Integrated Advertising, Promotion, and Marketing Communications, 8th Edition Kenneth E. Clow Solutio

Type:

Solution Manual

Integrated Advertising, Resource: Promotion, and Marketing Communications Edition:

8th Edition

Author(s):

Kenneth E. Clow Donald Baack

Chapter

1

Integrated Marketing Communications CHAPTER OBJECTIVES Students should be able to answer the following questions: 1.1 1.2 1.3 1.4 1.5

How does communication take place?

What is an integrated marketing communications program?

What trends are affecting marketing communications?

What are the components of an integrated marketing communications program?

What is meant by GIMC?

OVERVIEW Advertising and promotion face a rapidly shifting landscape. A decline in traditional media viewing combined with the rise in internet usage and the use of social media have created a new order.

Effective advertising and marketing campaigns often now involve more than one well-made commercial because such a wide variety of media is available.

Current advertising and marketing methods range from simple stand-alone billboard advertisements to complex, multilingual global websites.

Lean Cuisine How do you convince consumers that the same product should be viewed in a different way?

The marketing team realized that the term “diet” was fading in usage and popularity.

Nestle, ConAgra, Kellogg, and General Mills jointly launched a three-year, $30 million image campaign entitled “Frozen. How Fresh Stays Fresh.” The idea was to convince consumers, many of whom had begun to strongly prefer fresh food over frozen, that the latter was equally tasty and healthy. .

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Every element of this new approach sought to generate a change in consumer perceptions of a longstanding product, noting that in FDA standards the word “lean” means food items cannot contain more than 10 grams of fat.

Questions for Students: 1.

What do you think of when you hear the term “diet” food? Will these companies be able to change your perception?

Did you see this campaign? What was your reaction?

Do you think using social media will work in this instance? Why or why not?

2.

3.

This chapter explains the nature of an integrated advertising and marketing communications program.

First, communication processes are described. Understanding how communication works builds the foundation for an integrated marketing program.

Also, the trends affecting marketing communications are noted.

Next, an integrated marketing communications program is described.

Finally, the integrated marketing communications process is applied to global or international operations, creating a globally integrated marketing communications (GIMC) program.

Objective 1.1:

How does communication take place?

The Nature of Communication Communication is defined as transmitting, receiving, and processing information. The parts of a communications model are displayed in Figure 1.1. Components that should be discussed include:

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•

Sender—the person(s) attempting to deliver a message or idea

•

Encoding processes—the verbal (words, sounds) and nonverbal (gestures, facial expression, posture) cues that the sender utilizes in dispatching the message

•

Transmission device—all of the items that carry the message from the sender to the receiver

•

Decoding—takes place when the receiver employs any set of his or her senses (hearing, seeing, feeling, etc.) in the attempt to capture the message Page 1-2

•

Receiver—the intended audience for a message

•

Feedback—information the sender obtains from the receiver regarding the receiver’s perception or interpretation of a message

•

Noise—anything that distorts or disrupts a message

Figure 1.1

A Model of Communication

A message, from a company such as Chick-fil-A, is being prepared by the Sender.

Encoding processes include all of the verbal and nonverbal cues that are part of the marketing message.

Messages travel to audiences via various transmission devices, such as a television, billboard, Sunday paper with a coupon, or a letter to the purchasing agent of a large retail store.

Decoding occurs when the receiver’s (consumer’s) senses are touched in some way by the message.

Feedback occurs through inquiries, trips to the store, and purchases.

Noise is all of the factors that prevent the consumer from seeing the message. A classic example is clutter, which exists when consumers are exposed to hundreds of marketing messages per day and most are tuned out (see Figure 1.2) Figure 1.2

Displays examples of communication noise that affect television.

Question for Students:

Objective 1.2:

Can you think of additional examples of noise in advertising or marketing communications?

What is an integrated marketing communications program?

Integrated Marketing Communications Integrated marketing communications (IMC) is the coordination and integration of all marketing communication tools, avenues, and sources in a company into a seamless program designed to maximize the impact on customers and other stakeholders.

The program should cover all of a firm’s business-to-business, market channel, customerfocused, and internally directed communications.

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The marketing mix consists of • Products • Pricing systems • Distribution systems • Promotional programs The promotions mix consists of • Advertising • Sales promotions (including consumer and trade promotions) • Personal selling activities The IMC promotions mix also includes • Database marketing • Direct response marketing • Online marketing • Social media • Guerilla marketing • Alternative marketing • Public relations programs Figure 1.3

Displays all of these elements.

Figure 1.4

Lists the steps required to complete a marketing plan.

1. Situational analysis (examining problems and opportunities in the organization’s external environment and strengths and weaknesses in the firm itself) 2. Defining marketing objectives (sales, market share, competitive position, and customer actions desired) 3. Budget preparation 4. Finalizing marketing strategies and tactics 5. Evaluation of performance Objective 1.3:

What trends are affecting marketing communications?

Emerging Trends in Marketing Communications Figure 1.5

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Illustrates current trends affecting marketing communications

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Emphasis on Accountability and Measurable Results Advertising agencies are expected to produce tangible outcomes. Promotional dollars must be spent carefully.

Many companies have switched from 30-second television spots to digital, social, and alternative communication messages. These messages are combined with special events where names, profiles, and addresses of prospective customers can be collected and tracked.

Integration of Digital Media Smartphones, tablets, and text-messaging systems have created a new landscape and, in some cases, nearly a new language.

These digital marketing techniques seek to create experiences with a brand rather than mere purchases with little or no emotional attachment. Companies using these techniques include the following: • • • • •

Procter & Gamble (P&G) AT&T Johnson & Johnson Kraft Foods Toyota

When P&G introduced its Star Wars limited edition CoverGirl products, the company utilized Snapchat and geo-targeted advertising to drive in-store sales.

Integration of Media Platforms Today’s consumers spend an average of 5 hours and 16 minutes in front of screens other than television.

When combined with television (which consumers watch for an additional 4 hours and 31 minutes per day), the total becomes more than 10 hours per day examining some kind of screen.

Figure 1.6 •

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Four ways consumers interact across multiple media formats:

Content grazing involves looking at two or more screens simultaneously to access unrelated content, such as watching TV and texting a friend at the same time.

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•

Investigative spider-webbing occurs when consumers pursue or investigate specific content across multiple platforms, such as watching a football game and accessing stats for various players on a PC or mobile phone.

•

Quantam journey focuses on completing a specific task, such as when a consumer looks for a Chinese restaurant using a PC to locate one in the area, then obtains consumer reviews of the units close by on a smartphone, and finally employs a map app to locate the restaurant or to place an order.

•

Social spider-webbing occurs when consumers share content or information across multiple devices, such as by posting pictures on Facebook from a laptop then texting friends to go check out the posts.

Changes in Channel Power Retailers seek to maintain channel power by controlling shelf space and purchase data that allows them to determine which products and brands are placed on store shelves.

Fifty-seven percent of consumers say they will not buy a particular brand after just one negative experience, and 40 percent are likely to tell others not to purchase that brand.

Consequently, the internet and information technology have shifted more power to the consumer.

Understanding shifts in channel power has become essential. Marketers cannot rely solely on mass media advertising. They must incorporate social media and engage consumers with their brands.

The same principles apply to business-to-business purchasing activities.

Increases in Global Competition Consumers can purchase goods and services from anyplace in the world. Competition no longer comes from the firm just down the street—it can also come from a firm 10,000 miles away.

This shift affects manufacturers, retailers, and intermediaries. Customers want both value and price. Quality relationships between members of the marketing channel help to acquire and keep customers.

Increases in Brand Parity Many products have nearly identical benefits. When consumers believe that most brands provide the same set of attributes, the result is brand parity. This means shoppers will purchase from a group of accepted brands rather than one specific brand. .

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Marketers must generate messages in a voice that expresses a clear difference.

They must build some type of perceived brand superiority for the company and its products or services.

Emphasis on Customer Engagement A contact point is any place where customers interact with or acquire additional information about a firm.

Customer engagement programs often utilize digital media; however, they should also become part of a more integrated marketing approach.

The Role of Integrated Marketing Communications Effective integrated marketing communications ensures a brand’s target audiences hear the same message across all traditional and new media channels.

Each piece of a campaign should be driven by a single strategy that guides the creative development process.

An integrated approach times the release of individual campaign components in a manner that maximizes a customer’s journey from awareness to purchase.

Figure 1.7

Five reasons why integrated marketing communication works

Objective 1.4:

What are the components of an integrated marketing communications program?

IMC Components and the Design of This Text Figure 1.8

An overview of the integrated marketing communications model

The foundation of the IMC plan includes • Corporate and brand management (Chapter 2) • Analysis of buyer behaviors (Chapter 3) • The IMC planning process (Chapter 4) Advertising includes • Advertising campaign management, including the major functions of all those involved in an advertising campaign, advertising goals, and advertising theories (Chapter 5) • Advertising design focused on message strategies, appeals, executions, and .

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•

spokespersons (Chapter 6) Traditional media channels, including television, radio, magazines, newspapers, outdoor signs, and direct mail (Chapter 7)

Digital and alternative include • Digital marketing integratation of e-commerce programs with recent trends in interactive marketing, such as online advertising, search engine optimization, and mobile advertising (Chapter 8) • Social media and new trends in the area (Chapter 9) • Alternative marketing programs, including buzz marketing, guerilla marketing, product placements, branded entertainment, and lifestyle marketing (Chapter 10) Selling components include • Database, direct response programs, and personal selling (Chapter 11) • Sales promotions (consumer and trade promotions) (Chapter 12) • Public relations and sponsorships (Chapter 13) Integration includes • Regulations and ethics (Chapter 14) • IMC evaluation (Chapter 15)

Objective 1.5:

What is meant by GIMC?

International Implications In the past, marketers had two different strategies for global companies. One was to standardize the product and message across countries. The second is called adaptation, in which the product and message are customized for each region.

The globally integrated marketing communications (GIMC) approach is easier to apply when a company has relied on the standardization method; however, GIMC can and should be used with either standardization or adaptation.

In terms of marketing, perhaps the best philosophy to follow is “market globally but act locally.”

Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ .

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Both methods contain actual print materials produced for the campaign. Broadcast material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR MARKETING ACCOUNT EXECUTIVES (Note to professors— these materials are not in the text. They provide a method for you to summarize the chapter in a different way) Describe the role of marketing account executive to students. This individual is in charge of the connection between an advertising agency and a client company. Review the following ideas: Account executives are going to be asked to justify how marketing funds are being spent.

Therefore, three things are important: 1. Make sure that all marketing efforts focus on an integrated theme.

2. Establish clear-cut marketing objectives in the area of communication.

3. Recognize the difference between short-term outcomes (immediate sales, coupon redemptions, internet “hits”) and longer term brand equity and company image issues. Both are vital components in the marketing success of a firm over time.

Remember that because account executives are being held accountable, they also tend to hold more power. Effective use of this power would include the following: • • •

Careful selection of creatives who will stay focused on company themes, objectives, and desired outcomes.

Realistic expectations when designing campaigns so that they do not “oversell” anticipated outcomes.

Precisely tuned measurement instruments that provide clear information regarding success and failure rates for individual marketing communications campaigns.

Account executives should be reminded of several points from the communications model: 1. How the communications process works 2. What can go wrong (clutter, poor media selection, etc.) .

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3. Ways to overcome clutter and send a clear, coherent message to all concerned Account executives must be aware of the technologies and alternative media available for sending and receiving messages. These include the following: • • • • •

Social networks Blogs Buzz marketing Guerilla marketing Lifestyle marketing

Account executives must utilize the total IMC approach.

• • • •

• •

Note that it is a building process that begins with an effective overall marketing plan.

Conceptualize advertising as part of the IMC program, and fit other marketing activities together with ads to construct a more powerful approach to the promotions part of the marketing mix.

Discover ways to incorporate IMC efforts to make better contacts with those internal to the company (employees, other department heads, management teams, etc.).

Watch for shifts in channel power, especially when customers have clearly established the ability to make decisions by seeking out information on their own (through websites, personal visits, responses to advertisements, and so forth).

The account executive must rethink methods to reach consumers in ways which keep the company at the forefront as they make purchase decisions.

Focus on ways to make an IMC message a global message. This involves keeping a theme intact although adapting that theme to the requisites of individual countries and cultures.

REVIEW QUESTIONS 1-1.

Define communication. How does it play a crucial role in marketing and business?

Communication may be defined as transmitting, receiving, and processing information. It is critical to business because through communication businesses make contact with potential customers and complete transactions.

1-2.

What are the parts of an individual communications model?

The parts of the individual human communications model are as follows: Senders—the persons or companies sending messages

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Encoding—transforming an idea to an attention-getting form, such as through an advertisement or personal (e.g., personal selling) medium Transmission devices—occurs when a channel or medium delivers the message through the channel Decoding—occurs when the receiver’s senses are touched in some way by the message Receivers—the person who receives the message as encoded by the sender 1-3.

Who are the typical senders in marketing communications? Who are the typical receivers?

The typical senders in the communications model are companies seeking to sell a product or idea.

The typical receivers in the communication model are potential customers who are looking to buy the product.

1-4.

Name the transmission devices, both human and nonhuman, that carry marketing messages.

Transmission devices include television advertisements, billboards, and coupons from a Sunday paper (nonhuman). They also include people (humans) telling other people about an advertisement and other messages.

1-5.

Define clutter. Name some of the forms of clutter in marketing communications.

Clutter is the most common form of noise in the marketing communications. It occurs when receivers are exposed to many different messages (television, radio, billboards, bunches of ads in the Wednesday paper, etc.) in one day and therefore some messages get tuned out.

1-6.

Define integrated marketing communications (IMC).

Integrated marketing communications as the coordination and integration of all marketing communication tools, avenues, and sources in a company into a seamless program designed to maximize the impact on customers and other stakeholders. The program should cover all of a firm’s business-to-business, market channel, customer-focused, and internally-directed communications.

1-7.

What are the four parts of the marketing mix?

The four parts in the marketing mix are taken from product, price, promotion, and distribution. This book concentrates on the promotions mix through advertising,

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personal selling, consumer and business-to-business promotions, publicity, and direct marketing.

1-8.

What steps are required to write a marketing plan?

The steps in writing a marketing plan are o Situation analysis o Marketing objectives o Marketing budget o Marketing strategy and tactics o Evaluation

1-9.

What trends were given to explain the growth in importance of IMC plans in this chapter?

Trends include the an emphasis on accountability, the explosion of digital media, integration of media platforms, changes in channel power, increases in global competition, increases in perceptions of brand parity, and an emphasis on customer engagement.

1-10. How has the explosion communications?

of

the

digital

arena

impacted

marketing

Digital media has created a new landscape and, in some cases, nearly a new language. Digital marketing techniques seek to create experiences with a brand rather than mere purchases with little or no emotional attachment. It cannot be considered as an option for companies, but rather as a mandatory ingredient. Marketers now seek to engage a brand with all current and prospective customers in order to achieve success.

1-11. Identify and describe the four ways consumers can interact with multiple media formats.

Content grazing involves looking at two or more screens simultaneously to access unrelated content, such as watching TV and texting a friend at the same time.

Investigative spider-webbing occurs when consumers pursue or investigate specific content across multiple platforms, such as watching a football game and accessing stats for various players on a PC or mobile phone.

Quantam journey focuses on completing a specific task, such as when a consumer looks for a Chinese restaurant using a PC to locate one in the area, then obtains consumer reviews of the units close by on a smartphone, and finally employs a map app to locate the restaurant or to place an order.

.

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Social spider-webbing occurs when consumers share content or information across multiple devices, such as by posting pictures on Facebook from a laptop then texting friends to go check out the post.

1-12. What is channel power? How has it changed in the past few decades?

Channel power is who has the most influence in the marketing channel. It has changed because of technology, which has shifted power from producer to the retailer and the final consumer.

1-13. What is brand parity? How is it related to successful marketing efforts?

Brand parity is a situation in which consumers believe that many brands offer the same set of attributes. The result is that consumers will purchase from a group of accepted brands rather than one specific brand. Successful marketing overcomes this problem by making one brand seem better or more preferable.

1-14. Identify the role of integrated marketing in relation to new marketing trends.

Effective integrated marketing communications ensures a brand’s target audiences hear the same message across all traditional and new media channels.

Each piece of a campaign should be driven by a single strategy that guides the creative development process.

An integrated approach times the release of individual campaign components in a manner that maximizes a customer’s journey from awareness to purchase.

1-15. What is a contact point? How do marketers link contact points to customer engagement?

A contact point is any place where customers interact with or acquire additional information about a firm. Customer engagement programs often utilize digital media; however, they should also become part of a more integrated marketing approach.

1-16. What are the components of an integrated marketing communications program, as outlined in this textbook?

The IMC foundation includes corporate and brand management, understanding buyer behaviors, and communications research.

Advertising management programs include campaign management, design issues, and the selection of traditional media.

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Digital and alternative programs include digital marketing, social media, and alternative marketing.

Selling components include database, direct response programs, and personal selling, sales promotions, and public relations and sponsorships.

Integration includes regulations and ethics along with IMC evaluation.

1-1.

What is a GIMC? Why is it important for multinational firms?

GIMC is a globally integrated marketing communications program. A GIMC program has the same goals as IMC except on a larger scale. These programs are important for companies that choose to compete internationally, so that the firm’s unified message is presented effectively in other nations and regions.

1-18. What is the difference between standardization and adaptation in GIMC programs?

The difference between standardization and adaptation is how the product is marketed. Standardization means the company sells the same product in different countries and maintains the same basic message. Adaptation means adjusting the message for various individual countries or regions. Both can be a part of a GIMC program.

CRITICAL THINKING EXERCISES Discussion Questions 1-19. The Lean Cuisine effort to shift consumer perceptions of frozen products included a multi-faceted approach. Access the firm’s website and evaluate the marketing messages presented. Do they convince you to reconsider your views of various products? Is the effort working, or do you still perceive Lean Cuisine to just be “diet” food? Explain your answer.

Student answers will vary. Some will say the approach does work; others will say it does not. Ask students to defend their responses.

1-20. The marketing director for Tempur-Pedic mattresses is assigned the task of emphasizing the mattress’s superior sleep quality in the company’s next integrated marketing communications program. Discuss the problems the director might encounter in each step of the communication process since the campaign will emphasize something consumers cannot see or observe. Explain how noise or clutter interferes with the communication process. .

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Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Students should refer to the communication process illustrated in Figure 1.1 for ideas. In the discussion, students may note several things. The marketing director may run into problems if the company is already known in some other way. In essence, the sender is being misinterpreted. Encoding problems would include the use of language in commercials. Transmission problems consist of any breakdown in the actual movement of the message (website crash, radio station off-the air, etc.).

Decoding may be an issue if the receiver is impaired. Also, noise in various marketing channels could prevent the advertiser from being able to change consumer’s minds.

1-21. What do you typically do during commercials on television? What percentage of the time do you watch commercials? What makes you watch?

Ask these same questions of five other people. What type of activities do people engage in during commercials?

Student answers will vary. The best in-class part of this question would be about what makes a person watch or not watch a commercial.

1-22. Examine the four ways consumers interact across multiple media formats.

Which best describes you? Explain why.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Student answers will vary. The four ways are as follows: o Content grazing involves looking at two or more screens simultaneously to access unrelated content, such as watching TV and texting a friend at the same time. o Investigative spider-webbing occurs when consumers pursue or investigate specific content across multiple platforms, such as watching a football game and accessing stats for various players on a PC or mobile phone. o Quantam journey focuses on completing a specific task, such as when a consumer looks for a Chinese restaurant using a PC to locate one in the area, then obtains consumer reviews of the units close by on a smartphone, and finally employs a map app to locate the restaurant or to place an order.

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o Social spider-webbing occurs when consumers share content or information across multiple devices, such as by posting pictures on Facebook from a laptop then texting friends to go check out the post.

1-23. The use of social media has exploded during the last decade. Discuss your personal use of social media. Which social media platforms do you use? Why did you select those particular ones? How do you use social media?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Student answers will vary. This is a good in-class discussion question.

1-24. Explain how advances in information technology and communication have increased global competition for goods and services. How has the increased global competition, in turn, impacted brand parity, the need for customer engagement, and changes in channel power? Be specific by identifying examples to illustrate your thoughts.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Global competition makes brand equity more difficult to achieve. At the same time, the fact that something is made in another country will influence perceptions of brand parity. Customer engagement will likely be more difficult when a company operates from another country. Consumer channel power continues to grow with increasing choices of brands.

1-25. Brand parity has become a major issue for companies. Identify three product categories in which the brand you purchase is not very important. Why is the brand not important? Identify three product categories in which the brand is important. What brand or brands do you typically purchase in each category?

Why? Student answers will vary based on brands chosen.

1-26. The marketing director for a manufacturer of automobile tires has been asked to integrate the company's global marketing program. Should the director use a standardization or adaptation approach? How could the company’s marketing team be certain that their marketing program would be effectively integrated among the different countries in which it sells tires?

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The marketing director, in choosing whether to use a standardization or adaptation approach, should look at the type of product being sold as well as regional differences. If the tires are exactly the same, this would suggest a standardization approach. If the tires are adapted to regional conditions, then the message may need to be adapted. Also, marketing managers should always be aware of communication and cultural differences in various countries, suggesting at least a degree of adaptation for a standardized message.

INTEGRATED LEARNING EXERCISES 1-27. Examine the advertisement for JD Bank in the section entitled “The Nature of Communication.” Explain each of the steps in the communication process (Figure 1.1) in terms of the JD Bank print ad. Go to the authors’ website at clowbaack.net/video/ads.html. Watch the ad for JD Bank entitled “JD Gets Me.” Explain each of the steps in the communication model in relation to this television ad.

JD Bank is the sender. The message is the ad itself. The transmission device is whichever format carriers the ad. Decoding occurs as the consumer encounters the message. Consumers are receivers. Feedback includes any responses, such as inquiries or visits to the bank. Noise is any clutter that would prevent the consumer from encountering the message.

1-28. Access the website of Chick-fil-A at www.chickfila.com. Access the websites of Chick-fil-A’s competitors: KFC (www.kfc.com), Popeye's (www.popeyes.com), Church’s Chicken (www.churchschiken.com), and Bojangles (www.bojangles.com). Identify the social media used by each brand. Compare and contrast the information available and the design of each company’s website. Which website did you like the best? Why? Which one did you like the least? Why? Student answers will vary by site chosen at the time.

1-29. Pick one of the brands listed. Access the brand’s website. Identify the social media that is listed on the brand’s website, then access each of the social media pages. Go to YouTube and locate a TV ad of the brand. Discuss how well the website, social media sites, and ad you located on YouTube are integrated.

(Provide the URLs for the website, social media sites, and TV ad). a. JD Bank (www.jdbank.com) b. Red Lobster (https://redlobster.com) c. Salvation Army (http://www.salvationarmy.org) d. Visit South Walton (www.visitsouthwalton.com) Student answers will vary based on the site and its current information. .

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1-30. Information is one key to developing a successful integrated marketing communications program. Access each of the following websites. Describe the type of information and news available on each site. How would this information help in developing an integrated marketing campaign? a.

Brandweek (www.brandweek.com) b.

Adweek (www.adweek.com) c.

Mediaweek (www.mediaweek.com) d.

Branding Asia (www.brandingasia.com) Student answers will vary based on the site and its current information.

BLOG EXERCISES Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions posed on the blog.

1-31.

American Eagle, http://blogclowbaack.net/2015/12/03/american-eaglechapter-1

1-32.

Chick-fil-A, http://blogclowbaack.net/2014/04/24/chick-fil-a-chapter-1

1-33.

Integrated marketing, http://blogclowbaack.net/2014/04/24/imc-chapter-1

These exercises provide you with an additional tool to engage your students.

Student Project: Creative Corner This is an analysis of advertising for Red Robin restaurant, including social media components.

CASES Case 1

Mike’s Old-Time Ice Cream and Chocolate Shop

1-34. Mike’s store will be a local business that competes with large national companies. What communication challenges does that present? What opportunities does it offer?

Communication challenges would include trying to compete with more established brands and companies that may be able to spend more on advertising and marketing programs. .

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Communication opportunities include the ability to tailor products and messages to the local audience and emphasize that the company is local.

1-35. Which of the emerging trends in marketing communications can Mike use to promote his new business? Explain how it can be used.

The integration of digital media and digital platforms offers many opportunities for Mike to go beyond a website and add other methods for reaching customers. Changes in channel power reflect the role consumers play in making choices, which could also work to his advantage. Increases in brand parity emphasis may mean that people view national chains as being essentially similar or close to the same; Mike could try to differentiate from that. Customer engagement provides the best opportunity for a local company. Without it, Mike will soon be out of business.

1-36. What should be the first message that Mike should try to communicate to all potential customers? Should he emphasize price, value, or some other element of his business?

Student answers will vary. They should emphasize value and a unique experience not like national ice cream stores.

1-37. Will Mike be able to use social media in his marketing communications efforts? If so, how? If not, why not?

Students should agree that social media can be an important element of the company’s marketing plan. The secret will be finding venues to reach new customers and maintain contact with ongoing customers in positive ways to build relationships with them. This would include special loyalty deals and other enticements.

Case 2

Wake Up Call for 8:00

1-38. What coffee brands would constitute Eight O’Clock Coffee’s primary competition?

Most students will probably note Starbucks.

1-39. Would you characterize coffee consumption as a situation in which brand parity exists? Why or why not?

Student answers will vary, depending in part on whether the individual drinks coffee or is a coffee snob. Those who are will likely be more brand loyal.

1-40. Examine the emerging trends in marketing communications presented in the chapter. Which trends can Eight O’Clock coffee use to their advantage?

Explain how. .

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The emerging trends are • Emphasis on accountability and measurable results • Explosion of the digital arena • Integration of media platforms • Shift in channel power • Increase in global competition • Increase in brand parity • Emphasis on customer engagement Student opinions will vary. The most clear-cut factors that apply are the first and last: The emphasis on accountability and on customer engagement.

1-41. Evaluate the value of using social media for this type of marketing communications effort. Is it necessary or helpful? Why or why not?

Student answers will vary; however, this represents a new trend in marketing communications and was reported to achieve some success.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 1-42. Reebok’s tagline is now “Be More Human.” Examine Reebok’s website (www.Reebok.com). Define each of the components of the communication process (see Figure 1.1). Then explain each component as it relates to the Reebok tagline and website.

1-43. Find each of the following companies on the internet. For each company, discuss how effective its website is in communicating an overall message. Also, discuss how well the marketing team integrates the material on the website. How well does the website integrate the company’s advertising with other marketing communications? a. Revlon (www.revlon.com) b. J.B. Hunt (www.jbhunt.com) c. Interstate Batteries (www.interstatebatteries.com)

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Bonus Case The Cable Company Rachel Peterson knew she faced several major challenges as she took the job of marketing director for CableNOW. The company was the sole cable provider for six communities in northeast Louisiana. All of the cities were essentially “licensed monopolies” in the sense that no other cable company could compete within the city limits. In spite of this edge, however, competition was becoming a major problem.

Satellite television was the primary competitor for CableNOW’s customers. Both DirecTV and the Dish Network had set up operations in the six communities. The two providers were able to charge lower prices for basic services. They had also started to compete by offering price reductions on installations. This made switching from cable to satellite much easier for local residents.

CableNOW’s primary selling point was in the delivery of programming during bad weather. Thunderstorms and snowstorms completely disrupt a satellite signal. Severe weather is common in that part of Louisiana; however, the weather events do not affect a cable picture. CableNOW also held a competitive advantage because the company offered local business and real estate listings to subscribers. The firm also was able to provide local radar and weather forecasts during the “Local on the 8s” segments on the Weather Channel. The satellite companies could not provide these special options.

When Rachel took the job, she knew another issue was about to unfold. CableNOW had been able to transmit each city’s local channels as part of the basic cable package. Until this year, the satellite companies could not. Dish Network was changing the mix. Dish .

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Network had just signed a contract to provide the local stations to subscribers. DirecTV did not offer local stations but did offer a greater number of channels in the company’s basic package. As a result, Rachel knew she had her work cut out as the marketing department struggled to maintain share in each city.

(1)

What image or theme should CableNOW portray to subscribers?

Probably one that suggests they are the best “local” option.

(2)

Can you think of a way to emphasize the advantages CableNOW has in an advertising program?

One option would be the local weather emphasis. Not only does the CableNOW signal work during bad weather, it is the only way to get local radar and information during storms.

(3)

Do you believe CableNOW will survive these changes over the next 10 years?

Why or why not?

Student opinions will vary. The company does have an uphill battle.

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Chapter

2

Brand Management CHAPTER OBJECTIVES Students should be able to answer the following questions: 2.1 How does a brand’s image affect consumers, other businesses, and the company itself?

2.2 What are the different types of brands and brand names?

2.3 What are the characteristics of effective logos?

2.4 What elements are involved in identifying, creating, rejuvenating, or changing a brand’s image?

2.5 How are brands developed, built, and sustained in order to build brand equity and fend off perceptions of brand parity?

2.6 What current trends affect private brands?

2.7 How can packaging and labels support an IMC program—domestically and in foreign settings?

2.8 How are brands managed in international markets?

OVERVIEW One of the most critical ingredients in the successful development of an integrated marketing communications plan is effective management of an organization’s image.

Domino’s Brand Image Overhaul Domino’s marketing team identified a trend in which more customers were picking up pizzas rather than having them delivered. In response, some stores added big screen TVs, improved seating for those waiting to pick up orders, and established places where people could watch their pizza or carry-out items being put together.

The approach somewhat resembles what occurs in Subway stores.

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To accentuate these new methods of operation, the company’s name was also changed from Domino’s Pizza to simply Domino’s.

The brand name change and product line alterations were orchestrated with the firm’s integrated marketing communications program, including advertising and social media.

Questions for Students: 1.

2.

3.

What do you think of when you hear “Domino’s”?

Compare your image of Domino’s to other pizza chains.

Do you believe the changes will make a difference?

The first part of this chapter examines the activities involved in managing a corporation’s brand image, including its name and logo.

The second part addresses ways to develop and promote the various forms of brand names.

Brand equity and brand parity are described.

Finally, packages and labels, which should be included in any marketing communications program, are assessed. Ethical and international considerations are noted.

Objective 2.1:

How does a brand’s image affect consumers, other businesses, and the company itself?

Corporate and Brand Image A brand is the word, term, or phrase featured as the name of a product, product line, or company.

A corporation’s brand image reflects the feelings consumers and businesses have about the overall organization as well as its individual products or product lines.

Consumer beliefs about a firm are more important than how company officials perceive the image.

Components of Brand Image A corporate image contains invisible and intangible elements (see Figure 2.1). The components of a corporate image include the following: • • .

Products Personnel Page 2- 2

• • • • •

Retail outlets Servicing Advertisements Publicity Interactions with employees

Negative publicity has the potential to stain or damage consumer perceptions of a corporation’s image.

Question for Students:

What organizations can you think of that experienced damage to their images in the past five years? What caused the damage? (The BP oil spill is an example.)

The Role of Brand Image—Consumer Perspective From a consumer’s perspective, the corporate image serves several useful functions (see Figure 2.2). These include • • • •

Assurance regarding purchase decisions of familiar products in unfamiliar settings Assurance concerning purchases where there is little previous experience Reduction of search time in purchase decisions Psychological reinforcement and social acceptance

The Role of Brand Image—Business-to-Business Perspective Corporate image is a crucial element of the business-to-business marketplace.

Figure 2.3 identifies 10 top brands.

Making purchases from a well-known company is in many ways the same process as consumer purchases, in terms of the advantages of a strong and positive image.

Corporate image is especially important when expanding internationally.

The Role of Brand Image—Company Perspective Figure 2.4 lists benefits of brands to individual companies.

These include • • • .

Extension of positive consumer feelings to new products The ability to charge a higher price or fee Consumer loyalty leading to more frequent purchases Page 2- 3

• • •

Positive word-of-mouth endorsements The ability to attract quality employees More favorable ratings by financial observers and analysts

Objective 2.2

What are the different types of brands and brand names?

Brand Names and Brand Types A corporate name is the overall banner under which all other operations occur. Figure 2.5 lists the categories of brand names.

• • • •

Overt names reveal what the company does (American Airlines, BMW Motorcycles).

Implied names imply what the company is about (FedEx, IBM).

Conceptual names imply the essence of the brand (Google, Krispy Kreme).

Iconoclastic names do not reflect the company’s goods or services (Apple, Monster.com).

Question for Students:

Can you provide additional examples of each of these types of names?

Figure 2.6 provides backgrounds for some well-known company names.

Brands develop histories. They have personalities. They include strengths, weaknesses, and flaws.

Figure 2.7 identifies several types of brands.

Family Brands A family brand means a company offers a series or group of products under one brand, such as Campbell’s.

The advantage of a family brand is that consumers usually transfer the image associated with the brand name to any new products added to current lines.

Brand Extensions Brand extension is the use of an established brand name on goods or services that are not related to the core brand.

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Black & Decker has been successful in extending its brand name to new types of power tools. The company was not as successful in extending the line to small kitchen appliances.

Flanker Brands A flanker brand is the development of a new brand by a company in a good or service category it currently has as a brand offering. Flanker brands can help a company offer a more complete line of products, creating barriers to entry for competing firms.

Figure 2.8 lists select brands offered by Procter & Gamble.

Co-Branding Co-branding, or alliance branding, can take three forms, as shown in Figure 2.9.

1. Ingredient branding—is the placement of one brand within another brand.

2. Cooperative branding—a joint venture of two or more brands into a new product or service.

3. Complementary branding—is the marketing of two brands together to encourage co-consumption or co-purchases.

Co-branding succeeds when it builds the brand equity of both brands.

Recently, Wholly Guacamole developed a brand alliance with Sonic.

NutraSweet has co-branded with Diet Coke.

There can be risks in co-branding. If the relationship fails to do well in the marketplace, both brands normally suffer.

Objective 2.3:

What are the characteristics of effective logos?

Brand Logos A brand logo is a symbol used to identify a company and its brands, helping to convey the corporate image.

Quality logos and corporate names should pass four tests, as shown in Figure 2.10.

1. They should be easily recognizable.

2. They should be familiar.

3. They should elicit a consensual meaning among those in the firm’s target market.

4. They should evoke positive feelings. .

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Figure 2.11 identifies some of the oldest logos.

Logos are especially important for in-store shopping. To be advantageous, the logo should help with two things: 1. Consumers must remember seeing the logo in the past.

2. The logo must remind consumers of the brand or corporate name.

The notion that a logo can elicit a consensual meaning among customers is known as stimulus codability.

A logo does not have to be complex and contain every element of the brand’s meaning.

Simple logos can be effective, such as the Nike Swoosh.

Changing logos does not always modify public opinion of a company.

When completed properly, logo changes can trigger positive reactions and symbolize a positive change, such as when Pepsi developed a new logo.

Tips for creating or changing logos are provided in Figure 2.12.

Question for Students:

Objective 2.4:

Companies at times choose to modify the logo. Can you think of some examples?

What elements are involved in identifying, creating, rejuvenating, or changing a brand’s image?

Identifying the Desired Brand Image To promote the desired image, the marketing team should evaluate the nature of the company’s current image. Then future communications can be tailored to promote the proper image.

Company leaders first study the firm’s image and identify how it is connected to a company’s strengths and weaknesses.

The marketing team should try to discover how those outside of a company view the brand.

Once the team understands how the brand is viewed, decisions can be made regarding ways to correct any misperceptions or build on the image that customers currently hold.

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Creating the Right Brand Image In each industry, the right image is one that reaches all target markets and conveys a clear message regarding the unique nature of the organization and its products.

A strong image accurately portrays what the firm sells.

In a business-to-business operation, creating the right image can be challenging.

Rejuvenating a Brand’s Image Reinforcing or rejuvenating a current image that is consistent with the view of consumers is easier to accomplish than changing a well-established image.

Figure 2.13 lists four keys to image rejuvenation.

The key to successful image reengineering is to remain consistent with a previous image while at the same time building to incorporate new elements to expand the firm’s target audience.

Rejuvenating an image helps a firm sell new products and can attract new customers.

L’Eggs provides an example of an effective brand rejuvenation effort.

Changing a Brand’s Image Completely changing the image people hold regarding a company or a brand may not be possible.

Attempting to change an image becomes necessary when target markets have begun to shrink or disappear, or the brand’s image no longer matches industry trends and consumer expectations.

At that point, company leaders must consider what they wish to change, why, and how they intend to accomplish it.

Target sought to change its image to become accepted by readers of Vogue magazine.

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Learning Objective 2-5:

How are brands developed, built, and sustained in order to build brand equity and fend off perceptions of brand parity?

Developing and Building Powerful Brands Developing a strong brand begins with discovering why consumers buy a brand and why they repurchase the brand. Questions to be asked include the following: • Where does your brand stand now?

• What are your objectives?

• What are you doing to build your brand and business?

• What are your brand’s strengths? Weaknesses? i

• Which opportunities should be pursued first? Where are the pitfalls?

The goal of branding is to set a product apart from its competitors.

One primary feature that keeps a brand strong is that it contains something that is salient to customers.

Figure 2.14 identifies the ingredients required to build powerful brands.

Branding begins with awareness, which may be achieved by featuring the brand name prominently in repeated advertisements.

Brands should be authentic or unique in some manner.

Business and retail customers trust powerful brands. Trust represents the customer’s belief in the efficacy and reliability of the brand.

Powerful brands go beyond delivering functional features. They focus on providing an experience that involves the opportunity to be to customized and personalized.

Building powerful brands requires the effective use of social media and mobile advertising.

The final ingredient of powerful brands results when the company acts responsibly.

Brand Loyalty Brand loyalty means customers purchase only one brand. They consider no other brand, regardless of price differences.

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The Brand Keys Customer Loyalty Engagement Index (CLEI) suggests that emotion and value are the core drivers of brand loyalty, rather than rational thought based on functional product attributes.

Figure 2.16 identifies some of the top brands in select categories, in terms of engagement.

Brand Equity Brand equity is the perception that a good or service with a given brand name is different and better.

Brand equity allows the company the opportunity to charge a higher price and retain a market share that is greater than would otherwise be expected for an undifferentiated product.

Brand parity is the perception that there are no tangible differences between competing brands.

In business-to-business markets, brand equity often allows a company to charge a higher price.

Brand equity is a strong weapon that might dissuade consumers from looking for a cheaper product or for special deals or incentives to purchase another brand.

Brand name recognition and recall can be built through repetitious advertising.

Measuring Brand Equity Marketers have developed four different methods to measure brand equity (see Figure 2.17).

Brand equity based on financial value estimates the future cash flows of a brand based on its unique strength and characteristics, which will then be discounted to determine a net present value.

The stock market approach means the financial value of the company is determined through stock valuation. Then an estimate of the portion of the value allocated to brand equity and not physical assets is made.

The revenue premium compares a branded product to the same product without a brand name.

The consumer value attempts to measure the value of a brand based on input from consumers. Typical measures include familiarity, quality, purchase considerations, customer satisfaction, and willingness to seek out the brand.

Figure 2.18 identifies the top 10 most loved brands. .

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Objective 2-6:

What current trends affect private brands?

Private Brands Private brands, private labels, and store brands are proprietary brands marketed by an organization and normally distributed exclusively within the organization’s outlets.

Advantages to Retailers Several changes have occurred in the private brand arena, summarized in Figure 2.16: • • • • • •

Quality levels of private label brands have improved.

Many brands are perceived as a value purchase.

Loyalty toward stores has been gaining although loyalty toward individual brands has been declining, giving an advantage to private labels.

Private labels are used to differentiate retail outlets.

Many firms are now advertising company private brands.

There is increase in the quality of in-store displays for and packaging of private labels.

Responses from Manufacturers Some manufacturers have begun to respond to the inroads made by private labels. Figure 2.20 lists some of the tactics used by manufacturers, including • • • • •

Focus on a few core brands Advertise heavily Expanding product offerings Focus on in-store selling Use alternative marketing methods

Objective 2-7:

How can packaging and labels support an IMC program— domestically and in foreign settings?

Packaging A unique package and label can help sell a product, build brand recognition, and inspire repeat purchases.

The primary purposes of packages are displayed in Figure 2.21.

An example advantage created by packaging is the new form of refrigerator-friendly 12 packs, as created by Alcoa Rigid Packaging. .

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Sometimes packaging changes are necessitated by adverse market conditions. The popularity of Proctor & Gamble’s Tide Pods surged as soon as it hit the market because of ease of use; however, the company had to overcome the problem of children thinking the pods were candy, so the package was modified.

Labels Labels must • Meet legal requirements.

• Point out distinguishing features of the product.

• Help lead to the purchase.

The label represents another marketing opportunity.

A company’s image, brand, logo, and theme should extend to the design of the package and label.

The placement of QR codes for consumers to access with mobile devices represents a new trend in packaging and labeling.

Ethical Issues in Brand Management Brand infringement occurs when a company creates a brand name that closely resembles a popular or successful brand (Korrs, Victor’s Secret).

Domain squatting or cyber squatting means buying a domain name with the purpose of making a profit by reselling it to the firm.

Objective 2-8:

How are brands managed in international markets?

International Implications Carefully consider standardization versus adaptation when developing global brands.

Make sure packages and labels are legal and protect the product being shipped over long distances.

Be aware of the complications that occur when trying to position products in global markets.

The label must meet the legal requirements of the country in which the product is sold.

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MyMarketingLab Go to mymktlab.com to complete the problems marked with this icon .

Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/.

Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR BRAND MANAGERS AND PUBLICITY DEPARTMENTS (Note to professors— these materials are not in the text. They provide a method for you to summarize the chapter in a different way) Note the tricky relationship between a strong corporate image and bottom-line profits. In other words, be aware that it is difficult to use numbers to express the value of an effective image in an era where accountability is such a major concern.

Recognize the value of the following items: • • • • •

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An identifiable company logo A brand name that generates both recall and a favorable impression Quality family brands Brand equity Effective use of private labels

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Study the company’s position and the position of each individual product. Use the attributes of price, competition, use, quality, users, product class, or cultural symbols to identify the position that the company and its products hold. Then, make decisions about the following issues: • • • •

Is this position where we thought we were?

Is this the position we want?

If we intend to change our position, where do we aspire to be?

Which tactics will move the company and its products to the correct, appropriate, or desired position?

REVIEW QUESTIONS 2-1.

Describe the concept of brand image. What are the tangible aspects of a brand image? What are the intangible aspects?

Corporate image is how consumers view a company, which has many intangible and tangible aspects. The tangible aspects include • Goods and services sold • Retail outlets where product is sold • Factories where product is produced • Advertising, promotions, and other forms of communications • Corporate name and logo • Employees Intangible elements include the firm’s reputation for quality, standing behind products, and methods of dealing with customers.

2-2.

How does brand image help customers? How does it help the specific company?

A corporation’s image can help customers by • Providing assurance when they make purchase decisions of familiar products in unfamiliar settings • Providing assurance for purchases when there is little previous experience • Reducing search time in purchase decisions • Providing psychological reinforcement and social acceptance of purchase decisions A corporation’s image helps the company by • Making brand extensions easier • Being able to charge a higher price • Creating higher customer loyalty • Leading to more frequent purchases

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• • • 2-3.

Promoting positive word-of-mouth communications Attracting quality employees Causing the firm to be viewed more favorably by financial analysts

Describe the use of brand extension and flanker brand strategies.

Brand extensions appear when the company uses an established brand name on goods or services that are not related to the core brand. Flanker brand strategies are the development of a new brand by a company in a good or service category it currently has a brand offering for.

2-4.

Identify and describe three types of co-brands or alliance branding.

The three types of co-brands are 1. Ingredient branding, or placement of one brand within another brand 2. Cooperative branding, which is a joint venture of two or more brands into a new product or service 3. Complementary branding, which is the marketing of two brands together to encourage co-consumption or co-purchases

2-5.

What is a brand logo? What are the characteristics of an effective corporate logo?

A corporate logo is something (usually a symbol) that is easily recognizable to consumers. The characteristics of a corporate logo are that it should be easily recognizable, familiar, elicit consensual meaning among those in the firm’s target market, and should evoke positive feelings.

2-6.

What is meant by the term “stimulus codability?”

Stimulus codability means that a logo can elicit a consensual meaning among customers.

2-7.

How will company leaders know that they have created the desired image for their firm?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

A firm will know the marketing team has created the right image for the firm when benefits appear, such as attracting more customers, favorable ratings by financial observers and analysts, and the company attracts quality employees.

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2-8.

What four areas require attention when seeking to rejuvenate a firm’s image?

First, former customers need to rediscover the brand. Second, older and newer consumers need to be connected to the brand through a timeless value it offers. Third the brand should be contemporized. Fourth, marketers can build a brand community through social media, mobile, and other interactive marketing techniques.

2-9.

What are the characteristics of a strong and effective brand name?

The characteristics of a strong and effective brand name are that it is easily recognizable to consumers and that consumers have a positive reaction to the brand name.

2-10. Explain the role of trust in creating a strong brand.

Trust represents the customer’s belief in the efficacy and reliability of the brand. It can be established over time through personal experiences. Trust results from a brand performing consistently and fulfilling its promise, its authenticity, and its uniqueness.

2-11. What is the difference between brand equity and brand parity?

Brand equity is the set of characteristics unique to a brand that provide value to the brand. In essence, the brand is different and better. Brand equity allows the company the opportunity to charge a higher price and retain a market share that is greater than would otherwise be expected for an undifferentiated product. Brand parity is the perception that there are no differences between major brands.

2-12. What methods can be used to measure brand equity?

Brand equity based on financial value estimates the future cash flows of a brand based on its unique strength and characteristics, which will then be discounted to determine a net present value.

With the stock market approach, the financial value of the company is determined through stock valuation.

The revenue premium compares a branded product to the same product without a brand name.

The consumer value method attempts to measure the value of a brand based on input from consumers. Typical measures include familiarity, quality, purchase considerations, customer satisfaction, and willingness to seek out the brand.

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2-13. How has private branding, or private labeling, changed in the past decade?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Private branding, or private labeling, has changed in the past decade in the following ways: the quality levels of products have increased; the products are perceived as having high value; loyalty to stores has increased, allowing store managers to increase in-store or private lines; they can be used to differentiate retail outlets; private label companies have begun to advertise these differences; and store managers now devote more effort to creating quality in-store displays of and packages for private brands.

2-14. What role does a product’s package play in the marketing program?

The package is the last chance to make an impression on a customer. It should protect the contents, stand out, and tell the consumer what is inside.

2-15. How can a label support an IMC program or advertising campaign?

Labels must meet legal requirements and be distinguishable to consumers. Labels can refer to features of advertisements and other IMC efforts. They should match the theme of the IMC campaign.

2-16. What ethical issues are associated with brand management?

There are concerns with brand infringement and with domain or cyber squatting.

2-17. How do the concepts of standardization and adaptation apply to branding strategies?

Marketing managers must choose the strategy that fits the company and its products. There has been some resistance to more global or standardized brand names.

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CRITICAL THINKING EXERCISES 2-18 Ashley Drake just purchased a small clothing boutique two blocks from your campus. The current name of the store is College Fashions. She feels she needs a new name that projects an image of offering trendy, hip fashions to your college’s students. What name would you suggest? Discuss your brand name in terms of which category it fits and the four tests of quality names. To succeed, Ashley knows she needs to retain the store’s current customers as well as gain new ones. Outline a plan to rejuvenate the company’s brand image using the keys to image rejuvenation identified in Figure 2.5.

The brand name is overt name. It passes the four tests.

1.

2.

3.

4.

It is recognizable.

It is familiar.

It should elicit a consensual meaning among those in the firm’s target market.

It can evoke positive feelings.

