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MKT 423_Final

by: Allie S

MKT 423_Final MKT 4230

Allie S
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About this Document

Promotional Strategy
Dr. Knowles
Study Guide
MKT, Marketing, Clemson, Clemson University, MKT423
50 ?




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This 71 page Study Guide was uploaded by Allie S on Monday April 25, 2016. The Study Guide belongs to MKT 4230 at Clemson University taught by Dr. Knowles in Spring 2016. Since its upload, it has received 38 views. For similar materials see Promotional Strategy in Marketing at Clemson University.


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Date Created: 04/25/16
▯ MKT 423 Promotional Strategy ▯ ▯ Ch. 1 ▯ Marketing ▯ What IS Marketing (pg 7) Activity, set of instruction and Processes FOR: o Creating (product), communicating (promotion), delivering (placement), and exchanging (price) offers  that have VALUE for customers, clients, partners, and society at large ▯ Exchange: o Involves parties with:  Each person has something of value to one another  Desire and ability to give up something to the other party – have to want and be able to give up something  Need a way to Communicate between the two parties Value: o Customer’s perception of benefits of a product/service against the costs  The balance between costs and benefits o Benefits  functional, experiential, and/or psychological  Functional Benefits  what capabilities/features does the product have  Ex: water – thirst-quenching effect on someone thirsty  Experiential benefits  New ways to extend/enrich a campaign  Psychological benefits  How something makes you feel o Ex: safe, cool, luxurious o Costs  Ex: Money, making a purchase, learning to use it, maintaining it, disposing of product  Time, effort, psychic, sensory, opportunity loss cost ▯ Marketing Mix Four P’s o Product – physical goods, benefits, or service o Price – the costs o Placement – distribution, logistics o Promotion – how you are marketing product  To develop an effective marketing mix, marketers must: o Be knowledgeable – know issues surrounding product/market; know customers/target market o Combine the elements – know how o Analyze market and use data – to ^^^ ▯ ▯ Integrated Marketing Communications (IMC)  Bundling marketing mix in a way to give a “face” to a branded product o Contemporary perspective, changing environment o Ongoing strategic business process ▯  Goal: generate Short-term financial returns, but want to BUILD long-term brand equity and shareholder value ▯  Criticism - Inside-out marketing approach ▯  Tools: o Social Media, Email Marketing, Multi-media Marketing, Print Media and direct mail, video, PR ▯ Promotional Mix  Coordination of all seller-initiated efforts to: o Set up channels of information and persuasion o Sell goods and services or promote an idea  The TOOLS that accomplish an prganization’s communication objectives ▯ *** A DM DI S PR PS ▯ ▯ Advertising  Any paid form of non-personal communication about an organization, product, or service  From an identified sponsor Benefits of Advertising  Cost-effective  Builds brand equity ▯ ▯ Advertising Classification 1. National 2. Primary 3. Selective 4. Retail/local ▯  Primary Advertising o Primary-demand = general product class/industry  Appeals to the masses  Selective Advertising o Selective-demand = specific company’s brand  Meant for a select target market  Retail/Local Advertising o Specific, local store  National Advertising o Specific company, but advertised nationally, indiscriminatively o Done by big companies, just need people to remember them ▯ ▯ Advertising to Business and Professional Markets  Business to business o B2B o Targets individuals who buy/influence purchase of industrial goods/services for their COMPANIES  Company X using GE’s electric or AT&T phone services  Professional Advertising o Targets professionals/encourages them to use a company’s products in their Business operations  Ex: medical magazines in a Dr. Office  Trade Advertising o Target Marketing channel members, encouraging them to stock/produce/resell the manufacturer’s branded products  Similar to whole sale/resellers  Target selling McCormick brand spices ▯ ▯ Direct Marketing  Communicating directly with target customers to generate a response and/or a transaction  Important terms: o Database management o Direct selling o Telemarketing o Direct-response advertising ▯ ▯ Digital/Internet Marketing  Interactive media o Users can participate in and modify the information they receive in real time  Social Media o Online means of communication and interactions  Mobile Marketing o Messages delivered to a consumer’s location or consumption situation  Advantages: + Interactive + Measurement ▯ ▯ Sales Promotion  Marketing activities that provide extra value or incentives to the: o Sales Force o Retailers o Ultimate consumer 2 Categories:  Consumer-oriented  Couponing, sampling, premiums, rebates, contests, sweepstakes, POP materials  Encourages an IMMEDIATE Purchase  Trade-oriented  Promotional/merchandising allowances, price deals, sales contests, trade shows  Wholesalers, distributor, retailers Publicity  Nonpersonal communications regarding an organization or its offering not directly paid for or run under identified sponsorship o Advantage + High credibility and low cost o Disadvantages - Not always under the control of an organization - Negative stories are highly damaging o News stories, articles, etc. o NOT PAID FOR by own company ▯ Public Relations  Tools used to evaluate public attitudes o Identifies policies and