Integrated Marketing Communications 02/22/2016

Advertising
Sales promotions
Point-of-purchase displays

Rapidly changing media environment

 Increasingly difficult to target audiences and communicate
effectively
o Consumers are no longer passive recipients
o They demand more than information from myriad of sources
Notes: The mass media are losing viewers, listeners, and reads to the
highly fragmented, more targeted digital media that allows consumers to be
actively engaged in the communications process.
Think about who is the target consumer? Where do they go for this
information?
Traditional mass media
 Television, radio, magazines, newspapers, billboards
 Now drive consumers to websites
Online strategies
 Provide detailed information
 Be experimental, entertaining, interactive
 Twitter, YouTube, Facebook, wireless mobile media devices, email
Notes: In the past, the only advertising avenues were television, radio,
billboards, and printed media. Ads in these media promoted the product or
service for sale. Today, traditional media are used more and more to drive
customers to online sites, where the information can be more detail, colorful,
and interactive.
Traditional media now points consumers toward online information
-Often utilize guerilla/’oddball’ advertising
 Direct consumer towards website – banners, flyers, ads
Interactive marketing -- kiosks
Digital interactive marketing – Dominos
Marketing bringing buyer and seller together where each wins
AMA definition “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”
 Value
 Relationship marketing
 Mass customization
 Customer relationship management (CRM)
Notes: Key aspects of marketing which include:
 creating, communicating and delivering value,
 focusing on customer relationships,
 using mass customization to deliver products and services in
response to specific customer needs, and
 customer relationship management (CRM), which involves the
systematic tracking of customers’ preference and behavior and
adjusting the marketing program to meet their needs.
Marketing Mix:
 Product – What goods/services should we offer to our target
consumers?
 Place – Where should we sell our products?
 Price – How should we price our products? High? Low? Does the
brand value justify a high price point?
 Promotion – How we communicate our message to the consumer;
how are we drawing our consumer in?
Notes: Proper marketing mix does not just happen. Marketers must
understand the issues and options involved in each element of the mix, and
how these elements can be combined to form an effective marketing
program. Real estate agentsà often place a sign in front of the property to
be sold in order to attract drive-by customers; place ads in newspapers or
real-estate guides, and enter all the pertinent information into online
databases so consumers can search for the properties that meet their
individual needs. Larger real estate firms, or those with high-end properties
for sale, sometimes advertise them on television as well.
 Traditional Marketing Approach:
 Special events
 Interactive marketing
 Public relations
 Direct marketing
 Point of purchase
 Media advertising
 Publicity
 Direct response
 Packaging
 Sales promotion
Notes: Traditional approach to advertising and promotionà many of the
marketing and promotional functions were planned and managed separately
with different budgets, different views of the market, and different goals and
objectives. Many marketing activities, such as package design, sales
promotion, and direct marketing services, were viewed as ancillary services
and handled on a project basis rather than integrating them into the IMC
program.
Often lacked coordination and consistency
Contemporary IMC Approach: packaging, sales promotion, direct
response, point of purchase, media advertising, public relations, interactive
marketing, direct marketing, publicity, special events
Notes: Contemporary approach to advertising and promotionà
Integrated Marketing Communicationsà seeks to have all of a company’s
marketing and promotional activities project a consistent, unified image in
the marketplace. It calls for a centralized messaging function, so that
everything a company says and does communicates a common theme and
positioning.
Defining Integrated Marketing Communication
 Is a strategic business process used:
o To plan, develop, execute and evaluate coordinated,
measurable, persuasive brand communication programs with
consumers, customers, prospective employees and other
relevant external and internal audiences
 Goal:
o To generate short-term financial returns and build long-term
brand value
 Marketing plan:
 o Written document explaining the overall marketing strategy
and programs developed for an organization, product line or
brand
IMC: involves more than just coordinating the various elements of a
marketing and communications program into a “one look, one voice”
approach
 Recognized as a business process – rather than just tactical
integration of various communication activities
 Importance of relevant audiences – externally these include
customers, prospects, suppliers, investors interest groups and the
general public; employees are an example of an internal audience
 Demand for accountability – increased emphasis on the outcomes of
marketing communication programs
Growing Importance of IMC
 Strategic integration of communications functions
o Avoids duplication
o Synergy among promotional tools same voice/imagery
o More efficient and effective marketing
 Rapidly changing environment
o Consumers
o Technology
o Media
Notes: Benefits of strategically integrating communications functions,
and the driving forces behind the communications environment… consumer
trends, technology, and media.
Big four: newspaper, magazine, mail, direct
Behind the Growing Importance of IMC
 From Toward
o Media advertising multiple forms of communication
o Mass media specialized media
o Manufacturer dominance retailer dominance
 o General focus data-based marketing
o Low agency accountability greater agency accountability
o Traditional compensation performance-based compensation
o Limited internet availability widespread internet availability
A major reason for the growing importance of the IMC approach is the
ongoing revolution that is changing the rules of marketing. These changes
include:
 A shift in dollars from media advertising to other forms of
promotions particularly consumer and trade oriented sales
promotion.
 A movement away from mass media and advertising toward more
targeted communication tools such as event marketing and
sponsorship, direct mail, and the Internet.
 A shift in marketplace power from manufacturers to retailers
resulting in retailers demanding larger promotional fees and
allowances from manufacturers.
 Technology facilitated a rapid increase in database development
and information sharing. Marketers are using this information to
improve market targeting.
Greater accountability from advertising agencies and changes in
agency compensation. Companies are moving toward incentive-based
systems of compensation.
Rapid growth of the Internet. The interactive nature of the Internet has
made it a vital part of any communications strategy.
The role of IMC in Branding
 Brand identity is a combination of
o Name
o Logo
o Symbols
o Design
o Packaging
o Performance
o Image or associations
IMC plays a major role in developing and sustaining brand identity and
equity
 Notes: With more and more products and services available to
consumers, developing and maintaining brand identity is becoming
increasingly important. Well known brands have a major competitive
advantage in today’s marketplace. A well-defined and coordinated IMC plan
contributes to overall brand identity and equity.
More well-known brands have a competitive advantage in the market.
Finding New Ways to Build Brands
 Consumers driving the trend
o They view brands as a form of self-expression
o They know more about brands and companies that make
them
o Cynicism about corporations is at an all-time high
o They seek and share information with other consumers online
and through social networks
Notes: Marketers are can no longer build and maintain brand equity
merely by spending large sums on money on media advertising.
 Brands are becoming less about the actual product and more about
how people relate to them.
 Moving away from one-way communication to an interactive model,
whereby consumers can easily communicate with them as well as
with other customers.
Finding New Ways to Build Brands continued…
 Get consumers involved
o Apple lets consumers test products in store
o Starbucks positions stores as a community gathering place
 What elements of Starbucks encourage consumers to
“hang out”?
o Interaction can be the best marketing
 Twitter
 Facebook
 Instagram
Promotional Mix basic tools used to accomplish an organization’s
communication objectives
  Advertising – any paid form of non personal communication about
an organization, product, service or idea by an identified sponsor
 Direct marketing – communication directly with target customers to
generate a response and/or transaction
 Interactive/internet marketing – communication through interactive
media such as the internet, CD-ROMS and kiosks
 Sales Promotion - activities that provide extra value or incentives to
sales force, distributors or consumers to stimulate immediate sales
 Publicity/PR - form of non-personal communication not directly paid
for under identified sponsorship; management function to enhance
image of that company
o Difference: publicity…providing editor of a magazine some
free samples to encourage product, specific, news release to
different outlets saying look at our new product it is better
because blahblahblah
o PR…building goodwill toward organization, enhance image in
general sense, focused on broad overarching image of
company
 Personal selling person-to-person communication between a seller
and buyer
Advertising
 Paid forms of non-personal communication
o About an organization, product, service or idea by an
identified sponsor
o No feedback from audience
o Important for products and services aimed at mass consumer
markets
o Cost effective
Notes: Advertisers throw ads at thousands, sometimes millions, of
viewers and hope that it “sticks” to the desired audience (more on “sticky”
ads later in the semester). These ads may appear on TV, radio, magazines,
or newspapers, although there is no effective substitute for ads on network
television. For instance, a 30-second commercial on the four major networks
during evening prime-time programming reaches 6 million households. The
cost per thousand households reached during prime time in 2007 was
$22.87, or just over 2 cents per household.