The new plan should create a new experience for buyers. It really cannot rely on past relationships, because the company is new. It should be authentic.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

2-19

Henry and Becky Thompson are planning to open a new floral and gift shop in Orlando, Florida. They want to project a trendy, upscale, and fashionable image. They are trying to decide on a name and logo. What should be the name of the company? What kind of logo should be developed?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

2-20. Brand image affects purchase decisions. Identify two brands you consider to hold a positive image, and explain why. Identify two brands that you believe should either change or rejuvenate their brand images, and explain why. How can the change or rejuvenation be accomplished for each brand?

Student responses will vary by brands chosen. This should be a good question for in-class discussion.

2-21. Identify a brand that you have recently purchased that is not wellknown, but you like. Using the concepts presented in the “Building Powerful .

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Brands” section of this chapter, discuss how the brand you identified can be built into a powerful brand. Be specific.

Student answers will vary.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

2-22. Identify five different brands for which you have a high level of brand loyalty.

Describe your level of loyalty and discuss why you are loyal. Explain how brand equity impacts your loyalty for each brand.

Student answers will depend on brands chosen.

2-23.

Pick a private label that you have recently purchased. What is your evaluation of the private brand quality compared to national brands? The chapter discussed a number of changes in private label branding that has occurred (see Figure 2.19). Discuss each of these changes in relation to the private brand you picked.

Student answers will depend on the brand chosen.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

2-24. Look through your cupboard and locate three packages that you believe are effective. Describe why they are effective. Choose three labels that are effective at capturing attention. What are the attention-getting aspects of each label?

Student answers will depend on the packages they choose.

INTEGRATED LEARNING EXERCISES 2-25. Websites constitute an essential element of a brand’s image. Access the websites of the following brands to get a feel for the image each brand tries to project.

Locate on YouTube an advertisement for each brand (supply the URL in your response). Is the image projected on the website consistent with the YouTube advertisement and the image portrayed in the other advertisements for the brand? a. .

Sonic (www.sonicdrivein.com) Page 2- 18

b. c. d.

Skechers (www.skechers.com) Clinique (www.clinique.com) Maxwell House Coffee (www.maxwellhousecoffee.com)

Student opinions will vary. This can be a good in-class discussion question, especially if the sites can be posted for students to see.

2-26. A leading consulting firm that has been a leader in extending marketing knowledge and in the area of brand development is the Boston Consulting Group. Other companies who have been actively involved in brand development are Lexicon Branding and Corporate Branding. Access each firm’s websites. Describe the services provided by each firm. a. Boston Consulting Group (www.bcg.com) b. Lexicon Branding, Inc. (www.lexicon-branding.com) c. Tenet Partners (www.tenetpartners.com) d. Brand Keys (www.brandkeys.com) BCG lists branding, consumers, corporate development, deconstruction, diversity, e-commerce, energy, financial services, globalization, health care, industrial good, information technology, operations, organization, pricing, retail, strategy, technology & communications, and travel & tourism.

Lexicon lists technology, automotive, and “pharma.”

Tenet Partners offers research and analytics, brand strategy assistance, design assistance, and digital marketing activities.

Brand Keys describes itself as, “The World Leader in Customer Loyalty and Engagement Metrics.”

2-27. Brand extension and flanker branding are common strategies for large corporations. Access the following websites. Identify the various brand extension strategies and flanker brands used by each company. a. Procter & Gamble (www.pg.com) b. VF Corporation (www.vfc.com) c. (www.generalmills.com) P & G’s brands are noted in the chapter. In 2005, the company announced the acquisition of Gillette.

VF Corporation includes Wrangler, Lee, Vassarette, JanSport, and The North Face.

General Mills lists 14 brand categories and a wide variety of names. .

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2-28. Private labels provide a significant source of revenue for many retail stores and manufacturers. The Private Label Manufacturers’ Association promotes manufacturers that produce private labels. Visit the organization’s website at www.plma.com. Access each item on the menu. Summarize the information provided for each item.

These will change as the site is updated.

2-29. Conduct an internet search for brand logos. Identify five logos that you think are well designed. Screen-capture the logos and explain what you think makes each logo effective. Identify five logos that you think are poorly designed. Screen-caputrethem and explain why you think they are ineffective.

Answers will vary depending because websites tend to change on a regular basis.

2-30. Go to the authors’ website at clowbaack.net/video/ads.html. Watch a television ad for each of the medical institutions: DuPage Medical Group, Terrebonne General Medical Center, and St. Francis Medical Center. For each of the TV ads, identify the primary message of the ad and the image conveyed by the TV ad. Be specific in describing each medical facility’s image. If you had to choose among the three for medical services, which would you choose? Why? Student answers will depend on the advertisements they choose.

2-31. Go to the authors’ website at clowbaack.net/video/ ads.html. Watch a television ad for each of the financial banking institutions: JD Bank, Ouachita Independent Bank, Progressive Bank, and Centric Federal Credit Union. For each of the TV ads, identify the primary message of the ad and the image conveyed by the ad. Be specific in describing each financial institution’s image.

If you had to choose among the four for banking services, which would you choose? Why? Student answers will depend on the advertisements they choose.

BLOG EXERCISES Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

2-32. Kenmore, Craftsman, and Diehard: http://blogclowbaack.net/2014/05/07/privatebrands-sears-chapter-2/ 2-33. Target: http://blogclowbaack.net/2014/05/07/target-chapter-2/ 2-34. Branding: http://blogclowbaack.net/2014/05/07/branding-chapter-2/

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These exercises provide you with an additional tool to engage your students.

Student Project: Creative Corner The assignment is to develop a brand name, package, and label for a variety of products, including the following: a. b. c. d. e. f.

A new brand of skis for recreational boating A new line of eyeglasses A new chocolate candy bar A new line of jeans A new energy drink A new perfume or cologne

Individual student answers will vary widely.

Cases Case 1

Product Names

2-35. What type of product name is VitaMints? MultiGummies? Do you think such names will succeed? Why or why not?

The names are descriptive of contents. Student perceptions of their potential for success will vary.

2-36. Should the Centrum brand be emphasized in marketing VitaMints, or should the product name stand alone in the promotional program? Defend your answer.

The Centrum brand is fairly strong and should probably be emphasized.

2-37. Do you think marketing messages for VitaMints and Centrum MultiGummies should focus on the products themselves or make comparisons with other vitamin products, such as One a Day? Both approaches have value. Student answers will vary.

2-38. Design an advertising campaign for VitaMints or Centrum MultiGummies that will follow the introductory launch stage. Identify the product features and brand characteristics that should be emphasized to create brand equity and customer loyalty over time.

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Student campaigns will vary. Characteristics might include being “better” in some way, more fun, easier to chew, and so forth.

Case 2

Brand Alliances and Brand Resurrections

2-39. Provide an analysis of the brand alliances mentioned in this story. What factors shape your perceptions of the brands involved?

Student answers will vary. Factors that shape perceptions include past experiences with the companies involved, both positive and negative.

2-40. In each of the brand alliances, which of the two co-brands do you believe is the more powerful name? What causes you to hold that perception?

This can be a discussion question. Ideas about the more powerful brand will be based on consumer preferences, in this case, the students involved.

2-41. Can you think of any potential disadvantages of brand alliances? Explain your answer.

Negative publicity toward one of the co-brands could hurt the other.

2-42. Do you recall the names Datsun, Dodge Dart, or Taurus? What perceptions do you have of those brands? Ask your parents what they think of those brand names. Are their answers different from yours?

Most students will not recall the names unless their parents owned one of the cars.

2-43. Describe what you believe are potential advantages and disadvantages of brand resurrections.

Potential advantages include being able to use nostalgia and recall to enhance the brand.

Previous negative experiences could create a disadvantage, as could the belief that the brand is simply old or stale.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions:

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2-44. Brand image affects purchase decisions. What brands do you consider to hold a positive image? Why? Which brands should attempt to change brand images? Why? Explain how to accomplish this task. Which brands do you believe need rejuvenation? How can it be accomplished for each brand?

2-45. Look up each of the following brands on the internet. Discuss the image conveyed by each brand’s website. What positioning strategy is used? Justify your selection. What changes or improvements could these brands make to their website to enhance its appeal? a. Canyon Beachwear (www.canyonbeachwear.com) b. Applebee’s (www.applebees.com)

Bonus Case

A HEALTHY IMAGE Mary Wilson was both nervous and excited as she opened her first staff meeting in the marketing department of St. Margaret’s General Hospital. Mary’s new role was director of marketing and communications. Her primary task was to increase the visibility of St. Margaret’s Hospital in order to raise the image of the institution in the eyes of the many publics served. The long-term goal was to attract the best possible physicians while increasing use of the hospital’s facilities and attracting more patients.

The world of health care changed dramatically in the past decade. Government regulations and support, concerns about lawsuits, evolving and expensive technologies, and changes in health insurance provisions affected hospitals of all sizes. In addition, St. Margaret’s faces strong competition. The hospital’s primary location is in a major metropolitan area in Minnesota. Two other large hospitals also offer comparable services in the same city. Each seeks to sign physicians to exclusive contracts in which they will only provide care with one organization.

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The other significant challenge to St. Margaret’s is its proximity to the Mayo Clinic.

Clearly, Mayo holds the highest level of prestige in the state and even in the region. Most physicians are inclined to think of Mayo first when making referrals for patients with difficult medical problems. Mayo would be viewed by most publics as the “best” care possible.

The key issues in the image of any health organization include developing trust and a feeling of confidence in the quality of care that will be received. Beyond technological advantages, other, more subtle elements of an image could have an influence. Mary noted that the nurse plays a primary role in determining how patients view hospitals. An uncaring and inattentive nurse is likely to drive away both the patient who encountered the nurse and all of that patient’s family and friends. Negative word-of-mouth, Mary said, must be held to an absolute minimum.

Mary believed St. Margaret’s needed to overcome two problems. First, the name “Margaret” is not commonly used anymore. Some publics may view it as an “oldfashioned” name. Second, there was nothing distinctive about the hospital’s image. The overlap in services provided (heart care, cancer treatment) made it difficult to differentiate St. Margaret’s from other providers.

If there was any advantage, Mary believed it was that St. Margaret’s was affiliated with the Catholic Church. It was the only nonprofit hospital of the three major competitors. This attracted both Catholic patients and some Catholic physicians. Also, the hospital was able to utilize the services of a wide variety of volunteers.

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As the marketing meeting opened, the agenda was to discuss all of the ways St. Margaret’s could build its client base. The task would not be easy, but everyone in the room believed the hospital offered high-quality services in a caring atmosphere.

A Healthy Image What are the image issues in this case?

St. Margaret’s knows the hospital cannot be the “best.” The other problem is brand parity relative to the other hospitals in the city.

What are the brand name issues?

St. Margaret’s is viewed as an “old fashioned” name.

What types of advertisements should Mary develop for St. Margaret’s Hospital?

Ads that emphasize the organization’s advantages, including caring service, nonprofit status, and possibly the hospital’s Catholic heritage.

What other types of activities could St. Margaret’s pursue to build a strong positive corporate image?

and

Health fairs and community service projects. Outreach programs for the homeless and those without health insurance.

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Chapter

3

Buyer Behaviors CHAPTER OBJECTIVES Students should be able to answer the following questions: 3.1 What elements are involved in internal and external information searches by consumers, as part of the purchasing process?

3.2 What three models explain how individuals evaluate purchasing alternatives?

3.3 What trends are affecting the consumer buying environment?

3.4 How do the roles played by various members of the buying center and the factors that influence them impact business purchases?

3.5 What types of business-to-business sales are made?

3.6 What are the steps of the business-to-business buying process?

3.7 How does dual channel marketing expand a company’s customer base and its sales?

3.8 How can a company overcome international differences when adapting to buying processes?

OVERVIEW This chapter reviews consumer buyer behaviors and business-to-business buyer behaviors.

Consumer purchasing processes include five steps; however, two of those steps are most important from an IMC perspective: the information search stage and the evaluation of alternatives stage, which are described in detail in the first part of this chapter.

Next, the consumer buying environment is described.

Business buying behaviors are described starting with a description of the five major roles played in a business buying center.

The three main types of business-to-business purchases are noted.

Finally, dual channel marketing is explained.

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Nescafe In a country dominated by tea consumption (China), creating a new mindset in which coffee would be selected more often by younger consumers, especially in rural areas, was one key goal. Nescafé’s marketing team decided that new technologies presented the greatest opportunities to influence the entire buying process.

Questions for Students: 1. Do you think selling coffee in a country dominate by tea consumption is a good idea?

2. Do you think the company will succeed using social media? Why or why not?

Objective 3.1:

Which elements are involved in internal and external information searches by consumers, as part of the purchasing process?

Information Searches and the Consumer Purchasing Processes Marketing managers constantly endeavor to influence consumer decisions. Figure 3.1 displays the steps of the buying decision-making process. The two steps that are the most important to IMC programs are • •

Information search Evaluation of alternatives

After a need emerges, the consumer begins an internal search, mentally recalling products that might satisfy it.

Often, the individual remembers how the need was met in the past. If a particular brand was chosen and the experience was positive, the consumer repeats the purchase decision, and the information search ends.

When a previous purchase did not work out, or the consumer wishes to try something else, a more complete internal search may result.

Internal Search An internal search takes place when the consumer mentally recalls images of products that might fulfill or meet the need.

A major objective is to build equity so that the company’s brand will be recalled during an internal search.

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External Search Following an internal search, the consumer makes a mental decision regarding an external search.

External information comes from many sources, including the following: • Friends and relatives • Other consumers • Books, magazines, newspapers, and searches of the internet • Advertisements • In-store displays • Salespeople The amount of time a consumer spends on an external search depends on the factors shown in Figure 3.2: 1. The ability to search, which depends on the person’s educational level combined with specific knowledge of the product category and the brands being offered.

2. Motivation, such that the greater the motivation, the greater the extent of external search. Motivation is determined by a. The consumer’s level of involvement (enduring versus situational) b. The customer’s need for cognition (low versus high) c. The customer’s level of shopping enthusiasm (low versus high) 3. Costs, the cost of the search consists of several items: a. The actual cost of the good or service b. The subjective costs associated with the search, including the time spent and the anxiety experienced while making a decision c. The opportunity cost of forgoing other activities to search for information 4. Perceived benefits of the search: higher perceived benefits increase the tendency to search.

The four factors that make up an external search (ability, motivation, costs, and benefits) are normally all considered at the same time.

Question for Students: shopping?

Which of these four factors influences you the most when

From a marketing communication perspective, the search process is an important time to reach the consumer with information about a particular brand.

The goal of marketers during this stage should be to provide information that allows consumers to make the correct decision. .

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Some additional concepts should be considered by marketing experts as they study the information search process.

1. Consumer attitudes 2. Consumer values 3. Cognitive mapping Consumer Attitudes An attitude is a mental position taken toward a topic, person, or event that influences the holder’s feelings, perceptions, learning processes, and subsequent behaviors.

An attitude consists of three components: 1. The affective component contains the feelings or emotions a person has about the object, topic, or idea.

2. The cognitive component refers to a person’s mental images, understanding, and interpretations of the person, object, or issue.

3. The conative component is an individual’s intentions, actions, or behavior.

The most common sequence of events that takes places as an attitude forms is cognitive -> affective -> conative There are other ways in which attitudes may develop. An alternative process may be affective -> conative -> cognitive Some attitudes result from a third combination of the components, as follows: conative -> cognitive -> affective Attitudes are shaped, in part, by an individual’s personal values.

Consumer Values Values are strongly held beliefs about various topics or concepts and lead to the judgments that guide personal behaviors.

By appealing to the basic values shown in Figure 3.3, marketers hope to convince prospective customers that their products can help them achieve a desirable outcome.

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In terms of consumer decision-making processes, both attitudes and values are helpful to marketing experts.

Figure 3.4 identifies some of the brands consumers consider to be patriotic.

Cognitive Mapping Cognitive maps are simulations of the knowledge structures embedded in an individual’s brain.

People use knowledge structures to help them interpret new information and to determine an appropriate response to fresh information or a novel situation.

Figure 3.5 is an example of a cognitive map of a person thinking about Ruby Tuesday.

Cognitive Linkages Besides initial linkages, other features of cognitive maps are present. These include levels and layers, meaning that cognitive processing occur on many levels using highly complex mechanisms.

Processing New Information New information affects linkages that already exist.

In situations in which a message has no current linkages, a new map will evolve in the person’s mind.

Retaining Information Hearing something once usually is not enough to cause it to be retained in a person’s memory because of the difference between short-term recall and long-term memory.

New Concepts Another way a consumer can process information is to link the message to a new concept.

The individual can add a link, ignore or forget the message, or recall the message later.

Marketing Messages When a company attempts to introduce consumers to a new brand, the advertisements and other marketing messages should repeat the name of the product several times during the presentation to improve the chances it will be recalled.

Figure 3.6 displays the roles of marketing messages in cognitive mapping. .

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Question for Students: Can you imagine a cognitive map for one of your recent purchases?

Objective 3.2:

What three models explain how individuals evaluate purchasing alternatives?

Evaluation of Alternatives Three models portray the nature of the evaluation process.

1. The evoked set approach.

2. The multiattribute approach.

3. Affect referral.

Figure 3.7 displays these three methods.

The Evoked Set Approach A person’s evoked set consists of the brands that are considered in a purchasing situation.

Two additional components of evoked sets are part of the evaluation of purchase alternatives: 1. The inept set consists of the brands that are part of a person’s memory, which are not considered because they elicit negative feelings.

2. The inert set holds the brands that the consumer is aware of but the individual has neither negative nor positive feelings about the products.

The Multiattribute Approach The key to understanding this model is noting that consumers often examine sets of attributes across sets of products or brands. The multiattribute model assumes that a consumer’s attitude toward a brand is determined by the following: • •

The consumer’s beliefs about a brand’s performance on each attribute The importance of each attribute to the consumer

The higher a brand is rated on attributes that are important to the consumer, the more likely it becomes that the brand will be purchased.

Figure 3.8 displays an example of a multiattribute model.

Affect Referral With this method, a consumer chooses the brand that he or she likes the best. The individual does not evaluate the other brands and often does not even think about which attributes are important. .

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Two things explain why consumers rely on affect referral: 1. It saves mental energy.

2. The multiattribute model may have been utilized previously. Thus, the person has already spent a great deal of time considering various product attributes, deciding which attributes were most critical, and reaching a decision.

Question for Students:

Can you remember your last purchase using an affect referral type of approach?

Objective 3.3: What trends are affecting the consumer buying environment?

Trends in the Consumer Buying Environment It is important to note some of the more recent trends that have affected purchasing patterns.

Figure 3.9 lists the trends.

Age Complexity Some of the attitudes and values that are shifting at a cultural level include those associated with the following: • •

Young people “growing up” more quickly Older people refusing to “grow old”

Gender Complexity Roles of males and females continue to evolve.

Active, Busy Lifestyles Many people would prefer more time to more money and possessions. Convenience items are in higher demand.

Diverse Lifestyles A wide diversity exists in the adult paths individuals take and the living arrangements.

Divorce and remarriage alter many family units. Divorcees, or second chancers, tend to develop a new outlook on life. They have higher incomes and are more content with life .

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The number of openly lesbian, gay, bisexual, and transgender (LGBT) has grown to approximately 5 percent to 10 percent of the population.

Communication Revolution Advances in telecommunications, primarily social media and smartphones, have impacted consumers all over the world and have created significant changes in the way individuals communicate with each other, with brands, and with companies.

These technologies have changed the way brands and firms are influenced by word-of-mouth communication and can be used to engage consumers and stimulate positive endorsements.

Experience Pursuits Indulgences, such as expensive dinners or get-away weekends, bring feelings of comfort and reassurance.

Self-rewarding activities make the consumer feel that all the work and effort is “worth it.”

Health Emphasis Two outcomes of this trend are 1. A blossoming interest in health products 2. The desire to maintain a youthful appearance Marketers can create messages about the healthy aspects of products.

Figure 3.10 displays some of the potential responses to all of these new trends in the consumer buying environment.

Objective 3.4: How do the roles played by various members of the buying center and the factors that influence them impact business purchases?

Business-to-Business Buyer Behavior Business-to-business purchases are completed by people. Many of the processes involved in making a purchasing decision apply to both consumers and business buyers.

The group of individuals involved in the buying decision is called the buying center. The buying center consists of five different subsets of individuals playing various roles in the process. .

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The five roles involved in the buying center are shown in Figure 3.11: 1. Users are the members of the organization who actually use the product or service.

2. Buyers are the individuals who are given the formal responsibility of making the purchase. In larger organizations, buyers are either purchasing agents or members of the purchasing department.

3. Influencers are the people who shape purchasing decisions by providing the information or criteria utilized in evaluating alternatives.

4. Deciders are the individuals who authorize decisions.

5. Gatekeepers are the people who control the flow of information to members of the buying center. The gate-keeping function can be performed by several people rather than one individual.

Many times these five roles overlap.

• The behaviors of each member in the buying center are influenced by Organizational factors • Individual factors Organizational Influences Organizational influences include the following: • Company’s goals • Operating environment (recession, growth period, lawsuits pending, etc.)

• Finances and capital assets • Market position • Quality of the company’s human resources • Country in which the firm operates Some organizations have highly centralized purchasing programs although others are highly decentralized.

Studies of organizational decision making indicate that employees tend to adopt heuristics, which are decision rules designed to quickly eliminate as many options as possible.

One decision rule often employed is called satisficing, which means that when an acceptable alternative has been identified, it is taken and the search is completed.

Individual Factors At least seven major factors affect each member of the business buying center, as displayed in Figure 3.12.

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Personality Personality features include introversion, decisiveness, forcefulness, ego.

Roles Roles and perceived roles, influenced by age, heredity, ethnicity, and also by the role within the buying center.

Motivation Motivational levels, which depend on the match between the individual’s goals and the organization’s goals.

Level of Power The level of power depends on the person’s role in the buying center, official position in the organization, and the impact of the purchase decision on a specific job.

Risk Attitudes toward risk, which means many vendors are chosen because buyers believe the choice has the lowest risk and risk avoidance is common.

Level of Cognitive Involvement Levels of cognitive involvement means individuals with higher levels of cognitive capacity want more information prior to making decisions and ask more questions when interacting with a sales rep.

Personal Objectives Personal objectives are tied to motives, personality, perceptions of risk, and the other individual factors and can lead buyers to make purchases that help them politically in the organization.

Objective 3.5:

What types of business-to-business sales are made?

Types of Business-to-Business Sales These decisions fall into one of three categories: 1. Straight rebuy, which occurs when the firm has previously chosen a vendor and wishes to make a reorder. It tends to be a routine process. .

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2. Modified rebuy, where the company needs to consider and evaluate alternatives.

A modified rebuy situation can occur for four different reasons, as shown in Figure 3.14.

• Buyers are dissatisfied with a current vendor.

• A new company offers what is perceived by a member of the buying center to be a better buy.

• The end of a contractual agreement is reached • When a company purchases a product or service with which they have only limited or infrequent experience.

3. New task, where the company is buying a product or service for the first time and the product involved is one with which they have no experience.

Objective 3.6:

What are the steps of the business-to-business buying process?

The Business-to-Business Buying Process In new task purchasing situations, companies go through seven steps in the business-tobusiness buying decision process.

1. Identification of a need 2. Establishment of specifications 3. Identification of alternatives 4. Identification of vendors 5. Evaluation of vendors 6. Selection of vendor(s) 7. Negotiation of purchase terms Figure 3.15 compares individual purchase decisions with the business buying process.

In a new buy situation, companies will go through all seven steps. In modified rebuy or straight rebuy situations, one or more of the steps are eliminated.

Identification of Needs Individual buyers and members of individual firms recognize company needs on a daily basis.

Needs in the business world are often created by derived demand, which is based on, linked to, (or derived from) the production and sale of some other consumer good or service.

Establishment of Specifications Specifications are formulated by experts.

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Specifications are usually written down and distributed internally to those in the buying center and are communicated to vendors.

Identification of Vendors In most business situations, written, formal bids are required.

A member of the buying center is normally chosen to compile files of vendors that submit proposals.

The offers are circulated to all of the members of the buying center that have input into the final decision.

Vendor Evaluation Evaluations of vendors normally occur at three levels: 1. An initial screening of proposals 2. Undertaking a vendor audit. Members of the audit team normally include an engineer, someone from operations, a quality control specialist, and members of the purchasing department.

3. Sharing vendor audit information with various members of the buying center Many of the concepts described in the previous chapter regarding consumer buyer behavior apply to this stage of the business purchasing process.

Vendor Selection Once the choice is made, there are still items to be completed before shipment begins, including notifying the companies that did not win the bid.

Negotiation of Terms In most purchasing situations, negotiating terms is merely a formality because most of the conditions have already been worked out.

When the final agreement is set, goods are shipped and/or services are provided.

Postpurchase Evaluation In the business-to-business arena, the postpurchase phase represents a marketing opportunity.

Vendors that provide high-quality products, follow-up, and service often move into a straight rebuy situation.

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Objective 3.7:

How does dual channel marketing expand a company’s customer base and its sales?

Dual Channel Marketing Dual channel marketing occurs when firms sell virtually the same goods and/or services to both consumers and businesses.

Dual marketing channels arise for several reasons.

• A product is first sold in the business market and then is adapted to the consumer market.

• As sales grow, economies-of-scale can be created by selling to a new market.

Spin-Off Sales One type of dual channel marketing results from spin-off sales, in which individuals who buy a particular product at work and have positive experiences with the product purchase another one for personal use.

Marketing Decisions When there are substantial differences between the two channels, the typical tactics are • Use different communication messages.

• Create different brands.

• Use multiple channels or different channels.

In most cases, business customers and consumers seek the same basic benefits from products. In these situations, a single strategy for both markets is best. Tactics that should be used include the following: • • •

Integrating communications messages Selling the same brand in both markets Scanning both markets for dual marketing opportunities

There are two advantages to integrating consumer markets with business markets: 1. Synergies 2. Economies-of-scale

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Objective 3.8:

How can a company overcome international differences when adapting to buying processes?

International Implications The importance of a powerful brand rises when a company commences with international operations.

A visible global brand is one key to success in international business-to-business marketing.

MyMarketingLab Go to mymktlab.com to complete the problems marked with this icon .

Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/.

Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR THE MARKETING TEAM (Note to professors— these materials are not in the text. They provide a method for you to summarize the chapter in a different way) Recognize the opportunities that the consumer buying decision-making process identifies.

Structure the IMC program to take advantage of those opportunities.

• Know when consumers are likely to experience buying needs.

• Know how to cause customers to feel those needs, and to recall the specific company’s products when those needs are experienced.

• Design ads and other messages that make it more likely that a given good or service will become part of a consumer’s internal and external search for information. .

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• • • • • • • •

Make the perceived benefits of finding the company greater than the perceived costs (in the consumer’s mind).

Tie ads to widely held consumer attitudes and values.

Make sure ad information is consistent across potential central and peripheral route processing of the message.

Make sure, to whatever extent is possible, that the consumer links the firm’s goods and services to other positive thoughts as part of his or her cognitive mapping process.

Market products emphasizing key features that will show up as being important in consumer multiattribute assessments of goods and services.

Provide all of the necessary postpurchase reassurance needed to keep customers happy and loyal to the company.

Make it easy to complete the purchase once the consumer decides on the company. Don’t lose sales because of credit snafus, products that can only be back-ordered, or stores that are hard to find and/or access.

Remember that, in an era of increased accountability for outcomes, the consumer buying decision-making process is a key ingredient in success. This is because • Purchases are about to be made, so the company needs to be ready when the customer is on the “hot spot.”

• A consumer can go through the whole process and then actually ignore his or her own choice when there are extenuating circumstances. Therefore, the company would need to reduce the odds of this happening to them, and try to increase the odds that a consumer might buy their products/services on such a last-minute impulse.

Review all of the key factors that affect consumer purchases. Make sure ads meet those needs effectively.

Carefully study all of the newer trends affecting consumer purchases. Features that are increasingly important to many major target markets include the following: • The relationship between price and value • Distinctiveness • Convenient access to information (websites, noticeable ads) • Easy access when problems arise • Effective servicing • Ease of purchase, especially time-saving features Business-to-Business Know the business first. Account executives should be aware of the product type that is being sold along with the types of customers who may purchase the product. .

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Carefully examine all potential customers to see if there are new potential markets that the firm has not as yet explored Study the nature of services that businesses provide to other business. Seek to expand the firm’s domain by taking advantage of these services. Ask these questions: • Are there new services the company could provide?

• Are there services the company could add to make various products more attractive purchasing options?

• Could the company link its products with the services provided by another firm to make both firm’s offerings more enticing?

• If the firm expands its service offerings, how can the company continue to speak with a clear voice and integrate marketing communications messages?

Before any communications effort is designed, the account executive should work with the company’s production department to identify all of the members of the buying center. Then, communications should be addressed and fine-tuned according to the members of the team.

Account executives and creatives should review the steps of the business buying process.

Then, messages should be designed to have an impact on key points in the process, depending on the product and the buyer.

• Modified rebuys require messages that will entice businesses to take a long, hard look at their previous purchasing choices.

• New task purchases offer the greatest opportunity to make an impression, including attracting attention to the vendor, the product, the terms of the sale, and any other advantage the company offers Account executives should help their clients understand all of the potential opportunities for dual channel marketing, as well as also making them aware of the following: • Time to sell products differently versus time when the need being filled is essentially the same across the two channels.

• Situations in which marketing in one channel might damage marketing efforts in the other.

• Methods which can be used to design messages which take advantage of the firm’s strengths and brand equity and which keep the overall voice clear and focused on the total company Note the value of global brands.

Make sure internal marketing messages match with those sent to external groups. Be certain employees and departments clearly recognize how the IMC program works, and how they can help to achieve the greatest levels of success.

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REVIEW QUESTIONS 3-1.

What are the five steps of the consumer buying decision-making process?

Which two steps are the most important with regard to developing quality integrated marketing communications?

The five steps in the consumer buying decision-making process are 1. Problem recognition 2. Information search 3. Evaluation of alternatives 4. Purchase decision 5. Postpurchase evaluation process The two IMC steps are information search and evaluation of alternatives.

3-2.

Describe the natures of an internal search and an external search in a purchasing decision.

An internal search involves brands the consumer is willing to consider from past experiences. An external search expands the list to include new alternatives.

3-3.

Define attitude. What are the three main components of attitude, and how are they related to purchasing decisions?

An attitude is a mental position taken toward a topic, person, or event that influences a person’s feeling perceptions, learning processes, and subsequent behaviors.

Attitudes consist of three components: (1) affective, (2) cognitive, and (3) conative.

The affective component contains the feelings or emotions a person has about the object, topic, or idea. The cognitive component refers to a person’s mental images, understanding, and interpretations of the person, object, or issue. The conative component is an individual’s intentions, actions, or behavior.

3-4.

How do values differ from attitudes? Name some personal values related to purchasing decisions.

Values are strongly held beliefs about various topics or concepts. Attitudes are shaped, in part, by values.

Personal values related to purchasing decisions would be present in the purchasing of books, cigarettes, alcohol, clothes, and are expressed in religion, patriotism, love of family, and other personally held principles.

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3-5.

Explain what a cognitive map models.

Cognitive maps are simulations of the knowledge structures and memories embedded in an individual’s brain. These structures contain a person’s assumptions, beliefs, interpretation of facts, feelings, and attitudes about the larger world. These thoughts processes interpret new information and determine a response to fresh information or a novel situation.

3-6.

What is an evoked set? Why are evoked sets, inept sets, and inert sets important to the marketing department?

An evoked set consists of the brands he or she considers in a purchasing situation.

An evoked set may be reviewed during both the information search and evaluation stages of the buying decision-making process.

Two additional brand sets will become part of the evaluation of purchase alternatives: (1) the inept set and (2) the inert set. The inept set consists of the brands that are part of a person’s memory that are not considered because they elicit negative feelings. These negative sentiments are normally caused by a bad experience with a vendor or particular brand. They may also originate from negative comments made by a friend or by seeing an advertisement that the potential customer did not like.

The inert set holds the brand the consumer is aware of but the individual has neither negative nor positive feelings about the products. Inept sets and inert sets are important because the only brands typically considered are those in the evoked set. Inept and inert sets are not in the evoked set.

3-7.

What are the key features of the multiattribute approach to evaluating purchasing alternatives?

The key features of the multiattribute approach are the consumer’s beliefs about a brand’s performance on various attributes (price, quality, etc.) and the importance of each attribute to the individual consumer.

3-8.

What is meant by affect referral? When is a person likely to rely on such a cognitive approach to evaluating purchasing alternatives?

Affect referral is a purchasing decision model in which the consumer chooses the brand for which he or she has the strongest liking or feelings. A person is likely to rely on such an approach when the purchase is a low involvement item, which is made frequently.

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3-9.

What trends in the consumer buying environment affect consumer purchasing decisions?

The new trends include age complexity, gender complexity, active lifestyles, time pressures, diverse lifestyles, communication revolution, cocooning, experience pursuits, and an emphasis on health.

3-10. Name and describe the five roles played in a buying center.

Users are the members of the organization who actually use the product or service.

Buyers are the individuals who are given the formal responsibility of making the purchase. In larger organizations, buyers are either purchasing agents or members of the purchasing department.

Influencers are the people who shape purchasing decisions by providing the information or criteria utilized in evaluating alternatives.

Deciders are the individuals who authorize decisions.

Gatekeepers are the people who control the flow of information to members of the buying center. A gatekeeping function can be performed by several people rather than one individual.

3-11. What organizational and individual factors affect members of the business buying center?

Organizational influences include • Company’s goals • Operating environment (recession, growth period, lawsuits pending, etc.)

• Finances and capital assets • Market position • Quality of the company’s human resources • Country in which the firm operates At least seven factors affect each member of the business buying center: (1) personality features, (2) roles and perceived roles, (3) motivational levels, (4) levels of power, (5) attitudes toward risk, (6) levels of cognitive involvement, and (7) personal objectives. Each impacts how the individual interacts with other members of the center.

3-12. Describe the three main forms of business-to-business sales.

Straight rebuy, which occurs when the firm has previously chosen a vendor and wishes to make a reorder. It tends to be a routine process. .

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Modified rebuy, where the company needs to consider and evaluate alternatives. A modified rebuy situation can occur for four different reasons: New task, where the company is buying a product or service for the first time and the product involved is one with which they have no experience.

3-13. Name the steps in the business-to-business buying process.

1. Identification of a need 2. Establishment of specifications 3. Identification of alternatives 4. Identification of vendors 5. Evaluation of vendors 6. Selection of vendor(s) 7. Negotiation of purchase terms 3-14. Describe dual channel marketing and why it is important to a company’s well-being.

Dual channel marketing is when firms sell virtually the same goods or services to both consumers and businesses. It leads to selling products to every potential user of the company’s offerings.

CRITICAL THINKING EXERCISES 3-15. Compulsive buying and/or shopping takes place when a person becomes obsessed with making purchases, many of which are unnecessary or impractical.

For college students and other individuals with compulsive buying behaviors, a primary influence is the family. Often one or both parents are compulsive shoppers. Families that displayed other forms of dysfunctional behaviors—such as alcoholism, bulimia, extreme nervousness, or depression—tend to produce children who are more inclined to exhibit compulsive shopping behaviors. Why do dysfunctional behaviors among parents produce compulsive shopping behavior among children? Another component of compulsive buying behaviors is self-esteem. Again, self-esteem is partly inherited, but it also develops in the home environment. How would self-esteem be related to compulsive shopping behaviors? What influences other than family might contribute to compulsive shopping behaviors? If an individual has a tendency to be a compulsive shopper, what can (or should) be done?

In student discussions, the answers should describe views on how dysfunctional behaviors by parents affect children. First, what the children have seen may shape how the kids process information (rationally versus emotionally) and consequently make purchasing decisions. Second, attitudes and values shape the behaviors that .

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follow. Parents who have compulsive buying problems will role model the behavior and probably not punish kids for the same activity. The same might apply to selfesteem issues. Children who see parents exhibiting low self-esteem may assume the same attitudes and behaviors as the parents.

3-16. Examine the consumer decision-making process illustrated in Figure 3.1.

Think of a recent high-involvement purchase you made that involved every step in the process. Discuss each of the steps, especially the information search and evaluation of alternatives.

Student responses will vary. This is a good in-class discussion question that can be structured to different types of purchase.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

3-17. Think about the ways you purchase products and consider a recent purchase that involved an external search. Discuss your ability to search, the need for cognition, your personal level of shopping enthusiasm, and the perceived costs versus the perceived benefits of the search. How much time did you spend in the external search, and what was the outcome?

Student responses will vary by the product they describe. This is a good class discussion question. Ask students to compare the shopping enthusiasm aspect.

3-18. Study the list of personal values presented in Figure 3.3. Identify the five that are the most important to you. Rank then from first to last. Beside each value, identify at least two products or services you have purchased to satisfy those values.

Student answers will vary. In class, ask them to compare personal values.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

3-19. Review the three methods of evaluating alternatives. Briefly explain each method. For each of the following product categories, which method of evaluation would you use for your next purchase? Explain why. a. Meal with your significant other at a dine-in restaurant b. Auto service repair for your vehicle c. Pair of jeans d. Resort location for spring or winter break Student responses will vary based on the type of purchase made. .

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Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

3-20.

Pick two of the product categories below. Identify brands in your evoked set, inept set, and inert set for that product category. Explain the rationale for the placement of each of the brands. a. b. c. d.

Quick service restaurants Retail clothing stores Grocery stores Computers

Student answers will depend on the category chosen and brands identified.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

3-21. Review the trends in the consumer buying environment presented in this chapter. For each trend, discuss the level of impact it has on your purchase behavior. Cite examples of goods or services that you have purchased as a result of that trend.

Student responses will be based on the choices of goods and services.

3-22. A member of the buying center for a large shoe manufacturer tries to purchase soles for shoes from an outside vendor vendors. Study the individual and organizational factors that affect buying center members. Discuss the effect of each factor on the roles of members in the shoe company’s buying center. How does the factory foreman’s role differ from that of the purchasing agent? How would these roles differ from the company president’s role?

The factors that affect buying center members are personality features, roles and perceived roles, motivational levels, levels of power, attitudes toward risk, levels of cognitive involvement, and personal objectives.

The personalities of the members in the buying center affect buying decisions.

Conflicts between members will make the process more difficult.

The roles and perceived roles in the buying center also affect the purchase. Those who figure they are the major “players” will be more motivated and involved.

The motivational levels depend on which member is being contacted. Some will be highly motivated; others will not. .

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The level of power should be understood by the seller, so the vendor knows which person has influence with other members of the buying center group.

Buying center member attitudes toward risk mean individual members will probably try to make sure the purchase is not too risky.

Levels of cognitive involvement reflect how much time and thought each member of the buying center will give to a purchase decision. The vendor should be most interested in members with greater cognitive involvement.

Personal objectives mean politics can affect buying decisions, so the vendor should be aware of how the game is played, to whatever extent possible. The roles of the factory foreman, purchasing agent, and company president are all very different. The information available to each party is different, and the personal objectives of each person vary. A company president probably knows more about the decision and is looking out for the best interests of the overall organization. A factory foreman will have greater first-hand involvement but may not be exposed to the marketing messages sent by the vendor. A purchasing agent would look for value, delivery time, and consensus among members of the buying group.

3-23. A purchasing agent for a clothing manufacturer is in the process of selecting vendors to supply the materials to produce about 30 percent of its clothes. The clothing manufacturer employs about 300 people. As the audit nears completion, what factors are most important to the purchasing agent?

The factors that would be important to the purchasing agent would include production capability, quality control mechanisms and processes; type and age of equipment used; telecommunication and EDI capabilities; capacity to handle fluctuations in orders; financial stability of the firm; and the number of competitors that purchase from the firm. These factors would create an overall picture of the stability of the firm, which the purchasing agent would use as the audit was completed.

3-24. Identify four brands that you have used in a work environment that you also have purchased in your personal life. Discuss the dual channel marketing approach each of the brands use. Discuss the process that occurred in purchasing the product for personal use and the influence using the brand in the work environment had on the purchase, or the reverse if you used it personally first.

Student responses will vary. Some will not have made purchases for work.

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INTEGRATED LEARNING EXERCISES 3-25

Consumers and businesses conduct external searches when they lack sufficient internal knowledge to make a wise decision. Assume you have $150,000 to $200,000 to spend on a sailboat. Locate four websites that sell sailboats. Select one in your price range. Discuss the external search process you used to arrive at a decision. Relate this process to the concepts of external search, consumer attitudes, and consumer values presented in this chapter. Which method of evaluation did you use? Explain why.

Student answers will vary.

3-26.

Almost everyone has an opinion about tattoos. Some attitudes are positive whereas others are negative. Few are neutral. Go to www.tattoos.com and examine the material there. Did this information modify your attitude toward tattoos? What factors on the website influenced your attitude? Find at least one additional website of a company that offers tattoos. Provide the URL for the site and discuss the components of the website in terms of which components of attitude it is trying to influence: cognitive, affective, or conative.

Student answers will vary.

3-27. Go to the authors’ website at clowbaack.net/video/ads.html. Choose one of the television ads. Which component of an attitude is the primary focus of the ad? Justify your answer. Which consumer value is being emphasized? Justify your answer. For the evaluation of alternatives, which method of evaluation would be used by most consumers? Explain why. Which one of the trends in the consumer buying environment identified in the text does the ad target?

Explain why. (Be sure to identify which ad you watched in your response.)

Student answers will vary.

3-28. Go to the authors’ website at clowbaack.net/video/ads.html. Watch the two advertisements for NOLA, The Times-Picayune. For each ad identify the component of attitude that you think is the primary focus and the personal value being emphasized. Justify your choice. Who do you think is the target audience for these two ads? Explain why. Which of the two ads did you like the best? Why? Were the ads effective? Why or why not?

Student answers will vary.

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3-29. Review the trends in the consumer buying environment. Examine each of the following websites. Which trend or trends does each website seem to utilize on its website? Use screen shots to justify your thoughts. a. Chipotle Mexican Grill (http://chipotle.com) b. Visit South Walton (www.visitsouthwalton.com) c. Ralph Lauren (www.ralphlauren.com) d. Scott + Cooner (http://scottcooner.com Student answers will depend on the current website.

3-30. Examine the following websites. What type of information is provided?

Which component of attitude is the site designed to influence: cognitive, affective, or conative? Explain why. a. Kenneth Cole (http://www.kennethcole.com) b. Starbucks (http://www.starbucks.com) c. Cadillac (http://www.cadillac.com) d. IKEA (http://www.ikea.com) Answers will vary depending on what material is on the website when it is accessed by students.

3-31. A member of the buying center has been asked to gather information about possible shipping companies for international shipments. Visit the following websites. What companies have the most appealing websites? Beyond online materials, what additional information do they need to supply to the buying center in order to win the contract? a. b. c. d.

ABC India Limited (www.abcindia.com) SR International Logistics, Inc. (www.srinternational.com) Allison Shipping International (www.allisonshipping.com) Shipping International (www.shippinginternational.com)

Student answers will vary.

BLOG EXERCISES Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

3-32. Jeep: http://blogclowbaack.net/2014/05/07/jeep-chapter-3/ 3-33. Olive Garden: http://blogclowbaack.net/2014/05/07/olive-garden-chapter-3/

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3-34. Consumer behavior, buying process: http://blogclowbaack.net/2014/05/07/consumer-behavior-chapter-3/ These exercises provide you with an additional tool to engage your students.

Student Project: Creative Corner This is an analysis for advertising spring break trip packages to college students.

Students should design an emotional ad, a rational ad, and an action-oriented ad for a trip to Ft. Lauderdale, Florida, for a five-day trip.

CASES Case 1

Choosing a Life Insurance Policy

3-35. Identify the need (or needs) that would begin the consumer buying decision making process in this case.

The need to protect one’s family would likely begin the search.

3-36. How would the elements involved in an external search affect John and Sandy as they explore their purchase options? Think in terms of: a. b. c.

ability to search level of motivation costs versus benefits

The ability to search would be high, the level of motivation would be high, and the cost is time versus the benefit of feeling like they have provided protection for the new baby would lead to a fairly extensive search.

3-37. Explain how John and Sandy could evaluate their options using the following concepts and models: a. attitudes and values b. cognitive mapping c. multiattribute In terms of attitudes and values, protecting a child would rank high. They would choose the company that offered the best protection.

In the cognitive mapping area, they would explore current linkages in terms of companies they know about and how well those companies served the needs of .

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their families and/or friends. New linkages would come from marketing messages.

A multiattribute approach would likely look at costs of policies, benefits of those policies, and the reputations of companies offering policies.

3-38. What types of marketing messages should each of the three life insurance companies design to reach consumers such as John and Sandy, for either the information search, evaluation of alternatives, or both stages of the buying decision-making process?

Messages should probably emphasize the company’s name, so they become part of the potential choices. Then, they should focus on explaining why a specific company is better. When it comes to something like life insurance, often messages note strength, security, and peace of mind.

Case 2

The Choice

3-39. Discuss the reasoning behind each person’s choice based on the information provided and the individual factors outlined in this chapter.

Martin Garza made his choice for political reasons. He believed it would help him achieve promotion.

Suzette Simon was the product user. She wanted better quality.

Paul Johnson had motives related to saving the company money combined with the political motive of disliking Martin Garza.

Rose Knotts saw her position as having low power and voted to please her supervisor.

3-40. Identify the factors that favor each vendor and the factors that are the vendor’s weaknesses.

Company 1 – average to low quality but was the previous choice (last purchase), making it easier to rebuy.

Company 2 – advantage service; disadvantage price.

Company 3 – advantage quick service; disadvantage being unknown and new to the market.

Company 4 – advantages of price and an insider helping out; disadvantage quality. .

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3-41. How should Jason make the final choice, given there is such a great divergence in opinion?

Jason should balance the interests and opinions of buying center members he trusts and also consider the advantages and disadvantages listed above.

3-42. What should Jason say to the members of the buying center whose favorite companies are not chosen?

He should thank them for their time and effort and tell them that their input was given careful consideration.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 3-43. Describe each of the trends in the consumer behavior environment. Discuss the impact that each trend has on clothing purchases, especially current fashions.

3-44. Identify and define the factors that affect the amount of time consumers spend in conducting an external search. Suppose you wanted to purchase a boat (sailboat, powerboat, or fishing boat). Discuss each of the factors that would affect your external search process in the purchase of the boat.

Explain why.

Bonus Case

CLEARING THE AIR Most people want to live in a clean environment. Marketing cleaning products involves tactics ranging from rationality and logic to emotions and instincts. Some companies use the simplest possible terms, as basic as calling bacteria “germs.” Advertisers use cartoons and simple diagrams to show how the product kills bad germs and makes things “sparkle.” At the other extreme are the more complex and scientific explanations regarding a product’s ability to clean things up. .

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In this context, the market for air purifiers has grown and developed in the past decade. Smaller items, such as air freshener sprays and plug-ins made by brands such as Glade, have been available for many years. Now, newer technologies, such as HEPA hydro-allergenic filtration, are available.

The Sharper Image has been a leader in the marketing of new air cleaning technologies. The company’s basic product and brand, the Ionic Breeze, has been sold through retail stores and websites and via infomercials and inbound telemarketing for many years.

One primary feature of all the Ionic Breeze products is silent operation. The Silent Electronic Propulsion technology made the original product the number-one air-cleaner brand in America. Through this silent air circulation technology, the company promises effective removal of airborne contaminants, reduction of common household odors, no filters to replace, low energy costs, an attractive design, ease of operation, and low maintenance.

Variations on the base model now include advancements such as the Germicidal version; the QUADRA; a smaller, plug-in bathroom version; and the new MIDI, which is smaller than earlier products. Other features associated with the Ionic Breeze are its OzoneGuard with PremAir catalyst, developed by BASF Catalysts LLC, which converts the by-product ozone to oxygen.

