based on more traditional measures like how many people were exposed to an ad (Google Adwords)

economies of scale

The ability of a firm to lower the cost of each item produced because of high-volume production. when an organization creates large-scale demand for its brand, the quantity of product produced is increased, and __________________________ lead to lower unit production costs. Cost of production decreases because fixed costs (such as rent and equipment costs) are spread over a greater number of units produced. When Colgate manufactures hundreds of thousands of tubes of its Colgate Total toothpaste and ships them to warehouses, the fixed costs of production and shipping per unit are greatly reduced. With lower fixed costs per unit, Colgate can realize greater profits on each toothpaste sold.

Marketing Mix

The blend of the four responsibilities of marketing—conception, pricing, promotion, and distribution—used for a particular idea, product, or service. advertising messages, media placement, and IBP techniques must be consistent with and complement strategies in all other areas of the __________________________ .

Internal Position

The niche a brand achieves with regard to the other similar brands a firm markets. Effective _________________________ is accomplished by developing vastly different products within the firm's own product line. Ben & Jerry's ice cream, for example, offers plenty of distinctive flavors. Ben & Jerry's has a somewhat easier task in meeting this challenge, since each of the ice creams it needs to __________________________ has a tangible feature to highlight (flavor, ingredients, etc.).

Cooperative Advertising

This sharing of advertising expenses between national companies and local merchants As more companies step up their online branded advertising and support _____________________ for their retail partners, coordinating these efforts is vital for both efficiency and effectiveness

Primary Demand Stimulation

Using advertising to create demand for a product category in general. In _______________________________________, a company would be trying to create demand for an entire product category. __________________________________ is challenging and costly, and research evidence suggests that it is likely to have an impact only for totally new products—not brand extensions or product categories that have been around a long time (known as mature products). Only broad influences on society, like demographics, cultural values, or technology, can affect _________________________________ for a long-established product category such as milk.

Selective Demand Stimulation

Using advertising to stimulate demand for a specific brand. The purpose of _________________________________ advertising is to point out a brand's unique benefits compared to the competition. This is the proper role for advertising and IBP, and it is effective for individual brands, even those within mature product categories. Trickling Springs Creamery in Pennsylvania is building sales for its ice cream and milk products by promoting the local nature of its dairy farms and the organic ingredients. The creamery's marketing director observes, "Customers want to learn the story behind the food to see if it's the values they hold." Advertising and IBP are excellent ways to communicate the story behind specific brands and products.

Communication is inherently a Social process

What a message means to any given consumer is a function not of an isolated thinker but of an inherently social being responding to what he or she knows about the producers of the message (the companies), other receivers (peer groups, for example), and the social world in which the brand and the message exists.

Symbolic Value

What a product or service means to consumers in a nonliteral way. branded clothing such as Lululemon, Ralph Lauren, or The North Face can symbolize self-concept for some consumers. In reality, all branded products rely to some extent on _____________________; otherwise they would not be brands but just unmarked commodities (like potatoes).

Inelasticity of Demand

When consumers are brand loyal, they are generally less sensitive to price increases for the brand. In economic terms, this is known as ________________________________. When consumers are less price sensitive, firms have the flexibility to maintain higher prices and increase profit margins. Advertising contributes directly to brand loyalty, and thus to _________________________, by persuading and reminding consumers of the satisfactions and values related to a brand and why they want to choose that brand over competitors' brands.

Integrated Brand Promotion

When marketers combine contests, a website, event sponsorship, and point-of-purchase displays with advertisements and advertising campaigns or other tools, for example, they create an IBP. Integrated brand promotion

Brand Advertising

______________________________ communicates the specific features, values, and benefits of a particular brand marketed by a particular organization.

Corporate Advertising

_______________________________ is not designed to promote a specific brand but is meant to create a favorable attitude toward a company as a whole Prominent users of ______________________ include Apple, BP, and General Electric firms that have long-established corporate campaigns have designed them to generate favorable public opinion toward the corporation as a whole. When shareholders see good __________________________________ it instills confidence and, ideally, long-term commitment to the firm and its stock.

receivers of communication

__________________________________- must ACCOMADATE their perceived multiple meanings and personal agendas and then NEGOTIATE a meaning—that is, an interpretation—of the ad according to their individual life experiences and value systems.

Brand / Brand name

a name, term, sign, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers the most precious business asset owned by a firm allows a firm to communicate consistently and efficiently with the market. worth much more than the annual sales of the brand.

Advertising

a paid, mass-mediated attempt to persuade

Brand Equity

a set of brand assets linked to a brand, its name, and symbol When a firm creates and maintains positive associations with the brand in the mind of consumers and builds brand loyalty, the firm goes on to develop what is called _________________________ Brand experiences, physical/advertising and IBP help achieve retailer acceptance.

