Chapter 12 Retailing 12/19/2011 9:02:00 AM
1. IMPORTANCE OF RETAILING
Retailing is all the activities directly related to the sale of goods
are services to the ultimate consumer for personal, non business
use. Simply shopping for groceries =, clothes, hairstyling we are
involved in retailing.
The retailing in Canada has the largest amount of employees.
Retailers rang up more than $413 billion in sales in 2009.
Top 10 Canadian-based retailers
o Number one is Loblaws
2. CLASSIFICATION OF RETAIL OPERATIONS
A retail establishment can be classified according to its ownership,
level of service, product assortment, price and place of business.
o Retailers can be classified broadly by form of ownerships:
independent, chain member, or franchise.
o Independent retailers are retailers owner by a ingle person
or partnership and not operated as a part of a larder retail
o Chain stores are stored owners and operated as a group by
a single organization
o Franchise is the right operate a business or to sell a product
(think Tim Hortons)
Level of Service
o The level of service ranges form full service to self service.
Some retailers, such as exclusive clothing stores, offer high
levels of service.
o The third basis for positioning or classifying stores is
according to the breadth and depth of the products they
often. Places like Lululemon , Aldo, Harveys have the most
concentrated product assortment
o Other retailers such as factory outlets, may carry only part of
a single item. Price
o Price is a fourth way to position retail stores. Traditional
department stores and specialty stores typically charge the
full suggested retail price.
o Gross margin is the amount of money the retailer makes as
a percentage of sales after the cost of goods sold is
o A factory outlet has lower prices and low gross margins.
Markdowns on merchandise during sale period and price wars
among competitors, in which stores lower prices on certain
items in effort to win customers.
Place of Business
It is very important where you place your business. Place of
business is whether a retailer primarily sells using an in-store
method through a physical ( bricks or mortar) store location
method or sells using a non-store method.
In-store retailers means customers physically shop at
stores to make a purchase.
3. MAJOR TYPES OF RETAIL OPERATIONS
There are several types of retail stores with each offering a different
product assortment, type of service and price level.
o Department stores, specialty stores, supermarkets,
drugstores, convenience stores and discount stores
o Department stores are stores housing several different
departments under one roof.
o Each department is usually headed by a buyer, a department
head who not only select the merchandise for his/her
department but may also be responsible for promotion and
o Central management is also responsible for the overall
advertising program, credit policies, store expansion,
customer service etc.
o Canada is dominated by two department chains: The Bay and
Sears. o Department stores carry a variety of brands and there own
manufactured brands as well (think the Bay how they have
Lacoste, Guess, Material Girl and also Hudson Bay products)
o A specialty store is not only a type of store but also a
method of retail operation. They can also specialize in a type
o These types of stores carry a deeper but narrower assortment
of specialty merchandise than does a department store
M&M meat shops, Tim Hortons, Aldo Shoes are
examples of specialty stores
o Supermarkets are a large, departmentalized, self service
retailer that specializes in food and non food items.
o As stores seek to meet consumer demand for one stop
shopping, conventional supermarkets are being replaced by
superstores which are usually twice the size of supermarkets.
Superstores meet the needs of today’s customers for
convenience, variety and service.
o This tendency to offer wide variety of nontraditional goods
and services under one roof is called scrambled
Loblaws exemplifies this trend
o A recent trend is supermarket diversification is the addition of
store-owned gas stations.. The gas stations not only are new
revenue source and convenience but they attract new
o Trends are the add more cultural into these supermarkets and
offer a variety of food from all over the world in these
o Drugstores are retail stores that stocks pharmacy related
products and services as its main draw.
o Drug stores carry over the counter medications, cosmetics,
health, and beauty aids, seasonal merchandise, specialty
items like greeting cards. o They are very favourable for the drugstore industry
o Convenience store is a miniature supermarket carrying only a
limited line of high turn over convenience items.
o Convenient locations, long hours, and fast service.
o The Canadian market is dominated by chain store competitors
including North Americas market leader 7-11, and Couche
Tard ( Macs)
o A discount store is a retailer on the basis of low prices, high
turnover, and high volume.
o Discounters can be classified into four major categories: full-
line discount stores, specialty discount stores, warehouse
clubs, and off-price discount retailers.
o Full line discount stores
They offer the consumers very limited service and carry
much broader assortment of well-known, nationally
branded hard goods, including house wares, toys,
automotive parts, hardware, sporting goods and garden
Mass merchandising is a retailing strategy whereby
retailers offer reduced service and moderate to low
price on large quantities of merchandise in order to
stimulate high turnover of products.
