Test 1 MKT405

3 Different Types of Media

1) Earned Media 2) Paid Media 3) Owned Media

Perspective One: Consumer as the Decision Maker Process for buying decision (4 steps)

1. Need recognition 2. Information search and alternative evaluation 3. Purchase 4. Post-purchase use and evaluation

STP

1. Segmentation - Identify bases (e.g., behavior, demographics) to segment the market - Develop profiles of resulting segments 2. Targeting - Develop measures of segment attractiveness - Prioritize and select the target segment(s) 3. Positioning - Develop marketing mix (e.g., products, messaging) for each target segment

Areas of advertising regulation: FTC's policy on deception

1. There must be a representation, omission, or practice that is likely to mislead the consumer. 2. This representation, omission, or practice must be judged from the perspective of a consumer acting reasonably in the circumstance. 3. The representation, omission, or practice must be a "material" one. Is the act or the practice likely to affect the consumer's conduct or decision with regard to the product or service? If so, the practice is mate- rial, and therefore consumer harm is likely, because consumers are likely to have chosen differently if not for the deception. both implied claims and missing information can be bases for deeming an ad deceptive. Claim must be truthful, but also ads must tell the WHOLE story.

Market niche

A market niche is a relatively small group of consumers within a segment that has a distinctive set of needs or seeks very specific benefits small size of a market niche often means it would not be profitable for many organizations to serve it So when a firm identifies and develops products for market niches, the threat of competitors developing imitative products to attack the niche is reduced The future- Niche marketing will continue to grow in popularity as the mass media splinter into a series of complex and narrowly defined array of vehicles and advertisers target audiences more precisely with social/digital media

Clutter and Attention

Advertising clutter from context in which ads are processed- even if a person wanted to, it would be impossible to process and integrate every advertising message they are exposed to everyday Tactics to gain attention and reinforce recognition (combat selective attention): Target's eye-catching bulls eye logo in ads and promo materials Popular music, celebrity spokespersons, sexy models, rapid scene changes

The FTC's Regulatory Programs and Remedies: Affirmative disclosure

Affirmative disclosure: An advertisement that does not disclose important material facts about a product can be deemed deceptive, and the FTC may require affirmative disclosure, where important material absent from prior ads must be included in subsequent advertisements.

Evaluative criteria

As the search-and-evaluation process proceeds, consumers form evaluations based on the characteristics or attributes of those brands in their consideration set (evaluative criteria) Evaluative criteria: product attributes or performance characteristics differ from one product category to the next and can include many factors, such as price, texture, warranty terms, service support, color, scent, or carb content Advertisers should also know how consumers rate their brand in comparison with others from the consideration set

Ways to segment markets

Behavior segmentation Demographic Geodemographic psychographic (also benefits sought)

Brand communities:

Brand communities: groups of consumers who feel a commonality and a shared purpose attached to a consumer good or service Ex. When two perfect strangers stand in a parking lot and act like old friends simply because they both own Subarus Social media makes brand communities v important

Brand platform:

Brand platform: Core idea that frames an ambition or aspiration for the brand that will be relevant to target audiences over time

Brand promise:

Brand promise: Expressed in terms of what it is that the brand promises the customer Ex. Coca-Cola Brand Promise- To refresh the world in mind, body, and spirit, and inspire moments of optimism; to create value and make a difference.

Community

Can be imagined or even virtual, can be neighborhood, social clubs Virtual relationships/communities can have strong influence Community members believe they belong to a group of people who are similar to them in important ways and different from those not in the community Members of communities share rituals and traditions and feel responsibility to one another and the community Brand communities: groups of consumers who feel a commonality and a shared purpose attached to a consumer good or service Ex. When two perfect strangers stand in a parking lot and act like old friends simply because they both own Subarus Social media makes brand communities v important

Regulatory Issues in direct marketing/internet: click fraud

Click fraud: for companies that pay by the click for digital advertising, Fraud occurs when a company's ads are clicked not by actual humans but by bots designed to mimic what Internet users do, causing the advertiser to overpay

Cognitive dissonance:

Cognitive dissonance: the anxiety or regret that lingers after a difficult decision, sometimes called "buyer's remorse."

The FTC's Regulatory Programs and Remedies: corrective advertising

Corrective advertising: In cases where evidence suggests that consumers have developed incorrect beliefs about a brand based on deceptive or unfair advertising, the firm may be required to run corrective ads in an attempt to dispel those faulty beliefs. The most extensive remedy for advertising determined to be misleading is corrective advertising

Marketers influence need recognition by:

Creating dissatisfaction with the current state Creating a new ideal state ONCE CONSUMERS RECOGNIZE A NEED, THEY BEGIN TO TRY TO SATISFY THE NEED...

Deception

Deception is making false or misleading statements in an advertisement includes omission of information

Regulatory issues in Public Relations: Defamation, slander, libel

Defamation: When a communication occurs that damages the reputation of an individual because the information in the communication was untrue Defamation can occur through slander or libel Slander: oral defamation and in the context of promotion would occur during television or radio broadcast of an event involving a company and its employees Libel: defamation that occurs in print and would relate to magazine, newspaper, direct mail, or Internet reports by law, the standard of libel for public figures is high, making the case difficult to win. The celebrity will have to prove "actual malice" -- that the tabloid was not just negligent, but rather knew that the item was false and nonetheless displayed a reckless disregard for the truth

Ease of measurement/predicability of consumer behavior - by type of segmentation

Demographic -Easiest to measure -Lowest predictability of consumer choice behavior Geodemographic -2nd easiest measurement, pretty easy to measure -2nd lowest predictability of consumer choice behavior, doesn't tell us that much Psychographics -3rd easiest measurement (2nd hardest), not THAT easy to measure -2nd highest predictability of consumer choice behavior, tells us a good amount Behaviorgraphics -Hardest to measure -Highest predictability of consumer choice behavior

Episodic memory

Episodic memory - Memories of episodes or events, what you did last night, your friend's party, could be a consumption experience like driving a certain car or eating a brand of ice cream system driven as much by motivation and how we choose to remember as anything. To achieve episodic memory, marketers aim to make product/service central to life events

Food and Drug Administration (FDA)

Food and Drug Administration (FDA) Regulates the advertising of food, drug, cosmetic and medical product Prohibits false labeling and packaging

Regulatory Issues in direct marketing/internet: Geofencing

Geofencing: Advertisers can use geofencing to identify smartphone users within a given geographic area (such as inside a hotel or near a restaurant) and then offer these nearby consumers special deals or monitor their social media posts. capability to track consumers' physical whereabouts via their smartphones

Emotion

If a brand is associated with a positive emotion or feeling, the subsequent information about the brand is actually distorted in favor of the emotion-linked brand and against others Consumers change the nature of incoming information to favor this emotional brand connection

Search issues: (Information Search and Alternative Evaluation)

Internal Search: Availability bias Recall information that is more accessible, but not necessarily more diagnostic (i.e., informative for satisfying need) External Search: Confirmation bias Find information that is consistent with attitudes Find information that proves/supports, but do not usually try to falsify or contradict

Involvement

Involvement: the degree of perceived relevance and personal importance accompanying the choice of a certain product or service within a particular context: How much it matters to you

NET NEUTRALITY!!

LEARN

Non-comparable decisions:

Non-comparable decisions: Process of making decisions about products or services from different categories (e.g., weekend entertainment) Two main consumer strategies Alternative-Based (top-down processing): overall evaluation, may use pros & cons Attribute-Based (bottom-up processing): consumers form abstract representations to help them compare options

Perspective One: Consumer as the Decision Maker Buying decision step 3. purchase

Once the consumer has made a decision, and a sale is made Marketers aim for: Trial Conversion (repeat purchase) Brand loyalty Brand ambassadors - spread the brand

Essentials for Advertising

Paid Mass-mediated Attempting to persuade

2 Consumer Behavior Perspectives

Perspective One: Consumer as the Decision Maker Perspective Two: The Consumer as Social Being

Pester Power

Persuasions of advertising influence child's demands and cause child-parent conflict Parents find themselves having to say no over and over again to children whose desires are piqued by effective advertising. This is called pester power, which notes the strong influence kids can have on adult's purchases even when they have no money

Social aspects of advertising: Is advertising demeaning and deceitful or liberating and artful?

Pro: Advertisers are showing much more sensitivity Pro: Advertising is a source of fulfillment and liberation Pro: Advertising is democratic art Con: advertising perpetuates stereotypes Con: advertising is often offensive Con: Advertisers deceive via subliminal stimulation (below the threshold of consciousness)

Segmentation

Segmentation - Identify bases (e.g., behavior, demographics) to segment the market - Develop profiles of resulting segments

Stratification:

Stratification: refers to systematic inequalities in things such as wealth, income, education, power, and status Systematic inequalities in wealth, income, education, power, and status (i.e., determinants of SES - social class) lead to stratification (i.e., dividing consumers into groups, or strata, based on SES - social class) Members of the same social strata tend to consume in similar ways income, education, and occupation are three important variables for indicating social class 3 are Still individually, or even collectively, inadequate at capturing its full meaning

4. Identify the essential elements of an effective positioning strategy.

The P in STP marketing refers to the positioning strategy that must be developed as a guide for all marketing and advertising activities that will be undertaken in pursuit of the target segment. Effective positioning strategies should be linked to the substantive benefits offered by the brand. They are also consistent internally and over time, and they feature simple and distinctive themes. Benefit positioning, user positioning, and competitive positioning are options that should be considered when formulating a positioning strategy.

Consideration set:

The consideration set: the set of the brands the consumer will consider for purchase

Positioning model - brand opportunity

The positioning model has four factors represented by overlapping circles, the point where these 4 meet is considered the brand's best position/opportunity. They are: 1. Relevance: What is the consumer need? Where is the strong consumer connection? 2. Differentiation: Is the brand better than competitors? Will it stand out as different than others? 3. Credibility: Expertise and believability? Will consumers believe it? 4. Stretch: Potential over time? Will the brand's meaning have continued relevance in changing times? Will it foster brand extensions? Where these 4 overlap = brand opportunity

Areas of advertising regulation

There are three basic areas of advertising regulation: deception and unfairness in advertising, competitive issues, and advertising to children.

When does extended problem solving occur?

When does extended problem solving occur? When consumer is inexperienced in the consumption setting When the setting has high involvement Examples of extended problem solving come with harder decisions Products expensive, carry risk Buying your first new automobile and choosing a college

When does habit seeking occur?

When does habit seeking occur? High experience Low involvement habitual purchases are the most common decision-making mode consumer perceives little difference among the various competitive brands when a decision isn't involving and a consumer repurchases from the category over and over again It is NOT brand loyalty

Children's Television Act

restricts advertising on children's programming passed in 1990, restricts advertising on children's programming to 10.5 minutes per hour on weekends and 12 minutes per hour on weekdays, and mandates the airing of informational and educational programming for children.

primary demand stimulation

-In primary demand stimulation, a company is trying to create demand for an entire product category Challenging and costly Only has impact for totally new products, not brand extensions or product categories that have been around a long time Only broad influences on society, like demographics, cultural values, or technology, can affect primary demand for a long-established product category such as milk

All advertising includes an attempt to persuade

Communications designed to get someone to do something Advertising can be persuasive communication not only about a product or service but also about an idea, a person, or an entire organization.

