MGT 4308 (Quiz 1)

Integrated Marketing Communications (IMC)
The optimal combination and coordination of the promotional mix elements designed to provide clarity, consistency, and maximum communications impact
Marketing Strategy
Define a target market
Marketing mix
-Product
-Price
-Place
-Promotion
Advertising Defined
-The structured and composed non-personal communication of information
-Usually paid for
-Usually persuasive in nature
Can be persuasive, informative, or reminder-oriented

-about products, services, or ideas
-by identified sponsors
-through various media

Functions of Advertising
-to identify brands and differentiate them
-to communicate information about the brand, its feature (benefits), and its location of sale
-to induce consumers to try the brand and to suggest re-use (PULL)
-to stimulate the distribution of a brand (PUSH)
-to build brand value, preference, and loyalty
-to increase product use
-to lower the overall cost of sales
-to slow demand (demarketing)
Recent Developments
-very targeted media (narrowcasting)
-digital
-ads in new medium
-product placements in movies, TV
-native advertising
-“nontraditional” media methods of advertising
-concern with effectiveness of traditional media
-shifting $$$
Marketing Communication
Source–party who formulates an idea
-Company or organization
-Spokesperson

Encoding–translates the idea into a message
-words, symbols, both

Message–idea to be sent

Channel–medium or set of media carrying message
-Personal–personal selling
-Nonpersonal–television, newspapers, magazines, radio, and billboards

Receiver–consumer

Decoding–consumer’s interpretation of an advertisement
-Depends on aspects of consumer behavior
-Attitudes, perceptions, personality, etc.

Noise–hundreds of other advertisements consumers encounter

Feedback–acknowledgement of received message; importance of direct response mechanisms or tracking mechanisms
-redeemed coupons
-increase in store traffic
-banner ad clicks, etc.

What this means for marketers…
-clear, consistent messages are important
-need to understand consumers’ held beliefs about product, brand, category
-early positioning is important
-limited processing capacity means less opportunity for products and services to be differentiated
-importance of two-way communication and relationship marketing
-accumulation, not replacement
Replacement Model
new concept–>memory–>old or existing concept
Accumulation Model
New concept–>existing concept
Marketing communications messages will not be processed IF…
-they are not recognizable
-they are not related to each other
-conflict with what has already been stored
-unrelated or unimportant to the person
Four main groups comprise the advertising industry
-advertisers
-ad agencies
-media
-miscellaneous suppliers
Basic functions performed by advertisers and ad agencies
-planning
-research
-budgeting
-coordination
-ad creation
Advertising Agency
-an independent organization
-of creative and business people
-who specialize in developing and preparing advertising plans, advertisements, and other promotional tools
-who purchase advertising space and time in various media on behalf of their clients
-in support of specific marketing and advertising objectives
Ad Agency Functions
Account Management
–liaison between the agency and the client; manages the client/agency relationship
Account Planning
–integrated marketing communications planning
–Research
to develop
to evaluate
–Creative Development
–Ad Production
–Media Planning
Types of Ad Agencies
Full-Service Agencies
-general consumer agency
-business-to-business agency

Specialized Service Agencies
-creative boutiques
-media-buying services
-interactive agencies

Media Commission
(15%)
$100 billed to advertiser by agency
– 85 paid to media by ad agency
$15 commission to ad agency
$100 => published commissionable price
Mark-Ups
(17.65%)
$85 billed to agency by supplier
x1.1765 mark-up
$100 billed to advertiser by agency
$85 => non-commissionable expense
Fee-Based Systems
-Fee-commission
-straight-fee
-incentive plans
-risk-reward
Agency Compensation
the trend in advertising agency compensation is away from the traditional approach using media commissions and mark-ups, and towards more fee-based and incentive-based plans
Commissions/Mark-ups
Pros:
-simple to administer
-no negotiation needed

Cons:
-ignores performance
-agency incentive to spend
-need to operate within 15% may result in substandard work