Walmart is the worst largest full line discount
Supercentres combine a full line of groceries and
general merchandise with a wide variety of other
service including pharmacy, dry cleaning, photo
Many European countries are passing legislation to
make it more difficult to open supercentres. Specialty Discount Stores
Specialty discount stores are retail store that offers a
nearly complete selection of single line merchandise and
uses self-service, discount prices, high volume and high
Specialty discount stores are often termed category
killers. They dominate their narrow merchandise
o Warehouse Memberships Clubs
Warehouse memberships clubs sell a limited
selection of brand name appliance’s, household items
and groceries. These are usually sold in bulk from
warehouse outlets on a cash and carry basis to
Costco, Sam’s Club
o Off-Price Retailers
Off-price sells a prices 25 percent or more below
traditional department store prices because it pays cash
for its stock and usually doesn’t ask for return
Off price retailers buy manufacturers overruns at cost
or even less.
They also absorb goods from bankrupt stores, irregular
merchandise, and unsold end of season output.
Factory outlets are an interesting variation on the off
A factory outlet is an off price retailer owned and
operated by a manufacturer. This it carries one line of
Factory outlet malls typically locate in out of the way
rural areas or near the highway or even vacation spots.
Some stores such as the Gap, Brooks Brothers, Donna
Karan are have all made a different line for their outlet
o They are a fine line between service and retailing. They
tangle products like food and drink.
o Eating out is an important part of Canadians daily activities
and is growing in popularity.
o It is a very competitive industry. They not only face
competition from other restaurants but also from consumer
who can easily choose to cook at home.
4. NONSTORE RETAILING
Nonstore retailing is shopping without visiting the store. The major
forms of nonstore retailing are automatic vending, direct retailing,
direct marketing and electronic marketing.
o A low profile yet important for of retailing is automatic
vending tat is the use of machines to offer goods for sale.
o Pop machines, chips , candy, some are even coffee.
o Marks Work Wearhouse tried testing out two vending
machines to dispense clothing. It would dispense items like
umbrellas, mittens and toques and was located by a GO
transit in Toronto.
o The second was near a health centre and dispensed
loungewear and scrubs
o Some vending machines have cameras like at zoos.
o Direct retailers is the selling of products by representatives
who work door-to door, office-to office or home parties.
o Think of Tupperware, or even Avon.
o Direct marketing is techniques used to get customers to make
a purchase from their home, office, or other nonretail setting.
o Many retailers employ a direct selling business model as part
of a multichannel distribution approach, encompassing
electronic retailing, catalogue retailing and bricks and mortar
locations. o These types of techniques include direct mail, catalogue and
mail order, telemarketing and electronic selling
o Direct Mail
Direct mail can be the most efficient or the least
efficient retailing method, depending on the quality of
the mailing list and the effectiveness of the mailing
Direct mailers are becoming more sophisticated in
targeting the right customers. They use analyze census
data, lifestyle and financial information.
o Catalogues and Mail Order
Canadian consumers can buy just about anything
through catalogues and mail order from the mundane
such as books, music, and poloshirts.
They have been giving away to online shopping.
Improved customer service and quick delivery policies
have boosted consumer confidence in ordering from
Telemarketing is the use of the telephone to sell
directly to consumers. It consists of outbound sales
calls, usually unsolicited and inbound calls.
Rising postage rates and decreasing long distance
phone rates have made outbound telemarketing an
attractive direct marketing technique.
Searching for ways to keep costs under control,
marketing managers are discovering how to pinpoint
prospects quickly, zero in on serious buyers and keep in
close touch with regular customers.
o Electronic retailing includes the 24 hour, shop at home
television networks and online retailing.
Shop at Home Networks
Shop at home television networks are specialized
forms of direct response marketing.
The shopping channel is a very strong brand Home shopping networks attract a broad audience
through diverse programming and product
Online retailing is a type of shopping available to
consumer with personal computers and access to
Online retailing has exploded over the past
several years; consumers have found this type of
shopping convenient and often less costly.
As the popularity of online retailing grows, it is
becoming vital for retailers to go online and for
their stores, websites, and catalogues.
Famous players sells online tickets.
A franchise is a continuing relationship in which a
franchisers grants to a franchise the business
rights to operate or sell a product.
