Advertising

&
The Marketing Process
Chapter 3
 Definition’s of Marketing & Advertising
• Marketing: Process of planning and executing the conception, pricing, promotion,
and distribution of ideas, goods, and services to create exchanges that satisfy the
perceived needs, wants, and objectives of the customer and the organization
• Advertising: Is paid non-personal communication from an identified sponsor using
mass media to persuade or influence an audience. It is part of the marketing-mix
• Marketing-Mix: A blend of activities such as designing the product and its
package, pricing the product, distributing the product so that it is accessible to
customers, and promoting or communicating about the product.
• Marketing Communications a.k.a. Promotion: Is an umbrella term for
many types of promotional activities; advertising, public relations, sales promotions,
personal selling, packaging, point-of-sale, and direct marketing. As a part of this,
advertising has the ability to reach mass audience repeatedly. It helps introduce
products, explains important changes, reminds and reinforces and helps persuade.
Types of Markets
Professional and Trade Advertising

Institutional

Business-to-Business Reseller
(Industrial)

Consumer

Consumer Advertising
 The Process of Approaching
the Market
Undifferentiated or market
aggregation
strategy is when you treat
the market as homogenous
Segmentation is when you
recognize the
market differences and
adjust to them accordingly
Positioning is using
tangible and intangible
differentiation to create a
unique place in the
consumer’s mind. It can be
done using attributes,
pricing, competitor’s,
application, users, product
class etc. Eg. Volvo is Safe,
Haleeb is Thick.
Step 1
Assess the needs of the market and the company’s
Marketing Concept is
ability to meet these needs profitably
when consumer needs
takes precedence in
Step 2 shaping a marketing mix
Choose an undifferentiated, segmentation, or
combination strategy Integrated Marketing is
when all the elements of
the marketing mix work
Step 3
For a segmentation or combination strategy, together to position a
determine the target market(s) that would be brand (message and media
most receptive to the product
working in unison)
Relationship Marketing
Step 4
Select an approach to each target market through is when customer needs
product differentiation and positioning are fulfilled through
personal attention
Step 5
Take action to approach the target market(s)
 Marketing Mix Elements
Product Distribution
•Design and Development •Distribution Channels
•Branding •Market Coverage
•Packaging •Storage
•Maintenance

Price Communication
•Price Copy •Personal Selling
•Psychological Pricing •Advertising
•Price Lining •Sales Promotion
•Value Determination •Direct Marketing
•Marketing Public Relations
•Point of Sale/Packaging
 Product Characteristics
The Product

Tangible Characteristics Intangible Characteristics

•Size Message Strategy to •Style
•Features Represent the Product •Quality
•Color •Image
•Durability •Prestige
•Package •Warranty
•Taste Advertising Message •Brand Name
•Others •Others