Not surprisingly, competition has emerged. One of the new major players is Oreck, a company that gained fame and brand strength through its line of vacuums, which are lightweight but powerful carpet cleaners. A logical brand extension would be into air filtration. .

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Oreck promotes products that kill viruses, bacteria, mold, and fungi. One major difference is that the Oreck model does move the air. In advertisements and promotional materials, the air clearers are demonstrated as being superior because of this feature.

Product materials strongly emphasize the health benefits of cleaner air. Oreck air cleaners are also featured in infomercials, on websites, and through standard television advertising.

Both Oreck and Sharper Image note that the air inside a house often is much more polluted than the air outside. Consumers are warned that asthma, allergies, and respiratory illnesses are on the rise. Air cleaners are offered to help.

Now, many lower priced air cleaners are also available through retailers such as Walmart and Target. Consequently, consumers have a vast array of potential prices, product features, and promotional claims to consider when choosing an air cleaning product. The future of the air cleaning business appears to be either bright or cloudy, depending on one’s perspective, and consumers will undoubtedly see the number of options for methods to clear the air continue to rise.

Sources: Case based on information available at www.oreck.com and www.sharperimage.com.

(1)

How would a consumer’s level of involvement, need for cognition, and level of shopping enthusiasm affect the purchase of an air filtration product?

A consumer with a low level of involvement would not spend as much time searching for alternatives. One with a high level of involvement would seek out more options and want to know more about them.

A consumer with a low need for cognition would not care about the details regarding how each system works.

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A person with a higher level of shopping enthusiasm would be more inclined to go to a store such as Sharper Image would want demonstrations and other information.

(2)

Explain how cognitive mapping could be used to demonstrate a consumer’s reaction to either the Ionic Breeze or the Oreck Air Cleaner.

Each cleaner might have its own set of linkages. For example, the Oreck model may conjure up memories of commercials for Oreck vacuum cleaners and the CEO, David Oreck. Both would have various levels of cognition. The name Ionic might create images of something more high-tech or modern. Oreck may seem more oldfashioned, but the advertisements noting how the air moves through the system may attach to other concepts, such as fans and other types of filters, including air filters on air conditioners and automobiles.

(3)

Which model best explains the evaluation of alternatives when it comes to air filtration products, the evoked set model, the multiattribute approach, or affect referral?

Student responses will vary. It seems unlikely that affect referral would apply, except in the case of a buyer who already owns an Oreck product and therefore sticks with the same brand. In terms of an evoked set, there are limited choices in the first place. Those customers who take the time to really study the advantages and disadvantages of each model would be the ones using the multiattribute approach.

They would also be the ones with great levels of involvement and a greater need for cognition.

(4)

Should air cleaner companies focus on fear, health, or other emotions to sell products? Explain.

Student answers will vary. A case can be made for fear, health, protecting ones loved-ones and possibly other emotions.

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Chapter

4

The IMC Planning Process CHAPTER OBJECTIVES Students should be able to answer the following questions: 4.1 What makes marketing research critical to the IMC planning process?

4.2 What categories are used to identify consumer target markets or market segments?

4.3 What categories are used to identify business-to-business market segments?

4.4 How do the various approaches to positioning influence the IMC planning process?

4.5 How do the marketing communications objectives interact with the other elements of an IMC planning process?

4.6 How are communications budgets established?

4.7 What elements are considered in developing an IMC program?

OVERVIEW This chapter describes the nature of the integrated marketing communications planning process. An integrated marketing communications planning process requires careful oversight by the company’s marketing personnel and any agencies the firm employs.

IMC Planning and McBreakfast The vignette describes how the management and marketing team at McDonalds’ sought to increase sales by serving breakfast all day. The huge rollout was countered by other chains seeking to blunt the impact by engaging in similar tactics.

Questions for Students: 1. What consumer market segments does an all-day breakfast program serve?

2. Do you think the new tactic will keep working after the initial roll-out had success?

This chapter describes the nature of the IMC planning process (see Figure 4.1) .

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It begins with communications research that identifies potential target markets and positioning strategies that match brand offer.

Next, communications objectives are specified.

Finally, a budget designed to achieve the communication objectives is matched with the IMC components to be employed.

International considerations are taken into account.

Objective 4.1:

What makes marketing research critical to the IMC planning process?

Communications Research Three primary research approaches include product-specific research, consumer-oriented research, and target-market research.

Product-specific research involves identifying key product characteristics that become selling points, such as phone apps for various consumers.

Product-specific research goes beyond understanding attributes or characteristics. It includes an understanding of benefits that a product provides Consumer-oriented research assists marketers in identifying the context of a product’s use.

• • •

An anthropological approach involves direct observation of consumers using the good or service.

A sociological analysis examines social class issues, trends, and family life cycle changes.

The psychological approach looks at motives for product purchases, such as feeling sexy, powerful, or intelligent.

Target-market research identifies who will be the recipient of the planned communications campaign.

A focus group consists of consumers who are retained to talk about a particular topic, product, or brand in front of a moderator or panel who tracks consumer comments and ideas. The insights gained can become crucial elements in the IMC planning process.

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Objective 4.2:

What categories are used to identify consumer target markets or market segments?

Market Segmentation by Consumer Groups Target markets are often carefully specified as part of the market segmentation process, which is discussed in detail later in this chapter.

A market segment is a set of businesses or group of individual consumers with distinct characteristics. For a market segment to be considered a viable target, it should pass the following tests: •

The individuals or businesses within the market segment should be similar in nature, having the same needs, attitudes, interests, and opinions. This means persons or businesses within the segment are homogenous.

•

The market segment differs from the population as a whole. Segments are distinct from other segments and the general population.

•

The market segment must be large enough to be financially viable to target with a separate marketing campaign.

•

The market segment must be reachable through some type of media or marketing communications method.

Market segmentation consists of identifying specific groups based on their needs, attitudes, and interests.

Figure 4.2 displays the methods of segmenting the consumer market.

Segments Based on Demographics Gender Males and females purchase differing products, buy similar products with different features (e.g., deodorants for women versus men), buy the same products for dissimilar reasons (stereos, televisions), and buy the same products after being influenced by different kinds of appeals through different media.

Figure 4.3 examines marketing to tweens.

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Age Children, young adults, middle-aged grown-ups, and senior citizens are all targeted by different types of marketing campaigns. Often age-related factors are combined with other demographics such as gender. Children have a major impact on the purchasing decisions their parents make.

Another age-based demographic group, which appeals to many firms, is seniors, defined as individuals over the age of 55.

Income Spending is normally directed at three large categories of goods: necessities, sundries, and luxuries. The amount of goods in each category a consumer will purchase is highly dependent on their income.

Ethnicity The three major ethnic groups in the United States are African Americans, Hispanics, and Asian Americans.

Although different in many ways, there are several common threads among these ethnic groups. They all tend to be more brand loyal than their white counterparts. They value quality and are willing to pay a higher price for quality and brand identity. They value relationships with companies and are loyal to the companies that make the effort to establish a connection with them.

In recent years, the ways in which marketing professionals approach ethnic marketing have changed. Rather than create separate campaigns for each ethnic group, agencies take a more holistic approach and that incorporates insights into various ethnic groups to help create stronger campaigns.

Psychographics Psychographics emerge from patterns of responses, which reveal a person’s attitudes, interests, and opinions (AIO).

These patterns can then be applied to other demographics, including gender, income, and education.

Question for Students:

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Which demographics and psychographics match you?

Your parents?

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Segments Based on Generations Figure 4.4 identifies the characteristics of various generational segments.

The idea behind generational segments is that each generation goes through similar events that create similar viewpoints and attitudes.

Figure 4.5 looks at the millennial generation.

Segmentation by Geographic Area Marketing appeals made to people in a geographic area or region is geo-targeting.

This method is especially useful for retailers who want to limit marketing communication programs to specific areas and for companies conducting direct mail campaigns in target areas.

Geodemographic Segmentation Geodemographics combines census data with psychographic information. An example would be PRIZM (Potential Rating Index by Zip Marketing), which is a company that specializes in geodemographics. PRIZM has identified 62 different market segments in the United States.

Benefit Segmentation Benefit segmentation focuses on the advantages consumers receive from a product rather than the characteristics of consumers themselves. Demographics and psychographic information can be combined with benefit information to better identify segments.

Usage Segmentation The goal of usage segmentation is to seek to provide the highest level of service to a firm’s low or casual, medium or heavy users.

Many companies are able to identify heavy users by utilizing their own databases, using barcode scanners, point-of-sale systems, and credit/debit transaction cards data.

Objective 4.3:

What categories are used to identify business-to-business market segments?

Business-to-Business Segmentation Figure 4.6 lists the various forms of business-to-business segmentation. .

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Segmentation by Industry Many firms use the NAICS (North America Industry Classification System) code. The NAICS code is replacing the SIC (Standard Industrial Classification) coding system.

Firms can target specific industries such as construction (23) or wholesale trade (42). They can also segment within a specific category.

Segmentation by Size The rationale for this method is that large firms have different needs than smaller companies and therefore should be contacted in a different manner.

Segmentation by Geographic Location This approach is especially beneficial for businesses that have customers concentrated in geographic pockets such as the Silicon Valley area of California.

Companies can also use geodemographics, combining geographic areas with demographic and psychographic data.

Segmentation by Product Usage Business markets can be segmented by how the good or service is used. Many services (financial, transportation, shipping, etc.) have a variety of uses for distinct customers.

Segmentation by Customer Value This method of segmentation is much easier for business-to-business firms to utilize than it is for consumer businesses, due to the availability of in-depth data about each business customer. A more precise value can be assigned to each individual business through sales records and other sources of data and information.

Objective 4.4:

How do the various approaches to positioning influence the IMC planning process?

Product Positioning Positioning is the perception created in the consumer’s mind regarding the nature of a company and its products relative to the competition.

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Positioning features variables such as the quality of products, the price, methods of distribution, packaging, image, and other factors.

Two elements stand out: (1) how the product is perceived by customers and (2) the product’s standing relative to the competition.

Approaches to Positioning Various product positioning approaches are shown in Figure 4.7.

Product Attributes Any product trait or characteristic that sets it apart from other products may be considered an attribute.

Competitors Using competitors to establish position can be accomplished by contrasting the company’s product against others.

Use or Application Positioning that involves creating a memorable set of uses for a product emphasizes the use or application approach (Arm & Hammer as a deodorizer).

Price-Quality Relationship Businesses that offer products at the extremes of the price range may position by price– quality relationships.

Product User This involves distinguishing a brand or product by clearly specifying who might use it.

Product Class Position can be based on product class, such as an energy drink (Red Bull) versus soft drinks (Coke, Pepsi).

Cultural Symbol Positioning a product as a cultural symbol is not easy. When the position is successfully achieved, the company holds a strong competitive advantage.

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Question for Students:

Are there any cultural symbols for your generation? What are they?

Other Elements of Positioning A brand’s position is never completely fixed. It can be changed.

Brand positioning applies to business-to-business marketing efforts.

International Positioning In the international arena, effective positioning remains vitally important. Plans are made to establish an effective position when a firm expands into new countries.

Effective positioning, by whatever method chosen, should increase sales and strengthen the long-term position of an individual product and the total organization.

Objective 4.5:

How do the various marketing communications objectives interact with the other elements of an IMC planning process?

Marketing Communication Objectives Marketing objectives tend to be general because they are for entire company. Some examples of marketing objectives include the following: • Sales volume • Market share • Profits • Return on investment In contrast, a communications plan may emphasize a specific communications objective.

Figure 4.8 lists some of the more common objectives present for profit-seeking organizations.

• • • • • • • • .

Develop brand awareness Increase product/service category demand Change customer beliefs or attitudes Enhance purchase actions Encourage repeat purchases Build customer traffic Enhance firm image Increase market share Page 4-8

• •

Increase sales Reinforce purchase decisions

Benchmark measures, which consider a starting point in relation to a degree of change following a campaign, are useful to IMC programs.

Objective 4.6:

How are communications budgets established?

Methods for determining marketing communications budgets appear in Figure 4.9.

Types of Budgets Percentage of Sales Budgets can be based on sales from the previous year or anticipated sales for the next year.

Meet-the-Competition Meet the competition seeks to prevent loss of market share by raising or lowering expenditures to match the competition.

Figure 4.10 displays ad spending and market share of top credit card companies.

“What We Can Afford” This method sets the marketing budget after all of the company’s other budgets have been determined. Money is allocated based on what company leaders feel they can spend.

Objective and Task This method begins with a list of all communication objectives to pursue during the year and then calculates the cost of accomplishing each objective.

Payout Planning This occurs when management establishes a ration of advertising to sales or market share.

This method normally allocates greater amounts in early years to yield payouts in later years.

Quantitative Models Quantitative models are simulations of relationships between advertising and sales or profits. They may be difficult to create accurately.

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Communications Schedule A pulsating schedule involves continuous advertising and communications during the year with bursts of higher intensity at specific times (more ads in more media).

Companies can also select a flighting schedule or approach, whereby communications are presented only during peak times, and not at all during other times of the year.

Many marketing experts believe spending in level amounts keeps the brand name repetitively in front of consumers, which is a continuous campaign schedule for items such as durable goods.

Objective 4.7:

What elements are considered in developing an IMC program?

IMC Components Advertising expenditures may not make up the major portion of a marketing communications budget.

In terms of dollars spent, media advertising normally accounts for about 41 percent of a marketing communications budget. Trade promotions receive about 28 percent and consumer promotions average about 28 percent of overall marketing expenditures (see Figure 4.11). These percentages vary considerably from industry to industry Budgets also vary by product type Figure 4.12 shows ad spending as percent of sales for select industries.

Figure 4.13 indicates global ad spending by media.

International Implications Figure 4.13 identifies some of the tactics used by successful globally integrated marketing communications programs.

It is important to make sure the company's products and marketing messages will be understood in the region and, when needed, tailored to an individual area.

The goal is to create a borderless marketing plan that uses the same basic marketing approach for all of a company’s markets.

This allows each subsidiary the freedom to determine how to implement that marketing plan, in essence, to think globally but act locally. .

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Another key is developing local partnerships. Local partners can be marketing research firms or advertising firms that are familiar with the local language and culture. These partnerships sometimes are formed by hiring a cultural assimilator, who has an understanding of the market and speaks both the language of the parent company and the local region.

Communication segmentation means creating a communications package that effectively reaches all possible target markets in another country.

A well-designed market communications analysis begins with the marketing team identifying strengths and weaknesses of local competitors and places in which opportunities exist.

Finally, solid communication objectives should be established.

INTEGRATED CAMPAIGNS IN ACTION: PROGRESSIVE BANK Banks operate in a competitive market. Making one standout can be difficult, especially through an advertising campaign. For a local bank, it becomes even more challenging.

French Creative advertising agency accepted this challenge with Progressive Bank.

The agency developed a unique campaign that not only highlighted some of the bank’s strengths but also brought a human into the campaign to make the bank personal.

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/.

Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

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IMPLICATIONS FOR BRAND AND PROMOTION MANAGERS (Note to professors—these materials are not in the text. They provide a method for you to summarize the chapter in a different way) Recognize the connection between planning processes and evaluation processes. In other words, planning should only begin after previous efforts have been reviewed and analyzed.

This would lead the account executive to ask the following questions about previous marketing communications and campaigns.

• What was done right?

• What was done wrong?

• What are the company’s strengths and weaknesses?

• Did the last campaign (or previous promotional efforts) change this company’s strengths and weaknesses?

When conducting IMC planning process, the account executive should be aware of the following items: • What the competition is doing (and plans to do, if that can be discovered) • What opportunities are present in the environment • How current company objectives can be integrated into the overall IMC approach • What kinds of promotional strategies are in place • Alternative tactics that will help support the company’s strategies As potential new market segments are being examined, consider the following criteria.

• Contribution to sales • Contribution to profits, including how much should be spent in order to induce sales and revenues from the segment • Potential for growth of the segment • Potential to build company and brand loyalty in the segment • Potential for competition from other firms seeking to capture the same segment • The ability to match the firm’s message to the particular attitudes and needs of the segment • The possibility of combining segments or designing similar appeals to segments.

• Other short- and long-term implications of designing promotional efforts toward the segment Appraise global markets using the same criteria as were used for local target markets.

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REVIEW QUESTIONS 4-1.

What three forms of market research are used to develop marketing communications?

Three primary research approaches include product-specific research, consumeroriented research, and target-market research.

4-2.

What functions are performed by focus groups?

A focus group consists of consumers who are retained to talk about a particular topic, product, or brand in front of a moderator or panel who tracks consumer comments and ideas.

4-3.

Define market segment and market segmentation.

A market segment is a set of businesses or group of individual consumers with distinct characteristics. Market segmentation consists of identifying specific groups based on their needs, attitudes, and interests.

4-4.

Define demographics. How are they used to segment consumer markets?

Demographics are population characteristics. Target markets can be identified by gender, age, educational level, income, and ethnicity, as these are homogenous groups.

4-5.

How can firms take advantage of target markets by gender?

Segments for men and women can be combined with other demographics to create target markets, for example, teenage females and senior men.

4-6.

How do firms use age to identify market segments?

Children, young adults, middle-aged grown-ups, and senior citizens are all targeted by different types of marketing campaigns. Often age-related factors are combined with other demographics such as gender. Children have a major impact on the purchasing decisions their parents make. Another age-based demographic group, which appeals to many firms, is seniors, defined as individuals over the age of 55.

4-7.

What role does ethnicity play in identifying market segments?

The three major ethnic groups in the United States are African Americans, Hispanics, and Asian Americans. Several threads are common threads among these ethnic groups. They all tend to be more brand loyal than their white counterparts,

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value quality, and are willing to pay a higher price for quality and brand identity.

They value relationships with companies and are loyal to the companies that make the effort to establish a connection with them.

In recent years, the ways in which marketing professionals approach ethnic marketing have changed. Rather than create separate campaigns for each ethnic group, agencies take a more holistic approach and that incorporates insights into various ethnic groups to help create stronger campaigns.

4-8.

What problems are associated with markets segmented according to geographic areas?

The main problems associated with segmenting the market geographically are that everyone in the geographic area is targeted, with no focus on personal preferences or individual differences.

4-9.

What are geodemographics? How can they be successfully used to define market segments?

Geodemographics is a combination of using census data with psychographic information. This approach can be successful because marketers can conclude that people in certain areas tend to have the same basic needs. Geodemographics segmentation goes a step further by suggesting common personal preferences in individual geographic areas.

4-10. Describe usage segmentation and benefit segmentation.

Usage segmentation is defining the market by usage or purchases. It is designed to maximize sales to all user groups. Companies then gather information from their most frequent customers and form their own database of customers describing their wants and needs.

Benefit segmentation is focusing on the advantages consumers receive from a good or service rather than the characteristics of consumers themselves. Companies use this technique to understand the preferences of different groups of consumers.

4-11. What are the common business-to-business market segments?

The common business-to-business market segmentation concepts are by industry, business, and size. Segmentation by industry is utilizing the NAICS codes to identify a company’s potential of being a quality customer.

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4-12. Describe the NAICS approach to business market segmentation.

The NAICS approach to segmentation is using the company’s business code to decipher what products the firm will need or purchase. It is better than the old SIC code because it broadens the product categories from 10 to 20. This allows for a more precise classification of businesses.

4-13. Describe a usage segmentation approach in a business-to-business setting.

An example of a usage segmentation approach in a business-to-business setting would be that although Xerox markets to most businesses, the company pays extra attention to schools because these organizations utilize so many copiers, allowing for both sales and service contracts. (Student answers will vary.)

4-14. Describe a segmentation approach based on company size.

A segmentation approach based on company size would target companies within a certain range. For instance, an advertising agency may target firms that have sales from $3 million to $20 million. Another agency may target the small firms, with incomes less than $3 million. Another agency may go after extremely large international firms, with sales over $1 billion.

4-15. Define product positioning and identify the types of positioning approaches that can be used in the IMC planning process.

Positioning is the perception created in the consumer’s mind regarding the nature of a company and its products relative to the competition. It includes the following: • • • • • • •

Product Attributes Competitors Use or Application Price-Quality Relationship Product User Product Class Cultural Symbol

4-16. What is a benchmark measure?

A benchmark measure represents the starting point that has been established in relation to the degree of change following a promotional campaign. In other words, the benchmark is the baseline from which future outcomes can be assessed.

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14-7.

What common marketing communications objectives do firms establish?

The most common marketing communications objectives that firms establish are the following: • • • • • • • • • •

Develop brand awareness Increase product/service category demand Change customer beliefs or attitudes Enhance purchase actions Encourage repeat purchases Build customer traffic Enhance firm image Increase market share Increase sales Reinforce purchase decisions

4-18. Describe the methods that can be used to establish a communications budget.

The types of communications budgets are the following: • • • • • •

Percentage of sales method, which uses a percentage of the previous year’s sales and a projection of the coming year’s sales Meet the competition, which is designed to prevent a loss of market share What we can afford, which establishes the marketing budget after all other budgets have been set Objective and task method, which allows management to set goals and ways to achieve those goals through marketing dollars Payout planning, which establishes a ratio of advertising to sales or market share based on Nielsen ratings Quantitative models use computer simulations to locate relationships between advertising and promotional expenditures

4-19. Describe the three types of advertising schedules that may be used during the course of a year.

A pulsating schedule involves continuous advertising and communications during the year with bursts of higher intensity at specific times (more ads in more media).

Companies can also select a flighting schedule or approach, whereby communications are presented only during peak times, and not at all during other times of the year. Level amounts of spending keeps the brand name repetitively in front of consumers, which is a continuous campaign schedule.

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4-20. Which IMC components are more likely to be used in business-to-business marketing communications programs, as compared to consumer markets?

Figure 4.14 indicates how business-to-business marketing monies are allocated.

Although telemarketing may be detested by consumers, it remains an important component of business-to-business marketing. Direct mail is used extensively along with noncatalog direct mail. Television advertising is a much smaller amount than for consumer products while internet marketing expenditures are much larger, used even more than television.

CRITICAL THINKING EXERCISES Discussion Questions 4-21. Assume you are a marketing intern for Lululemon and have been asked to conduct some communications research around the brand’s leggings. Identify the three types of communication research and describe how you could use each to gather information that can be used in marketing Lululemon’s leggings.

The students should note product characteristics and what needs they serve (product research), the types of customers who would be interested in the items and why (consumer research) based on sociological or psychological needs, and then state a target market based on demographics, age, usage, or some other (less likely) market segmentation approach.

4-22. Daniel Taylor Clothier has noticed a decline in the sales of men’s ties. Company marketers believe they should focus advertising effort on the market segment most likely to purchase ties. Examine the segmentation variables identified in Figure 4.2. If you were responsible for the segmentation strategy for Daniel Taylor Clothier’s, which segmentation variables would you use? Justify your answer.

Age, gender, income, and psychographics are all possibilities. Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

4-23. Make a list of five consumer goods or services segmented on the basis of gender but sold to both genders. Are there any differences in the product or service attributes? Are there differences in how they are marketed? What are those differences? Do you think using a different marketing approach has worked?

Student responses will vary. They should note how each gender uses the product and how companies advertise and promote the products. Refer to the MyLab for an .

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opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

4-24. Make a list of five consumer goods or services that are segmented on the basis of age. Are there actual differences in the product or service attributes? Are there differences in how they are marketed? What are those differences? Do you think using a different marketing approach has worked?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

4-25. Examine the list of demographic segmentation variables. For each demographic variable listed in the text, identify two products that are marketed to a specific demographic segment. Identify the specific demographic segment and explain why the product is aimed at that particular market segment. Identify one brand that has been especially successful at reaching a specific demographic segment.

Student answers will depend on products chosen.

4-26. Examine the VALS psychographic groups presented in the chapter. For each of the following goods or services, identify the VALS segment that would be the best to target. Justify your choice. Describe an advertisement or marketing communication that could be use for the VALS segment you identified for each product. a. b. c. d. e.

Seafood restaurant Home accounting software Optometrist or eye-care clinic Florida resort Home furniture

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Student answers will vary, but some suggested answers follow. a. A seafood restaurant is satisfying hunger needs, entertainment needs, and can be marketed to be exotic, showing sea shores and people enjoying themselves at the beach. (Red Lobster) b. Home accounting software saves time and gives the person a sense of control. .

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c. An optometrist or eye-care clinic sells the benefit that the consumer will see more clearly. Safety is also an issue, as well as a customer service. (Pearle) America’s Contacts and Eyeglasses markets to lower-income people through price. d. A Florida resort offers relaxation and luxury (benefit) and may appeal to certain age groups and income levels. e. Home furniture depends on the price and quality levels involved.

4-27. Millennials are an attractive generation for marketers. Examine the millennial segments described in the chapter. Which segment do you belog to? Why? Identify a friend or relative that would fit into each of the other millennial segments. Explain why you would put them into that particular millennial segment.

Student answers will depend on the friend or relative chosen and that person’s characteristics.

4-28. Usage segmentation targets heavy users, average users, light users or nonusers.

Describe campaigns for each of the usage segments for a tanning salon. In your discussion, identify the best communication objective for each of the campaigns and the product positioning strategy that you would use for each segment.

Justify your decisions.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Heavy users do not constitute the best target for a campaign. You can only tan so much. Average users can be encouraged to keep going, the objective being loyalty to the specific salon. Attempting to move light users to higher levels would involve some approach making increase tanning more attractive.

4-29. For each of the product-positioning strategies discussed in this chapter, identify two brands that feature the strategy and explain how the strategy is used to successfully market the brand.

Student answers will vary by brands chosen.

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INTEGRATED LEARNING EXERCISES 4-30. Use a search engine to locate five companies on the internet that sell swimwear.

For each of the companies, discuss the types of products sold and the types of promotional appeals used. Review each website. Describe the segmentation strategy you think the company is using and the specific market segments being targeted. For each company, which product-positioning strategy is being used?

Justify your choice.

Student reports will vary. Promotions will probably feature fashion, sleek/sexiness, price, and quality.

4-31. A brand’s product-positioning strategy should be an integral part of the company’s advertising and marketing strategy, including its website.

Examine the following websites and identify the product-positioning strategy that you think is being used. Explain your choice. a. Polaris (www.polarisindustries.com) b. Edgewater Beach & Golf Resort (www.edgewaterbeachresort.com) c. Celestial Seasonings (www.celestialseasonings.com) d. Sony (www.sony.com) e. Stetson cologne (www.stetsoncologne.com) Polaris highlights the benefits of using the product. It may also be viewed as a cultural symbol form of positioning.

Edgewater Beach positions itself as the only “full service” resort on Panama City Beach, suggesting segmentation possibly based on income and possibility based on customer benefit.

Celestial Seasonings is represented as a healthy and natural product line, which suggests psychographics or benefit segmentation.

Sony emphasizes quality of its product lines. The company could target by income, geodemographics, benefit, or usage segmentation.

Stetson tends to emphasize cultural symbols in its marketing. It targets males.

4-32. VALS psychographic segmentation can be a valuable tool for marketers as they prepare their marketing materials. Access VALS through the Strategic Business Insights (SBI) website at www.strategicbusinessinsights.com/vals and examine the characteristics of each of the groups. Then take the test to determine which group you belong to. How can VALS help marketers develop advertising messages? .

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Students will receive different group locations based on their answers. VALS2 can then target the individual groups with more specific messages.

4-33.

A current trend for many companies is the development of marketing messages for specific demographic, ethnic, or lifestyle groups. This allows for a more targeted message than is possible for the mass audience. Go to the following websites. What types of marketing messages are on each site? How could the information on these websites be used to develop integrated marketing communication plans? a. Parents (http://www.pbs.org) b. Women (womensenews.org) c. African Americans (www.targetmarketnews.com) d. Gays and lesbians (http://www.gaycenter.org) iVillage features sections on beauty and style, health and well-being, diet and fitness, love and sex, pregnancy and parenting, house and home, entertainment, and magazines.

WomensNews.org features articles about items including gender, gender roles, babies, children for adoption, and other stories.Targetmarketnews.com has a wide list of media featuring black performers and participants.

GayCenter.org features a he center that is the heart and home of NYC's LGBT community, providing programs for health, wellness and community connection.

4-34. For the following firms, examine the company’s website to determine what segmentation strategy is being used. Describe the intended target market for the website. What communication objective(s) do you think the company is trying to accomplish? What product positioning strategy is being used? Explain your responses. a. Sara Lee Deserts (www.saraleedeserts.com) b. Skeeter boats (www.skeeterboats.com) c. Reynolds Protection (http://www.reynoldsprotection.com/protection.com) Student answers will vary depending what is on the website at the time the students access them.

4-35. Go to the authors’ website at clowbaack.net/video/ads.html. Watch one of the television ads for DuPage Medical Group, one of the television ads for Terrebonne General Medical Center, and one of the ads for St. Francis Medical Center. Identify which three ads you watched. For each ad describe who you think is being targeted using the methods of consumer segmentation described .

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in the chapter. Define each of the approaches to product positioning described in the chapter. For each of the three TV ads you picked, decide which positioning approach is being used. Justify your answer.

Student answers will vary.

4-36. Go to the authors’ website at clowbaack.net/video/ads.html. Watch one of the television ads for Ouachita Independent Bank, one of the television ads for Progressive Bank, and one of the ads for Centric Federal Credit Union. Identify which three ads you watched. For each ad describe who you think is being targeted using the methods of consumer segmentation described in the chapter.

Define each of the approaches to product positioning described in the chapter.

For each of the three TV ads you picked, decide which positioning approach is being used. Justify your answer.

Student answers will vary.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

4-37. Motel 6: http://blogclowbaack.net/2014/05/05/motel-6-chapter-4/ 4-38. Carnival Cruise Line: http://blogclowbaack.net/2014/05/05/carnival-cruise-linechapter-4/ 4-39. Segmentation and positioning: http://blogclowbaack.net/2014/05/05/segmentation-and-positioning-chapter-4/ These exercises provide you with an additional tool to engage your students.

Student Project: Creative Corner This exercise is designed to help students create ads for Yamaha Boats using the VALS2 typology of segments.

CASES Case 1

THE JAPANESE STEAKHOUSE EXPERIENCE

4-40. Which consumer market segments best match with Benihana?

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Student answers should note age (probably more targeted toward teenagers and older), income (at least some disposable income), education (tied to income), and benefit (enjoyment, fun). Ethnicity answers could be interesting, as the company targets more than just Asians.

4-41. Explain the positioning approach used by Benihana.

Product attributes include a unique dining experience. Product user includes people who enjoy dining out. Cultural symbol would be of Japan, not the United States.

4-42. If you were assigned to create a competitor restaurant that prepared and served Japanese-style hibachi meals, which colors would you choose for the restaurant?

What type of music should be played? What other features should be key parts of the interior of the restaurant? How would you differentiate the restaurant from Benihana and other similar chains?

Student answers will vary. The colors would be festive, the music probably Asian or “elevator music.” Other features would be unique cultural items that might somehow make the experience different, if Benihana has a restaurant in the city.

4-43. For the same competitor restaurant, assume that it has only one location in Seattle, Washington. Design an advertising campaign and identify the types of media that would reach your target market and create the right positioning.

Local media might include a city-based magazine, newspaper, billboards or outdoor, and radio. The campaign should be based on the goal associated with reaching a target market (awareness versus loyalty for example).

4-44. The color red holds special meaning in Asian culture as a symbol of celebration.

Consequently, red is featured in much of Benihana’s marketing materials.

Which colors would match other restaurant types, such as fried chicken, fast food hamburgers, or pizza parlors? Would your answer be different if the food were to be sold in other countries? Why or why not?

Student answers will vary widely. In class, note that certain colors represent somber elements, such as mourning or death. These should be avoided.

Case 2

Phase 2 Fitness Center

4-45. Explain each of the types of research presented in the chapter in terms of the Phase 2 Fitness Center. Which would you recommend? Why? Three primary research approaches include product-specific research, consumeroriented research, and target-market research. Student choices will vary .

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4-46. Discuss the potential consumer market segments that Phase 2 Fitness Center could serve using the information on consumer segmentation. Which segment or segments would you recommend? Why? Student choices could include demographics (gender, age), psychographics (fitness enthusiasts, benefit (get in shape), or usage (low, medium, high users.

4-47. Are there any business-to-business segmentation opportunities present? Why or why not?

Definitely. The company could reach out to local firms and offer programs.

4-48. What positioning approach would be most valuable to Phase 2 Fitness Center?

Defend your answer • • • • • • •

Choices include: Product Attributes Competitors Use or Application Price-Quality Relationship Product User Product Class Cultural Symbol

Student answers will vary.

4-49. Explain the most viable marketing communications objectives for the opening of the Phase 2 Fitness Center. Then note how those objectives might change over time.

Choices include: • • • • • • • • • .

Develop brand awareness Increase product/service category demand Change customer beliefs or attitudes Enhance purchase actions Encourage repeat purchases Build customer traffic Enhance firm image Increase market share Increase sales Page 4-24

•

Reinforce purchase decisions

Student answers will vary.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 4-50. A dog breeder recognizes the need for segmenting her advertising and marketing.

Discuss the merits of each of the methods of segmentation presented in the text (see Figure 4.2). Based on your discussion of each method, which would you recommend? Why? Define in your own words each of the product positioning strategies. Based on your segmentation decision, which positioning strategy would you use? Why? 4-51. Use a search engine to locate three companies on the internet that sell activewear. For each website, discuss the types of clothing sold and the types of promotional appeals used. For each website identify the market segmentation strategy you believe is being used and the product positioning strategy that is being used. Justify your choice.

Bonus Case

BOSE: HIGH-END SOUND REPRODUCTION A case can be made that sound reproduction has become one of the areas in which technological innovations have made the most profound leaps forward. Leading the way are major competitors such as Sony, Philips, Tivoli Audio, and Bose. Many forms of

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sound delivery exist, some featuring earphones and headphones, and others through stand-alone speakers.

The Bose Corporation began operations in 1964. Amar G. Bose, a professor of electrical engineering at the Massachusetts Institute of Technology, became frustrated during his attempt to purchase a high-quality stereo system. He believed that the speakers that were available had impressive technical specifications but failed to reproduce the realism of a live performance.

Four years later, the first Bose product reached the market. In a very short time, Bose has delivered a series of innovations in sound.

Currently, the Bose Wave products are at the forefront of quality sound, including the Wave radio, Wave music system, and Acoustic Wave music system. Each is designed to deliver the most realistic sound through a compact, attractive device that will fit in any room in the home or office. The product can be linked with a dock that both plays and recharges an iPod. Another product allows the user to wirelessly play and store music from an internet radio station. Other Bose products include headphones, home theater systems, speakers, and sound systems for various locations, including boats and businesses.

Bose systems are on the high end in terms of price. For example, the most widely purchased Wave music system had a list price of $499.95 in November 2009. To entice buyers, product discounts are routinely offered, including a $100.00 price reduction when the Wave is purchased with the accompanying multi-CD changer. Also, Bose offers oneyear, interest-free financing.

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The Bose marketing program includes use of traditional media, most notably television, newspaper, and magazine advertising. The company’s website allows buyers to find and purchase all items online. The company employs a limited number of retail stores that feature the Bose line. The primary marketing emphasis remains focused on quality. For example, Fortune rated the Bose QuietComfort headset, which cancels outside noise, as the best-quality option for headphones.

Although a company’s reputation for quality may help to drive sales, outside factors can interfere. The recession that began in 2008 and continued into 2009 led many shoppers to cut back purchases, especially for more expensive luxury items. Bose was not immune to this trend. The company was forced to lay off nearly 1,000 workers, or 10 percent of its labor force, during the decline.

At the same time, Bose forged ahead, seeking to develop new technologies in areas other than sound. As the economy continues to recover, business analysts expect Bose to build on its core products while moving into new areas, furthering the growth of this innovative, energetic organization.

(1)

Explain how the IMC planning process would apply to future marketing efforts for Bose Wave products.

All of the elements would apply including context, customers, competitors, and communications, market segments, product positioning, communication objectives, budgets, and IMC components.

(2)

Identify the market segments that the Bose Wave products should continue to maintain.

Based on positioning, the target markets will be persons with higher incomes who enjoy high quality music.

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(3)

Should Bose continue to compete based on the high-price/high-quality positioning, or develop programs to reduce prices and entice a wider variety of shoppers?

This is a discussion question, and student responses may vary. It may damage the brand to try to move to any other than the current position.

(4)

What should be the primary marketing communications objectives for Bose?

Student answers will vary; however, the primary objective may be to keep the brand in the consumer’s mind when he or she is ready to make a new sound system purchase. The company may also wish to inspire action, especially during higher purchase seasons such as Christmas.

(5)

What type of budget should be used for the Bose promotional program?

Student responses will vary; however, the objective and task may be best, given the choice or marketing objectives.

(6)

Which IMC components best match the target market, position, objectives, and budget for Bose products?

Bose typically features television and magazine and Sunday supplement newspaper advertising.

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Chapter

5

Advertising Campaign Management CHAPTER OBJECTIVES Students should be able to answer the following questions: 5.1 Why is an understanding of advertising theories important in the advertising management process?

5.2 What is the relationship of advertising expenditures to advertising effectiveness?

5.3 When should a company employ an external advertising agency rather than completing the work in-house?

5.4 How do companies choose advertising agencies?

5.5 What are the primary job functions within an advertising agency?

5.6 What are the advertising campaign parameters that should be considered?

5.7 How does a creative brief facilitate effective advertising?

5.8 What are the implications of advertising management in the global arena?

OVERVIEW Section two of this textbook describes the role advertising plays in an integrated marketing communications program. Figure 5.1 portrays the overall IMC approach. The three chapters in this section focus on developing an effective IMC advertising program.

Advertising campaign management is the process of preparing and integrating a specific advertising program in conjunction with the overall IMC message.

Zehnder Communications Zehnder is a full-service marketing and communications agency located in Louisiana. The stated goal is to challenge traditional thinking. The company has a positive reputation as an employee-friendly employer.

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Questions for Students: 1. What do you think of the concept of Vacation as Needed (VAN)?

2. Have you seen advertisements prepared by Zehnder?

3. Would you like to work for this company after graduating? Why or why not?

Chapter 6 focuses on advertising design addressing issues such as the message strategy, appeals, executions, and the use of spokespersons. Chapter 7 presents traditional media that can be used for advertising. Although the use of social media and digital media are growing, traditional media remain vital for the advertising of most brands.

Objective 5.1:

Why is an understanding of advertising theories important in the advertising management process?

Advertising Theory The hierarchy of effects model and a means–end chain can both assist in developing effective campaigns. Advertisers also consider the mix of visual and verbal elements in a commercial or advertisement.

Hierarchy of Effects The hierarchy of effects model helps to clarify the objectives of an advertising campaign. The model outlines six steps a consumer or a business buyer moves through when making a purchase: 1. Awareness 2. Knowledge 3. Liking 4. Preference 5. Conviction 6. The actual purchase Building brand loyalty requires all six steps.

The hierarchy of effects model features similarities with theories regarding attitudes and attitudinal change, including the concepts of cognitive, affective, and conative elements. The most common sequence that takes place when an attitude forms is Cognitive → Affective → Conative The sequence parallels the six-step hierarchy of effects process; however, these six steps might not always constitute the route taken by a consumer.

Question for Students: .

Does an “impulse buy” match up with the hierarchy of effects model?

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Means–End Theory The second theoretical approach available to creatives, a means–end chain, suggests that an advertisement should contain a message, or means, that leads the consumer to a desired end state. These end states are personal values (see Figure 5.2).

Means–end theory forms the basis of the Means–End Conceptualization of Components for Advertising Strategy (MECCAS) model. The MECCAS model explains ways to move consumers from product attributes to personal values by highlighting the product’s benefits.

Advertisers can link the attributes of the product to specific benefits consumers can derive.

Figure 5.3 provides an example.

Verbal and Visual Images Visual images often lead to more favorable attitudes toward both the advertisement and the brand and tend to be more easily remembered than verbal copy.

Visual images range from concrete and realistic to highly abstract.

Advertisers often use visual imagery in international marketing. Global advertising agencies try to create visual Esperanto, the universal language that makes global advertising possible for any good or service.

Question for Students:

Can you think of an example of visual Esperanto?

Business-to-Business Recently, many business advertisements have begun to rely more heavily of visual imagery.

Objective 5.2:

What is the relationship of advertising expenditures to advertising effectiveness?

The Impact of Advertising Expenditure Figure 5.5 displays a conceptualization of the relationship between marketing expenditures and advertising.

Communication goals differ depending on the stage in the buying process that is being addressed.

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Threshold Effects Threshold effects occur when enough attention is captured to increase sales.

Diminishing Returns Figure 5.5 displays the relationships between advertising and marketing expenditures and sales and profit margins, as the sales-response function curve. Diminishing returns occur when advertising expenditures begin to lose their impact.

The concave downward function indicates when further advertising expenditures result in diminishing returns.

Carryover Effects Carry-over effects mean the consumer remembers the product or company when it is time to buy.

Wear-Out Effects Wear-out effects means an ad can become old or boring.

Decay Effects The decay effects model is displayed in Figure 5.6. Decay effects are when a company stops advertising, and consumers forget the brand or the company. A marginal analysis indicates when further advertising expenditures adversely affect revenues and profits.

Random events can disrupt any advertising or promotional campaign at any time.

Objective 5.3:

When should a company employ an external advertising agency rather than complete the work in-house?

In-House Versus External Advertising Agencies The first step in developing an advertising program is choosing between an in-house advertising group and an external advertising agency.

Figure 5.7 compares the advantages of an in-house facility to an outside agency.

Advantages of in-house advertising include the followng: • .

lower costs Page 5-4

• • • • •

aligning all communications the CEO can work closely with the marketing team a better understanding of the product and company mission ability to quickly produce commercials lower turnover rate in the company

Advantages of external agencies are the following: • • • •

can reduce costs by being more efficient with time greater expertise access to top talent an outside perspective

Media service companies negotiate and purchase media packages (called media buys) for companies.

Direct-marketing agencies handle every aspect of a direct-marketing campaign, through telephone orders (800 numbers), internet programs, and by direct mail.

Some companies focus on consumer promotions, trade promotions, or both. These companies assist in developing promotions such as coupons, premiums, contests, and sweepstakes.

A new group of agencies specialize in developing digital services. Other companies offer social media services to reach consumers and businesses through a wide array of social media techniques.

Public relations firms provide experts to help companies and brands develop positive public images and for damage control responses when negative publicity arises.

Budget Allocation Considerations A small account usually may not be attractive to an advertising agency. Smaller accounts generate lower revenues. If the agency charges a higher fee to compensate, it becomes too costly for the small firm.

One rule of thumb marketers consider is a 75–15–10 breakdown, where 75 percent of the money spent on advertising should be used to purchase media time or space, 15 percent to the agency for the creative work, and 10 percent for the actual production of the ad.

In contrast, for smaller accounts, the breakdown may be 25–40–35. This means that only 25 percent is being spent on media purchases. The other 75 percent of the funds goes to the creative and production work.

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Crowdsourcing Crowdsourcing is the process of outsourcing the creative aspect of an advertisement.

Unilever used this approach for meat snack brand as did Doritos for a Super Bowl ad. Harley Davidson also uses crowdsourcing.

Question for students:

Objective 5.4:

Do you think consumer-generated ads are of equal quality to those created by advertising agencies?

How do companies choose advertising agencies?

Choosing an Agency Choosing the advertising agency that best suits a company requires careful planning. The steps of choosing an agency are displayed in Figure 5.9.

Goal-Setting Before any contact is made with an advertising agency, it is important to identify and prioritize corporate goals. Clear goals help ensure a good fit between the company and the agency.

Selection Criteria Even firms that have experience in selecting agencies must establish the process and criteria in advance. The objective is to reduce biases that may enter into the decision process.

Common selection criteria, as shown in Figure 5.10, include the following: Agency Size Agency size is particularly important as it compares to the size of the company hiring the agency.

Relevant Experience Relevant experience in an industry is a second evaluation criterion that companies use.

At the same time, there can be no conflicts of interest.

Creative Reputation and Capabilities One method of judging an agency’s creativity is to ask for a list of awards the company has received. However, awards do not always translate into effective advertisements,

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Production and Media Purchasing Capabilities These capabilities should be examined if these services are needed.

Other Criteria Other services available, client retention rates, and personal chemistry are revealed as the final steps of selection take place.

Creative Pitch Advertising agencies are chosen to compete by providing a formal presentation addressing a specific problem, situation, or set of questions, called a shootout.

The presentations reveal how each agency would deal with specific issues that arise during preparation of a campaign.

Figure 5.11 lists some key do’s and don’ts associated with the creative pitch.

Agency Selection Chemistry may be a factor in the choice. It can be assessed as members of the advertising agency meet with members of the marketing department.

When the process has been completed, the agency and the company work together to prepare the advertising campaign.

Objective 5.5:

What are the primary job functions within an advertising agency?

Roles of Advertising Personnel The primary roles within the agency are the account executives, creatives, traffic managers, and account planners.

Account Executives The advertising account executive is the key go-between for both the advertising agency and the client company.

Creatives Creatives are the people who actually develop and produce advertisements.

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Creatives face long hours and work under enormous pressures to design ads that are effective and that produce results.

Traffic Managers These individuals work closely with the advertising agency’s account executive, creatives, and production staff.

They schedule the various aspects of the agency’s work to make sure it is completed on time.

Account Planners The account planner becomes the voice or advocate for the consumer in the advertising agency. This person has the responsibility of making sure the creative team understands the consumer (or business).

Account planners interact with the account executive and the client to understand the target audience of the ad campaign.

Objective 5.6:

What are the advertising campaign parameters that should be considered?

Advertising Campaign Parameters Creating effective campaigns requires attention to the advertising campaign parameters listed in Figure 5.12.

Advertising Goals Advertising campaign goals are identified in Figure 5.13.

Build Brand Awareness Brand awareness means the consumers recognize and remember a particular brand or company name when they consider purchasing options.

The brand should be a top of mind brand.

A top choice brand is the first or second pick when a consumer reviews his or her evoked set (possible purchasing alternatives).

Many products become top of mind or top choice due to brand equity, the set of characteristics cause consumers or businesses to believe that a brand is different and better. .

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In business-to-business marketing, brand awareness is often essential to being considered by members of the buying center.

Provide Information Typical information for consumers includes a retail store’s hours, business location, or sometimes more detailed product specifications.

For business-to-business situations, information from some ads may lead various members of the buying center to consider a particular company as they examine their options.

Information is one component in persuasion, which is another objective of various advertising programs.

Persuasion Advertisements may be designed to convince consumers that a particular brand is superior to other brands.

Changing consumer attitudes and persuading them to consider a new purchasing choice is a challenging task.

Persuasive advertising is used more in consumer marketing than in business-to-business situations.

Supporting Marketing Efforts Manufacturers use advertising to support trade and consumer promotions, such as theme packaging or combination offers.

Both manufacturers and retail outlets use advertising in conjunction with coupons or other special offers.

When ads are combined with other marketing efforts into a larger, more integrated effort revolving around a theme, the program is called a promotional campaign.

Encouraging Action Many commercials encourage the audience to take action by dialing a toll free number or going to a website.

Action-oriented advertising is heavily used in the business-to-business sector. The most common goal is to generate sales leads. .

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Media Selection Selecting the appropriate media requires an understanding of the media usage habits of the target market and then matching that information with the profile of each medium’s audience.

In business-to-business markets, knowing the trade journals or business publications that various members of the buying center most likely read assists in the development of a print advertising campaign.

Although media buys are guided by the advertising agency and the client company, media companies typically make the purchases.

A trend toward involving media companies at an earlier stage in the campaign process has evolved.