Franchiser is the originator of a trade name,
product, methods of operations, and so on that
grants operating right to another party to sell its
Franchisee is an individual or business that is
granted the right to sell another’s party’s product.
Franchising is not new.
Two basic forms of franchises are used today:
product and trade name franchising AND business
Product and trade name franchising is a
dealer agrees to sell certain products provided by
a manufacturer or a wholesale.
Business format franchising is an ongoing
business relationship between franchiser and a
franchisee. Typically the franchiser sells a
franchisee the right to use the franchisers format. 6. RETAIL MARKETING STRATEGY
Retailers must develop marketing strategies based on overall goals
and strategic plans. Retailing goals might include more traffic, high
sales of a specific items, a more upscale image
Defining a Target Market
o The first and foremost ask in developing a retail strategy is to
define the target market.
o Target markets in retailing are often defined by
demographics, geography, and psychographics.
o Determining a target market is a prerequisite to creating the
Choosing the Retailing Mix
o The retailing mix consists of six P’s: the four P’s of the
marketing mix ( product, place, promotion, price) as well as
presentation and personnel .
o The 4 P’s together project a stores image, which influences
o The Product Offering
The first element in the retailing mix is the product
The product offering is the mix of products offered to
the consumer by the retailer; also called the product
assortment or merchandise mix.
Developing a product is essentially a question of the
width and depth of the product assortment.
Width refers to the assortment of products offered
Depth refers to the number of different brands
offered within each assortment.
Private label brand is a brand that is designed and
developed using the retailers name.
Think of Presidents Choice
o Promotion Strategy
Retail promotion strategy includes advertising, public
relations, and publicity, and sales promotion.
The goal is to position the store in consumer minds. Retailers design intriguing ads, stage specials, events,
Advertising is mostly local although some brands do
o The Proper Location
After settling on a geographic region or community
retailers must choose a specific site.
Besides growth potential, the important factors are
neighborhood socioeconomic characteristics, traffic
flows, land costs, zoning regulations and public
One final decision about location faces retailers:
whether to have a freestanding unit or to become a
tenant in a shopping centre or mall.
o Freestanding Stores
Destination stores are stores that consumers
purposely plan to visit.
An isolated store are stores that consumers seek out
and then purposely plan to visit.
Freestanding units are increasing in popularity as
retailers strive to make their stores more convenient to
access, more enticing to shop in and more profitable.
o Shopping Centres
Community shopping centres provided off street parking
and a broader variety of merchandise
o Regional Malls
Regional malls offer a much wider variety of
merchandise started appearing in the mid 1970s.
They are entirely enclosed or roofed to allow shopping
in any weather.
Locating in a community shopping centre has many
Designed to attract customers
Unified image Tenants share expenses
o Retail Prices
Retailing ultimate goal is to sell products to consumers,
and he right price is critical in ensuring sales.
A trend is “ everyday low pricing” or EDLP
o Presentation of the Retail Store
The main element of a store’s presentation is its
atmosphere, the overall impression conveyed by its
physical layout, décor, and surroundings.
The layout of the store is a key factor.
These are the most influential factors in creating a
A) Employee type and density
B) Merchandise type an density
C) Fixture type and density
F) Visual factors
o Personnel and Customer Service
Most retail sales involve a customer and a sales person
o Summarize is:
PRODUCT: width and depth of product assortment
PLACE: location and hours
PROMOTION: advertising, publicity, public relations
PRESENTATION: layout and atmosphere
PERSONNEL: Customer service and personal selling. 7. NEW DEVELOPMENTS IN RETAILING
o Adding interactivity to the retail environment has been one of
the most popular strategies in retailing over the past years
o Think of stores like Build a Bear
o Mobile commerce enables consumers using wireless mobile
devices to connect to the Internet and shop/
o Cashless services are also available for the vending industry.
o They are temporary retail establishments that allow flexible
locations without the long term commitment of a more
expensive retail lease. Chapter 13 Promotion Decisions 12/19/2011 9:02:00 AM
THE ROLE OF PROMOTION IN THE MARKETING MIX
Promotion: Communication by marketers that informs, persuades, and
reminds potential buyers of a product in order to influence an opinion or
elicit a response.