Product Interpretation and

Evaluation by Customer
 Branding
• Brand: A name, term, design, symbol (e.g. package,
spokesperson) that identifies the goods, services,
institution, or idea sold by a marketer
• Brand Name: Part of a brand that can be spoken, such
as words, letters, or numbers e.g. Xerox, WD 40
• Brand Mark: a.k.a. the logo, is part of the brand that
cannot be spoken. It is the symbol, picture, design,
distinctive lettering or color combination e.g. Shell,
Swoosh
• Trade Mark: When a brand name or brand mark is
legally protected through registration. Usually given for
specific categories unless unique e.g. Supreme is
registered only for tea and beverages
 Branding…
Brand Equity: Set of assets (and liabilities) linked to a
brand’s name and symbol that adds to (or subtracts
from) the value provided by a product or service to
a firm and/or that firm’s customers. Equity
enhancing drivers include brand awareness, brand
loyalty, perceived quality and other brand
associations.
Brand Identity: Includes the essence, core and
extended identity – the DNA of a brand. This is
how the marketer wants the consumers to think of
the brand
Brand Image: What the consumers actually perceive
of the brand. Based on the positioning and any
contact the consumer has with the brand
 Channels of distribution
• Direct Marketing: Companies distributing their
products directly without using resellers e.g. Bombay
Bakery
• Indirect Marketing: Product is distributed through a
channel structure that includes one or more resellers
• Cooperative Advertising Allowances: When
producers and resellers share the cost of placing the ad
• Push, Pull and Combination Strategies: Directing
marketing efforts at resellers in push and consumers in
pull or using a combination of both as in most cases
• Exclusive Distribution: Only one distributor is
allowed to sell the brand in a particular market e.g.
Dabur in Pakistan uses only Muller and Phipps for
distribution
 Channels of
distribution…
Selective Distribution: Expands the number of outlets
but restricts participation to those that contribute
most profitably to the manufacturer e.g. Walls
cabinets given to only those shops that sell a certain
volume every month
Intensive Distribution: Placing the product in every
possible outlet (even vending machines) to attain
total market coverage e.g. colas
 Pricing
• Price Copy: Advertising copy which delivers
information on pricing
• Customary or Expected Pricing: Uses a single, well
known price for a long period of time e.g. Sachets of
tea, shampoo priced at Rs. 2
 Pricing…
Psychological Pricing: E.g. Prestige pricing, where a high
price is set t make the product seem worthy or valuable.
Price reductions dine with slogans such as “Special
Sale” or “Rs. 100 and Rs. 50 shops at Park Towers”
Luxury Products can be divided into four consumer
categories namely:
1. Wealthiest of the Wealthy e.g. Advertising
targeting Rolls Royce, Cartier users
2. Class gone Mass e.g. Tudor by Rolex, Fairfield Inn
by Marriott
3. Mass gone Class e.g. Gul Ahmed’s “Ideas” or
Suzuki’s “Baleno”
4. Everyday Luxury e.g. Starbucks CaffeLatte
 Pricing…
Category and Media: Print advertising has a
high value for advertising to the affluent. Fashion
brands choose a few magazines appealing to
relevant high end consumers e.g. Harpers Bazaar
Price Lining: When a company offers variations
of a product and prices them accordingly e.g.
Ads by Sony and Philips with price ranging from
reasonable to exorbitant depending on size and
features
Advertising should clearly and consistently match
the product’s pricing strategy
 Marketing Communications Mix
Marketing
Comparison
Objectives Customer Time of
Communication Contact Response
Element
Advertising Attention, Indirect Moderate or short
attitude and
behavior
change
Personal Selling Sales Direct Short
Sales Promotion Sales Semidirect Short
Direct Marketing Behavior Semidriect Short
change
Public Relations Attitude Semidirect Long
change
MC orPoint-of-sale and
Integrated Marketing Behavior
Communication Direct
is when all of the Moderate
above communication m
ementspackaging change
work in unison to deliver a consistent message across media
 Types of Agencies
• Full-Service: Includes four major staff functions
including account management, creative services,
media planning and research (buying and account
planning)
• Specialized: Specialized in certain functions e.g.
copy writing, audiences e.g. youth or industries e.g.
health care. They can also specialize in communication
areas such as PR, Event Management, Activations etc.
• Industry-Focused: Concentration on one industry
e.g. Government of Pakistan, Computers, Medicine,
NGO’s etc.
 Types of Agencies…
Minority: Focusing on certain ethnic groups. Not
common in Pakistan
Creative Boutiques: Ad agencies, usually small, that
concentrate entirely on preparing the creative
execution i.e. from idea to the creative product
Media-Buying Services: Specialize in the purchase
of media for clients e.g. Mindshare, Media Matrix
Virtual: Agency operating as a group of free lancers.
Usually operate without conventional office space i.e.
operating out of home, cars or client’s offices
 How Agencies are Organized
and Reimbursed
• Account Management: Acts a liaison between the client and the
agency. Typically has four levels: management representative or
supervisor (reporting to top management, looking after strategic
issues, new business opportunities, profit management) account
director, account supervisor (primary contact between agency and
client, handling strategic plans, assigning task priorities), account
executive and their assistants, (handling day to day activities such
as contact reports, budget adherence, supervising production of
material etc.).
• Creative Development and Production: Includes staff such as
the creative directors (master creator who conceives, writes, and
produces innovative advertising), group heads or assistant creative
directors (who work as coaches i.e. delegate assignments, work
with the staff to find an idea and then mold, improve, nurture an
inspire the staff), creative department managers, copywriters, art
directors (people who design ideas for print or TV) and producers
(people who convert ideas into commercials)
 How Agencies are Organized
and Reimbursed
Media Planning and Buying: Media department
(in-house) usually perform three functions: planning,
buying and research
Account Planning and Research: Gathers all available
intelligence on the market and consumers so that ad messages
should be based on consumer insights
Internal Services: These include the traffic department
(responsible for internal controls and tracking of projects to
meet deadlines), print production (taking a layout, a visual
and page of copy and turning it into a full page ad), financial
services (managing agency cash flow, billing and receivables
etc), human resources. Can also include PR, Sales Promotion,
Direct Marketing and Event Management
How Agencies are Organized
and Reimbursed
Reimbursed through: Commission as a
percentage of the media costs (usually 15%), fee –
could be hourly, fixed retainer plus actual expenses
for artworks, ad productions etc.