procedures o Systematically plans and distributes info  Attempts to manage the public’s image of their company ▯ ▯ Personal Selling  Person-to-person communication with intent to: o Sell/Purchase o Act on an idea o Tailoring messages o Immediate and precise feedback ▯  Contact/Touch points – Every opportunity a customer has to see or hear about a company and/or its brands or have an encounter or experience with ▯ Ch. 2 ▯ Marketing and Promotions Process Model ▯ ▯ ▯ Marketing and Promotions Process Model ▯ 1. Marketing Strategy and Analysis  Strategic Marketing Plan  Why have this plan? o To make better decisions, formulating specific marketing programs and policies, allocating resources  Where does it come from? o From an Organization’s OVERALL Corporate strategy plan 1) Opportunity Analysis – Where are we needed, where can we expand to, The 3 components for opportunity analysis: i. Favorable demand ii. Needs and opportunities are not being satisfied iii. Firm can compete effectively – no monopolies Already in place 2) Competitive Analysis – how the competition is doing - Analyze the competition and look for a potential Competitive advantage  Competitive advantage – attributes that give a firm an edge over competitors  Added incentive to your brand/product  Better advertising, prices, services added, CSR 3) Target Market Selection - ▯  Identify Markets o has direct implications on a firm’s advertising efforts o Based on the OPPORTUNITY ANALYSIS  Favorable demand  Needs and opportunities are not being satisfied  Firm can compete effectively  Determining Market Segmentation o Dividing a market into distinct groups, easily grouped o 2 Necessary components:  common needs  who respond similarly to a marketing situation o Customer characteristics vs. Buying situations  Buying situations  Outlet type – discount store, whole foods type  Usage – do you use a lot of product, heavy users  Benefits sought – what are they looking for  Awareness and intentions –  Behavioral involvement – minimal effort person? Criteria o Geographic segmentation: Markets are divided into different geographic units o Demographic segmentation: Dividing the market on the basis age, sex, family size, education, income, and social class o Psychographic segmentation: Dividing the market on the basis of personality, lifecycles, and/or lifestyles o Socioeconomic segmentation: Monetary background, class level  Selecting Target Market o Determine WHICH segments offer Most potential o Determine how MANY segments you which to enter Marketing Coverage Strategies  Undifferentiated Marketing  Ignoring segment differences and offering just one product or service to the entire market  Differentiated Marketing  Involves marketing in a number of segments, developing separate marketing strategies for each  Concentrated Marketing  Selecting a segment and attempting to capture a large share of this market  Positioning o Fitting a product/service to one or more segments of the broad market to make it unique within the marketplace o Approaches:  Attributes and benefits  Set apart by extra features and attributes  Salient attributes = aspect of a product by which the consumer tends to judge a product by o Very noticeable and obvious  Price/Quality  Expensive and well made products  Inexpensive and OK products  Use/Application  Enter based on a particular use or application  Product Class  Positions AGAINST a product in another category  7-up as the alternative to cola  Busses vs. airplanes  Substitutes  Competitor  AT&T vs. Verizon, Mac vs. PC, Prego vs. Ragu  Cultural Symbols  Makes the brand easily identifiable and differentiated from others  Repositioning  Altering a product/brands position due to:  Declining or stagnant sales  Anticipated opportunities in other market positions  Difficult to accomplish  People tend to remember the old brand and it conflicts o Promotional PUSH Strategy  Programs designed to persuade the trade to stock, merchandise and promote a MANUFACTURER’S Product  Push the product through the supply chain to the consumer  o Pull  Spending money on advertising and sale promotion efforts direct toward the ultimate consumer   Advertising to the consumer and then letting the consumer demand the product of the wholesalers/retailers Price Decisions Price variable - Refers to what the consumer has to give in exchange for a purchase o Factors that determine price o Costs o Demand factors o Competition o Perceived value o Product quality o Advertising ▯ ▯ Ch. 4 ▯ Perspectives on Consumer Behavior ▯ ▯ Consumer Behavior  Process and activities people engage in with relation to products and services to satisfy their needs and desires o Searching and selecting o Purchasing and using o Evaluating o Disposing – environmental consciousness ▯ ▯ ▯ ▯ Each stage in the Consumer Decision-making Process is paired with a psychological component ▯ ▯ 1. Problem Recognition – Motivation  Consumer perceives a need and gets motivated to solve the problem  Caused by a difference between consumer’s ideal state and actual state  Sources o Out of stock o Dissatisfaction, new needs or wants o New products, related products or purchases o Marketer-induced problem recognition  Motives: Factors that lead a consumer to take action o Need to understand reasons underlying purchases  Maslow’s Hierarchy of Needs ▯  Psychoanalytic Theory o Influenced modern psychology and explanations of motivation and personality o Applied to the study of consumer behavior o Deep motives can only be determined by probing the subconscious  ID = Pleasure, immediate response  Super Ego = morality, higher thinking  Ego = reality construct, mediator between ID and Super Ego ▯ ▯ Methods used to probe the mind of the consumer ▯ ▯ ▯ 2. Information Search – Perception  Personal searches/word-of-mouth – friends, family  Internet sources  Personal experience  Public sources – articles/magazines/reports – News  Marketer-controlled – Commercial sources  Receiving, selecting, organizing, and interpreting info to create a meaningful picture of the world  Depends on: o Internal factors o Characteristics of a stimulus ▯  Selective Perception o Filtering o Selective COMPREHENSION  Interpreting info on the basis of their Own ATTITUDES, beliefs, motives, etc.  