Promotional Strategy: A plan for the optimal use of the elements of
promotion: advertising, public relations, personal selling and sales
The marketing manager determines the goals of the companies
promotional strategy in light of the company’s marketing mix (the 4
p’s). Using these goals they combine the elements of the
promotional strategy into a coordinated plan. The promotion plan
then becomes an integral part of the marketing strategy for
reaching the target market.
Competitive Advantage: One or more unique aspects of an organization
that cause target consumers to patronize that company rather than
The main goal of a promotional strategy is to convince the customers that
their goods and services have these competitive advantages.
Ex: high product quality, fast service, low prices.
Communication: The process by which we exchange or share meanings
through a common set of symbols. A company must communicate their
selling message to potential customers. They do this through promotion
Communication can be divided into two different categories. Interpersonal
Interpersonal communication: Direct, face-to-face communication
between two or more people. Salesperson speaking directly with a client.
Mass Communication: The communication of a concept or message to
large audiences. Tv’s or newspapers (customers as a whole). They generally
do not know people whom they are communicating to on a personal basis.
They look for reaction in negative or positive thoughts. The Communication Process
Marketers are both senders and receivers.
As senders they attempt to inform, persuade, and remind the target
market to adopt certain courses of action.
As receivers, marketers attune themselves to the target market in
order to develop the appropriate messages, adapt existing
messages and spot new communication opportunities.
Marketing communication is a two-way rather than one-way
Sender: Is the originator of the message in the communication
process. Could be parent, friend or salesperson. Company or
Encoding: The conversation of the senders ideas and thoughts into
a message, usually in the form of words or signs. “What matters is
not what the source says but what the receiver hears.”
Channel: A medium of communication, such as a voice, radio, or
newspaper, for transmitting a message.
Reception occurs when the message is detected by the receiver and
enters his or her frame of reference. It is higher in a two-way
conversation, but in mass communication it may not be.
Noise: Anything that interferes with, distorts, or slows down the
transmission of information.
Receiver: The person who decodes the message.
Decoding: Interpretation of the language and symbols sent by the
source through a channel.
Common understanding between two communicators, or a common
frame of reference, is required for effective communication.
A marketer must ensure a proper match between the message to
be conveyed and the target market’s attitudes and ideas.
Feedback: the receiver’s response to a message. In interpersonal
communication, the receiver’s response to a message is direct
feedback to the source. Can be verbal or non-verbal.
Mass communication must rely on indirect feedback. Websites such
as blogs, reviews, etc also capture customer’s feedback.
Impact of Web and social media on marketing communication Web 2.0 tools include: blogs, podcasting, vodcasts, and social networks.
Brands permeate the blogosphere.
4/5 bloggers post brand or product reviews so even if the brand
doesn’t have a formal social media strategy chances are the brand
is still out in the blogosphere.
Because of this companies are reaching out to the most influential
Blogs can be divided into corporate blogs or professional blogs and
Corporate blogs: Blogs that are sponsored by a company or one
of its brands and maintained by one or more of the companies
employees. These give the marketers the opportunity to adapt their
messages more frequently than with any other communicating
channel. They provide a direct, personalized feedback channel.
Noncorporate blogs: Independent blogs that are not associated
with the marketing efforts of any particular company or brand.
These are opinion perceived and can create a lot of goodwill for a
company. They are usually done by people for a hobby or interest
and don’t last for a long period of time. Provide indirect
Because noncorporate blogs can create negative feedback about a
brand many companies have a crisis plan if they were to be in this
type of situation.
The goals and tasks of promotion
Promotion seeks to modify behavior and thoughts in some way.
It will either inform, persuade or remind the target audience.
THE GOALS AND TASKS OF PROMOTION
Informing: Seeks to convert and existing need into a want or to stimulate
interest in a new product. Usually in the early stages of a product life cycle.
Informing is important for promoting complex and technical products as well
as a new brand being introduced into an old product class. (Ex coke zero
Persuading: to stimulate a purchase or an action. This is usually the main
goal when the product enters the growth stage. By this time the target
market knows about the product and has knowledge of how it works. They want to now persuade to buy theirs other than the competitors. The
Perceived differential advantages through an appeal to emotional needs.
Reminding: Used to keep the product and brand name in the public’s mind.
It is prevailed during the maturity stage of the product. Its purpose is to
trigger a memory.
THE PROMOTIONAL MIX
Promotional mix: The combination of promotional tools, including
advertising, public relations, personal selling, and sales promotion, used to
reach the target market and fulfill the organization’s overall goals.
