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Test 2 Study Guide

by: Kaylin Wallen

Test 2 Study Guide APR 221

Kaylin Wallen
GPA 3.2

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APR 221 Michael Little
Intro to Advertising
Michael Little
Study Guide
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This 14 page Study Guide was uploaded by Kaylin Wallen on Monday September 26, 2016. The Study Guide belongs to APR 221 at University of Alabama - Tuscaloosa taught by Michael Little in Fall 2016. Since its upload, it has received 213 views.


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Date Created: 09/26/16
Test 2 Study Guide Chapter 4 Utility: A product’s ability to satisfy needs and wants Research can uncover the needs and wants of companies Exchange: Trading of one thing for another thing of value Marketing facilitates exchanges by: - Developing goods and services we might want - Pricing them attractively - Distributing them to convenient locations - Informing us about them through advertising and other communication tools Satisfaction must occur every time customers use the product, or people won’t think they got a fair exchange Satisfaction leads to: - Higher repurchases - Positive word of mouth Advertising reinforces satisfaction by: - Reminding customers why they bought the product - Helping them defend the purchase against skeptical friends and associates - Enabling them to persuade other prospects to buy it Marketing: The process companies use to make a profit by identifying and satisfying their customers’ needs and desires The Marketing Segmentation Process: - Identifying groups with shared needs and characteristics - Aggregating the groups into larger segments (according to their interest in the product’s utility) through a marketing mix Target Market: The market segment or group within the market segment toward which all marketing activities will be directed The people we want to talk to Two Types: - Consumer The advertising we see daily Sponsored by the producer of the product/service - Business The people who buy goods and services for resale, for use in their own business, or for manufacturing other products Trade Professional Agricultural Target Audience: The specific group of individuals to whom the advertising message is directed Who we reach Categories of Market Segmentation: Behavioristic Segmentation: Method of segmenting consumers based on the benefits being sought Determined by: - User Status (Sole Users, Semisole Users, Discount Users, Aware Nontriers, Trial/Rejectors, Repertoire Users) - Usage Rates: The extent to which consumers use a product: light, medium, or heavy Measured by Volume Segmentation - Purchase Occasion: When consumers buy and use a good or service - Benefits: Product attributes offered to a customer (high quality, low price, status, speed, sex appeal, good taste, etc.) Geographic Segmentation: Segmenting markets by geographic regions based on the shared characteristics, needs, or wants of people within a region Demographic Segmentation: Based on a population’s statistical characteristics such as gender, age, ethnicity, education, occupation, income, etc. Geodemographic Segmentation: Combining demographics with geographic segmentation to select target markets Psychographic Segmentation: Based on psychological variables including values, attitudes, personality, and lifestyle VALS: assigns consumers to one of eight groups based on Primary Motivation (ideals, achievement, self-expression), and Resources Segmenting Business and Government Markets: Business Markets - Employ professional buyers and use systematic purchasing procedures - Concentrated geographically - Small number of buyers - Purchase decisions depend on: Price and quality Product demonstrations Delivery time Terms of sale and dependability Brand loyalty and risk management Market Concentration: markets can be focused in specific regions or areas Target Marketing Process: The process by which an advertiser focuses its marketing efforts on a target market Target Market selection: Those consumers the company wishes to appeal to, design products for, and tailor its marketing activities toward Assessing which of the newly created segments: - Offer the greatest profit potential - Is the most successfully penetrated Matching products to market Product Life Cycle: Introductory Phase: New product is introduced, costs are highest, and profits are lowest Growth Stage: Market Expansion—More and more customers make their first purchases while others are already making their second or third purchases Maturity Stage: The market has become saturated with products, the number of new customers has dwindled, and competition is most intense Competition intensifies and profits diminish Decline Stage: Sales begin to decline due to obsolescence, new technology, ot changing consumer tastes Product Positioning: How the product is perceived in the marketplace Product Differentiation: Creating a difference in the product that appeals to a market segment Perceptible differences: differences that are visibly apparent Hidden differences: imperceptible but existing differences that may affect the desirability of a product Induced differences: differences effected through branding, packaging, merchandising, and advertising Branding: A marketing function that identifies products and their source and differentiates them from all other products The role of branding: Recognition and Identification Brand: combination of name, words, symbols, or designs that distinguishes a product from competitors Types of Brands: Individual Brand: A unique name to each product a manufacturer produces Family Brand: Various products under the same umbrella name National Brand: Marketed in several regions of the country Private Label: Personalized brands applied by distributors or dealers to products supplied by manufacturers Product Packaging: The marketer’s last chance to communicate and promote Considerations: Identification, Containment, Protection, Convenience, Consumer