Interpret in a way that supports their own agendas/beliefs  What their attitudes allow them to take away from your message o Selective Retention  Consumers do not remember everything  Choose to remember what they want to/found meaning in  What they remember o Selective exposure  Consumer choose whether or not to make themselves available to the information  What they are available to o Selective attention  Consumer chooses to focus attention  What they focus on o Subliminal Perception  Ability to perceive a stimulus that is below the conscious awareness – unaware ▯ ▯ 3. Alternative Evaluation – attitude formation  comparing the brands one has identified as being capable of:  Solving the consumption Problem  Satisfying the needs or motives o EVOKED SET – subset of ALL the brands customer is aware of o Inept Set – unfit o Inert Set - ….  Size depends on: o Importance o Time and Energy Spent ▯  Evaluative criteria: Dimensions or attributes of a product that are used to compare different alternatives o Objective or subjective o Viewed as product or service attributes  Functional consequences: Concrete outcomes of product or service usage o Tangible and directly experienced by consumers ▯ Attitude Formation o Learned predispositions to respond to an object o Theoretically summarize a consumer’s evaluation of an object o Represent positive or negative feelings and behavioral tendencies ▯ ▯ 4. Purchase Decision - Integration  An outcome of the alternative evaluation o Brand loyalty – a preference for la particular brand  Integration o Becomes a part of the consumer’s lifestyle/integrated ▯ ▯ ▯ 5. Post-Purchase Evaluation – Learning  Assessing: o Satisfaction o Dissatisfaction Learning = a change in behavior resulting from the interaction between a person and stimulus o Conditioning = UNINTENTIONAL Learning  Just involved in daily activities  Can ENHACE consumer comprehension of your message  Encourages repeat behaviors  Help promote self efficiency/navigate stimuli o Two types of conditioning:  Classical  Instrumental o Classical conditioning- Learning by Association o Unconditional stimulus – stimulus that Naturally triggers a response o Unconditional Response – natural response o Conditioned stimulus – becomes associated with an Unconditional stimulus through conditioning/pairing  This will trigger the natural response via unconditioned stimulus, but over time, the conditional stimulus will also o Conditional response – learned response to conditioned stimulus  Mind/body connection  Natural occurring paired/manipulated with the conditioned  Instrumental conditioning- Behavior is conditioned through reinforcement or rewards – not just association o Positive reinforcement – rewarding desired behavior  Ex: loyalty cards o Punishment – demonstrate negative results of behavior  Fear ▯ Ch. 5 ▯ Models of Communication/ the response Process ▯ ▯ Communication – passing of info, exchanging of ideas, process of establishing a commonness or oneness of thought between a sender and receiver ▯ ▯ Basic model of communication  Sender – the communicator/SOURCE  Encoding – putting thoughts/ideas/info into symbolic form o the message represented by words, symbols, pictures/represent the message  Message – contains info/meaning the source hopes to convey o Marketers must determine the content/structure/design  Channel – travelling of the message o Non-personal – directed at mass media o Personal – word-of-mouth, Buzz marketing (consumer- generated marketing/viral)  Receiver – the other party o Decoding – transforming the sender’s message back into thought  Response/feedback o Viral marketing – propagating marketing-relevant messages through the help and cooperation of individual consumers  Factors affecting success  Message characteristics  Individual sender or receiver characteristics  Social network characteristics  Seeding – determining the initial group that will start the diffusion of your intended message Encoding ▯ ▯ ▯ ▯ The Response Process ▯ ▯ 3 stages: ▯ Cognitive stage- awareness, understanding of the product ▯ Affective stage- feeling associated with the product ▯ Behavioral/conative stage – call to action, purchase, adoption behaviors ▯ ▯ ▯ AIDA – from Personnel selling  AIDA gets customer to make a purchase decision o Attention – salesperson must capture attention o Interest – need a level of intrigue o Desire – desire to purchase product over others o Action – purchase ▯ ▯ Hierarchy of effects model – “Purchase Funnel”  Methodically reduces the number of products by evaluating alternatives  Measures effectiveness of advertising o Awareness – generate awareness o Knowledge – comprehend message o Liking – affective component o Preference – over other models, narrowing down o Conviction – similar to a loyalty o Purchase – decision ▯ Innovation Adoption Model – for new products  New products for adoption o Awareness – of new product; demonstration of product o Interest o Evaluation – based on demonstration/actual use o Trial – noncommittal