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1、Advertisings Role in Marketing,Advertising Principles and Practices,Questions Well Answer,What is marketing and what are its key concepts?What are the different types of markets,and how do they relate to the marketing process?Who are the key players in marketing?How are agencies organized,and how do
2、 they work with their clients?,2-2,Prentice Hall,2009,Pumas Brand Evolution,What were the key decisions behind Pumas brand strategy?How does Puma communicate its“cool”brand image?,Visit the Site,2-3,Prentice Hall,2009,2-4,What is marketing?,Traditionally,marketing is the way a product is designed,te
3、sted,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 Associ
4、ation,WHAT IS ADVERTISING?,2-5,Key Concepts:The Marketing Concept,Marketing should focus first on identifying the needs and wants of the consumer,rather than building products the consumer may not want.Market-driven companies include Dell,Harley-Davidson,Intel,UPS.Two steps of the marketing concept:
5、Determine customer needs and wants through research.Develop,manufacture,market,and service goods that fill those needs and wantssolve customers problems.,Example of Consumer-First Approach,Do you think this is a believable ad?Does it ring true to you?Do you think it works to attract new customers to
6、 the Discover card?,6,2-6,Prentice Hall,2009,Consumer vs.Corporate Focus,7,2-7,Prentice Hall,2009,2-8,Key Concepts:Exchange,Exchange is the act of trading a product or service for something of value(money)Two types of exchange:economic and communication,2-9,Key Concepts:Differentiation nad Competiti
7、ve Advantage,A brands competitive advantage is where its different from its competitors and superior in some way.In marketing,this concept is called differentiation.Areas of differentiation include:PriceDesignPerformanceDistributionBrand imageReliability(Maytags lonely repairman),2-10,Key Concepts:A
8、dded Value,Added value is a marketing or advertising activity that makes the product more valuable,useful or appealing to consumers.Other ways to add value:More convenient to buyLower priceMore useful featuresHigher qualityStatus symbolMore knowledgeable employees,2-11,Key Concepts:Branding,Branding
9、 is the way marketers create a special meaning for a product.Brand image is based on communication and on the consumers personal experiences with the product.Brand Equity refers to the financial value based on the reputation and meaning the brand name has acquired over time.,Principle:Effective bran
10、ding transforms a product by creating a special meaning based on an emotional connection.,A Motorcycle is a MotorcycleBut a Harley is Something Different,Visit the Site,12,2-12,Prentice Hall,2009,2-13,BrandCoca-ColaMicrosoftIBMGeneral ElectricIntelNokiaToyotaDisneyMcDonaldsMercedes-Benz,Market Value
11、($Billions)$67$57$56$49$32$30$28$28$28$22,Table 2.1 Most Valued Global Brands,Source:Interbrand Group;quoted in“Best Global Brands,”Business Week,August 7,2006,p.54.Reprinted with permission.,Ivory Soap:Its Pure and it Floats,How did Ivory become one of the most powerful brands of all time?What role
12、 did research play in building the Ivory brand?,Visit the Site,14,2-14,Prentice Hall,2009,2-15,Types of Markets,A market is a particular type of buyer.Share of market is the percentage of a product categorys total market that buys a particular brand.,Ads for Four Types of Markets,Which is which?Cons
13、umerBusiness-to-BusinessInstitutionalChannelHow are the four ads different?How are they the same?,16,2-16,Prentice Hall,2009,2-17,The Marketing Plan,Steps in the Marketing ProcessResearch the consumer marketplace and competitive marketplace and develop a situation analysis or SWOT analysis.Set objec
14、tives for the marketing effort.Assess consumer needs and wants,segment the market into groups,target specific markets.Differentiate and position the product relative to the competition.Develop the marketing mix strategy.Evaluate the effectiveness of the strategy.,2-18,The Marketing Plan,Marketing Re
15、searchResearch 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
16、:Marketing research is about more than just the compilation of information;it also produces insights into marketing situations and consumer behavior.,2-19,The Marketing Plan,Key Strategic DecisionsObjectivesincreases sales,share of market,or broader distribution Segmenting and targeting Potential cu
17、stomers 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 positioningThe point of differentiation position