Taglines The key phrase in an advertisement, the tagline, should be something memorable that identifies the uniqueness of a brand or conveys some type of special meaning, such as Nike’s “Just Do It.” Figure 5.14 supplies some well-known taglines.

Consistency Repeatedly seeing a specific visual image, headline, copy, or tagline helps to embed a brand into a person’s long-term memory. Visual consistency becomes especially important because most customers spend very little time viewing an advertisement.

Variability theory suggests that variable encoding occurs when a consumer sees the same advertisement in different environments. These varied environments increase recall and effectiveness by encoding it into the brain through various methods.

Creatives can generate the effect by varying the situational context of a particular ad.

Positioning Maintaining consistent product positioning throughout a product’s life makes it more likely that a consumer will place the product in a cognitive map.

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Campaign Duration The length or duration of a campaign should be identified. Using the same advertisement for an appropriate period of time allows the message to embed in the consumer’s longterm memory.

Account executives consider how long to run an advertisement. It should be changed before it becomes stale and viewers lose interest; however, at the same time changing ads too frequently impedes retention. Creating new campaigns also increases costs.

Typical campaigns last about six months, but there are exceptions; some last for years.

Objective 5.7:

How does a creative brief facilitate effective advertising?

The Creative Brief A creative brief contains information for the creative. It contains information provided by the account executive and is used by the creative department to produce an advertisement that conveys the desired message.

The basic components of a standard creative brief are provided in Figure 5.15.

The Objective The first step in preparing the creative strategy is to identify the objective of the advertisement. Some possible objectives may include the following: • • • • • •

Increase brand awareness.

Build brand image.

Increase customer traffic.

Increase retailer or wholesaler orders.

Increase inquiries from end-users and channel members.

Provide information.

The Target Audience A creative should know the target audience. The more detail that is known about the target audience, the easier it is for a creative to design an advertisement that will be effective.

Target market profiles that are too general are not very helpful.

The Message Theme The message theme outlines the key idea(s) the advertising program conveys. .

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The message theme is the benefit or promise (unique selling point) the advertiser wants to use to reach consumers or businesses.

Message themes can be oriented toward either rational or emotional processes.

A left-brained ad is oriented toward the logical, rational side, which manages information such as numbers, letters, words, and concepts. Left-brained advertising is logical and factual.

A right-brained ad deals with emotions and works with abstract ideas, images, and feelings.

The Support Support takes the form of the facts, which substantiate the message theme.

The Constraints Constraints deal with legal and mandatory restrictions for ads, or company imposed requirements. They include the following: • • • •

Legal protection for trademarks, logos, and copy registrations Disclaimers about warranties, in which the disclaimer specifies the conditions under which they will be honored Disclaimers about offers spell out the terms of financing agreements, as well as when bonuses or discounts apply Disclaimers about claims identify the exact nature of the statement made in the advertisement

Objective 5.8:

What are the implications of advertising management in the global arena?

International Implications There are two main differences in international advertising campaign management.

First, while the processes may be similar, the availability of high-quality agencies may be limited in some countries.

Second, the campaign must be adapted to the culture and customs of each country.

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MyMarketingLab Go to mymktlab.com to complete the problems marked with this icon .

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR THE ADVERTISING AGENCY (Note to professors—these materials are not in the text. They provide a method for you to summarize the chapter in a different way) The agency should study the client’s paperwork. It will help in designing ads and IMC programs. This includes the following: • • • • •

Mission statements Goals Past history (through magazine articles, minutes of meetings, etc.)

Past advertisements and other marketing activities Advertisements of the competition

The agency should carefully match the pitch used to gain new clients with the needs and identities of prospective firms.

The agency should be aware of the relative advantages an external advertising agency holds over in-house programs.

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Agencies should remember the criteria companies use in the selection of advertising agencies. The agency should solicit client companies where they have a built-in advantage because your agency has the characteristics the target company is seeking. The company should, in return, make certain they are being clear about what they are looking for in an agency.

The agency should build the capacity to provide as many marketing activities as possible. If the company cannot provide them directly, the agency’s management team should work diligently to construct a list of freelancers who are partner organizations, so that the agency can serve as a quality contact point for all types of marketing efforts, including the following: • • • •

Direct marketing campaigns of all types Sales and trade promotions Public relations efforts Advertising campaigns

The agency should build an effective work force through the following: • • •

Hiring quality creatives Establishing strong bonds with current creatives Recruiting regularly at schools and universities as well as other places where quality creatives may be found in future years

Client company leaders should expect that advertising agencies will help them work through every aspect of an advertising campaign, from goal setting, to media selection, to creative briefs, to the actual advertisements, to methods for measuring effectiveness.

Both client companies and advertising agencies can build relationships with media buyers or media agencies that will be contracted to purchase media time (on radio and TV) and space (in print media).

REVIEW QUESTIONS 5-1.

Define advertising campaign management.

Advertising campaign management is the process of preparing and integrating a specific advertising program in conjunction with the overall IMC message.

5-2.

What are the six stages of the hierarchy of effects model? Do they always occur in that order? Why or why not?

The model outlines six steps a consumer or a business buyer moves through when making a purchase:

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1. Awareness 2. Knowledge 3. Liking 4. Preference 5. Conviction 6. The actual purchase 5-3.

How are the three components of attitudes related to the hierarchy of effects model?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

The Cognitive → Affective → Conative sequences matches. Cognitive steps include awareness and knowledge; affective includes liking, preference, and conviction; and the actual purchase is the conative component.

5-4.

In a means–end chain, what are the means? The ends? How do they affect advertising design?

An advertisement should contain a message, or means, that leads the consumer to a desired end state. These end states are personal values. The message spells out the means and ends, thereby leading to a purchase decision.

5-5.

Why are visual elements in advertisement important? What is the relationship between visual and verbal elements? Can there be one without the other?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

5-6.

What is visual Esperanto?

Visual Esperanto is the universal language that makes global advertising possible for any good or service.

5-7.

What are threshold effects? Diminishing returns? Carryover effects?

Threshold effects occur when an advertising program has run often enough to capture attention and increase sales. Diminishing returns occur when advertising expenditures begin to lose their impact. Carryover effects are present when the consumer remembers the product or company when it is time to buy.

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5-8.

What are the differences between wear-out effects and decay effects?

Wear-out effects means an ad can become old or boring. Decay effects occur when a company stops advertising, and consumers forget the brand or the company. A marginal analysis indicates when further advertising expenditures adversely affect revenues and profits.

5-9.

What factors influence the decision of whether to use an in-house advertising group or an external advertising agency?

• • • • •

The size of the account, which should be matched to the company The amount of money the advertiser can spend on media The objectivity factor provided by an outside agency The complexity of the product Creativity concerns, possible greater creativity with an outside agency

5-10. Besides advertising agencies, what other types of organizations play roles in the communication process?

The other organizations include the following: • Media service companies negotiate and purchase media packages (called media buys) for companies.

• Direct marketing agencies handle every aspect of a direct marketing campaign, either through telephone orders (800 numbers), internet programs, or by direct mail.

• Sales promotions or trade promotions agencies play a role.

• Public relations firms are experts in helping companies and individuals develop positive public images and are also called in for damage control when negative publicity arises.

5-11. What is crowdsourcing? What are its advantages and disadvantages?

Crowdsourcing is the process of outsourcing the creative aspect of an advertisement.

It has the advantage of creating and excitement and customer engagement. It may not deliver as coherent of an advertising message over time because each ad will be unique.

5-12. What steps should be taken in selecting an advertising agency?

1. Identify and prioritize corporate goals. Develop agency selection process and criteria.

2. Initially screen firms based on credentials, size, capabilities, relevant experience, and conflict of interests.

3. Request client references. .

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4. Perform background checks with other firms and media agents.

5. Request written and oral presentations.

6. Meet creatives, media buyers, account executives, and other personnel that will work with the account.

5-13. What evaluation criteria should be used in selecting an advertising agency?

Evaluation criteria used in selecting an advertising agency include the following: • • • • • • • • •

The size of the agency Relevant experience of the agency Potential conflicts of interest Creative reputation and capabilities of the agency Production capabilities Media purchasing capabilities Other services offered Client retention rates Personal chemistry with the agency’s team

5-14. What is a creative pitch?

Advertising agencies are chosen to compete by providing a formal presentation addressing a specific problem, situation, or set of questions, called a shootout. The presentations reveal how each agency would deal with specific issues that arise during preparation of a campaign.

5-15. Describe the various roles within an advertising agency.

The advertising account executive is the key go-between for both the advertising agency and the client company. Creatives are the persons who actually develop and produce advertisements. Traffic managers schedule the various aspects of the agency’s work to make sure it is completed on time. The account planner becomes the voice or advocate for the consumer in the advertising agency. This person is responsible for making sure the creative team understands the consumer (or business). Account planners interact with the account executive and the client to understand the target audience of the ad campaign.

5-16. What advertising campaign parameters were described in this chapter?

The parameters include setting advertising goals, media selection, creating an effective tagline, consistency, quality positioning, and choosing a campaign’s duration.

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5-17. Describe the terms top-of-mind and top choice.

When consumers are asked to identify brands that quickly come to mind from a product category, one or two particular brands are nearly always mentioned. These names are the top-of-mind brands.

A top choice brand is the first or second pick when a consumer reviews his or her evoked set of possible purchasing alternatives.

5-18. What is a tagline, and what role does a tagline play in an advertisement?

The key phrase in an advertisement, the tagline, should be something memorable that identifies the uniqueness of a brand or conveys some type of special meaning.

5-19. Explain how variability theory can be used to create consistency in an advertising campaign.

Variability theory suggests that variable encoding occurs when a consumer sees the same advertisement in different environments. These varied environments increase recall and effectiveness by encoding it into the brain through various methods.

5-20. What elements are included in a creative brief?

1. The objective is what the advertiser seeks to build, which includes brand awareness, brand image, customer traffic, retailer or wholesaler orders, inquiries from end-users and channel members, or simply provide information.

2. The target audience is the primary audience. The ways to define a target audience include using demographics, interests, lifestyles, and other noticeable target market characteristics.

3. The message theme is an outline of key idea(s) that the advertising program is supposed to convey.

4. The support is the form of the facts that substantiate the message theme.

5. Constraints are legal and mandatory restrictions that are placed on advertisements.

CRITICAL THINKING EXERCISES

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5-21. Pick two of the print ads in this chapter. Identify the part of the hierarchy of effects model the advertisement targets. Explain why. In terms of attitude formation, which sequence is being used? Justify your answer. Discuss the relationship of the visual and verbal elements in the ad. Which is prominent?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

5-22. Choose one of the following brands. Develop a means-ends chain similar to the two that are shown in this chapter.

• • • •

St. Francis Medical Center JD Bank Orkin Pest Control Maxwell House Coffee

Student responses will vary based on the advertisements chosen.

For St. Francis Medical Center, seeking medical help leads to a healthy outcome, which strengthens personal well-being in some manner.

For JD Bank, saving and investing lead to self-respect and a sense of security.

For Orkin Pest Control, keeping a house bug free creates inner peace and personal security.

For Maxwell House Coffee, the outcome is pleasure.

5-23. Explain means-end theory and why it is important in advertising design. Pick two ads in this textbook other than the milk and ReRez used to explain meansend theory. Identify the attribute(s) featured in the two ads and the benefits derived from those attributes. Construct a means-end chain for one of the ads.

(Be sure to provide the page number of the two ads you selected).

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

5-24. Think about recent advertisements you have seen or watched. Explain each of the concepts listed below, then give an example of an advertisement you believe illustrates the concept. Explain why you believe the ad fits the category.

• .

Threshold effects Page 5-19

• • • •

Diminishing returns Carryover effects Wear-out effects Visual Esperanto

Student answers will vary based on the ads they select.

5-25. Look through the ads in this chapter. Which ad do you like the best? Why? Which ad is the least appealing to you? Why? Discuss the relationship between the visual and verbal elements. Locate one ad you believe displays the characteristic of visual Esperanto. Explain why.

Student responses will depend on the ads they select.

5-26. Review the responsibilities of each of the jobs under “Roles of Advertising Personnel.” Which one most appeals to you? Why? Which is least appealing?

Why? Student answers will vary based on preferences for each type of job.

Choices include account executives, creatives, traffic managers, and account planners.

5-27. Identify and briefly describe the five advertising goals presented in the chapter.

Examine each advertisement in this chapter and identify the primary advertising goal you believe is being used for the ad. Justify your choice.

Student answers will depend on the ads chosen.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

5-28. Choose one of the following. Using the information in this chapter, prepare a creative brief. You can pick a brand from within the product category. a. Energy drink b. Frozen apple juice c. Fast food restaurant d. Museum e. Dress shoes Student answers will vary but should include the components needed in the creative brief: the objective, target audience, message strategy, support, and constraints.

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INTEGRATED LEARNING EXERCISES 5-29. Making the decision to use an external advertising agency as opposed to an in-house program for advertising or some other aspect of the advertising function can be difficult. Access the American Association of Advertising Agencies website at www.aaaa.org. What type of information is available at this website? How would it benefit companies looking for an advertising agency? Explain your answer. How would it benefit advertising agencies?

Explain your answer.

The site offers news, commentary, business resources, talent development information, communities of members, advocacy and policy guidelines, and information about best practices in the industry.

5-30. A number of agencies assist business organizations with integrated marketing communication programs. Whereas some firms try to provide a wide array of services, others are more specialized. Access the following association websites. What type of information is available on each site? How would the information provided be useful in building an IMC program? a. b. c. d. e.

International Social Media Association (www.ismaconnects.org) Brand Activation Association (www.bbalink.org) Outdoor Advertising Association of America (www.oaaa.org) Direct Marketing Association (www.the-dma.org) Digital Marketing Association (www.digitalmarketingassoc.com)

Answers will vary depending on what information is available at the time each website is accessed. It is important for students to relate the material to advertising and to the development of an integrated marketing campaign.

5-31.

Part of an advertising management program includes understanding the media usage habits of consumers and their attitudes towards various media.

An excellent source of information in Canada is the Media Smarts Program at http://www.mediasmarts.ca/. Review the types of information available at the website. Examine the news articles. What type of information is available at this website, and how could it be used in developing an advertising campaign?

Answers will vary depending on what information is available at the time the website is accessed. Students should relate the information to advertising and to the development of an integrated marketing campaign.

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5-32. Many advertisers direct ads toward the right side of the brain and develop advertisements based entirely on emotions, images, and pictures. Companies often advertise auto parts and tools with a scantily clad woman to attract the attention of men. The woman has nothing to do with the product, but gains attention. The rationale for using a sexy woman is that if consumers like her, they will like the product and then purchase that brand. Effective advertisements integrate elements from both the left side of the brain as well as the right. They contain elements that appeal to emotions as well as having rational arguments. A laundry detergent may be advertised as having the rational benefit of getting clothes cleaner but also contain the emotional promise that your mother-in-law will think of you more favorably. For each of the following websites, discuss the balance of left-brain versus right-brain advertising appeal. a. b. c. d.

Pier 1 Imports (http://www.pier1.com) Pig O’ My Heart Potbellies (http://www.potbellypigs.com) Popeyes Louisiana Kitchen (www.popeyes.com) Backcountry.com (www.backcountry.com)

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Answers will vary depending on the design of the website when it is accessed.

5-33. You have been asked to select an advertising agency to handle an account for Red Lobster, a national restaurant chain. Your advertising budget is $30 million. Study the websites of the following advertising agencies. Follow the selection steps outlined in the chapter. Narrow the list down to two agencies and justify your decision. Then choose between the two agencies and ustify your choice. a. b. c. d. f.

The Richards Group (www.richards.com) Leo Burnett (www.leoburnett.com) Slingshot (www.slingshot.com) mcgarrybowen (www.mcgarrybowen.com) Zehnder Communications (www.z-comm.com)

Student answers will vary.

5-34. A marketing manager has been placed in charge of a new chanin of sporting goods stores to be introduced into the market. The company’s corporate headquarters are in Atlanta, and the firm’s management team has already decided to use a local advertising agency. The primary objective in choosing an agency is that the firm must have the capability to develop a strong brand name. .

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Type “advertising agencies in Atlanta” into a search engine. Identify an initial list of six ad agencies. Follow the steps outlined in the chapter to narrow the list to two agencies. (Please provide the URLs for all six agencies.) Discuss the steps you used in choosing the two agencies and why you selected them. Then design a project for the agencies to prepare as part of an oral and written presentation (shootout) to the company’s marketing team.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

5-35. Go to the authors’ website for this textbook at clowbaack.net/video/ads.html and watch the TV ad for JD Bank. Examine the two JD Bank ads featured in the 6.hapter section “Advertising Campaign Parameters.” Discuss how well the TV ad matches the print ads. What do you think is the primary goal of the TV and print ads? Discuss the concept of consistency, variability theory, and positioning as it relates to the TV ad and two print ads.

Student answers will vary. In general, the ads are consistent and do offer more than one medium.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

5-36. Oreo Cookies: http://blogclowbaack.net/2014/05/07/oreo-cookies-chapter-5/ 5-37. John Deere: http://blogclowbaack.net/2014/05/07/john-deere-chapter-4/ 5-38. Advertising Agencies: http://blogclowbaack.net/2014/05/07/advertisingagencies-chapter-5/ These exercises provide you with an additional tool to engage your students.

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Student Project: Creative Corner This is an analysis for advertising Porsche.

Creative Brief for Porsche Product:

Porsche

Objective:

To change consumers view that the Porsche can be driven every day

Target Audience:

30- to 55-year-old consumers, slightly more male, college educated, with annual incomes of approximately $100,000. Psychographically, the targeted market is a group known as individualists. They tend not to buy mainstream products. In automobile selection, they place greater emphasis on design elements, distinctiveness, and utility.

Social status is important.

Background Information:

Market research found that potential customers balked at the idea of buying a car just to sit around. When asked what kept them from driving the car every day, they said, “I don’t feel comfortable driving in city traffic. It doesn’t have the technology that I need to manage my everyday life. It doesn’t have space for passengers.”

Message Theme:

The Porsche can be driven every day for normal activities. It does not have to sit in the garage and only be driven on weekends. It has the newest technology and can comfortably carry passengers.

Constraints:

All ads must contain the Porsche logo.

5-39.

As an account executive for an advertising agency, discuss the creative brief in terms of the completeness of the information provided and whether the objective is realistic. What additional information should Porsche provide before a creative can begin working on the account?

The components that should appear in a creative brief are the objective, target audience, message strategy, support, and constraints. The components provided in this brief were the objective, target audience, and message theme, which were given in mild detail. The components that are missing are the support and constraints. This information would need to be given to the creatives before work on the project could begin. Students may add other ideas as part of the discussion.

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5-40. The media planner for the Porsche account suggests a media plan consisting of cable television, print advertising, internet ads, and network advertising on Family Guy, CSI, Monday Night Football, Big Bang Theory, and American Idol. Evaluate this media plan in light of the creative brief’s objectives. Can these shows reach the target audience? What information does a creative and the account executive want from the media planner before starting work on actual commercials?

The media planner has a variety of options open in terms of the various media that could be used. Consideration should be given to cable television featuring the right kinds of programming to match the target market 25- to 35-year old, relatively wellto-do college grads. Sports shows seem logical. A specialty channel such as Lifetime may not be ideal. In print media, magazines should reflect the interests of these consumers, possibly through travel magazines and those related to sports cars.

Internet advertising would be placed on links that this group would find.

The problem with this media plan may be in only choosing to advertise on Fox shows, if the other networks have better similar demographics.

Student evaluations of these programs will vary. The information needed would be the rest of the components needed in the creative brief, the support and constraints.

The creative and the account executive would want this information to begin work.

5-41. Using the information provided in the creative brief, prepare a magazine advertisement. Which magazines might match the target audience? Why? Student answers will vary, but information should be followed in the creative brief.

Magazines that would attract the target audience might include Car and Driver, GQ, Glamour, Rolling Stone, People, and Us.

CASES Case 1

Jake’s Trophy Shop

5-42. Explain how would the hierarchy of effects model apply to the four main trophy-buying groups.

Students should note for each group that six stages are involved.

1. Awareness 2. Knowledge 3. Liking 4. Preference 5. Conviction .

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6. The actual purchase The buyers have different needs; however, awareness and knowledge are “musts” for each group. Liking and preference are most crucial for groups that would make repeat purchases.

5-43. Would threshold effects, diminishing returns, and wear-out effects apply to Jake’s upcoming advertising program? Explain why or why not.

Absolutely. The key would be to reach threshold effects and then not spend too much money once the ads start experience diminishing returns and wear-out effects.

5-44. Should Jake utilize a local advertising agency or do as much of the work as he could by himself? Defend your response.

Most likely, Jake should use an agency. They would know how to best reach each of the four target groups efficiently.

5-45. Would the concepts of top of mind and top choice apply to advertising for the second location of Jake’s Trophy shop? If so, how? If not, why not?

If the ads have reached a wide enough audience in the area, then top of mind can be achieved.

5-46. Design two creative briefs. The first should seek the goal of enticing customers in the south end of town to visit the new store, seeking especially to reach business-to-business buyers. The second should emphasize the “gag” gift line of trophies for both stores in order to increase sales following the launch of the second store.

Student briefs will vary but should clearly outline differing objectives and target audiences, which would in turn affect the message theme.

Case 2

Classic Crystal

5-47. Using the internet, identify a glassware brand and/or manufacturer that interests you. Based on the information provided for the brand, choose a particular type of glassware. Explain why you chose this particular brand, include the brand’s website and a screenshot of its main page.

Student responses will be based on the companies they choose.

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5-48. Develop a means-ends chain that explains the purchasing process for the brand’s specific products.

Student chains will depend on the products selected.

5-49. Using the internet, identify five advertising agencies in your area. Evaluate each advertising agency in terms of its ability to handle an advertising campaign for your company. Choose one of the five to handle your account and explain why it was chosen. (Include each agency’s URL in your response).

Student choices will vary, depending on the area.

5-50. Develop a creative brief for an advertising campaign that you believe would best fit your glassware company.

The briefs will vary but should contain the following elements: 1. The objective is what the advertiser seeks to build, which includes brand awareness, brand image, customer traffic, retailer or wholesaler orders, inquiries from end-users and channel members, or simply provide information.

2. The target audience is the primary audience. The ways to define a target audience include using demographics, interests, lifestyles, and other noticeable target market characteristics.

3. The message theme is an outline of key idea(s) that the advertising program is supposed to convey.

4. The support is the form of the facts that substantiate the message theme.

5. Constraints are legal and mandatory restrictions that are placed on advertisements.

5-51. Design a print ad that fits the creative brief you developed.

Student ads will vary but could be shared with the class.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 5-52. Explain in your own words the three primary advertising concepts presented in this chapter: hierarchy of effects, means-end theory, and relationship of verbal and visual elements. Examine the two JD Bank ads shown in the “Advertising Campaign Parameters” section of the chapter. Discuss each of the concepts as it relates to the JD Bank ads. .

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5-53. You have been asked to select an advertising agency to handle an account for Red Lobster, a national restaurant chain. Your advertising budget is $30 million. Study the websites of the following advertising agencies. Follow the selection steps outlined in the chapter. Narrow the list down to two agencies and justify your decision. Then choose between the two agencies and justify your choice. a. The Richards Group (www.richards.com) b. Leo Burnett (www.leoburnett.com) c. DDB (www.ddb.com) d. Lucas Design & Advertising (www.aladv.com) e. mcgarrybowen (www.mcgarrybowen.com) f. Zehnder Communications (www.z-comm.com) Mymktlab Only—comprehensive writing assignment for this chapter.

Bonus Case

How to Win (and Lose) an Advertising Account Being selected to manage a major advertising account is a difficult but enriching process.

For instance, consider the case of Atlanta-based Charter Behavioral Systems. Charter is the largest provider of alcoholism and depression treatment services in the United States.

The goal was to select an agency to handle a $20 million television advertising account.

Charter identified some basic goals and developed a selection process that included the criteria to use in the screening process. The six agencies identified for initial screening were McCann Erickson, BBDO, Rubin Postaer, Carat ICG, Tauche Martin, and Bates USA. The initial screening process was based on the following items: • Size • Capabilities • Credentials and references • Documented experience and past successes .

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Tauche Martin was dropped from the list because it was too small. Although the management team at Charter believed the staff at Tauche Martin consisted of some very bright people, the size of the account would have overwhelmed the firm. Bates USA was rejected because Bates’ major client was Korean. A recent lag in the Asian economy caused the leaders of Charter to fear that Bates might be forced to close its Atlanta office if it lost its Korean client. Charter eliminated another agency based on reference checks.

From television station reps to media buyers, the consistent word was “run!” At the end of the initial screening process, two agencies remained: Rubin Postaer and Carat ICG. Rubin Postaer is a $550 million full-service agency based in Los Angeles. The firm is known primarily for work with Honda, Charles Schwab, and Discover magazine. Carat ICG is a $600 million agency with clients such as Ameritech, Midas, Primestar, and DHL Worldwide.

To decide between Rubin Postaer and Carat ICG, Charter asked each to make a creative pitch addressing a series of 10 questions. They were further instructed to think of it as a “mock buy” in the Atlanta market. The companies were asked to provide their projected list of media buys and the rationale for the buys. The most challenging aspect of the creative pitch requirement was a roundtable discussion with at least five of the agency’s media buyers. Although each agency’s management team could be present, the managers were told not to answer questions posed to the buyers.

Carat ICG included employees in the final presentation who were not going to be part of the account team. Although Charter’s management team felt that it was flattering to have Carat ICG’s chairman present for the three-hour presentation, Charter believed ICG’s approach was more of a sales presentation than a mock media buy. .

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ICG demonstrated a solid command of the strategies the agency believed Charter should use in the Atlanta market. Unfortunately, ICG skimped on some logistical details.

Charter’s leaders also thought that when ICG presented the mock buy, its representatives were quick, superficial, and had not spent a great deal of time laying out a total approach.

On the positive side, ICG’s senior vice president Jim Surmanek led the agency’s presentation. Surmanek, the author of a media textbook, knew the media issues extremely well. In the final evaluation, Charter concluded ICG clearly was superior at developing an advertising strategy. The agency’s recommendations highlighted the company’s deep understanding of Charter’s business.

In contrast, Rubin Postaer made a presentation using employees who would be servicing the account. Chairman Jerry Rubin did not attend the meeting, although he did meet with Charter’s management briefly to assure them of his commitment. Charter felt Rubin Postaer made a serious mistake during the presentation. The presentation team did not bring in a buyer for the direct-response media. ICG did. At the same time, Rubin’s vice president of spot buying, Cathleen Campe, grasped quickly what was most important. Campe flew in buyers from Chicago, New York, and Los Angeles to assist in the presentation. These buyers spoke often, expressing their views. Charter concluded that Rubin was more powerful in “branding” its media style with a label called “active negotiation.” Rubin’s basic philosophy was that the toughest negotiations begin after buying the media time. Rubin made the claim that the agency was willing to spend more time monitoring media purchases than making the actual purchases. This advantage was substantiated by all of the references.

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(1)

Which agency should Charter Behavioral Systems hire? Justify your answer.

Student answers will vary; however, they should provide a logical explanation of the choice. Both companies have similar references and abilities, so the only item left would be in their presentation abilities. Carat ICG used members that would not actually be doing the purchasing; this does not give Charter a good picture of how their company does business. Rubin Postaer used the people that would actually be doing the purchasing and even had buyers flown in. This gives a much better picture of their abilities. In the decision, Rubin Postaer will probably be chosen because Charter had a better sense of how the company would be presented to other companies.

(2)

Should Carat ICG do anything differently the next time they make a presentation? Why or why not?

Student answers will vary. The company should try to be clear about what it can offer a client. Rushing through a presentation may leave the audience feeling like all the material was not covered. Carat ICG may also have the people who would actually be doing the buying to make the presentation, which might portray a better image to potential clients.

(3)

Should Rubin Postaer do anything differently the next time they make a presentation? Why or why not?

Student discussions may suggest that Rubin Postaer should have the media buyer attend the presentation, or explain why he or she was not present. The people doing the presentations seemed to be informative so the company would only need to make minor modifications.

(4)

Should “fuzzy” variables such as trust and confidence be the deciding factor in choosing an advertising agency? Why or why not?

They should not be deciding factors, but they are important factors. First client companies should narrow down the agencies using selection criteria. Only after the choices have been reduced to two or three agencies should companies look at fuzzy variables when making their decisions. At the same time, a firm should trust and have confidence in their final selection for an advertising agency.

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Chapter

6

Advertising Design CHAPTER OBJECTIVES Students should be able to answer the following questions: 6.1 6.2 6.3 6.4

How are message strategies used in designing effective advertisements?

What are the seven main types of advertising appeals?

What role does the executional framework play in advertising design?

How are sources and spokespersons decisions related to advertising design?

OVERVIEW A successful advertising campaign results when people do more than merely enjoy what they see; it also changes their behaviors and attitudes. At the least, viewers should remember the good or service. mcgarrybowen In 2002, John P. McGarry, Jr., Gordon Bowen, and Stewart Owen designed an organization that would be “gracious” and “tenacious” at the same time. The agency delivers a strategic approach focused on the client’s business and brand.

Questions for Students: 1. Have you seen an advertising campaign created by mcgarrybowen?

2. Do you think the agency’s storytelling approach is more effective than advertising based on research? Why or why not?

The first three topics included in this chapter regarding advertising design are message strategies, appeals, and executional frameworks.

The final topic in the chapter is a discussion of sources or spokespersons.

Objective 6.1:

.

How are message advertisements?

strategies

used

in

designing

effective

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Message Strategies A message strategy is the primary tactic or approach used to deliver the message theme.

The three broad categories of message strategies are cognitive, affective, and conative groups (see Figure 6.1) Cognitive Message Strategies A cognitive message strategy is being utilized when rational arguments or pieces of information are presented to consumers. There are five major forms of cognitive strategies.

Generic Messages Generic messages are direct promotions of good or service attributes or benefits without any claim of superiority. They work best for a firm that is clearly the brand leader and dominant in the industry within which it operates.

Preemptive Messages Claims of superiority based on a specific attribute or benefit of a product are preemptive messages. Once made, the claim normally preempts the competition from making such a statement.

Unique Selling Proposition A unique selling proposition is an explicit, testable claim of uniqueness or superiority, which can be supported or substantiated in some manner.

Hyperbole Hyperbole is an untestable claim based upon some attribute or benefit.

Comparative Advertising Comparative advertisements are used when an advertiser directly or indirectly compares a good or service to the competition. The competitor may or may not be mentioned by name in the advertisement.

In the business-to-business sector, shipping companies compare delivery times and accuracy rates. The major advantage of comparative ads is that they often capture the attention of consumers.

A danger of comparative ads is the negative attitudes consumers may develop toward the ad.

If viewers acquire negative attitudes toward the advertisement, these negative attitudes may .

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transfer to the sponsor’s product. This is especially true when the sponsor runs a negative comparative ad.

Comparison ads are less common in other countries due to both social and cultural differences as well as legal restrictions.

Many times, international consumers not only dislike comparative advertisements but also often will transfer that dislike to the company that sponsored the ad.

In general, comparing a lesser known brand to the market leader seems to work well. On the other hand, comparing a new brand with the established brand is often not effective.

Question for Students:

Do you like comparison ads or prefer some other form?

Affective Message Strategies Affective message strategies are designed to invoke feelings and emotions and match them with the product, service, or company.

Affective messages • • • •

Seek to enhance the likability of the product Build recall of the appeal Increase comprehension of the advertisement Elicit emotions which then in turn affect the consumer’s reasoning process, and finally lead to action

Affective strategies fall into two categories: (1) resonance and (2) emotional.

Resonance advertising attempts to connect a product with a consumer’s past experiences in order to develop stronger ties between the product and the consumer.

A new form of resonance advertising, comfort marketing, emerged when marketers looked for ways to encourage consumers to purchase branded rather than generic products.

The approach reassures consumers looking for value that a branded product stands the test of time.

Comfort marketing involves bringing back vintage characters, themes, and jingles from the past to evoke fond memories when times were better.

Emotional advertising attempts to elicit powerful emotions that eventually lead to product recall and choice, including trust, reliability, friendship, happiness, security, glamour, luxury, serenity, pleasure, romance, and passion.

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Conative Strategies Conative message strategies are designed to lead more directly to some type of consumer behavior.

Action-inducing conative approaches create situations in which cognitive knowledge of the product and/or affective liking of the product may come later (after the actual purchase) or during usage of the product. A point-of-purchase display is designed (sometimes through advertising tie-ins) to cause people to make impulse buys.

Promotional support conative advertisements are designed to support other promotional efforts using coupons, phone-in promotions, a sweepstakes, or some other form.

Figure 6.2 displays the linkages between the hierarchy of effects model, message strategies, and advertising components.

Objective 6.2:

What are the seven main types of advertising appeals?

Types of Advertising Appeals The primary appeals, as shown in Figure 6.3, are • • • • • • •

Fear Humor Sex Music Rationality Emotions Scarcity

The appeal to be used should be based on a review of the creative brief, the objective of the advertisement, and the means–ends chain to be conveyed.

Fear Appeals Fear appeals are used because they work. Fear increases both the viewer’s interest in an advertisement and the persuasiveness of that ad.

The theoretical explanation regarding the way fear works is referred to as the behavioral response model and is shown in Figure 6.4.

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Severity and Vulnerability A business-to-business advertiser offering internet services may try to focus on the severity of down time if a company’s internet server goes down or the firm’s vulnerability to items such as hacker attacks.

Rewards to Response Efficacy The combination of (1) intrinsic and extrinsic rewards, (2) response costs, (3) and the degree of self-efficacy contribute to response efficacy.

Appeal Strength A key decision is how strong to make the fear in the advertisement. Most advertisers believe a moderate level of fear will be the most effective. Too much fear causes the viewer to turn away. Too little does not attract attention.

Question for Students:

Have you ever been “scared” into buying a product?

Humor Appeals Humor is effective in both getting attention and keeping it, which helps the ad cut through clutter. Figure 6.5 displays reasons for using humor in ads.

Humor is used in about 30 percent of all advertisements.

The success of humor as an advertising tactic is based on causing consumers to • • •

Watch Laugh Most importantly, remember

Humorous ads pique viewer interest. This makes it is easier to gain more careful consumer consideration of the advertisement’s message.

A funny ad captures the viewer’s attention, which leads to improved comprehension and recall of the advertising message and tagline.

Humor elevates people’s moods.

Humor helps fix the brand in the consumer’s cognitive structure with links to positive feelings. In recall tests, humorous ads are often the most remembered.

Humorous ads can backfire.

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Advertisers must be careful to avoid letting the humor overpower the advertisement. When humor fails, it is usually because the joke in the ad is remembered but the product or brand is not.

To be successful, the humor should be directly connected to the product’s benefits.

Question for Students:

When was the last time you saw an ad you thought was truly funny?

Sex Appeals Sex appeals are one approach to building brand awareness.

Figure 6.6 summarizes the five ways sexuality has been employed in advertising.

Subliminal Techniques This involves placing sexual cues or icons in advertisements where they will affect a viewer’s subconscious mind.

Sensuality This is normally targeted toward women who might respond to more of a sensual suggestion than an overt sexual approach. Instead of strong sexual images, an alluring glance across a crowded room is shown.

Sexual Suggestiveness This is used to make the product seem more sensuous.

Nudity or Partial Nudity Both male and female models can be used.

Overt Sexuality This is the most strongly sexual method.

Decorative Models Decorative models are individuals in advertisements to adorn products as sexual or attractive stimuli. The models serve no other purpose than to attract attention Figure 6.7 presents things to consider before using this tactic. .

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Question for Students:

Can you give examples of these approaches?

Effectiveness of Sexual Appeals A number of studies have investigated sex appeals and nudity in advertising.

Most research concludes that sex and nudity do increase attention, regardless of the gender of the individuals in the advertisement or the gender of the audience.

Advertisements using overt sexual stimuli or containing nudity produce higher levels of physiological arousal responses.

The cognitive impression made on viewers of a sexually oriented ad depends on whether the viewer feels the advertisement is pleasant or offensive. If a viewer likes the ad, then a positive impression of the brand will result These arousal responses have been linked to the formation of both affective and cognitive responses.

Societal Trends When determining the level of sex appeal to feature in an advertisement, the advertising team considers society’s view and level of acceptance.

Currently acceptance seems to be on the rise again.

Criticisms of Sex Appeals One major criticism of sexually based advertising is that it has perpetuated dissatisfaction with one’s body.

One problem with stereotyping women in ads is that it takes a different twist in other countries. For example, in Saudi Arabia and Malaysia, women must be shown in family settings.

In general, the use of sex to make products more appealing is a legitimate tactic for many companies, products, and advertising firms. The goal should be to use sex in a manner that is interesting, germane to the product, and within the ethical standards of the region.

Music Appeals Music gains attention and increases the retention of visual information at the same time. Most consumers remember the song along with images of the product or company.

Music can lead to a better recall of the visual and emotional aspects of an advertisement. .

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Music can also increase the persuasiveness of argument.

Musical memories are often stored in long-term recall areas of the brain.

Several decisions are made when selecting music for ads, including answers to these questions: • • • •

What role will music play in the ad?

Will a familiar song be used, or will something original be created?

What emotional pitch should the music reach?

How does the music fit with the message of the ad?

Music can be • • •

An incidental part or the primary theme of the ad Used to misdirect the audience so a surprise ending can appear Anything from whimsical, to dramatic, to romantic

An important decision involves the selection of a familiar tune versus creating original music for the ad.

Well-known songs have an advantage: Consumers already have developed an affinity for the song that they can transfer to the product.

Popular songs are often costly, and some musicians refuse to sell them. Some advertisers now look for new, less-well-known musicians to reduce costs.

Rational Appeals A rational appeal often follows the hierarchy of effects stages of awareness, knowledge, liking, preference, conviction, and purchase.

To be successful, rational appeals rely on consumers actively processing the information presented in an advertisement.

Print media offers the best outlets for rational appeals because they give the readers a greater opportunity to process copy information.

Print media and the internet offer the best outlets for rational appeals. Print and internet ads allow readers greater opportunities to process copy information.

Print media are used extensively for business-to-business messages.

Conventional advertising wisdom is that rational appeals are well suited for high involvement and complex products. High involvement decisions require considerable cognitive activity .

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and consumers spend more time evaluating the attributes of the individual brands. Complex products require more time to absorb key information.

Rational appeals are effective when consumers are willing to pay attention to the advertisement.

Emotional Appeals Emotional appeals are based on three ideas. Reasons for using them appear in Figure 6.8.

1.

2.

3.

Consumers ignore most advertisements.

Rational appeals go unnoticed unless the consumer is in the market for a particular product at the time it is advertised.

Emotional advertising can capture a viewer’s attention and help develop an attachment between a consumer and a brand.

Figure 6.9 displays emotions used in advertising.

Most creatives view emotional advertising as the key to brand loyalty. Creatives want customers to experience a bond with the brand.

Business-to-business advertisers are using more emotional appeals. In the past only 5 percent to 10 percent of all business-to-business ads utilized an emotional appeal. Today, that percentage is around 25 percent.

The rationale for changing to emotional business-to-business ads is the idea that emotions affect all types of purchase decisions, so they also affect members of the buying center.

Television is one of the best media for emotional appeals because it has intrusion value and can utilize both sound and sight. Facial expressions can convey emotions and attitudes.

Emotions can be tied with humor, fear, music, and other appeals to make a compelling case for a product.

Emotional ads are also widely featured on the internet.

Scarcity Appeals Scarcity appeals urge consumers to buy a particular product because of a limitation. The limitation can be a limited number of the products available or, more often, that the product is available for only a limited time.

A scarcity appeal is often used with other promotional tools, such as a price discount to encourage retailers who stock up.

The primary benefit of scarcity appeals is that they encourage consumers to take action. .

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Objective 6.3:

What role does the executional framework play in advertising design?

Executional Frameworks An executional framework is the manner in which an ad appeal is presented. If the ad appeal is the script in a movie, then the plot would be the actual executional framework. Types of executional frameworks, as shown in Figure 6.10, include the following: • • • • • • • •

Animation Slice-of-life Dramatization Testimonial Authoritative Demonstration Fantasy Informative

Animation Executions In recent years, the use of animation in advertising has increased, due primarily to the greater sophistication in computer graphics programs.

Rotoscoping is the process of placing hand-drawn characters digitally into live sequences.

Animated characters can be human, animal, or product personifications.

Another method of animation, which was made popular by the California raisins commercials, is clay animation.

The computer graphics technology has allowed animation to move beyond personifications into creating real-life images.

More business ads are being placed on television because of the availability of high-quality graphics technologies, which allow various businesses to illustrate the uses of their products through animated graphics.

Question for Students:

Give an example of rotoscoping in an ad you’ve seen.

Slice-of-life Executions In slice-of-life commercials, advertisers attempt to provide solutions to the everyday problems faced by consumers or businesses. These advertisements normally show common things people experience, especially the problems they encounter. Then, the product is made

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available to solve the problem. The most common slice-of-life format has four components, as summarized in Figure 6.11.

1.

2.

3.

4.

Encounter Problem Interaction Solution

In print advertisements, slice-of-life frameworks are more difficult to prepare.

The slice-of-life approach was introduced and made popular by Procter & Gamble.

The slice-of-life executional framework has become popular in Japan in recent years because it is easily adapted to the more soft sell approach used in Japan.

Slice-of-life commercials are also used heavily in business-to-business advertisements. This executional framework is popular because it allows the advertiser to highlight how their product can meet business needs.

Slice-of-life executional frameworks are possible in most media, including magazines or billboards, because a single picture can depict a normal, everyday situation or problem.

Storytelling Executions A storytelling execution resembles a 30-second movie with a plot or story in which the brand is more at the periphery rather than at the center of the ad.

Testimonial Executions The testimonial type of executional framework is being used when a customer in an advertisement tells about a positive experience with a product.

In the business-to-business sector, testimonies from current customers add credibility to the claims being made.

Testimonials are an effective method for promoting services.

One major reason companies choose testimonials are that they enhance company credibility.

Authoritative Executions In using the authoritative executional framework, an advertiser seeks to convince viewers that a given product is superior to other brands.

One form of authoritative framework is expert authority, where a physician, a dentist, an engineer, or chemist states the product’s advantages over other products. .

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Many authoritative advertisements include some type of scientific or survey evidence provided by an independent organization, such as the American Medical Association.

Authoritative advertisements have been widely incorporated into business-to-business sector ads, especially when scientific findings are available to provide support for a company’s products.

Authoritative ads work especially well in specialty magazines.

Question for Students:

Do you think authoritative ads really work by convincing you someone knows more about a product?

Demonstration Executions Advertisements using the demonstration executional framework are designed to show how a product works. A demonstration is an effective way to communicate the attributes of a product to viewers.

Demonstrations are often presented in business-to-business ads. They allow a business to show how a product can meet the specific needs of another business.

Demonstration-type ads are especially well suited to television. To a limited extent, the print media can feature demonstrations, especially when a series of photos shows the sequence of product usage.

Fantasy Executions Fantasy executions are designed to lift the audience beyond the real world to a make-believe experience. Some fantasies are meant to be realistic. Others are completely irrational.

The most common fantasy themes are still sex, love, and romance. As raw sex and nudity in advertisements are losing their impact, fantasy approaches are taking their place.

One product category that uses fantasy is the perfume and cologne industry.

Television fantasy ads for cruise lines and resorts show couples enjoying romantic, sensuous vacations together, swimming, jet skiing, and taking a walk. The goal is to make the cruise line or resort into more than just a vacation—it should become a romantic fantasy trip.

Informative Executions Informative ads present information to the audience in a straightforward matter.

One of the keys to informative advertising is the placement of the advertisement. .

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Informative ads are prepared extensively for radio advertisements, where only verbal communication is possible, but are less common in television and print because consumers tend to ignore them.

Informative ads work well in high involvement purchase situations. As a result, the informative framework continues to be a popular approach for business-to-business advertisers.

Beyond these types of executional frameworks, the creative decides about all of the other ingredients, including music, copy, use of color, motion, light, and size.

Objective 6.4:

How are sources and spokespersons decisions related to advertising design?

Sources and Spokespersons Selecting a source or spokesperson to be used in an advertisement is a critical decision. Four types of sources are displayed in Figure 6.12: 1.

2.

3.

4.

Celebrities CEOs Experts Typical persons

Celebrity Spokespersons Celebrities are now used in about 6 percent of all advertisements.

High cost is the primary disadvantage of featuring celebrities.

Celebrity endorsers are used because their stamp of approval on a product can enhance the product’s brand equity.

Additional Celebrity Endorsements There are four variations on celebrity endorsements: 1.

2.

3.

4.

Unpaid spokespersons for charitable causes Celebrity voice-overs Dead-person endorsements Social media, where celebrities tweet or send product information

Question for Students:

.

Do celebrity spokespersons affect your purchase decisions?

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CEO Spokespersons A highly visible and personable CEO can become a major asset for the firm and its products.

Michael Dell sometimes is the spokesperson for Dell Computers.

Experts Expert sources include physicians, lawyers, accountants, and financial planners. These experts tend not to be famous celebrities or CEOs. Experts provide backing for testimonials, serve as authoritative figures, demonstrate products, and enhance the credibility of informative advertisements.

Typical Persons Typical persons are one of two different types: 1. Paid actors or models who portray or resemble everyday people 2. Actual typical, everyday people who are used in advertisements Real people sources are becoming more common, in part because of the overuse of celebrities.

Source Characteristics The effectiveness of an advertisement depends on the degree to which a spokesperson has one or more of the following five characteristics shown in Figure 6.13.

Credibility Credibility is the sum of the other characteristics. Thus, it is a composite of attractiveness, trustworthiness, likability, and expertise. Credibility affects a receiver’s acceptance of the spokesperson and message.

Attractiveness Attractiveness consists of physical and personality characteristics.

Similarity Similarity allows the viewer to identify with the spokesperson. Identification comes from the belief that the source has similar beliefs, attitudes, preferences, or behaviors or is in the same or a similar situation as the customer.

Likeability Consumers respond more positively to spokespersons they like. .

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Trustworthiness Trustworthiness is the degree of confidence or the level of acceptance consumers place in the spokesperson’s message.

Expertise Spokespersons with higher levels of expertise are more believable than sources with low expertise.

Matching Source Types and Characteristics The account executive, ad agency, and corporate sponsor, individually or jointly, may choose the type of spokesperson. They can choose a celebrity, CEO, expert, or typical person, and the specific individual should have the key characteristics.

Celebrities Celebrities normally score well in terms of trustworthiness, believability, persuasiveness, and likability. These benefits increase if the match between the product and celebrity is a logical and proper fit.

Several dangers exist in using celebrities. First, any negative publicity about the celebrity caused by inappropriate conduct can reflect on the brands being endorsed. Second, celebrities can endorse so many products that they lose their credibility.

It is this potential for negative publicity that has led some advertisers to use deceased celebrities who will not generate negative stores. Otherwise, what is essentially negative likability can become attached to the company and its products.

Another problem associated with celebrity endorsements is credibility. Consumers know celebrities are paid, which detracts from their believability.

CEO A CEO or prominent corporate official may or may not possess the characteristics of attractiveness and likability. The individual should appear to be trustworthy, have expertise, and maintain a degree of credibility.

Experts Experts should be, first and foremost, credible. The ad agency should seek out an expert who is also attractive, likable, and trustworthy. An expert who is not attractive and likable may not be able to convince consumers that he or she can be trusted, and credibility drops as a result. .

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Experts are often used in business-to-business ads. The advertising agency should be certain that the spokesperson truly is an expert and that the individual can explain a good or service’s benefits in terms other companies can understand.

Typical Persons Typical person ads are sometimes difficult to prepare, especially when real persons are used.