The nature and purpose of advertising differs from one industry to

another and/or across situations. Advertising can be targeted toward
consumer and/or business markets.
Most common forms of advertising
 Consumer advertising is classified as:
o National advertising – done by large companies on a
nationwide basis. Ads for well-known brands and companies
shown on television are an example
 o Retail/local advertising – done by retail and local merchants
encouraging consumers to shop at specific stores, use a local
service or patronize a particular establishment
o Primary vs. selective demand advertising – primary demand
advertising is designed to stimulate demand for the general
product class or industry. Selective-demand focuses on
creating demand for a specific company and/or its brands
 Advertising to business and professional markets includes:
o Business-to-business advertising – advertising that targets
individuals who buy or influence the purchase of industrial
goods or services for their companies
o Professional advertising – advertising targeted to
professionals such as doctors, lawyers, engineers and the like
o Trade advertising – targeted to marketing channel members
such as wholesalers, distributors and retailers
Direct Marketing one of the fastest-growing sectors of the U.S.
economy. It is a form of integrated marketing communications whereby an
organization communicates directly with target customers to generate a
response and/or transaction. It involves a variety of activities, including:
 Direct mail – mail directly to the consumer
 Direct response advertising – (on TV, radio or in magazines or
newspapers) use of media to transmit messages that encourage
buyers to purchase directly from the advertiser
 Telemarketing – calling the customer directly
 Catalogs – may involve sending catalogs to the consumer’s home,
or including with in-store purchases
 Shopping channels – Home Shopping Network
Notes: Direct response print ad for Bose Corporation promoting its
audio products. There is a response card in the ad as well as an 800 number
to encourage the consumer to make an inquiry or even a purchase. Direct
response advertising and other forms of direct marketing have increased in
popularity due to:
 Changing lifestyles, particularly two-income households with more
income, but less time to shop.
 Availability and use of credit cards
 Toll free telephone numbers
 Web address
Although direct mail is the primary medium for this form of advertising,
direct response ads often appear in magazines. Direct mail pieces range from
simple letters and flyers to detailed brochures, catalogs, and videotapes.
Interactive/Internet Marketing
 Back-and-forth communication
o Users participate in and modify the form and content of
information
 o Happens in real time
o Consumers have an expectation of two-way communication
 Interactive media
o Internet
o Kiosks
o Interactive television
o Smartphones
Notes: Over the past decade, there have been dynamic and
revolutionary changes in marketing, advertising, and promotion. These
changes are being driven by advances in technology and interactive media,
which allow a back-and-forth flow of informationà social media
communication with consumers/marketing
Now take interactive communication for granted, although it has only been
around for just over a decade. The fact that we accept, and even expect,
such interaction shows how quickly it has become ingrained it society today.
 Ex: Nike ID (personalized), sales promotion GoDaddy.com
 Shoes built to order
o These changes are being driven by advances in technology
and interactive media, which allow a back-and-forth flow of
information
Using the Internet as an IMC tool
 Educates or informs customers
 A persuasive advertising medium
 A sales tool or an actual sales vehicle
o Obtains customer database information
o Communicates and interacts with buyers
o Provides customer service and support
o Builds and maintains customer relationships
Notes: Rapid changes in technology have led to dramatic growth of
communications through interactive media, particularly through social
media. The Internet is a unique communication medium in that it allows for
back-and-forth information in real time. Customers can perform a variety of
functions on the Internet, such as receive and alter information and images,
make inquires, respond to questions, and make purchases. The internet has
changed the ways companies communicate with their customers, and
companies and organizations of all sizes have developed websites to
promote their products and services.
Because of its interactive nature, it is a very effective way to
communicate with customers. It is a medium that can be used to execute all
elements of the promotional mix. In addition to online advertising,
companies can also offer sales promotion incentives (coupons or contests),
do direct marketing, and execute public relations and personal selling
functions.
 Sales Promotion
 Consumer-oriented [for end-users]
o Coupons
o Samples
o Premiums
o Contest/sweepstakes
o Refunds/rebates
o Bonus packs
o Loyalty programs
o Events
 Trade-oriented [for resellers]
o Trade allowances
o POP displays
o Training programs
o Trade shows
Coop advertising
Notes: A company can use either a push or pull marketing strategy.
Programs designed to motivate the channel members, persuade them to
stock merchandise, and promote a manufacturer’s products are part of a
push strategy.
A push strategy encourages resellers to order merchandise and push
it through to their customersà the aim is to get the retailer to encourage
consumers to purchase the product.
A pull strategy involves spending money on advertising and sales
promotion efforts directed toward the ultimate consumer. The goal of a pull
strategy is to create demand among consumers and encourage them to
request the product from the retailer.
The choice of a strategy depends on a number of factors, including the
company’s relations with the trade, its promotional budget, and demand for
the firm’s products. Companies often use both of these strategies, with the
emphasis changing as a product moves through its life cycle.
 Promotional Strategy: Push or Pull?

