Transcript Chapter Two: Advertising`s Role in Marketing

Advertising’s Role in
Marketing
Part 1: Foundations
Chapter 2
Chapter Outline
I.
II.
III.
IV.
V.
VI.
VII.
Chapter Key Points
What is Marketing?
The Key Players and Markets
The Marketing Process
How Agencies Work
International Marketing
The Dynamics of Modern Marketing
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Key Points
• Define the role of advertising within marketing
• Explain how the four key concepts in marketing
relate to advertising
• Identify the key players in marketing and how the
organization of the industry affects advertising
• List and explain the six critical steps in the marketing
process
• Summarize the structure of the advertising agency
industry
• Analyze the changes in the marketing world and what
they portend for advertising
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What is Marketing?
• The way a product is designed,
tested, produced, branded,
packaged, priced, distributed, and
promoted
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Key Concepts in Marketing
• The marketing
concept
• Exchange
• Branding
• Added value
• Marketing should focus
first on identifying the
needs and wants of the
customer
• To compete effectively,
marketers must focus on
the customers’ problems
and try to develop
products to solve them
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Key Concepts in Marketing
• The marketing
concept
• Exchange
• Branding
• Added value
• The act of trading a
desired product or
service to receive
something of value in
return
• Money is exchanged for
goods
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Key Concepts in Marketing
• The marketing
concept
• Exchange
• Branding
• Added value
• The process of creating
a distinctive and special
meaning for a product
• Brand equity is
reputation, meaning,
and value that the brand
name or symbol has
acquired over time
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Key Concepts in Marketing
• The marketing
concept
• Exchange
• Branding
• Added value
• A marketing or
advertising activity
makes a product more
valuable, useful, or
appealing
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The Key Players and Markets
• The marketer
• Suppliers and
vendors
• Distributors
and retailers
• The organization,
company, or
manufacturer producing
the product and offering
it for sale
• The advertiser or client
(from the agency’s point
of view)
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The Key Players and Markets
• The marketer
• Suppliers and
vendors
• Distributors
and retailers
• Other companies that
manufacture the
materials and
ingredients used in
producing the product
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The Key Players and Markets
• The marketer
• Suppliers and
vendors
• Distributors
and retailers
• Various companies that
are involved in moving
a product from its
manufacturer to the
buyer
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Types of Markets
• Market
– Where the exchange
between buyer and seller
takes place
– A particular type of
buyer
Consumer
Business-tobusiness
Institutional
Channel
• Market share
– The percentage of the
total market in a product
category that buys a
particular brand
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Types of Markets
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•
•
•
Consumer
Business-to-business (Industrial)
Institutional
Channel
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The Marketing Process
1. Conduct research and develop a situation
analysis
2. Set objectives for the marketing effort
3. Assess consumer needs and wants
4. Differentiate and position the product
5. Develop the marketing mix strategy
6. Evaluate the effectiveness of the strategy
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Marketing Mix Strategies
• Product
• Place
• Price
• Promotion
• The product is both the
object of the advertising
and the reason for
marketing
• Product category
– A class of similar
products
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Marketing Mix Strategies
• Product
• Place
• Price
• Promotion
• The channels used in
moving the product
from manufacturer to
buyer
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Marketing Mix Strategies
• Product
• Place
• Price
• Promotion
• Based on the cost of
making and marketing
the product and on
expected profit
– Customary
– Psychological
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Marketing Mix Strategies
• Product
• Place
• Price
• Promotion
• Use face-to-face contact
between marketer and
prospective customer
• Used to create
immediate sales
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How Agencies Work
Full-Service Agencies
• Include the four major
staff functions
– Account management
– Creative services
– Media planning and
buying
– Account planning
Specialized Agencies
• Specialize in certain
functions, audiences,
industries or markets
– Creative boutique
– Media-buying services
• Also have accounting,
traffic, production, and
HR departments
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How Agencies Work
Account Management
• Acts as a liaison
between the client and
the agency
• Responsible for
interpreting the client’s
marketing strategy
Creative Development
• People who write
• People who design ideas
for ads and commercials
• People who convert
these ideas into
commercials
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How Agencies Work
Media Planning/Buying
• Recommends to the
client the most efficient
means of delivering the
message
• Responsible for buying,
planning, and research
Account Planning
• Gathers all information
on the market and
consumers and acts as
the voice of the
consumer
• Prepares comprehensive
recommendations
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How Agencies Work
Internal Agency Services
• Traffic department
• Print production
department
Revenues and Profits
• Commission
• Fee
• Retainer
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International Marketing
• An international brand is available virtually
anywhere in the world
• The shift requires new tools for advertisers,
including one language, one control
mechanism, and one strategic plan
• The choice of an agency depends on the
decision to standardize messages or localize
them to accommodate local cultures
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The Dynamics of Modern Marketing
• Integrated marketing
– All areas of the marketing mix work closely together to
present the brand in a coherent and consistent way
• Relationship marketing
– Marketing that considers all the firm’s stakeholders
• Permission marketing
– Inviting prospective customers to self-select into a brand’s
target market in order to receive marketing communication
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