Brand Extension/Variant

adaptation of an existing brand to a new product area. Ex. Ben & Jerry's nondairy frozen desserts is a ________________________________ of the original Ben & Jerry's ice cream product line. advertising and IBP play a key role in attracting attention to the brand "managers should favor the ________________ with a greater allocation of the ad budget."

How advertising creates image and meaning for a brand

advertising can help link a brand's image and meaning to a consumer's social environment and to the larger culture, and in this way, advertising can actually deliver a sense of personal connection for the consumer.

Advertisings effect on value

advertising is an essential way in which the image of a brand is developed, it contributes directly to consumers' perception of the value of the brand. The more value consumers see in a brand, the more they are willing to pay to acquire the brand. If the image of a Gucci watch, a Toyota Prius, or a Four Seasons hotel is valued by consumers, then consumers will pay a premium to acquire that value

How advertising is related to GDP

advertising is related to GDP in that it can contribute to levels of overall consumer demand when it helps introduce new products, such as alternative energy sources. As demand for these new products grows, this consumer spending fuels retail sales, housing starts, and corporate investment in finished goods and capital equipment—all part of a nation's GDP

Global Advertising

advertising that is used worldwide with only minor changes in the visual and message content. Very few brands can use this. These are typically brands that are considered "citizens of the world" and whose manner of use does not vary tremendously by culture. effective only when a brand and the messages about that brand have a common appeal across diverse cultures. Singapore Airlines, IBM, Apple, and Pirelli Tires, try to develop and place advertisements with a common theme and presentation in all markets around the world where the firm's brands are sold

Regional Advertising

carried out by producers, wholesalers, distributors, and retailers that concentrate their efforts in a relatively large but not national geographic region, to reach customers and potential customers.

government officials and employees

constitute an audience in themselves due to the large dollar volume of buying that federal, state, and local governments do. organizations from universities to road maintenance operations buy huge amounts of various types of products. Producers of items such as office furniture, construction materials and equipment, vehicles, fertilizers, computers, and business services all target this group with advertising (direct mail, catalogs, personal selling, and Web advertising.)

Professionals

defined as doctors, lawyers, accountants, teachers, electricians, or any other professional group that has special training or certification. This audience warrants a separate classification because its members have specialized needs and interests. typically highlights products and services uniquely designed to serve their more narrowly defined needs. The language and images used in advertising to this target audience often rely on esoteric terminology and unique circumstances that members of professions readily recognize. Advertising to the them predominantly carried out through TRADE JOURNALS

Local Advertising

directed at an audience in a single trading area, either a city or a state. Under special circumstances, national companies will share advertising expenses in a market with _________________ dealers to achieve specific advertising objectives.

The role of advertising relates to ......

four important aspects of the marketing process undertaken by every organization: (1)contributing to the marketing mix , (2)developing and managing the brand, (3)achieving effective market segmentation, differentiation, and positioning, (4)contributing to revenue and profit generation.

members of business organizations

he focus of advertising for firms that produce business and industrial goods and services, such as office equipment, production machinery, supplies, and software. Although products and services targeted to this audience often require personal selling, advertising is used to create awareness and a favorable attitude among potential buyers. IBM has used advertising during the U.S. Open tennis tournament to reach chief marketing officers within organizations, because this audience is becoming more influential regarding hardware and software decisions within corporations

Household Consumers

he most conspicuous audience in that most mass media advertising is directed at them. McDonald's, Toyota, Forever 21, Progressive Insurance, and Apple have products and services designed for the consumer market, and so their advertising targets household consumers.

Audience

household consumers, college students, or businesspeople, for example. Any large group of people

Perceptual Space

how one brand is seen on any number of dimensions—such as quality, taste, price, or social display value—in relation to those same dimensions in other brands. importance of positioning can be understood by recognizing that consumers create a __________________________ in their minds for all the brands they might consider purchasing

Members of a Trade Channel

include retailers (like Best Buy for consumer electronics), wholesalers (like Castle Wholesalers for construction tools), and distributors (like Sysco Food Services for restaurant supplies) target audience for producers of both household and business goods and services. The promotional tool used most often to communicate with this group is PERSONAL SELLING and SALES PROMOTION because this audience represents a relatively small, easily identifiable group.

Trade Journals

magazines published specifically for members of a trade and carry articles of interest to that audience (Food technology)

Content Marketing

marketing of informational content such as videos or posts for target audiences online and on social media

Gross Domestic Product (GDP)

measure of the total value of goods and services produced within an economic system.

Repositioning

occurs when a firm believes that a brand needs to be revived or updated to address changing market or competitive conditions. An advertising message can be altered to appeal to consumer behavior trends. Packaging can be changed to attract attention, or the brand's logo can be updated to provide a more powerful visual brand representation. Some analysts refer to the process of __________________________ with such visual elements of IBP as "the best way into a consumer's mind is not with verbal nails, but with a visual hammer."

