Marketing Management ch 10-12

Types of emotional ads

1. Humor•May break through clutter & be buzz-worthy•Usually not cost efficient•May remember the joke but not the product 2. Fear ads•Use negative emotions•For a fear appeal to be effective, the ad must provide a solution to reduce the consumer's fear 3. Subliminal ads: contain elements shown too fast to detect consciously•Considered unethical and have never been shown to work

Types of cognitive ads

1. One-sided argument: focuses on product's benefits 2. Two-sided argument: gives pros and cons -Usually stand out more and are considered more objective 3. Non-comparative ad: only one brand's features, attributes, image, etc., are presented 4. Comparative ad: two or more brands' features, attributes, image, etc., are presented•Ads created by the smaller company help the company and the competitor 5. Product demonstration: shows the product at work 6. Drama: product is the solution to a problem•Memorable

Concept testing

3-4 focus groups of 8-10 screened participants are shown the ideas of the ad•Ads are usually in preliminary development•Consumers' responses to ad, brand, etc., are evaluated

Selective distribution

A manufacturer selects a limited number of wholesalers or retailers and works closely with them to further the sale of his products. This method can be used for any type of products, even with convenience goods. This policy makes it necessary on the part of the manufacturer to select the best distributors available, concentrate efforts on them and thus obtain a greater selling effort for his products.

What is a distribution channel?

A network of firms that are interconnected in their quest to provide sellers a means of infusing the marketplace with their goods, and buyers a means of purchasing those goods

Measure two attitudes: Attitudes-toward-the-ad (A ad) Attitudes-toward-the-brand (A brand)

Aad > Abrand > likelihood to purchase

Image ads

Ad message is more abstract Company distinguishes itself by its image because the product's category is crowded Used for positioning

Cognitive tests - Day-after recall tests (DAR)

Ask random samples of households "Which brands did you see last night?"

AIDA goal model

Attention (capture attention) Interest (pique interest) Desire (Make consumer desire the product) Action (Get consumer to act/buy)

IMC: When advertising across media

Consider the company's overarching strategy Ensure a consistent message -All communications »e.g., Trade advertising, personal selling, direct marketing, and product placements -As well as other marketing mix elements »e.g., Product design, pricing, and channels Play to each media's strength Need consistency in ads

Essay: "Define forward integration and backward integration and provide an example of each"

Forward integration: Forward integration is a type of vertical integration that extends to the next levels of the supply chain, aiming to lower production costs and increase the efficiency of the firm. In other words, it's a business strategy where a firm replaces third party distribution or supply channels with its own in an effect to consolidate operations, reduce costs, and become a step closer to the end consumer. example: For instance, a firm that imports oranges and sells them as a retailer can acquire a retail store to distribute its products. The positive outcome of this integration is higher operating margins due to increased sales as a result of the firm's access to more distribution channels. Furthermore, the firm adopts more flexible production processes, thereby increasing its market share and gaining a competitive advantage. Backward Integration: Backward integration refers to the process in which a company purchases or internally produces segments of its supply chain. Backward integration refers to a company buying or internally producing parts of its supply chain. example: Company XYZ manufactures widgets. It needs 10 pounds of punched plastic to manufacture one widget. In order to control the quality of the punched plastic and "cut out the middle man," Company XYZ buys Plastic Company ABC. This backward integration allows Company XYZ to acquire punched plastic much more cheaply, and it also prevents other companies from buying punched plastic from Plastic Company ABC, thereby hindering competition.

Franchise benefits

Franchisor: receives capital, scales of economy, committed people, less risk, can focus on core functions Franchisee: well-known brand and some market awareness, supplier relationships, templates for training, central support

Pull strategy (upwards)

Incentives are offered to consumers to pull products through the channel

Push strategy (downwards)

Incentives are offered to distribution partners to push products through the channel

Intensive distribution

It is a policy where a manufacture seeks to use as many outlets as possible, in as many places as possible. Such a method is known as 'maximum expansion'. Such methods are usually adopted in the case of convenience goods.