Definition of Marketing:

Marketing is 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 The marketing mix contains 4 areas of responsibility and decision making in marketing: conceiving, pricing, promoting, and distributing goods and services

Describe the different ways of classifying audiences for advertising and IBP.

One way to appreciate the complexity and diversity of advertising is to classify it by audience category or by geographic focus. For example, advertising might be directed at households or government officials. Using another perspective, it can be global or local in its focus.

cooperative advertising/co-op advertising

Under special circumstances, national companies will share advertising expenses in a market with local dealers to achieve specific advertising objectives. This sharing of advertising expenses between national companies and local merchants is called cooperative advertising/co-op advertising

Basic structure of the industry - Advertisers (1)- 4 types of advertisers

manufacturer and service firms (Proctor and Gamble, Verizon) trade resellers (Walmart, Macy's) Government (federal, state, and local governments) social and not-for-profit orgs (The Nature Conservancy, United Way, American Red Cross)

Brand features are

the most important influence on building and maintaining brand loyalty

Advertising to professionals is predominantly carried out through ...

trade publications

Race and ethnicity

"Our discomfort stems from having, on the one hand, the desire to say 'race doesn't matter, we're all the same,' and on the other hand, not wanting (or not being able) to deny the significance of race and ethnicity in terms of reaching ethnic cultures and influencing a wide variety of... consumer behaviors"

Four modes of consumer decision making

(1) extended problem solving, (2) limited problem solving, (3) habit or variety seeking (4) brand loyalty

Geodemographic Segmentation

- 2nd easiest measurement, pretty easy to measure - 2nd lowest predictability of consumer choice behavior, doesn't tell us that much -Geographic segmentation may be conducted within a country by region, by state or province, by city, or even by neighborhood -Climate and topographical features yield dramatic differences in consumption by region for products such as snow tires and surfboards -Eating and food preparation habits, entertainment preferences, recreational activities, and other aspects of lifestyle vary along geographic lines -Geodemographic segmentation identifies neighborhoods (by zip codes) around the country that share common demographic characteristics. Ex. PRIZM identifies 66 market segments that encompass all the zip codes in the United States. Each of these segments has similar lifestyle characteristics and can be found throughout the country.

Corporate vs Brand Advertising

- Corporate advertising: meant to create a favorable attitude toward a company as a while, not designed to promote a specific brand Apple, BP, GE firms that have long-established corporate campaigns have designed them to generate favorable public opinion toward the corporation as a whole - Brand advertising: communicates the specific features, values, and benefits of a particular brand marketed by a particular organization Institutional advertising: when corporate advertising takes place in a trade channel 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.

Direct vs Delayed Response Advertising

- Direct-response advertising asks consumers to act immediately, call to action is specific and time bound (like come to our Memorial Day Weekend Sale) Click here to order NOW direct-response advertising 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 Apple pay and mobile payment methods have increased direct response for higher priced products as well - Delayed-response advertising relies on imagery and message themes that emphasize the benefits and satisfying characteristics of a brand, any time there is no obvious call to action Attempts to develop awareness and preference for a brand over time delayed-response advertising 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 delayed- response advertising comes into play Most advertisements we see on television and in magazines are of the delayed-response type

Psychographic segmentation

-3rd easiest measurement (2nd hardest), not THAT easy to measure -2nd highest predictability of consumer choice behavior, tells us a good amount Psychographics: emphasizes the understanding of consumers' activities, interests, and opinions (AIOs) -Psychographics usually results in lifestyle segmentation- a focus on consumers' activities, interests, and opinions often produces insights into differences in the lifestyles of various segments -Measurement of Psychographics: VALS (formerly Values & Lifestyle Survey), Responses to a proprietary survey place a consumer in one of 8 categories- Innovator, thinker, believer, achiever, striver, experiencer, survivor, maker -Customized (product-specific) vs. general purpose psychographic profiles: Psychographic/lifestyle segmentation can be customized with a focus on the issues specific to a single product category, or it may be pursued so that the resulting segments have general applicability to many different product or service categories. Ex. Vans- Skateboarders and surfers have been the brand's primary segments, defined by lifestyle rather than solely by age. Vans also uses the psychographic variable of creative expression to identify consumers of any age who buy shoes as an expression of their personality.

Targeting, 2nd step in STP

-Develop measures of segment attractiveness -Prioritize and select the target segment(s) the main idea of targeting is to efficiently deliver the branding effort to the chosen segments

Demographic segmentation

-Easiest to measure -Lowest predictability of consumer choice behavior Demographic segmentation: widely used in selecting target markets- age, gender, race, marital status, income, education, and occupation -if an advertiser knows the demographic characteristics of the target segment, choosing media to efficiently reach that segment is easier -Identify needs and characteristics of groups with Big Data -Demographics are commonly used to profile segments that have been identified with some other variable Ex. If an organization had first segmented its market in terms of product usage rates, the next step would be to describe or profile its users in terms of demographic characteristics such as age or income demographic categories are used frequently as the starting point in market segmentation Demographic trends: Global population growth- 7.5 billion (2018) to 8.5 billion (2030) to 9.7 billion (2050) In U.S.: Median age will increase to 38 by 2025, More middle-aged Baby Boomers, Fewer children, teenagers, and young adults due to decreased birthrates Largest countries are china, India, US

Behavior segmentation

-Hardest to measure -Highest predictability of consumer choice behavior -Marketers often use online behavioral targeting for behavior segmentation -3 types: usage level/heavy users/committed users/lead users, Switchers and variety seekers, emergent consumers 1. Heavy users---Segment markets by consumers' brand commitment or usage levels - one of the most common ways to segment markets -Consumers will purchase more and more frequently than others- these consumers are called heavy users, committed users, or lead users Downsides to heavy-user-focused segmentation plan: -devoted users may need no encouragement at all to keep consuming -heavy-user focus takes attention and resources away from those who do need encouragement to purchase the marketer's brand 2. Switchers and variety seekers Switchers: consumers who often buy whatever is on sale or choose brands that offer discount coupons or other price incentives -can be a costly target segment for competing brands and affect category profitability -Very expensive to get their business, and they may disappear as soon as their business is won Variety seekers: enjoy new experiences and switch brands or products for that reason, and not for lower prices or another incentive -some companies deliberately provide variety within a brand- enables variety seekers to try something new and different without actually switching away -For companies that target multiple segments, multibrand portfolios also offer opportunities for variety seekers 3. Emergent consumers Gradual but constant influx of first-time buyers in most product categories (Reasons vary, include purchase triggers like college graduation, marriage, baby, divorce etc, also immigration) Emergent consumers are motivated by many different factors but share one characteristic: brand preferences are still under development Target emergents with messages that fit their age or social circumstances (May create brand loyalty in the future) Developing advertising campaigns to win with first-time users is often referred to as point-of-entry marketing. Ex. the marketers of Folgers want to appeal specifically to the next generation of coffee drinkers

Types of Advertising Primary vs Selective Demand Stimulation

-In primary demand stimulation, a company is trying to create demand for an entire product category Challenging and costly Only has impact for totally new products, not brand extensions or product categories that have been around a long time Only broad influences on society, like demographics, cultural values, or technology, can affect pri- mary demand for a long-established product category such as milk -Selective demand stimulation stimulates demand for a particular company's brand. Selective demand stimulation advertising points out a brand's unique benefits compared to the competition Effective for individual brands, even those within mature product categories

Model of mass-mediated communications

-Model is fluid, not unidirectional. The feedback loop from meanings formed back to the audience illustrates how we gain understanding of a brand or an ad. -Moving from left to right, first is the process of communication production where the content of a mass communication is created = production source. The creation of the advertisement is a complex interaction of the company's brand message, the company's expectations about the target audience's desire for information, the company's assumptions about how members of an audience will interpret the words and images in an ad, and the rules and regulations of the medium that transmits the message. Interaction of advertiser, imagined audience, agency, media, and other social institutions that results in production of advertising content. -The mediating processes of accommodation and negotiation lie between the production and reception phases. Accommodation and negotiation are the ways in which consumers interpret ads, decoding what the source has encoded. Every consumer who sees an ad gets an interpretation of the ad that makes sense to that person individually, serves his or her needs, and fits his or her personal history with a product category and a set of brands. -Reception also takes place in the context of potential interference known as clutter. Clutter is the sheer number of diversity of brand messages to which you're exposed every day in every medium.

3 Positioning Strategic Decisions to Make

1. A firm must decide on the external position for the brand, or the niche the brand will pursue relative to all the competitive brands on the market With an external-positioning decision, a firm creates a distinctive competitive position based on design features, pricing, distribution, or promotion or advertising strategy Effective external positioning 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 2. An internal position, achieved with regard to the other similar brands the firm itself markets Effective internal positioning is done by developing vastly different products within the firm's own product line. Ex. Ben & Jerry's ice cream offers plenty of distinctive flavors 3. Repositioning occurs when a firm believes that a brand needs to be revived or updated to address changing market or competitive conditions Aided by variety of advertising and IBP tactics Advertising can be altered to appeal to consumer behavior trends Packaging can be updated to provide a more powerful visual brand representation

Basic structure of the industry - External Facilitators (4), Media Organizations, different types

1. Broadcast Television (Major network, independent station, cable, broadband), Radio (Network, local), Satellite 2. Print Magazines (By geographic coverage, By content), Direct Mail (Brochures, Catalogs, Videos), Newspapers (National, Statewide, Local), Specialty (Handbills, Programs), Banners 3. Interactive Media Online Computer Services, Home-Shopping Broadcasts , Interactive Broadcast Entertainment Programming, Social Media and Mobile Media, Internet, Smartphones, Tablets 4. Support Media Outdoor (Billboards Transit Posters), Directories (Yellow Pages Electronic directories), Premiums (Keychains Calendars Logo clothing Pens), Point-of-Purchase Displays, Film and Program Brand Placement, Event Sponsorship 5. Media Conglomerates Multiple Media Combinations (AT&T Liberty Media Comcast Walt Disney Co. iHeartMedia Hearst Corp.)

