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ADV 3008 Exam 2 Review - Summary Contemporary Advertising and Integrated Marketing Communications

Summaries of the chapters included in exam 2

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Principle Of Advertis (ADV 3008)

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University of Florida

Academic year: 19/20

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Chapter 7:

● Information about customers that advertisers need to know: ○ Who they are (audience) ○ What they want ○ What they like ○ Where they spend their media time ● Marketing research- the systematic procedure used to gather, record, and analyze new information to help managers make decisions about marketing goods and services. ○ Helps managers: ■ Identify consumer needs and market segments ■ Develop new products and communication strategies ■ Assess the effectiveness of marketing programs and promotional activities ○ Also useful for: ■ Financial planning ■ Economic forecasting ■ Quality control ○ Information helps to: ■ Recruit- ● Researchers study different market segments and create product attribute models to match buyers with the right products and services. ● Marketers questions: ○ What new products do consumers want? ○ Which ideas should we work on? ○ What product features are most important to our customers? ○ What changes in the product’s appearance and performance will increase sales? ○ What price will maintain the brand’s image, create profit, and still be attractive and affordable? ■ Nature, content, packaging, and pricing of products may change with the answers to these questions! ■ Retain- ● A marketer may use customer satisfaction studies ● Databases of customer transactions may identify reasons for customer satisfaction and dissatisfaction. ● Best sales go to companies who develop good relationships with individual customers. ○ Customer satisfaction is the fastest growing field in marketing research ■ Regain-

● Good marketing research enables companies to devise a sophisticated, integrated mix of product, price, distribution and communication elements. ● Gives them the information they need to decide which strategies will enhance the brand’s image and lead to greater profits. ● Enables them to judge the effectiveness of past marketing programs and campaigns. ● Before developing a campaign a company must know: ○ How people perceive its products ○ How they view the competition ○ What brand or company image would be most credible ○ What messages offer the greatest appeal ■ Companies answer these questions through IMC research!! ● Marketing research provides information necessary for marketing decisions while IMC research uncovers the information needed for IMC decisions ● IMC research- systematic gathering and analysis of information to help develop or evaluate message strategies, individual promotions, and whole campaigns. ○ Helps advertisers: ■ Develop strategies ■ Test concepts ○ Research results help to: ■ Define the product concept ■ Select the target market ■ Develop the primary message elements ● Strategy research- used to help define the product concept or to assist in the selection of target markets, messages, or media vehicles. ● Creative concept research- measures the target audience’s acceptance of different creative ideas at the concept stage. ● Pretesting- helps detect and eliminate weaknesses before a campaign runs. ○ Techniques: ■ Central location tests ■ Clutter tests ■ Direct questioning ○ Problems: ■ Artificiality ■ Consumer inaccuracy ■ The halo effect of consumer responses ● Posttesting- helps evaluate effectiveness of an ad or campaign after it runs. ○ Techniques: ■ Aided recall ■ Unaided recall ■ Attitude tests ■ Inquiry tests

● Ex. Kraft singles and J Walter Thompson, ○ Kraft worried about competition because although consumers liked their product, they were scared of competitors having lower priced alternatives. An extra source of calcium was a popular trend among phone interviews so the brand used concept testing to determine which message element options might prove most successful ■ A commercial with kids stating how much they enjoy Kraft singles and how its an extra source of calcium for 2 of 5 kids who don’t get enough calcium featuring children gobbling up grilled cheese sandwiches and the dairy fairy who adds a light hearted tone proved to be the most valid option among focus groups. ■ IMC is one of the biggest expenses in a company’s marketing budget so adds are tested. In 5 test markets the commercial increased sales by 10% and nationally sales also grew once the campaign was released. Brands want to be sure that a campaign will gain traction. ● Testing evaluates variables such as: ○ Merchandise- the product concept ■ Companies may pretest the package design, how a message positions the brand, or how well it communicates product features ○ Markets- ■ Companies may pretest a strategy or particular commercials with different markets. ● The info they gain may cause them to alter their strategy and target new segments. ■ Posttesting is done to see if the campaign succeeded in reaching its target markets ● Changes in awareness and increases in market share are two indicators of success. ○ Motives- consumers motives are outside a company’s control but the messages they create to appeal to those motives are not. ■ Pretesting helps marketers identify and appeal to the most compelling needs and motives and to evaluate whether consumers consider brand claims about meeting these needs as compelling and credible. ■ Posttesting can indicate how effective they were. ○ Messages- pretesting helps identify outstanding as well as underperforming messages. Helps determine what consumers think a message says and how well it says it.