Sales Promotion
 Most of the promotional budget now goes to sales promotion
o Declining brand loyalty
o Increased consumer sensitivity to “deals”
o Larger and more powerful retailers are demanding more trade
promotion support
Notes: Customers have come to expect discounts and sales
promotions no longer the exception; now the rule
Advertising vs. Publicity
Control great vs. little
Credibility lower vs. higher
Reach measurable vs. undetermined
Frequency schedulable vs. uncontrollable
Cost high/specific vs. low/unspecified
Flexibility high vs. low
Timing specifiable vs. tentative
Notes: Another important component of an organization’s promotional
mix is publicity/public relations.
Publicity refers to the non personal communications regarding an
organization, product, service, or idea not directly paid for or run under
identified sponsorship. Companies attempt to get the media to cover or run
favorable stories on their products, services, or causes. It usually comes in
the form of a news story, editorial, or announcement. There are a number of
advantages and disadvantages that publicity has relative to advertising.

Companies attempt to get the media to cover or run favorable stories

on their products, services, or causes. There are a number of publicity
vehicles available to marketers. Publicity can be generated through the use
of:
Publicity Vehicles
  Feature articles – detailed product descriptions or newsworthy
programs that a PR firm writes for immediate publication or buy
airing by print or broadcast media or distribution via appropriate
social media or online
 Interviews – similar to a press conference, however the interviewer
and interviewee are on an individual, face-to-face basis, similar to a
one-on-one conversation
 Special events – can include sponsorship of an event in which the
sponsor receives a fee from the sponsor to associate the sponsor
with the sponsee; can also take the form of an event with the brand
itself, such as an author doing an in-person book signing or a
musical act performing in-store
 Press conferences – formal media event in which a spokesperson for
the organization provides either a) some kind of public
statement/announcement and/or b) information following a major
event, with the press being allowed to as questions (as a group)
 News releases – announce new products/information about the
company to media/generate public
Public Relations
 Systematically planning and distributing information in an attempt
to control and manage the image and nature of the publicity
received
 Focuses on building a positive public image of the company/product
 Its about building good relationships with stakeholders
Notes: Public relations generally has a broader objective than does
publicity. It’s purpose is to establish and maintain a positive image of the
company among its various publics.
PR is an attempt to show a company in a positive light, and to feed
information into the sources from which publicity arises.
Public Relations Tools
 Cause-related marketing
o Publicity vehicles
o Special publications
o Community activities
o Corporate advertising
o Public affairs activities
o Special event sponsorship
Notes: Variety of public relations tools with which marketers can try to
enhance an organization’s imageà can include publicity vehicles, special
publications, community activities, fund raising programs, public affairs
activities, and special event sponsorships. Organizations can also use
advertising as a public relations tool.
Personal Selling
  Person-to-person communication
o A seller attempts to assist and/or persuade prospective buyers
to make a purchase or act on an idea
Notes: May be face-to-face or telecomà get actual reactions from your
consumer and modify the message as needed!
Personal selling is the final element of an organization’s promotional
mix. Unlike advertising, personal selling involves direct contact between
buyer and seller. This can be face-to-face or through some form of
telecommunications, such as telephone sales. This interaction allows the
seller to see or hear the potential buyer’s reactions and modify the message
accordingly.
A key aspect of IMC is that it encourages marketers to consider a
variety of communication tools and how they can be used to deliver
messages about their company or brands.
Marketers determine how valuable each contact tool is and how they
can be combined to form an effective IMC program.
IMC Planning Process
 Developing an integrated marketing communications plan requires:
o Planning: What do you want to accomplish?
o Executing: How do you want to accomplish this?
o Evaluating: Did it work?
o Controlling: How do you make adjustments to the plan?
Notes: The integrated marketing communications plan provides the
framework for developing, implementing, and controlling an organization’s
IMC program. Those involved with the IMC program must decide on the role
and function of the specific elements of the promotional mix, develop
strategies for each element, determine how they will be integrated, plan for
their implementation, consider how to evaluate the results achieved, and
make any necessary adjustments (control).
*Understand model of IMG planning process
model presents the framework for developing, implementing,
evaluating, and controlling the firm’s IMC program and activities.
This is the “big picture.”
Slide #42
The ________ is a written document that describes the overall marketing
strategy and programs developed for an organization, product line or brand
 A) Promotional plan
 B) Marketing plan
 C) Communications Plan
 D) Marketing Audit
 E) Situation Analysis
Communication Challenges 02/22/2016

Basic IMC Issues:

Marketing Communication (Marcom)
 How to enhance brand equity
 How to impact consumer behavior
 How to justify marcom investments
 How to demonstrate investments
 How to demonstrate financial accountability
Brand exists when a marketing entity (i.e. product, retail outlet,
service, place) receives its own name, term, sign, symbol, design etc.
Brand Equity looks at the outcomes extending from efforts to enhance
a brand’s value to its various stakeholders
Why does the organization care about brand equity? (Organizational
Perspective)
 Higher brand equity =
o Higher market share
o Higher brand loyalty
o Ability to charge premium prices
o Earning a revenue premium
 Revenue differential between a branded item and the
corresponding private-label item
Notes: Can be viewed from the organization and the consumer
perspective
A Firm-Based Perspective on Brand Equity
 Effects of increases in brand equity
o Higher market share
 o Increased brand loyalty
o Premium pricing
o Revenue premiums
Brand Equity:
Customer Perspective of Brand Equity
 The extent that people are familiar with the brand and have
favorable, strong and unique brand associations
It consists of two forms of brand-related knowledge
 1) Brand Awareness consumer knows about the brand
o If a brand comes to mind when consumers think about a
product category evoked
 Brands of toothpaste – what comes to mind? Crest?
Colgate?
 2) Brand Image associations in the mind of the consumer
Brand equity is typically measured in three stages:
 Brand recognition - Consumer awareness and identification of a
brand (I can recognize this brand)
o Being able to identify a brand on a list if hints/cues are
provided
 Brand preference - Consumer reliance on previous experiences
with a product to choose that product again (I’ve tried it and I liked
it)
 Brand insistence - Consumer refusal of alternatives and extensive
search for desired merchandise (I have to have this)
 Brand Recall – being able to identify a brand without any reminders
The Brand Awareness Pyramid: TOMA – top of mind awareness

