Final Exam Study Guide
Final Exam Study Guide ADV 3008
Popular in Principles of Advertising
Popular in Advertising
verified elite notetaker
This 11 page Study Guide was uploaded by Leticia Notetaker on Friday April 22, 2016. The Study Guide belongs to ADV 3008 at Florida State University taught by Barry Solomon in Summer 2015. Since its upload, it has received 108 views. For similar materials see Principles of Advertising in Advertising at Florida State University.
Reviews for Final Exam Study Guide
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 04/22/16
PRICE INCENTIVE SALES PROMOTION Integrated Marketing Communication o A management concept designed to make all aspects of marketing communication work together as a unified force o Advertising, sales promotions, & public relations Sales Promotion (not advertising) o A direct inducement which offers an extra value or incentive for the product to the sales force, distributors, or the final consumer with the primary objective of creating an immediate sale Incentive to behave in a certain way; short term behavior oriented o Advertising vs. Sales Promotion Creates an image over time, long term Relies on emotional appeals; advertising to the heart, sales promotion usually dealing with price Contributes somewhat to profitability, creates demand; long term profitability Adds intangible value; changes perception, not the actual product o Sales Promotion vs. Advertising Creates immediate action, short term Rational appeals; BOGO, 20% off Contributes significantly to short term profitability; sales promotions last a short time Adds tangible value, more for your money; buy 1 get 3 o Coordinating Promotions Awareness before promotion Speak with one voice; keep styles, target market, etc. the same Behavioral Learning o Future behavior is determined by reinforcement accompanying past behavior; ex training a dog o Promotional tools act as reinforcers along with product performance (primary reinforcement) to increase the profitability of repeat purchase Ppl won’t take advantage of a promotional incentive if they don't like the product Promotions can't save bad products Shaping o The process of learning a complex behavior by learning a series of successive approximations of the final behavior o Errors in implementation Improper fading of the incentives Overuse; ppl won't buy a product at regular price bc they are accustomed to buying it on sale (conditions the shopper) Price Oriented Promotional Tools o Samples Product given to consumer free of charge Opportunity to try the product before making a purchase Eliminates financial risk & inconvenience o Samples are effective when A brand is clearly superior; give it away, acting on promotion vs. Just stating it Product comes in limited varieties; many options to choose from, makes it easier to try samples Purchase cycle is short; many opportunities to use product Attitudes or behaviors must be created or changed; expensive bc companies are giving it away Change the way ppl perceive the product, ex test drives Coupons o Certificates presented to a dealer that give the bearer a stated savings on the purchase of a product o Likely users are current users of the product, already know what they're getting Retains current users, keep buying the brand Encourages brand switching, want to attract non loyal shoppers Increase in-home inventory, long term purchase; increases the amount of product a customer has at home Lengthens purchase cycle, cheapens due to consumer 'shaping' Money Refunds/Rebates o A partial refund following a purchase, usually higher priced items (automobile, electronics) Consumer purchases product, mail in proof of purchase, refund sent at a later date (6- 8 wks.) Redemption problems o Delay of reinforcement, society wants things now Decide between paying less now or getting money later o Effort required, fill out forms, wait for mail o Cheapens value o Stimulates short term action ADDED VALUE SALES PROMOTION Added Value Promotions o Product is sold at full price, customers get more for their money, doesn't reduce price/value ratio (ps4 coming with a $50 gift card, ps4 same price but customer feels like they're getting more) o Premium - an extra item offered at a low price or free as an extra Gives you more w/o charging less; gift card with tire purchase Encourage brand switching, trade up a larger size (buy a large instead of a medium & get free breadsticks), increase repeat purchase, put a long term message in front of the consumer Methods of distribution In a package; buy cereal, toy in box In store; come into the store, get free gift wrapping Package itself; souvenir cup Mail & online Sweepstakes o A game where all participants have an equal chance of winning without cost to enter Effectively build short term sales, increased engagement & awareness o Odds of winning Small prize winning is more frequent, major prizes are Lottery o Sweepstakes but with a charge to enter o Illegal for businesses bc they were historically ran by organized crime o Donations from non-profit organizations Contest o Winners selected based on skill &now charge to enter Promotions to Retailers o More money spent than on consumer promotions Objectives; retail incentive to push vs. pull promotions, Push the product on to the shelves vs. pulling them off for the consumer maintain or increase distribution maintain or expand shelf space; more space or better placement in the isle Preempt competition Change consumer purchase patterns making the product more available o Types of retail promotions Buying allowance - manufacture