■ Pretesting is not fullproof ● The only way to know for sure if a message is effective is posttesting, where the marketer determines to what extent the message was seen, remembered and believed. ○ Media- media advertising is more expensive now and marketers hold agencies accountable for proving the effectiveness of media buys. Info gained from pretesting can include several types of media decisions: ■ Classes of media- broad media categories. ● Print, electronic, digital interactive, direct mail, and out-of-home. ■ Media subclasses- more narrow types. ● Newspapers, magazines, radio, tv, etc. ■ Specific media vehicles- the particular publication or program ■ Media units of space and time- the size or length of an ad ● Half page or full page ● 15 second or 30 second spot ● 60 second length commercials ■ Media budgets- ■ Scheduling criteria- through pretesting marketers can test consumer response during different seasons or days and test whether frequent advertising is more effective than occasional advertising. ○ Overall results- marketers want to measure overall results to evaluate how well they accomplished their objectives. Posttesting is most helpful here to determine whether and how to continue, what to change, and how much to spend in the future. ● Testing is used to make sure IMC dollars are spent wisely and to prevent costly errors, particularly in judging which strategy or medium is most effective. ○ Can give the marketer some measure of the campaign’s value. ○ Pretesting can be controversial for leading to “safe” copy but large clients frequently insist on it, now even in digital campaigns. ■ Not pretesting can lead to a surprise reaction ● Most negative responses are insidious as consumers turn the page or change the channel and sales mysteriously suffer. ○ Posttesting (tracking)- provides the marketer with useful guidelines for future advertising. ● Research process: ○ Analyzing the situation and defining the problem ■ MIS (marketing information system)- a sophisticated set of procedures designed to generate continuous, orderly flow of information for use in making marketing decisions. These systems ensure that managers get the information they need when they need it. ● Typical of large firms with in-house departments ● Small firms struggle here with defining the problem and find that good research on the wrong problem is a waste of effort

■ Using qualitative or quantitative methods ● Qualitative research- gets a general impression of the market or product ○ Enables researchers to gain insight into both the population whose opinion will be sampled and the subject matter itself. ○ Methods may be projective or intensive ○ Focus groups and in depth interviews where the interviewer must think quickly and probe responses and questions vary in order and phrasing each time and questions are added and dropped. Utilities fewer interviews that are longer in length to develop hypotheses, gain insight, explore language, refine concepts, etc. ● Quantitative- include observation, experiment, and survey, to get hard numbers about specific marketing situations ○ Validity and reliability of surveys depend on the sampling methods used and the design of the survey questionnaire ○ Survey and experiments where interviewers read a script and every question is always the same as many samples are done at once to test a hypothesis, prioritize factors, and provide data for mathematical modeling and projections. ○ Interpreting and reporting findings- the report should state the problem and research objective, summarize the findings, and draw conclusions. The researcher should make recommendations for management action and the report should be discussed in a formal presentation to allow for questions and to highlight important points. ● Qualitative research is used to get people to share their motives, beliefs, and perceptions as it encourages consumers to openly discuss their thoughts and feelings in response to questions from the interviewer. ○ Some call this motivation research ○ Projective or intensive methods are used in qualitative research ■ Projective techniques: used to unearth people's underlying or subconscious feelings attitudes, interests, opinions, needs and motives. ● Asks indirect questions to get consumers to express feelings ● Sometimes asked to select pictures to exemplify a brand or company and then questions are asked to determine the meaning of the pictures chosen ● Projective techniques come from marketing research and require more highly experienced researchers ■ Intensive techniques: ● In Depth interviews- carefully planned but loosely structured questions provoke deeper feelings