Agency compensation methods

1. Commissions: The traditional method of agency compensation is the commission system, which is based on the amount of money the advertiser spends on media. 2. Markup charges: add a percentage markup charge (sometimes referred to as cost- plus) to a variety of services the agency purchases from outside suppliers, an agency will turn to outside contractors for art, illustration, photography, printing, research, and production 3. Fee systems: the advertiser and the agency agree on an hourly rate for different services provided This is the most common basis for promotion agency compensation Another version is a fixed fee, or contract, set for a project between client and agency Agencies opposed to the fee system approach. Argue that creative impact cannot be measured in "work hours" but rather must be measured in "the value of the materials the agency is creating for the client" 4. Pay-for-results: incentive-based compensation that base the agency's fee on the achievement of agreed-on results Results narrowly defined as "sales", not a good idea for agencies

Essentials for effective positioning strategies

1. Effective positioning strategies are based on meaningful commitments of organizational resources to produce substantive value for the target segment -Deliver on promise 2. Effective positioning strategies are consistent internally and over time - everything must work in combination to reinforce a distinct perception in the consumer's eyes about what a brand stands for - Basic premise of a positioning strategy must be simple and distinctive to be communicated effectively to the target segment 3. Effective positioning strategies feature simple and distinctive themes

Trends affecting the industry

1. Reduced dependence on mass media advertising - Promotion options such as online communication, brand placement in film and television, point-of-purchase displays, and sponsorships are more attractive to advertisers Mobile marketing/mobile media Tech has created opportunity for advertisers to reach consumers w messages directed to consumers' mobile devices (smartphones and tablets) 2. Increased reliance of highly targeted communication methods - In an effort to "cover all the bases" in reaching audiences, media companies have been engaging consumers in as many ways as possible, traditional media, broadcast TV, newspapers, radio, magazines etc 3. Consumer control -Top trend on the list, consumers now in greater control of the info they receive about product categories and brands within those categories. Social media, Blogs, WOM, on-demand streaming 4. Consumer participation (Crowdsourcing) - idea behind crowdsourcing is to get consumers more involved with and committed to a brand in a way that passive, intrusive advertising cannot Consumers help "build the brand" with recommendations for features or ad campaign images products identified as crowdsourced do better in the marketplace, because consumers perceive that these products will effectively address their needs 5. Media clutter (makes IBP more important) - More ways to try to reach consumers than ever before, Clutter: from TV ads to banner ads to virtual billboards, new and increased media options have made so much clutter that the probability of one advertisement breaking through is lowering. Key to breaking through is IBP 6. Data (over creative) - death of true creativity? 7. Direct to consumer - future of retail? 8. Voice marketing - siri, alexa, more than 50% of households by 2022? 9. Future of influencer marketing - most relevant platforms?

Basic structure of the industry

1. advertisers (4 types- manufacturer and service firms, trade resellers, federal state and local governments, social and not-for-profit orgs) 2. advertising and promotion agencies (many different types) 3. external facilitators 4. media organizations 5. target audiences

Advertising can help create pricing flexibility in 2 ways

1. by contributing to economies of scale When an organization creates large-scale demand for its brand, the quantity of product produced is increased, and economies of scale lead to lower unit production cost Cost of production decreases because fixed costs (such as rent and equipment costs) are spread over a greater num- ber of units produce Advertising contributes to demand stimulation by communicating to the market about the features and availability of a brand. 2. helping create inelasticity (insensitivity) of demand to price changes When consumers are brand loyal, they are less sensitive to price increases for the brand - This is known as inelasticity of demand. Brand loyalty and advertising work together to create this economic effect When consumers are less price sensitive, firms can maintain higher prices and increase profit margins.

Targeting - Prioritizing Segment and Selection Considerations

1. what the members of the segment want versus the organization's ability to provide it -To serve a target segment, an organization may commit substantial resources to provide what that segment wants. If the price for these new capabilities is too high, the organization must find another segment -the most fundamental criterion in segment selection 2. the size and growth potential of the segment Segment size: a function of the number of people, households, or institutions in the segment plus their willingness to spend in the product category Number of people in a segment of heavy users may be small, but high usage rates can make up for it Small segments may grow- devote resources to segments projected for growth 3.forecasted return on investment (ROI) for the segment Marketing analytics 4. competitive field— companies that compete for the segment's business Does advertiser have an expertise or bigger budget that would help serve the segment more effectively than competitors? 5. Market niche/niche marketing - smaller is better segmentation principle A market niche is a relatively small group of consumers within a segment that has a distinctive set of needs or seeks very specific benefits small size of a market niche often means it would not be profitable for many organizations to serve it So when a firm identifies and develops products for market niches, the threat of competitors developing imitative products to attack the niche is reduced A niche may be small in the beginning, but over time, it can grow into a substantial segment that attracts more consumers and more competition The future- Niche marketing will continue to grow in popularity as the mass media splinter into a series of complex and narrowly defined array of vehicles and advertisers target audiences more precisely with social/digital media

1.Extended Problem Solving

1.Extended Problem Solving (i.e., high effort decision-making) In extended problem solving - consumers go through a deliberate decision-making process that begins with explicit need recognition, proceeds with careful internal and external search, continues through alternative evaluation and purchase, and ends with a lengthy postpurchase evaluation. Deliberate, careful search When does extended problem solving occur? When consumer is inexperienced in the consumption setting When the setting has high involvement Examples of extended problem solving come with harder decisions Products expensive, carry risk Buying your first new automobile and choosing a college

2.Limited Problem Solving

2.Limited Problem Solving (i.e., low-effort decision-making) In limited problem solving- a consumer is less systematic in his decision making. The consumer has a new problem to solve, but it is not a problem that is interesting or engaging, so the information search is limited to simply trying the first brand encountered—especially when the "problem" is minor. Common products, limited search When does limited problem solving occur? Low experience Low involvement CPG categories (consumer packaged goods), where memory is a huge factor consumers simply seeking adequate solutions to mundane problems just trying a brand or two may be the most efficient way of collecting information about one's options Marketers opportunity for trial offers, free samples, inexpensive "trial sizes," or discount coupons

3.Habit or Variety Seeking

3.Habit or Variety Seeking Habit and variety seeking occur when a decision isn't involving and a consumer repurchases from the category over and over again Habit seeking: Refers to buying a single brand repeatedly as a solution to a simple consumption problem. It is not the same as brand loyalty. Consumers find a brand of snacks or soap that suits their needs, they run out of the product, and they buy it again. When does habit seeking occur? High experience Low involvement habitual purchases are the most common decision-making mode consumer perceives little difference among the various competitive brands when a decision isn't involving and a consumer repurchases from the category over and over again It is NOT brand loyalty In product categories where a buying habit would be expected, a phenomenon called variety seeking may be observed instead Variety seeking: refers to the tendency of consumers to switch their selection among various brands in a given category in a seemingly random pattern, switch brands from within this set just for the sake of variety Doesn't buy just any brand, consumer has 2-5 brings that provide similar levels of satisfaction Product categories such as snack foods, soft drinks and alcoholic beverages, breakfast cereals, and fast food prone to variety seeking When does variety seeking occur? High experience Low involvement frequently purchased categories in which sensory experience- taste or smell, accompanies product use Satiation occurs after repeated use and leaves the consumer looking for a change of pace snack foods, soft drinks and alcoholic beverages, breakfast cereals, and fast food

Describe the different ways of classifying audiences for advertising and IBP.

5 Audience Categories: Household consumers, Members of business organizations, Members of a trade channel, Professionals, Government officials and employees Audience geography: Global advertising, international advertising, national advertising, Regional advertising, local advertising, coop advertising

Define brand extension

A brand extension (also called brand variant) is an adaptation of an existing brand to a new product area

What is a brand?

A brand is a name, term, sign, symbol, or design intended to identify the goods and services of one seller or groups of sellers and differentiate them from those of competition

Audience

A group of individuals who receive and interpret messages sent from companies or organizations

Perceptual space (positioning)

A perceptual space is how one brand is seen on any number of dimensions— such as quality, taste, price, or social display value—in relation to other brands Positioning is the 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.

Perspective One: Consumer as the Decision Maker Buying decision step 4. Postpurchase use and evaluation

About 65 percent of the average company's business comes from present, satisfied customers. 91 percent of dissatisfied customers will never buy again from the company that disappointed them -consumers' evaluations of products in use are a major determinant of which brands will be in the consideration set the next time around Customer satisfaction: from a favorable postpurchase experience, required sustained use Advertising role in customer satisfaction: creating appropriate expectations for a brand's performance or helping the consumer who has already bought the advertised brand feel good about doing so Customer (dis)satisfaction: disconfirmed expectations for purchase or consumption experience Cognitive dissonance: the anxiety or regret that lingers after a difficult decision, sometimes called "buyer's remorse." Cognitive dissonance increases when: -Purchase price is high -There are many close alternatives -Item is intangible -Purchase is important -Item purchased lasts a long time How advertisers can reassure buyers, when dissonance is expected what they should do -reassure buyers with detailed information about its brands -Postpurchase reinforcement programs- direct mail, email, or other types of personalized contacts with the customer consumers often seek reassurance about their purchase by reading what other purchasers say in online reviews

Agency Services

Account services: identifying the benefits a brand offers, its target audiences, best competitive positioning and then developing a complete plan Marketing research services: The research group will help the client interpret the research and communicate these interpretations to the creative and media people. If existing studies are not sufficient, research may be conducted by the agency itself. Creative and production services: The creative services group in an agency comes up with the concepts that express the value of a company's brand in interesting and memorable ways. Media planning and buying services: a specialized agency effort through which advertisers can contract for media buying and planning Administrative services: Agencies have personnel departments, accounting and billing departments, and sales staffs that go out and sell the agency to clients. Most important to clients is the traffic department, which has the responsibility of monitoring projects to be sure that deadlines are met.

Define Advertisement

Advertisement refers to a specific message that an organization has created to persuade an audience

3. Discuss the role of memory and emotion in how advertising may influence consumer behavior.

Advertisements are developed to influence the way people think about products and brands. More specifically, advertising is designed to affect consumers' beliefs and brand attitudes. Advertisers use multiattribute attitude models to help them ascertain the beliefs and attitudes of target consumers. However, consumers have perceptual defenses that allow them to ignore or distort most of the commercial messages to which they are exposed. When consumers are not motivated to thoughtfully process an advertiser's message, it may be in that advertiser's best interest to feature one or more peripheral cues as part of the message.

1. Describe the four basic stages of consumer decision making.

Advertisers need a keen understanding of their consumers as a basis for developing effective advertising. This understanding begins with a view of consumers as systematic decision makers who follow a fairly predictable process in making their choices among products and brands. The process begins when consumers perceive a need, and it proceeds with a search for information that will help in making an informed choice. The search-and-evaluation stage is followed by purchase. Postpurchase use and evaluation then become critical as the stage in which customer satisfaction is ultimately determined.

Evoked set:

Advertisers want the outcome of internal search to result in their brand being in the evoked set Evoked set: the set of brands (usually two to five) that come to mind when a category is mentioned The evoked set is usually highly related to the consideration set

4. Discuss the role of culture in consumer behavior and in creating good advertising.

Advertisers who overlook the influence of culture are bound to struggle in their attempt to communicate with the target audience. For example, rituals are patterns of behavior shared by individuals from a common culture. Violating cultural values and rituals is a sure way to squander advertising dollars. Advertising and integrated brand promotion help turn products into brands. They do this by wrapping brands with cultural meaning. Brands with high cultural capital are worth more. Brands are cocreated by consumers and advertisers.

