Chapter 1Advertising Today?

William F. Arens Michael F. Weigold Christian ArensMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

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Chapter Overview

Stresses the importance of IMC to relationship marketing; introduces advertising and distinguishes it from other forms of marketing communication.

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Chapter Objectives

Explain how the basic human communication process is useful in advertising communication

Define advertising and distinguish it from other forms of marketing communications

Explain the importance of relationship marketing

Define integrated market communications (IMC)

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Chapter Objectives

Illustrate advertising’s role in marketing strategy

Identify important categories under promotion: the communication element of strategy

Define marketing and identify the 4 elements of marketing strategy

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Hillary Clinton Election Ad

McCain/Obama Debate

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Q. 1. Define Relationship Marketing.

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Relationship Marketing

Relationship marketing – creating, maintaining, and enhancing long term relationships with stakeholders that result in exchanges of mutual value

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Relationship Marketing

Goals

Manage customer/ company contacts

Maximize value of

profitable customers

Use data to know

customer

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Q. 2. Why is it important for organizations to build

relationships?

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Importance of Relationships

Cost of lost customersLifetime Customer Value (LTCV)

Cost of acquiring new customers

Value of loyal customers

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Q. 3. What are the five levels of relationships?

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Relationship Levels

Partnership

Transactional

Reactive

Accountable

Proactive

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Customer/Profit Relationships

Profit Margins

Number of

Customers

High Medium Low

Many Accountable

Reactive Transactional

Medium

Proactive Accountable

Transactional

Few Partnership

Accountable

Reactive

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IMC Tactics

Mass media

Less advertising in mass media

Target messages

Heavier reliance on targetedmessages

Consumer data

Increased use of consumer data

Expectations

Changed expectations for marketing communication suppliers

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News

Word of

mouth

Web

Expert opinio

nGossip

CEO personalit

y

Financial report

Affects on Customer View

Product

view

IMC helps company manage customer perceptions

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Dale Peterson Political Ad

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Q. 4. What are the four sources of brand messages?

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4 Sources of Brand Messaging

1. Planned messages(advertising, publicity releases)

Low impact

2. Product messages(product, price, packaging)

Great impact

3. Service messages (employee interactions)

Positive or negative

4. Unplanned messages(news stories, rumors, competitors remarks, disasters)

Company can influence

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Dimensions of IMC

Say

DoConfirm

Planned messages

Unplanned

messages

Product, service

messages

The Integration Triangle

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Q. 5. Define Advertising.

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What is Advertising?

Structured, composed communication Directed to groups Paid for Usually persuasive About products Identified sponsors Transmitted through

a communication medium

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Dimensions of Advertising

Communication

Marketing

Economic

Social/Ethical

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Q. 6. What are the four kinds of advertising media?

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Communication Channels

BillboardsNewspapers & Magazines

Radio & TV

Mass

© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Communication Channels

Direct Mail E-Mail

AddressableMass

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Communication Channels

Direct Mail

E-Mail

Mobile Online

InteractiveAddressable

Billboards

Newspapers & Magazines

Radio & TV

Mass

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Communication Channels

Direct Mail

E-Mail

Mobile

Online

Shopping Carts

BlimpsTattoos

Non-traditional

Billboards

Newspapers & Magazines

Radio & TV

AddressableMass Interactive

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Hudson Taylor (1832-1905)

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Q. 7. What are the various elements in the human

communication process?

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Human Communication Process

Source Encoding Message

Decoding Receiver

Feedback

Channel

Noise

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Interactive Communication Model

Encoder

SourceDecode

r

Message

Decoder

Receiver

Encoder

Feedback

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Stern Communication Model

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Q. 8. What three literary forms are used in advertising messages?

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Communication: Message Dimensions

Autobiography

“I” tell a story aboutmyself to “you,” theimaginary audience

NarrativeThird person persona tells a story about others to imagined audience

Drama Characters act in frontof imagined empathetic audience

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Q. 9. Who are the sources and receivers in a message according

to the Stern model?

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Communication: Source Dimensions

Sponsor • Legally responsible• Has a message

Author• Copywriter, art director,creative group

• Invisible to audience

Persona• Within the text• Lends voice or tone to ad

• Real or imaginary spokesperson

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Receiver Dimensions

Implied consumers

• Every ad or commercial assumes an audience of ideal consumers

Sponsorial consumers

• Decision makers at the sponsor’s organization

• They decide if the ad will run

Actualconsumers

• People in the real world who comprise the target audience

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Feedback and Interactivity

Lets sender know if message received, understood

Sender can tell when communication breaks down

Feedback & Interactivity

RedeemedCoupons

SurveyResponses

PhoneInquiries

IncreasedSales

Visits to Web site

Visits toa store

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The Marketing Dimension

Business Functional Divisions

Operations

Finance & Admin

Marketing

Defines advertising’s role in businessOnly marketing has revenue generation as primary role

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What is Marketing?

• The process of planning and executing…• Concepts, pricing, distribution, and

promotion of• Ideas, goods, and services

• To create exchanges that… • Satisfy the perceived needs, wants,

and objectives of individuals and organizations

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Advertising Classifications

Target Audience

Geographic Area

Medium

Purpose

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Target Markets and Audiences

Consumer MarketsRetail & Public Service

Business/Industrial MarketsTrades, Professions, & Agriculture

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Q. 10. How are the 4Ps related to advertising strategy?

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Marketing: The 4 Ps

Product Categories ofgoods or services

Price Strategies for competitive pricing

Place Distribution and geography

Promotion Communication channels

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Product

Consumer Goods

Advertising

High-TechAdvertising

Service Advertising

Types ofMarketing

Communication

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Price

Image Advertising

Sales and Clearance Advertising

Loss-LeaderAdvertising

Regular Price-line

Advertising

Types ofMarketing

Communication

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Place

Local Advertising

InternationalAdvertising

GlobalAdvertising

Regional Advertising National

Advertising

Types ofMarketing

Communication

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Promotion

Collateral Materials

SalesPromotion

ProductAdvertising

PersonalSelling Public

Relations

Types ofMarketing

Communication

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Marketing: IMC

Integrated Marketing

CollateralMaterials

SalesPromotion

ProductAdvertising

PersonalSelling

PublicRelations

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Frank Caliendo-Impressions of Bush and Clinton