Brand Image
 The associations that are activated in memory when people think
about a particular brand
 o What do you think of when you think of brand x?
 Ex: Forever 21, Coke, Cleveland Browns, Cubs
 “Types” of Brand Image
o Attributes- characteristics/qualities of the product
 Products (e.g. design)/Non-Product (e.g. price)
o Benefits- consequences/results of consumption for the
consumer
 Functional – intrinsic advantage
 Goldwell shampoo removes dead-ends
 Symbolic – extrinsic advantage
 Goldwell shampoo makes me beautiful
 Experimental – usage imagery
 Goldwell shampoo makes my head feel good when
I lather it onto my scalp
 Overall evaluation (attitude)
Dimensions of Brand Personalities
Five main dimensions of brand personalities – brands can be
multifaceted
 Sincerity
o Down-to-earth, honest, wholesome, cheerful
 Ex. Disney
 Competent
o Reliable, intelligent, successful
 Ex. Toyota
 Ruggedness
o Tough and outdoorsy
 Ex. Patagonia
 Sophistication
o Upper class and charming
 Ex. Jewelry, perfume, high end kitchen products
 Ex. Rolex
 Excitement
o Daring, spirited, imaginative, up-to-date
 Apple Ipod
Ways of Enhancing Brand Equity
 Speak-for-itself products are made so well they speak for
themselves
o Marketing plays a limited role other than getting consumers to
try the product for the first time
 Ex: Pantene
 Message-Driven marcom practitioners build positive brand-related
associations with repeated claims
o Is effective if the messages are creative, attention getting,
believable and memorable
 Ex: got milk? Associate with celebrities (success)
 Leveraging create meaning and associations for their brands by
connective them with other objects that already possess well-known
meaning
o Marketing communications draw meanings from the culturally
constituted world (i.e. everyday world filled with signs and
artifacts)
o Other brands, places, things and people can leverage these
associations
 Starbucks VIA Ready Brew
 Leveraging Brand Meaning from Various Sources

Notes: Perceptions/knowledge/experiences with these sources can

reflect on the brand (and vice versa)
What Benefits Result from Enhancing Brand Equity?
 Increased consumer loyalty
 Long-term growth and profitability for the brand
 Maintain brand differentiation from competitive offerings
 Insulate brand from price competition
However…
Creating brand awareness and boosting brand image…
 Does not matter if you are not affecting behavior (boosting sales)
 Measuring campaign effectiveness is difficult
Difficulties in Measuring Marcom Effectiveness: Choosing a Metric
 What to measure?
o Change in brand awareness
o Improvement in attitudes toward the brand
o Increased purchase intentions
o Larger sales volume
Gaining Agreement
 Finance Department (easier to measure)
o Discounted cash flows: Discounted cash flow (DCF) analysis is
a method of valuing a project, company, or asset using the
concepts of the time value of money
 o Net present values of investment decisions: The sum of the
present values (PVs) of the individual cash flows of the same
entity
o Marketing Department
 Measures of brand awareness, image and equity
External Influences on Consumer Behavior
A number of external factors have been identified that may influence
consumer decision making. This slide summarizes those influences
 Culture – the learned meanings, values, norms and customs shared
by a society. It is the broadest and most abstract influence on buyer
behavior
 Subculture – smaller groups within cultures, whose beliefs, values,
norms and patterns of behavior set them apart from the larger
cultural mainstream. Subcultures can be based on age, geography,
religion and ethnicity
 Social class – homogenous divisions in a society into which people
sharing similar lifestyles, values, norms, interests and behaviors can
be grouped
o Ex: ADPI at other universities as well
 Reference group – a group whose presumed perspectives or values
are being used by an individual as the basis for his or her
judgments, opinions and actions. It is one of the primary factors
influencing our purchase decisions
o Ex: ADPI in house at Arkansas
 Situational determinants – the specific situation in which consumers
make a purchase decision or plan to use the product or brand.
Situational determinates include the usage situation, the purchase
situation and the communications situation
Probing the Minds of Consumers
 In-depth interviews:
o One of one interview between researcher and informant
o Detailed information about a person’s thoughts and behaviors
 Ethnography:
o First-hand observation of daily participation
o Participation is key
 Projective techniques:
o Hidden emotions
 o Look at scene and say what happened afterwards
o Draw a person that wears this brand
 Focus groups:
o Similar to an in-depth interview but with several people
 Association tests:
o What comes to mind when you see these images?
 Razorback and Alabama Crimson Tide logo
o Harvard implicit association test
Logos and Brand Names 02/22/2016
Brand is a company’s particular offering of a product, service or other
consumption object
 Exists when a marketing entity (i.e. product, retail outlet, service,
place, etc.) has its own name, term, sign, symbol, design, etc.
Brand Characteristics Influencing Adoption
1) Relative Advantage
 Degree to which consumers perceive a new brand as being better
than existing alternatives
 Function of consumer perception
 Not a matter of whether a new brand is actually better by objective
standards
Notes: Consumer perceives the new offering as better than what they’re
currently using (doesn’t matter if it’s actually better)à just need the
consumer to see it as better
2) Compatibility
 Degree to which an innovation is perceived to fit into a person’s way
of doing things
 Cork debate – change in view of cork vs. screwtop
Notes: Change in societal expectation/viewpoint; Consumer sees the
new product as fitting into their lifestyle
Trends of women engaging in traditionally male pursuits/jobsà it being
acceptable for women to become engineersà wasn’t the norm 40 years ago
3) Complexity
 Degree of perceived difficulty
 The harder it is to understand or use, the slower the adoption rate
o Apple vs. Microsoft
4) Trialability
 Extent to which an innovation can be used on a limited basis
o i.e. test drive a car, try a computer in store
 Brands that lend themselves to trialability are adopted faster
 Notes: Brands that lend themselves to trialability are adopted fasterà
consumers are able to try the product and see the advantages
Able to go into an Apple store and physically test out the iPhone, iPad,
etc.; Non-Apple users may view the product as difficult to use until they try it.
Able to try driving a car around for a little whileà how easy is the
product to use?
5) Observability
 Degree to which the user can observe the positive effects of new-
product usage
o Higher the better
 Ex: design your own Nike shoe
Notes: Consumer sees a positive effect from using a productà new
razor leaves legs smoother, Nike Shox technology is visible, etc.
Good Brand Names
 1) Distinguish the brand from competitive offerings
o Trademarks legally prevent brands from having the same
name
 2) Facilitates consumer learning of brand associations
o Brand names can serve as memory cues
o Help recall product attributes and benefits
 Ex: ‘I can’t believe its not butter’
 3) Achieve compatibility with brand’s desired image and with its
product design or packaging
o Ex: Publix ‘GreenWise’
 4) Be memorable and easy to pronounce
o Ex: Tide, Bold, Shout, Edge, Bounce, Cheer, Swatch, Smart,
Zune, Crocs, Nike, Coke etc…
o High end brands may focus more on being memorable
(though often a function of founder’s name)
Logos
 Graphic design element
 A shorthand way of identifying a brand
 Can be used with or without brand names
Good Logos are:
 Recognized readily
 Convey essentially the same meaning to all target members
 Evoke positive feelings
Updating Logos
 Logos become dated over time
 Need to make sure logo is up to date with the times
o Logos with unintentional meanings
o Logos with hidden meanings
Logorama
 French animated film
 2,500+ logos used
 Prix Kodak (2009 Cannes Film Festival)
 Academy award for best animated short film (82nd Academy Awards)