Promotional mix

Advertising PR Sales promotion Digital marketing/social media Personal selling Direct marketing

Basic structure of the industry - Advertising and Promotion Agencies (2), different types

Advertising Agencies -full service agencies -creative boutiques (niche expertise) -digital/interactive agencies -in-house -media specialists (not technically agencies, media specialists specialize in buying media time and space and offer media strategy consulting to advertising agencies and advertisers) since media specialists buy media in large quantities, they often acquire media time at a much lower cost than an agency or advertiser could Promotional Agencies -Direct marketing and database agencies (also called direct-response agencies): provide a variety of direct marketing services. Direct marketing agencies and database agencies maintain and manage large databases of mailing lists as one of their services. Can design direct marketing campaigns that use either (1) mail or telemarketing or (2) direct-response campaigns using all forms of media -Sales Promotion Agencies: Design and then operate contests, sweepstakes, special displays, or coupon campaigns for advertisers can specialize in consumer sales promotions and will focus on price-off deals, coupons, sampling, rebates, and premiums. Other firms specialize in trade-market sales promotions designed to help advertisers use promotions aimed at wholesalers, retailers, vendors, and trade resellers -Event planning agencies: experts in finding locations, securing dates, and putting together a team of people to pull off a promotional event -Design firms: help a firm create the visual impression of a firm's advertising materials—particularly print, in-store display, or Web graphics -PR firms: manage an organization's relationships with the media, the local community, competitors, industry associations, and government organizations

Define Advertising Campaign

Advertising Campaign: A series of coordinated advertisements that communicates a reasonably cohesive and integrated theme about a brand Advertising occurs not face-to-face but through a medium (TV, side of building, on phone)

The FTC's Regulatory Programs and Remedies

Advertising Substantiation Program, Consent Order, Cease and desist order, Affirmative disclosure, Corrective advertising

The FTC's Regulatory Programs and Remedies: Advertising Substantiation Program

Advertising Substantiation Program: intention of ensuring that advertisers make supporting evidence for their claims available to consumers. Before a company runs an ad, it must have documented evidence that supports the claim it wants to make in the ad For example, health and safety claims will require competent and reliable scientific evidence that has been examined and validated by experts in the field concrete substantiation regarding products' "sustainability" and "environmental impact" Clinical trials, consumer data

Discuss the role played by advertising and promotion agencies, the services provided by these agencies, and how the agencies are compensated.

Advertising and promotion agencies come in many varieties and offer services such as market research and marketing planning, the creation and production of ad materials, the planning and purchase of media time or space for ads, and traffic management to keep production on schedule. Some advertising agencies offer a full array of services under one roof; others, such as creative boutiques, develop a particular expertise with specialized skills. Promotion agencies specialize in one or more of the other forms of promotion beyond advertising. The four most prevalent ways to compensate an agency for services are commissions, markups, fee systems, and the pay-for-results programs.

IBP Toolkit

Advertising in mass media Sales promotions point of purchase materials direct marketing personal selling internet advertising social networks/blogs podcasting/smartphone messaging event sponsorship branded entertainment outdoor signage billboard, transit, aerial advertising PR influencer marketing corporate marketing

Definition of Advertising

Advertising is a brand's paid, mass-mediated attempt to persuade

Know what advertising and integrated brand promotion (IBP) are and what they can do.

Advertising is distinctive and recognizable as a form of communication by its three essential elements: its paid sponsorship, its use of mass media, and its intent to persuade. An advertisement is a specific message that a company has placed to persuade an audience. An advertising campaign is a series of ads and other promotional efforts with a common theme also placed to persuade an audience over a specified period of time. Integrated brand promotion (IBP) is the use of many promotional tools, including advertising, in a coordinated manner to build and maintain brand awareness, identity, and preference.

What differentiates advertising from personal selling?

Advertising is not delivered in a face to face manner.

8. Discuss how effective advertising uses sociocultural meaning in order to sell things.

Advertising transfers a desired meaning to the brand by placing it within a carefully constructed social world represented in an ad, or "slice of life." Advertisers paint a picture of the ideal social world, with all the meanings they want to impart to their brand. Then the brand is carefully placed in that picture, and the two (the constructed social world and the brand) rub off on each other, becoming a part of each other. Meaning is thus transferred from

Perspective One: Consumer as the Decision Maker Buying decision step 2. Information search and alternative evaluation

After a consumer has recognized a need, best way to satisfy need not obvious, so they search and evaluate Internal search: draw on personal experience and prior knowledge, this is the consumer's first option for information, Based on considerable prior experience with the products in question (i.e., memory and thinking) -Internal search may be all that is needed when consumer has experience with product in question -Advertisers want the outcome of internal search to result in their brand being in the evoked set Evoked set: the set of brands (usually two to five) that come to mind when a category is mentioned -The evoked set is usually highly related to the consideration set The consideration set: the set of the brands the consumer will consider for purchase Top of mind awareness: when a brand is the first mentioned If an internal search does not turn up enough information to yield a decision, the consumer proceeds with an external search External search: involves visiting retail stores, looking online to examine the alternatives, seeking input from friends and relatives about their product experiences, reading product evaluations, perusing media, experiential (trial) Search issues: search is not always accurate -Internal Search: Availability bias Recall information that is more accessible, but not necessarily more diagnostic (i.e., informative for satisfying need) -External Search: Confirmation bias Find information that is consistent with attitudes Find information that proves/supports, but do not usually try to falsify or contradict Alternative evaluation: The consumer searches for and is simultaneously forming thoughts and opinions about possible alternatives - structured by the consumer's consideration set and evaluative criteria -The consideration set is the subset of brands from a particular product category that becomes the focal point of the consumer's evaluation -product categories contain too many brands for all to be considered, so the consumer finds some way to focus the search and evaluation Ex. Consumers may consider only cars priced less than $25,000, or only cars that have all-wheel drive, or only foreign-made cars, or only cars sold at deal- erships within a 20-mile radius of their work or home As the search-and-evaluation process proceeds, consumers form evaluations based on the characteristics or attributes of those brands in their consideration set (evaluative criteria) Evaluative criteria: product attributes or performance characteristics differ from one product category to the next and can include many factors, such as price, texture, warranty terms, service support, color, scent, or carb content Advertisers should also know how consumers rate their brand in comparison with others from the consideration set

6. Discuss the role of family, identity, gender, and community in consumer behavior and advertising.

All four of these sociological factors influence how consumers see themselves and others. It affects what they buy.

Alternative evaluation:

Alternative evaluation: The consumer searches for and is simultaneously forming thoughts and opinions about possible alternatives - structured by the consumer's consideration set and evaluative criteria The consideration set is the subset of brands from a particular product category that becomes the focal point of the consumer's evaluation -product categories contain too many brands for all to be considered, so the consumer finds some way to focus the search and evaluation Ex. Consumers may consider only cars priced less than $25,000, or only cars that have all-wheel drive, or only foreign-made cars, or only cars sold at dealerships within a 20-mile radius of their work or home

Regulatory issues in Public Relations: Appropriation

Appropriation: the use of pictures or images owned by someone else without permission. If a firm uses a model's photo or a photographer's work in an advertisement or company brochure without permission, then the work has been appropriated without the owner's permission.

Regulatory issues in Public Relations

Appropriation: the use of pictures or images owned by someone else without permission. If a firm uses a model's photo or a photographer's work in an advertisement or company brochure without permission, then the work has been appropriated without the owner's permission. Copyright infringement: Copyright infringement can occur when a public relations effort uses written, recorded, or photographic material from others' works. Written permission must be obtained Defamation: When a communication occurs that damages the reputation of an individual because the information in the communication was untrue Defamation can occur through slander or libel Slander: oral defamation and in the context of promotion would occur during television or radio broadcast of an event involving a company and its employees Libel: defamation that occurs in print and would relate to magazine, newspaper, direct mail, or Internet reports -by law, the standard of libel for public figures is high, making the case difficult to win. The celebrity will have to prove "actual malice" -- that the tabloid was not just negligent, but rather knew that the item was false and nonetheless displayed a reckless disregard for the truth

Audience category: Govt officials and employees

Are an audience in themselves due to the large dollar volume of buying that federal, state, and local governments do. Government 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 government organizations with advertising. Advertising to this target audience is dominated by direct mail, catalogs, personal selling, and Web advertising

Audience geography

Audience Geography- Audiences can be broken down by geographic location Global advertising National Advertising Regional advertising local advertising (sometimes coop advertising)

Regulatory Issues in direct marketing/internet: Behavioral targeting

Behavioral targeting: the process of database development facilitated by online tracking markers that advertisers place on a Web surfer's devices in order to track that person's online behavior For Google and Facebook (who don't charge users a fee), they generate revenue by selling your online behavior patterns to advertisers

Benefit segmentation:

Benefit segmentation: In benefit segmentation, target segments are delineated by the various benefit packages that different consumers want from competing products and brands -different people want different benefits from their vehicles. Some consumers want efficient and reliable transportation; others want speed, excitement, and glamour; and still others want luxury, comfort, and prestige - one product could not possibly serve such diverse benefit segments -Ex. Toyota promotes the sustainability benefits and money-saving features of its Prius cars, aiming for the segment of people who want to save the planet and save money at the same time -Other Toyota vehicles are geared toward different benefit segments, such as rugged driving (SUVs) and luxury (Acura sedans)

Brand equity is

Brand equity is 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 brand equity

Difference between brand loyalty and simple habit

Brand loyalty based on an emotional connection toward the brand and a conscious commitment to find this brand each time the consumer purchases from the category Habits are consumption simplifiers that are not based on the power of an emotional relationship with the brand

Brand loyalty occurs when

Brand loyalty occurs when a consumer repeatedly purchases the same brand and excludes competitors' brands

4.Brand Loyalty

Brand loyalty: In this mode, brand loyalty becomes a major consideration in the purchase decision. Consumers demonstrate brand loyalty when they repeatedly purchase a single brand as their choice to fulfill a specific need and have some degree of emotional connection to the brand. Marketers aspire to have brand loyalty Brand attachment (emotional!) ---> information distortion Difference between brand loyalty and simple habit Brand loyalty based on an emotional connection toward the brand and a conscious commitment to find this brand each time the consumer purchases from the category Habits are consumption simplifiers that are not based on the power of an emotional relationship with the brand When does brand loyalty occur? High involvement High experience consumer perceives that brand outperforms all others in providing a critical benefit brand loyalty can be due to the emotional benefits that accompany certain brands Biggest indicator: tattoo on bodies Harley Davidson example Predecisional distortion: when consumers have an emotional connection to a brand, they distort information in a positive way to favor that brand and distort information in a negative way to diminish competing brands

Effective positioning over time

Brand positioning is often summarized as a value proposition, a brand promise, or a brand platform, which are three ways of saying (almost) the same thing. Value proposition: Statement of the benefits offered by a brand which create value for the customer - Will often include headline (1 short, catchy sentence about focal benefit(s)), short follow-up paragraph or 3 - 5 bullet points (about product/service and why it's useful or differentiating features), an image Brand platform: Core idea that frames an ambition or aspiration for the brand that will be relevant to target audiences over time Brand promise: Expressed in terms of what it is that the brand promises the customer Ex. Coca-Cola Brand Promise- To refresh the world in mind, body, and spirit, and inspire moments of optimism; to create value and make a difference.