Typical person sources do not have the name recognition of celebrities. Consequently, advertisers often use multiple sources within one advertisement in order to build credibility.

Real person ads are a kind of two-edged sword. On the one hand, trustworthiness and credibility may rise when the source is bald, overweight, or has some other physical imperfections.

On the other hand, using a real person in advertisements can be difficult because they will flub lines and look less natural on the screen.

In general, the ad agency should seek to be certain that the source or spokesperson has the major characteristics needed for the advertisement or commercial.

International Implications Choices of appeals vary by culture.

Sexual appeals must fit with the laws and culture of the country.

MyMarketingLab Go to mymktlab.com to complete the problems marked with this icon .

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background .

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information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR CREATIVES AND MARKETING MANAGERS (Note to professors—these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

Creatives must be certain they understand and utilize the following theories: • • • •

The hierarchy of needs Means–ends theory Visual versus verbal cues The behavioral response model

Creatives need space. Make sure they have enough freedom to design ads that reflect their best talents and efforts. Let the creative be the first to suggest the leverage point that he or she believes will be most effective.

The marketing team should review the creative brief carefully. Creatives must make sure there is a quality match between the theme, medium, leverage point, and target audience.

When working with clients, make sure they understand the intention of each of the advertising appeals.

• • •

• •

.

The primary goal of a fear appeal is to attract attention and to create enough cognitive unpleasantness so that the consumer makes a purchase to alleviate concerns.

The primary goals of humor are to attract attention, help the customer remember the product and company names, and to make them feel good about buying the firm’s offerings.

The main goals of sex appeals are to grab attention and to link the product with the type of sexual appeal being used, from shock value to sensuality. The key is to link the nature of the appeal with the most important element of the product being advertised.

There are many uses for music. It can be as a backdrop, as an attention getter, as a method to help the consumer remember the product or company, or as an overarching theme that will run over a series of commercials.

Rational appeals attempt to persuade consumers that a given company’s goods and services have some advantage over the competition. The logic of a rational appeal must be sound, and the ad must quickly and convincingly convey the information in a manner that the customer can understand.

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• •

Emotional appeals are based on a wide range of possibilities. The secret is making sure the emotion is appropriate for the advertisement’s goals and for the company or products being featured.

Scarcity appeals are designed to move the consumer to quick action. Conveying a sense of urgency is a key ingredient in a scarcity ad.

Remember the advantages of combining appeals. Music goes with many media and with other appeals. Humor, sex, and emotions are also logical candidates for combined appeals.

When working with business-to-business clients, make sure they understand print media/rational appeals are not the only choice. Increasingly, creatives are aware of excellent ways to find members of buying centers in other media and by using other appeals (not just rational approaches).

Discourage clients from using decorative models, except in rare cases.

When developing ads for international advertisers, everyone should remember the importance of visual Esperanto. Also, consider the following: • • •

The success rates of various appeals vary by country. What works in one may not work in another culture (e.g., sexual appeals).

A cultural assimilator should examine every ad to make sure it is not offensive or confusing to patrons in the nation where the ads will run.

Language, slang, customs, and other variables take a long time to learn and understand. A local advertiser may be more successful than a firm trying to be all things to all countries. Know when to farm out work to other companies.

REVIEW QUESTIONS 6-1.

What is a message strategy?

A message strategy is the primary tactic or approach used to deliver the message theme. The three broad categories of message strategies are cognitive, affective, and conative groups

6-2.

Describe a cognitive message strategy and identify the five major forms advertisers can use.

A cognitive message strategy is being utilized when rational arguments or pieces of information are presented to consumers. Generic messages are direct promotions of good or service attributes or benefits without any claim of superiority. Claims of superiority based on a specific attribute or benefit of a product are preemptive messages. A unique selling proposition is an explicit, testable claim of uniqueness or superiority that can be supported or substantiated in some manner. Hyperbole is an

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untestable claim based upon some attribute or benefit. Comparative advertisements are used when an advertiser directly or indirectly compares a good or service to the competition.

6-3.

What is spontaneous trait transference in comparison advertising?

In psychology, the concept of spontaneous trait transference suggests that when a comparative advertisement criticizes the competition’s brand based on a particular attribute, it may lead viewers to also attribute the deficiency to the sponsor brand. The transference becomes more likely when the consumer purchases the comparative brand, not the sponsored brand.

6-4.

Describe an affective message strategy and identify the primary forms it can take in an advertisement.

Affective message strategies are designed to invoke feelings and emotions and match them with the product, service, or company. Affective strategies fall into two categories: resonance, and emotional. Resonance advertising attempts to connect a product with a consumer’s past experiences in order to develop stronger ties between the product and the consumer. Emotional advertising attempts to elicit powerful emotions that eventually lead to product recall and choice, including trust, reliability, friendship, happiness, security, glamour, luxury, serenity, pleasure, romance, and passion.

6-5.

What is comfort marketing?

Comfort marketing involves bringing back vintage characters, themes, and jingles from the past to evoke fond memories when times were better.

6-6.

What is the attitude sequence present in a conative message strategy advertisement?

The attitude sequence for conative message strategies becomes conative → cognitive → affective.

6-7.

What are the seven most common types of advertising appeals?

Fear, humor, sex, music, rationality, emotional, and scarcity are the most common types of appeals.

6-8.

What are the advantages and disadvantages of fear appeals in advertising?

The major advantage of using a fear appeal in advertising is that it can work. Fear increases a viewer’s interest in an advertisement and raises the persuasiveness of the ad. The disadvantages are that fear appeals may not be appropriate for all products and that too high of a level of fear may be detrimental.

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6-9.

When does humor work in an ad? What pitfalls should be avoided in using humorous appeals?

Humor works effectively in most situations. Humorous ads cause consumers to watch, laugh, and remember the message. Advertisers should be cautious to avoid having the humor overpower the rest of the advertisement. The objective is to get the consumer to remember the brand, not just the humor in the advertisement. Other issues to consider include are how different groups of people will view the ad and whether the humor is in good taste. Different ages, ethnic groups, and even members of the two genders view ads and humor differently.

6-10. What types of sexual appeals can advertisers use?

The types of sexual appeals that advertisers can use are subliminal techniques, sensuality, sexual suggestiveness, nudity or partial nudity, and overt sexuality.

6-11. When are sexual appeals most likely to succeed? To fail?

Sexual appeals are most likely to succeed when an advertisement features a softer sexual appeal but is strong enough to garner the viewer’s attention. Sexually oriented ads that create physiological arousal responses in the viewers tend to be more effective. Sexual appeals work best when they are related to the product being advertised. Sexual appeals often fail when they are too overtly sexual and are seen as offensive by different groups of people.

6-12. Name the different ways music can play a role in an advertisement. Explain how each role should match individual appeals, media, and the other elements in the design of the ad.

Several decisions are made when selecting music for ads, including answers to these questions: • • • •

What role will music play in the ad?

Will a familiar song be used, or will something original be created?

What emotional pitch should the music reach?

How does the music fit with the message of the ad?

Music can be • • •

.

An incidental part or the primary theme of the ad Used to misdirect the audience so a surprise ending can appear Anything from whimsical, to dramatic, to romantic

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In selecting music for an advertisement, it is important that the music match the appeal being used. The music for a fear appeal will be quite different than a sex appeal. The other aspects of the ad must also be considered, such as the media being used and the design of the ad itself.

6-13. Compare the advantages and disadvantages of rational appeals to emotional appeals.

Rational appeals are effective when consumers are willing to pay attention to the advertisement. The advantage is that they follow the steps of the hierarchy of effects model. Retention of information is greater if information is cognitively processed.

The primary disadvantage is that they do not take advantage of the interest-grabbing features of some of the other approaches and do not build emotional responses.

Unless consumers are in the market for the product being advertised, they are not likely to notice an ad using the rational approach. Rational appeals go unnoticed unless the consumer is in the market for a particular product at the time it is advertised.

Emotional advertising can capture a viewer’s attention and help develop an attachment between a consumer and a brand. Emotional ads reach the right side of the brain, which is the creative side. Emotional ads are being used more in businessto-business advertisements because businesses are realizing that decision makers, as well as regular customers utilize emotions in decision making. They may ignore more rational ads, or not be as strongly persuaded by them.

6-14. What types of executional frameworks can be used when developing an advertisement?

Types of executional frameworks include the following: • • • • • • • 6-15.

Animation Slice-of-life Testimonial Authoritative Demonstration Fantasy Informative

Describe how each of the executional frameworks can be used in ad development.

Animation can be used to create interest and excitement for a variety of products. In slice-of-life commercials, advertisers attempt to provide solutions to the everyday problems faced by consumers or businesses. The testimonial type of executional

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framework is being used when a customer in an advertisement tells about a positive experience with a product. In using the authoritative executional framework, an advertiser seeks to convince viewers that a given product is superior to other brands.

Advertisements using the demonstration executional framework are designed to show how a product works. Fantasy executions are designed to lift the audience beyond the real world to a make-believe experience. Informative ads present information to the audience in a straightforward matter.

6-16. What four types of sources or spokespersons can be used by advertisers?

The four types of sources that are available to advertisers are celebrities, CEOs, experts, and typical persons.

6-17. What are the most desirable characteristics of a source or spokesperson?

The criteria are attractiveness, similarity, likeability, trustworthiness, expertise, and credibility. Attractiveness, likeability, trustworthiness, and expertise combine to form credibility.

CRITICAL THINKING EXERCISES Discussion Questions 6-18. Describe the unique characteristics of each of the message strategies presented in this chapter. Pick ten ads in this chapter not found in the “Message Strategy” section. Identify the message strategy used. Provide a rationale for your choice.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

6-19. Studies involving comparative advertisements as compared to noncomparative ads produced the following findings. Discuss why you think each statement is true. Try to think of comparative ads you have seen which substantiate these claims. a. Message awareness was higher for comparative ads than for noncomparative ads if the brands are already established brands. b. Brand recall was higher for comparative ads than for noncomparative ads. c. Comparative ads were viewed as less believable than noncomparative ads. d. Attitudes toward comparative ads were more negative than toward noncomparative ads.

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a. Message awareness may be due to our competitive and even combative nature.

Today’s students have been exposed to a great deal more of this type of programming, especially on television. b. Students may report they recall “winners” and “losers.” c. Comparisons often stretch credibility, for all viewers. d. A percentage of the populous does not like one person or product “showing up” another.

6-20. Describe the unique characteristics of each of the appeals presented in this chapter. Pick ten ads in this chapter not found in the Appeals section. Identify the appeal being used. Provide a rationale for your choice.

Student answers will depend on the ads they choose.

6-21. Examine the print ad for the Snoring Center featured in the “Animations” section of this chapter. Explain in your own words all of the elements of the behavioral response model in Figure 6.4. Then explain each element of the behavioral response model in terms of the Snoring Center advertisement. Some of the elements will require thinking beyond what is visually present in the ad itself.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

6-22. Locate five television commercials on YouTube or find five print advertisements on the internet that use sex appeals. Identify which of the four ways sexuality was used. Evaluate each ad in terms of the appropriateness and effectiveness of the sex appeal. Provide a copy of the print ad or the URL to the TV ad on YouTube.

Student choices will vary. Have them discuss their comfort levels with each type.

6-23. Identify an advertisement that uses each of the following executional frameworks. Evaluate the advertisement in terms of how well it is executed.

Also, did the appeal and message strategy fit well with the execution? Was the ad memorable? What made it memorable? a. b. c. d. e. f. g. h. .

Animation Slice-of-life Testimonial Authoritative Demonstration Fantasy Informative Storytelling Page 6-23

Student answers will vary by the type of ad chosen.

6-24. Describe the unique characteristics of each of the executional frameworks presented in this chapter. Pick ten ads in this chapter not found in the “Executional Frameworks” section. Identify the execution being used. Provide a rationale for your choice.

Student answers will vary by the type of ad chosen.

6-25. Find a copy of a business journal such as Business Week or Fortune or a trade journal. Also locate a copy of a consumer journal such as Glamour, Time, Sports Illustrated, or a specialty magazine. Look through an entire issue. What differences between the advertisements in the business journal and consumer journals are readily noticeable? For each of the concepts listed below, discuss specific differences you noted between the two types of magazines. Explain why the differences exist. a. b. c. d.

Message strategies Appeals Executional frameworks Sources and spokespersons

Student responses will vary based on magazines and ads chosen. Ask if there are any systematic differences in the magazines and their ads.

6-26. Select five ads in this chapter that you like. Identify the message strategy, the appeal, and the execution that is being used. Provide a rationale for your choices. For each ad, give it a grade of A, B, C. or D based on its overall design.

Explain the reason for your grade.

Student answers will depend on the ads chosen. They can compare answers in class.

6-27. A manager from a resort in Florida wants to develop an advertisement highlighting scuba diving lessons. The target market will be college students.

Identify the best combination of message strategy, appeal, and execution. Justify your choice. What message strategy, appeal, and execution would you use if the target market was families with children? Justify your choice. Choose one of the target markets. Design a print ad using the design combination you selected.

Student answers will vary. Appeals can range for sexual to fantasy.

6-28. Define each of the characteristics of effective spokespersons shown in Figure 6.13. Name three influential spokespersons. For each one, discuss the five characteristics used to evaluate spokespersons and their overall level of credibility. Next, make a list of three individuals who are poor spokespersons. .

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Discuss each of the five evaluation characteristics for each of these individuals.

What differences exist between an effective and a poor spokesperson?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

INTEGRATED LEARNING EXERCISES 6-29. Describe the unique characteristics cognitive, affective, and conative message strategies presented in this chapter. Go to YouTube and find one example of each type of message strategy. Identify the subgroup, such as generic, hyperbole, or resonance. Provide a rationale for your choice. For each of the three ads you chose, identify the appeal and execution used. Explain your reasoning. Provide the URLs for the three ads.

Student answers will vary; they can compare choices in class. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

6-30. Current as well as past Super Bowl ads are available at www.superbowl-

ads.com. Access the site and compare Super Bowl ads over the last several years.

What types of message strategies were used? What types of appeals were used?

What types of executions were used? Who and what types of endorsers or spokespersons were used? Compare and contrast these four elements of ads over the last three years of Super Bowl ads.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

6-31. Most advertising agencies provide examples of advertisements on company websites. The goal is to display the agency’s creative abilities to potential clients.

Using a search engine, locate three different advertising agencies. Locate samples of their work. Compare the ads produced by your three agencies in terms of message strategies, appeals, executions, and spokespersons? What similarities do you see? What differences do you see? Which agency, in your opinion, is the most creative? Why? Student responses will depend on the agencies chosen.

6-32. Describe in your own words the unique characteristics of each of the appeals presented in this chapter. Locate four ads on YouTube that illustrate .

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different types of appeals. Explain the appeal that is being used in each ad.

Provide a rationale for your choice. For each of the four ads you chose, identify the message strategy and execution used. Explain your reasoning.

Provide the URLs for the four ads.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

6-33. Describe in your own words the characteristics of each of the executional frameworks presented in this chapter. Locate four ads on YouTube that illustrate different types of executions. Explain the execution that is being used in each ad. Provide a rationale for your choice. For each of the four ads you chose, identify the message strategy and appeal used. Explain your reasoning.

Provide the URLs for the four ads.

Student responses will depend on the ads they choose.

6-34. Visit the following websites. Identify the primary message strategy, appeal, and execution used. Evaluate the quality of the website based on message strategy, appeal, and execution. Do the sites utilize a spokesperson? If so, who is it and which type is he or she? Evaluate the spokesperson in terms of the components of credibility. a. Johnson & Johnson (http://www.jnj.com) b. Hyundai Motors, USA (www.hyundaiusa.com) c. Skechers (www.skechers.com) d. Bijan Fragrances (www.bijan.com) e. Applebee’s (http://www.applebees.com) Answers will vary depending on the time the website is opened. The Johnson & Johnson home page began with company executives in February 2014. The approach was to highlight altruistic activities of the company. Hyundai promoted the products themselves in an informative fashion. Sketchers employed real person models with elements of fantasy on the opening page. Bijan used a fast-moving opening page highlighting different aspects of the company’s operations. Applebee’s began with the tagline “See you tomorrow.” These may have changed by the time students access them.

6-35. Visit the following websites. Identify the primary message strategy, appeal, and execution used. Evaluate the quality of the website based on message strategy, appeal, and execution. Do the sites utilize a spokesperson? If so, who is it and which type is he or she? Evaluate the spokesperson in terms of the components of credibility. a. Visit South Walton (www.visitsouthwalton.com) .

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b. Jockey International (http://www.jockey.com) c. ReRez (http://www.rerez.com) d. DuPage Medical Group (www.dupagemedicalgroup.com) South Walton opens with a series of photos. There is no spokesperson. The appeal is emotion. The execution is fantasy.

Jockey uses decorative models. The approach is fantasy-like. The execution is demonstration (modeling).

Rerez starts with an informative approach. The spokespeople are typical persons.

DuPage uses happiness and comfort as emotions. The execution is testimonial from typical persons.

6-36. Study the print advertisement for DuPage Medical Group used in this chapter as an illustration of an emotional ad. Go to the authors’ website at www.clowbaack.net/video/ads.html and watch the television ad for DuPage Medical Group entitled “No More Rushing.” Notice its similarity to the print ad.

What type of message strategy and execution was used in the TV ad? What type of spokesperson was used? Discuss each of the characteristics of effective spokespersons as it relates to the TV ad.

Student answers will vary depending on the ads they choose from the website.

6-37. List the four types of spokespersons presented in the chapter. For each type identify a major advantage and a major disadvantage. Locate an example of each type of spokesperson on YouTube. For each ad and spokesperson used, discuss the characteristics of effective spokespersons highlighted in Figure 6.13.

Provide the URLs for the four ads.

Student responses will depend on people selected. They can share answers in class.

6-38. Go the authors’ website at clowbaack.net/video/ads.html. Pick one of the TV ads for DuPage Medical Group. Identify the message strategy used in the TV ad. Justify your choice. Identify the type of appeal being used. Justify your choice. Identify the type of execution used. Justify your choice. What type of spokesperson was used? Justify your choice. Be sure to provide the URL in your response and identify the ad you chose.

Student answers will depend on the ads they choose.

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6-39. Go the authors’ website at clowbaack.net/video/ads.html. Pick one of the TV ads for one of the financial institutions. Identify the message strategy used in the TV ad. Justify your choice. Identify the type of appeal being used. Justify your choice. Identify the type of execution used. Justify your choice. What type of spokesperson was used? Justify your choice. Be sure to provide the URL in your response and identify the ad you chose.

Student answers will depend on the ads they choose.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

6-40. Television ads, set 1 - http://blogclowbaack.net/2014/05/08/television-ads-set1-chapter-6/ 6-41. Television ads, set 2 - http://blogclowbaack.net/2014/05/08/television-ads-set2-chapter-6/ 6-42. Television ads, set 3 - http://blogclowbaack.net/2014/05/08/television-ads-set3-chapter-6/ 6-43. Television ads, set 4 - http://blogclowbaack.net/2014/05/08/television-ads-set4-chapter-6/

Student Project: Creative Corner Students are asked to actually create television commercials for a series of products.

CASES Case 1

Felicity’s Fine Formalwear

6-44. If Felicity’s Fine Formalwear used television advertising, what message strategy, appeal, and execution would you recommend? Why? Briefly describe the television ad you envision.

Student answers will vary.

6-45. Would the television ad designed for parents on the nightly news be different than one designed to stream online for students? Why or why not?

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Student answers will vary.

6-46. Suppose Felicity decided to create a flyer to be placed on cars at the local high school. Decide which message strategy, appeal, and execution you would use.

Explain why you chose this particular combination. Now design the flyer for Felicity. You can make up contact information such as phone number, address, and website URL. Student choices will vary.

6-47. What type of spokesperson should be used in ads for Felicity’s Fine Formalwear? Would the person change for each of the three target markets (prom-goers, wedding participants, winter gala attendees)? Defend your answer.

In each case, it would likely be a typical person unless a local celebrity could be found who would emphasize elegance.

Case 2

Black-Eyed Marketing

6-48. Discuss each of the source characteristics in terms of the Black Eyed Peas serving as a spokesperson for a product. Would it make a difference on what type of product the Black Eyed Peas were endorsing? Explain.

The band displays attractiveness (especially Fergie to males), similarity (people identify with them), credibility (the use the products they endorse), and likeability.

They are less likely to engender trustworthiness or expertise.

Credibility might be affected if the product does not match the band’s image.

6-49. What types of brands or products are best-suited to endorsements by the Black Eyed Peas? By rock bands in general? What about country music artists?

What about hip-hop artists?

Technologically based products are idea for rock bands. They can also endorse fashion, sports, foods and drinks. Students may offer additional ideas.

Country bands are more likely to endorse pick-up trucks, other kinds of fashion (boots and hats), different types of food, and outdoor equipment. Students may offer additional ideas.

Hip-hop has begun to permeate a wide variety of products and company ads.

6-50. If you were going to design a television advertisement for a concert for the Black Eyed Peas, who would be your target market? What message strategy .

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and executional framework would you use? Why? Describe your concept of an effective television ad.

Student answers will vary. Target markets include young people around 20 years of age and their parents, if the story is correct as presented. Values include excitement, sensuality, feeling part of a larger social group, and high energy. Executional frameworks might include fantasy, animation, and dramatization.

6-51. Suppose the Black Eyed Peas were contracted to perform at your university.

Design a print ad for your local student newspaper. Discuss the message strategy, appeal, and execution you used and why you used it.

Student advertisements will vary.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 6-52.

Define each of the message strategies that can be used in advertising and match each to the appropriate step in the hierarchy of effects model and attitude formation sequence (such as cognitive → affective → conative).

Suppose a local pizza restaurant near your campus wanted to develop print ads for your school newspaper. For each message strategy, describe the content that would be in that print ad.

6-53. Hardee’s and Carl’s Jr. recently used a television commercial featuring a schoolteacher dancing on top of her desk while a room full of guys performed a rap song entitled “I Like Flat Buns.” The song seemed appropriate because the ad was for the Patty Melt on a flat bun. Instead, the ad received considerable flack because the sexy blonde schoolteacher was wearing a short, tight skirt. Teachers’ associations complained that it was inappropriate because it was a “sexually exploitive assault” on teachers, students, and schools. Which type of sex appeal is being used? Disucsss the appropriateness of this ad in terms of the concepts presented in the chapter in the “Sex Appeals” sections. What makes it effective?

What makes it ineffective?

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Bonus Case

PEERLESS MARKETING In the United States, the majority of homes have indoor plumbing. Sinks, faucets, toilets, and other pieces of hardware are largely taken for granted. Only in two circumstances are they prominently in the minds of customers. The first is when a plumbing product is being purchased for the first time, such as when a home is being built or an area is being refurbished. The second is when an item is defective and must be replaced.

The challenge to manufacturers is to make certain that a company’s brand is remembered by consumers and preferred by builders and plumbers. The products must be placed in stores such as Home Depot or Lowes in a way that makes them easy to find and always accessible.

One of the major players in the plumbing fixture marketplace is Delta Faucet Company. A strange path brought the company to prominence. In the 1920s, an immigrant named Alex Manoogian founded Masco Company, which provided auto parts.

Twenty-five years later, Manoogian was contacted by an inventor who had created the first washerless faucet. Although it was not related to his current business, Manoogian saw the potential and refined the item, which was first sold out of the trunks of salesmen’s cars, as the first Delta Faucet. The name was chosen because a key part of the product resembled the shape of the Greek letter delta.

The Delta Faucet Company became a separate part of the original Masco Company and relocated. Over the next two decades, it expanded quickly to an entire line of products. Currently, Delta Faucet Company is a multinational firm with four primary .

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locations: Indianapolis, Indiana; Jackson, Tennessee; London Ontario, Canada; and Panyu, China. It sells more than 1 million faucets per month. The overall Masco Company now sells door hardware and locks, cabinets, and glass products in addition to faucets.

The Delta line includes two other names: Brizo and Peerless. Brizo is the high-end line of faucets, Delta is the flagship and primary brand, and Peerless is the lower-end line of items.

The primary advertising challenges appear to exist in four main areas. First, company leaders must make sure that one brand does not cannibalize the others. The brands must remain as distinct products offered to separate sets of consumers. Second, the brands must be viewed as the primary choices and must be remembered by consumers when the time comes to buy a plumbing fixture. Third, there cannot be brand confusion. Builders and plumbers must believe that the fixtures are distinct along several lines, including quality and durability, ease of installation, and strong warranties, but they must also be perceived as being fashionable. Fourth, innovation has become a new part of the plumbing fixture industry. A wide variety of options exist. Delta’s products must compete with all the new faucet variations and retain its position as the one of the premier manufacturers.

Complications occur due to differences in markets and customers. Many contractors and builders are simply looking for a low-cost option, especially when lower-end rental properties and similar units are being developed. Plumbers may be willing to install a wide variety of products. They will consider the costs of a product but also want something that will be easy to install and that will be durable. Individual consumers are .

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the most likely to be interested in other product qualities, such as novel features and the look of the product.

6-54. What type of message strategy should Delta Faucet Company utilize? Should it be the same for all of the brands and in all of the markets (builders, plumbers, customers)?

A case can be made for all three: cognitive to explain the benefits, Aafective to inspire emotions regarding a luxurious bathroom, and conative to move each type of customer to buy.

6-55. What type of advertising appeal makes the most sense for Delta Faucet Company advertising to individual consumers? To contractors, builders, and plumbers? How does the appeal you selected match the message strategy chosen in Question 1?

Student answers will vary but will probably tend to use rationality. Fear would be based on plumbing not working right and would also be possible.

6-56. What type of executional framework should be used for print advertisements aimed at the target audiences-- contractors, builders, and plumbers? Explain how it fits with the message strategies and appeals you have already selected.

The three most common answers will probably be testimonial, authoritative, and informative.

It makes sense that it would be the same because plumbing is a practical matter; however, it is also possible to make a case for a more emotional appeal based on elements such as convenience and luxury, in the case of consumers.

6-57. Should the company use a spokesperson? If so, which on of the four types should be used? Justify your answers.

A case can be made for an expert or a regular person for the cognitive and rational approaches.

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Chapter

7

Traditional Media Channels CHAPTER OBJECTIVES Students should be able to answer the following questions: 7-1 7-2 7-3 7-4 7-5 7-6 7-7 7-8

What is a media strategy?

What elements and individuals are involved in media planning?

How do the terms used to describe advertising help the marketing team design effective campaigns?

What are some of the primary advertising objectives?

What are the advantages and disadvantages associated with each traditional advertising medium?

How can the marketing team use the media mix to increase advertising effectiveness?

What are the key issues associated with media selection for business-to-business markets?

What issues are associated with media selection in international markets?

OVERVIEW Traditional media play an important role in developing a fully integrated marketing program.

This chapter examines traditional media advertising in detail.

A good example of how traditional media is combined with newer technologies may be found in a recent campaign for Oreo cookies.

Wonderfilled Oreos In 2013, Oreo cookies celebrated their 100th birthday.

The campaign included original music, a strong traditional media presence, and the addition of social media.

Questions for Students:

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1. Do you view any of the Oreo commercials? How did you react to them?

2. What is the target market for Oreos, and which traditional media reach that market?

3. Can you think of a better way to advertise Oreos than this campaign?

This chapter explains the various traditional media channels, beginning with an analysis of the media strategy as well as media planning processes.

Next, common advertising terms are explained followed by an examination of advertising objectives. These processes lead to media choices and selection targeted to specific consumers, businesses, and customers in other countries.

The largest part of the chapter describes the traditional media used in advertising, along with advantages and disadvantages of each.

The media mix along with business-to-business and international implications are then described.

Objective 7.1:

What is a media strategy?

The Media Strategy A media strategy involves analyzing and choosing media for an advertising and marketing campaign.

The average consumer spends little time on any advertisement. Simply finding the right places to speak to potential customers is an increasingly challenging task.

Advertising agencies design a campaign within the framework of the overall integrated marketing communications program.

Objective 7.2:

What elements and individuals are involved in media planning?

Media Planning Figure 7.1 lists times when consumers are exposed to advertisements.

Media planning begins with a careful analysis of the target market. Demographics such as age, gender, income, and education are not enough to determine the media habits of a person in a target market.

Figure 7.2 identifies the components of a media plan, which are the following: • .

A marketing analysis to review the fundamental marketing program Page 7-2

• • • •

An advertising analysis to spell out fundamental advertising strategy A media strategy to state the media to be used and creative consideration Media scheduling notes the times ads will appear Justification and summary to state the measures and the rationale for media choices

Media Planners The media planner formulates a program stating where and when to place advertisements, working closely with creatives and account executives.

Another task for the media planner is to conduct research to match the product with the market and media.

Part of the media planner’s research is devoted to gathering facts about various media, such as the circulation rates and demographic groups reached by each medium.

Media Buyers The media buyer purchases the space, while negotiating rates, times, and schedules for ads.

To ensure promotional dollars are spent wisely, it is best to involve the media planner and the media buyer with the creative and the account executive in the design of an advertising campaign.

There is little connection between the size of an advertising firm and the prices they can negotiate.

Differences in effectiveness of advertising are often related to the following: • • • • • •

Quality media choices (the right ones) made by each agency Creativity Financial stewardship (“bang” for your advertising buck) Agency culture and track record Computer systems to analyze data Relationships between the agency and the medium’s sales representative

The negotiated price is only one element in the success of an advertising program.

A spot ad is a one-time placement of a commercial in a medium.

Question for Students:

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Which type of advertising job would you prefer? Why?

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Objective 7.3: How do the terms used to describe advertising help the marketing team design effective campaigns?

Advertising Terminology As with many subjects, advertising has its own unique set of terms and measures. These are listed in Figure 7.3.

Several concepts or technical terms used in the advertising world are important in developing media objectives. Following are terms students need to understand.

Reach is the number of people, households, or businesses in a target audience exposed to a media vehicle or message schedule at least one time during a given time period (usually four weeks).

Frequency Frequency, which is the average number of times an individual, household, or business within a particular target market is exposed to a particular advertisement within a specified time period (again, usually four weeks).

Opportunities to See (OTS) Opportunities to see (OTS) identifies the cumulative exposures achieved in a given time period.

Gross Rating Points Gross rating points (GRP) measure of the impact or intensity of a media plan. GRPs are calculated by multiplying a vehicle’s rating by the frequency or number of insertions of an advertisement.

Cost Cost is a measure of overall expenditures associated with an advertising program or campaign.

A second useful number that can be calculated to measure the costs of a program is the cost per thousand (CPM) of the program.

Figure 7.4 presents hypothetical media information for select magazines to support a campaign for a digital camera.

The cost per thousand is calculated by using the following formula: .

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CPM = (cost of media buy / total audience) x 1,000 To calculate the Cost Per Rating Point (CPRP), the formula is: CPRP = cost of media buy / vehicle’s rating To calculate the weighted (or demographic) CPM, the formula is: Weighted CPM = advertisement cost x 1,000 / actual audience reached Figure 7.5 calculates weighted or demographic CPM. Ratings and Cost per Rating Point Ratings measure the percentage of a firm’s target market that is exposed to a television show or the number of readers of a print medium.

In order to compare media, a measure called the cost per rating point (CPRP) may be used.

The cost per rating point formula that measures the relative efficiency of a media vehicle relative to a firm’s target market is: CPRP = Cost of media buy/Vehicle’s rating Continuity Continuity is the exposure pattern or schedule used in the ad campaign. The three types of patterns are used: Continuous— a continuous campaign buys media time in a steady stream throughout the year.

Pulsating— a firm advertises some throughout the whole year but will increase advertising in small, short bursts around special events, such as holidays.

Flighting (discontinuous)— a flighting schedule places advertisements at special intervals during the year, with no advertising between.

Impressions Impressions include the number of gross impressions measures the total exposures of the audience to an advertisement.

This does not take into consideration what percentage of the total audience did or did not see an advertisement.

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Objective 7.4:

What are some of the primary advertising objectives?

Achieving Advertising Objectives Advertisers consider the number of times a person will be exposed to an ad before it creates an impact.

Most agree that a single exposure is not enough. The actual number inspires a great deal of debate.

Some argue it takes three. Others say as many as 10.

The Three-Exposure Hypothesis The three-exposure hypothesis suggests that it takes a minimum of three exposures for an advertisement to be effective. It has been followed by most media planners for quite a while.

The traditional three-exposure hypothesis is based on the intrusion value of advertisements, which is the ability of a media or advertisement to intrude upon a viewer without their voluntary attention.

Recency Theory Recency theory suggests that a consumer’s attention is selective and is focused on his or her individual needs and wants.

Rcency theory states that consumers use selective attention processes as they consider advertisements. Attention is given to messages that might meet a person’s needs or wants.

When a consumer is contemplating a future purchase of the product being advertised, the more likely it becomes the consumer will pay attention to and react favorably toward an ad.

Recency theory notes that advertising is a waste of money when ads reach individuals who are not in the market for a particular product and for those who do not need the product.

Another difference in recency theory is the idea that one ad exposure is enough to affect an audience when that person or business needs the product being promoted.

The closer, or more recent, an ad is to a purchase, the more powerful the ad will be.

Effective Reach and Frequency Seeking to discover the minimum number of exposures needed to be effective is based on two concepts: .

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1. Effective frequency, which refers to the number of times a target audience must be exposed to a message in order to achieve a particular objective.

2. Effective reach, which is the percentage of an audience that must be exposed to a particular message to achieve a specific objective. Implied in the concept of effective reach is that some minimum number of exposures exits.

Effective reach and frequency are affected by the following differences: • • •

The interests, personalities, and exposures to the media outlets for individual consumers The size and placement of ads The number of different media being used in a particular advertising campaign

In recent years, numerous media companies have designed computer models to optimize reach and frequency.

Brand Recognition Brand recognition requires an emphasis on the visual presentation of the product or logo.

The idea is to strengthen or create links between the brand and other nodes of information that exist in the person’s knowledge structure.

Brand Recall To increase brand recall, frequency becomes more important than reach. Repetition helps embed a brand in the consumer’s cognitive memory. Repetition increases the odds that a particular brand will come to mind.

Figure 7.6 compares brand recognition to brand recall.

Objective 7.5:

What are the advantages and disadvantages associated with each traditional advertising medium?

Media Selection Television Figure 7.7 summarizes the advantages and disadvantages of television advertising.

Advantages of Television Advertising • .

High reach Page 7-7

• • • • •

High frequency potential Low cost per contact Quality creative opportunities High intrusion value Segmentation possibilities through cable

Disadvantages of Television Advertising • • • • •

Clutter Channel surfing during commercials Short amount of copy High cost per ad Low recall

Television has always been a popular medium for consumer products. Recently, however, more business-to-business ads are appearing on television.

Ratings Television ratings are calculated as follows: Rating =

number of households turned to a program / total number of households in a market

Television share is calculated as follows: Share =

number of households turned to a program / number of households with a television turned on

Figure 7.8 provides the costs of 30-second ads using the C3 system.

Ratings Providers Organizations that prepare this information include Nielsen Media Research; Starch INRA; Hooper, Inc.; Mediamark Research, Inc.; Burke Marketing Research; and Simmons Market Research Bureau.

Local and Regional Television Advertising For local and regional companies, spot TV may be the best television advertising option. In many cases, national brands supplement national commercials with spot TV purchases in select markets.

Dynamic Advertising .

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Dynamic advertising allows a company such as DirecTV to obtain consumer information from marketing research firms and combine it with the company’s data to send targeted ads to its subscribers that meet specific criteria and live in targeted areas.

Social Media and Television Social media, mobile, and the internet can enrich television viewing experiences and actually drive consumers to watch more programs.

As the amount of time people spend on social media continues to increase, so will the online buzz about television shows. By monitoring this type of online chatter, advertisers and their clients can gain a better perspective on which television shows to place ads.

YouTube and Television Many companies and advertising agencies post television ads on YouTube.

Some of the ads are placed on the site simultaneously with the TV launch (called in-stream) while others are be submitted to YouTube prior to the national launch (called pre-roll).

Super Bowl Advertising The Super Bowl continues to be the biggest television advertising event of the year. A large percentage of the 110 million viewers pay close attention to the commercials.

Many Super Bowl commercials first appear on YouTube, Facebook, the company’s website, or the agency’s site prior to the game.

In the past, ads were kept under wraps until the moment they appear during the game.

Now, many Super Bowl commercials first appear on YouTube, Facebook, the company’s website, or on the agency’s site prior to the game (a pre-roll).

Another new approach involves the release of extended versions of advertisement with more content or additional information about the ad spot on the website.

Super Bowl advertising results in nearly immediate feedback.

Radio The advantages and disadvantages of radio advertising are displayed in Figure 7.9.

Advantages of Radio Advertising .

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• • • • • • • •

Lower cost per spot than television Low production costs Background music can match station format High segmentation Flexible Intimacy which means listeners can develop a closeness to the DJs and other radio personalities Creative opportunities Mobile

Disadvantages of Radio Advertising • • • •

Short exposure time Low attention Few national audiences Target duplication when several stations use the same format

Radio advertising is a low-cost option for a local firm. Radio remotes, where the station broadcasts from a business location, have been popular methods of attracting attention.

For business-to-business advertisers, radio provides the opportunity to reach businesses during working hours or while business people are in transit to or from work.

Out-of-Home (OOH) Advertising Figure 7.10 summarizes expenditures on Out-of-Home Figure 7.11 lists the advantages and disadvantages of out-of-home advertising.

Advantages of Outdoor Advertising • • • • • • •

Large, spectacular ads possible Able to select key geographic areas Accessible for local ads Low cost per impression Broad reach High frequency on major commute routes Long life

Disadvantages of Outdoor Advertising • • .

Short exposure time Brief messages Page 7-10

• •

Limited segmentation possible Cluttered travel routes

There are also some legal limitations to outdoor advertising.

Question for Students:

Do you read billboards? Which ones?

Print Media A growing number of print magazines and newspapers have developed digital versions of materials that can be viewed on computers, tablets, and smartphones.

In some cases, the digital format will be identical to the print version. In others, the site includes additional or different content Magazines The advantages and disadvantages of magazines are summarized by Figure 7.12.

Advantages of Magazine Advertising • • • • • • •

High market segmentation Target audience interest by magazine High color quality Special features available Long life Direct response techniques Read during leisure time

Disadvantages of Magazine Advertising • • • • •

Declining readership High level of clutter Long lead time Low flexibility High cost

Magazines have proliferated even as the problems of declining readership have occurred.

Although business-to-business marketers are increasingly using other mediums, trade journals and business magazines still remain an effective method of reaching their target markets.

Question for Students: .

How many of you read magazines? Newspapers?

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Newspapers The advantages of disadvantages of newspaper advertising appear in Figure 7.13.

Advantages of Newspaper Advertising • • • • • • •

Geographic selectivity High flexibility High credibility Strong audience interest Longer copy/message possible Cumulative volume discounts Excellent location for coupons and special-response features

Disadvantages of Newspaper Advertising • • • • •

Poor buying procedures Short life span Major clutter (especially near Christmas) Poor color quality Internet classified competition

Few young people read newspapers.

Most major city newspapers are now owned by chains, such as Gannett.

For many smaller local firms, newspaper ads, billboards, and local radio programs are the only viable advertising options.

Newspapers have not been a major medium for business-to-business marketers primarily because of the local nature of newspapers.

Objective 7.6: How can the marketing team use media mixed to increase advertising effectiveness?

Media Mix Selecting the proper blend of media outlets for advertisements is a crucial activity as campaigns are prepared. Media planners and media buyers are both excellent sources of information on what type of mix is the most effective for a particular advertising campaign.

There are several possible linkages between various media.

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Figure 7.14 provides advertising expenditures and average media mix percentages for CocaCola.

The media multiplier effect suggests that the combined impact of using two or more media is stronger than using either medium alone.

Figure 7.15 suggests logical combinations of media.

Objective 7.7:

What are the key issues associated with media selection for business-to-business markets?

Media Selection in Business-to-Business Markets Figure 7.16 identifies the ways business-to-business advertising expenditures are divided among the various media.

Currently, about 56 percent of all business advertising dollars are spent in non-business environments. There are several reasons for this shift to more non-business media.

• • •

Business decision makers are also consumers of goods and services, so the same psychological techniques work.

Business decision makers are very difficult to reach at work, so companies try to reach them elsewhere.

Clutter among the traditional business media has made it more difficult to get a company noticed.

Trade journals provide an opportunity to reach members of the buying center who may not be able to be reached with sales people.

Clutter is a major problem in trade journals.

In addition to trade journals, business-to-business advertisers also use business magazines such as Time and consumer magazines. This approach is successful because many of the goals in business-to-business advertisements are the same as those devoted to consumers.

Objective 7.8:

What issues are associated with media selection in international markets?

International Implications Understanding media viewing habits in international markets is important for successful advertising programs. Media viewing is different, as is media buying in other countries.

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In international settings, it is important to understand that the media habits of consumers vary as well as their daily life styles.

In general, many of the tactics used to develop advertising campaigns in the United States apply to international advertising. What differs is the nature of the target markets, consumer media preferences, and the processes used to buy media.

Careful attention must be given to cultural mores to make sure that the buying process does not offend the cultural and religious attitudes, which are prevalent in any given region.

INTEGRATED CAMPAIGNS IN ACTION: THE SNORING CENTER Pink Jacket Creative, led by Bill Breedlove and Elena Baca, developed a series of campaigns for a sleep apnea and snoring treatment facility.

Primarily through the use of billboards, the campaigns all begin with "Snoring Kills..." with a series of outcomes.

This highly successful approach is detailed further on the website for professors.

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR MEDIA PLANNERS, BUYERS, AND ACCOUNT EXECUTIVES (Note to professors—these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

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Start with the message theme, and finish with the message theme. The IMC approach works best if every activity focuses on the one clear voice of the company.

Decide whether the client is large enough to have a separate media planner and media buyer, or if the two positions should be combined. Remember, the driving criteria should be service to the client, not cost savings.

Review the research conducted by the media planner. Make sure the plan is doing an effective job of finding media to match the message, the company, its customers, and the goods or services being advertised.

Review the work being performed by the media buyer. Make sure that purchases do indeed reflect the best available rates for the client. Also make sure the times and schedules are appropriate, and that they will lead to the best possible response.

Develop a strong, positive relationship with the media planner and media buyer and between those two individuals and the client. The planner and buyer will have a large impact on the success of the campaign.

Consider hiring a research agency, as needed, to follow on up advertising campaigns in order to be certain the company is effectively reaching its audience.

Review the goals of advertising with every client. Make sure they understand the following differences: • • • • • • • •

Reach (and effective reach) Frequency (and effective frequency) Opportunity to see (OTS) Continuity CPM, GRP, ratings, and CPRP Impressions Ratings Share

Review the advantages and disadvantages of each potential medium with clients. Avoid using words like “always” and “never” when discussing options.

Talk carefully about the potential mixes of media. Note that the internet is probably going to be somehow connected to every advertising campaign, even if only to give the company’s website address.

Ask business customers to think about their intentions in reaching members of the buying center. Remind them of the challenges associated with the following:

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1. Straight rebuys 2. Modified rebuys 3. New task purchases Consider the differences in the mix that will exist between business campaigns and consumer campaigns. Make certain creatives are aware of the trade journals and other advertising outlets that should be part of every business-to-business advertising campaign.

Think SMALL. Remind the creative, media planner, and media buyer of all of the small ways a product can be advertised and a message can be reinforced. These include the following: • • •

Envelopes carrying the company’s current advertising message Give-away in contests where the company provides the prize in return for being mentioned Merchandise which can be sold or given away carrying advertising, such as cups, toys, carry out bags, receipts, ash trays, napkins, towels, packaging and other containers, and every creative method possible to restate the firm’s name

Follow up. Find ways to keep score. Make sure you can give prospective clients clear and convincing evidence that your firm knows how to reach a company’s ongoing and new customers effectively.

REVIEW QUESTIONS 7-1.

What is a media strategy? How does it relate to the creative brief and overall IMC program?

A media strategy is the process of analyzing and choosing media for an advertising and promotions campaign. It is related to the creative brief and overall IMC program because the media strategy follows the factors given by the creative brief and IMC program.

7-2.

What does a media planner do?

A media planner formulates a program stating where and when to place advertisements. Also, the media planner conducts research to match the product with the market and media. Part of the media planner’s research is devoted to gathering facts about various media, such as the circulation rates and demographics groups reached by each medium.

7-3.

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Describe the role of media buyer in an advertising program.

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The role of a media buyer in an advertising program is to buy the space, negotiate rates, times, and schedules for the ads. To ensure promotional dollars are spent wisely, it is best to involve the media planner and the media buyer with the creative and the account executive in the design of an advertising campaign.

7-4.

What is reach? Give examples of reach in various advertising media.

Reach is the number of people, households, or businesses in a target audience exposed to a media vehicle or message schedule at least one time during a given period. Examples of reach in various media would include: how many people heard the radio ad, read the newspaper, watched the ad on television, accessed a Web site, or saw a billboard.

7-5.

What is frequency? How can an advertiser increase frequency in a campaign?

Frequency is the average number of times an individual, household, or business within a particular target market is exposed to a particular advertisement within a specified time period (normally four weeks). An advertiser can increase frequency by increasing the number of ads within a period in a given market. For example: the same ad several times during one TV program, several times in a magazine, or several times in a radio show.

7-6.

What are gross rating points? What do they measure?

Gross rating points (GRP) are a measure of the impact or intensity of a media plan.

They measure the chances the target audience actually viewed the ad. GRP are calculated by multiplying a vehicle’s rating by the frequency or number of insertions of an advertisement.

7-7.

What is the difference between CPM and CPRP? What costs do they measure?

The difference between cost per thousand (CPM) and cost per rating point (CPRP) is that CPM measures the dollar cost of reaching 1,000 members of the media vehicle’s audience. CPRP is a relative measure of the efficiency of a media vehicle to a firm’s target market. CPRP takes into consideration the rating of the media vehicle, not just the cost of the media.

7-8.

What is continuity?

Continuity is the exposure pattern or schedule used in the campaign. The three types of patterns used are: • Continuous—a continuous campaign buys media time in a steady stream.

• Pulsating—a firm advertises some throughout the whole year but will increase advertising in small, short bursts around special events such as holidays.

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•

Flighting—the campaign schedule places advertisements at special intervals with no advertising between.

7-9. Describe the three-exposure hypothesis.

The three-exposure hypothesis is a basic rule stating that it takes a minimum of three exposures for an advertisement to be effective.

7-10. How does recency theory differ from the three-exposure hypothesis?

Recency theory is different because it suggests that a consumer’s attention is selective and is focused on his or her individual needs and wants. This is different from threeexposure hypothesis because consumers may not need three exposures for an ad to be effective if they are interested in the product.

7-11. What is effective frequency? Effective reach?

Effective frequency is the number of times a target audience must be exposed to a message in order to achieve a particular objective. Effective reach is the percentage of an audience that must be exposed to a particular message to achieve a specific objective. Implied in the concept of effective reach is that some minimum number of exposures exits. Effective reach and frequency are affected by the following differences: • The interests, personalities, and exposures to the media outlets for individual consumers • The size and placement of ads • The number of different media being used in a particular advertising campaign 7-12. What are the major advantages and disadvantages of television advertising?

Advantages include • High reach • High frequency potential • Low cost per contact • Quality creative opportunities • High intrusion value • Segmentation possibilities through cable Disadvantages include • Clutter • Channel surfing during commercials • Short amount of copy • High cost per ad • Low recall .

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7-13. What are the major advantages and disadvantages of radio advertising?