18、s the product within the competitive environment,relative to consumer needs.Positioning is how consumers view the brand relative to others in the category.,2-20,The Marketing Mix,2-21,The Marketing Mix:Product,Considerations include product design and development,product operation and performance,br
19、anding,and physical packaging.Product design,performance,and quality are key to a products success.Design is important for fashion and clothing itemsPerformance is important for cars and computersQuality is important for upscale brands,2-22,The Marketing Mix:Distribution,The channels used to move a
20、product from manufacturer to buyer.Types of distribution:Direct marketing to consumerChannel marketing through resellers and retailersStrategic distribution decisions:Market coverage strategyPush strategies direct marketing to the consumerPull strategies direct marketing to resellers,Push,Pull,and C
21、ombination Strategies,2-23,Prentice Hall,2009,2-24,The Marketing Mix:Pricing,Price is based on:Cost of making and marketing the product and sellers expected profit levelAlso,based on what the market will bear,competition,economic well-being of customer,value of product,and the consumers ability to g
22、auge the valuePricing strategies:Customary pricing(e.g.,movie theaters)Psychological pricing for affluent customers,2-25,The Marketing Mix:Marketing Communications,Includes personal selling,advertising,public relations,sales promotion,direct marketing,events and sponsorships,point of sale,packagingP
23、ersonal sales uses face-to-face contact with customers to create immediate salesAn ad or direct mail piece may invite a potential customer to contact the company and the sales staff follows up on the“lead.”Marketing communication is about“Big Ideas”Creative concepts that get attention and stick in m
24、emory,2-26,Key Players:Marketer,The advertiser or client that is the company or organization who produces and sells the brand.The marketing function is usually handled by a marketing department headed by a VP or director of marketing.Some companies have a product or brand manager who handles marketi
25、ng and makes all strategic decisions about design,manufacture,and the marketing mix.(e.g.,Procter&Gamble).,2-27,Key Players:Suppliers and Vendors,They provide or produce the materials and ingredients that are sold to manufacturers to make products.This network of suppliers/vendors is the supply chai
26、n.In theory,every member of the supply chain adds value.In practice,every member of the supply chain is a partner in creating the product and marketing the brand.Ingredient branding acknowledges a suppliers brand as a product feature,2-28,Key Players:Distributors and Retailers,The distribution chain
27、 or channel of distribution refers to all the companies who help move a product from manufacturer to buyer.Wholesalers use personal selling,direct mail,trade papers,and catalogsRetailers try to draw their customers through advertising.The trade refers to upstream players(suppliers and vendors in the
28、 supply chain)and downstream players(companies in distribution chain),2-29,Key Players:Marketing Partners,Suppliers,distributors,and marketing communication agencies are partners in supporting the brand and maintaining good customer relationships.Affiliate marketing is a partnership in which one com
29、pany drives customers to another company and may get a commission for doing so.AebayBarnes&Noble,2-30,How Agencies Work with Clients,Agencies and agency networks(holding companies)Companies have internal advertising departments who act as a liaison between the marketing department and advertising ag
30、ency(ies).Also called marketing services Advertisers may have one agency of record(AOR)or several agenciesAgencies offer clients:Specialized servicesObjective adviceExperienced staffingManagement of all advertising activities and personnel,2-31,Marketing OrganizationOmnicom GroupWPP GroupInterpublic
31、 GroupPublicis GroupeDentsuHavasAegis GroupHakuhodo DY HoldingsaQuantiveAsatsu-DK,Worldwide Revenues($millions)$11,376.9$10,819.6$6,190.9$5,872.0$2,950.7$1,841.0$1,825.8$1,337.0$442.2$430.0,Table 2.2 Top 10 Agency Networks,Source:Agency Report:Worlds Top 25 Marketing Organizations,”Advertising Age,A
32、pril 30,2007:S-2.,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?,2-32,Prentice Hall,2009,2-33,AgencyDentsu DentsuMcCann E
33、rickson Worldgroup InterpublicBBDO Worldwide OmnicomDDB Worldwide Communications OmnicomOgilvy&Mather Worldwide WPPYoung&Rubicam Brands WPPTBWA Worldwide OmnicomJWT(WPP)WPPPublicis Worldwide PublicisLeo Burnett Publicis,Headquarters 06 Revenue(billions)Tokyo$2.49New York$2.13 New York$2.10New York$2