5 Different Media Organization types

Broadcast Print Interactive Media Support Media Media Conglomerates

The FTC's Regulatory Programs and Remedies: cease and desist order

Cease and desist order: For advertisers who do not comply voluntarily, the FTC can issue a cease-and- desist order, which generally requires that the advertising in question be stopped within 30 days so that a hearing can be held to determine whether the advertising is deceptive or unfair. For products that have a direct effect on consumers' health or safety (e.g., foods), the FTC can issue an immediate cease-and-desist order.

Challenges of paid media

Challenges: Clutter, declining response rates, poor credibility

Clutter

Clutter is the sheer number and diversity of brand messages to which you're exposed every day in every medium. Reception takes place in the context of potential interference known as clutter.

Cognitive dissonance increases when:

Cognitive dissonance increases when: Purchase price is high There are many close alternatives Item is intangible Purchase is important Item purchased lasts a long time

Areas of advertising regulation: Unfairness

Congress defines unfair advertising as "acts or practices that cause or are likely to cause substantial injury to consumers, which is not reasonably avoidable by consumers themselves, and not outweighed by the countervailing benefits to consumers or competition." Obligates FTC to assess both benefits and costs of advertising, rules out reckless acts on part of consumer

The FTC's Regulatory Programs and Remedies: Consent Order

Consent Order: In a consent order, an advertiser accused of running deceptive or unfair advertising agrees to stop running the advertisements in question without admitting guilt.

Consumer Finance Protection Agency (CFPA)

Consumer Finance Protection Agency (CFPA) Ensures the disclosure for financial products are clearly presented to consumers Protects consumers against abuse and fraud

5. Discuss the role of social class, taste, and cultural capital in consumer behavior and advertising.

Consumer behavior is an activity that each of us undertakes before a broad audience of other consumers. Advertising helps the transfer of meaning. Gender, eth- nicity, and race are important influences on consumption. Who consumers are—their identity—is changeable; consumers can change aspects of who they are rapidly and frequently through what they buy and use. Celebrities are particularly important in this regard.

Consumer behavior

Consumer behavior: The totality of decisions about the consumption of offerings by decision-makers (consumers) over time

Perspective Two: The Consumer as Social Being

Consumers are influenced by... Culture Social class (SES)/stratification taste Family Race and ethnicity Political identification Gender Online and brand communities Reference groups Socialization and normative influence

The Role of Advertising in contributing to social Purpose

Consumers are looking carefully at the differences between brands more than ever before Purpose-driven marketing: marketing (including advertising and IBP) that helps the organization achieve its long-term social purpose

Brand loyalty

Consumers demonstrate brand loyalty when they repeatedly purchase a single brand as their choice to fulfill a specific need and have some degree of emotional connection to the brand.

Information overload and simplification

Consumers get too much info and have too many choices to apply all the info to the choice task Consumers say that they want more information...but that may not always be true or helpful This overload leads them to use a decision heuristic, or a way of simplifying the task Common decision heuristics are buying the most popular brand, the least expensive, the most expensive, the one you have heard the most about, or the one you bought last.

Regulatory issues in Public Relations: Copyright infringement

Copyright infringement: Copyright infringement can occur when a public relations effort uses written, recorded, or photographic material from others' works. Written permission must be obtained

Corporate advertising

Corporate advertising: meant to create a favorable attitude toward a company as a while, not designed to promote a specific brand Apple, BP, GE firms that have long-established corporate campaigns have designed them to generate favorable public opinion toward the corporation as a whole

Cultural branding

Cultural branding is a type of branding that leverages sociocultural forces to create and maintain great brands. It is often dependent on advertising. The basic idea is to find some rift or stress in the seams of society and culture and then use this to offer a solution in the form of a branded good. Ex. Doritos used the brand to celebrate diversity and inclusion with the limited-edition Rainbow chips product is an example of cultural branding and advertising that can be integrated through both traditional and digital/social media Rebellion and advertising consumers sometimes use their consumption choices to stake out a position in a "revolution" creating integrated brand promotions emphasizing themes such as adventure and freedom Harley Davidson Authenticity and opinion leaders If an advertiser can convince consumers that its brand is the "real," the authentic choice of those in the know, the original, then it is seen as the best Opinion leaders influence the opinions and behaviors of consumers, which can reinforce a brand's apparent authenticity

7. Describe the basic idea underlying cultural branding.

Cultural branding is a type of branding that leverages sociocultural forces to create and maintain great brands. The basic idea is to find some rift or stress in society and culture and then use this to offer a solution in the form of a branded good.

Culture:

Culture: the total life ways of a group of people what a people do, or "the total life ways of a people, the social legacy the individual acquires from his (her) group" Culture is the way we eat, groom, celebrate, travel, play, get together, communicate, and express feelings Cultures may be national, regional, local, or cross geographic borders: urban hipster culture, teen tech-nerd, Junior League Culture surrounds the creation, transmission, reception, and interpretation of ads and brands Materialism: a cultural value in some culture where people place emphasis on money and material goods Materialistic consumers more interested in brands and products that signal status or wealth within the culture Rituals: "often-repeated formalized behaviors involving symbols" (products, words), rituals are core elements of culture Cultures affirm, express, and maintain themselves through rituals rituals help intertwine culture and consumption practices when someone buys a new car or a new home, they do all sorts of "unnecessary" things to make it theirs- rituals everyday rituals, such as the way we eat, clean ourselves, and groom Cleaning and beauty practices are highly ritualized

Customer (dis)satisfaction:

Customer (dis)satisfaction: disconfirmed expectations for purchase or consumption experience Customer satisfaction: from a favorable postpurchase experience, required sustained use Advertising role in customer satisfaction: creating appropriate expectations for a brand's performance or helping the consumer who has already bought the advertised brand feel good about doing so

Paid Media explained

Definition: Brand pays to leverage a channel Examples: Display ads, paid search, sponsorships The Role: Shift from foundation to a catalyst that feeds owned and creates earned media Benefits: In demand, immediacy, scale, control Challenges: Clutter, declining response rates, poor credibility

Owned media explained

Definition: Channel a brand controls Examples: Website, mobile site, blog, twitter account The Role: Build for longer term relationships with existing potential customers and earned media Benefits: Control, cost efficiency, longevity, versatility, niche audiences Challenges: No guarantees, company communication not trusted, takes time to scale

Earned media explained

Definition: When customers become the channel Examples: WOM, Buzz, Viral The Role: Listen and respond- often the result of well-executed and well-coordinated owned and paid media Benefits: Most credible, key role in most sales, transparent and lives on Challenges: No control, can be negative, scale, hard to measure

Delayed-response advertising

Delayed-response advertising relies on imagery and message themes that emphasize the benefits and satisfying characteristics of a brand, any time there is no obvious call to action Attempts to develop awareness and preference for a brand over time delayed-response advertising 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 delayed- response advertising comes into play Most advertisements we see on television and in magazines are of the delayed-response type

Advertising is mass-mediated

Delivered through a communication medium designed to reach a large number of people. The mass-mediated nature creates a communication environment in which the message is not delivered in a face-to-face manner. This distinguishes advertising from personal selling as a form of communication.

Family

Different families... have different needs, so they spend $ differently are reached by different media Marketers tend to focus on... -Life-stage variable (e.g., marriage; age of youngest child, the age of the youngest child, the size of the family, and the family income) ex. Advertisers like to track the age of the youngest child living at home and use it as a planning criterion -Types of families and identity of individuals within a family ex. teenagers are a great market segment bc their identity is in constant flux, and to express identity, they constantly consume things: clothing, music, electronics, sports, jewelry

Differentiation (and the role of advertising in it)

Differentiation is the process of creating a perceived difference, in the mind of the consumer, between a brand and its competition. Brand differentiation is based on consumer perception. Differences can be tangible or based on image/style factors If consumers do not perceive a difference, then any actual differences do not matter Use advertising to highlight points of differentiation

Direct-response advertising

Direct-response advertising asks consumers to act immediately, call to action is specific and time bound (like come to our Memorial Day Weekend Sale) Click here to order NOW direct-response advertising 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 Apple pay and mobile payment methods have increased direct response for higher priced products as well

Explain how ethical considerations affect the development and implementation of advertising and IBP campaigns.

Ethical considerations are a concern when creating advertising and promotion. Deception in advertising and promotion is never acceptable or defendable. The ethical considerations get more complex, especially when advertising is targeted to children or involves controversial products such as firearms, gambling, alcohol, or cigarettes. Although ethical standards are a matter for personal reflection, it certainly is the case that unethical people can create unethical advertising. But there are also many safeguards against such behavior, including the corporate and personal integrity of advertisers.

Ethics

Ethics is defined as moral standards and principles against which behavior is judged. Honesty, integrity, fairness, and sensitivity are all included in a broad definition of ethics. Much comes down to personal judgment.

Basic structure of the industry - External Facilitators (3), different types

External facilitators are organizations or individuals that provide specialized services to advertisers and agencies -Marketing and advertising research firms -Consultants: marketing, creative and communications, event planning and sponsorship, PR, media experts...3 NEW, database consultants, website development + management, third type integrates info across social media activities -Production facilitators: External production facilitators offer essential services during and after the production process. In broadcast production, directors, production managers, songwriters, camera operators, audio and lighting technicians, and performers are all essential to preparing radio, television, or video ad. Production houses provide the physical facilities, including sets, stages, equipment, and crews, needed for broadcast production. -Software firms: software firms help advertisers and agencies make the best use of evolving media and technology. Some of these firms are well established and well known, such as Microsoft and Oracle.

Government Regulatory Agents, FTC

Federal Trade Commission (FTC) -Controls unfair methods of competition -Regulates deceptive advertising -Has various programs for controlling the advertising process

Audience category: Members of business organizations

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 Ex. IBM has used advertising during the U.S. Open tennis tournament to reach chief mar- keting officers within organizations, because this audience is becoming more influential for hardware and software decisions within corporations

Perspective One: Consumer as the Decision Maker Buying decision step 1. Need Recognition

From the psychological perspective, the consumption process begins when people perceive a need Need state: arises when one's desired state of affairs differs from one's actual state of affairs Need states are accompanied by a mental discomfort or anxiety that motivates action severity of this discomfort is variable depending on the need. Ex. The need state that arises when one runs out of toothpaste is very mild discomfort for most people- the need state that accompanies the breakdown of one's automobile can become desperation Marketers influence need recognition by: Creating dissatisfaction with the current state Creating a new ideal state ONCE CONSUMERS RECOGNIZE A NEED, THEY BEGIN TO TRY TO SATISFY THE NEED... Maslow's hierarchy of needs Physiological needs: Biological needs that require the satisfaction of hunger, thirst, and basic bodily functions. Food and health care product advertising, for example, relates to physiological needs. Safety needs: The need to provide shelter and protection for the body and to maintain a comfortable existence. Home security systems and smoke detector ads help remind us of our safety needs, for instance Love and belonging needs: The need for affiliation and affection. A person will strive for both the giving and receiving of love. Advertising during Valentine's Day (which also brings some market resistance due to the perception that buying things is "required" if you are in a romantic relationship) reminds us that giving gifts such as flowers or jewelry can symbolize love. Esteem needs: The need for recognition, status, and prestige. In addition to the respect of others, there is a need and desire for self-respect. Much personal-care product marketing can promote feelings of self-esteem, confidence, and romance. In the pursuit of esteem, many consumers buy products they perceive to have status and prestige: expensive clothing, cars, and homes are examples Self-actualization needs: This is the highest of all the need states and is achieved by only a small percentage of people, according to Maslow. The individual strives for maximum fulfillment of individual capabilities. Although it is difficult to buy self-actualization (the highest level of Maslow's hierarchy), educational pursuits and high intensity leisure activities can foster pride and accomplishments that contribute to self-actualization

Basic structure of the industry - Advertisers (1), role of advertisers

Fully understand and describe the value that the firm's brand(s) provides to users. Understand and describe the brand's position in the market relative to competitive brands. Describe the firm's objectives for the brand in the near term and long term (e.g., brand extensions, international market launches). Identify the target market(s) that are most likely to respond favorably to the brand. Identify and manage the supply chain/distribution system that will most effectively reach the target markets. Be committed to integrating advertising, event sponsorship, and other promotional tools as part of the organization's overall marketing strategy to grow the brand via both digital and traditional channels.