○ Help reveal individual motivations but are also expensive and time consuming and skilled interviewers who are in short supply. ● Focus group- the company invites 6 or more people of the target market to session to discuss the product in an hour or longer. A trained moderator guides a free discussion that reveals participants feelings or behavior through group interaction. Focus groups are often recorded or observed through a one way mirror. ○ Not a representative of the population but the responses are useful for providing input about the viability of a spokesperson, determining the effectiveness of visuals and strategies, identifying elements in ads that are unclear or claims that don’t seem plausible. ○ Best used with surveys ○ Particularly useful to gain understanding of particular market segments ● Quantitative research- used to gain reliable, hard statistics about specific market conditions or situations. ○ Observation- researchers monitor consumer activities in their native environment. ■ Usually performed by large independent marketing research companies. ● UX (user experience testing)- heavily used to asses experiences with new websites and ensure quality service. ■ UPC (universal product code)- using optical scanners reading codes, researchers can tell what products are selling and how well which increases speed and accuracy at checkout counters, streamlines inventory control, and gives stores and manufacturers point of purchase data. ○ Experiment- used to measure cause and effect relationships. ■ Experiment is a scientific investigation in which a researcher randomly assigns different consumers to two or more messages or stimuli. ● Results are compared to determine campaign effectiveness however researchers mist se strict controls so the variable that causes the effect can be accurately determined. ○ Survey- the researcher gains information on attitudes, opinions, or motivations by questioning current or prospective customers. ■ Can be conducted by personal interview, telephone, mail, or internet. ● Validity- whether it has been administered to a randomly selected sample. ● Direct questioning- researchers can elicit a full range of responses from people and thereby infer how well advertising messages convey key copy points. ○ Especially effective for testing alternative messages in the early stages of development, when respondent’s reactions and input can best be acted on.

○ Universe- the entire target population of prospective customers who must be represented in a sample. ○ Sample- representative of the population’s characteristics ■ Must be large enough to achieve precision and stability ■ 500 survey participants are generally recommended for an accurate sample ○ Sample units- individuals, families, or companies being surveyed. ● Survey questions require: ○ Focus on the topic of the survey ○ Brevity- be as brief as possible ○ Clarity - expressed clearly and simply ■ Ensure respondents understand questions in the same way ○ Typical problems- wrong types of questions, asking too many questions, using the wrong word form for a question and using the wrong choice of words ● Four most common types of questions: ○ Open ended- ○ Dichotomous- ○ Multiple choice- ○ Scale- ● Data collected must be validated, edited, coded, and tabulated. ○ Many researchers want cross-tabulations and software like SPSS and SAS make it easier to tabulate on personal computers and apply advanced statistical techniques. ● International market research is often more expensive and less reliable than the US but it is used to understand cultural traits and habits in overseas markets. ○ Research in 5 countries costs 5 times as much as research in one country ○ Control and direction of the research is another problem ○ Marketers need more than just facts about a country’s culture, they need to understand the nuances of its culture and habits which is hard for someone who doesn’t live there or speak the language ● Challenges of research abroad- ○ Translating questionnaires to local languages ○ People view strangers a s suspicious and don’t want to talk about their personal lives ■ Mail surveys and phone surveys don’t work in Japan ● Expensive- time consuming personal interviews instead ○ Lead times to begin projects are typically longer... far east is particularly troublesome ○ Groups can take twice as long to set up overseas ○ Focus groups rarely use more than 4-6 people rather than 8- ○ Screening requirements for participants abroad are less rigid and foreign moderators tend to be less structured

○ Facilities don't have all the amenities of US offices but costs are frequently twice as high in europe and three times as high in asia ● Two goals for international research are: ○ Flexibility- using the best approach in each market ■ Mexicans and soy sauce, thai and salsa ○ Standardization- information from different countries can be compared .. the study is meaningless ● Quantitative research- ○ Validity- results must be free of bias and reflect the true status of the market. ○ Reliability- results must be repeatable and produce approximately the same result each time the test is administered.