o Adoption – commitment stage ▯ ▯ Information Processing –  Presentation – exposure  Attention – recognition, grabbed  Comprehension – understanding the message  Yielding – accepting the information/message and LIKING it  Retention – retain info/recall  Behavior – purchase (Alternative Response Hierarchy) Three-orders Model of Info Processing ELM  Elaboration Likelihood Model o Focuses on the differences in the ways consumers process and respond to persuasive messages o Attitude formation or change process o Depends on the amount and nature of elaboration that occurs in response to a persuasive message o Elaboration likelihood is a function of: o Motivation o Ability ▯ ▯ Source, Message and Channel Factors ▯ ▯ Persuasion matrix  Purpose  HOW Controllable elements interact with consumer’s responses o Controllable elements:  Source  Message  Channel o We can’t control our consumers, can’t control the message they take away, o But we can expose them ▯ ▯ THE PERSUASION MIX: ▯ ▯ Independent variables ▯ Dependent variables – Steps they go through to be persuaded  how were they effected; behaviors? ▯ NONE of these variables can be ignored ▯ ▯ 1. Source  Person involved in communicating a marketing message o Direct source - Delivers a message and/or endorses a product or service o Indirect source - Draws attention to and enhances the appearance of an ad o Organization – no direct/indirect source, but organization does have a message and usually the product delivers message o EX:  Tom Brady for Smartwater – DIRECT = we “know” him  Beautiful model for Dolce and Gabbana = Indirect  Swatch model – Indirect – decorative model  Heinz – organization = use tomatoes Credibility works through the process of internalization o If this is a credible person, we may internalize this because WE want to be similar to this person o Do we accept them as credible?  What is their: level of Expertize, or trustworthiness?  Marketers want them to trust the source’s expertise and character o Limitations:  High and low credibility sources  Arguing for a position opposing their own best interest? We see equal effects  Sleeper effect – persuasiveness of a message increases with the passage of time regardless of the source credibility  Overtime the message becomes more believable ▯ ▯ ▯ ▯ ▯ 2. Attractiveness – how much do we want to be like the spokesperson  similarity  familiarity  likability ▯ ▯ Q-Score = star power  Q-score formula = the % of those who say “one of my favorites”/ by the % who have heard of him/her ▯ ▯ Problem with celebrities: ▯ ▯ ▯ The meaning movement and endorsement process: ▯ ▯ ▯ Celebrity bundles emotions or cultural pieces – consumer buys idea attached ▯ ▯ ▯ 3. Power = customer compliance  Power depends on the amount of control over the consumer, the customer’s perceived level of concern for self, and the level of “watching” the consumer feels Message Factors  Message structure o Order presentation o Conclusion drawing o Message sidedness o Refutation o Verbal versus visual  Message appeals: o Comparative advertising o Fear appeal o Humor appeals 1. Order of presentation - o Primary effect  Stronger  Recall the beginning of the message o Recency effect  Recall the end of the message, most recent 2. Message structure o Conclusion drawing  Depends on:  Target Audience  Type of issue of topic  Nature of the situation 3. Message Appeals o Comparative advertising – compare directly to competitor  May be especially useful for new brands  Often used for brands with small market share  Frequently use in political advertising o Fear appeals – fear of not using or using competitor product  May stress physical danger or threats to health  May identify social threats: disapproval or rejection  May backfire if the level of threat is too high  o Humor appeals – attracts attention best  They can attract and hold attention  They are often the best remembered  They put the consumer in a positive mood  Advantages + Create a positive mood that enhances persuasion + Aids retention and awareness  Disadvantages - Harms recall/comprehension - viewers can block out ad - doesn’t persuade general 3. Channel Factors  Personal versus nonpersonal channels - Information received from personal channels is more persuasive than that received from the mass media  Effects of alternative mass media o Differences in information processing  Self-paced - Readers process the ad at their own rate and study it as long as they desire  Externally paced - Transmission rate is controlled by the medium ▯ Ch. 7 ▯ Value of Objectives  Communications o facilitate coordination of the various groups  Planning and decision making o guide decision making and development of the integrated marketing communications plan  Measurement and evaluation of results o provide a benchmark to measure success or failure Within a Company… o create a set of general ideas called CORPORATE Objectives  Marketing gets these and has to market based on these  Marketing objectives are set in specific and measurable – quantifiable, realistic, and attainable  Part of the Marketing Plan created o 4 P’s  Promotional people get the Marketing plan and are passed downwards – promotional, product, distribution people  Have to translate the Marketing plan into the IMC Promotional Objectives: 1. Inform about product – new product/group 2. Persuade to purchase – now or when needed 3. Remind – keep relevant and known ▯ Marketing Objectives Versus Integrated Marketing Communications Objectives ▯ Sales-oriented Objects versus Communication Objectives  Sales Objectives = main goal is to increase sales o Require economic justification – ROI o Successful implementation requires all marketing elements to work together o Required to produce quantifiable results; % or $ Problems with Sales Objectives o Advertising has carryover effect  Carryover effect: Money spent on advertising does not have immediate impact on sales  Can’t always tie ad to sales today^^^ o It is difficult to determine precise relationship between advertising and sales o Do not offer much guidance for planning and developing promotional program  Communications Objectives = increase brand knowledge, interest in brand, favorable attitude o Based on hierarchy effect models  Cognitive, affective, and behavioral goals o Quantifiable and observable results  Not always immediate effects Criticisms of DAGMAR  Based on communications effect o Awareness, comprehension, conviction and action Objectives and strategies in the social consumer decision journey Source: Expert interviews; McKinsey analysis Factors affecting/influencing advertising budgets Note: 1 relationship means the factor leads to a positive effect of advertising on sales; 2 relationship indicates little or no effect of advertising on sales. Budgeting approaches:  Top-down o Affordable method  What’s left o Arbitrary allocation  Management decision about what is necessary o Percentage of sales method  Advertising and promotions budget is based on sales of the product  Bottom-up o Objective and task method  Best method  Define communications objectives  Determine specific strategies  Estimates costs o Payout Plan o Quantitative Models  GIGO – Garbage in, garbage out – need to consider all variables  Hard to program all consumer profiles and situations/reasoning ▯ ▯ ▯ Steps to Implement the budget  Employ comprehensive strategy  Develop strategic planning framework o Must employ integrated marketing communications philosophy  Develop contingency plans  Focus on LONG-TERM Objectives o Budget should be long-term; think ahead  Evaluate effectiveness of programs  Factors to consider when budgeting o Allocating to IMC Elements o Client/agency policies o Market size o Market potential o Market share goals  ▯ Ch 8 ▯ ▯ Different Perspectives on creativity  Managers – “suits” = more bottom line, interested in sales and numbers  Creative – “artists” = more for the pursuit of art/creativity; trying something new o Ultimately, need a combination of the two ▯ ▯ Advertising Creativity – ability to generate fresh, unique, and appropriate ideas that can be used as solutions to communication problems  Solutions – reach audience in a new way  2 factors : o Ad Divergence – extent that ad is novel/unusual = attention grabbing:  Originality  Flexibility  Elaboration – unexpected details, more complex ideas  Synthesis – ideas are connected/blended  Artistic value o Ad Relevance – degree to which the ad is meaningful, useful, or valuable to consumer  Ad to the consumer – is there a connection for the consumer?  Brand to consumer – brand needs to be of personal interest for a consumer ▯ ▯ D’Arcy Masius Benton & Bowles’s Universal Advertising Standards  Does the advertising position the product simply, with unmistakable clarity? o Is your point understood? What are they taking away?  Does the advertising bolt the brand to a clinching benefit?  Does the advertising contain a Power Idea?  Does the advertising design in brand personality?  Is the advertising unexpected? o Enough differentiation to grab attention?  Is the advertising single-minded? o Want a single focus  Does the advertising reward the prospect? o Does the consumer get the idea?  Is the advertising visually arresting?  Does the advertising exhibit painstaking craftsmanship? o Shows details – hard work ▯ ▯ Creative Challenge  Different situations = different approaches needed o There is no one formula, No Rules ▯ ▯ Creative Risks  Have to get through the clutter o Back to differentiation, unexpected ▯ ▯ ▯ Changing your focus can change your perspective  Preconceived notions lead our train of thought – or focus o Changing perception allows you to expand focus  Findings for being creative: o Try to relax o Lie on your back and think o Successful creativity involves ensuring ideas are practical and convincing ▯ ▯ Creative Versus Hard-sell Advertising  Rationalists o Advertising must sell the product or service  Poets o Advertising must build an emotional bond between consumers and brands or companies ▯ ▯ Young’s Model Creative Process 1. Immersion o Gathering raw material and data 2. Digestion o Analyzing info; Understanding it 3. Incubation o Subconscious 4. Illumination o Birth of an idea 5. Reality or verification o Reshaping idea for practicality ▯ ▯ Wallas’ Model 1. Preparation o Gathering info needed to solve the problem 2. Incubation o Letting ideas to develop 3. Illumination o Finding the solution 4. Verification o Refining the idea and analyze General Preplanning Input  Gather and organize information on the product, market, and competition o Analyze the trends, developments, and happenings in the marketplace  Product/service-specific preplanning input o Gathering info through CLIENT STUDIES o Problem detection o Psychographic studies o Branding research Objective o Evaluate ideas o Reject the inappropriate o Refine the remaining o Give ideas final expression Techniques o Directed Focus groups o Message communication studies o Portfolio tests o Viewer reaction profiles ▯ ▯ Marketing Communication Activities  Interrelated  Integrated  Coordinated ▯ ▯ Centered on a theme or idea  In different media  Over a time period The Unique Selling Proposition (USP)  Benefit o Buy this product/service – get benefit  