Global advertising:

Global advertising: Advertising that is used worldwide with only minor changes in the visual and message content. Very few brands can use global advertising. Typically brands whose manner of use does not vary a ton by culture - using a samsung TV or taking a trip on Singapore Airlines doesnt change with geography or culture Firms that market brands w global appeal (IBM, Apple) try to develop advertisements with a common theme and presentation in all markets around the world where the brand is sold Global placement is effective only when a brand and the messages about that brand have a common appeal across diverse cultures

Demographic trends

Global population growth- 7.5 billion (2018) to 8.5 billion (2030) to 9.7 billion (2050) In U.S.: Median age will increase to 38 by 2025, More middle-aged Baby Boomers, Fewer children, teenagers, and young adults due to decreased birthrates Largest countries are china, India, US

Discuss the role of government agencies and consumers in the regulation of advertising and promotion.

Governments typically are involved in the regulation of advertising and promotion to combat deception and unfairness, deter unfair competition, and protect children. However, regulations can vary dramatically from one country to the next. In the United States, the seven primary government agencies regulating advertising are the Federal Trade Commission; the Federal Communications Com- mission; the Food and Drug Administration; the U.S. Postal Service; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Securities and Exchange Commission; and the Consumer Finance Protection Agency. State governments in the United States have limited powers due to the interstate nature of most advertising and promotion, thereby making any legal issues federal in nature. Consumerism and consumer organizations can also be regulatory agents.

Habit and variety seeking occur when a decision isn't involving and a consumer repurchases from the category over and over again

Habit and variety seeking occur when a decision isn't involving and a consumer repurchases from the category over and over again

Brand's symbolic value and social meaning

Harley Davidson vs. Range rover Harley - community, tough, leather Range - rich mom, safety, family, status

Which audience category is most mass media advertising directed at?

Household consumers

Audience categories (5)

Household consumers Members of business organizations Members of a trade channel Professionals Government officials and employees

Main point of the model of mass-mediated communication:

IBP eases reception because fewer potential meanings of messages need to be accommodated

Advertising is Paid

If a communication is NOT paid for, it's not advertising. Client or sponsor: The company or organization that pays for advertising Publicity is NOT advertising because it is not paid for

external search

If an internal search does not turn up enough information to yield a decision, the consumer proceeds with an external search External search: involves visiting retail stores, looking online to examine the alternatives, seeking input from friends and relatives about their product experiences, reading product evaluations, perusing media, experiential (trial)

The difference between IBP and IMC

In IBP, the emphasis is on the brand and not just the communication.

2. Describe different bases that marketers use to identify segments.

In market segmentation, the goal is to break down a heterogeneous market into more manageable subgroups or segments. Many different bases can be used for this purpose. Markets can be segmented on the basis of usage patterns and commitment levels, demographics, geography, psychographics, lifestyles, benefits sought, NAICS business categories, or stages in the purchase process. Different bases are typically applied for segmenting consumer versus business-to-business markets.

3. Discuss the criteria to target a segment.

In pursuing STP marketing, an organization must get beyond the stage of segment identification and settle on one or more segments as a target for its marketing and advertising efforts. Several criteria are useful in establishing the organization's target segment. First, the organization must decide whether it has the proper skills to serve the segment in question. The size of the segment and its growth potential must also be taken into consideration. Another key criterion involves the intensity of the competition the firm is likely to face in the segment. Often, small segments known as niches can be attractive because they have few if any competitors and may have significant growth potential.

Another area of FTC regulation and remedy involves celebrity endorsements, testimonials, and bloggers

In the case of experts (those whose experience or training allows superior judgment of products), the endorser's qualifications must justify his or her status as an expert, like a doctor recommending a cold remedy or surgical procedure In the case of "average consumer" endorsements, the ad must reveal whether the results being portrayed are "typical" of brand use a celebrity endorser must be an actual user of the product, or the ad is considered deceptive FTC requires clear disclosure when a popular blogger or other social media star receives cash or in-kind payments (e.g., free products) in exchange for mentioning a brand/product

Audience category: Members of a trade channel

Includes retailers (like Best Buy for consumer electronics), wholesalers (like Castle Wholesalers for construction tools), and distributors (like Sysco Food Services for restaurant supplies) These members of the trade channel are a 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, because this audience represents a relatively small, easily identifiable group. Other IBP tools, including sales promotion, are also used when targeting this audience.

Institutional advertising:

Institutional advertising: when corporate advertising takes place in a trade channel 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.

IMC

Integrated Marketing Communications (IMC): Beginning around 1990, the concept of mixing various promotional tools was referred to as integrated marketing communications (IMC) But, promotional strategies in the 21st century demanded that the emphasis on communication give way to an emphasis on the brand

Definition of IBP

Integrated brand promotion (IBP) is the process of using a wide range of promotional tools that work together (in a coordinated manner) to build and maintain brand awareness, identity and preference. IBP is brand focused (build widespread brand exposure)

Internal search:

Internal search: draw on personal experience and prior knowledge, this is the consumer's first option for information, Based on considerable prior experience with the products in question (i.e., memory and thinking) Internal search may be all that is needed when consumer has experience with product in question Advertisers want the outcome of internal search to result in their brand being in the evoked set If an internal search does not turn up enough information to yield a decision, the consumer proceeds with an external search

International Advertising:

International Advertising: Occurs when firms prepare and place different advertising in different national markets for the same brand outside their home market Ex. Unilever prepares different versions of ads for its laundry products for nearly every international market because consumers in different cultures don't have the same needs or household situations International advertising differs from global advertising bc different ads for the same brand are tailored for each market

Effort that goes into decision making

Involvement: the degree of perceived relevance and personal importance accompanying the choice of a certain product or service within a particular context: How much it matters to you Effort is a continuum: low ("system 1") high ("system 2") Need for efficiency -In time-pressed situations -Relative to other demands on consumer's attention over time The amount of effort is adjusted based on the perceived importance of a particular decision -High perceived importance ---> high effort/involvement What effects level of involvement? Personal interests, values, goals Risk of high price or long term commitment -Ex. cars are usually high involvement, and things like chips are typically low involvement. High symbolic meaning of product/brand -If a purchase carries great symbolic and real consequences—such as choosing the right gift for a special someone on Valentine's Day—it will be highly involving. Deep emotion attached to purchase Consumer-brand relationship (the consumer has come to have some sort of emotional attachment to the brand or even the category)

When does limited problem solving occur?

Low experience Low involvement CPG categories (consumer packaged goods), where memory is a huge factor

5. Review the necessary ingredients for creating a brand's value proposition.

Many complex considerations underlie marketing and advertising strategies, so the value proposition is a useful way of summarizing the essence of the brand's strategy. A value proposition is a statement of the various benefits (functional, emotional, and self-expressive) offered by a brand that create value for the customer. These benefits as a set justify the price of the product or service. Clarity in expression of the value proposition is critical for development of advertising that sells.

Describe the advertising and promotion industry's size, structure, and participants

Many different types of organizations make up this large industry. The process begins with an organization (the advertiser) that has a message to communicate to a target audience. The advertiser typically hires advertising and promotion agencies to launch and manage a campaign, but other external facilitators are often brought in to perform specialized functions, such as digital/interactive agencies for mobile marketing and social media campaigns. To reach target markets, advertisers and their agencies work with media organizations.

Market segmentation

Market segmentation is the process of breaking down a large, widely varied (heterogeneous) market into submarkets, or segments, that are more similar (homogeneous) than dissimilar in terms of consumer characteristics

Market segmentation (and the role of advertising in it)

Market segmentation is the process of breaking down a large, widely varied (heterogeneous) market into submarkets, or segments, that are more similar (homogeneous) than dissimilar in terms of consumer characteristics Markets can be segmented based on needs and desires of buyers, demographics (age, marital status, education, gender, income) and psychographics (attitudes, beliefs, personality, lifestyle, values) Advertising's role in the market segmentation process is to develop messages that appeal to the needs and desires of different segments and then to transmit those messages via appropriate media.

Identify key external facilitators who assist in plan- ning and executing advertising and integrated brand promotion campaigns.

Marketing and advertising research firms assist advertisers and their agencies in understanding the market environment. Consultants of all sorts from marketing strategy through event planning and retail display are also external facilitators. External production facilitators offer services during and after the production process. In promotions, designers and planners are called on to assist in creation and execution of promotional mix tools. Software firms fill a growing role in the industry by offering specialized expertise in tracking and analyzing consumer behavior and media usage.

Discuss the role played by media organizations in executing effective advertising and integrated brand promotion campaigns

Media organizations are the essential link in delivering advertising and IBP communications to target audiences. In addition to traditional media organizations, advertisers can reach audiences through interactive media options (online, mobile, social media) and support media. The media industry is geared toward target audiences of consumers and of businesses and government agencies. Business advertisers are investing heavily in content marketing to appeal to decision makers.

Audience category: Household consumers

Most mass media advertising 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 Ex. Men, 25 to 45, in professional occupations, living in metropolitan areas, with incomes greater than $50,000 per year

National advertising:

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

Discuss important trends transforming the advertising and promotion industry.

One major trend affecting advertisers, agencies, and the media is that consumers are now in greater control of their exposure to information. Collectively, individuals are gravitating toward sharing and creating information through websites, social media, apps, and video sites. Another example of consumer control is the increased use of on-demand streaming and digital video recorders, with a growing number of households cutting the cord on cable subscriptions. The proliferation of media has created new advertising options, and media firms are becoming multiplatform media giants with television, radio, print, and/or Internet properties. Media proliferation has led to more media clutter and fragmentation, reducing the effectiveness of advertisements; as a result, advertisers are using more IBP tools and digital buys to enhance the primary advertising effort. Through crowdsourcing, advertisers get consumers more involved with and committed to a brand. Technology enables advertisers to reach consumers with messages directed to consumers' mobile devices, despite the growing use of ad blockers as consumers seek to retain control over information flow.