Appeal, Economy Price Element: Amount charged for the good or service - Influences consumer perceptions of a brand Factors influencing price: - Market demand for the product - Costs of production and distribution - Competition and corporate objectives Psychological Pricing: Influencing a consumer’s perceptions using price Place Element: How and where customers will buy a company’s product Two basic methods of distribution: Direct Distribution: The manufacturer sells directly to the customers without the use of retailers (Buy a mac from apple) Indirect Distribution: Resellers buy products from manufacturers (buy a mac from Best Buy) Distribution Strategies: Intensive Distribution: Based on making the product available to consumers at every possible location Selective Distribution: Limiting the distribution to select outlets Exclusive Distribution: Limiting the number of wholesalers or retailers who can sell a product Vertical Marketing System (VMS): The main members of a distribution channel (producer, wholesaler, and retailer) work together as a cooperative group to meet consumer needs Three Types: Corporate: one company owns multiple levels of the distribution or production channel Administered: One member of the production and distribution chain is dominant and calls the shots Contractual: Involves a formal agreement between the various levels of the distribution or production channel to coordinate the overall process Marketing Communications: The various efforts and tools companies use to initiate and maintain communication with customers and prospects Methods: Advertising Personal Selling Sales Promotion Direct Marketing Public Relations Promotion Element: All market related communications between the seller and the buyer Important for advertising success: - Strong primary demand trend - Potential for significant product differentiation - Hidden qualities highly important to consumers - Opportunity to use strong emotional appeal - Substantial funds available to support advertising Chapter 5 The Human Communication Process: Source: The party that formulates the idea, encodes it as a message, and sends it via some channel to the receiver Organization that has information it wishes to share with others Sponsor of the advertising Message: The idea formulated and encoded by the source and sent to the receiver Must be encoded so the receiver understands what’s being communicated Verbal or Nonverbal, using words and symbols familiar to the intended audience Channel: Any medium through which an encoded message is sent to a receiver Personal Channels: Involve direct contact between the parties Nonpersonal Channels: Do not involve interpersonal contact between the sender and the receiver Receiver: Consumer who receives the advertiser’s message Decode: To interpret a message by the receiver Noise: Sender’s advertising message competing with other commercial and noncommercial messages Feedback: Verifying that the message was received Interactive Media: Permit consumers to give instantaneous, real-time feedback on the same channel used by the sender Consumer Decision Process: 1. Problem recognition 2. Information search 3. Evaluation and selection 4. Store choice and purchase 5. Post-purchase behavior (positive or negative experience) Personal Processes: The three internal, human operations—perception, learning, and motivation—that govern the way consumers discern raw data and translate them into feelings, thoughts, beliefs, and actions Mental processes and behavior affected by: Interpersonal Influences: Family, society, culture Nonpersonal Influences: Time, place, environment Personal processes of consumer behavior: 1. Create awareness that the product exists 2. Provide enough compelling information about the product for prospective customers to become interested 3. Advertising stimulates customers’ desire to satisfy their needs and wants by trying the product Consumer Perception Process: Perception: One’s personalized way of sensing and comprehending stimuli Stimulus: Physical data that can be received through the senses Perceptual Screens: Physiological or psychological filters that messages must pass through Physiological screens: Use the senses to detect incoming data and measure the dimension and intensity of the stimulus Cognition: Point of awareness and comprehension of a stimulus Self-concept: Images individuals carry in their minds of the type of person they are and who they desire to be Mental Files: Stored memories in consumers’ minds Consumer Involvement: Importance or relevance of a decision to a consumer Theories of Learning: Cognitive Theory: An approach that views learning as a mental process of memory, thinking, and the rational application of knowledge to practical problem solving More applicable in high involvement purchases Conditioning Theory: Learning is a trial-and-error process More applicable in low involvement purchases Persuasion: Change in thought process or behavior caused by promotion communication The Elaboration Likelihood Model: A theory of how persuasion occurs. Proposes that the method of persuasion depends on the consumer’s level of involvement with the product and the message Central Route: High level of involvement; customers more motivated to pay attention to product-related information Peripheral Route: Low level if involvement; little reason to pay attention to the central message of the ad The Hierarchy of Needs: Maslow’s theory that the lower biological or survival needs are dominant in human behavior and must be satisfied before higher, socially acquired needs become meaningful Negatively Originated Motives: Consumer purchase and usage based on problem removal or problem avoidance Solve a problem (skin care) Called informational motives Positively Originated Motives: Consumer’s motivation to purchase and use a product based on a positive bonus that it promises Transformational Motives: Promise to transform consumers through sensory gratification, intellectual stimulation, or social approval Interpersonal