Unique o Must be unique to the brand o Rivals can’t offer it  Potent o Promise must be strong enough to move mass millions ▯ ▯ ▯ ▯ Positioning  Establishes the product or service in a particular place in the consumer’s mind  Done on the basis of a distinctive attributes  Basis of a firm’s creative strategy when it has multiple brands competing in the same market ▯ ---------------- ▯ Appeals and Execution style ▯  Advertising appeal: Approach used to attract consumers’ attention and/or to influence their feelings toward the product, service, or cause  Creative execution style: Manner in which a particular appeal is turned into an advertising message presented to the consumer ▯ ▯ Appeals  Informational/Rational Appeals o Focuses on consumer’s practical, functional, or utilitarian need for the product  Emphasize the features, benefits, reasons why to consider/own this brand/product  Tends to be informative Types: o Competitive Advantage appeal  Compares to another brand and claims superiority on one or more attributes  Directly mention or indirectly notion to other o Feature Appeal  Focuses on the dominant traits of the product or service  Benefits from products, o Favorable Price Appeal  Makes product price the dominant point of the message  Have to still show product is good, but cheaper price  Not sacrificing quality o News Appeal  Involves a type of news about the product, service, or company  New product, improved o Product/Service Popularity Appeal  Stresses the popularity of a product or service by pointing out the:  Number of consumers who use the brand or those who have switched to it  Number of experts who recommend the brand  Leadership position in the market  Emotional Appeals o Social and psychological needs o Can create favorable effect on evaluation o May generate large Profit gains o Can use any of these as the basis of your emotional ad: ▯  Transformational Ads o Associates experience of product/brand with a unique experience o Exciting, active  Additional Types of appeals: o Reminder Advertising  o Teaser Advertising  Builds curiosity or excitement for a product without giving too much information  Simply supposed to generate interest and people thinking about the product o User-generated content  Ads that were made by the user ▯ ▯ Ad Execution Techniques  Straight Sell/Factual o  Scientific Technical o Cite evidence/scientific info that supports claims  Demonstration o Showing the uses of the products  Comparison o Use comparative advertising o Shows brand’s advantages over rival o Helps in positioning of new/lesser-known brands  Testimonial o Person elaborates on his personal experience on product o Endorsement  Slice of Life o Based on a problem/solution approach o Presents relatable situation – real life scenario  Slice of Death o Shows the negative consequences of a scenario o Often used B2B marketing – you’ve made a mistake in not using our product  Animation o Animated scenes o Target children, have a lighthearted feel o But can be aimed at adults Inspires a creativity, fun, catchy  Personality Symbol o Aflack duck, Keebler elves, charmin bear  Imagery o Consists of visual elements, not info o Encourages buyers to associate brand with symbols, characters, or situation in the ad  Dramatization o Tells short story o Product is the star  Humor o Used  Combination ▯ ▯ ▯ Basic Components of Print Advertising  Headline o Words in leading position of ad o Always the biggest  Subheads o Smaller than headline, but larger than copy o  Body Copy o The Main text portion of a print ad  Visual Elements o Illustration, drawings, photos  Layout o How elements are blended into a finished ad ▯ ▯ ▯ ▯ Basic Components of Television Advertising  Video o Visual elements that:  Attract viewer’s attention  Communicate an idea, message, or image  Audio o Includes voices, music and sounds  Voiceover: message is delivered by announcer  Needledrop: music is prefabricated, multipurpose, highly conventional  Jingles: Catchy songs about a product or service  Carry the advertising theme and simple message  Three Phases of production for 1. Preproduction o All the work BEFORE the actual shooting/recording  Preproduction meetings to:  Select a director  Production company  Estimating costs  timetables 2. Production o Filming/taping/recording  Location  Timing  Talent 3. Postproduction o Work after filmed o Tasks:  Processing  Editing  Sound effects/audio  Approvals ▯ Ch. 10 ▯ ▯ Media Plan  Guides media selection o Aims to find a combination of media to communicate a message:  In the most effective manner  To the largest number of potential customers  At the lowest cost  Media planning = series of decisions; delivering message to prospective customers  Media objective = goals to be attained by media strategy o Is the WHAT, not the How to do it… ▯ Media objective = goals to be attained by media strategy ▯ Is the WHAT, not the How to do it… ▯  Tactical Social media objectives o Connect with existing customers/new prospective o Listen and engage  Strategic social media objectives o Grow network  Strategic business goals ▯ ▯ Media Terms and Concepts  Plans of action ▯ ▯ Reach = number of people, individuals, that are exposed to your message ▯ Frequency = the number of times each receiver sees your ad Reach vs. Frequency o Do you want a batch of mail to reach a small number of people, but multiple times – increasing the impact of your message o Or do you want a single message to reach mass audiences? ▯ ▯ Coverage = potential audience that might receive the message through a vehicle  Full Coverage – every person in target segment is reached and NO OTHER