Advantages • Lower cost per spot than television • Low production costs • Background music can match station format • High segmentation • Flexible • Intimacy which means listeners can develop a closeness to the DJs and other radio personalities • Creative opportunities • Mobile Disadvantages include • Short exposure time • Low attention • Few national audiences • Target duplication when several stations use the same format • Radio advertising is a low-cost option for a local firm 7-14. What are the major advantages and disadvantages of out-of-home advertising?

Advantages • Select key geographic areas • Accessible for local ads • Low cost per impression • Broad reach • High frequency of major commuter routes • Large visuals possible • Digital capabilities Disadvantages • Short exposure time • Brief messages • Little segmentation possible • Clutter 7-15. What are the major advantages and disadvantages of magazine advertising?

Advantages include • High market segmentation .

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• • • • • •

Target audience interest by magazine High color quality Special features available Long life Direct response techniques Read during leisure time

Disadvantages include • Long lead time to ad appearance • Low flexibility • High cost • Higher clutter • Declining readership 7-16. What are the major advantages and disadvantages of newspaper advertising?

Advantages include • Priority for local ads • Good for coupons and special-response features • High credibility • Strong audience interest • Longer copy/message possible • Flexibility • Cumulative volume discounts Disadvantages include • Major clutter (especially near Christmas) • Short life span • Poor color quality • Poor buying procedures Also, there is limited audience (few under 25 years old).

7-17. Is the strong intrusion value of television an advantage? Why or why not?

The intrusion value of television is an advantage because by being able to prepare ads with catchy tunes, sexy content, or motion it can grab consumers’ attention. These consumers may not have paid attention to the ad otherwise, but the intrusion value may cause them to become interested in a product.

7-18. What special challenges does media selection present for businesses? What roles do gatekeepers play in creating those challenges?

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Special challenges that face media selection for businesses are that business-tobusiness ads often have a difficult time getting noticed, gatekeepers hinder the information flow to decision makers, and clutter is growing in business advertisements. Gatekeepers are a hindrance in the flow because of voice mail, secretaries, and other intermediaries that may keep the decision maker from being reached.

7-19. What special challenges are present in media selection for international advertising campaigns? What differences and similarities exist with U.S. media selection processes?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Special challenges that are present in media selection for international advertising campaigns include television is not the dominant media in every country; cable TV, and satellites are growing; smaller subregions impact media preferences; and media buying behaviors are different. Also an awareness of the culture of the company must be in place to advertise in the correct manner.

CRITICAL THINKING EXERCISES Discussion Questions 7-20. To be effective, multiple media should be chosen and integrated carefully.

Individuals who are exposed to advertisements in combinations of media selected from television, radio, magazines, newspapers, and outdoor are more inclined to process the information than when a message appears in only a solitary medium. For each of the media, what is the probability of you being exposed to an advertisement? The percentages should add up to 100 percent.

Which media are most effective in reaching you? Explain.

Student choices will vary. This is a good in-class discussion question, especially in the area of probability of being exposed to an ad.

7-21. Billboard advertising in Times Square is so popular that space has already been sold for 10 years. Coca-Cola, General Motors, Toshiba, Prudential, NBC, Budweiser, and The New York Times are paying rates in excess of $100,000 per month to hold these spaces. Why would companies pay so much for outdoor advertising? What are the advantages and disadvantages of purchasing billboards at Times Square?

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Student discussions should note that companies pay these fees for the same reasons companies pay millions to advertise during the Super Bowl: Many consumers will be reached at the same time. In addition, the advertisement will be viewed many times by the same viewers (people who work in the area) and by new people all the time (tourists). The disadvantages include the cost and the lack of control over who views the ads. Many will not be interested in the company’s products. Also, there is great competition, so all of the ads are very dramatic, making the impact of one single ad lower.

7-22. The Super Bowl is the most-watched program on television. Many tune in just to watch the ads. Discuss the concepts of effective reach, effective frequency, ratings, gross ratings points, brand recognition, brand recall, and opportunities to see as it relates to Super Bowl advertising. What are the advantages for a brand to advertise on television during the Super Bowl? What are the disadvantages?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

7-23. Xerox offers a color printer that sells for $1,200. The goal is to market it to business buyers. What media mix would you suggest for a $5 million advertising campaign? Justify your answer.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

7-24. Complete the following table by calculating the missing values. Based on the values you calculated, identify two magazines and two television shows for advertising sports equipment. Support your answer with specific data from the table.

Student answers will depend on their choices.

7-25. Use the internet or phone directory to identify all of the radio stations in your area. What type of format does each have (for example, talk, country, hip hop, easy-listening, or rock)? Is radio a good advertising medium to reach college students at your university ? Why or why not? Which of the radio stations on your list would be the most effective in reaching college students?

Students may disagree about radio. Many will point out iPods have replaced radio as the mobile medium for young people.

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7-26. As you drive to school (or home) make a list of all of the billboards and outdoor advertising you see. Which are the most effective? Why? Which are the least effective? Why? How effective are billboards at reaching you with an advertising message?

Student answers will depend on the billboards they choose. Ask them to discuss their responses in class.

7-27. Pick three different magazines on a wide range of topics. For each, describe the types of ads and the number of ads in the issue. Did you see any business-tobusiness ads? What similarities did you see in the ads across the three magazines? What differences did you notice? Which would be most effective at reaching people in your demographic?

Student answers will vary by the magazines and advertisements they choose.

7-28. Explain the concepts of recency theory and three-exposure hypothesis in your own words. Discuss an example of an advertisement that was a catalyst to a purchase you made. How many times did you see the ad before you made the purchase? How did the ad impact your action to make the purchase? Think of an ad you recently saw or heard that has no impact on your purchase behavior.

Explain why in the context of recency theory.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

7-29. Define brand recognition and brand recall. Explain the difference between the two concepts. Suppose a home furniture store wants to increase its brand recognition. Explain the process and media that should be used. Instead of brand recognition, suppose the furniture store wanted to increase brand recall.

How would the media and message be different? Be specific.

Student answers will vary based on their personal response. The answers should reflect the idea that certain media are better for recognition and others are better for recall, noting that the ad’s content plays a key role. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

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INTEGRATED LEARNING EXERCISES 7-30. Go to the internet and do a search for “Nielsen TV ratings.” What were the top 10 television shows last week? What other information is available at the website about the top TV shows?

Responses will depend on the time of year and the year itself.

7-31. Access Nielsen’s top ten list at www.nielsen.com/us/en/top10s.html. Identify the categories listed on the webpage. Examine each of the lists and identify any brands or media that you have accessed or purchased.

Answers will depend on when the website is visited.

7-32.

In Canada, a valuable source of information is BBM (Bureau of Broadcast Measurement). Access this website at www.bbm.ca. What type of information is available on the site? What media does the BBM cover? How can it be used to develop a media plan for Canada?

The website provides articles on a wide variety of subjects about magazines, including new digital formats. It provides an in-depth research page that an advertiser could use to match the magazine to a good or service, or type of customer.

7-33. A trade organization for magazines is the Magazine Publishers of America.

Access the association’s website at www.magazine.org. What type of information is available? How could it be used by a company wanting to advertise in magazines?

The website provides articles on a wide variety of subjects about magazine, including new digital formats. It provides an in-depth research page that an advertiser could use to match the magazine to a good or service, or type of customer.

7-34. Two websites that are important for radio advertising are the Radio Advertising Bureau at www.rab.com and the top 100 radio sites at www.100topradiosites.com. Access both sites. What information is available in each site? Discuss how the information can be used to develop an advertising plan using radio.

Rab.com is for radio advertisers. The site offers articles on a wide variety of broadcasting topics, plus special insights for radio advertisers. The 100topradiosites.com site offers access to the top 100 radio stations. It is also a venue for musicians to reach audiences. .

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7-35. A major company for outdoor advertising is Lamar Advertising Company.

Access its website at www.lamar.com. Access the outdoor advertising component of the company and locate the rates for your area or another area of interest to you. What type of outdoor advertising is available? What other products does Lamar offer? What services does Lamar offer? Write a short report on what types of advertising Lamar can provide for a company.

Local rates will vary by the area in which the student lives. The company offers a wide variety of standstill and moving billboards. Lamar also offers graphics programs and a real estate program that even includes antennas on billboards.

7-36. An excellent source of information for business advertisers is at Entrepreneur. Access the advertising section of Entrepreneur at www.entrepreneur.com/advertising. What type of information is available at this website? How can it be used by a small business? Pick an article from the page that is of interest to you. Report on the article. Provide the URL in your report.

Entrepreneur is a “how to” site that covers websites, franchises, and brand building. Student reports will vary.

7-37. The Newspaper Association of America is a trade association for newspaper.

Access the website at http://www.naa.org. What type of information is available? How could this information be used by your local newspaper to increase business?

The website offers industry news, statistics regarding newspaper circulation and advertising, discussions of public policy, tools for more effective advertising, exchanges with other media, and connections with social media.

The information provided offers advice regarding how to advertise locally in a more effective manner.

7-38. Go to the authors’ website at www.clowbaack.net/video/ads.html and watch the two television ads for NOLA The Times-Picayune, which is the New Orleans newspaper. Which TV ad did you like the best? Why? Why would a newspaper, such as The Times-Picayune need to advertise on television?

Student answers will depend on the ads they choose. The newspaper can target the types of consumers who would be most likely to subscribe.

7-39. Go to the authors’ website at www.clowbaack.net/video/ads.html and watch the TV ad for JD Bank. Locate the print ad in the “Media Planning” section .

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of the chapter. Explain the concepts of media multiplier effect and recency theory as it relates to the TV and print ads. Would the media plan for the TV ad and print ad be different? Why or why not? Could JD Bank use dynamic advertising and retargeting with the TV ad? Explain how they could use it, or why they couldn’t use it.

The media multiplier effect suggests that the combined impact of using two or more media is stronger than using either medium alone. It would take both TV and print, or some other combination of media to achieve the effect.

Recency theory states that consumers use selective attention processes as they consider advertisements. Attention is given to messages that might meet a person’s needs or wants. It is different from the media multiplier, which suggests that the power of a message increases with exposures in more than one medium. In recency theory it would be exposure at just the right time that would have the most power.

Dynamic advertising allows a company such as DirecTV to obtain consumer information from marketing research firms and combine it with the company’s data to send targeted ads to its subscribers that meet specific criteria and live in targeted areas. This may be less useful in a local market.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

7-40. Duracell Batteries http://blogclowbaack.net/2014/05/08/duracell-chapter-7/ 7-41. Geico Insurance http://blogclowbaack.net/2014/05/08/geico-chapter-7/ 7-42. Media http://blogclowbaack.net/2014/05/08/media-chapter-7/

Student Project: Creative Corner The project assigns students to identify a target audience for an advertising campaign dedicated to horse racing. Students are asked to choose media for the campaign, to develop a magazine ad, and to prepare an outdoor or billboard advertisement.

CASES Case 1

Cindy’s Auto Body Repair Shop

7-43. Discuss the pros and cons for Cindy’s Auto Body Repair Shop of each of the media presented in this chapter. If you were the media planner assigned to this account, which of the media would you recommend, and why? .

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Student answers will vary. It is a local company, which allows for local radio, television, and newspapers. There may even be a local magazine. Out-of-home presents another traditional media option.

7-44. Describe the roles that reach, frequency, effective reach, and effective frequency should play in the campaign designed to acquaint customers with this new business.

Reach is the number of people, households, or businesses in a target audience exposed to a media vehicle or message schedule at least one time during a given time period (usually four weeks). Cindy would want reach to extend to drivers and parents of teens who are more likely to have auto accidents.

Effective frequency, which refers to the number of times a target audience must be exposed to a message in order to achieve a particular objective. She would need to move drivers from remembering company to being willing to give it a try.

Effective reach is the percentage of an audience that must be exposed to a particular message to achieve a specific objective. Implied in the concept of effective reach is that some minimum number of exposures exists. Again, the goal would move from recall to the willingness to go to her shop in the case of an accident or when someone wanted work performed.

7-45. Which theory best applies to Cindy’s situation, recency theory or the threeexposure hypothesis? Explain your answer.

The three-exposure hypothesis suggests that it takes a minimum of three exposures for an advertisement to be effective. It may take three exposures for people to remember her business is there.

Recency theory states that consumers use selective attention processes as they consider advertisements. Attention is given to messages that might meet a person’s needs or wants. If a person has recently been involved in an accident, an exposure at the right time might lead the person to contact her company.

7-46. Create an effective media mix and describe the campaign you would create for the grand opening and subsequent months for Cindy’s Auto Body Repair Shop.

Student answers will vary. Look for logical combinations based on the target market.

7-47. Create the ad for Cindy’s Auto Body Repair Shop that will be placed in the local newspaper.

Student answers will vary. .

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Case 2

Running Free

7-48. Define the marketing goals for the second phase of the Running Free Dog Park promotional efforts.

The company would be seeking return business, word-of-mouth referrals, and increased usage.

7-49. How would the three-exposure hypothesis or recency theory apply to this advertising program in its initial stages? What about the second campaign after consumers are aware of the dog park?

The three-exposure hypothesis would suggest that the consumer would need to see the message several times before it would sink in. The intrusion value of the medium would be important. After awareness, the message would require several iterations to convince consumers of the value of the park.

7-50. Which traditional advertising media should the marketing team use for the second campaign? Discuss the pros and cons of each in terms of the Running Free Dog Park campaign and the desire to stimulate trial usage.

Television would be expensive but would provide powerful visual. Radio could concentrate on dogs barking happily and use creativity to inspire consumers.

Local magazines and newspapers could feature coupons and enticements.

Billboards (outdoor) would be seen by a large audience. The biggest challenge would be reaching dog owners at a reasonable cost.

7-51. How could social media and nontraditional media be used to supplement a traditional media campaign in this circumstance?

Websites favored by dog owners offer great possibilities.

7-52. Design a newspaper ad and an out-of-home ad that will be placed at Little League baseball parks in the area. Explain why having these two ads in different media is better than having two ads within the same media.

Student ads will vary. Reach would be expanded by using more than one medium, which also reflects recency theory.

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MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 7-53. The Super Bowl is the most watched program on television. Many tune in just to watch the ads. Discuss the concepts of brand recognition versus brand recall for the Super Bowl. Which is more appropriate? Why? 7-54.

Identify the primary advantage of each of the media discussed in the chapter (television, radio, out-of-home, magazines, and newspapers).

Explain why you think it is the primary advantage. For each medium, identify the primary disadvantage. Explain why. Consider an advertising campaign for a 35mm camera targeted towards individuals your age, your gender, and your ethnicity. If the company is limited to only two media, which two should it be? Explain why.

BONUS CASE

AFTER UNLEASHING Dog owners constitute a large target market. Most members share something in common: the desire to let the pet run free and unfettered. If other friendly dogs are nearby and want to play—all the better. The Unleashed Dog Park was created to meet this need.

Out-of-home advertising can be the critical component of an IMC program and, in some cases, the primary medium. To help launch the new business venture, The Pink Jacket Creative advertising agency created a feeling of expectancy and mystery with its “Unleashed Dog Park” campaign, which featured the three successive billboards shown in this section.

The first billboard displays a dog on a leash. The unfinished nature of the image helps capture interest. Next, the dog, now with an unfastened leash, moves to the center of the

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billboard, and “unleash” appears in the top-right corner. In the final billboard, the dog is on the right side of the billboard, the leash is gone, and the message “Unleashed indoor dog parks” appears. It also displays the services offered, the website of the park, and the location of the facility. In addition to billboards, street kiosks and bus wraps were used to get the message out.

The early results of the campaign were positive. Many dog owners became aware of the new indoor dog park. What followed represent common challenges in marketing communications: sustaining initial interest, moving consumers to action, and building repeat business.

In this next phase, dog owners needed to be encouraged to try the facility. They should be led to believe that the price of entry was a value. Then, over time, they can be enticed to make return visits and to offer word-of-mouth referrals to other pet owners.

Only if these objectives can be attained will the initial success of the Unleashed campaign become validated.

(1)

Define the marketing goals for the second phase of the Unleashed Dog Park promotional efforts.

The goals were sustaining initial interest, moving consumers to action, and building repeat business.

(2)

How would the three-exposure hypothesis or recency theory apply to this advertising program in its initial stages? What about the second campaign after consumers are aware of the dog park?

Recency theory would mean a person looking for a dog park would only need to see the ad once. The three-exposure hypothesis suggests that consumers would need to see the ad more times in order to remember it and give the dog park a try.

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(3)

Which traditional advertising media should the marketing team use for the second campaign? Discuss the pros and cons of each in terms of the Unleashed Dog Park campaign and the desire to stimulate trial usage.

Student answers will vary. Television is probably too expensive; radio may offer the chance to reach dog owners by format; newspaper would not reach young people; only a local magazine would work for this campaign, and it would be expensive and not reach a wide audience. Outdoor probably has the best chance because people have seen the message there before.

(4)

How could social media and nontraditional media be used to supplement a traditional media campaign in this circumstance?

Social media might be able to connect dog owners as fans of the park.

(5)

Design a newspaper ad and an outdoor ad that will be placed at little league baseball parks in the area.

Student ads will vary. They should incorporate children/families into the message appeal.

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Chapter

8

Digital Marketing CHAPTER OBJECTIVES Students should be able to answer the following questions: 8-1 8-2 8-3 8-4 8-5 8-6 8-7 8-8

What is digital marketing?

How has the transition to Web 4.0 affected the field of marketing communications?

How can e-commerce programs and incentives build a stronger customer base and overcome consumer concerns at the same time?

How do mobile marketing systems enhance digital marketing programs?

What digital strategies do marketing professionals employ?

What types of web advertising can companies use to reach consumers?

What is a search engine optimization strategy?

How can companies successfully conduct digital marketing programs in international markets?

OVERVIEW This section of the textbook explains the additional elements needed to fully reach a target market and all potential customers.

Digital marketing programs are detailed in this chapter.

Social media messages are the subject of Chapter 9.

Alternative marketing channels are described in Chapter 10.

The first section of this chapter examines the evolution to Web 4.0.

Next, e-commerce programs, including the incentives used to attract customers as well as consumer concerns with internet shopping are presented.

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Then, the explosion in the use of smartphones also leads to an examination of mobile marketing techniques. Digital strategies designed to maximize a company’s reach are described.

Web advertising programs receive attention along with search engine optimization techniques.

Finally, international implications of these activities are drawn.

Choice Marketing Choice Marketing is an example of a local agency that has adapted to the national and international trends in marketing communications noted throughout the book.

Questions for Students: 1. What is C-to-C marketing? Why is it important?

2. Would you enjoy working in a small, local agency such as this?

3. What would be the advantages and disadvantages of working in a small agency such as Choice Marketing?

Objective 8.1:

What is digital marketing?

Digital Marketing Digital marketing combines all of the components of e-commerce, internet marketing, mobile marketing, and social media.

Digital marketing includes anything with a digital footprint.

This chapter presents the various concepts related to digital marketing.

Objective 8.2:

How has the transition to Web 4.0 affected the field of marketing communications?

Web 4.0 Web 4.0 has emerged, with key characteristics of customer engagement, cloud operations, and Web participation as necessities.

Figure 8.2 depicts the stages of Web 4.1 to Web 4.0. .

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Companies cannot just sell products to individuals and then allow customers to post reviews.

Engagement is the business model for Web 4.0.

Many companies employ people to monitor Twitter and other social media sites and to develop a web presence.

Objective 8.3:

How can e-commerce programs and incentives build a stronger customer base and overcome consumer concerns at the same time?

E-Commerce E-commerce focuses on selling goods and services over the internet. Many types of ecommerce businesses exist, ranging from click-only operations that sell entirely online to bricks-and-clicks that supplement physical store operations with an online presence.

E-commerce involves both businesses selling to consumers (B2C) and businesses selling to other businesses (B2B).

Building a Successful e-Commerce site Figure 8.3 notes the characteristics of successful e-commerce sites.

Search-Optimized Design Few consumers go directly to a retail website. Instead, most type the product into a search engine.

Regardless of the final purchase location, e-commerce sites should be designed to optimize search results.

The title tag presents a short line of meta-copy, which is extremely important to search engines.

Customer-Centric Design Effective e-commerce sites feature customer-centric designs, which allow individuals to easily locate merchandise.

Product descriptions are important to both a customer-centric design and to search engines.

Pictures garner attention more effectively than words.

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Mobile-Optimized Design Most sites have moved to an adaptive design, which automatically adjusts content to the screen size of the device being used to access the webpage.

Adaptive design mobile-optimization increases interaction and conversions.

Mobile-optimized design leads to quicker purchases and better rankings on search pages.

Consistent Customer Experiences Today’s consumers expect a consistent positive experience every time they access a web site.

Positive, consistent customer experiences and quick load-time of pages are key.

Channel Integration Channel integration becomes essential when the business sells through additional channels beyond the web. A company that offers a printed catalog or has a retail store should match the printed catalog with the web catalog.

To encourage online shopping, Sears Holdings expanded its online offerings to include products not found in the stores or in catalogs.

Brand Engagement Blogs, feedback applications, and customer reviews provides ways for e-commerce sites to encourage customers to interact with the website. Facebook and Twitter allow customers to like a brand and become fans. Involvement in social causes that involve customers also creates brand engagement.

Part of brand engagement involves personalization and customization.

Personalization welcomes individuals by name as they access a site.

Customization features also include the ability to: • Locate the nearest retail store on a website or via mobile phone • Print coupons or other promotions from the website or use a mobile phone to access discounts at the retail store • Access information on the web site or via a mobile phone that an item is in stock prior to making a purchase

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Shopping Cart Abandonment Greg Hintz of Yahoo! Shopping offers these suggestions to keep customers from abandoning a shopping cart: • Show any additional costs, such as shipping and handling, upfront so there are no surprises when the customer reaches checkout.

• Make checkout easy and allow customers to make a purchase without registering a user name and password.

• Make it easy for customers to enter discount codes from coupons, gift certificates, and other promotions.

• Provide a checkout procedure that is safe and the customer feels can be trusted.

Question for Students:

How often do you shop online rather than in a conventional store?

E-Commerce Incentives Three incentives consumers consider when making a purchase online are 1. Financial 2. Convenience 3. Value-added Financial incentives are used because when consumers or businesses buy over the internet, the company often saves time and money. The e-company is then able to pass along savings.

A firm that fills orders via the internet saves in several ways, including the following: • Lower long-distance telephone bills • Reduced shipping costs, because the costs are passed along to the buyer • Decreased labor costs associated with stocking shelves • Smaller personnel costs (sales force) paid for waiting on in-store customers In business-to-business settings, purchases via e-commerce also make it possible to offer financial incentives because the company may be saving the cost of a sales call.

Cyberbait is a lure or attraction that brings people to the website. Various forms are displayed in Figure 8.4.

Convenience incentives are highly attractive for many consumers and businesses, because • Instead of making a trip to a retail store, a consumer can place the order while remaining at home.

• The order can be placed at any time.

• Seeking information about various products can be quicker and easier on the internet.

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To get consumers to return, a website must be updated and changed regularly. It is important to keep the site current.

Internet searches provide convenience. For each search, the most frequently given reasons for selecting the method was that it was easier, more convenient, and quicker.

Value-added incentives are used to cause consumers to change purchasing habits over the long term. The value-added incentive may be personalized shopping, where the software system recognizes patterns in the customer's purchasing behaviors.

The specialized software can be used to inform customers about special deals.

Figure 8.5 depicts value-added incentives: • Customized shopping • Unique product information • Mobile apps • Social media engagement • Exclusive shopping • Tutorials, user tips, and repair instructions Offline Marketing Integration Offline marketing efforts should be integrated with the e-commerce site.

Question for Students: Objective 8.4:

Are you concerned with online security issues?

How do systems enhance digital marketing programs?

Mobile Marketing Forty-three percent of the U.S. population owns a smartphone. Estimates suggest the figure will rise to almost 60 percent.

Mobile marketing improves understanding of how individuals use mobile devices. It provides a social device that links individuals to social networks, thereby allowing individuals to post comments, pictures, and videos and read the thoughts shared by others.

Further, a mobile device offers a method for shopping.

Effective mobile marketing involves understanding the social and shopping natures of mobile phone users and incorporates it into the firm’s mobile marketing strategy.

Figure 8.6 notes ways mobile marketing differs from other media.

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Companies take advantage of mobile phones by sending text message ads to consumers.

Voice recognition adds another key advantage to mobile devices.

A new type of mobile advertising gaining popularity is in-app advertisements.

Some apps are designed to engage consumers with the brand.

Other apps can be designed to streamline the business use or the purchasing process.

QR codes, watermarks, and 2D barcodes directing consumers with a smart phone to a website now appear in magazines. Almost every magazine features some type of action code.

Action codes offer an excellent method of collecting data and building opt-in lists for permission marketing. Other uses for action codes are show in Figure 8.7.

Geo-targeting represents a unique and highly attractive feature of mobile marketing. By downloading an app, a fast food restaurant such as McDonald’s can recognize a person’s location and show him how far he is from the nearest outlet and provide walking or driving directions to that unit.

Many smartphone owners have check-in services at Foursquare, Gowalla, Facebook Places, and Twitter geolocation.

Objective 8.5:

What digital strategies do marketing professionals employ?

Digital Strategies Figure 8.8 identifies the primary digital marketing strategies: • • • • • • •

Interactive marketing Content and native marketing Location-based advertising Remarketing Behavioral targeting Blogs and newsletters Email marketing

Interactive Marketing Interactive marketing is the development of marketing programs that create interplay between consumers and businesses.

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The programs feature two-way communication and customer involvement. The internet is an ideal medium.

Interactive marketing assists in targeting individuals with personalized information.

It engages the consumer with the product and company.

Content Marketing and Native Advertising Content marketing, or branded content, consists of providing useful information and product-use solutions to potential customers. Figure 8.9 highlights the characteristics of content marketing.

It focuses on authentic content.

It should be relevant and answer problems faced by customers or in some way improve their lives.

It utilizes frequency.

Native advertising is hosted on a third-party site. It appears to look like an article that provides useful information that solves a problem, but the solution depends on purchasing a particular brand of a product or service.

Native advertising is paid advertising. It appears in the form of an article or blog piece.

An alternative to branded content is sponsored content, whereby a brand sponsors the content of a blogger or related website. Marketing professionals hope that potential customers will see the information as valuable, share it with others, and most importantly, purchase the sponsor brand.

Location-Based Advertising Geo-targeting involves reaching customers where they are located based by contacting their mobile communication devices Figure 8.10 displays the different forms of location-based advertising and the approximate percentage quantity of each.

Creating successful geo-targeting campaigns requires two actions. First, consumers should be in control of the engagement. They opt-in for the app.

Second, the brand should provide a discount or something of value to consumers.

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Remarketing Remarketing re-engages individuals who have visited a site but did not make purchases.

Remarketing ads should be customized to the products, or similar products, that were viewed on a website or those placed in a shopping basket or on wish list Behavioral Targeting Behavioral targeting utilizes web data to identify these individuals. Behavioral targeting can occur in three different ways. It can be based on • • •

Pages a person visits on the Internet Keyword searches or content read Past visits to a site

Blogs and Newsletters Blogs are online musings that cover a wide range of topics. Some permit visitors to post

comments; others do not.

A company-sponsored blog provides a number of potential benefits; however, analysts stress the importance of identifying a specific reason for the blog before launching it.

For small businesses, blogs provide a relatively inexpensive way to communicate with customers.

Information provided on blogs and in newsletters should be authentic and offer something individuals want to share.

Email Marketing In Figure 8.11 offers a number of suggestions for developing successful email campaigns.

Essential activities include the following: • • • • •

Behavior targeting (browsing history, demographics, abandoned carts, past purchases) Dynamic web cropping Event targeting Weather targeting Geo-targeting

Web analytics means analyzing where consumers went on a brand's website.

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Benefit include • Integrating with website content management • Integrating with a customer relationship management program Email newsletters help to create brand awareness, drive traffic to a website, and spur sales.

A newer email tactic involves weather-targeting. With GPS and location indicators on mobile phones, companies tie the weather to an automated drip campaign.

Newsletters are especially beneficial when consumers sign up to receive them.

The newsletter should offer value to recipients.

Web Advertising Web advertising seems to be especially effective at reaching younger, more Internet-savvy consumers.

Figure 8.13 indicates the percentage of online advertising dollars allocated to each of the primary formats.

Banner Advertising Currently banner ads can be embedded with videos, widget applications, or targeted display ads to increase the chances viewers will see and click on the icon.

The newest online technology, which has been taken from paid search auction systems, allows advertisers to display a banner ad to only individuals the company chooses.

Widgets Widgets are mini-applications embedded in a banner ad that permit a consumer access to some form of dynamic content that is provided by an external source other than the company where the ad resides.

Widgets provide individuals with personalized access to web information or functionality from any device connected to the internet.

Geo-target ads offer another version of banner advertising that have increased in popularity.

These ads are presented only to individuals who log on to a website in a particular region.

Impact of Online Advertising Banner ads are still popular even as click-through rates decline.

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Advertisers have begun banking on the new technologies to increase response rates and to deliver targeted messages to individuals most likely to respond.

To improve response rates, advertisers have created increasingly complex targeting campaigns that utilize various web metrics.

Offline Advertising To build a brand’s reputation and brand loyalty, online advertising should be integrated with offline branding tactics that reinforce each other to speak with one voice. This process, brand spiraling, involves the use of traditional media to promote and attract consumers to a website.

Marketers design television, radio, newspapers, magazines, and billboards that encourage consumers to visit the firm’s website in an effort to maintain a uniform brand presence and advertising message.

Tailor-made websites can be used with direct mail and email campaigns. These sites are accessed through personalized URLs, called PURLs. Objective 8.7:

What is a search engine optimization strategy?

Search Engine Optimization (SEO) Search engine optimization is the process of increasing the probability of a particular company's website emerging from a search.

The three methods are 1. a paid search insertion 2. organic or natural emergence 3. paid search ads A paid search insertion comes up when certain products or information are sought.

A natural or organic emergence of the site involves developing efficient and effective organic results that arise from a search process. Results from this approach can be impressive.

Paid search ads, includes small text boxes that pop up when a particular word is typed in or it can be paid link boxes at the top or side of a search result Search ads can be effective for local businesses.

Objective 8.8: .

How can companies successfully conduct digital marketing programs in international markets?

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International Implications The major advantage of e-commerce over the brick-and-mortar retail store is the ability to reach consumers everywhere, even in other countries.

Shipping Issues Making shipping arrangements is one important task. Internet companies must examine both export and import laws in the countries involved.

Communication Issues The company must have someone who understands both the language and culture of the target area in order to ensure no one is offended by a company’s marketing efforts.

Technology Issues The most difficult challenge companies face in the international market is the technical side of the e-commerce site, especially software compatibility.

A major key to successful global e-commerce is a coherent IMC strategy utilizing local input from the various countries involved.

MyMarketingLab Go to mymktlab.com to complete the problems marked with this icon .

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

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IMPLICATIONS FOR WEB MASTERS (Note to professors— these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

Consider yourself to be a major player on the company’s marketing team.

Ask to be included in marketing meetings involving the sales staff, promotions, advertising programs, and any other item that might touch a company’s website.

Keep up with the technology. Techniques for developing greater internet sophistication routinely appear, and your company should try to stay on the cutting edge.

Avoid the pitfalls of bad websites.

Carefully study the marketplace to know where to advertise on the internet and who can offer your company quality link options. The marketing team may be less informed about web information and know more about traditional advertising venues. It is your job to educate everyone about how to effectively use the internet. Take this responsibility seriously.

Build a strong relationship with the database manager. The two of you can combine to provide extremely valuable information to the company and the marketing department.

Be willing to show the company how to expand sales through direct marketing programs, combination approaches with retail operations, and business-to-business selling plans. Build websites that accommodate business needs for information with efficiency and ease of selling.

Investigate every opportunity to move into international e-commerce. Build toward a future in which national boundaries do not inhibit the growth and expansion of your firm’s business.

REVIEW QUESTIONS 8-1.

Define digital marketing.

Digital marketing combines all of the components of e-commerce, internet marketing, and mobile marketing. Digital marketing includes anything with a digital footprint.

8-2.

How has Web 4.0 influenced the field of marketing?

Web 4.0 has the key characteristics of customer engagement, cloud operations, and web participation as necessities. Companies cannot just sell products to individuals and then allow customers to post reviews. Engagement is the business model for Web 4.0.

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8-3.

Describe e-commerce, search-optimized design, and customer-centric design.

E-commerce is selling goods and services on the internet. E-commerce components include channel integration and brand engagement. Search-optimized design means that e-commerce sites should be designed to optimize search results. Customercentric design allows individuals to easily locate merchandise.

8-4.

What is cyberbait? What are the three main forms of cyberbait?

Cyberbait is some type of lure or attraction that brings people to a company’s Web site. The three main forms are 1. Financial 2. Convenience 3. Value-added

8-5.

What is adaptive design?

Adaptive design automatically adjusts content to the screen size of the device being used to access the webpage.

8-6.

What is mobile marketing?

Mobile marketing improves understanding of how individuals use mobile devices. It provides a social device that links individuals to social networks, thereby allowing individuals to post comments, pictures, and videos and read the thoughts of others.

8-7.

What is interactive marketing?

Interactive marketing is the development of marketing programs that create interplay between consumers and businesses rather than simply sending messages to potential customers.

8-8.

Describe content marketing and native advertising Content marketing consists of providing useful information and product-use solutions to potential customers. Native advertising is paid advertising the appears in the form of a blog or an article.

8-9.

What is geo-targeting, or location-based advertising?

Geo-targeting involves reaching customers where they are located based by contacting their mobile communication devices

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8-10. What is remarketing?

Remarketing re-engages individuals who have visited a site but did not make purchases.

8-11. What is behavioral targeting?

Behavioral targeting utilizes web data to identify these individuals. Behavioral targeting can occur in three different ways. It can be based on pages a person visits on the internet, keyword searches or content read, or past visitors to a site.

8-12. How are blogs and newsletters used in marketing program?

A company-sponsored blog provides a number of potential benefits; however, analysts stress the importance of identifying a specific reason for the blog before launching it. For small businesses, blogs provide a relatively inexpensive way to communicate with customers. Information provided on blogs and in newsletters should be authentic and offer something individuals want to share.

8-13. Identify and describe the elements of an effective email campaign in marketing.

Essential activities include (1) integrating with other marketing channels, (2) being based on eeb analytics, and (3) effective e-newsletters.

8-14. What primary forms of online or web advertising are used by marketing teams?

The four are banner or display ads, classified ads, purchase spots on search engines, and online media/video ads.

8-15. What is a widget?

Widgets are mini-applications embedded in a banner ad that permit a consumer access to some form of dynamic content that is provided by an external source other than the company where the ad resides.

8-16. What is brand spiraling?

Brand spiraling is the practice of using traditional media to promote and attract consumers to an online website. The primary goal is to build an online brand presence through an offline technique.

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8-17. What is a personalized URL or PURL? A PURL contains a personalized preloaded webpage that contains the customer’s personal data, contact information, purchase behavior, and previous interactions with the company.

8-18. What is meant by the term search engine optimization (SEO)? How can it be accomplished?

Search engine optimization is the process of increasing the probability of a particular company's website emerging from a search.

The three methods are 1. a paid search insertion 2. organic or natural emergence 3. paid search ads 8-19. What challenges must be overcome to establish an international e-commerce operation?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

There are obstacles to selling across national boundaries, including the following: • • • •

Global shipping problems due to a lack of sufficient infrastructure Differences in payment methods Communication issues Technology issues, including varying degrees of Internet capability in countries

CRITICAL THINKING EXERCISES 8-20. Examine the characteristics of Web 1.0 to Web 4.0. Discuss how the internet affects your daily life. Interview individuals in each of the following age categories concerning their use of the internet: 30-39, 40-59, 60+. Relate their conversations to Web 1.0, Web 2.0, Web 3.0, and Web 4.0.

Student answers will depend on the individuals they interview. Comparisons should be drawn between the various age groups, especially comfort levels with using the web.

8-21. Examine the value-added incentives listed in Figure 8.5 and discussed in the chapter. Rank these value-added incentives in terms of your personal online .

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shopping experience. For each incentive, discuss its impact on your shopping behavior and explain why it is important to you or not important.

The incentives include • Customized shopping • Unique product information • Mobile apps • Social media engagement • Exclusive shopping • Tutorials, user tips, and repair instructions Student answers will vary by the incentives they choose to be most important.

8-22. Mobile marketing has become an important component of digital marketing campaigns. Assume you are a marketing intern for a local book, comic and video store. Describe how you could use mobile marketing to drive website visits as well as store visits. Be specific in your ideas.

Student answers will depend on the choices of books or comics.

8-23. Look through the digital marketing strategies identified in Figure 8.7. Discuss each strategy as it relates to your online experience. Which strategies are the most successful at reaching you? Why? Which are the least effective? Why? The strategies include • • • • • • •

Interactive marketing Content and native marketing Location-based advertising Remarketing Behavioral targeting Blogs and newsletters Email marketing

Student answers will depend on the strategies the value the most.

8-24. Describe in your own words each of the digital marketing strategies listed in Figure 8.8. Assume you are an intern working in the digital marketing department of small chain of sporting goods stores in the South. Describe how you could use each of the digital marketing strategies in a digital marketing campaign. Be specific.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board. .

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Digital marketing strategies are • • • • • • •

Interactive marketing Content and native marketing Location-based advertising Remarketing Behavioral targeting Blogs and newsletters Email marketing

Student answers will depend on the strategies they choose.

8-25. Do you have any apps on your cell phone? If so, describe the apps you have and why you downloaded the app. Is any advertising connected with the app?

What are your thoughts about apps that utilize some type of advertising?

Student answers will depend on their apps and their favorites among those apps.

8-26. Interview five individuals of different ages about blogs. What percent have read, launched, or participated in blogging on the Internet? What was each person’s motivation? What is your experience with blogs? If you have never read or contributed to a blog, why not?

The answers will depend on who is interviewed. Most of the older people probably have no experience.

8-27. Describe in your own words each of the email marketing tactics presented in Figure 8.11. Assume you are a marketing intern for a small chain of trendy, upscale clothes targeted towards professional females, ages 25 to 40. Discuss how you could use each of the email marketing tactics. Be specific in terms of reaching the clothing store’s target audience.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Tactics include • • • .

Behavior targeting (browsing history, demographics, abandoned carts, past purchases) Dynamic web cropping Event targeting Page 8-18

• •

Weather targeting Geo-targeting

INTEGRATED LEARNING EXERCISES 8-28. Best Buy was a late e-commerce entrant, but now has developed a strong ecommerce component. The key to Best Buy’s success, according to Barry Judge, vice president of marketing, is, “We do a lot of one-to-one marketing.

We’re not overly focused on where the consumers buy.” The website carries every product that Best Buy stocks. It uses personalized services, along with convenient pick-up and fair return policies to entice consumers to shop.

Consumers can purchase items on the internet and either have them shipped directly to them or pick them up at the closest store. Shoppers can use the internet to see if Best Buy stocks a particular item, to determine what the item costs, and to gather product information. What is the advantage to this strategy? Access the website at www.bestbuy.com. Evaluate it in terms of ease of use, product information, and then locate the Best Buy closest to you.

Next, access Tiger Direct’s website at www.tigerdirect.com. Compare it to Best Buy’s site. Select a product, such as a camcorder, to compare the two websites.

Student answers will vary based on their locations and the products they choose.

8-29. Pick one of the following product categories and access the websites of two companies that sell the product. What types of financial incentives are offered on each company's website to encourage you to purchase? What about the other two types of incentives, greater convenience and added value? What evidence do you see for them? Compare and contrast the two companies in terms of incentives offered. Provide the URLs of the two websites and screenshots to illustrate your examples. a. Contacts or eyeglasses b. Water skis c. Camping supplies d. Cameras Student answers will vary dependent on the sites visited.

8-30. Choose two of the following e-commerce sites. Discuss each of the characteristics of successful e-commerce sites listed in Figure 8.3. Compare and contrast the two sites for each of the characteristics and use screenshots to illustrate your evaluations. a.

Travelocity (www.travelocity.com) b.

Wells Fargo Bank (www.wellsfargo.com) .

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c. d. e. f.

The Knot (http://www.theknot.com/) Bluefly (www.bluefly.com) Diesel (www.diesel.com) Quiznos (www.quiznos.com)

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

8-31. Go to one of your favorite e-commerce sites. If you do not have a favorite, do a search and pick one that looks good to you. Provide the URL of the e-commerce site; then discuss each of the characteristics of a successful e-commerce site listed in Figure 8.3 as it relates to the site you picked. Use screenshots to illustrate your points.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

8-32. Locate the website of a local lawn service in your area. Provide the URL and a screenshot of the website. In your own words, describe the differences between branded content, sponsored content, and native advertising. Discuss how the lawn service could use branded content. What type of articles should the owner write? Using a search engine, locate two other websites that would be good for sponsored content. Provide the URLs and discuss why you think each of those sites would be good for sponsored content. How could the lawn service use native advertising? Be specific.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

8-33. Blogs provide opportunities for both individuals and businesses to share information, thoughts, and opinions. Go to Google Blog Search at www.blogsearchengine.com. Type in a topic that you are interested in that is related to advertising and marketing communications, such as “advertising to children.” Locate three blogs on the topic you choose. Discuss who initiated the blog and the value of the information on the blog. Provide screenshots of your search results page and the landing page of each blog you access.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

8-34. Access each of the following search engines. For each one, discuss how it handles paid search advertising when you type in a search term such as “running .

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shoes.” Instead of “running shoes” you can type in another search term that interests you. What ads do you see as display ads, text ads and organic search results? Discuss the differences among the four search engines. Which one do you like the best? Why? Be sure to make screenshots of your original search results. a.

Google (www.google.com) b.

Yahoo! (www.yahoo.com) c.

AOL Search (www.search.aol.com) d.

Bing (www.bing.com) They all feature paid ads as “sponsored links.” All four have these on the right side of the screen. The search results sites are on the left.

8-35.A high percentage of internet traffic begins with someone conducting a search. Compare and contrast the concepts of paid search insertions, organic search results, and paid search ads from the perspective of a consumer wanting to locate websites that provide information and products on camping. Compare and contrast paid search insertions, organic search, and paid search ads from the viewpoint of Coleman, a company that sells camping supplies and equipment.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

8-36. Use a search engine to locate three digital advertising agencies. For each agency, describe what type of digital marketing services the agency provides.

If you owned a small restaurant chain, which agency would you hire for your digital marketing program? Why? (Provide the URL for each agency in your response as well as pertinent screenshots.)

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

8-37. Access the internet and locate four banner ads. Copy and paste the banner ads in a Word document. Evaluate each banner ad in terms of design and appeal. Provide a screenshot of the landing page and discuss each landing page. Of the four banner ads, which yielded the best results in terms of providing useful information on the landing page? Why? Student responses will vary based on the ads they choose. These can be shared in class for discussion purposes.

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Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

8-38. Advil http://blogclowbaack.net/2014/05/12/advil-chapter-8/ 8-39. Digital Marketing Strategies http://blogclowbaack.net/2014/05/12/digitalmarketing-strategies-chapter-8/ 8-40. Search Engine Optimization http://blogclowbaack.net/2014/05/12/seochapter-8/

Student Project: Creative Corner The assignment is for students to work with the Bluefly website to create various programs, including brand spiraling, a social network presence, a viral marketing campaign, and a search engine optimization program.

CASES Case 1

Ski and Snowboard Specialists

8-41. What roles might mobile marketing and interactive marketing play in Ski and Snowboard Specialists’ efforts?

Mobile marketing could direct enthusiasts to the location.

8-42. How can Ski and Snowboard Specialists offer cyberbait to new customers? To returning customers?

Financial incentives could be used to give returning customers discounts; convenience could make booking easy; value added would be additional enticements.

8-43. Explain how the company could take advantage of content marketing and/or native advertising.

Messages can be tailored to those who enjoy the sport in blogs and other materials.

8-44. Discuss how location-based advertising could be featured by Ski and Snowboard Specialists.

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Customers would be reached where they are when the weather becomes favorable or some special enticement is being offered.

8-45. Explain how remarketing and behavioral targeting could help increase sales for Ski and Snowboard Specialists.

Remarketing would be used for those who visited but did not make purchases.

Behavioral targeting would track those who have visited similar pages or other web history to find potential customers.

8-46. Would a blog be useful for Ski and Snowboard Specialists? If so, how? If not, why not?

Absolutely. Blogs could talk about the sport itself as well as times to visit.

8-47. Describe the tactics you would use to make the best use of search engine optimization for Ski and Snowboard Specialists.

Student answers will vary.

Case 2

Runza Restaurants

8-48. Access Runza Restaurant’s website at www.runza.com. Describe the content on the site. Examine the characteristics of successful e-commerce sites given in the chapter. Discuss each characteristic as it relates to Runza’s website. What is your overall evaluation of the website?

The site offers standard materials found for restaurants, including a menu, nutritional information, and about the company. It also provides information about franchise opportunities and employment possibilities.

The site emphasizes consistent customer experiences across restaurants. There is no specific channel integration program. Brand engagement occurs through the community page and “runzatic” page on the site. Customization is possible through a sign-up program. The site does not deal with shopping cart abandonment.

8-49. What types of cyberbaits do you see on the Runza website? Give specific examples of each.

The site offers financial incentives through online coupons. It provides for convenience through a store locator.

8-50. Explain how a Runza Restaurant could use mobile marketing. Provide details.

A store locator and pre-ordering app. .

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8-51. Discuss how location-based advertising could be valuable to an individual Runza Restaurant manager. Which form of geo-targeting would you use? Why? Customers can become engaged through the community and “runzatic” pages.

They can obtain value through coupons and frequent purchase discounts.

8-52. Explain how behavioral targeting would be useful to an individual Runza Restaurant manager. Design a behavioral targeting program that could be used

by Runza.

Behavioral targeting utilizes web data to identify these individuals. Behavioral targeting can occur in three different ways. It can be based on pages a person visits on the internet, keyword searches or content read, or past visitors to a site.

All three would apply to Runza.

8-53. Design a banner ad for Runza Restaurants.

Student banners will differ but should include the logo and key colors.

8-54. Examine Runza’s website again. Make a list of ten words that could be used for a search engine optimization program. Rank the words in order from what you think would be the best search terms to the least attractive. Justify your list and ranking.

Student choices will vary. Common answers would include runza, fast food, ethnic food, sandwich, and others. Ask students to share their answers and rationale.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 8-55. Define each of the email marketing tactics presented in this chapter. Access the website of Calvin Klein (www.calvinklein.com ). For each email marketing tactic, describe an email marketing campaign that could be used

by Calvin Klein. Identify the specific target audience and the manner in which Calvin Klein could use the tactic.

8-54. Blogs provide an opportunity businesses to share information, thoughts, and opinions. Identify the benefits of a company blog for the business and for its customers. Discuss the ingredients for creating a successful company blog.

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Bonus Case

SHELLY’S CONNECTION K. Michele Kacmar (who goes by Shelly) loved love. She enjoyed introducing people to see if any kind of spark would fire. She had “set up” several friends who wound up dating and even marrying each other. Shelly’s other major talent was web design. These two skills led Shelly to believe her calling was to set up an internet dating service. She created one for the Los Angeles area, where she lived, called “Shelly’s Connection.”

Shelly’s Connection had two twists. First, the site was designed only for local people, those living in Los Angeles and the surrounding counties. She was not trying to set up a national service. Second, besides simply making high-tech introductions, Shelly’s Connection offered social events. These included evening “meet ups,” where people sipping coffee or soft drinks circulated through the room and visited with five to ten potential dating partners in a 90-minute time span. Also, Shelly’s Connection had singles parties and mixers where people who had expressed interest in three or four potential dating partners could pay a cover charge and then attend the event; light snacks were served, dance music was played at a volume low enough for people to talk, and a cash bar was available. Shelly’s marketing idea was to create a “fully integrated” dating program.