Advertising Management 02/22/2016
Is Advertising Rocket Science?
The truth is that advertising is harder than rocket science
It’s news when a rocket launch fails. It’s news when an ad campaign
launch succeeds
Introduction
 Advertising defined
o A paid, mediated form of communication from an identifiable
source, designed to persuade the receiver to take some
action, now or in the future
 Types of Advertising
o Business to consumer (B2C)
o Business to Business (B2B)
Notes: The word paid distinguishes advertising from public relations
B2C undertake the most advertising
Advertising
 Identifiable source
 Important for products and services for mass consumer markets
 Typically cost effective
 No immediate feedback (though this is changing in the age of social
media!)
Advertising Spending
 2016:
o In the US, digital media is expected to overtake TV as the #1
advertising category ($68b vs. $66b in ad sales) (cord cutting,
declining TV ratings
o Mobile expected to overtake desktop ads by 2018
o Once accounting for growth due to 2016 “tent pole” events,
growth is closer to 3.3% year-to-year growth (2014 to 2015
was ~3.8%)
 Top 20 Spenders in U.S. Advertising
1. Proctor and Gamble $4.6 billion
2. AT&T $3.3
3. General Motors Company $3.1
4. Comcast Corporation $3
5. Verizon Communications $2.5
6. Ford Motor Co. $2.5
7. American Express $2.4
8. American Express $2.4
9. L’Oreal $2.2
10. Walt Disney Company $2.1
The Magnitude of Advertising
 Advertising-to-sales Ratios
o Ratios typically range from 2% to 10% with an average of
3.1% across most B2C and B2B categories
o Advertising as a percentage of sales ranges from a low of 1.3
% to a high of 29.9 %
 Competition from larger firms forces smaller companies
to have higher ratios
o Personal care products based on image have high ratios
Notes: 3.1 % means that on average, the advertising spent for
companies in the United states is approximately 3 cents out of every dollar
of sales revenue (for every $1 I make, I spend $.03 on advertising)
1.3% = IBM, 29.9% = Estee Lauder
Advertising Functions
Many firms have faith in advertising.
 It is valued because it is recognized as performing five critical
communication functions:
 Informing:
o Simply to publicize brands
o Aware of new brands, educates them about brands distinct
features and benefits
o Facilitates the creation of positive brand images
 Influencing:
o Trying to get people to try your brand
o Show off advertising products and services
o Typically an emotional appeal or compare one brand to
another
 Ex: preferred by 9 out or 10 doctors
 Reminding and increasing Salience:
o Keeping the company’s brand fresh in the consumers memory
 Adding Value:
o Influences perceptions
o Effective advertising causes brands to be viewed as more
elegant, stylish, prestigious, higher quality, etc…
o Greater ad spending has been proven to make consumers
believe the product is of higher quality
 Assisting Others Company Efforts
o Can be used to facilitate other marcom efforts
 Ex: it could be used as a vehicle for delivering coupons,
sweepstakes, attracting attention to other promotional
tools
o It can also assist sales representatives
o Advertising can also help legitimize or make the sales
representatives’ claims more credible
 The Role of Advertising Agencies
 Advertising Function Alternatives
o In-house Advertising Operation
o Purchase Services as Needed
o Use a Full-Service Advertising Agency
Notes: Advertising management can be thought of as the process of
creating ad messages, selecting media to place ads, and measuring the
effects of the advertising. This process general requires two entities, the
advertising agency and the client.
Advertising Function Alternatives
 In-House Advertising Operation
o Necessitates employing an advertising staff and absorbing
the operation costs
o Unprofitable unless a company does a large amount of
continual advertising
 Purchase Services À la Carte
o Advantages
 Use services only when they are needed
 Availability of high-caliber creative talent
 Potential cost efficiencies
o Disadvantages
 Lack cost accountability
 Financial instability of smaller boutiques
 Full-Service Advertising Agency
o Advantages
 Access to in-depth knowledge and skills
  Obtaining negotiating leverage with the media
 Coordinating advertising and marketing efforts
o Disadvantages
 Some control of advertising function is lost
 Larger clients are favored over small clients
 Occasionally inefficient in media buying
Typical Full-Service Agency Organization
pp slide 19

Agency Services:
Account servicesthis is the link between the agency and its clients.
The account executive is the liaison and focal point of the agency-client
relationship. They are responsible for understanding the advertiser’s
marketing and promotions needs and interpreting them to agency personnel.
Marketing services includes marketing research and media planning.
Account planners gather information that is relevant to the client’s product
or service to be used in the IMC campaign. Media departments analyze,
select, and contract media sources.
Creative services is responsible for the creation and execution of
advertisements. Copywriters and artists are specialists in this department.
Additionally there is a production department that coordinates all phases of
production of advertising and other creative work.
Management and finance services includes such things as performing
basic operating and administrative functions, such as accounting, finance,
and human resources. It must also try to generate new business.