gives discount (largest) Temporary price reductions ( incentives to buy more advil); everyone wins From manufacturer to the retailer (2nd largest) Advertising allowances - co-operative advertising Payments by the manufacturer to the retailer Funding of the retailer's advertising of the product Contests; between retailers to see whole can sell the most of a product Sweepstakes; advertise about new packaging & be on the lookout for it by having a sweepstakes Points of Purchase (P.O.P.) Promotional materials placed at point of purchase More likely to grab a product & when you are at the store ready to make a purchase Types of P.O.P. Outside signs, window displays, counter displays, display racks, banners, posters, shelf talkers P.O.P. Objectives Increase consumer learning (table tents) Increase purchase behavior (see a brand at the end of an isle, more likely to be seen & bought) Low cost production & implementation; don't cost as much as typical type of advertising Ease of evaluation; look a sales levels before & after the promotion Good P.O.P. for Retailers Monetary incentive; reduce price, ad allowance Tied to other items; tie peanut butter to jelly or bread to help increase sales Easy to set up; likely for retailer to set up, quicker & cheaper PUBLIC RELATIONS Public Relations - a management function that formulates & executes a program action to earn the understanding & goodwill of its publics o Not free advertising; nothing is free Differences between advertising & public relations o Goals Advertising; inform, persuade, & remind target to buy specific brands & products Public relations; favorable attitudes, develop understanding & goodwill o Credibility; PR seen as more credible o Cost Major advertising costs = media time & space Major PR costs = non-media Interest o Advertising = editorial interest not very important o Public relations = critical to success o Personnel Advertising = more likely to have a business background Public Relations = more likely to have a journalism background Similarities between Advertising & Public Relations o Stimulate interest in a target group, research based situation analysis, specific objectives, detailed knowledge of media Reasons to Use Public Relations o Relatively inexpensive compared to advertising o Cuts through advertising noise o Highly credible o Develop new sales leads & reach areas that advertising doesn't o Difficult to reach some publics Corporate Image Advertising (CIA) o An umbrella of advertising that is for the benefit of the overall company image rather than for individual products o CIA relationships to PR Share the same objectives as public relations; understanding goodwill Paid time provides greater control over message & media o Corporate Image & Product Advertising Differences Direction - overall image, for the company; not specific products Tangibility -corporate image is less tangible than product attributes Upper management involvement - affects entire company o Corporate Image & Product Advertising Similarities Gain attention, involve the audience, build credibility, get action o Types of Corporate Advertising Messages General image – designed to enhance the basic image of the company Financial – creates a favorable image in the financial community Advocacy – attitude or behavior with the public on a specific issue & often controversial Recruiting – presents the company favorably to prospective employees Special situation – corporate giving (financial giving for a cause) Corporate Advertising Problems o Lack of clear cut purpose o Lack of results measurement; objectives are less than measurable o Little knowledge about what works o Basic lack of research; prevents corporate advertising from reaching full potential BUDGET STRATGIES Predetermined Methods o Allocation is determined in advance of advertising task analysis Affordable (method) - non-advertising expenses & the desired profit are deducted from projected revenues & part of what's left the budget closest to household method Problems o Least sophisticated & the simplest o No situation analysis o May lead to under spending Percent of Sales (method) - budget is some percent of past or projected sales Most companies use projected sales (forward thinking) Problems o No situation analysis - predetermined o Difficult to use with new products – no sales history o May lead to under spending o Able to maintain % of spending only if financially stable Competitive Party – company's share of industry expenditures on advertising should equal its market share Increased spending doesn't always lead to increased sales Don't have to be the biggest company to still be competitive Increase market share by increasing spending; increase spending doesn't always lead to increased sales Objective & Task; look at what needs to be done o Situation analysis o Set objectives, identify strategies, estimate costs (that it would take to implement strategies) o compensation Budgeting for New Products o Larger budgets needed o Awareness o Trial; important that trial base is large 50% of ppl that try a product, don't try it again o Double the budget – (of an already established company) Spend money on more, that way if you lose half you still have a customer base to work with Agency Compensation o Commission - dying out bc agencies are doing less traditional work o Fee - pay as you go (hourly); seen more today o Combination - commission on media, fee based for creativity o Other (ex. bonus structure) Retainer - fixed monthly bill regardless of the work performed; evens out at the end of the year RETAIL