Internet dating services are not new. Two of the more popular ones are eHarmony and Chemistry.com. They are plagued by several problems. First, unless properly screened, married people sign up to start dating “on the side.” Second, some people confuse dating services with online escort services and prostitution rings. Third, most dating services offer nationwide prospects rather than just local arrangements. Sifting through all of the

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clients to find one close to home can be a problem. Fourth, some people shy away from the services because they feel like joining makes them seem “desperate.”

To combat these problems, Shelly believed a high-quality advertising campaign would be needed. The ad should clearly spell out what type of service she offered, warn away married people, and emphasize that dating and meeting people is time-consuming.

Shelly’s Connection was set up to offer convenience, help people who want to use their spare time wisely, and have fun. Armed with some venture capital from local investors, Shelly’s Connection began operations. Time would tell if love would bloom and Shelly would enjoy a successful Internet business operation.

Source: Based on Ray Jutkins, “13 Ideas That Could Lead to Successful Web Marketing,” Advertising Age’s Business Marketing 84, no. 6 (June 1999), p. 27.

(1)

Are there any other potential problems Shelly has not considered in creating her company?

Competition and hackers.

(2)

Which media should Shelly use to promote her website?

Local television, radio, newspaper, and billboards are possibilities. Also, there may be a local Los Angeles magazine of some type.

(3)

Create the ad copy Shelly's Connection should use in its advertisements. Also, write an effective tag line for the ads.

Student ads will vary.

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Chapter

9

Social Media CHAPTER OBJECTIVES Students should be able to answer the following questions: 9.1 9.2 9.3 9.4 9.5

What constitutes a social network?

What are the unique characteristics of the primary social media websites?

What is the nature of social media marketing?

Which social media marketing strategies do companies employ?

How can marketers use social media strategies in international operations?

OVERVIEW The continual growth of social network websites presents opportunities and challenges to marketing departments from the smallest single-family business to major corporations.

Instant communication creates the potential to create buzz and excitement in a short period of time. More sophisticated interactions with customers can be readily achieved.

Negative word of mouth and other developments can quickly damage a brand across a wide range of customers and the general public.

Wholly Guacamole A new production process allowed Wholly Guacamole to expand its network of business and individual customers.

The company uses social media in combination with traditional media to expand its reach.

Questions for Students: 1. Have you heard of or purchased Wholly Guacamole products?

2. Do you think the company has made effective use of tie-ins with other products and businesses?

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Objective 9.1:

What constitutes a social network?

Social media includes any digital tool or venue that allows individuals to socialize on the web.

A social network is a social structure of individuals and/or organizations that are tied together in some manner.

Social media marketing is the utilization of social media and/or social networks to market a product, company, or brand.

Social Networks General social networking sites are broadly based and are designed to appeal to all demographics, regardless of gender, age, race, income, or education (Twitter).

A niche social networking site focuses on a specific interest, hobby, or demographic group (Our Time, Farmers Only).

Social bookmarking sites allow individuals to share bookmarks of websites.

Figure 9.1 identifies types of social networking sites.

Objective 9.2:

What are the unique characteristics of the primary social media web sites?

Social Media Sites Figure 9.2 depicts characteristics of social media users.

Women tend to use social media more than men; blacks trend toward using Twitter and Instagram.

Facebook Facebook, the largest social media site, houses more than 1.2 billion users worldwide.

Facebook generates almost $2 billion in advertising revenue.

Facebook recently expanded its advertising services to allow marketers to target customers on mobile devices based on an individual’s activity outside of Facebook, for “custom audiences” The number of teen users has declined more than 25 percent in the last three years.

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The number of older consumers, individuals 55 years old or older, increased 80 percent to 28 million.

A behavioral targeting tool—called custom audiences—allows marketers to gather information from the company’s websites and applications, and then uses that data to target individuals when they visit Facebook.

Question for Students:

What do you think is the future of Facebook?

Instagram Instagram is a mobile photo and video social sharing network with more than 200 million users.

Instagram users tend to be young, wealthy, and female. Almost 60 percent visit Instagram every day.

The two most popular marketing tactics on Instagram are contests and crowdsourcing for photos.

A new trend in retailing involves individuals uploading personal pictures wearing a particular brand of clothing, which provides a consumer-to-consumer recommendation.

Twitter Twitter’s users are more racially diverse than the internet as a whole or Facebook.

Approximately 41 percent of the 54 million Twitter users are of a minority race.

Marketers may monitor what customers are saying about a company or brand by using Software, such as Tweetscan or Summize, to locate a brand or company name mentioned in tweets.

Twitter works well for local businesses.

Figure 9.3 offers tips for using Twitter.

Pinterest Pinterest is bulletin-board style social site that allows users to post photos and imagebased articles about events, special interests, or hobbies.

Currently, 70 million people use Pinterest and 70 percent are female.

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YouTube Figure 9.4 summarizes trends in video sharing.

Some videos depict how consumers interact with brands.

Consumer product reviews are also popping up on YouTube.

Some consumers enjoy modifying or re-creating ads they see.

YouTube can be used to show how to use or repair a product.

Branded videos tie posts by individuals to various companies and products.

Objective 9.3:

What is the nature of social media marketing?

Social Media Marketing Figure 9.5 identifies some of the more common reasons for engaging in social media marketing.

Two frequently reported rationales are to stay in engaged with customers and increase brand exposure to potential customers.

To do so, most brands utilize multiple social media networks.

Increase Traffic and Enhance Brand Image Social media can also drive traffic, normally to the brand’s website.

To enhance a brand’s image. Social media should offer a venue for solving problems, gathering useful information, and gaining insights.

Improve Search Rankings Social media can boost organic search rankings with search engines.

When individuals more frequently mention the brand name on social media networks, the ranking improves.

When the content or comments made about the brand fit the search terms, then the quality of those interactions are increased and various search engines give more credibility to the brand.

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Customer Intelligence Social listening, or listening to social chatter, often provides enlightening information to marketing professionals.

Comments can be either negative or positive, but in most cases they will be honest opinions.

Figure 9.6 displays other functions related to social listening.

Social listening can be an excellent source of ideas for branded content.

A trend being examined by marketing professionals involves wearable devices, such as mobile wallets and eye glasses that also serve as cameras.

Marketers use social listening to detect patterns or shifts in views of consumers.

Social listening patterns assist in identifying customer advocates. These brand advocates often exhibit three characteristics: • • •

Behavioral commitment Emotional connection Quality communication skills

Increase Sales and Build Brand Loyalty Developing brand loyalty and increasing sales are the ultimate goals of any marketing program, including social media marketing.

Question for Students:

How often do you use social media to investigate companies or brands?

L’OREAL L’Oreal provides an excellent example of successful social media marketing.

The company employs differing marketing strategies and unique Facebook pages for each country in which products are sold.

Marketers seek to create content that will lead to social conversation.

Social media works best when customers encounter it before and after a purchase.

L’Oreal’s marketers believe that social media provides a unique venue for businesses to connect with loyal customers while at the same time positively influencing others.

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Objective 9.4:

Which social media marketing strategies do companies employ?

Social Media Marketing Strategies Social interaction remains as the fundamental basis for social media.

Figure 9.7 identifies ways to build a social media presence.

Building a Social Media Presence Each brand has a personality, whether intentional or by default.

The personality chosen for social media should match the voice used in other venues and marketing communications.

Figure 9.8 lists social media strategies.

Content Seeding Content seeding involves providing incentives for consumers to share content about a brand.

The incentive does not have to be financial, although financial incentives tend to be the most frequently used. A common method of seeding is offering a coupon, rebate, contest or other financial incentive.

Occasionally a mistake, or what appears to be a snafu, can create social buzz.

A value-added incentive that can be part of a seed sharing program is offering customers something exclusive that makes them feel special.

Appealing to consumer altruism, such as a campaign to donate blood in the wake of a tragedy, offers an additional content seeding approach.

Real-Time Marketing Real-time marketing is the creation and execution of an instantaneous marketing message in response to and in conjunction with an occurrence during a live event.

Effective real-time marketing requires upfront strategic planning before assembling a war room and prior to any live event.

Rules, procedures, and processes must be in place that allows the war team to react quickly.

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Video Marketing Figure 9.9 notes types of video marketing tactics.

Spending on advertising in videos on sites such as YouTube has reached $4.6 billion annually and continues to rise.

Ads embedded in videos can be pre-roll (before the video starts), mid-roll (in the middle of the video content), or post-roll (at the end of the content).

Most companies maintain YouTube channels in order to share various types of videos.

Videos can be (1) instructional or (2) cause-related.

Paying individuals to promote a brand has become a recent and new strategy in the video arena. These individuals are known as vloggers.

Influencer Marketing Influencer marketing involves an individual marketing a brand through social media.

It is word-of-mouth communication from individuals who are seen as thought or opinion leaders within their social circles or as experts within particular fields.

Aligning a brand’s message with an influencer’s motivation will be the key to success.

To be effective, influencers must be deemed authentic and not as paid spokespersons.

Interactive Blogs Interactive blogs permit visitors to send comments or posts, making them another important component of social media.

Figure 9.11 lists three types of interactive blogs. A company can • Create a blog • Sponsor a blog • Monitor individuals who like a brand and blog about it without financial compensation Consumer-Generated Reviews Amazon and Best Buy pioneered this approach.

The increased use of online reviews by consumers has led to an increase in websites devoted to providing them. .

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Marketers carefully study customer-generated reviews because they provide important information about how customers evaluate brands and how an item compares to its competition.

Viral Marketing Viral marketing takes the form of an email or a video posted to a personal blog and passed to other blogs or websites such as YouTube.

It can evolve into a form of advocacy or word-of-mouth endorsement.

Figure 9.12 lists methods for successful viral marketing programs.

Individuals should receive an incentive to pass the message along.

Following Brands on Social Media Figure 9.13 highlights reasons consumers follow brands in social media.

Although they vary by social media site, the two top reasons tend to be (1) to keep up with activities of the brand and (2) to learn about the product or service.

Objective 9.5:

How can marketers use social media strategies in international operations?

International Implications In international settings additional complexities include, language differences, social norms, and technological issues.

MyMarketingLab Go to mymktlab.com to complete the problems marked with this icon .

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/

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Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR MARKETERS (Note to professors—these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

Make sure your company investigates all possible social media venues.

Set quality goals for a social media program.

Recognize the ability to build relationships with customers through social media.

Watch for negative posts that can quickly damage your company’s image.

Target the best social media marketing strategies for the company.

Make certain messages that appear in social media outlets blend with the firm’s overall IMC program.

REVIEW QUESTIONS 9-1.

Define social media, a social network, and social media marketing.

Social media includes any digital tool or venue that allows individuals to socialize on the web.

A social network is a social structure of individuals and/or organizations that are tied together in some manner.

Social media marketing is the utilization of social media and/or social networks to market a product, company, or brand.

9-2.

What are the three major forms of social media networks? Describe each.

General social networking sites are broadly based and are designed to appeal to all demographics, regardless of gender, age, race, income, or education (Twitter).

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A niche social networking site focuses on a specific interest, hobby, or demographic group (Our Time, Farmers Only).

Social bookmarking sites allow individuals to share bookmarks of websites.

9-3.

What are the most commonly used social media sites?

Facebook, Twitter, Pinterest, YouTube, and Instagram

9-4.

How has video posting changed the nature of social media networking?

They have broad exposure, and companies spend more money on them each year.

9-5.

What are the major objectives of social media marketing programs?

• • • •

9-6.

Increase traffic and enhance brand image Improve search rankings Customer intelligence through social listening Increase sales and build Brand loyalty

What is social listening?

It is listening to social chatter.

9-7.

What three characteristics should consumer advocates demonstrate to be effective spokespersons in social media programs?

Brand advocates often exhibit three characteristics: • • •

9-8.

What are the most commonly used social media marketing strategies?

• • • • • • •

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Behavioral commitment Emotional connection Quality communication skills

Content seeding Real rime marketing Video marketing Influencer marketing Interactive blogs Consumer-generated reviews Viral marketing

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9.9.

Describe content seeding.

Content seeding involves providing incentives for consumers to share content about a brand.

9-10. Describe real-time marketing.

Real-time marketing is the creation and execution of an instantaneous marketing message in response to and in conjunction with an occurrence during a live event.

Effective real-time marketing requires upfront strategic planning before assembling a war room and prior to any live event. Rules, procedures, and processes must be in place that allows the war team to react quickly.

9-11. What three types of interactive blogs support social media marketing programs?

• • •

A company or brand sponsored blog An individual or person who sponsors a brand and has a connection to the company Individuals who speak about a brand with no financial connection to it

9-12. Describe viral marketing.

Viral marketing takes the form of an email or a video posted to a personal blog and passed to other blogs or websites such as YouTube. It can evolve into a form of advocacy or word-of-mouth endorsement. Individuals should receive an incentive to pass the message along.

9-13. Discuss the reasons why consumers follow brands on social media.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Although they vary by social media site, the two top reasons tend to be (1) to keep up with activities of the brand and (2) to learn about the product or service.

9-14. What issues complicate international social media marketing programs?

In international settings additional complexities include, language differences, social norms, and technological issues.

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Critical Thinking Exercises DISCUSSION QUESTIONS 9-15. Suppose you were in charge of the social media for your college. Discuss the pros and cons of each of the social media platforms presented in the chapter (Facebook, Instagram, Pinterest, Twitter, and Tumblr). Which two would be the most important? Why? Should the social media be targeted to current students or prospective students? Explain why.

Student answers will depend on the platforms they choose.

9-16. Compare and contrast the social media sites Facebook, Instagram, Twitter, Pinterest, and YouTube. Discuss ways they are similar and ways they are different. Describe your level of involvement with each of these social media platforms.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Student answers will vary.

9-17. Suppose a local pizza chain with nine restaurants has asked you to help them with their social media strategy. Discuss the pros and cons of each of the primary social media platforms (Facebook, Instagram, Twitter, Pinterest, and YouTube) for the pizza restaurants. Which one do you consider to be the best? Why? Facebook has wide exposure but a declining number of younger users. Instagram relies on pictures. Twitter has limited text. Pinterest has a more exclusive audience.

YouTube has clutter.

They are all widely viewed.

9-18. Describe the current trends of consumer video-sharing. For each trend discuss your personal experience of sharing, creating, or watching a video. Which trend or trends impact you? Why? Student answers will vary.

9-19. Why has YouTube gained considerable popularity in recent years? How often do you use YouTube? What types of videos do you watch? Do your friends and relatives access YouTube? If so, how often and why? If not, why not?

Student answers will vary. They can share in class the types they watch and why. .

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9-20. Examine the reasons companies use social media marketing listed in Figure 9.5.

Rank the reasons from most effective to least effective based on your personal experience with social media and brands that use it. Discuss your rankings.

Explain, with examples, your top three choices.

The reasons include engage fans, increase brand exposure, provide avenue for customer interaction, increase traffic, generate leads, enhance brand image, improve search rankings, gather customer intelligence, develop loyal fans, and increase sales.

9-21.

Social listening is now being used by most brand managers. Describe the functions of social listening presented in the chapter and discuss the relative importance of each function.How important do you think it is for marketers to listen to social media chatter? Almost all comments made on social media are by a small percentage of consumers. Do you think these comments are representative of most consumers and what they think of a brand? Why or why not? If not, why should brand managers even pay attention to social chatter? Should brand managers make marketing strategy decisions based on social chatter? Why or why not?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Student answers will vary. This makes an excellent in-class discussion question.

9-22. Have you made brand purchases based on comments made on social media?

Why or why not? Provide specific details. Have you decided against purchasing a particular brand based on comments on social media? Why or why not?

Provide specific details.

Student answers will vary. They can discuss them in class.

9-23. Examine the social media strategies listed in Figure 9.8. Discuss each strategy in terms of your personal experience. Describe whether the strategy impacts your purchases and views of brands. For each strategy, discuss why it does have an impact or why it does not. Provide details to support your thoughts.

Student answers will vary.

9-24. Look at the social media strategies listed in Figure 9.8. Assume you are the marketing manager for a new brand of cosmetics targeted to females between the ages of 18 and 30. Define each strategy, then discuss its appropriateness for a social media marketing campaign for this new brand of cosmetics. If you had money for only two of the strategies, which two would you choose? Why? .

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Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

9-25. Do you use consumer-generated reviews in making purchase decisions? Why or why not? Are they valuable to consumers?

Students may or may not use them. Most probably do. They let people know what others think about a product or service, which aids in making choices.

9-26. Brand managers often become excited when something the company posts on the Internet goes viral and spreads like wildfire among consumers. What factors contribute to a brand’s posting going viral? Discuss how the social media strategies listed in Figure 9.8 can contribute to a successful viral marketing attempt or unsuccessful viral marketing. Of the strategies listed in Figure 9.8, which one would have the greatest chance of becoming viral? Why? Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Integrated Learning Exercises 9-27. Choose one of the following brands. Go the company’s website and locate the social media links provided. Access each of the social media brand pages and evaluate them in terms of engaging consumers with the brand and how it is integrated with the website. Provide specific information from each social media network that shows how consumers can be engaged. Identify the number of fans, followers, and posts on each site. Provide screenshots of each social media page and website main page. a. Wholly Guacamole (www.eatwholly.com) b. Sonic (www.sonic.com) c. Starbucks (www.starbucks.com) d. Coca-Cola (www.coca-cola.com) e. Lucky Brand (www.luckybrand.com) Wholly Guacamole provides links to six social media sites. They are refered to as the company’s “community.”

Sonic.com redirects to sonic.net. It should be sonicdrivein.com. The reference to social networks is very small and may not be noticed at first.

Starbucks only lists Facebook and Twitter on its opening page.

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Coca-cola notes Facebook, Twitter, YouTube, and Flickr. The icons are partially hidden by a suggestion to go to Facebook, which is the one the company seems to prefer.

Lucky Brand posts links at the very bottom of the page as “social communities.”

It does not appear to be much of a priority to the company.

9-28. Name a brand that you really like and for which you have a high level of loyalty. Access the brand’s website and the social media pages shown on the brand’s website.. Discuss the information provided on each social media.

Based on the reasons brands use social media shown in Figure 9.5, discuss what you think is the reason for each social media site. Evaluate how successful you think the brand is with social media. Provide screenshots of the social media sites and website to support your thoughts.

Student answers will vary widely.

9-29. Choose one of the following product categories. Select two prominent brands from that category. Access each of the brand’s website and social media links shown. Compare and contrast what information is provided for each brand and social media. Which brand has the best social media presence? Why? Provide screenshots to illustrate your points. a. b. c. d.

Sports equipment Clothing Restaurants Beverage

Student answers will depend on the brands they select.

9-30. Examine the reasons brands use social media shown in Figure 9.. Pick three of the reasons and identify from your personal experience a brand that you believe did well with each. It could be three different brands or one brand for all three. Support your answer with specific information, links to the social media pages, and screenshots illustrating your discussion.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

9-31. Figure 9.8 identifies strategies brands can use with social media. Describe each of the strategies in your own words. Find an example of each strategy in social media not described in the textbook. Provide the link and a screenshot, explain why it is an example of the strategy, and give your evaluation of whether the strategy was good or bad, and why. .

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Answers will depend on the brands and strategies chosen.

9-32. Figure 9.9 identifies six video marketing tactics. Go to YouTube and find an example of each strategy. Provide links to your six videos and explain why you think it is a good example of the particular strategy. Evaluate how well the brand or company did with the video marketing strategy.

Student responses will depend on the videos they find.

9-33. Using a blog search engine, locate an example of an interactive blog. Evaluate the blog. Is it effective? Why or why not? Provide a link to the blog and a screenshot.

Answers will vary based on the blog chosen.

9-34. Use a search engine to locate an example of viral marketing. Evaluate the viral marketing. Was it effective? Why or why not? Provide a link to the viral campaign and a screenshot.

Answers will vary based on the example chosen.

9-35. Go to the website of Visit South Walton at www.visit southwalton.com. What is your impression of the website? Visit each of the social media platforms identified on the Visit South Walton website. Describe the content on each social media site and identify what you think is the primary objective (provide screenshots to support your answer). How well are the social media platforms for Visit South Walton integrated with its website? Be specific.

The site offers food, art, and adventure. Student responses will depend on the social media sites they choose. Overall, relaxing adventure is the theme.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

9-36. Hooters: http://blogclowbaack.net/2014/05/12/hooters-chapter-9/ 9-37. Covergirl: http://blogclowbaack.net/2014/05/12/covergirl-chapter-9/ 9-38. Social Media: http://blogclowbaack.net/2014/05/12/social-media-chapter-9/

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Student Project: Creative Corner The assignment is for students to work with a hot dog and pastry stand in St. Louis. The students are asked to create social media programs for the company.

CASES Case 1

Shelby’s Stables

9-39. Should Shelby’s Stables emphasize general social networking sites, niche social networking sites, or both? Explain your answer.

Probably both. She needs to reach as many people as possible.

9-40. Which social media sites are best suited to this type of promotional campaign?Why? Student choices will vary. Have them discuss answers in class.

9-41. Examine the social media strategies listed in Figure 9.8. For each social media strategy discuss how Shelby could use it for her business. Which would be the best? Why? The choices are • Content seeding • Real-time marketing • Video marketing • Influence marketing • Intractive blogs • Consumer-generated reviews • Viral marketing Student answers will vary for each.

9-42. Examine the video marketing approaches listed in Figure 9.9 For each video marketing approach discuss how Shelby could use it with her business. Which would be the most feasible? Why? The choices are • Advertising on videos • Posting of television ads • Informational videos .

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• • •

Cause-related videos Product reviews Vloggers

Student answers regarding how each could be used will vary.

She needs to tie them together in a way that does not alienate patrons.

9-43. How can the photos taken by Shelby for various patrons be used as a marketing tool for her Stables?

They make great posts on all the available venues.

Case 2

Post-It: Making the Ordinary Extraordinary

9-44. Which social media sites are best suited to this type of promotional campaign?

Why? Student responses will vary. The company offers links to all of the media outlets discussed in this chapter.

9-45. How could consumers, fans, and the company take advantage of new videoposting technologies to promote the Post-it brand?

YouTube is the obvious answer.

9-46. What were the marketing objectives of the “Go ahead” campaign?

The idea was to build brand loyalty, increase interactions with customers, and create buzz.

9-47. Would social listening be of value to Post-it’s marketing team? If so, how? If not, why not?

It is a tough sell to get people to become “friends,” some would argue.

9-48. Which social media marketing strategies should Post-it’s team use? Provide justification for your response.

Student answers will vary.

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MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 9-49. Discuss the current trends of consumer video-sharing. Examine reasons brands have become involved in social media marketing. For each of the trends you identify, elaborate on ways brands can use social media marketing to reach video-sharing consumers. Be sure to justify your choices of social media marketing.

9-50. Describe in your own words each of the social media strategies (see Figure 9.8).

Suppose you are a marketing intern for a minor league baseball team located in your region. Identify the pros and cons of each of the social media strategies in terms of the minor league baseball team. Pick two of the social media strategies.

Describe a social media program the minor league baseball team could use.

Bonus Case

VIVE HOY The market for carbonated soft drinks represents one of the largest and most lucrative targets in the United States and around the world. Coca-Cola and PepsiCo have dominated the industry for many years. As the competition continues to evolve, each seeks out groups to attract and retain. Recently, PepsiCo reinvigorated its own efforts to capture the Hispanic share in the United States.

Advertising Age reported that in 2004, PepsiCo ranked number 6 on the magazine’s list of the Top 50 Advertisers in Hispanic Media, spending $68.5 million. Then, the company dropped to number 27, spending $41 million in 2007. The next year, the company dropped off the list and remained in that position for four years. At the same time, Coca-Cola dropped its spending dramatically to the same group, although the organization still spent $29.8 million in 2011, with a ranking of number 48 on the Top 50 list. .

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Javier Farfan, senior director for cultural branding at PepsiCo, noted that, “One of the key reasons I came here is to figure out how to dive deeper into the Hispanic space.”

Suggesting that the company had somewhat “lost its way,” Farfan said, “In the carbonated category, exponentially, growth is going to come from Latinos. There’s the population growth, but we’re also more prone to drink soda. So it became really important and strategic for Pepsi to get into that space.”

One of the outcomes was the “Vive Hoy” or “Live for Now” campaign and tagline associated with a new wave of television commercials. Farfan noted, “There’s a new mainstream evolving. It’s a different state of mind. Latinos don’t want to be separate; they want to be included. We want to nod and wink to them in places where they actually engage with media. Latinos watch MTV as much as Univision.”1 To more fully attract Hispanic patrons, Pepsi launched two new products, Paradise Mango and Cherry Vanilla. Both were designed to attract Hispanic customers.

In addition to mainstream advertising and new products, Marketing Daily notes another fertile ground. Hispanic consumers are “Social Media Catalysts,” according to the magazine. A recent study conducted for Unilever revealed that Hispanic consumers are “twice as likely to either share content or click on shared content than Americans in general.” The report’s data indicates that “Hispanic consumers are also more influential on social media: content they share garners more “click-backs” (the act of clicking shared links to view the shared content) than content shared by non-Hispanic consumers.”

Although Hispanic consumers read more on mobile devices than other groups, they are less inclined to share from those devices. At the same time, the youngest Hispanic consumers do not have reservations about sharing from mobile devices, which indicates .

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the potential to reach them in ways that would lead to a larger community of advocates for Pepsi.2 The next generation of marketing efforts will likely integrate messages for Hispanic and non-Hispanic consumers as society becomes more blended. The net result will likely be an expanding marketplace for companies that are able to attract individual groups while at the same time reaching the mainstream audience.

(1)

The Marketing Daily article noted that Hispanics, “are less likely to use Pinterest or Twitter, and twice as likely to use email and nearly 50% more likely to use blogging channels such as Tumblr and Blogger.” How should PepsiCo’s marketing team respond to these statistics?

The team should focus on those most likely to reach the target market. The message can then be more tailored and focused.

(2)

What social media marketing goals should PepsiCo seek to achieve with Hispanics? Why? The company is reintroducing the product to consumers. The goal would be to develop loyalty, create interaction, and hopefully drive additional sales over time.

(3)

Which social media marketing tactics do you believe will be most effective for PepsiCo when seeking to reach the Hispanic audience? Which would be least likely to succeed? Defend your responses.

Student choices will vary.

Content seeding would involve incentives such as free Pepsi or other logical tieins to soft drink consumption.

Real-time marketing opportunities might accompany sports with high Hispanic interest, including soccer and the NBA. Each year, some NBA teams use Hispanic names, such as Los Suns and Los Lakers.

Interactive blogs provide some opportunities, as noted in Question 1 Consumer-generated reviews would be less valuable.

Viral marketing would be great if the marketing team could discover an innovative way to encourage interest.

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(4)

How might social listening be of value to PepsiCo with regard to the Hispanic market? Justify your answer.

Marketers could discover any complaints about the company and its product or messages. They might also discover what resonates with loyal consumers.

1

Natalie Zmuda, “Pepsi Refocuses on Hispanics,” Advertising Age, July 24, 2013,

http://adage.com/article/hispanic-marketing/pepsi-refocuses-hispanics-flavorstagline/236269/, retrieved March 6, 2014.

2

Karl Greenberg, “Hispanic Consumers Are Social Media Catalysts,” Marketing Daily,

February 20, 2014, http://www.mediapost.com/publications/article/219954/hispanicconsumers-are-social-media-catalysts.html, retrieved March 6, 2014.

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Chapter

10

Alternative Marketing CHAPTER OBJECTIVES Students should be able to answer the following questions: 10.1 10.2 10.3 10.4 10.5 10.6

How can buzz marketing, guerrilla marketing, lifestyle marketing, and experiential marketing enhance a marketing communications program?

What methods can be used to effectively employ product placements and branded entertainment?

Why has the use of alternative media venues, especially video game advertising, grown in marketing communications programs?

How have in-store marketing and point-of-purchase displays evolved into effective communication and sales tools?

How can brand communities enhance brand loyalty and devotion?

What methods are used to adapt alternative marketing programs to international marketing efforts?

OVERVIEW Traditional mass media advertising faces many challenges. The use of alternative media is on the rise.

The Prairie Fire Experience Questions for Students: 1. Have you ever attended an event like this? How did you hear about it?

2. What combination of traditional and alternative advertising would work best for this event?

The first topic covered in this chapter is a review of alternative media programs, including buzz marketing, guerilla marketing, product placements and branded entertainment, and lifestyle marketing.

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The second issue is a review of alternative media tactics.

The third part of the chapter describes in-store marketing.

Brand communities are also discussed.

Fourth, international implications of alternative marketing programs are examined.

Objective 10.1:

How can buzz marketing, guerilla marketing, lifestyle marketing, and experiential marketing enhance a marketing communications program?

Alternative Marketing Programs Alternative marketing relies on buzz, word-of-mouth, and lifestyle messages at times when consumers are relaxing and enjoying hobbies and events.

The forms of alternative marketing are displayed in Figure 10.1 Alternative media programs include: • • • •

Buzz marketing Guerilla marketing Product placements and branded entertainment Lifestyle marketing

Buzz Marketing Buzz marketing is also known as word-of-mouth advertising. It emphasizes consumers passing along information about a product.

Buzz has three main sources: • • •

Consumers who truly like a brand and tell others Consumers who like a brand and are sponsored by the company to tell others Company or agency employees posing as customers and telling others

Consumers Who Like a Brand Enthusiasts deliver these messages in person or via the internet in chat rooms, blogs, or emails.

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Sponsored Consumers Brand ambassadors engage in programs with names such as “brand advocates” or “connectors.”

House parties or block parties occur when brand ambassadors use events in their homes to build excitement for a loyalty to a product.

Company Employees Company employees should identify their affiliations or risk being seen as unethical.

The Word of Mouth Marketing Association (WOMMA) states that individuals should be upfront and clearly identify themselves as being with the company.

A current trend, employer branding occurs when companies showcase employees discussing what it is like to work for a particular company.

In the past, this approach was used by the human resource department to attract quality employees.

Then marketing departments realized that employer branding appealed to customers as well.

Buzz Marketing Stages The three stages are (1) inoculation, (2) incubation, and (3) infection, similar to viral marketing, as shown in Figure 10.3.

Buzz Marketing Preconditions The preconditions are noted in Figure 10.4: • • • •

The brand must standout.

The company must feature memorable advertising.

The advertising must be intriguing, different and unique.

The buzz should get customers involved.

Stealth Marketing Stealth marketing uses surreptitious practices to introduce a product to individuals or fails to disclose or reveal the true relationship with the brand. It is a form of buzz marketing.

Some argue that stealth marketing represents a shrewd way to reach consumers and generate buzz.

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The WOMMA has clearly stated the importance of honesty of relationship and honesty of identity. The FTC has issued an opinion letter supporting the WOMMA regarding the full disclosure of any paid individuals in ads.

Question for Students:

Have you ever encountered a stealth marketing program?

Guerilla Marketing Guerilla marketing is designed to obtain instant results using limited resources. Its tactics rely on creativity, quality relationships, and the willingness to try unusual approaches.

Guerilla programs were originally aimed at small businesses; however, now a wide array of firms takes advantage of them.

Guerrilla marketing emphasizes a combination of media, advertising, public relations, and surprises to reach consumers.

Figure 10.5 compares traditional marketing and guerilla marketing.

Figure 10.6 lists the reasons for engaging in guerilla marketing.

Lifestyle Marketing Another program that can be used to make contacts with consumers in more offbeat and relaxed settings is lifestyle marketing, which involves identifying marketing methods associated with the hobbies and entertainment venues of the target audience.

Places such as farmer’s markets, bluegrass festivals, stock car races, and craft shows are examples.

Experiential Marketing A newer form of alternative marketing, experiential marketing, combines direct marketing, field marketing, and sales promotions into a single consumer experience.

It typically involves direct marketing through interactive means such as special events and free samples.

There are three steps: 1.

2.

3.

Choose a clear market segment to target.

Identify the right time and place to involve consumers with the brand.

Make sure the experience reveals clearly the brand’s promise that represents the brand well to consumers.

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Objective 10.2:

What methods can be used to effectively employ product placements and branded entertainment?

Product Placements and Branded Entertainment Both methods couple the popularity of an entertainment venue with a product or company.

Product Placements A product placement is the planned insertion of a brand or product into a movie, television show, and program in some other medium with the purpose of influencing viewers.

One key advantage of brand placement is the low cost-per-viewer, especially for movies.

After a movie has finished at the cinema, it may be converted to a DVD and then to television for viewing on syndication outlets or one of the premium movie channels. It might also be made available on TV through video-on-demand.

This expands movie’s reach beyond the cinema screen to other venues where it may be seen multiple times by individuals.

Figure 10.7 displays the top six brands and top six television shows for product placements.

Branded Entertainment Branded entertainment means the product is woven in as part of the storyline.

Achieving Success Figure 10.8 lists some of the key factors. They include choosing the right media, supporting promotional activities, consumer attitudes toward placements, placement characteristics, and regulations.

The primary goal typically is to increase brand awareness.

Company Tactics Among the most important is to make sure the brand is placed in a favorable light within the program.

Brand insertions work best when they seem logical.

Many companies buy advertising spots on television programs that feature product placements of the brand. .

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The Media’s Perspective For the most part, movie and television product companies are interested in the revenues they receive for using placements.

Question for Students: Objective 10.3:

Do you notice product placements?

Why has the use of alternative media venues, especially videogame advertising, grown in marketing communications programs?

Alternative Media Venues There many additional ways to contact customers. Figure 10.9 identifies some of these venues.

Video Game Advertising Figure 10.10 names the forms of video game advertising: • • • • • • •

In-game advertisements Rotating in-game advertising Interactive ads Game-related websites Advergames Sponsored downloads Mobile game apps

Advergames are those played on a branded website.

Benefits • •

Quality web metrics Ability to target key demographic groups and locations

New Video Game Technology Massive, a new media company, has pioneered a technology that rotates or changes ads in online video games in real time.

Females and Video Games Forty percent of gamers are women. One recent estimate suggests that more than 130 million women play video games. .

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Many believe more can be done to entice women into the market.

Games should be adapted to female preferences.

Cinema Advertising These include more than just trailers. Specific ads can be shown to a captive audience.

Other Alternative Media A number of other media alternatives exist. Ads now appear on subways and other public facilities as local and state governments struggle to balance budgets.

Parking lots, stairs, and escalators all feature advertising displays.

Airlines increase revenues by presenting advertisements on flight ticket jackets and using inplane signage.

Shopping bags, clothes, and restaurant menus provide additional advertising venues.

Objective 10.4:

How have in-store marketing and point-of-purchase displays evolved into even more effective communication and sales tools?

In-Store Marketing Approximately 60 percent of all purchase decisions are made in the retail store.

In store marketing consists of point of purchase displays (POP) and other activities.

In one survey, more than half of the respondents reported they were influenced by in-store signage and POP. In-Store Marketing Tactics Addition of motion is one key feature. This especially affects in-store signage.

Another in-store tactic relies on the other senses, taste and smell.

Walmart uses flat screen television monitors to display messages throughout stores.

Figure 10.11 lists the types of advertising that influenced clothing purchases, and in-store advertising leads the list. .

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Point-of-Purchase Marketing Point-of-purchase displays affect impulse buys.

Designing Effective Point-of-Purchase Displays Figure 10.12 lists keys to effective POP displays: • • • • • • • •

Integrate the brand’s image into the display.

Integrate the display with current advertising and promotions.

Make the display dramatic to get attention.

Keep the color of the display down so the product and signage stand out.

Make the display versatile so it can be easily adapted by retailers.

Make the display reusable and easy to assemble.

Make the display easy to stock.

Customize the display to fit the retailer’s store.

Measuring Point-of-Purchase Effectiveness Use of point-of-sale (POS) data is one key.

From the manufacturer’s viewpoint, point-of-sale data helps to improve POP displays.

Objective 10.5:

How can brand communities enhance brand loyalty and devotion?

Brand Communities In most cases, a symbolic meaning behind the brand links individuals to the brand community and other owners of the brand.

Figure 10.13 lists reasons why brand communities form: • • • • •

Affirmation of the buying decision Social identity and bonding To swap stories To swap advice and help others For feedback and new ideas

The marketing team can enhance band communities using the tactics shown in Figure 10.14: • • • .

Create member benefits to encourage new members.

Provide materials to the group they cannot get elsewhere.

Involve firm representatives in groups.

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• • •

Sponsor special events and regular meetings.

Promote communications among members of the group.

Build a strong brand reputation.

Question for Students: Objective 10.6:

Are you part of any brand community?

What methods are used to adapt alternative marketing programs to international marketing efforts?

International Implications The use of alternative media is growing in marketing to minority groups within the United States. It is also growing in other countries.

Brand communities are also evolving in other nations.

INTEGRATED CAMPAIGNS IN ACTION: MyLab Interstate Batteries Interstate Batteries employed its internal marketing department to launch a geo-targeted online media plan for all company Battery Centers located in cities throughout the United States. The objectives of the campaign were as follows: • Increase awareness of all Interstate Battery Centers.

• Drive traffic to all Interstate Battery Centers.

• Create awareness of key brand messages.

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created. .

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IMPLICATIONS FOR MARKETING PROFESSIONALS (Note to professors— these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

If you are going into the marketing profession, become well acquainted with the new alternative media outlets. Gaining expertise in them will make you more marketable to employers.

If you are an older member of the marketing community, familiarize yourself with alternative media. It may even be worthwhile to form focus groups of younger consumers to discover what they prefer and in which circumstances.

Look for ways to combine alternative media with other programs, such as guerilla marketing.

Remember that combinations of traditional media and alternative media are often the most effective.

Study the newer forms of in-store marketing. Consider shopping as an interactive experience, and look for ways to build bonds and relationships based on those experiences.

Consider the relationships between brand loyalty and in-store marketing programs.

Companies such as Lowes and Home Depot are well-aware of the benefits of in-store demonstrations of products. Find ways to expand these concepts to your retail operations.

REVIEW QUESTIONS 10-1. What are the three main alternative media programs described in this chapter?

The main alternative media programs are buzz marketing, guerilla marketing and experiential marketing.

10-2. What is buzz marketing?

Buzz marketing is also known as word-of-mouth advertising. It emphasizes consumers passing along information about a product.

10-3. What three types of consumers can pass along buzz marketing messages?

The three types are (1) consumers who truly like a brand and tell others, (2) consumers who like a brand and are sponsored by the company to tell others, and (3) company or agency employees posing as customers and telling others. .

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10-4. Why is buzz marketing effective? What preconditions should be met to ensure its effectiveness?

Buzz marketing is effectively because of the credibility of word-of-mouth. People tend to believe family members and friends who recommend products. The preconditions include the following: • • • •

The brand must standout.

The company must feature memorable advertising.

The advertising must be intriguing, different and unique.

The buzz should get customers involved.

10-5. What is stealth marketing?

Stealth marketing uses surreptitious practices to introduce a product to individuals or fails to disclose or reveal the true relationship with the brand.

10-6. What is guerilla marketing? How does it differ from traditional marketing?

Guerilla marketing is designed to obtain instant results using limited resources.

Typically a program relies on (1) alternative media tactics and (2) creative ways of doing things.

10-7. What is lifestyle marketing? What types of locations are suited to lifestyle marketing?

Lifestyle marketing involves identifying marketing methods associated with the hobbies and entertainment venues of the target audience. Lifestyle marketing includes contacting consumers at places such as farmer’s markets, bluegrass festivals, city-wide garage sales, flea markets, craft shows, stock car races, and other places where large concentrations of potential customers are found.

10-8. What is experiential marketing?

Experiential marketing combines direct marketing, field marketing, and sales promotions into a single consumer experience. It typically involves direct marketing through interactive means such as special events and free samples.

10-9. What are product placements and branded entertainment? What do they have in common?

A product placement is making sure a product is seen as part of a film or television program. Branded entertainment means the product is woven in as part of the storyline. Both involve television programs and movies. .

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10-10. Identify the alternative media venues described in this chapter.

Beyond video game advertising, the other venues include the following: o Cinema advertising o In-tunnel subway advertising o Parking lot advertising o Escalator advertising o Airline in-flight advertising o Leaflets and brochures o Carry-home menus o Carry-home bag advertising o Advertising on clothing o Mall signs 10-11. Describe the forms of video game advertising, including advergames.

The types include o In-game advertisements o Rotating in-game advertising o Interactive ads o Game-related websites o Advergames o Sponsored downloads Advergames are those played on a branded website.

10-12. What is in-store marketing? Why is it important?

In store marketing consists of point of purchase displays (POP) and other activities.

In one survey, more than half of the respondents reported they were influenced by in-store signage and POP. 10-13. What new in-store marketing tactics are being utilized?

Addition of motion is one key feature. This especially affects in-store signage.

Walmart uses flat screen television monitors to display messages throughout stores.

10-14. What is point-of-purchase advertising? Why is it important?

Point-of-purchase displays are all of the promotions for products within the store.

They are placed at the ends of aisles, near store entryways, and by the cash register.

Point-of-purchase displays affect impulse buys.

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10-15. How have new technologies changed some forms of point-of-purchase advertising?

Many POP contain digital, interactive displays. Many now used LED technology to be able to refresh messages. Computers are used to change the messages. Some integrate POP with brand advertising and marketing campaigns. Many companies now feature in-store networks.

10-16. What is a brand community?

A brand community link individual owners of a brand with other owners.

10-17. What should a company’s marketing team do to assist in the development and growth of brand communities?

A marketing team should do the following: o o o o o o

Create member benefits to encourage new members.

Provide materials to the group they cannot get elsewhere.

Involve firm representatives in groups.

Sponsor special events and regular meetings.

Promote communications among members of the group.

Build a strong brand reputation.

10-18. Is the use of alternative media growing or declining in international markets?

Explain why.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

It is growing as international companies use the same tactics that are present in the United States.

CRITICAL THINKING EXERCISES 10-19. Think about a product category where you have a high knowledge of the various brands. Pick one of the major brands. Discuss the characteristics the brand would want for a brand advocate, ambassador, or evangelist. What type of offers would it take from the company to create a strong brand ambassador?

Discuss each of the stages of buzz marketing as it relates the brand you identified. Which stage is the brand in now? Justify your answer. Discuss each of the preconditions of buzz marketing as it relates to your chosen brand.

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Student answers will vary widely based on their choices.

10-20. Describe in your own words each of the alternative marketing strategies listed in Figure 10.1. Suppose you are a marketing intern at the Five Star Fitness Center. Discuss the pros and cons of each form of alternative marketing for the fitness center. If your budget only allowed one of the alternative marketing approaches, which would you choose? Explain why.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

10-21. Consider a recent purchase you made at the recommendation of someone else.

Why did you trust that person’s recommendation? How important is the recommendation of others in your purchase decisions?

People tend to trust their family and friends. They may even trust a stranger, if the stranger appears to be an expert in some way.

10-22. Discuss the difference between buzz marketing and stealth marketing. If you were hired as a marketing manager for a local business, would you support a stealth marketing campaign? Why or why not?

Buzz marketing is also known as word-of-mouth advertising. It emphasizes consumers passing along information about a product. There are three main sources of buzz: • Consumers who truly like a brand and tell others.

• Consumers who like a brand and are sponsored by the company to tell others.

• Company or agency employees posing as customers and telling others.

Stealth marketing uses surreptitious practices to introduce a product to individuals or fails to disclose or reveal the true relationship with the brand. It is a form of buzz marketing.

Student use of stealth would depend on the individual. Have students discuss their responses in class.

10-23. Describe the primary differences between guerrilla marketing and traditional marketing. Imagine being approached by the owner of a small clothing boutique. She has heard about guerrilla marketing and wants to try it. Why should she use guerrilla marketing? What are the pros and cons? What guerrilla marketing techniques would you suggest? Be specific.

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Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Guerilla marketing is designed to obtain instant results using limited resources.

Typically a program relies on (1) alternative media tactics and (2) creative ways of doing things. Other differences are listed in Figure 10.5 10-24. Can you think of a lifestyle marketing program or an experiential marketing campaign that you experienced? What was your reaction? Was the approach effective with you? Why or why not? What about with other consumers? If you have not experience lifestyle or experiential marketing, think of a situation and brand where you think it would be effective. Explain why.

Student answers will depend on their exposures to programs.

10-25. Find a movie that you have already watched and enjoyed. Watch it again, but this time, make a list of all of the product placements you see. Identify if each was a prominent placement, if the actor used the brand, or if it was just in the background. When you finish, discuss the product placements that were most effective and the placements that were least effective. What made the placement effective? What made it ineffective?

Student answers will vary depending on the movie selected.

10-26. Explain the difference between product placement and branded entertainment.

Do you personally notice product placements in television shows or movies?

Why or why not? Identify the factors that make product placement or branded entertainment successful for a brand.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

A product placement is the planned insertion of a brand or product into a movie, television show, and program in some other medium with the purpose of influencing viewers.

Branded entertainment means the product is woven in as part of the storyline.

They need to stand out without being too obvious.

10-27. Do you play video games? If so, approximately how many hours per month do you play games (including online games)? What advertising have you noticed in the game? How effective was the advertising? .

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Student answers will vary. Compare male to female students.

10-28. Describe in your own words the various types of video game advertising listed in Figure 10.10. Suppose you have a marketing internship with Pizza Hut. Discuss the pros and cons of each method of video game advertising for Pizza Hut. Which method or methods would you recommend for Pizza Hut? Why? Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

10-29. Look at the graph in Figure 10.11. Rank each of the items in the graph from most effective to least effective for you personally as it relates to purchasing clothes. Justify your ranking.

Student rankings will vary.

10-30. Think about point-of-purchase displays. Do they impact your purchases? Why or why not? Describe the most effective point-of-purchase displays for you personally. Why are they effective? Describe the least effective point-ofpurchase displays for you personally. Why are they ineffective?

Student answers will depend on their reactions to displays. Compare in class those who are influenced by POP displays and those who are not.

10-31. What brand are you the most passionate about? Does a brand community exist around that brand? Examine the ways a brand can enhance a brand community listed in Figure 10.14. Discuss each one in terms of the brand you mentioned for this question either in terms of what the brand is currently doing or what they should do.

A brand can enhance a brand community in several ways: • Create member benefits to encourage new members.

• Provide materials to the group they cannot get elsewhere.

• Involve firm representatives in groups.

• Sponsor special events and regular meetings.

• Promote communications among members of the group.

• Build a strong brand reputation.

INTEGRATED LEARNING EXERCISES 10-32. Type “buzz marketing” into an online search engine. Find two advertising agencies or marketing agencies that offer buzz marketing expertise. What types of buzz marketing services does each provide? Which company do you think .

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offers the best buzz marketing program? Why? Provide the URL of the two agencies as well as screenshots to illustrate your points.

Student responses will depend on the agencies they choose.

10-33. Describe in your own words each of the forms of alternative marketing listed in Figure 10.1. Access the website of Scott + Cooner at http://scottcooner.com.

After you have studied the company’s website, discuss the pros and cons of each form of alternative marketing listed in Figure 10.1. If Scott + Cooner’s budget only allowed for one of the alternative marketing methods, which would you choose? Why? Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Alternative media programs include the following: • Buzz marketing • Guerilla marketing • Product placements and branded entertainment • Lifestyle marketing 10-34. Access http:/women.igda.org. What is your opinion of this website? How can it be beneficial to a marketing manager? How can it be beneficial to females who want to pursue video game design? Go to the parent website www.igda.org.

What types of information is available at this site?

The site is for the International Game Developers Association. It makes extensive use of social media sites to connect with members. It offers a wide variety of connects for members, along with news about the organization and the industry. In October 2012, a substantial amount of interest was about rebooting the industry.