34、.08New York$1.71New York$1.59New York$1.52New York$1.50Paris$1.24Chicago$1.19,Table 2.3 Top 10 Consolidated Agency Networks,Source:Agency Report:Top Ten Consolidated Agency Networks,”Advertising Age,April 30,2007:S-4.,2-34,Types of Agencies,Full-service AgenciesOffer account management,creative serv
35、ices,media planning,account planning,accounting,traffic,production,and HRSpecialized by:Function(copy,art,media)Audience(minority,youth)Industry(healthcare,computers,agriculture)Market(minority groups)Creative BoutiquesSmall agencies focused on the creative product Media-buying ServicesFocused on pu
36、rchasing media for clients,2-35,How Agency Jobs Are Organized,Account ManagementServes as a liaison between the client and agencyThree levels:management supervisor,account supervisor,account executiveAccount Planning and ResearchActs as the voice of the consumerCreative Development and ProductionPeo
37、ple who create and people who inspireCreative directors,copywriters,art directors,producersMedia Planning and BuyingRecommend most efficient means of delivering the messageInternal Agency ServicesTraffic,print production,financial services,human resources,2-36,How Agency Are Paid,CommissionsA percen
38、tage of the media costFeesHourly fee or rate plus expenses and travelRetainersAmount billed per month based on projected amount of work and hourly rate chargedPerformance-basedBased on percentage of sales or marketing budgetProfit-basedGreater risk if campaign doesnt have desired impactValue Billing
39、Based on value of creative strategy or ideas,2-37,Accountability,Senior managers want marketing managers to prove that their marketing is effective based on:Sales increasesPercentage share of the market the brand holdsReturn on Investment(ROI)Agencies are creating departments to help marketers evalu
40、ate the efficiency and effectiveness of their marketing communication budgets.,2-38,Integrated(Holistic)Marketing,Focused on better coordinating all marketing efforts to maximize customer satisfactionAll areas of the marketing mix work together to present the brand in a coherent and consistent way.T
41、he goal is to manage all the messages delivered by all aspects of the marketing mix to present a consistent brand strategy.,2-39,Emerging Marketing Strategies,Relationship MarketingPermission MarketingExperience MarketingGuerilla MarketingDigital MarketingViral MarketingMobile MarketingSocial Networ
42、k Marketing,2-40,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 ne
43、w 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.,Discussion Questions,2-42,Discussion Question 1,Look through the ads in this textbook and find an example of
44、an ad that you think demonstrates the marketing concept and another ad that you think does not represent an effective application of the marketing concept.Compare the two and explain why you evaluated them as you did.,2-43,Discussion Question 2,Coca-Cola is the most recognizable brand in the world.H
45、ow did the company achieve this distinction?What has the company done in its marketing mix in terms of product,price,distribution,and marketing communications that has created such tremendous brand equity and loyalty?How has advertising aided in building the brand?,2-44,Discussion Question 3,Imagine
46、 you are starting a company to manufacture fudge based on your familys old recipe.Consider the following decisions:Describe the marketing mix you think would be most effective for this company.Describe the marketing communications mix you would recommend for this company.How would you determine the
47、advertising budget for your new fudge company?,2-45,Discussion Question 4,Three-minute debate:This chapter stressed integration of advertising with other components of the marketing mix.A classmate argues that advertising is a small part of the marketing process and relatively unimportant.If you wer
48、e in marketing management for Kellogg cereals,how would you see advertising supporting the marketing mix?Does advertising add value to each of these functions for Kellogg?Do you think it is a major responsibility for the marketing manager?What would you say either in support or in opposition to your
49、 classmates view.Organize into small teams with pairs of teams taking one side or the other.In class,set up a series of 3-minute debates in which each side has half the time to argue its position.Every team of debaters must present new points not covered in the previous teams presentations until the
50、re are no arguments left to present.Then the class votes as a group on the winning point of view.,2-46,All rights reserved.No part of this publication may be reproduced,stored in a retrieval system,or transmitted,in any form or by any means,electronic,mechanical,photocopying,recording,or otherwise,w
