Transcript Document

Advertising Principles
and Practices
Advertising’s Role
in Marketing
WHAT IS ADVERTISING?
What is marketing?
• Traditionally, marketing is the way a
product is designed, tested, produced,
branded, packaged, priced, distributed, and
promoted.
• “An organizational function and a set of
processes for creating, communicating, and
delivering value to customers and for
managing customer relationships in ways
that benefit the organization and its
stakeholders.”—American Marketing
Association
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Key Concepts
• The marketing concept
• Exchange
• Differentiation and
competitive advantage
• Added value
• Branding
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Table 2.1
Most Valued Global Brands
Brand
Market Value ($ Billions)
1. Coca-Cola
$67
2. Microsoft
$57
3. IBM
$56
4. General Electric
$49
5. Intel
$32
6. Nokia
$30
7. Toyota
$28
8. Disney
$28
9. McDonald’s
$28
10. Mercedes-Benz
$22
Source: Interbrand Group; quoted in “Best Global Brands,” BusinessWeek,
August 7, 2006, p. 54. Reprinted with permission.
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Types of Markets
• A market is a particular type of buyer.
• Share of market is the percentage of a product
category’s total market that buys a particular brand.
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Ads for Four Types of Markets
• Which is which?
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Consumer
Business-to-Business
Institutional
Channel
• How are the four ads
different?
• How are they the
same?
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The Marketing Plan
Steps in the Marketing Process
1. Research the consumer marketplace and
competitive marketplace and develop a situation
analysis or SWOT analysis.
2. Set objectives for the marketing effort.
3. Assess consumer needs and wants, segment the
market into groups, target specific markets.
4. Differentiate and position the product relative to
the competition.
5. Develop the marketing mix strategy.
6. Evaluate the effectiveness of the strategy.
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The Marketing Plan
Marketing Research
• Research markets, product categories,
consumers, and the competitive situation.
• Planners need to know as much as they can about
the marketplace so they can make informed,
insightful strategic decisions.
• SWOT (Strengths, Weaknesses, Opportunities,
Threats) helps managers turn data into insights.
Principle:
Marketing research is about more than just the
compilation of information; it also produces insights
into marketing situations and consumer behavior.
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The Marketing Plan
Key Strategic Decisions
• Objectives—increases sales, share of market, or
broader distribution
• Segmenting and targeting
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Potential customers constitute the target market.
Identifying specific groups within the target market whose
needs intersect with the product and its features is segmenting.
A target audience is the audience for a marketing
communication message.
Differentiating and positioning.
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The point of differentiation positions the product within the
competitive environment, relative to consumer needs.
Positioning is how consumers view the brand relative to others
in the category.
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The Marketing Mix
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Push, Pull and Combination Strategies
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Key Players
• Marketer
– The advertiser or client that is the company or
organization who produces and sells the brand.
• Suppliers and Vendors
– They provide or produce the materials and ingredients
that are sold to manufacturers to make products.
• Distributors and Retailers
– The distribution chain or channel of distribution refers
to all the companies who help move a product from
manufacturer to buyer.
• Marketing Partners
– Suppliers, distributors, and marketing communication
agencies are partners in supporting the brand and
maintaining good customer relationships.
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How Agencies Work
with Their Clients
• Agencies and agency networks (holding companies)
• Companies have internal advertising departments
who act as a liaison between the marketing
department and advertising agency(ies).
– Also called marketing services.
• Advertisers may have one agency of record (AOR)
or several agencies.
• Agencies offer clients:
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Specialized services
Objective advice
Experienced staffing
Management of all advertising activities and personnel
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Table 2.2
Top 10 Agency Networks
Marketing Organization
Worldwide Revenues ($ millions)
1. Omnicom Group
$11,376.9
2. WPP Group
$10,819.6
3. Interpublic Group
$6,190.9
4. Publicis Groupe
$5,872.0
5. Dentsu
$2,950.7
6. Havas
$1,841.0
7. Aegis Group
$1,825.8
8. Hakuhodo DY Holdings
$1,337.0
9. aQuantive
$442.2
10. Asatsu-DK
$430.0
Source: Agency Report: World’s Top 25 Marketing Organizations,” Advertising
Age, April 30, 2007: S-2.
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• Agencies have their
own style and
philosophy.
• In these three ads for
the Navy, Army, and
Air Force, can you
perceive a difference
in approach, style,
and strategy?
• Which do you think
would be most
effective in recruiting
volunteers?
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Table 2.3
Top 10 Consolidated Agency Networks
Agency
Headquarters
‘06 Revenue (billions)
1.
Dentsu [Dentsu]
Tokyo
$2.49
2.
McCann Erickson Worldgroup
New York
$2.13
New York
New York
$2.10
$2.08
[Interpublic]
3.
BBDO Worldwide [Omnicom]
4.
DDB Worldwide Communications
[Omnicom]
5.
Ogilvy & Mather Worldwide [WPP]
New York
$1.71
6.
Young & Rubicam Brands [WPP]
New York
$1.59
7.
TBWA Worldwide [Omnicom]
New York
$1.52
8.
JWT (WPP) [WPP]
New York
$1.50
9.
Publicis Worldwide [Publicis]
Paris
$1.24
Chicago
$1.19
10. Leo Burnett [Publicis]
Source: Agency Report: Top Ten Consolidated Agency Networks,” Advertising
Age, April 30, 2007: S-4.
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Types of Agencies
• Full-service Agencies
– Offer account management, creative services, media
planning, account planning, accounting, traffic,
production, and HR
• Specialized by:
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Function (copy, art, media)
Audience (minority, youth)
Industry (healthcare, computers, agriculture)
Market (minority groups)
• Creative Boutiques
– Small agencies focused on the creative product
• Media-buying Services
– Focused on purchasing media for clients
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How Agency Jobs Are Organized
• Account Management
– Serves as a liaison between the client and agency
– Three levels: management supervisor, account supervisor,
account executive
• Account Planning and Research
– Acts as the voice of the consumer
• Creative Development and Production
– People who create and people who inspire
– Creative directors, copywriters, art directors, producers
• Media Planning and Buying
– Recommend most efficient means of delivering the message
• Internal Agency Services
– Traffic, print production, financial services, human resources
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How Agencies Are Paid
• Commissions
– A percentage of the media cost
• Fees
– Hourly fee or rate plus expenses and travel
• Retainers
– Amount billed per month based on projected amount of
work and hourly rate charged
• Performance-based
– Based on percentage of sales or marketing budget
• Profit-based
– Greater risk if campaign doesn’t have desired impact
• Value Billing
– Based on value of creative strategy or ideas
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Current Developments
• Accountability
• Integrated (Holistic) Marketing
• Emerging Marketing Strategies
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Relationship Marketing
Permission Marketing
Experience Marketing
Guerilla Marketing
Digital Marketing
Viral Marketing
Mobile Marketing
Social Network Marketing
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Global Marketing
• Most countries have local, regional, and
international brands requiring international
advertising to promote the same brand in several
countries.
• Companies may have several international regional
offices and/or a world corporate headquarters.
• Agencies must adapt with new tools including one
language, one budget, and one strategic plan.
• The choice of an agency for international advertising
depends on whether the brand message will be
standardized or localized.
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mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2009 Pearson Education, Inc.
Publishing as Prentice Hall
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