Ch 12 to Ch 18 Marketing-1.docx

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Business Administration
Business Administration 3301K
Scott Mac Dougall- Shackleton

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.  Ownership 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 institution. 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.  Product Assortment 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 subtracted. 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 Restaurants  Department 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 personnel. 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)  Specialty stores 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 of merchandise. o These types of stores carry a deeper but narrower assortment of specialty merchandise than does a department store service.  M&M meat shops, Tim Hortons, Aldo Shoes are examples of specialty stores  Supermarkets 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 merchandising.  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 customers. o Trends are the add more cultural into these supermarkets and offer a variety of food from all over the world in these  Drugstores 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  Convenience Stores 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)  Discount Stores 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 items.  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 organization.  Supercentres combine a full line of groceries and general merchandise with a wide variety of other service including pharmacy, dry cleaning, photo finishing etc.  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 turnover.  Specialty discount stores are often termed category killers. They dominate their narrow merchandise segment, 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 members only.  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 privileges.  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 price concept.  A factory outlet is an off price retailer owned and operated by a manufacturer. This it carries one line of merchandise-its own.  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 locations.    Restaurants 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. o 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.  Automatic Vending 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.  Direct Retailers 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.  Direct Marketing 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 piece.  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 home. o Telemarketing  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.  Electronic Retailing 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 offering.  On-line Retailing  Online retailing is a type of shopping available to consumer with personal computers and access to the Internet.  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.  Franchising  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 product.  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 format franchising  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 retailing mix.  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 consumers perceptions. o The Product Offering  The first element in the retailing mix is the product offering.  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, promotions.  Advertising is mostly local although some brands do national campaign 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 transportation.  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 advantages.  Designed to attract customers  Anchor stores  Ample parking  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 store’s atmosphere  A) Employee type and density  B) Merchandise type an density  C) Fixture type and density  D) Sound  E) Odours  F) Visual factors o Personnel and Customer Service  Most retail sales involve a customer and a sales person relationship o Summarize is:  PRODUCT: width and depth of product assortment  PLACE: location and hours  PROMOTION: advertising, publicity, public relations  PRICE:  PRESENTATION: layout and atmosphere  PERSONNEL: Customer service and personal selling. 7. NEW DEVELOPMENTS IN RETAILING  Interactivity 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  M-Commerce 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.  Pop-Up-Shops 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 promotion.  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 competitors. 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. MARKETING COMMUNIATION 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 programs. Communication can be divided into two different categories. Interpersonal and mass. 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 process.  Sender: Is the originator of the message in the communication process. Could be parent, friend or salesperson. Company or organization.  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 bloggers.  Blogs can be divided into corporate blogs or professional blogs and noncorporate blogs.  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 personalized channel.  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 into coca-cola) 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 all. From a consumers perspective the company’s communications are already integrated. 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 complex one. 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 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 benefits)  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 -Advertising can:  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:  Institutional advertising: o A form of advertising designed to enhance a company’s image rather than to promote a particular product  Advocacy advertising:  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  Product advertising: o A form of advertising that touts the benefits of a specific good or service o The product’s life cycle often determines which type of product advertising is sued, pioneering, competitive, or comparative  Pioneering advertising:  A form of advertising designed to stimulate primary demand for a new product or product category  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 friendly”  Competitive advertising:  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, and image  Comparative advertising:  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 competition  Ie, Mac versus PC ads for apple  Must be accurate or potentially lead to litigation Creative Decisions in Advertising Advertising campaign:  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 first identify; Advertising objective:  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 DAGMAR approach:  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, or relief.  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” Advertising appeal:  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 lifestyle o spokesperson/ testimonial o fantasy o humorous o real/animated product symbols o mood or image o demonstration o musical o scientific 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 Medium:  The channel used to convey a message to a target market Media planning:  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 Cooperative advertising:  An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand Alternative media:  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 -Media mix:  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 -reach:  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) -frequency:  the number of times an individual is exposed to a given message during a specific period -audience selectivity:  the ability of an advertising medium to reach a precisely defined market  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 distractions -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
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