ADVERTISING Retailing - the activities involved in selling goods or services directly to final consumers for their personal use o Largest retailer in country; Amazon Retail Advertising Tasks o Reduce excess inventory, create awareness & a unique position Differences between Retail & Product Advertising o Immediacy Generate sales to reduce inventory o Product vs. Location Retail advertising stresses location Advertise products, but don't always specify where to buy it from o Breadth (width) of Product Line Retail reach has to be wide Balance advertising across thousands of products Only constant in the store o Geographic Coverage Often focuses on a specific geographic area This is not the case with online shopping Different regions have different customers & that is reflected on the products sold Less wool coats sold in Florida than in New Jersey Match the product with the region Types of Retail Advertising o Regular price line advertising Focuses on the product line & regular prices No sale or price mentioned Positioning advertising; design brand identity, Image oriented Long term; does not move product quickly o Sale advertising (most common) Reduce prices for a limited time Short term response Creates a sense of urgency Not as image oriented as price line o Clearance advertising Very immediate Extreme sale advertising Least image oriented Retail Media Selection o Media selection issues Local media & short term results o Print media Newspaper; short term results More money is spend on newspaper ads by retailers than any other media Magazines o Broadcast Television Effective for both sale & regular price line Short term results bc you can run a lot of ads in a short amount of time Radio Effective with narrow target markets Reduce wasted coverage o Direct mail Digital or physical mail Easiest to reach existing customers ; know buying pattern, individual messages Geographic trading area - can target customers based on location o Out of Home Limited use; long term messages, less effective for retailers New electronic billboards can advertise for multiple retailers Regular price line Geographic segmentation; advertise where ppl are likely to be o Internet Rapidly growing Social media, stimulate interest Location based advertising Cooperative Advertising o Co-op advertising - manufacturer pays for all or part of the retailer's advertising of that product (ex. Nautica & Macy's) o strengths Stretches the budget (new money) Leverage with media; can purchase more per dollar Tie in to national quality products; enhance identity of retailers Advertisements are supplied o Weaknesses Contrasting goals Message & media restrictions Message Strategy o Information vs. Image High involvement-focus on info Low involvement-focus on image Relationship to national; advertisers'; closer the tie, less focus on image on info Strong tie-in Let national company create image Focus retail ad on info o Creativity on a Limited Budget Create consistent messages; easily identifiable Avoid ads that don't stand out Focus on short & long term goals o Relevant issues Short life so rapid impact is needed Grab the reader/viewer/listener… NOW o Sales promotion Significant component of retailing Both focus on short-term behavior Budget considerations o Percent of sales is the most common o Co-op advertising increases the budget & extends the messaging (strengthens the budget) o Image vs. sales; combination of both is needed depending on company needs o Charity vs. advertising Charity is not advertising Set up on a separate budget; don't have to pick between charity or other work Long term charity money is good for the company's short term image Larger Budget Needed o Less favorable location; if far away ppl have to spend money to get to you o New or expanding locations o Changing positioning strategy o Strong competition o Price strategy; risky bc competitors can match the price BUSINESS TO BUSINESS Business to Business Business Market Diversity o Industrial; manufacturing & technology o Government; local, state, & federal Not a consumer market Purchase billions of $ worth of products per year o Professional; financial, legal, & health care Financial industry B2B - used in producing consumer goods, other business or industrial goods & services, &/or facilitating the operation of an enterprise Differences between Business & Consumer Markets o Final users include middleman & industry Dasani buys the labeled water bottles & then sells them to us (the consumer) o Complex buying situations Company buying customized electronics for sales employees o Key decision makers may be outside the company Companies will bring in consultants to help decide on which agency would work best for them o Sales reps often needed Go to the store to buy a product & a rep is needed to assist you Goals of B2B Advertising o Increase awareness & knowledge of product, company, & capabilities o Lower the cost of selling Market Issues o Markets are small & concentrated o Each customer is large o Consumer demand often drives market o Minimal secondary data compared to consumer market o Segmentation Geography & size of company Product Issues o Technical & complex can be useful for a variety of business types & so the advertising is very general to reach to a wider market o Built to specifications; selling products to specific companies Buying Issues o Professional buyers More straight forward; not likely to be swayed by ads, celebrities, or humor Pricing & Distribution Issues o Negotiation or bid; short, often direct business channels o Different business are using the