Copy testing

Large random samples of consumers view a TV program and ads; after 30 minutes, consumers take survey Ad evaluation items -Stimulation (curious, enthusiastic, etc.) -Information (useful, credible, etc.) -Negative emotion (irritation, etc.) -Transformation (enjoyment, satisfied feeling, etc.) -Identification (felt involved with it, etc.)

Distribution channel members include

Manufacturers, wholesalers, retailers, consumers, etc.

Backward integration

Moving backward in a distribution channel •e.g. Manufacturer controls raw materials or retailer sets up private label

Vertical integration

Moving backward or forward in a channel the supply chain of a company is owned by that company. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy a common need.

Forward integration

Moving forward in a distribution channel •e.g. Manufacturer opens its own retail stores

Essay: "In marketing explain the distinction between a one-sided argument and a two-sided argument and give an example."

One-sided argument= The company focuses on expressing the benefits of its products to the consumer This is a common approach among advertisers One sided arguments are straight-forward and offer an explanation of the anticipated benefits EX: burger king showing a cheeseburger with "HOME OF THE WHOPPER" Two-sided argument= The company describes the pros and cons of its brand Used when the target customers already know that your brand has some weaknesses and therefore should use the honesty tactic and then go on to tell them your brand is still better Benefits to 2 sided ads= 1. they stand out and grab attention 2. they are seen as more objective/neutral because you're pointing out the pros and cons so they seem more credible EX: Verizon showing a comparative coverage ad with AT&T and how they cover more of the US

Advertising

Primary means to communicate with customers about its products, brands, and position in the marketplace

Subliminal ads

Shown fast enough that viewers cannot point to the ad (thought to affect the subconscious); considered unethical and have never been shown to work

Franchising

Unique format of multisite expansion Company can retain some control without complete ownership or capital expenditure

Double Marginalization

When a manufacturer uses an intermediary who wants to make money off the manufacturer and the manufacturer then has to markup their product to the consumer. Price of the product may then become so high that the demand drops off and then both the manufacturer and the distributor lose

Cognitive tests - Recognition tests

When can't remember more ads, ask"Do you remember seeing X ad?"

IMC Choices Depend on Goals

When determining which promotional method to choose, consider: 1. The target audience 2. The company's goal= Awareness, information, preferences, purchase trial, and repeat purchase Additional questions to consider Should we schedule continuously, occasionally, or seasonally? What is the consumer's purchase cycle? What is the level of saturation desired? What life cycle stage is the product in? What can we afford? What is best for our target? What do we want the target to know?

Public relations

a means of providing and building brand attributes PR lines of communication are a company's attempt to reach its constituency = Customers, suppliers, stockholders, government, employees, general community Convey a positive image and educate a constituency about the company Generate goodwill on behalf of the company

Sales force (personal selling) vs. advertising

a sales force can be more expensive

Endorsement ads

ads that feature a spokesperson on behalf of the brand

IMC (Integrated Marketing Communications)

coordination of promotion and other marketing efforts for maximum informational and persuasive impact to try and capture splintered audiences across the varied media that engage them

Double marginalization

different firms in the same industry that have their respective market powers but at different vertical levels in the supply chain (example, upstream and downstream) apply their own markups in prices.

Cognitive ads

engage the consumer's brain

Personal selling

essential communication vehicles for many companies and industries Accounts for 14 million jobs Over 10% of workforce •Is especially important for expensive, complicated products

Franchising economies of scale

provide a small percentage to make the franchisor more profitable to re-invest in its brand and the services it provides to its franchisees, while still providing hopefully lower costs for the franchisees in the system

Essay: "Explain the concepts of push and pull."

push marketing: manufacturers offer incentives to distributors or retailers to sell a product to end users such as reduced pricing, an allowance to cover marketing, discount for purchasing a larger quantity, financing a payment for several months, and spiffs (incentives for the sales force) pull marketing: strategies used by marketers towards consumers such as: reducing prices, enhance size/quantity, offer trials, free samples. coupons, rebates, financing, and points towards loyalty programs.

GRP (gross rating points)

reach x frequency

GRP frequency

the average number of times your target audience saw the ad (within some set duration)

GRP reach

the share (percentage) of the target audience that has seen your ad at least once