The Role of Creative Boutiques

 Provide only creative services
 Full-service agencies may subcontract with created boutiques
 Ability to turn out inventive creative work quickly
Example:
Notes: Creative boutiques developed in response to some clients’ desire to
use only the creative talent of an outside agency while maintaining other
functions internally. Clients seek the help of creative boutiques when an
extra creative effort is required, or because its own employees do not have
sufficient skills. They can be used in these ways:
 By client companies for creative services only
 Full service agencies may subcontract for their creative services
when busy or when not wanting to add permanent employees
 Other functions such as advertising planning, research and media
buying may be done internally within the company or contracted
out
a) They usually are hired for their creative talent and are paid on a fee
basis.
b) They can be hired directly by a company for their specialized services,
or by a full service agency when they are very busy or do not want to
hire full-time employees.

Media Buying
 Media Specialist
o Specialized in buying media, especially broadcast time
o Agencies and clients develop media strategy
o Media buying organizations implements the strategy and buy
time and space
Notes: The task of purchasing advertising media has grown more
complex as specialized media proliferate. Media buying services have found
a niche by specializing in the analysis and purchase of advertising time and
space. Agencies and clients usually develop their own media strategies and
hire independent buying services to execute them. Some of the
characteristics of media specialist companies include:
 They specialize in buying media time, particularly radio and
television time
 Because they purchase large amounts of time and space, they
usually receive large discounts and can save the agency/company
money on media purchases
o They are paid a fee or commission for their work
 The agency or client may often develop the media strategy
 Media buying organizations may be used to implement the media
strategy and buy broadcast time and/or space in print publications
Their use is growing as more companies look for ways to get more
clout from their advertising budgets.
Agency Compensation Methods:
 Commissions from Media
  Labor-based Fee System
 Outcome or Performance-Based Programs
Notes: Various services of a full service advertising agency. These
agency services consist of:
Account services – this is the link between the agency and its clients.
The account executive is the liaison and focal point of the agency-client
relationship. They are responsible for understanding the advertiser’s
marketing and promotions needs and interpreting them to agency personnel.
Marketing services – includes marketing research and media
planning. Account planners gather information that is relevant to the client’s
product or service to be used in the IMC campaign. Media departments
analyze, select, and contract media sources.
Creative services – is responsible for the creation and execution of
advertisements. Copywriters and artists are specialists in this department.
Additionally there is a production department that coordinates all phases of
production of advertising and other creative work.
Management and finance services – includes such things as
performing basic operating and administrative functions, such as accounting,
finance, and human resources. It must also try to generate new business.
are many activities and personnel involved in the planning, creating,
and production of ads. The coordination of their effort is critical to the
success of an IMC program.
Why Agencies Lost Clients:
 Poor performance
 Poor communication
 Unrealistic client demands
 Personality conflicts
o Declining sales
o Payment conflicts
o Policy changes
 Personnel changes
 Changes in size of client or agency
 Conflicts of interest
 Change in client’s strategy
Notes: Some of these are avoidable, while others may be beyond the
agency’s control. Recognizing these warning signs promptly can give an
agency the time it needs to adapt its programs and policies, with the
objective of trying to keep the client satisfied.
Ad-Investment Considerations
 Elasticity a measure of how responsive the demand for a brand is
to changes in marketing variables such as price and advertising
Ad Spending, Advertising Elasticity and Share of Market
 Share of Voice how much a firm spends on advertising relative to
other brands in the category
 Advertising Strength: Share of Market the predicted market share
of a firm based on its advertising spending in comparison to the
total level of advertising by all firms in its category
Segmentation and Targeting:
Targeting and Measuring Advertising Effectiveness
02/22/2016
Market Segmentation division of the total market into smaller,
relatively homogenous groups
 A process that involves searching for a relatively homogenous
cluster in a heterogeneous market
 The result is a segment – a group of customers, existing and
potential, with common needs, values and responsiveness
o Ex: male vs. female
Notes: What is the benefit to segmentation?
Market Segmentation Process
Consider the customer needs and benefits sought, then decide on:
 Market segmentation:
o Identify bases (e.g., behavior, demographics) to segment the
market
o Develop profiles of resulting segments
 Market targeting:
o Develop measures of segment attractiveness
o Select the target segment(s)
Consider the customer needs and benefits sought, then decide on:
 Market positioning - key feature, benefit or image that a brand
stands for in the target audience’s collective mind
o Develop positioning for each target segment
o Develop marketing mix for each target segment
 Develop a relevant profile for each segment
o In-depth analysis helps managers accurately match buyers’
needs with the firm’s marketing offerings
 Forecast market potential
o Market potential sets the upper limit on the demand
competing firms can expect from a segment
  Forecast probable market share
o Comes from analysis of competitors’ market position and
development of marketing strategy
 Select specific market segments
o Use demand forecasts and cost projections to determine
profits and the return on investment from each segment
 Marketers weigh more than monetary costs and benefits
Targeting
 Targeting Specific Audiences
o Is considered the starting point for marcom decisions
o Allows for precise delivery of marketing communications to
targeted markets
o Prevents wasted coverage to people falling outside the
targeted market
Notes: If they aren’t the intended market, don’t waste your time
focusing on them… focus on the group you will increase share from?
Sweeps – determine how many people watch each show so how much
they can spend on advertising
 Choosing a Targeting Method
o How difficult is it to obtain data about the characteristic to be
used in targeting consumers?
o How predictive is the characteristic of consumer choice
behavior?
Measurable Consumer Characteristics:
 Behavioral segments: previous behavior, what are they going to do
now
o Best predictor, most difficult to measure
 Psychographics: what do we value, attitudes
o Aware of how they think, tougher to measure
 Demographics: visible, straight-forward, easy to quantify (age,
gender, race)
 o Easy to measure, not that predictive
 Geodemographics: location, different needs
o A little more predictive of behavior