Straight-fee
Pros:
-removes agency incentive to spend
-increases advertiser control

Cons:
-ignores performance
-difficult to negotiate
-agency incentive to reduct resourses

Incentive/Risk-Reward Plans
Pros:
-compensation is performance-based
-best in principle

Cons:
-how to measure performance?
-lag effects
-limited to situations where advertising is the dominant promotion mix element

Agency Compensation New Developments
-equity stakes
-ads as intellectual property
Agency Organization
Departmental Systems:
-organized by function/expertise

Group Systems:
-organized by customer/client

In-House Agency:
-advertiser builds and staffs their own ad agency to perform agency functions

In-House Ad Agency
Pros:
-save commissions and mark-ups
-align brand message
-faster response
-already understand the business
-no other clients
-consistency from lack of turn over

Cons:
-loss of objectivity
-loss of creativity
-difficult to attract the best creative talent
-staffing $$$

Most readily overcome the disadvantages of using an in-house ad agency?
-Business to business
-Creative organizations

Agency Review (packet)
-general
-marketing
-creative
-production
-media
-personality
-references
Marketing Research
-identify consumer needs
-identify market segments
-develop new products
-design marketing strategies
-assess effectiveness of marketing programs
-provides information necessary to make marketing decisions
Advertising Research
-systematic gathering and analysis of information to help develop and evaluate advertising strategies, individual ads, and entire campaigns
-provides information necessary to make advertising decisions

1. Strategy Determination
2. Creative Concept Development
3. Pre-testing
4. Post-testing

Product Concept
-consumers’ perception of a product or service as a bundle of values that satisfy wants and needs
-leads to effective positioning strategy
Target Audience Selection
-Who are the heavy users?
-Untapped groups?
Media Selection
-What television shows/magazines.websites are our customers watching/reading/visiting?
-when are they watching/reading/listening/surfing?
Message element selection
how do we create a clear message that will influence/persuade/etc. our customers?
Creative Concept Research
-measures the target audience’s acceptance of different creative ideas at the concept stage
-done before agency production begins
-may include: concept testing, name testing, slogan testing
Pretesting Ads
-testing the effectiveness of an advertisement for gaps or flaws in message content before recommending it to clients
-done before finished artwork and photography
-is it believable? interesting? likable? memorable? persuasive?

Challenges:
-artificial setting
-interviewer
-demand responses

Posttesting Ads
-testing the effectiveness of an advertisement after it has been run
-tests finished ads under actual market conditions
-is it memorable? changing attitudes? affecting sales?
Posttesting Methods
Unaided recall
-what advertisements can you recall?

Aided recall
-do you remember seeing this ad?

Attitude tests
-measuring changes after a campaign
-better than recall tests for measuring sales effectiveness

Inquiry tests
-readers respond to get something

Sales tests
-past sales versus current sales

Challenges of Posttesting
Recall tests
-measure what they notice, not what they buy

Inquiry tests
-do they reflect sincere interest?

Sales tests
-only useful when advertising is the dominant marketing communication
-other factors can affect
-lag effects

Planning Process
Marketing plan
-marketing goals and objectives
-marketing strategy and tactics

Advertising plan
-advertising goals and objectives
-advertising strategy and tactics

Marketing Plan
-specifies the overall goals, objectives, strategies, and tactics for the brand

Effect on advertising
-helps managers analyze and improve communications
-defines the role of advertising in the marketing mix
-enables better implementation, control, and continuity of campaigns
-ensures most efficient allocations of IMC dollars

Top-Down Marketing Plan
Most traditional and most commonly used format of marketing planning that includes 4 stages:

Situation Analysis:
-factual statement of the company’s current situation and how it got there
-should also place these facts into context
-from it, companies usually develop SWOT analysis

Marketing Objectives:
-need-satisfying (focus on customer)
-sales-targeting (focus on company)
-different from corporate objectives, which are expressed in terms of profit, ROI, net worth, earnings ratios, etc.