Advertising: Impersonal, one-way mass communication about a product or
organization that is paid for by a marketer.
Primary benefit is the ability to communicate to a large number of people at
one time. Although the cost per contact is low the overall cost is high leaving
this to national ads with the financial resources.
There are so many ways now that advertisers are having more and more
difficulty reaching large numbers of people with their message.
Public Relations: The marketing function that evaluates public attitudes
identifies areas within the organization that the public may be interested in,
and executes a program of action to earn public understanding and
acceptance. They help them communicate with customers, suppliers,
employees etc. Marketers use PR not only to maintain a positive image but
also to educate the public about the company’s goals and objectives, to
introduce new products, and to support the sales effort.
Sales promotion: Marketing activities, other than personal selling,
advertising, and public relations, which stimulate consumer buying and
dealer effectiveness. Generally used in short term to stimulate increases in
demand. Free samples, contests, coupons, vacation getaways etc.
Personal Selling: A purchase situation in which two people communicate in
an attempt to influence each other. They focus on determining long term
relationships with each other. Some rely on the internet for the customers to
get driven to the physical store for this type of selling. PROMOTIONAL GOALS AND THE AIDA CONCEPT
AIDA concept: A model that outlines the process for achieving promotional
goals in terms of stages of consumer involvement with the message; the
acronym stands for attention, interest, desire and action.
The model proposes that consumers respond to marketing messages in a
cognitive (thinking), affective (feeling), and conative (doing) sequence.
Attention: Must first gain the attention of the target market. They cannot
sell something if they don’t know that the good or service exists.
Interest: create interest in the product. Interest of a brand leads to sales.
Desire: Have to convince consumers that this product is the best to meet
their desire for that type of item.
Action: The consumer may be convinced to buy the product but has not yet
taken the action, therefore the company needs effectively communicate the
benefits and add promotions.
Most buyers involved in high-involvement purchase situations pass through
the four stages of AIDA.
The promoter needs to determine which stage the consumers are in to
effectively create a promotional plan.
INTERGRATED MARKETING COMMUNICATIONS
The message from all the forms of marketing communications should ideally
be integrated and the message reaching the consumer should be the same
From a consumers perspective the company’s communications are already
The most common rift occurs between personal selling and the other
elements of the promotional mix.
Integrated marketing concept (IMC): The careful coordination of all
promotional messages for a product or a service to ensure the consistency of
messages at every contact point where a company meets the consumer.
The IMC concept has been growing in popularity because there are so many
media choices for messages now that this becomes more important. There
are also more niche markets than just a broad mass market. FACTORS AFFECTING THE PROMOTIONAL MIX
A company may choose not to use all four promotional elements in its
marketing mix, or it may choose to use them in varying degrees. This
decision is based on the following factors:
Nature of the product: Characteristics of the product itself can influence
the promotional mix. Ex: Business or consumer product. A business product
is not going to need mass promotion since they usually are custom tailored,
but they do still need to advertise. On the other hand consumer products do
not usually need a sales company representative but do need to be
advertised in mass for brand awareness.
The costs and risks associated with the product also influence the
promotional mix. When the costs and risks of using a product increase
generally personal selling becomes more important.
Social risk is also a factor. Products such as jewelry usually require a
personal seller to help guide the customer.
Stages in the product life cycle:
Introduction stage: basic goal is to inform the target audience
that the product is available. Initially on product class then
gradually attaining attention for the specific brand.
Growth Stage: The promotional strategy is to emphasize the
product’s differential advantage over the competition. Persuasive
promotion is used to build and maintain brand loyalty to support
the product during this stage. Sales promotion can be reduced and
personal selling has usually succeeded.
Maturity Stage: Competition becomes more intense and thus
persuasive, and Reminder advertising is more strongly emphasized.
Sales promotion comes back into focus as product sellers try to
increase their market share.
Decline stage: all promotion is reduced in this stage, but personal
selling and sales promotion efforts may be maintained.
Target market characteristics: a target market characterized by widely
scattered potential customers, highly informed buyers, and brand-loyal
repeat purchasers generally requires a promotional mix with more
advertising and sales promotion and less personal selling. Sometimes
personal selling is required though. When they sell goods or services in markets where potential customers are hard to find, print ads reach them
and they are encouraged to contact for personal sales people to reach them.
Type of buying decision: Depends on if it is a routine decision or a
Routine: Advertising and sales promotion. Calls attention to the brand or
reminds the customer.