Maslow's hierarchy of needs

Physiological needs: Biological needs that require the satisfaction of hunger, thirst, and basic bodily functions. Food and health care product advertising, for example, relates to physiological needs. Safety needs: The need to provide shelter and protection for the body and to maintain a comfortable existence. Home security systems and smoke detector ads help remind us of our safety needs, for instance Love and belonging needs: The need for affiliation and affection. A person will strive for both the giving and receiving of love. Advertising during Valentine's Day (which also brings some market resistance due to the perception that buying things is "required" if you are in a romantic relationship) reminds us that giving gifts such as flowers or jewelry can symbolize love. Esteem needs: The need for recognition, status, and prestige. In addition to the respect of others, there is a need and desire for self-respect. Much personal-care product marketing can promote feelings of self-esteem, confidence, and romance. In the pursuit of esteem, many consumers buy products they perceive to have status and prestige: expensive clothing, cars, and homes are examples Self-actualization needs: This is the highest of all the need states and is achieved by only a small percentage of people, according to Maslow. The individual strives for maximum fulfillment of individual capabilities. Although it is difficult to buy self-actualization (the highest level of Maslow's hierarchy), educational pursuits and high intensity leisure activities can foster pride and accomplishments that contribute to self-actualization

Maslows Hierarchy of Needs

Physiological needs: Biological needs that require the satisfaction of hunger, thirst, and basic bodily functions. Food and health care product advertising, for example, relates to physiological needs. Safety needs: The need to provide shelter and protection for the body and to maintain a comfortable existence. Home security systems and smoke detector ads help remind us of our safety needs, for instance Love and belonging needs: The need for affiliation and affection. A person will strive for both the giving and receiving of love. Advertising during Valentine's Day (which also brings some market resistance due to the perception that buying things is "required" if you are in a romantic relationship) reminds us that giving gifts such as flowers or jewelry can symbolize love. Esteem needs: The need for recognition, status, and prestige. In addition to the respect of others, there is a need and desire for self-respect. Much personal-care product marketing can promote feelings of self-esteem, confidence, and romance. In the pursuit of esteem, many consumers buy products they perceive to have status and prestige: expensive clothing, cars, and homes are examples Self-actualization needs: This is the highest of all the need states and is achieved by only a small percentage of people, according to Maslow. The individual strives for maximum fulfillment of individual capabilities. Although it is difficult to buy self-actualization (the highest level of Maslow's hierarchy), educational pursuits and high-intensity leisure activities can foster pride and accomplishments that contribute to self-actualization

Politics

Politics consumption and branding have a long political history, so brand-political associations are commonplace Can be... brand-generated (through donations, marketing, public statements from execs) Consumer-generated (consumption preferences, WOM)

Positioning (and the role of advertising in it)

Positioning is the 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. A perceptual space is how one brand is seen on any number of dimensions— such as quality, taste, price, or social display value—in relation to other brands

Positioning

Positioning: the "space" a brand occupies in consumers' minds in relation to other brands - Develop marketing mix (e.g., products, messaging) for each target segment

Predecisional distortion:

Predecisional distortion: when consumers have an emotional connection to a brand, they distort information in a positive way to favor that brand and distort information in a negative way to diminish competing brands

Regulatory Issues in Sales Promotion

Premium offers For premiums (an item offered for "free" or at a greatly reduced price with the purchase of another item), marketers required to state the fair retail value of the item offered as a premium Trade allowances The Robinson-Patman Act, which applies to contemporary practices, requires marketers to offer similar customers (particularly wholesalers and retailers) similar prices on similar merchandise and quantities Marketer cannot use special allowances as a way to discount the price to highly attractive customers Contests and sweepstakes FTC has 4 violations of regulations that marketers have to avoid when carrying out sweepstakes and contests: 1. Misrepresentations about the value (e.g., stating an inflated retail price) of the prizes being offered 2. Failure to provide complete disclosure about the conditions necessary to win (are there behaviors required on the part of the contestant?) 3. Failure to disclose the conditions necessary to obtain a prize (are there behaviors required of the contestant after the contestant is designated a "winner"?) 4. Failure to ensure that a contest or sweepstakes is not classified as a lottery, which is considered gambling—a contest or sweepstakes is a lottery if a prize is offered based on chance and the contestant has to give up something of value in order to play

Primary demand

Primary demand: demand for an entire product category Why doesn't advertising cause people to smoke and drink? Because advertising generally isn't powerful enough to create primary demand in mature product categories such as milk, automobiles, toothpaste, tobacco, and alcohol. advertising plays its most important role in consumers' choice of brands (e.g., Camel, Coors) after consumers have decided to use a product category

Social aspects of advertising: advertising educates consumers

Pro: Advertising Informs consumers more educated about products Con: advertising is superficial and intrusive, it's biased in favor of the brand

Social aspects of advertising: Advertising affects happiness and general well-being

Pro: Advertising only reflects society's priorities Pro: Advertising addresses a wide variety of basic human needs Maslow's hierarchy- physiological, safety, love and belonging, esteem, self actualization Con: Advertising creates needs -unattainable standards, things we dont need Con: advertising promotes materialism

Social aspects of advertising: advertising improves the standard of living

Pro: Economic effects of advertising lower the cost of products, 4 aspects Due to economies of scale (ie it costs less to produce products in large quantities), products cost less than if there were no advertising. As demand stimulation results in lower production and administrative costs per unit produced, lower prices are passed on to consumers Consumers have a greater variety of choice in products and services because advertising increases the probability of success that new products will succeed. The more products that succeed, the fewer losses firms take from failed product introductions. This should make products cost less. The pressures of competition and the desire to have fresh, marketable brands motivate firms to produce improved products and brands and introduce lower-priced brands Advertising helps the diffusion of innovations. New discoveries can be delivered to large percentage of marketplace very quickly Con: Advertising wastes resources and raises the standard of living only for some Critics argue that advertising only helps widen the gap between rich and poor, creating strife between social classes

Social aspects of advertising: Advertising has a powerful effect on the mass media

Pro: advertising fosters a diverse and affordable mass media -Advertising good for a more informed democracy because it is often the financial mechanism for purportedly unbiased media. Magazines, newspapers, television, radio stations, and many websites are supported by advertising expenditures, allowing consumers access to a variety of information and entertainment sources at low cost Con: advertising affects programming

Audience category: Professionals

Professionals form a special target audience and are defined as doctors, lawyers, accountants, teachers, electricians or any other professional group that has special training or certification This group has a seperate classification bc its members have specialized needs and interests Advertising directed to professionals highlights products and services uniquely designed to serve their defined needs. The language and images used in advertising to this target audience often rely on terminology/unique circumstances that members of professions recognize. Advertising to professionals is predominantly carried out through trade publications.

Identify the potential benefits and problems of advertising and promotion, and debate key issues concerning their effects on society's well-being.

Proponents of advertising argue that it offers benefits for individual consumers and society at large, including educating consumers, promoting a higher standard of living, affecting happiness and general well-being, democratizing goods and art, and fostering diverse and affordable mass media. Critics argue that advertising is superficial and intrusive, wastes resources and widens the gap between rich and poor, encourages people to buy what they don't really need, promotes materialism, perpetuates superficial stereotypes, is offensive and even manipulative, and affects entertainment programming.

Puffery

Puffery is the use of absolute superlatives like "Number one" or "Best in the world" is LEGAL It is not illegal for a manufacturer to claim to have "The Best Laundry Detergent in the World," puffery

Purpose-driven marketing

Purpose-driven marketing: marketing (including advertising and IBP) that helps the organization achieve its long-term social purpose

Reference Groups and IBP Strategies:

Reference Groups and IBP Strategies: Association with aspirational groups (e.g., celebrity endorsements) Accurate representation of associative groups Developing brand communities (associative) Positions against dissociative groups (FUCLA)

Reference groups (3)

Reference groups: Groups against which one compares oneself Aspirational: Those admired that the person would like to resemble Associative: Those considered peers or part of one's group Dissociative: Those who are disliked or otherwise viewed unfavorably Reference Groups and IBP Strategies: Association with aspirational groups (e.g., celebrity endorsements) Accurate representation of associative groups Developing brand communities (associative) Positions against dissociative groups (FUCLA)

Regional advertising:

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

Rituals

Rituals: "often-repeated formalized behaviors involving symbols" (products, words), rituals are core elements of culture Cultures affirm, express, and maintain themselves through rituals rituals help intertwine culture and consumption practices when someone buys a new car or a new home, they do all sorts of "unnecessary" things to make it theirs- rituals everyday rituals, such as the way we eat, clean ourselves, and groom Cleaning and beauty practices are highly ritualized

Selective demand stimulation

Selective demand stimulation stimulates demand for a particular company's brand. Selective demand stimulation advertising points out a brand's unique benefits compared to the competition Effective for individual brands, even those within mature product categories

Semantic memory:

Semantic memory: Word memory, memory through which names, words and concepts are stored and retrieved from our minds Drives low-involvement brands CPG are the most common users of semantic memory-based advertising, Ex. laundry detergent, canned foods, and paper goods Easier you can retrieve something from semantic memory, more accessible it is. Accessibility good for 2 reasons: more likely to buy a low-involvement good for a brand you remember Accessibility bonus: more easily (or more quickly) one retrieves something from memory, the more frequent or popular one believes it to be To achieve semantic memory, Aim for memorable brand names, slogans Alliteration (Best Buy, Krispy Kreme, Range Rover, Dunkin' Donuts, Coca-Cola), Assonance (YouTube, Häagen-Dazs and FedEx), Imagery (Zero Gravity indoor trampoline park), Rhyme (Piggily Wiggly, 7 Eleven and StubHub), Metaphor (Amazon symbol of vastness), Invent words (Pinterest, Groupon)

How are brands labeled in terms of personality

Sincerity Excitement Competence Sophistication Ruggedness

Social meaning:

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

Socialization and normative influence

Socialization: the process of learning what is "appropriate" to do Examples of what is done and what is reinforced Formal and informal rules Some manifestations... Clothing and personal appearance Brand choices Implies consumers will be: Sanctioned/punished if norms not followed Rewarded for performing expected behaviors (reinforcement)

Explain the meaning and importance of self- regulation for firms that develop and use advertising and promotion.

Some of the most important controls on advertising and promotion are voluntary; that is, they are a matter of self-regulation by advertising and marketing professionals. For example, the American Association of Advertising Agencies has issued guidelines for promoting fairness and accuracy when using comparative advertisements. Many other organizations, such as the Better Business Bureau, the National Association of Broadcasters, and the Direct Marketing Association, participate in the process to help ensure fairness and assess consumer complaints about advertising and promotion. One important self-regulation organization is the National Advertising Review Board.

2. Explain how consumers adapt their decision-making processes as a function of involvement and experience.

Some purchases are more important to people than others, and this fact adds complexity to any analysis of consumer behavior. To accommodate this complexity, advertisers often think about the level of involvement that attends any given purchase. Involvement and prior experience with a product or service category can lead to four diverse modes of consumer decision making. These modes are extended problem solving, limited problem solving, habit or variety seeking, and brand loyalty.