Influences: Social influences on the consumer decision-making process Categories: Family Influence Societal Influence Cultural and subcultural influence Purchase Decision and Postpurchase Evaluation: Evoked Set: Particular group of alternative goods a consumer considers when making a buying decision Evaluative Criteria: Standards a consumer uses for judging the features and benefits of alternative products Cognitive Dissonance: People try to justify their behavior by reducing the inconsistency between their cognitions and reality FCB Grid: A 2-D model that categorizes consumer products into four quadrants based on “high involvement” or “low involvement” and “think” or “feel.” By positioning brands in the grid, an agency can determine the type of advertising that would be most appropriate Kim-Lord Grid: A variation of the FCB grid, which allows for the fact that the level of consumer involvement in a product does not have to be high “think” and low “feel” (or vice versa) but can be high (or low) in both categories Chapter 6 Account Planner: Individual at an advertising agency primarily responsible for account planning Represents the consumer Ensures that the advertising strategy and executions are relevant to the target audience Marketing Research: Systematic gathering, recording, and analysis of information to help managers make marketing decisions Identifies consumer needs and market segments Helps develop new products Helps devise marketing strategies Assesses the effectiveness of marketing activities Pretesting: Testing the effectiveness of an advertisement for flaws in message content before recommending it to clients Conducted through focus groups Challenges: There is no best way to pretest advertising variables Respondents’ answers may not reflect their real buying behavior - Assume the role of expert or critic - Invent opinions to satisfy the interviewer - Be reluctant to admit they are influenced - Vote for the ads they think they should like Posttesting: Testing the effectiveness of an advertisement after it has been run Provides the advertiser with guidelines for future advertising Challenges: Recall tests only measure what respondents noticed and remembered - Fail to measure whether they intend to buy the product Inquiry tests may not reflect a sincere interest in a product - Responses may take months to receive Sales tests are costly and time-consuming Steps in the Research Process: 1. Situation analysis and problem definition 2. Secondary research 3. Refinement of research objectives 4. Primary research 5. Interpretation and reporting of findings Issues with advertising research: Validity: Free of bias and reflects the true status of the market Reliability: Repeatable with the same results Sampling Methods: Probability (Random): Everyone has an equal chance of being selected Nonprobability (Convenience): Samples are selected because they are readily available Establishing Research Objectives: Concise statement of the research problem and objectives should be formulated Statement must be specific and measurable Decision point must be clear and the questions must be related and relevant Research results should provide the information required to decide on a new positioning strategy Primary Research: Collecting data directly from the marketplace using qualitative or quantitative methods Qualitative Research: Uses small, nonrandom samples to explore behavior, perceptions, needs, and motivations of a target audience Methods: Projective technique Intensive technique Ethnographic research or ethnography Quantitative Research: Uses larger, representative samples to quantify hypotheses and measure market variables Methods: Observation method Experimental method Survey Collecting Primary Data in International Markets: No economies of scale Translating questionnaires to the local languages is a difficult task Some cultures are not open to advanced methods of research Lack of adequate facilities Internet can be used to conduct foreign market research Chapter 7 Marketing Plan: Assembles relevant facts about the organization, its markets, products, services, customers, and competition - Directs a company’s marketing effort - Forces all departments to focus on the customer - Lists goals and objectives for specific periods of time - Lays out precise strategies and tactics to achieve them - Length and complexity of the plan depends on the size of the company - Ongoing activity - Can be brief for smaller organizations or detailed and complex for larger companies (Review and Revise) Effect of the Marketing Plan on IMC - Helps analyze and improve all company operations - Defines the role of advertising in the marketing mix - Enables better implementation, control, and continuity of advertising programs - Ensures efficient allocation of IMC dollars Traditional Top-Down Marketing Plan: Situation Analysis: The organizations situation and how it got there SWOT Analysis: Strengths, Weaknesses, Opportunities, Threats) Marketing Objectives: Goals of the marketing effort Marketing Strategy: How to achieve the objectives Marketing Tactics: Specific short-term actions to support strategy Marketing Objectives, Strategies, and Tactics: Marketing Objectives: Goals of the marketing effort expressed in terms of the needs of specific target markets and specific sales objectives Need-satisfying Customer’s perspective Marketing Strategies: Statement of how the company is going to achieve its marketing objectives Sales-target Company’s perspective - Define the target markets - Determine the strategic positioning (product attribute, price/quality, etc.) - Develop the marketing mix Marketing Tactics: Specific short-term actions used to achieve marketing objectives Bottom-Up Marketing Plan: Marketing Tactics For smaller companies When details come first An ingenious tactic can develop into a strategy Marketing Strategy Marketing Results (Situation Analysis) Relationship Marketing: Cooperation between the buyer and the seller


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