Complex: Personal selling is most effective. They rely on large amounts of
information and internet sources. (ex purchasing a car).
Neither complex or routine: Advertising and PR help establish awareness for
the good or service.
Available funds: Money or lack of it may be the most important factor in
determining the promotional mix. An advertisement in McLean’s or readers
digest could cost the salary of a salesperson for the year. When funds are
available they try to optimize the return by minimizing the cost per contact.
There are plenty of low cost options available for companies without a huge
budget like online advertising etc.
Push and Pull strategies:
Push Strategy: A marketing strategy that uses aggressive personal selling
and trade advertising to convince a wholesaler or a retailer to carry and sell
particular merchandise. Ex: The Jamaican tourism board targets promotions
to travel agencies, which in turn tell their customers about the benefits of
vacationing in Jamaica.
Pull Strategy: A marketing strategy that stimulates consumer demand to
obtain product distribution. Rather than focusing on the wholesaler, the
manufacturer focuses on end consumers or opinion leaders. Ex: Crest pro-
health toothpaste campaign. Consumers responded positively to the
campaign and demanded the product from their retailer.
Usually push and pull strategies are not used exclusively, but are used with
a mix emphasizing one of them.
Most pharmaceutical companies supplement their push promotional strategy
with a pull strategy targeted directly at potential patients through ads in
consumer magazines and on television. Chapter 14 Advertising in Public Relations 12/19/2011 9:02:00 AM
The Effects of Advertising
Impersonal, one-way mass communication about a product or
organization that is paid for by a marketer
-most companies spend their advertising dollars to maintain brand
awareness and market share
-two reasons new brands with small market share tend to spend
proportionately more for advertising and sales promotion than those with
large market share:
1)Advertising response function:
o A phenomenon in which spending for advertising and sales
promotion increases sales or market share up to a certain
level but then produces diminishing returns
Ie, Jergens spends more on its brand to gain attention
and increase market share (on a new product),
whereas, Neutrogena (a market leader already) only
spends as much as necessary to maintain their market
share (anything more would produce diminishing
2) A certain minimum level of exposure is needed to measurably
affect purchase habits.
o Ie, if Jergens only advertised Natural Glow Revitalizing Daily
Moisturizer in only one or two publications and TV spots, it
certainly would not achieve the exposure required to
penetrate consumers’ perceptual defenses, gain attention,
and ultimately affect purchase intentions
change –ve attitude to +ve, reinforce +ve attitude, affect how
consumers rank brand attributes
o -serious or dramatic advertisements are more effective at
changing consumers’ negative attitudes. Humorous ads, are
more effective at shaping attitudes when consumers already
have a positive image of the advertised brand o -however, serious or funny, it does not necessarily improve
produce recall, message credibility, or buying intentions.
Consumers purchasing decisions will not be affected unless
they can actually recall the brand. The best results are
achieved by making the message relevant to the product. (Ie,
Buckleys, it tastes awful and it works)
Major Types of Advertising
-A firms promotional objectives determine the type of advertising it uses:
o A form of advertising designed to enhance a company’s image
rather than to promote a particular product
A form of institutional advertising in which an
organization expresses its views on controversial
issues or responds to media attacks
Ie, MADD and #TAXI combined for a promotional
campaign over the years. The focus to discourage
drinking and driving. The interest of #TAXI is to
earn revenue by using the service, but they
benefit by acting directly to prevent drinking and
driving because the firm supports MADD Canada’s
cause as a sponsor
o A form of advertising that touts the benefits of a specific good
o The product’s life cycle often determines which type of
product advertising is sued, pioneering, competitive, or
A form of advertising designed to stimulate
primary demand for a new product or product
Heavily used during the introductory state of the
product life cycle, it offers consumers in-depth information about the benefits of the product
class, while also seeking to generate interest
Ie, Microsoft’s advertising to introduce its
Windows and Office software products as “user
A form of advertising designed to influence
demand for a specific brand
Used when a product enters the growth phase of
the product life cycle and other companies begin
to enter the marketplace
Promo becomes less informative and appeals
more to emotions, stress subtle differences
among brands with heavy emphasis on building
recall of a brand name and creating favourable
attitudes towards the brand
Ie, automobile advertising, long used highly
competitive messages, drawing distinctions base
on such factors as quality, safety, performance,
A form of advertising that compares two or more