Regulatory Issues in direct marketing/internet: spam/phishing

Spam: unsolicited commercial messages sent through the email system, worst version of spam is phishing Phishing: spammers try to entice Web users to enter personal information on a fake website that is forged to look like it is from a bank, the IRS, or another organization that will get the email user's attention CAN SPAM Act targets fraudulent, deceptive, and pornographic email messages and has resulted in some prosecutions, with violators spending time in jail.

Symbolic value:

Symbolic value: refers to what a product or service means to consumers in a nonliteral way. Ex. branded clothing such as Lululemon, Ralph Lauren, or The North Face can symbolize self- concept for some consumers

Target Audience

Target Audience: A particular group of consumers singled out by an organization for an advertising or IBP campaign Considered the potential audience since it cannot be assured the message has been received as intended

Taste

Taste: a generalized set or orientation to consumer aesthetic preferences social stratification and taste are intertwined cultural capital: the value that cultures place on certain consumption practices and objects

The 4 Key Functions of IBP

The 4 I's 1) Information and persuasion 2) Introduction of new products and extensions 3) Investments from customers (ie brand loyalty) 4) Image and meaning creation

The 4 Key Functions of IBP explained

The 4 I's 1) Information and persuasion Target audiences can learn about a brand's features and benefits through advertising and, to a lesser extent, other promotional tools. Most other promotional tools, except the Web and personal selling, are not heavy on content 2) Introduction of new products and extensions A brand extension (also called brand variant) is an adaptation of an existing brand to a new product area When brand extensions are brought to market, advertising and IBP play a key role in attracting attention to the brand This is often accomplished with advertising working in conjunction with other promotional activities such as sales promotions and point-of-purchase displays. 3) Investments from customers (ie brand loyalty)/ Building and maintaining brand loyalty among consumer It costs 5-10x more to acquire a new customer than to keep a current one Brand loyalty occurs when a consumer repeatedly purchases the same brand and excludes competitors' brands Brand features are the most important influence on building and maintaining brand loyalty Brand equity is 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 brand equity 4) Image and meaning creation IBP can communicate how a brand fulfills needs and desires and therefore plays an important role in attracting customers to brands that appear to be useful/satisfying

Areas of advertising regulation: advertising to children

The Council of Better Business Bureaus established a Children's Advertising Review Unit and has issued a set of guidelines for advertising directed at children Advertisers should be sensitive to the level of knowledge and sophistication of children as decision makers, guidelines urge advertisers to make a constructive contribution to the social development of children by emphasizing positive social standards in advertising Children's Online Privacy Protection Act (COPPA), FTC regulates websites directed at children under 13. Any such site that gathers information must obtain parent or guardian consent before doing so. FTC has stated that "the commission does not support legislation restricting food advertising to children." - obesity

Client or sponsor

The company or organization that pays for advertising

The Marketing Mix

The marketing mix contains 4 areas of responsibility and decision making in marketing: conceiving, pricing, promoting, and distributing goods and services The word mix describes a blend of emphasis on the product versus its price versus its promotion (including advertising) versus its distribution when a brand is marketed to consumers—this mix results in the overall marketing program for a brand. Advertising is important, but it is only one of the major areas of marketing responsibility and only one of many IBP tools relied on in the marketing mix Decisions under each of the marketing mix areas can directly affect the advertising message

Discuss a basic model of communication.

The model features basic considerations such as the message-production process versus the message-reception process, and this model says that consumers create their own meanings when they interpret advertisements. A message has a source, and the audience (consumer) accommodates and negotiates the message and its intent. The model includes encoding and decoding of the message, with meanings formed during the interplay with the individual person's comprehension of the content. Reception takes place in the context of potential interference such as clutter that might disturb the process.

Discuss the regulation of the full range of techniques used in the IBP process

The regulation of other tools in the IBP process focuses on direct marketing, e-commerce, sales promotions, and public relations. In direct marketing and e-commerce, areas of concern include consumer privacy, spam, contests and sweepstakes, coupon fraud, click fraud, and telemarketing. In sales promotions, premium offers, trade allowances, and off-line contests and sweepstakes are subject to regulation, as is product/brand placement. The regulation of public relations efforts has to do with privacy, copyright infringement, and defamation

1. Explain the process known as STP marketing.

The term STP marketing refers to the process of segmenting, targeting, and positioning. Marketers pursue this set of activities in formulating marketing strategies for their brands. STP marketing also provides a strong foundation for the development of advertising campaigns. While no single approach can guarantee success in marketing and advertising, STP marketing should always be considered when consumers in a category have heterogeneous wants and needs.

Understand the various types of advertising

There are six fundamental types of advertising described in contrasting pairs: a. Primary versus selective demand stimulation. Primary demand stimulation is the attempt to stimulate demand for an entire product category. Selective demand stimulation is the attempt to stimulate demand for a particular brand within a product category. Advertising is not powerful enough to stimulate demand for a product category—only broad in- fluences like demographics, cultural values, or technology can stimulate primary demand. Selec- tive demand is what advertising does and can be very effective for building brand awareness and preference. B. Direct- versus delayed-response advertising. Direct- response advertising asks consumers to act immediately upon receipt of the advertising message. Delayed-response advertising develops awareness, preference, and an image for a brand that takes much longer to affect consumer choice. C. Corporate versus brand advertising. Corporate advertising features an entire corporation rather than focusing on any one brand marketed by that corporation.

An advertisement meant to inform gamblers and lottery players of the choices of games and places to play...

This would be selective (i.e., brand) demand stimulation. If it is designed to stimulate demand for consumers to engage in gambling, it would be primary demand stimulation

Trade journals

Trade journals, like Food Tech- nology, are magazines (and websites) published specifically for members of a trade and carry technical articles of interest to that audience.

Value proposition

Value proposition: Statement of the benefits offered by a brand which create value for the customer Will often include headline (1 short, catchy sentence about focal benefit(s)), short follow-up paragraph or 3 - 5 bullet points (about product/service and why it's useful or differentiating features), an image Ex. McDonald's Value Propositions ▪ Functional benefits: Good-tasting hamburgers, fries, and drinks served fast; extras such as playgrounds, prizes, premiums, and games. ▪ Emotional benefits: Kids—fun via excitement at birthday parties; a feeling of special family times. Adults—warmth via time spent enjoying a meal with the kids; admiration of McDonald's social involvement with charities

Value

Value: refers to a perception by consumers that a brand provides satisfaction beyond the cost incurred to obtain that brand Consumers want every purchase to be a "good deal" Value can be added to the consumption experience by advertising Advertising also affects a consumer's perception of value by contributing to the symbolic value and the social meaning of a brand.

Areas of advertising regulation, competitive issues (3)

Vertical cooperative advertising: advertising technique whereby a manufacturer and a wholesaler or retailer share the expense of advertising technique commonly used in regional or local markets where a manufacturer wants a brand to benefit from promotions run by local dealers, legal Concern: dealers might receive bogus cooperative advertising allowances from manufacturers Illegal because it is unfair competition If a dealer receives an advertising allowance, it must demonstrate that the funds are applied specifically to advertising Comparison advertisements: ads where an advertiser makes a comparison between the firm's brand and competitors' brands, legal The advertiser must convey a fair comparison in the ad, be ready to substantiate its claims, and show that its claims are not intended to deceive Monopoly power: some firms are so powerful in their use of advertising that monopoly power by virtue of their advertising spending can become a problem. This issue some- times arises in the context of mergers and acquisitions

What effects level of involvement?

What effects level of involvement? Personal interests, values, goals Risk of high price or long term commitment Ex. cars are usually high involvement, and things like chips are typically low involvement. High symbolic meaning of product/brand choosing the right gift for a special someone on Valentine's Day—it will be highly involving. Deep emotion attached to purchase -Consumer-brand relationship (the consumer has come to have some sort of emotional attachment to the brand or even the category)

When does brand loyalty occur?

When does brand loyalty occur? High involvement High experience consumer perceives that brand outperforms all others in providing a critical benefit brand loyalty can be due to the emotional benefits that accompany certain brands Biggest indicator: tattoo on bodies Harley Davidson example

When does variety seeking occur?

When does variety seeking occur? High experience Low involvement frequently purchased categories in which sensory experience- taste or smell, accompanies product use Satiation occurs after repeated use and leaves the consumer looking for a change of pace snack foods, soft drinks and alcoholic beverages, breakfast cereals, and fast food

Scope of the Advertising and Promotional industry

Worldwide, nearly $600 billion is spent on advertising, advertising industry is huge Spending on all forms of IBP worldwide including advertising exceeds 1 trillion dollars a year Worldwide advertising spending >$600 billion US advertising spending $200-300 billion (highest, second closest is China at $114 billion) US advertising + promotion spending >$450 billion Media spending in 2019 and percent change vs 2018 by medium, Internet +9.7%, second is TV +1.1%, Newspaper -6.9% Media spending in 2019 and percent change vs 2018 by region, North America +2.4%, second is Asia Pacific Total media ad spending US 2019 by media, 1. Digital $129 billion, 2. TV $70, 3. Newspaper, 4. Mag, 5. Radio Alibaba, FB, Google capture over 60% of digital ad spending worldwide

6 fundamental types of advertising described in pairs

a. Primary versus selective demand stimulation. Primary demand stimulation is the attempt to stimulate demand for an entire product category. Selective demand stimulation is the attempt to stimulate demand for a particular brand within a product category. Advertising is not powerful enough to stimulate demand for a product category—only broad in- fluences like demographics, cultural values, or technology can stimulate primary demand. Selec- tive demand is what advertising does and can be very effective for building brand awareness and preference. B. Direct- versus delayed-response advertising. Direct- response advertising asks consumers to act immediately upon receipt of the advertising message. Delayed-response advertising develops awareness, preference, and an image for a brand that takes much longer to affect consumer choice. C. Corporate versus brand advertising. Corporate advertising features an entire corporation rather than focusing on any one brand marketed by that corporation.

Ways to reach a customer

advertising & promotions promotional mix (6) integrated marketing communications (IMC) integrated brand promotion (IBP)

Demographics

age, marital status, education, gender, income

psychographics

attitudes, beliefs, personality, lifestyle, values

Audiences of IBP

audience: A group of individuals who receive and interpret messages sent from companies or organizations Target Audience: A particular group of consumers singled out by an organization for an advertising or IBP campaign Considered the potential audience since it cannot be assured the message has been received as intended Companies oftentimes specifically target these categories: household consumers, members of business organiza- tions, members of a trade channel, professionals, and gov- ernment officials and employees.

The goal of strategic marketing principles is always to

communicate effectively about a brand

Content marketing:

creating and posting relevant informational messages for target audiences online and on social media, accessible whenever targeted decision makers are considering a purchase. important to step 5 in industry structure, target audiences

Most advertisements we see on television and in magazines are of the BLANK-response type

delayed-response

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 local dealers to achieve specific advertising objectives. This sharing of advertising expenses between national companies and local merchants is called cooperative advertising/co-op advertising

most credible type of media?

earned media