○

Chapter 8:

● Marketing plan- a document that serves as a guide for the present and future marketing activities of an organization. ○ State an organization’s mission ■ Mission statement- a short description of the organization’s purpose and philosophy ● Who the company is, what it does, and how it does it. ○ Assess a brand’s current marketing situation and identify factors ■ Situational analysis- a detailed description of the brand's current marketing situation within the company and in the environment that may help or hinder achieving marketing objectives ● Presents all the facts that are relevant for planning a marketing strategy ● Include a description of brand history, market share, growth, profitability, promotional expenditures, key competitors, etc. ● Provide context for factual information

○ Seven distinct approaches to developing a positioning strategy (ernest martin): ■ Product attribute- setting the brand apart by stressing a particular product feature important to consumers. ■ Price/quality- positioning on the basis of price or quality. ■ Use/application- positioning on the basis of how a product is used. ■ Product class- positioning the brand against other products that while not the same offer the same class of benefits ■ Product user- positioning against the particular group that uses the product ■ Product competitor- positioning against competitors using the strength of the competitor's position to help define the subject of the brand. ■ Cultural symbol- positioning apart from competitors through the creation or use of some recognized symbol or icon ● 8th unofficial approach** By category- positioning by defining or redefining the business category. ○ A simple way for a company to get the number one position is to invent a new product category. ● Developing an appropriate marketing mix for each target market ○ Determine a cost effective marketing mix for each target market the company pursues ■ Product ■ Price ■ Distribution ■ Communication ■ The marketing strategy determines the role and amount of advertising in the marketing mix, its creative thrust, and the media to be employed. ○ Describe tactics or action programs for implementing the marketing strategy ○ Explain how the effectiveness of the marketing efforts will be evaluated ○ Propose a budget for marketing activities ● Successful organizations do not separate IMC plans from marketing ● Objectives indicate the direction a company wants to go ● Strategy indicates the intended route ● Tactics determine the specific short term actions to be taken internally and externally and by whom and when

● Bottom up marketing- ○ Marketing results ○ Marketing strategy ○ Marketing tactics ● Jack Trout and Al Ries think one of the best ways for a company to develop a competitive advantage is to focus on ingenious tactic first and then develop that tactic into a strategy. ○ Reversing the normal process leads to marketers sometimes making important discoveries ● Tactic- a specific action for helping to accomplish a strategy. ○ By planning from the bottom up, entrepreneurs can find unique tactics to exploit ○ Companies should find JUST one tactic, NOT two or three. ■ All elements of the marketing mix can be focused on the tactic. ■ The strategy is what drives home the tactic. ● Combing tactic and strategy creates a position in the consumer’s mind. ● IMC mixes marketing and communications planning together rather than separating them. ○ Using the outside-in process, the IMC approach starts with the customer, as marketers learn about what media consumers use, the relevance of their message to the customer, and when customers and prospects are most receptive to the message. ○ IMC activities begin with the customer and work back to the brand so in turn all corporate marketing functions are dedicated to building and maintaining brand equity through a united focus on stakeholder loyalty. ● Starting the planning process with a database focuses the company on the consumer, not sales or profit goals. ● Wang and Schultz developed a seven step IMC planning model: ○ Segment the customers and prospects in the database ■ Either by brand loyalty or some other measurable purchase behavior ○ Analyze information on customers to understand their attitudes, history, and how they discover and interact with the brand or product ■ The goal is to determine the best time, place, and situation to build and maintain relationships ○ Set marketing objectives based on the analysis ■ Can relate to building and maintaining usage or nurturing brand loyalty ○ Marketer identifies what brand contacts and what changes in attitude are required to support the consumer’s continuance or change of purchase behavior. ○ Set communication objectives and strategies for reaching the consumer and influencing his or her attitudes, beliefs, and purchase behavior. ■ Marketers can decide what other elements of the marketing mix will further encourage the desired behavior