specifically named or shown competing brands on
one or more specific attributes
Used for products experiencing sluggish growth or
those entering the marketplace against strong
Ie, Mac versus PC ads for apple
Must be accurate or potentially lead to litigation
Creative Decisions in Advertising
A series of related advertisements focusing on a common theme,
slogan, and set of advertising appeals
o Ie, Tim Horton’s campaign of “Always Fresh” and connecting
it to Canadian roots -before any creative work can begin on an advertising campaign, it must
A specific communication task that a campaign should accomplish
for a specified target audience during a specified period
o Ie, Tim Horton’s main campaign objective is to continue to
remind Canadians to enjoy Tim Horton products and entrench
the restaurant as the place to go for coffee
Defining Advertising Goals for Measured Advertising Results is one
method for setting advertising objectives. According to this, all
advertising objectives should precisely define the target audience,
the desired percentage change in some specified measure of
effectiveness, and the time frame in which that change is to occur
o Ie, Telus phones might be to encourage 20% of current
competitor Roger’s subscribers living in Ontario to inquire
about switching to a new Telus plan within 6 months
-“sell the sizzle, not the steak” – that is, in advertising the goal is to sell the
benefits of the product, not its attributes! An attribute is simply a feature of
the product (such as easy-open package or special formulation). A benefit is
what consumers will receive or achieve by using the product. A benefit
should answer “what’s in it for me”, such as, convenience, pleasure, savings,
Attributes: “the iPhone 4 is coming soon to Virgin Mobile and all
Virgin Mobile phones are available in thousands of stores across
Canada including Best Buy, 7-eleven, Walmart….
Benefit: “We’ve got the happiest customers in Canada, plans with
extra for no cost, no funny business, more than a mobile phone
company, and what they want, where they want it”
A reason for a person to buy a product
o see exhibit 14.2 pg, 443
the advertising appeal selected for the campaign becomes what
advertisers call its;
o Unique selling proposition: A desirable, exclusive, and believable advertising appeal
selected as the theme for a campaign
Ie, telus’s selling proposition is “future friendly”
which is their “commitment to innovation, fresh
thinking, and technological progress”
-executing the message:
ten common executional styles for advertising
see Exhibit 14.3 pg, 444
o slice of life
o spokesperson/ testimonial
o real/animated product symbols
o mood or image
Creative decision in developing an advertising campaign (overview):
Set advertising objectives (DAGMAR)
Identify the benefits of product/service
Develop appeal (Unique selling proposition)
Execute the message
Evaluate campaign results (and then readjust for future campaigns)
Media Decisions in Advertising
The channel used to convey a message to a target market
The series of decisions advertisers make regarding the selection
and use of media, allowing the marketer to optimally and cost-
effectively communicate the message to the target audience
-advertising media are channels that advertisers use in mass
communication, the major advertising media are newspapers, magazines,
radio, TV, outdoor media and the Internet - see exhibit 14.6 pg, 448 for advantages and disadvantages of
major advertising media
An arrangement in which the manufacturer and the retailer split the
costs of advertising the manufacturer’s brand
Advertisers creating new media vehicles to advertise their products,
some ordinary and others quite innovative. Just about anything an
become a vehicle for displaying advertising
o Ie, video game advertising, mobile phones, stealth (guerrilla)
marketing, is known as ambush marketing or buzz, is usually
just any unconventional way of performing marketing
promotions on a low budget
Media selection considerations
the combination of media to be used for a promotional campaign
usually based on several factors, such as, cost per contact, reach,
frequency, target audience considerations, flexibility of the medium,
noise level, life span
-cost per contract:
the cost of reaching one member of the target market
the number of target consumers exposed to a commercial at least
once during a specific period, usually four weeks
ie, try to reach 70% of the target market in three months, or
measured by GRP (gross ratings points)
the number of times an individual is exposed to a given message
during a specific period
the ability of an advertising medium to reach a precisely defined
ie, reaching expecting mothers, market in select baby magazines
-flexibility of a medium is extremely important to an advertiser, in the past
limited flexibility of changes in advertising made it harder to adapt to
changing market conditions -noise level, is the level of distraction to the target audience in a medium, ie,
to understand a televised promotional message, viewers must watch and
listen carefully. But they often watch TV with others, who may well provide
-life span of media means that messages can either fade quickly or persist
as tangible copy to be carefully studied, ie, a radio commercial cann