products differently, there is not always a set price Media selection o Trade publications; dominant buyers Digital or hard copy; limited wasted coverage o Direct mail Small targets, minimal wasted coverage, & detailed presentation o Internet Home pages, search engine optimization, & banner ads o Consumer Media Used with broad target markets Magazines, network tv Message Strategy o What to ay Product & company attributes Price is often not mentioned Priorities differ in different departments of the company o Rational vs. emotional messages More rational than consumer advertising, but emotional is still important o How to say it Testimonial; experts & peers, rarely celebrities Experts are credible & knowledgeable Case history; 3rd person version of a testimonial Demonstration; show what the product does News; new product info Generic; positions the company as expert in the field Sales Promotion o Trade shows - companies in a specific industry showcase & demonstrate their new products; generally not open to public o Specialty items; keeps the company name in front of the customer (logo) o Samples; short purchase cycle, lower priced items SERVICE ADVERTISING Service – an object of a transaction, which does not involve the transfer of ownership of a tangible product o Ex. car insurance; you get coverage, not a tangible product) Elements of a Service o Task or work; haircut, mani-pedi, auto mechanic o Use of a facility; golf membership, movie theater, hotel o Use of a product; gym membership, rent textbooks or cars Service Advertising Characteristics o Intangibility Intangibles are more difficult to assess, more emotional Difficult to portray in advertising May need more advertising = more money o Inability to Store the Service Highly perishable services use strong price advertising & promotions; limited seats on a plane, once the plane leaves those seats are gone o Inability to Transport the Service Some service providers may serve limited geographic areas; fully booked hotels cannot sell more rooms than they have o Quality Control Multiple production centers may mean variable quality control; increases the chance of inconsistent quality to between locations Advertising may create expectations that can't be met due to lack of quality control There is so much human interaction dealing with a service, hard to be 100% consistent o Managing Demand Price is the primary response & key to successful service advertising Private Sector Services o Convenience; time & place savings (ex. ATM & mobile banking) o Shopping; difficult to evaluate prior to usage (ex. Hair salon or restaurants) o Professional; healthcare, legal, financial (ex. Ally bank) Social Marketing (non-profit) o Issues (intense, unsettling), ideas, non-profit organizations & government o Problems (mostly ineffective) Weak personal benefits & limited personal satisfaction Questionable demand; no market research to establish demand (ex. Giving blood) Psychic costs; non-financial costs associated with change in behavior Insufficient budgets; biggest obstacle for social marketing CONCLUSION Effects on Society o Motivates Consumers Creates brand preferences Shifted focus from product to brand o Showcases Competitive Advantages Discussion of unique benefits Maintain strong competitive position Ex. Wendy's 4 for $4 inspired Burger King 5 for $4 & McDonald's McPick 2 o Improves Products Clear benefit when improved products meet needs o Communication Most cost efficient way to communicate with a mass market Economic Issues o Advertising results in higher prices? - depends on the situation No clear evidence Effects price less than other expenses; labor & materials increase May increase price? Product is truly different; 4 for $4 advertising lead to more sales Little or no competition; able to change more Mature product category – increased spending Perceived differences are small Image advertising May reduce price? Competition is intense; keeps prices in check (price matching) Product category is growing Advertising creates demand bc economies of scale kicks in o Barrier to Entry High cost of product introduction o Market Concentration Limited competitors in a product category could result in higher prices; less choices = higher price o Product proliferation Too many brands Only as many as the market will bear; fewer brands in some categories & many in others Consumer Decision Making o Manipulation Won't occur if marketing concept is followed Needs must exist for product to be a success Advertising reflects high value on material wealth More likely to occur with low involvement products; not likely to be manipulated into buying a car o Advertising doesn't provide complete information; it is not designed to Advertising is advocacy; don't expect full info More info doesn't always lead to better decision-making o Advertising misleads, deceives, & is full of lies This does occurs, but less than it appears o Advertising is offensive & tasteless If ppl were really offended, they wouldn't buy the product Those most likely to be offended are not members of the target market Who gets to judge? First amendment Freedom of speech Careers in Advertising o Advertising agency Highly competitive & low starting salaries o Advertising department Usually not entry level – experienced ppl Work your way into advertising o Media vehicle Sales Production; radio stations & newspaper ads o Production company Specialized boutiques make contracts with other agencies o Research company Advanced degree often required – beneficial
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'