objectives, and restate decisions regarding market positioning and the marketing mix ○ The brand manager then determines what the IMC must accomplish ■ Vague goals lead to misunderstandings and no one understands what the messages are intended to do, how much they will cost, or how to measure the result ● Objectives should be specific, realistic and measurable ■ Sales goals are marketing objectives NOT advertising objectives ● Before persuading customers to purchase, a company must inform, persuade or remind its intended audience about the product, service, or issue. ● “Marketing sells, IMC tells” ○ IMC objectives should always be related to communication effects ■ IMC pyramid (bottom to top): ● Awareness- to acquaint people with the company, product, service and brand ● Comprehension- communicating enough information about the product so that some percentage of the aware group recognizes the product’s purpose, imge, or position and perhaps some of its features. ● Conviction- persuading a certain number of people to actually believe in the product’s value. ● Desire- once convinced, some people will move to desire ● Action- those who desire the product will take action ○ They may request extra info, send in a coupon, visit a store, or buy a product. ■ The IMC pyramid functions in terms of: time, dollars, and people ● Campaign results take time, especially for expensive products that aren’t repeat buys ● As a company continues to communicate with prospects and customers, the number of people who become aware of the product increases. ● As more people comprehend the product, believe and desire, more take action and purchase. ■ Comprehension, interest and credibility can be augmented by media advertising, press publicity, direct mail brochures, and special events. ■ Desire can be enhanced by buzz from review, plus media advertising, beautiful brochure photos, and excitement from sales promotion. ■ Action can be stimulated by direct mail solicitation, sales promotion, and the attentive service of retail salespeople. ■ After the sale, direct mail should continue to reinforce the purchase decision. Call to thank the buyer or solicit feedback on the experience and

offer assistance. This shows that the sale was the beginning of a relationship ● Traditional advertising approaches end with the sale, IMC approach treats the sales as part of a broader relationship. ■ IMC pyramid= learn, feel do ● People rationally consider a purchase, once they feel good about it, they act. ● IMC affects attitude, attitude leads to behavior.. theory. ○ True for big purchases that are high involvement like a new car. ● Impulse purchases= do, feel, learn ○ Behavior leads to attitude ■ Other purchases may follow the same pattern ● IMC pyramid reflects the traditional mass marketing monologue, ○ Marketers talk, consumers listen ■ Still valid in some categories with limited options but today technology and computers has shifted this. Marketers have databases with info about where consumers live, what they buy, what they like and dislike. ■ Marketers have a dialogue and the model becomes a circle rather than a pyramid ● Interactive media=real time responses ● Feedback can evolve the product, sercie, and message ● IMC reinforcement builds brand loyalty and reminds people of their successful experience with products, suggesting reuse. ● IMC objective- what the marketer wants to achieve with respect to consumer awareness, attitude, and preference ● Advertising strategy- how do we get there. ● IMC strategy- blends the creative mix (target audience, product concept, communications media, and advertising message). ● Target audience- the specific people the IMC will reach.. larger than the target market. ○ Heavy users and light users of a brand must both be targeted because brand popularity cuts across all levels of purchasing frequency ○ The accumulation of sales to both kinds of users is what makes a product dominant ● Product concept- “bundle of values” ○ A simple statement must be made to describe the product concept .. is how IMC will present the product