Behaviorgraphic Targeting
 Behaviorgraphics
o Describe how people behave with respect to a particular
product category or class of related products
o Assume that the best predictor of future behavior is past
behavior
 Not everyone is going to make those purchases in the
same place
 Online Behavioral Target
o Tracks the online site-selection behavior of users as to enable
advertisers to serve targeted ads
 Privacy Concerns
o Technological advances increase the ability to serve
consumers at the risk of invading their privacy
Psychographic Targeting
 Psychographics
o Describe aspects of consumers’ psychological make-ups and
lifestyles as they relate to buying behavior in a particular
product category
 Attitudes
 Values
 Motivations
o Yankelovich Mindbase
o VALS (Values and Attitudes)
 VALS Psychographic Segments:
Innovators successful, sophisticated, take-charge, with high self-
esteem
Thinkers mature, satisfied, comfortable and reflective; valuing order,
knowledge and responsibility and motivated by ideals
Believers conservative, conventional with concrete beliefs based on
traditional, established codes: family, religion, community and the nation;
motivated by ideals
 Achievers motivated by the desire for achievement; have goal-
oriented lifestyles and a deep commitment to career and family
Strivers trendy and fun loving; motivated by achievement out of
concern about the opinions and approval of others
Experiencers motivated by self-expression; are young, enthusiastic
and impulsive consumers; quickly become enthusiastic about new
possibilities but are equally quick to cool
Makers motivated by self-expression; express themselves and
experience the world by working on it and have enough skill and energy to
carry out their projects successfully
Survivors live narrowly focused lives; with few resources with which to
cope, often believe that the world is changing too quickly; are comfortable
with the familiar and are primarily concerned with safety and security
Geodemographic Targeting
 Geodemographics consumers who reside within geographic
clusters such as zip codes or neighborhoods also share demographic
and lifestyle similarities
o Typical Clusters (PRIZM NE)
 Bohemian Mix
 White Picket Fences
 Suburban Pioneers
Valencia, CA 91355
 Brite Lites, Lil City- upscale middle age w/o kids
 Middleburg Managers- Upper mid older w/o kids
 Second City Elite- upscale older w/o kids
 Up-and-Comers- upper middle younger w/o kids
 Upward bound- Upscale Middle Age w/Kids
Demographic Targeting
Major Demographic Aspects:
 Age structure of the population
 Changes in household composition
 Ethnic population developments
Demographic Trends
 World Population Growth
o 6.67 billion (2009) to 8 billion (2025) to 9 billion (2050)
 Changing Age Structure in United States
o Median age will increase to 38 by 2025
o More middle-aged Baby Boomers
o Fewer children, teenagers, and young adults due to decreased
birthrates
Demographic Segments by Age Group
 Preschoolers (5 years or younger)
 Elementary-school-age children (6-11 years)
 Tweens (8-12 years)
 Teenagers (13-19 years)
 Millennial Generation or Generation Y
o Highly conformist, narcissistic, and fickle consumers
 Young adults (20-34 years)
o Generation X (Baby Busters)
o Up & Comers, Bystanders, Playboys, and Drifters
 Middle-Aged (35-54 years)
o Younger baby boomers and older Gen Xers
o Target category for luxury goods and youth
 Mature Consumers (55 years or older)
o Are 23% of the total U.S. population
o Have highest discretionary income and most assets
o Census Bureau classification: Olders (55 to 64); Elders (65 to
74); and the Very Old (75 and over)
o Descriptive groups: Healthy Hermits, Ailing Outgoers, Frail
Recluses, and Healthy Indulgers
The Ever-Changing American Household
 Household an independent housing entity, either rental property or
owned property
 U.S. Households:
o Growing in number, shrinking in size and changing in
character
o Married couples with children now represent less than one-
third of all households
o Single person and unrelated persons households are a
growing market
Ethnic Population Developments
 Changes in the U.S. Melting Pot
o More diversity in the overall population
o Growth in all ethnic groups
 Implication for Marketers
 o Need to devise marcom strategies to meet ethnic groups’
unique wants/needs
 African Americans
o Average age that is considerably younger than that of whites
o geographically concentrated, with three-fourths of all blacks
living in 16 states
o Tend to purchase prestige and name-brand products in greater
proportion than whites
o Have spending power that totals nearly $800b annually
 Hispanic Americans (Latinos)
o Are the largest U.S. minority population segment
o Are not a single unified market
 Does not mean that they are all the same (different
language, etc)
o Are underserved by current marketing efforts
o Are responsive to advertising in their dominant language
 Univision: powerful
 Asian-Americans
o Represent many nationalities
o Are the newest “hot” ethnic market
o Are better educated
o Have higher incomes
o Occupy more prestigious jobs
o Variety of languages
o heavy internet users
 o Respond to marketing programs reflecting their values and
lifestyles
Market Targeting
 The 5 criteria for Effective Segmentation (next slide)
o Measurable – degree to which useful information exists on the
segment
 Demographics, VALS, Prizm, etc.
 If the segment is not easily measured, you can still find
creative ways to predict the segment
o Substantial – is it large enough to be profitable?
 Not necessarily just # of people
o Accessible – can we reach the segment with our IMC
campaign
o Differentiable – are they distinct from other markets?
 Will different segments react differently to the
differentiated IMC?
o Actionable – can your IMC be formulated and implemented
 Funds?
Target Market Selection Strategies
 Undifferentiated Marketing
o Strategy that focuses on producing a single product and
marketing it to all customers; aka mass marketing
 Differentiated Marketing
o Strategy that focuses on producing several products and
pricing, promoting and distributing them with different
marketing mixes designed to satisfy smaller segments
 iPhones; different types
 Concentrated Marketing
o Focusing marketing efforts on satisfying a single market
segment; also called niche marketing
 o Approach can appeal to small firms or to firms that offer
highly specialized goods and services