Marketing Strategy:
-describes how the company plans to meet its marketing objectives–includes defining target market, determining strategic positioning, and developing appropriate marketing mix

Marketing Tactics:
-specific short-term actions to be taken to put into effect marketing strategy

Bottom Up Marketing Plan
Marketing Tactics–>
Marketing Strategy–>
Marketing Results
The New Marketing Mantra: Relationship Marketing
Keys to Building Brand Equity:
-Customers, not products, are focus
-Market relationships, not transactions
-Know the customer has choices
Four P’s –> Four C’s
-Customer (instead of product)
-Cost (instead of price)
-Convenience (instead of place)
-Conversation (instead of promotion)
Sources of Brand Messages
-Planned
-Product
-Service
-Unplanned
Planned
Traditional marketing communications messages
-Advertising
-Sales promotions
-Personal selling
-Public relations
-Event sponsorships
Product
Messages from other elements in marketing mix
-Price
-Packaging
-Distribution elements
Service
Employee interactions with customers
-General employees
-Customer service
Unplanned
Uncontrollable sources
-Employee gossip
-Unsought news stories
-Competitors
-Word-of-mouth rumors
-Major disasters
IMC Approach to Marketing Planning
Customer–>
Communications Objectives–>
Communications Strategy–>
Communications Tactics
Advertising Planning
-The plan that directs the company’s advertising effort

-It analyzes the situation, sets advertising objectives, and lay out a specific strategy from which ads and campaigns are created

-Stems from the marketing plan
—what strengths and opportunities need to be leveraged?
—what weaknesses and threats need to be addressed?

Advertising Planning–Setting Advertising Objectives (first step)
Objectives are KEY!
-They guide the planning and decision making
-They affect creative media decisions
-They provide a benchmark

Must be specific, about the customer, clearly written, measurable, realistic, achievable, and time specific
(SMART–Specific, Measurable, Achievable, Realistic, and Time specific)

Caveat
Marketing sells, Advertising tells:

-Marketing objectives can be related to sales, advertising objectives should be related to communication outcomes

-Before advertising can persuade consumers to buy, it must inform, persuade, or remind its audience about the product or service

-Some communications are more directly tied to sales:
—direct-response advertising
—sales promotions
—point-of-purchase displays

Advertising Objectives
Any individual advertising objective must be:
1) result-specific (i.e., measurable)
2) time-specific
3) quantified
4) reasonable/challenging

-not related to sales in communication

The Advertising Plan: Setting Objectives (Advertising Pyramid)
Action (Top)
Desire
Conviction
Comprehension
Awareness (Bottom)

(as you go up, fewer people, more time, more money)

Setting the Objectives
Awareness
-to acquaint people with the company, product, service, and/or brand
-“within 3 months, communicate the existence of CAR to half of the more than 500,000 people who annually buy imported economy cars”

Comprehension
-communicate enough information about the product’s purpose, image, or position, and perhaps some of its features
-“within 5 months, get two-thirds of the “aware” group to comprehend that CAR is a superior economy car with many design, safety, and environmentally friendly features, etc. etc.”

Conviction
-persuade people to actually believe in the product’s value
-“within 6 months, convince two-thirds of the “comprehending” group that CAR is a high-quality car, reliable, economical, and fun to drive”

Desire
-motivate consumers to desire the product
-“within 8 months, stimulate desire within two-thirds of the “convinced” group for a test drive”

Action
-motivate people to request additional information, send in a coupon, or visit a store
-“within a year, motivate two-thirds of the “desire” group to take action and visit retailer for a test drive”

Determining Advertising Strategy
Creative Strategy:
-guide for developing advertising
-defines the target audience
-restates the objective of advertising
-specifies the key benefits to be communicated

Media Strategy:
-provides direction to the media planners
-defines communication objectives that must be achieved and describes how these will be accomplished through the use of media vehicles

Get access to
knowledge base

MOney Back
Guarantee
No Hidden
Charges
Unlimited
Knowledge base
Become a Member