International Advertising

occurs when firms prepare and place different advertising in different national markets for the same brand outside their home market Unilever has different laundry ads for every international market.

Source

originator or creator of content

Value

perception by consumers that a brand provides satisfaction beyond the cost incurred to obtain that brand. The ___________ perspective of the modern consumer is based on wanting every purchase to be a "good deal." _______________ can be added to the consumption experience by advertising. Advertising also affects a consumer's perception of ________________ by contributing to the symbolic value and the social meaning of a brand

Market Segmentation

process of breaking down a large, widely varied market into submarkets, or segments, that are more similar than dissimilar in terms of consumer characteristics. The market for automobiles can be divided into submarkets for different types of automobiles based on the needs and desires of various groups of buyers: large or small, luxury or economy, sedan or SUV or pickup or minivan.

Differentiation

process of creating a perceived difference, in the mind of the consumer, between a brand and its competition. based on consumer perception. The perceived differences can be tangible differences, or they may be based on image or style factors. ad may emphasize performance features, or it may create a distinctive image for the brand. Ex. Bottled Water - Coke's Dasan/ pepsi's Aquafina marketers use different advertising and IBP strategies to highlight points of _____________________

Positioning

process of designing a brand so that it can occupy a distinct and valued place in the target consumer's mind relative to other brands. This distinctiveness can be communicated through advertising. depends on a perceived image of tangible or intangible features.

National Advertising

reaches all geographic areas of a single nation. ______________________________- is the term typically used to describe the kind of advertising we see most often in the mass media in the domestic U.S. market.

Social Meaning

refers to what a product or service means in a societal context. For example, social class is marked by any number of products, such as cars, beverages, and clothes, that are used and displayed to signify class membership. Often, the brand's connection to social class values addresses a need within consumers to move up in class.

Model of Mass Mediated Communication

shows mass communication as a process in which people, institutions, and messages interact. Two major components production (by the sender of a message) and reception (by the receiver of a message). Between production and reception are the mediating (interpretation) processes of accommodation and negotiation. fluid and not unidirectional

Target Audience

singled out because the firm has discovered that these specific audience members like the product category and might prefer their particular brand within that product category. household consumers, members of business organizations, members of a trade channel, professionals, and government officials and employees. (men, 25 to 45, in professional occupations, living in metropolitan areas, with incomes greater than $50,000 per year)

Marketing

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

Client/Sponsor

the company or organization that pays for advertising

External position

the competitive niche a brand pursues a firm tries to create a distinctive competitive position based on design features, pricing, distribution, or promotion or advertising strategy (Acura's NSX, among the most costly cars built in America, starting at about $156,000. Other brands seek a position at the low end, such as the Nissan Versa sedan, with a base price below $13,000) Effective __________________________ is achieved when the firm carefully segments the market, develops brand features and values that are distinctive from the competition, and follows through with advertising and IBP messages that highlight the distinctions

advertising functions as a business process in three ways...

the role advertising plays in the overall marketing and brand development programs in firms. types of advertising used by firms advertising by identifying the economic effects of the process.

clutter

the sheer number and diversity of brand messages to which you're exposed every day in every medium. digital advertisers consider_________________ the biggest challenge they face in trying to get messages across to consumers

Accommodation and Negotiation

the ways in which consumers interpret ads lie between the production and reception phases decoding what the source has encoded

Advertisings role in the market segmentation process

to develop messages that appeal to the needs and desires of different segments and then to transmit those messages via appropriate media Ford, for example, TARGETS different segments for different vehicles and creates advertising and IBP messages suited to each segment's needs and wants. It paid to have its F-series Super Duty pickup trucks named "Official Truck of the NFL" as a way to link its "Built Ford Tough" trucks with the toughness of football—reaching a key target audience while reinforcing a key benefit. For Ford's sporty Mustang car, the company TARGETED buyers interested in performance and design with its "Powerful, By Design" ads.

Importance of Trade Channels/buyers on new brands or brand extension

trade buyers (retailers, wholesalers, distributors, brokers) can be key to the success of new brands or brand extensions. Marketers have little hope of successfully introducing a brand if there is no cooperation in the trade channel among wholesalers and retailers. This is where IBP as a factor in advertising becomes prominent Direct support to the trade in terms of displays, contests, increased margins, and personal selling combined with advertising in an IBP program helps ensure the success of a brand.

When do sales occur?

when a brand has a well-conceived and complete marketing mix—including good advertising

Brand Loyalty

when a consumer repeatedly purchases the same brand to the exclusion of competitors' brands. This can result because of habit, because brand names are prominent in the consumer's memory, because of barely conscious associations with brand images, or because consumers have attached some fairly deep meanings to the brands they buy. brand features are the most important influence on building and maintaining _______________________________ (frequent flyer or frequent buyer programs)