Positioning…Chapter 5 continued
When we think about positioning…
 How can our product best serve the needs of the customer?
 What do we emphasize?
Two key things necessary for good positioning…
 Reflect a brand’s competitive advantage
 Motivate consumers to action
Recall: Customer-Based Brand Equity Framework
 Brand Awareness – if a brand comes to mind when consumers think
about a product category evoked.
o Brands of toothpaste – what comes to mind? Crest?
 Two levels of brand awareness are:
 Brand Recognition being able to identify a brand on a list, or if a
hints/cues are provided
 Brand Recall being able to identify a brand without any reminders
So How do we Position our Product?
 Attributes
o Non-product related
o Product related
 Benefits
o Functional – intrinsic
 o Symbolic – extrinsic
o Experiential – usage imagery
Benefits vs. Attributes
 Attributes are characteristics of the product
 Benefits are advantages (positive consequences) to using the
product
Notes: Product-related attributes vs. functional benefits
Why is the product better than the competitor; what are the specific
features of the product (certain brand of vitamins is more readily absorbed
than the competition)? VS. What problems (in a more general sense) does
the product solve (vitamins improve your health)?
Non-product related attributes vs. symbolic benefits
The personality of the product itself VS product represents who you
want to be
Attributes Non-Product Related
 Usage imagery depicts brand in terms of specific, hopefully unique,
usages associated with it
o Ex: Cannondale bites  rugged, able to climb the mountain
 Position in terms of the kinds of people who use them
o Ex: Kate Spade #MissAdventure
Notes: Attributes (qualities/features of the product)
Product related- specific advantages of the product over the
competition (Product A is better than/preferred over Product B)
Non-product related- If you had to describe the brand as a person,
what adjectives come to mind or how would you describe the personality?
what sorts of people use those products; what are the personalities of those
individuals/brand?
 Patagonia is outdoorsy, environmentally friendly, independent
 Disney- magical, family friendly, happy
Attributes – Product Related
 What are the benefits sought by the consumers?
  What are the product’s advantages compared to competitors?
 Indicates better than competitors
o Ex: Sensodyne toothpaste  provides sensitivity relief
o Ex: Aleve --? Headache relief that lasts all day
Benefits – Functional
 Solves consumer’s current or potential consumption-related
problems
o Regular appeals to convenience, safety, good health,
cleanliness, etc.
Notes: Benefits (how the product aids the consumer)
Functional- what can the consumer get out of the product? What
problems (in a general sense) are solved by this problem?
Taking vitaminsà improved health; short on time? à meals that can be
made quickly with little/no effort
Symbolic- displaying the product is a way of displaying who the
consumer wants to be
I want to be seen as someone wealthy/high status, so I purchase a
Bentley
Experiential – what do you experience by consuming the product?
Benefits – Symbolic
 Associate brand with desired group, role or self-image
 Display products related to who the consumer aspires to be
Benefits – Experimental
 Provide sensory needs and/or cognitive stimulation
o Ex: Dove chocolate
Perceptual Maps
 Use:
 o To learn how brands in the market are perceived
o To learn what is desired by consumers and whether those
desires are already being fulfilled
o To construct a model for predicting consumer preferences and
market share for new or modified products
 How are you perceived now?
 How do you want to be perceived?
Notes: A positioning map is a tool that graphically illustrates
consumers’ perceptions of competing products within an industry by
presenting two characteristics (such as price and quality) to show differing
views of a product, service, or retailer
Repositioning refers to changing the position a product holds in the
minds of prospective buyers relative to the positions of competing products
Changes in the competitive environment may force marketers to
reposition their products
To gain greater market share, they may even reposition highly
successful items
Perceptual Maps tell you…
 Who is your competition
 What segments are being served
 If you modified a product (or it’s perception), who you would steal
share from
 If you developed a new product, what segment would be best
o fits with a current segment
o manageable competition
Exam 1 Review 02/22/2016
50 questions multiple choice
questions are application based
Positioning maps
Differentiation: a brand having multiple lines within it
 Dove for men, Dove for women, Dove Naturals
Concentrated: serve a very small population
 Surf shop – selling surfboards to surfers
 Smaller, narrow market
Sample:
Merck Worldwide a pharmaceutical company, is involved in the
research, development, manufacture and marketing of prescription
medicines. A new drug to treat chronic cell phone addiction was developed..
General Electic combines metal, rubber and other components in the
production of appliance. In doing so the company creates _______ utility.

Into to IMC/Role of IMC

 Why has there been a shift from advertising to an integrated
marketing communication plan? Why has IMC grown in importance?
 Understand what the marketing and promotions process model
looks like (don’t need to be able to fill in, but understand what the
process entails)
 Traditional marketing vs. contemporary IMC
 Promotional mix (advertising, direct marketing, interactive/internet
marketing, sales promos, publicity/PR, personal selling)
Communication Challenges
 Basic IMC issues
 Brand equity, image and personality (difference)
 How to increase brand equity
Logos and Brand Names
 Characteristics influencing adoption
 Important elements of good brand names
 Good logos
Ad functions
In-house, ala carte, full-service (differences)
Why agencies lose clients
Segmentation, Targeting and Positioning (strategy)
 Types of targeting characteristics (i.e. demographics,
psychographics etc.)
 Market segmentation process
 Ethnic population developments
 Targeting selection strategies
 How to position products (brand image stem)
Readings (broad strokes)
Feed Communities:
Cultivating Nutrition Together 02/22/2016
Mission Feed Communities is dedicated to creating community food
security by cultivating a sustainable food network
 Want to change:
o Mission, vision, 3-year plan, marketing
Strategic about switching names without losing brand recognition
Feed Fayetteville…old name for 5 years
Feed Communities began 2 years ago
Current Programs:
 Plant A Row
o Local gardens, farmers encouraged to grow an extra bed,
raised bed or even container of produce and donate it to
those in need
 Social media, flyers, mailers
 Farm a Preschool
o Goal to increase access and exposure to gardening, healthy
home-grown food and knowledge
 Neighborhood Garden
o Open garden
o Partnered with Fayetteville Public Library
o Fayetteville Farmer’s Market
 Display, infrastructure
 Tool Library
o Gardening tools and carpentry
o Check them out like a book at the library
o Tool Drive: donate old tools
  Cooking Class
o Lifestyles: tailored cooking classes for people with disabilities
o Crockpot Cooking: Food Pantry teach future
Partnership with UAMS Northwest
Three-year project grant
Goal is to increase healthy food access to undeserved populations in
NWA
Work: establish community gardens, partner with local food pantries
and community meal programs

Preliminary Marketing
Currently use Facebook mostly
 Women 30-40s
 2 accounts: Feed Communities and Feed Fayetteville
 Need to transfer over to FC only
o Plan for that
Twitter
 Help
 2 accounts FC FF
 Trying to delete FF account
Instagram
NEED SOCIAL MEDIA STRATEGY
 Plan posts and timing
 Healthy recipes
 Scheduled
o *Should do something so that the community can post their
own pictures and plants growing
Websites
 Two FC FF
 www.feedcommunities.org
 Disregard FF
 NEED TO MAKE TRANSITION TO FC
o We do everything for FC its up to date
 Put message to go to FC on FF website
Online Newsletter: MailChimp
Goal is to get one out monthly…hasn’t been happening
 Volunteer list
 Subscriber list