outside people (best case scenario)  Partial Coverage – not all of the target is reached, but there is no waste  Coverage exceeding market – Target market AND outsiders reached… waste ▯ ▯ ▯ Media Plan  Guides media selection ▯ ▯ Problems with media Strategy  Insufficient information  Sweeps periods: Used for measuring TV audiences and setting advertising rates o Inconsistent terminologies o Time pressures o Difficulty measuring effectiveness ▯ ▯ ▯ Criteria considered in the development of Media Plans ▯ ▯ ▯ Developing a media plan ▯ Target Market Identification  Primary research and/or secondary sources help determine which specific groups to target  Index number: good indicator of the potential of a market (Percentage of users in a demographic) X100 (Percentage of population in the same segment) x>100 – use of the product is “higher” than normal consumption x<100 – use of the product is “less” in one segment over another than normal consumption  Using indexes to determine Where to promote o Surveying of buying power index  Charts potential of a particular metro area/county/city relative to the US as a whole  Gives insight into relative value of a market o Brand Development Index  BDI  Factors the rate of product usage by geo area into the decision process o Category Development Index  CDI  Provides info on the potential for development of the total product category (not specific) Using BDI and CDI indexes ▯ Eyes ▯ ▯ We are visual creatures ▯ ▯ E.H. Hess – Physiologist – gathered info about HOW to test good/bad advertisements  First to research eye tracking o Because he was the first to make a connection between stimulation and visceral response ▯  Pupils dilated when looking at a book of beautiful animal pictures o Visceral response to a visual stimulation o When we look at something that sparks our interest, our eyes dilate  In a study, it was found that men were attracted to large pupils o Women respond more to children, handsome men o Men respond to women, landscapes o Given 2 of the same pictures of a woman, but one had dilated pupils  Men liked big pupils  Women did not respond as well  Liked medium, also blue eyes – see pupils in a blue eye better  Encyclopedia Study o Two images on the cover of the same encyclopedia:  Boys in a pool  People’s pupils dilated more  Cooler picture  Family around a telescope  But preferred this ▯  There is software to track eye movement o Tobii o Movement maps o Heat maps ▯ Ch. 18 Measuring effectiveness Reasons to measure effectiveR neessons to not measure Lack of time Determine if objectives are achievedObjections of creative department Increased advertising efficiency Disagreement on what to test Evaluate alternative strategies Research problems Avoid costly mistakes Costs involved What to Test:  Source factors  Message variables  Media strategies  Vehicle option source effect: Differential impact of an advertising exposure on the same audience depending on the media option used  Budgeting decisions ▯ ▯ Where to Test:  Laboratory tests: People are brought to a particular location where they are shown ads and/or commercials o Location  Testing bias: People may scrutinize the ads much more closely than they would at home o Know that is their objective – try harder to pay attention because the location/pressure  Field tests: Tests under natural viewing situations o Carried out with the realism of noise, distractions, and the comforts of home o More indicative of natural habits How to Test: • Positioning Advertising Copy Testing (PACT): Improves the research used in preparing and testing ads by: • Providing a better creative product for clients • Controlling the cost of TV commercial Testing Process  Concept generation and testing  Rough art, copy, and commercial testing o Types:  Comprehension and reaction tests: Assess the reaction an ad generates to ensure that it is not offensive  Test on a group  Consumer juries: Use consumers representative of the target market to evaluate the probable success of an ad  Pretesting of finished ads  Market testing of ads ▯ Weaknesses/Limitations  of Focus Group Research  Consumer may become a self-appointed expert  Number of ads that can be evaluated is limited  Halo effect: Overall rating is influenced by the judgment on one or few characteristics of the ad  Preferences for types of advertising may overshadow objectivity ▯ ▯ Gallup & Robinson Impact System ▯ ▯ ▯ Portfolio Test  Expose a group of respondents to a portfolio consisting of control and test ads  Limitations  Factors other than advertising creativity and/or presentation may affect recall  Ability to recognize the ad when shown may be a better measure than recall  ▯ Readability Tests  Communications efficiency of the copy in a print ad is tested without reader interviews  Flesch formula: Assesses readability of a copy by determining the average number of syllables per 100 words  Limitations  Copy may become too mechanical  Direct input from receiver is not available ▯ ▯ New Print Pretesting Measures  PreTesting Groups’ People Reader methodology o Provides mocked-up magazines to consumers and measures their responsiveness to each ad o Uses hidden cameras to record behavior  Link o Uses a comprehensive set of diagnostic questions to evoke viewer reactions to the ads Pretesting Finished Broadcast Ads Theatre testing-Participants On-air test-Commercials are are invited to view pilots of inserted into actual TV proposed TV programs programs in certain markets. • Advantages • Recall: Number of persons • Establish norms indicate able to recall the ad and/or how an add will fare its message against competition • Brand preference measure is supported by actual sales results • Disadvantages • Artificial environment • Contrived measure of brand preference, change is recognizable • Group effect may influence a viewer’s reaction Physiological Measures • Indicate receiver’s involuntary response to the ad • Pupil dilation • Pupillometrics: Measures dilation and constriction of the pupils in response to stimuli • Galvanic skin response (GSR) • Electrodermal response (EDR): Measures the skin’s resistance or conductance to a small amount of current • Brain Waves • Electroencephalographic (EEG): Determine electrical frequencies in brain •    Alpha activity: Degree of brain activation •    Hemispheric lateralization: Distinguishes between alpha activity in the left and right sides of the brain • Brain scan imaging - Examine physiological reactions to ads and brands Posttests of Print Ads Posttests of Broadcast Commercials Issues with Current Research methods • Accomplishing some factors important to good copy testing require more effort • Most current methods do little more than provide recall scores • Lab measures - Artificial and vulnerable to testing effects • Field measures - Result in a loss of control Essentials of effective Testing • Establish communications objectives • Use a consumer response model • Use both pretests and posttests • Use multiple measures • Understand and implement proper research • Solid research should meet these criteria. Research methodologies that meet these criteria will be the most effective for providing insight into the performance of advertising. Regulation in Advertising ▯ ▯ What are people worried about?  Subliminal advertising  Advertising to children  Stereotypes in advertising  Advertising in controversial products – alcohol and tobacco  Drug ad  Political ad  Deceptive advertising ▯ ▯ Subliminal Advertising  Putting thoughts into consumer’s heads o Manipulation Advertising to kids  Have a difficult time truly deciphering ads – don’t know the difference between reality and fantasy o Targeting susceptible minds ▯ ▯ Stereotypes  Fueling stereotypes o Sets back certain groups – offensive ▯ ▯ Regulation and control of ad  Regulatory concerns o Nature and content of the ad o Potential of the ad to offend/exploit/mislead consumers ▯ ▯ Ad Controls  Self regulation – legal department, network censors  State Regulation – State Attorneys general  Federal Regulation – FTC, FCC, FDA, US Postal ▯ ▯ Self-regulation  Voluntary internal regulation  Protective measures o Guidelines, standards, policies o Attorneys – corporate o True ad claims o Contracts o Review board o Specialized lawyers ▯  Self-Regulation by Trade Associations o Affected products and services  Similar products ban together to represent each other  Liquor and alcohol  Tobacco  NRA  Self-Regulation by Businesses o Better Business Bureau - BBB  Promotes fair advertising and selling practices across industries at the local level o Council of Better Business Bureaus  Provide effective control over advertising practices at the national level ▯  National Advertising Review Council o Mission - To sustain high standards of truth and accuracy in national advertising o Advertising Accountability Program - Regulates online behavioral advertising (OBA) across the Internet ▯  National Advertising Review Board o Appealed for additional review by advertisers who disagree with NAD’s findings o Composed of advertising professionals and prominent public interest members ▯ ▯ ▯ Self Regulation by Media  Newspapers and Magazines o Have requirements and restrictions depending on the size and nature of the publication o Some test the products advertised and offer refunds if they are later found to be defective  Television and Radio o Major TV networks have incorporated the NAB codes into their standards o All commercials intended for airing on a network or an affiliate has to be reviewed o Network standards change constantly ▯ ▯ ▯ Major Divisions of the FTC  Bureau of Competition o Seeks to prevent business practices that restrain competition o Enforces antitrust laws  Bureau of Economics o Provides economic analysis and support to antitrust and consumer protection investigations o Analyzes the impact of government regulation on competition and consumers  Bureau of Consumer Protection o Protects consumers against unfair, deceptive, or fraudulent practices o Investigates and litigates practices alleged to be unfair to consumers ▯ ▯ Deceptive Advertising  Deceptive Advertising – “drawing conclusions” trickery o Misleading consumer to buy product that will not meet their needs  Omissions of importance???  If advertisers can substantiate their claims?? – need evidence before they run their ad ▯  Puffery – the ultimate, the very best… o Allowed in advertising o Hyperbole ▯ ▯ ▯ Ch. 21 ▯ ▯ Advertising and Promotion Ethics ▯  Ethics: Moral principles and values that govern the actions and decisions of an individual or group  Marketing or promotion action may be legal but not ethical  Marketers must base their decisions on ethical considerations ▯ ▯ Untruthful or deceptive advertising  Consumers rely on word of mouth  Difficult to prove deception  Projects only positive points  Exists more at the local level  Sources of distaste o Ads of personal products or services o Ads of products and brands that consumers do not use or would not buy  Type of appeal or the manner of presentation o Sexual appeal in ads  Offensive and tends to demean women or men  Promotes a decline of moral and social values o Shock advertising: Using nudity, sexual


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