○ Sales response to advertising may build over time, but the durability of advertising is brief, so a consistent investment is important. ○ Advertising expenditures below certain minimum levels have no effect on sales. ○ Some sales will occur even if there is no advertising. ○ Culture and competition impose saturation limits above which no amount of advertising can increase sales. ● IMC isn’t the only marketing activity that affects sales ○ A change in market share may occur because of quality perceptions, word of mouth, the introduction of new products, competitive trade promotion, the opening of more attractive outlets, better personal selling, seasonal changes in the business cycle, or shifts in consumer preferences ● Sustained spending during difficult times protects and sometimes even increases market share and builds brands ● Before determining IMC allocations, the brand manager must consider the company’s economic, political, social, and legal situations since these factors affect total industry sales and profits ○ Consider institutional and competitive environments ○ Consider the internal company environment ● Methods to determine IMC budget: ○ Percentage of sales- ■ One of the most popular techniques for setting promotional budgets ■ May be based on a percentage of last year’s sales, anticipated sales for next year, or a combination of the two. ■ Simple method that doesn’t cost anything and is related to revenue.. safe. ■ Problem: what percentage do you use? ● Usually the percentage is based on an industry average or company experience ● Applied against anticipated future sales, the method usually works well by assuming that a certain number of dollars will be needed to sell a certain number of units. If the company knows what the percentage i, the correlation between IMC spend and sales should remain constant assuming the market is stable and competitors spending remains unchanged. ○ Since this is a common method, it diminished the likelihood of competitive warfare. ■ A big issue with this method is that it violates a basic marketing principles.... Marketing activities should stimulate demand and thus sales, not occur as a result of sales. ● If IMC automatically increases when sales increase and declines when sales decline, it ignores all other factors that might encourage an opposite move.

■ This method also ignores the strategic nature of marketing, instead of encouraging planners to think carefully about the proper budget for accomplishing objectives, it forces them to develop objectives that fit the budget. ● The opportunity to build brand equity or relationships is thus lost. ○ Percentage of profit ○ Unit of sale ○ Competitive parity ○ Share of market/share of voice- an attempt to link promotional dollars with sales objectives. A company’s best chance of maintaining its share of a market is to keep a share of IMC (voice) somewhat ahead of its market share. ■ Commonly used for new product introductions. ■ When a new brand is introduced, the budget for the first two years should be about one and a half times the brand’s targeted share of the market in two years. ● If the company's two year sales goal is 10% of the market, they should spend about 15% of promotional spending during the first two years. ○ Objective/task methods ■ Used mainly by large national marketers in the US and treats IMC as a marketing tool for generating sales. ■ Three steps in the task method: ● Defining objectives ● Determining strategy ● Estimating cost ○ After setting specific, quantitative communication objectives, the company develops programs to attain the, ● The estimated cost for the program becomes the basis for the budget ● The task method forces companies to think in terms of accomplishing goals and its effectiveness is most apparent when campaign results can be readily measured. The task method is adaptable to changing market conditions and can be easily revised. ● Empirical research method- a company runs a series of tests in different markets with different budgets to determine the best level of advertising expenditure. ● ALL METHODS rely on one of two fallacies. ○ IMC is a result of sales ■ Marketers know this is not true yet they continue to use the percentage sales method ○ IMC creates sales

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ADV 3008 Exam 2 Review - Summary Contemporary Advertising and Integrated Marketing Communications

Course: Principle Of Advertis (ADV 3008)

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Students shared 18 documents in this course

University: University of Florida

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Chapter 7:

● Information about customers that advertisers need to know:

○ Who they are (audience)

○ What they want

○ What they like

○ Where they spend their media time

● Marketing research- the systematic procedure used to gather, record, and analyze new

information to help managers make decisions about marketing goods and services.

○ Helps managers:

■ Identify consumer needs and market segments

■ Develop new products and communication strategies

■ Assess the effectiveness of marketing programs and promotional

activities

○ Also useful for:

■ Financial planning

■ Economic forecasting

■ Quality control

○ Information helps to:

■ Recruit-

● Researchers study different market segments and create product

attribute models to match buyers with the right products and

services.

● Marketers questions:

○ What new products do consumers want?

○ Which ideas should we work on?

○ What product features are most important to our

customers?

○ What changes in the product’s appearance and

performance will increase sales?

○ What price will maintain the brand’s image, create profit,

and still be attractive and affordable?

■ Nature, content, packaging, and pricing of products

may change with the answers to these questions!

■ Retain-

● A marketer may use customer satisfaction studies

● Databases of customer transactions may identify reasons for

customer satisfaction and dissatisfaction.

● Best sales go to companies who develop good relationships with

individual customers.

○ Customer satisfaction is the fastest growing field in

marketing research

■ Regain-