The women segment offers mentoring and other resources. The idea is to spur interest and help them develop new games. A marketing manager could target women who develop games as well as women/girls who buy them.

10-35. Access the Word of Mouth Marketing Association website at http://womma.org. What features did you find on the site? What resources are available? What benefits does the site provide to a business? Is there any value for a consumer? Provide screenshots to support your thoughts.

Advocate marketing and social media marketing were mentioned on the opening page.

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10-36. Type “guerrilla marketing” into an online search engine. Find two agencies that offer guerrilla marketing services. Describe what type of services each offers. Go to an article database and type in “guerrilla marketing.” Find two articles about guerrilla marketing that interest you. Summarize the articles.

Provide the site for the two articles, the URLs of the two websites, and screenshots to support your answers.

Student responses will depend on the agencies they select.

10-37. Explain the difference between lifestyle marketing and experiential marketing.

Suppose you have been hired as an intern for a new brand of energy drink. Go the internet and locate an agency that offers lifestyle marketing. Describe the services the agency could offer for your energy drink. Go back to the internet and locate an agency that provides experiential marketing. Describe the services the agency could offer your energy drink. Provide the URLs of the two agencies as well as screenshots to illustrate your answers.

Lifestyle marketing involves identifying marketing methods associated with the hobbies and entertainment venues of the target audience. Places such as farmer’s markets, bluegrass festivals, stock car races, and craft shows are examples. It is similar to event marketing because the company meets customers are places they go due to interests and hobbies.

Experiential marketing combines direct marketing, field marketing, and sales promotions into a single consumer experience. It typically involves direct marketing through interactive means such as special events and free samples.

10-38. Soap is a digital creative agency that brings brands and consumers together through gaming. Access the agency’s website at www.soapcreative.com. What information is available on the website? Who are some of the agency’s clients?

Describe some of the games created by Soap and why they have been successful. Use screenshots to support your response.

Expendables 2, CarsThatFeel, Tokyo Fury, and Cancer Council NWS are featured on the opening page.

“Soap creates things that people want to play with. Our experiences connect a variety of brands with consumers across every screen. We are creatives, artists, designers, technologists, community managers, producers and developers working in reactive and collaborative teams. Our solutions are elegant, but feel simple enough to engage.

We create with people in mind, not robots, although they do create robots.”

The company has an impressive list of clients, from Warner Brothers to X-Box.

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10-39. Use an internet search engine to locate two agencies that offer in-store marketing. For each agency discuss the services provided and identify some of the agencies’ clients. Use screenshots to illustrate the services offered. If you were a marketing intern for small chain of clothing stores, which agency would you use? Why? Identify at least three in-store tactics that the agency could provide.

Student responses will depend on the agencies they locate.

10-40. Point-of-purchase displays should be an important component of a firm’s IMC program. Research indicates that effective displays have a positive impact on sales. Access the following firms that produce point-of-purchase displays.

Which firm’s site is the most attractive? Which firm would be the best from the standpoint of developing displays for a manufacturer? Explain. a. Displays2Go (http://www.displays2go.com) b. Vulcan Industries (www.valcanind.com) c. Display Design & Sales (ww.displays4pop.com) Displays2Go is a warehouse for in-house marketing displays.

Vulcan focuses more on merchandising (retailer) aspects, especially custom store displays and stocked retail displays.

The Display Design & Sales page opened very slowly and contained vague information. Unless someone knew the company, they would not know what it sold by its opening page.

Student evaluations of these pages will vary.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

10-41 Coca-Cola: http://blogclowbaack.net/2014/05/12/coca-cola-chapter-10/ 10-42 Harley Davidson: http://blogclowbaack.net/2014/05/12/harley-davidson-chapter-10/ 10-43 Buzz marketing: http://blogclowbaack.net/2014/05/12/buzz-marketing-chapter10/

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Student Project: Creative Corner This exercise is designed to lead students to study the buzz marketing techniques by Ugg. The assignment is to create a brand ambassador program for Ugg.

CASES Case 1

Matt and Jerry’s Disc Golf Course

10-44. Is a buzz marketing program possible for the opening of Matt and Jerry’s Disc Golf Course? Why or why not?

A creative agency should easily be able to find a way to create buzz marketing.

10-45. Can you think of a way to use stealth marketing to promote Matt and Jerry’s Disc Golf Course? Do you think Matt and Jerry should use stealth marketing? Why or why not?

People could meet in all kinds of places (bars, on campus, sports events) and talk about how much fun they had playing disc golf.

10-46. How could Matt and Jerry create a guerilla marketing program with a tie-in to a charitable event to promote their business?

There should be lots of fun ways to attract attention at a low cost. Student answers will be based on their levels of creativity.

10-47. What forms of alternative media offer the best chances to promote Matt and Jerry’s Disc Golf Course? Be specific with examples.

Alternative media programs include the following: • • • •

Buzz marketing Guerilla marketing Product placements and branded entertainment Lifestyle marketing

Student answers will vary.

10-48. Think about all the forms of alternative marketing presented in this chapter.

If you were a marketing intern for Matt and Jerry, which one would you choose? Why? Describe the type of alternative campaign the two could use to build patrons for their disc golf course.

It would be fairly small but should be possible through leagues and other events. .

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Case 2

After the Rush: What’s Next for Red Bull?

10-49. What alternative marketing methods does Red Bull use?

Red Bull utilizes lifestyle marketing, experiential marketing, and brand communities and ambassadors.

10-50. Visit Red Bull’s Web site (www.redbull.com) and identify the alternative media venues used by Red Bull’s marketing team.

Red Bull uses event marketing, including an airplane race, lifestyle marketing including skateboarding and extreme sports, and some product placements.

10-51. What role should traditional media play in Red Bull’s future, especially when compared to alternative media?

Student answers may vary. Red Bull employs very little television, radio, and print advertising. For the most part the company tends to feature alternative media formats.

10-52. Are there ways to build brand communities around Red Bull? What role might Twitter, Digg, or Facebook play in supporting such communities?

It is likely that there are brand communities and that they do visit these sites.

10-53. Red Bull’s marketing team believes staying with alternative approaches best fits its image. As you think about all of the alternative marketing methods and alternative media, what suggestions would you make to Red Bull for the future?

Describe a campaign for Red Bull using one or more alternative methods.

Student answers will vary. This would be a good in-class discussion question.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 10-54. Describe in your own words each of the forms of alternative marketing listed in Figure 10.1. Suppose your best friend has a band that has been playing at the local nightclubs for the last three years. He has asked you to help market his band. Discuss the pros and cons of each of the alternative marketing methods (see Figure 10.1). Which one would you recommend the band use first? Why? Describe an actual campaign the band could use. Be specific.

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10-55. Access Ugg’s website at www.uggaustralia.com. Evaluate the website in terms of its effectiveness, freshness, and the use of alternative marketing methods. What traditional marketing methods did you see? Do you think Ugg has effectively merged traditional and nontraditional advertising methods? Why or why not?

Bonus Case

DOGGIE DIP AND DO Darla Domke had always been an animal lover. Early in life Darla wanted to become a veterinarian, but unfortunately she found the science classes a little too challenging. Still, she wanted to work with pets, especially dogs, if at all possible. Eventually an idea came to her, a new business called Doggie Dip and Do. Doggie Dip and Do is a full-service dog shelter. An owner can have a dog’s hair groomed and nails trimmed; in the summertime, the dog can be dipped in a solution that provides flea and tick protection. The shelter also offers a dog kennel for owners who are on vacation or out of town. Inside the store, various dog products are sold, including foods, medicines, collars, chewing bones, and other treats.

Darla’s main worry was consumer awareness. Her store is located in a convenient shopping plaza on the outskirts of Atlanta, Georgia. Clearly enough potential customers are in the Atlanta area to support her business, but they need to know about all of the products and services that Doggie Dip and Do offers.

There were other challenges. Another issue was finding ways to reach potential Doggie Dip and Do customers efficiently. Clearly, a large number of people in the Atlanta area owned dogs, and many knew what a “doggie dip” was. Still, how could she steer them to her retail outlet? .

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Darla believed it would be worth her while to spend $40,000 on advertising in the first year. She took out a loan to help finance what she thought of as “start-up advertising expenses.” Her first thought was to simply hire a television station to create ads. After visiting with a local marketing professor, she decided it would be better to spend money on several media. Her choices were to try to figure out an advertising campaign on her own or hire a local advertising agency. Clearly money was the biggest obstacle.

Darla decided her ads should emphasize her love for animals. Customers should believe they were going to find quality dog products and be greeted by employees who genuinely care about the dog as well as the pet’s owner.

(1)

Which alternative media best fit with Doggie Dip and Do’s market?

Choices include leaflets and brochures, carry-home bags, mall signs, parking lot advertising, advertising on clothes, and kiosk ads.

(2)

Would a lifestyle marketing program be available for Doggie Dip and Do? Yes, Adopt-a-pet programs, dog shows and contests, and tie-ins with the Humane Society are all possible.

(3)

Could Darla develop a brand community for her company?

Again, yes. Dog owners who buy products there and have the services conducted may be put in contact with each other.

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Chapter

11

Database and Direct Response Marketing and Personal Selling CHAPTER OBJECTIVES Students should be able to answer the following questions: 11.1 11.2 11.3 11.4 11.5 11.6

What role does database marketing, including the data warehouse, data coding and analysis, and data mining, play in creating and enhancing relationships with customers?

How can database-driven marketing communication programs help personalize interactions with customers?

How do database-driven marketing programs create sales and build bonds with customers?

When should direct response marketing programs be used to supplement other methods of delivering messages and products to consumers?

What are the tasks involved in developing successful personal selling programs for consumers and businesses?

How should database marketing and personal selling programs be adapted to international settings?

OVERVIEW The secrets to developing loyalty include recognition, relationships, and rewards. Building them requires effective use of the IMC Promotional tools displayed in Figure 11.1: 1. Database and direct response marketing 2. Sales promotions 3. Public relations and sponsorships Sephora Cosmetics and the more general beauty industry offer a rich environment for creating successful loyalty programs, where Sephora has enjoyed a great deal of success. .

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One key to the company’s success has been the highly sophisticated personalized data program.

Questions for Students: 1. Have you ever shopped at Sephora? Describe your experience.

2. What other products primarily targeted to women would be well served by loyalty programs?

The first part of this chapter examines database marketing, including methods for building data warehouses, data coding, data mining, and data-driven communications and marketing programs.

Three key data-driven marketing programs are permission marketing, frequency programs, and customer relationship management.

Database programs are also used for direct response marketing techniques, including direct mail, television programs, other traditional media, alternative media, and telemarketing.

Databases are also used to support personal selling.

Objective 11.1:

What role does database marketing, including the data warehouse, data coding and analysis, and data mining play in creating and enhancing relationships with customers?

Database Marketing Database marketing involves collecting and utilizing customer data for the purposes of enhancing interactions with customers and developing customer loyalty.

Successful database marketing emphasizes (1) identifying customers and (2) building relationships with them.

Figure 11.2 summarizes the tasks involved in database marketing.

Building a Data Warehouse A data warehouse holds all customer data.

The operational database contains the transactions individuals have with the firm and follows accounting principles.

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A wide variety of information about customers themselves, purchasing patterns and histories, preferences, and marketing programs to which they responded should be included.

Examples of data and analyses found in a standard marketing data warehouse include the following: • • • • • • • • •

Customer names and addresses Email addresses and the cookies that record visits to the company’s website History of every purchase transaction History of customer interactions, such as inquiries, complaints, and returns Results of any customer surveys Preferences and profiles supplied by the customer Marketing promotions and response history from marketing campaigns Appended demographic and psychographic data Database coding such as lifetime value and customer segment clusters

Email, Mobile, and Internet Data Whenever possible, collect consumer email addresses and utilize cookies to record website visit patterns.

Most database programs take advantage of digital tracking to register and store website visits and browsing patterns regardless of the type of digital device (computer, tablet, or mobile phone).

This information allows for personalization of the firm’s website for individual customers.

Purchase and Communication Histories Both histories are important to a database program; what customers bought and a record of other interactions with the company (complaints, inquiries, compliments).

Personal Preference Profiles The goal is to record what works and what does not in terms of marketing efforts directed at specific consumers.

Customer Information Companies Information may be provided by outside firms, such as Knowledge Base Marketing, Donnelly, Dialog, and Claritas.

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Geocoding Geocoding is the process of adding geographic codes to each customer record so the person can be located on a map.

CACI Coder Plus is a commonly used software to record customer activity.

Question for Students:

Are these tactics invasions of privacy?

Database Coding and Analysis The goal of this process is to be able to personalize marketing messages to customers.

Lifetime Value Analysis Lifetime value is the figure that represents the profit potential of a customer throughout the lifetime of a relationship. It can be for a specific individual or for a customer segment.

The key figures are revenues, costs, retention rates, and visits or purchases per period (normally one year).

Lifetime value analysis stresses the value of investing in a long-term relationship with a customer or set of customers.

Customer Clusters Coding can be used to group customers into clusters based on a wide variety of criteria.

Location Data Tracking The newest form of data analytics is based on information provided by mobile GPS technology.

Mobile phone companies can track customer locations and combine it with profile information.

This type of information may be valuable to sports properties as well as restaurants and retailers.

Data Mining Data mining is a program used to develop a profile of a firm’s best customers.

Data mining normally involves one of two approaches: .

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1. Building profiles of customer groups.

2. Preparing models that predict future purchase behaviors based on past purchases.

Figure 11.3 displays the purposes served by data coding and data mining.

Objective 11.2:

How can database-driven marketing communication programs help personalize interactions with customers?

Database-Driven Marketing Communications Figure 11.4 details why the internet is important for customer communications, including the following reasons: • • • • •

It is the cheapest form of communication.

It is available 24/7.

Metric analysis reveals that the customer read the message, time it was read, and how much time was spent reading it.

Customers are able to access additional information whenever they want.

It can build a bond with customers.

The internet provides instant communications, easy and viable analyses, and messages can be adapted to specific customers.

Identification Codes The first step is to assigning individual customers IDs and passwords to use. This facilitates all other communications.

Personalized Communications Building customer profiles leads to more individualized messages being sent to them.

Cookies are uses to facilitate building profiles.

Customized Content In addition to personalized communications, data can be analyzed in order to customize content.

As an example, Netflix can make movie suggestions based on past rentals.

In-Bound Telemarketing The goal is to have quick access to customer information for the person receiving the call so that the employee can personalize conversations with customers.

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Trawling Trawling is the process of searching the database for a specific piece of information for marketing purposes (e.g., Home Depot finding people about to move and contacting them).

Objective 11.3:

How do database-driven marketing programs create sales and build bonds with customers?

Database-Driven Marketing Programs The most common database-driven marketing programs are • • •

Permission marketing Frequency programs Customer relationship management

Permission Marketing In a permission marketing program, the company only sends promotional information to customers who give permission. This provides the following advantages: • • •

Response rates are often higher.

Marketing costs are reduced because people who are not interested in the products do not receive marketing materials.

Customers can be reached by telephone, mail, or email.

Keys to Success in Permission Marketing For a permission marketing program to succeed, the marketing team ensures that the recipients have agreed to participate.

The marketing material should be relevant to the consumer receiving it.

The marketing team monitors responses and customizes the permission program to meet individual customer needs.

Figure 11.5 lists the steps of permission marketing, as follows: 1. Obtain the permission of the consumer.

2. Once the consumer has consented, the marketer is then ready to offer the consumer a full curriculum of information.

3. Reinforce the incentives by giving new ones.

4. Increase the permission level from the consumer to include information about the consumer’s family, life, hobbies, interests, attitudes, and opinions.

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5. Leverage the information gathered in step four to provide for the needs of the customer more effectively.

Permission Marketing Enticements Empowerment means consumers believe they have power throughout the relationship and not just at the beginning when they agreed to join the program.

Figure 11.6 lists reasons customers consumers opt-in to permissions marketing programs: • • • • •

Sweepstakes or chance to win (41 percent) Found site randomly (37 percent) Email required to access content (38 percent) Already a customer (40 percent) Friends recommended (24 percent)

Figure 11.7 provides a list of motives that help retain customers in a permission marketing relationship Empowerment means consumers believe they have power throughout the relationship and not just at the beginning when they agreed to join the program.

Reciprocity is a sense of obligation to the company.

Question for Students:

Are you part of any permission marketing programs? What do you like, or dislike, about them?

Frequency Programs A frequency program, or a loyalty program is an incentive plan designed to cause customers to make repeat purchases. Companies develop frequency programs for two primary reasons: 1. To develop loyalty in customers 2. To match or preempt the competition Figure 11.8 identifies the benefits of loyalty programs cited by customers.

Goals Figure 11.9 shows the common objectives of frequency programs: • • • • .

Maintain sales, margins, or profits Increase loyalty of existing customers Preempt or match a competitor’s frequency program Induce cross-selling to existing customers Page 11- 7

• •

Differentiate a parity brand Preempt the entry of a new brand

Principles Successful loyalty programs are based on two principles: added value and reciprocity.

Data-Driven Customization The key to successful frequency programs is the development of a database that allows for accumulation of purchase and personal data.

Collecting data allows companies to customize loyalty programs to meet each individual’s needs.

Maximize Motivation The best target for a frequency program is the group in the middle, neither low nor heavy users. Incentives can encourage this group to continue to buy because they often will make enough purchases in order to redeem incentives.

Question for Students:

Do you use frequency programs? Which ones?

Customer Relationship Management Customer relationship management programs allow companies to use databases to customize products and communications with customers with the goals of higher sales and profits.

Unfortunately, however, most CRM endeavors were not successful.

The two primary metrics of CRM are 1. lifetime value of the customer 2. share of customer Share of customer refers to the percentage of expenditures a customer makes with one particular firm compared to total expenditures in that product category.

A CRM program relies on quality service. CRM programs fail because they • • • •

.

Fail to identify markets Roll out the program before changing the organization Are technology driven rather than customer driven Stalk customers, rather than woo customers

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Objective 11.44:

When should direct response marketing programs be used to supplement other methods of delivering messages and products to consumers?

Direct Response Marketing Direct response marketing (or direct marketing) is the targeting of products to customers without the use of other channel members.

A list of methods to carry out direct marketing is provided in Figure 11.10.

Direct marketing programs are designed to develop closer relationships with customers through the following direct contact: • • • • • • •

Mail Catalogs Bill Stuffers Telemarketing Mass media (t.v., radio) Internet (search engine) Email

Direct Mail The most common form of direct marketing is through the mail.

Types of Commercial Lists A response list, which consists of customers who have made purchases or responded to direct mail offers in the past.

A compiled list provides specific information about customers who meet a specific demographic profile.

The primary advantage of direct mail is that it can be targeted to various consumer groups with measurable results.

The primary disadvantage of direct mail is clutter.

Catalogs Many consumers tend to be more favorable in their responses to catalogs because they are viewed at one’s leisure. .

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Many consumers save catalogs and pass them along. The key to successful cataloging is an enhanced database.

Catalogs are widely used in business-to-business marketing situations.

Mass Media The most common forms of mass media used in direct marketing are television, radio, magazines, and newspapers.

On television, infomercials can be part of an overall network (Home Shopping) or prepared for more traditional channels.

Internet and Email The internet provides a new channel for direct marketing. For most companies, the internet is a place for consumers and businesses to get more information. Many companies use the internet to display goods and services customers can order directly.

Internet direct marketing programs are not only fast but can also suggest the goods and services to the consumer that are based on that individual’s past purchasing or click-stream behaviors.

Direct Sales In the consumer sector, companies such as Amway, Mary Kay, and Avon use direct sales.

The salesperson contact friends, relatives, coworkers and others and provides them with small catalogs or marketing brochures.

Alternatively, individuals may host parties and invite friends and relatives to see products.

Telemarketing Inbound telemarketing occurs when an individual initiates a call to a company. When a customer places an order, cross-selling can occur by offering other products or services.

The least popular method for direct marketing is outbound telemarketing. Cold calling consumers yields few buyers and alienates many people.

Objective 11.5:

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What are the tasks involved in developing successful personal selling programs for consumers and businesses?

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Personal Selling Personal selling offers a face-to-face opportunity to build relationships with consumers. It takes place in both consumer and business-to-business transactions.

In relationship selling, the goal is to create a customer for life, not for a single transaction.

Figure 11.11 lists the steps in the selling process.

Question for Students:

Do you get annoyed when a salesperson is “pushy?”

Generating Leads Referrals are ideal leads because most recommendations are made by satisfied individuals.

Referral marketing is a strategic approach designed to generate leads from both customer and noncustomer sources.

Figure 11.12 identifies types of referrals.

Experience referrals directly result of a company’s work and typically come from current and former customers.

An expertise referral is made by a non-client.

Reputation referrals are provided by non-clients. They are based on the reputation that a company holds in a community or industry.

The final type method for generating leads is a network referral. These referrals are the least attractive because the prospect has limited knowledge of the company.

For generating leads, databases provide quality leads, especially internal databases. Most of these leads are generated through some type of advertising or inquiry.

Direct response ads in various media such as television, radio, magazines or newspapers can generate leads. Online ads on various websites or search engines may also generate leads.

Qualifying Prospects Qualifying prospects means evaluating leads on two dimensions: (1) the potential income the lead can generate and (2) the probability of acquiring the prospect as a customer.

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Knowledge Acquisition During the knowledge acquisition phase, salespeople or individuals within the sales organization gather information about the prospect in preparation for a sales call.

Figure 11.13 identifies typical information to be gathered.

Understanding the prospect’s business, customers, and needs will be extremely helpful.

The Sales Presentation The types of sales presentations used typically fall into one of these categories: (1) stimulusresponse, (2) need-satisfaction, (3) problem-solution, and (4) mission-sharing.

A stimulus-response sales approach, often called a “canned” sales pitch, uses specific statements (stimuli) to elicit specific responses from customers.

The need-satisfaction sales approach strives to discover a customer’s needs during the first part of the sales presentation and then provide solutions to those needs.

The problem-solution sales approach requires employees from the selling organization to analyze the buyer’s business. It usually involves a team of individuals, such as engineers, salespeople, and other experts.

In the mission-sharing approach, two organizations develop a common mission. They then share resources to accomplish that mission. This partnership resembles a joint venture.

Handling Objections The most common methods of handling objections are listed in Figure 11.14.

With the head-on approach, the salesperson answers the objection directly.

The indirect approach method allows the salesperson to never really tell the customer he is wrong. Instead, the salesperson sympathizes with the customer’s viewpoint and then provides the correct information.

When the customer’s objection is partially true, then salesperson may utilize the compensation method. With this approach the salesperson replies “yes, but ...” and then explains the product’s benefits or features that answer the customer’s objection.

The sales rep can use a feel, felt, found method. The salesperson allows the customer to talk about fears or worries. In response, the salesperson can relate personal experiences or experiences of other customers who had the same fears and worries and how the product resulted in a positive experience. .

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Closing the Sale Figure 11.15 identifies some of the most common sales-closing methods.

In direct close, the salesperson asks for the order outright.

The trial method approach means the salesperson solicits feedback that provides information regarding what will be the customer’s reaction, without asking directly for the sale.

Another alternative is to summarize the product’s benefits and how it meets the customer’s needs prior to asking for the order.

Sometimes a salesperson asks a serious of questions along the way, ensuring the customer will continuously respond “yes.”

A salesperson can also assume the customer will say yes.

Follow-Up Keeping a customer happy after the purchase will result in repeat business, customer loyalty, and positive referrals.

Quality follow-up programs are cost effective ways to retain customers, which is much cheaper than continually finding new customers.

Objective 11.6:

How should database marketing and personal selling programs be adapted to international settings?

International Implications One decision is whether data should be country-specific, especially when two nations share a small geographic space.

Direct marketing programs must be adapted to local conditions, technologies, and delivery systems.

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MyMarketingLab Go to mymktlab.com to complete the problems marked with this icon .

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR DATABASE MANAGERS (Note to professors—these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

Insist on the right equipment to do your job: • • •

Computers Scanners for cash registers Software packages such as CACI Coder/Plus (for geocoding)

Develop a high quality staff. Train and retrain employees frequently. Stay on the cutting edge of technology and information management techniques.

Get to know the entire marketing department. Generate discussions in which you spell out the items you can provide: • • • • • • .

Customer locations by geographic area Demographic information about key buyers Buyer profiles Attitudinal tendencies of buyers Characteristics of businesses most likely to make purchases Tendencies of business buyers, especially the decision maker Page 11- 14

Attend meetings and ask to be invited into discussions where data may be applied: • • • • • •

Advertising creatives Promotions managers Advertising account executives Sales managers Customer service managers Conversations with others in the market channel (wholesalers and retailers)

Constantly remind yourself of the goals of the database program. Make sure they are consistent with the firm’s IMC goals and major theme.

Constantly re-evaluate the effectiveness of various direct marketing programs. Be innovative.

Try new approaches and new media.

Make sure your database management program is carefully aligned with the firm’s website.

Use the website in direct marketing programs, whenever possible.

Consider the use of permissions marketing programs for your organization. Make sure the data you would receive is unique and valuable.

Seek out cost information for frequency programs. Develop techniques to see who collects incentives, and whether or not the benefits of the program outweigh the costs, especially with regard to competitive efforts.

REVIEW QUESTIONS 11-1. What two activities are parts of a successful database marketing program?

Successful database marketing involves identifying customers and building relationships.

11-2. What is a data warehouse? What is the difference between an operational database and a marketing database?

A data warehouse holds all customer data. An operational database contains the transactions individuals have with the firm and follows accounting principles.

11-3. List the tasks associated with data-based marketing.

Successful database marketing emphasizes (1) identifying customers and (2) building relationships with them.

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11-4.

Describe geocoding, customer clusters, and location data tracking.

Geocoding is adding geographic codes to each customer record. It plays a role in database programs by allowing the company to plot the addresses of customers on a map. Among other benefits, this process helps company leaders make decisions about where to place retail outlets.

Customer cluster are used when coding can be used by marketers to group customers into clusters based on various criteria.

Location-data tracking involves mobile phone companies tracking customer locations and combining it with profile information.

11-5. Define lifetime value. How is it determined?

The lifetime value is based on the average number of visits per year times the amount of money spent, less selling costs. The share of customer figure is the potential value that could be added to a customer’s lifetime value. It is crucial to identify and focus on the most profitable customers with IMC dollars.

11-6. What are the two primary functions of data mining?

Data mining normally involves one of two approaches: 1. Building profiles of customer groups.

2. Preparing models that predict future purchase behaviors based on past purchases 11-7. Explain how identification codes are used in database-driven marketing communications.

The first step in database-driven marketing communications is establishing identification codes, which is assigning IDs and passwords to individual customers.

This facilitates all other communications.

11-8.

Explain how consumer profile communications to customers.

information

is

used

when

sending

Building customer profiles leads to more individualized messages being sent to them.

Cookies are uses to facilitate building profiles.

11-9. What is trawling?

Trawling is the process of searching the database for a specific piece of information for marketing purposes.

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11-10. Describe a permission marketing program. What are the key benefits of this approach?

A permission marketing program is where the company only sends promotional information to consumers who give the company permission to do so. The benefits are that consumers do not believe they are receiving unsolicited junk mail. Response rates are generally higher, and costs are reduced when permission is given first.

11-11. What are the keys to an effective permission marketing program?

The steps involved in developing an effective permissions marketing program are: • • • • •

Obtain permission from the customer.

Offer the consumer a curriculum over time.

Reinforce the incentive to continue the relationship.

Increase the level of permission.

Leverage the permission to benefit both parties.

11-12. Describe a frequency program.

A frequency program is an incentive plan designed to cause customers to make repeat purchases. The program should add value to what the product offers or provide a unique new feature. Next, the more effort a customer expends to participate in a frequency program, the greater the value of the reward should be. Also the program should be designed to maximize the customer’s motivation to make the next purchase.

11.13. What is customer relationship management?

Customer relationship management (CRM) is a program to build long-term loyalty and bonds with customers through the use of a personal touch facilitated by technology.

11-15. What is meant by the term share of customer?

The term share of customer refers to the percentage of expenditures a customer makes with one particular firm compared to total expenditures in that product category.

11-15. What is direct response marketing?

Direct marketing programs are designed to develop closer relationships with customers through direct contact.

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11-16. Explain how response lists and compiled lists are used in direct mail programs.

A response list consists of customers who have made purchases or responded to direct mail offers in the past. A compiled list provides specific information about customers who meet a specific demographic profile.

11-17. Explain the two ways infomercials are presented as parts of a direct response program.

On television, infomercials can be part of an overall network (Home Shopping) or prepared for more traditional channels.

11-18. Describe relationship marketing and the four types of referral marketing.

In relationship selling, the goal is to create a customer for life, not for a single transaction.

Experience referrals directly result of a company’s work and typically come from current and former customers.

An expertise referral is made by a non-client.

Reputation referrals are provided by non-clients. They are based on the reputation that a company holds in a community or industry.

The final type method for generating leads is a network referral. These referrals are the least attractive because the prospect has limited knowledge of the company.

11-19. What steps are involved in the personal selling process?

Generating leads, qualifying prospects, knowledge acquisition, the sales presentation, handling objections, closing the sales, and follow up.

11-20. Identify the four types of sales presentations that typically used by sales reps.

(1) stimulus-response, (2) need-satisfaction, (3) problem-solution, and (4) missionsharing 11-21. What types of sales closing methods are available to salespeople?

(1) The direct close, or directly asking for the sale, (2) trial method, soliciting feedback first, (3) summarization, (4) continuously ask questions with the answer “yes,” (5) assume the sale has been made and move forward.

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CRITICAL THINKING EXERCISES Discussion Questions 11-22. Assume you are the account executive at a database marketing agency. A local music retailer with four stores has asked you to develop a database for the company. What information should be in the databases? How would you build a data warehouse and where would you obtain the data? Be specific.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

A database developer would seek to achieve the two primary objectives of database marketing: to identify customers and build relationships. It would be important to the kinds of data that would be best for the music retailer. Do they carry sheet music, instruments, and offer repair services? Do they provide music lessons? Are all their products sold online? Do they have institutional buyers, such as local schools? The type of information needed would come from high school band teachers, from instore purchases, from internet visits to the company’s website, from band contests (where groups of band are in the same location), and possibly other venues.

11-23. The Chic Shaque sells contemporary fashions, bedding, bath, gifts and home décor items in its 14 stores. Explain each of the data coding processes of lifetime value, customer clusters, and location-data tracking. For each coding method, describe how the Chic Shaque could use the data coding process in its database marketing effort.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Lifetime value is the figure that represents the profit potential of a customer throughout the lifetime of a relationship. It can be for a specific individual or for a customer segment.

Customer cluster coding can be used to group customers into clusters based on a wide variety of criteria.

Location-data tracking is the newest form of data analytics and is based on information provided by mobile GPS technology. Mobile phone companies can track customer locations and combine it with profile information.

11-24. Hickory Outdoor is a retail store that sells fishing, hunting, camping, and other outdoor type of equipment and supplies, including various items for a number .

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of outdoor sports. The company has built a database of its customers over the last five years. This means the marketing team can use data mining to improve its marketing efforts. Suggest ways data mining can be used. What type of marketing programs would you suggest based on data mining? What other types of marketing programs can be developed from the database?

Data mining normally involves one of two approaches: 1. Building profiles of customer groups 2. Preparing models that predict future purchase behaviors based on past purchases Both of these would have value in identifying customer types (family camping versus camping on a hunting trip) and ways to reach them.

11-25. Karen’s Formal Dress is a retailer specializing in formal and wedding wear. She has a database with more than 3,000 names of individuals who have purchased or rented formal wear. She would like to develop a permission marketing program. How can the marketing team encourage individuals to give permission to receive marketing materials? Once the company has the customer’s permission, how can the relationship be continued to make it beneficial to both the consumer and to Karen’s Formal Dress? Describe the methodology Karen should use in her permissions marketing program to include types of materials, methods of distribution, and incentives.

A permission marketing program might be helpful for wedding coordinators and planners as well as individual customers. They would need to be somehow driven to the site just as wedding plans begin to develop. Frequency programs may work for coordinators and planners but do not make much sense for individual customers, who should plan to only marry once. The same true is for customer relationship management programs.

11-26. A primary reason for developing a frequency program is to encourage customers to be loyal to a business or brand. For each of the following products, discuss the merits of a frequency program. What types of incentives would individuals need to join the frequency club and then participate in the program? a. Local restaurant b. Auto repair service c. Printing service d. Clothing retailer Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

11-27. Suppose you have been hired as a marketing intern for Centric Federal Credit Union and asked to develop a direct response marketing campaign. For each .

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direct response marketing method, describe how Centric could utilize it. Be specific with the description of the campaign in terms of how and where you would obtain names and type of media outlets used. When you have finished, rank the methods of direct response marketing in terms of their desirability for Centric. Justify your ranking.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Direct marketing programs are designed to develop closer relationships with customers through direct contact: • Mail • Catalogs • Statement stuffers • Telemarketing • Mass media (tv, radio) • Internet (search engine) • Email Student rankings will vary.

11-28. Examine the forms of direct response marketing shown in the graph in Figure 11.10. Which ones have you responded to in the past? Which ones are most likely to influence your purchase decisions? Which ones are the least likely? Explain for each method your personal responses over the last year.

Direct marketing programs are designed to develop closer relationships with customers through direct contact: • Mail • Catalogs • Statement stuffers • Telemarketing • Mass media (tv, radio) • Internet (search engine) • Email Student answers will vary.

11-29. Examine the direct marketing methods highlighted in Figure 11.10. Think about the following businesses. For each business, identify the best direct response marketing method. Justify your choices. Describe a direct response campaign that you envision for each of the methods chosen.

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a. Shoe store b. Sporting goods retailer c. Internet calendar and video game retailer (sells only via the internet) d. Accounting and tax services for small businesses and individuals Direct marketing programs are designed to develop closer relationships with customers through direct contact: • Mail • Catalogs • Statement stuffers • Telemarketing • Mass media (tv, radio) • Internet (search engine) • Email Student answers will vary.

11-30. Think about a recent personal purchase experience that involved a salesperson.

Describe how the salesperson handled you during the sales call. Which sales presentation approach did the salesperson use? Which methods of handling objections were used? Evaluate how well the objection was handled. Which closing did the salesperson use? How well did the salesperson handle the closing?

Student responses will vary dependent on the type of experiences they describe. This is a good in-class discussion question.

11-31. In your own words explain the four types of referrals in referral marketing.

Suppose you are the marketing intern for a local CPA and corporate tax business. For each type of referral, discuss a viable strategy for obtaining referrals for your business. Of the four strategies you just discussed, which is the most feasible? Why? Which is the second-most feasible? Why? Experience referrals directly result of a company’s work and typically come from current and former customers.

An expertise referral is made by a nonclient.

Reputation referrals are provided by nonclients. They are based on the reputation that a company holds in a community or industry.

The final type method for generating leads is a network referral. These referrals are the least attractive because the prospect has limited knowledge of the company.

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INTEGRATED LEARNING EXERCISES 11-32. Pick one company that sells clothing. Go to the company’s website. What evidence do you see of database marketing and of personalization of the website? Describe a database marketing program that the company could use to reach consumers such as yourself.

Student responses will vary by the site chosen.

11-33. Go to the website for Scotts Miracle Gro at www.scotts.com. What evidence do you see of database marketing and of personalization? Review the concepts presented in the section “Database-Driven Marketing Communications.” What steps should Scotts take to develop data-driven communications with visitors to the website as well as individuals who make purchases?

The site contains a link called “Connect” that allows for personalization and a wide variety of venues for customer contact and discussion, including a chat room, blogs, and “ask the expert” section.

11-34. Describe each of the data-base marketing communications methods identified in the chapter. Go to the website of Weaver Leather at http://www.weaverleather.com. Discuss each of the database-driven marketing communication methods presented in the chapter in relation to Weaver Leather. Explain the importance of each and describe how Weaver Leather could use each to enhance its communications with visitors to its website.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

The three approaches are • Permission marketing • Frequency programs • Customer relationship management 11-35. You have been hired as a marketing intern for a small chain of 17 Chinese food restaurants. Your boss has asked you to locate three database marketing agencies on the Internet. Describe the services of each company and evaluate its feasibility for developing a database marketing program for the Chinese restaurants. Provide the URL for each agency and use screenshots to illustrate your answer. Which company would you recommend? Why? Student answers will depend on the agencies they select. .

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11-36. DMNews is a trade journal for database marketing and customer relationship management programs. Access the website at www.dmnews.com. What types of information is available on the site? How could this help companies with database marketing and CRM programs? Access and read one of the articles from the journal. Write a paragraph about what you learned.

DM News offers a vast variety of marketing programs, including blogs, email marketing, DRTV, search marketing, direct mail, and multichannel/retail marketing information.

Student reports on articles will vary by the ones they choose.

11-37. The Direct Marketing Association (DMA) is a global association of business and nonprofit organizations that use direct marketing tools and techniques. Access the trade organization’s site at www.the-dma.org. What services does the DMA provide its members? What value would this be to a business in developing a direct marketing response program?

The site offers education programs, events, advocacy programs, resources, a bookstore, research, and white papers. A member would have access to stories and templates of companies that have created successful direct response programs.

11-38. A primary key in successful direct marketing is the quality of the list that is used. One company that specializes in compiling lists is U.S. Data Corporation.

Access the company’s website at www.usdatcorporation.com. What types of lists does the company offer? Access one of the lists and describe how that list can be compiled. Discuss how a company could use U.S. Data Corporation for a direct response marketing program. What services does U.S. Data Corporation offer?

The lists include business, consumer, specialty, response, mortgage, new homeowners, new businesses, ethnic, data cards, data services, marketing services, and mailing lists. The company offers a guarantee that the lists will be accurate above industry standards.

Student list choices and descriptions will vary. A company could build a variety of direct response programs from these lists, starting with direct mail but including most of the other choices.

11-39. Suppose you are the marketing manager for a chain of 15 beauty salons and have decided to use a direct response marketing campaign. Access the website of US Data Corporation (www.usdatacorporation.com). Select five different lists you could purchase from the company and explain why they were chosen.

Identify two different services offered by US Data Corporation that would be of interest to you. Explain how that service could be used in your direct response marketing campaign. .

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Student answers will depend on the lists they select.

11-40. Use the internet to find three companies or organizations that offer advice to salespeople. Write a report about the methods the sites suggest and how those tactics compare to the materials presented in this chapter. Use screenshots to enhance your report and provide the URL of the three companies.

Student answers will be based on the websites they identify. This is an effective exercise to share in class.

11-41. In your own words describe each of the methods of handling objections and closing sales presented in this chapter. Go to YouTube and locate two videos, one that discusses handling objections and the other that discusses how to close sales. Provide the URLs of the two videos. Describe the methods presented in the videos and how it is similar or different than the information presented in the textbook.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Student Project: Creative Corner The assignment is to create a newspaper advertisement that encourages women in the company’s target market to visit the retail store and join Lilly Fashion’s database program.

The next part of the assignment is to develop an email promotion for those in the database that offers a birthday present to them.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

11-42. Database marketing: http://blogclowbaack.net/2014/05/12/databasemarketing-chapter-11/ 11-43. Direct response marketing: http://blogclowbaack.net/2014/05/12/directresponse-marketing-chapter-11/ 11-44. Personal selling: http://blogclowbaack.net/2014/05/12/selling-chapter-11/ These exercises provide you with an additional tool to engage your students.

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CASES Case 1

Salon Sensational

11-45. Identify the types of data Jennifer should collect from her customers and how she could obtain it.

She would want the same information as any business: The operational database would contain the transactions individuals have with the firm. The marketing database would contain information about current customers, former customers, and prospect, plus information regarding various marketing efforts used to reach them.

The goal would be to identify customers and build relationships with them, which would be especially important in this type of business.

11-46. Suppose Jennifer wants to start a loyalty card program to build her database.

Design a flyer that could be handed to customers of the salons encouraging them to join the loyalty program. What benefits would customers receive? In exchange, what information would Jennifer request from each customer?

Student answers should note that all of the information from operational and marketing databases would be valuable.

11-47. Once the database is built, what database-driven marketing communications should Salon Sensational send out to individuals in its database?

The database should send personalized communications, create customized content, and be useful in trawling programs. In-bound telemarketing probably would not be helpful to this company.

11-48. Which direct response marketing programs would be helpful to Jennifer? How would they be of value? Explain how Jennifer could use each to increase purchase frequencies and visits to her salons.

The choices include the following: • • • • • • •

Mail Catalogs Stuffers Telemarketing Mass media (tv, radio) Internet (search engine) Email

Student answers will vary. Catalogs would be found in the salon. .

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11-49. What types of personal selling tactics should stylists use? Which should not be used? Why? Relationship building would be the key. Hard sell would work against the stylists.

11-50. What methods for overcoming objections would best serve Salon Sensational when selling hair care products?

With the head-on approach, the stylist answers the objection directly.

The indirect approach method allows the stylist to never really tell the customer she is wrong. Instead, the stylist sympathizes with the customer’s viewpoint and then provides the correct information.

When the customer’s objection is partially true, then the stylist may utilize the compensation method. With this approach the salesperson replies “yes, but ...” and then explains the product’s benefits or features that answer the customer’s objection.

The stylist can use a feel, felt, found method. The salesperson allows the customer to talk about fears or worries. In response, the salesperson can relate personal experiences or experiences of other customers who had the same fears and worries and how the product resulted in a positive experience.

Student responses will vary.

Case 2

The Travel Agency Dilemma

11-51. How might database marketing, including the data warehouse, data coding and analysis, and data mining, help a travel agency create and enhance relationships with customers and potential customers?

The data warehouse would contain all of the customer data. Data mining would use computer software to analyze customer types of purchasing patterns. The company could use geocoding to find places where clusters of customers are located and then calculate lifetime values of various customer groups (including possibly businesses).

Relationships would be built by providing quality, personalized service that saves customers money on travel by finding the best deals or the ones that are the best in terms of quality.

11-52. How could data-driven marketing programs including permission marketing, frequency programs, and customer relationship management systems be of use to travel agencies? .

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Permission marketing would grant the agency the ability to contact clients when special travel deals arise. Frequency programs would allow for discounts and perks to the more frequent customers. Customer relationship management could help the agency better understand client special needs and respond to them, such as a handicapped traveler, one with small children, business travelers, and so forth.

11-53. Discuss each of the direct response marketing techniques in relation to marketing of travel agencies.

Direct mail could be used to seek out new customers or maintain relations with current clients.

Catalogs could be developed for specific areas (Bahamas, Hawaii, etc.) displaying hotels and other travel amenities.

Direct response mass media can be used for special travel events, such as a cruise with a local celebrity or sports team.

The internet could provide offers when special rates or events occur. Many sites such as Travelocity use such enticements.

Direct sales are offered through phone calls, emails, or other contacts with customers.

The company should only use inbound telemarketing to interact with customers.

Outbound calls would not be successful.

11-54. What personal selling tactics are most important to travel agency employees as they work with customers and potential customers?

Relationships marketing and referrals would be keys.

11-55. Discuss the pros and cons of each of the methods of handling objections in personal selling in relation to a couple who are hesitant to purchase vacation to one of the Caribbean islands.

With the head-on approach, any anxiety about traveling there should be directly confronted by the salesperson.

The indirect approach method allows the salesperson to never really tell the customer he or she is wrong. Instead, the salesperson sympathizes with the customer’s viewpoint and then provides the correct information. This would be used to allay any fears or concerns about price, convenience, safety, etc.

.

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When the customer’s objection is partially true, then salesperson may utilize the compensation method. With this approach the salesperson replies “yes, but ...” and then explains the product’s benefits or features that answer the customer’s objection.

With the feel, felt, found method, the salesperson allows the customer to talk about fears or worries. In response, the salesperson can relate personal experiences or experiences of other customers who had the same fears and worries about travel the Caribbean and how the trip was a positive experience.

11-56. Discuss the pros and cons of each of the closing methods in personal selling in relation to a couple who are hesitant to purchase vacation to one of the Caribbean islands.

In direct close, the salesperson asks for the order outright but risks alienating the potential customer.

The trial method approach means the salesperson solicits feedback that provides information regarding what will be the customer’s reaction, without asking directly for the sale. This may lead to never doing the “ask.”

Another alternative is to summarize the product’s benefits and how it meets the customer’s needs prior to asking for the order. Again, at some point, in this circumstance, the customer would need to be asked to place an order.

Sometimes a salesperson asks a serious of questions along the way, ensuring the customer will continuously respond “yes.” This might build excitement but make the customer feel pressured.

A salesperson can also assume the customer will say yes, which could lead to some confusion if the person hasn’t made up his/her mind.

Student choices will vary.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 11-57. Karen’s Formal Dress is a retailer specializing in formal and wedding wear.

She has a database with more than 3,000 names of individuals who have purchased or rented formal wear. She would like to develop a permission marketing program. How can the marketing team encourage individuals to give permission to receive marketing materials? Once the company has the customer’s permission, how can the relationship be continued to make it .

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beneficial to both the consumer and to Karen’s Formal Dress? Describe the methodology Karen should use in her permissions marketing program, including the types of materials, methods of distribution, and incentives.

11-58. In your own words describe each of the methods of handling objections and closing sales presented in this chapter. Go to YouTube and locate two videos, one that discusses handling objections and the other that discusses how to close sales. Provide the URLs of the two videos. Describe the methods presented in the videos and how they are similar to or different from the information presented in the textbook.

BONUS CASE

LINCOLN MEDICAL SUPPLY Sara Holmes has just taken on a unique dual role in her job at Lincoln Medical Supply.

She was to be in charge of the marketing database for the company and also would serve as liaison with the advertising firm and marketing group that provided promotions for the organization. Sara was told her input would be heavily counted on to help with key decisions to build the size and scope of the company in the next several years.

Lincoln Medical Supply was located in Lincoln, Nebraska. The company served both retail and business-to-business markets by selling and servicing various types of medical equipment, from items as basic as ankle braces to those as sophisticated as fetal monitors.

The company had achieved a great deal of success simply through the sheer demand for various products, but the management team was concerned that no coherent marketing plan had ever been developed.

Sara was told that the company had three basic customer groups:

.

•

Retail walk-in buyers

•

Physicians’ offices

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•

Hospitals

Retail customers purchased the lower cost, less intricate items, such as braces, bandages, and cold packs. Physicians bought more elaborate equipment and also provided referrals for patients. Hospitals ordered the big-ticket items. Each customer type generated a solid source of revenue for the organization.

Sara’s first challenge was to develop a database for each type of customer. Her potential sources for retail customers were insurance forms (many filed for insurance to pay for the items involved) and sales ticket information requested from each person.

Doctors’ offices could be sources of a great deal of information, but the company often had to “push” the staff to provide statistics on numbers of patients, types of expenditures, and other key facts. Hospitals could be assessed through internal company reports and as well as by accessing data from external sources.

Following the simple generation of data, Sara would need to decide if all this information should be compiled into one overall data warehouse, or if it should be separated by customer type. Clearly the needs of each group were different, and therefore it seemed plausible that the marketing tactics used for each customer type would also vary. At the same time, Sara wanted a consistent message sent out that Lincoln Medical Supply stood for consistent, high-quality, and excellent service advantages. She knew the name “Lincoln” didn’t help because so many companies in the city also used the name (e.g., Lincoln Electric Supply, Lincoln Party Favors, and so forth).

Sara held a meeting with the marketing team. The group told her the primary goal was to build greater brand equity in the name because a new medical supply house had just opened near one of Lincoln’s biggest hospitals. Next, the company’s leaders wanted to .

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know how to get walk-in buyers to purchase more items and how to expand purchases from the other two segments of the business at the same time. The leaders discussed the use of catalogs and an internet site to widen the scope of product offerings. They also considered the possibility of opening satellite locations in Omaha (50 miles away), Grand Island (90 miles west), and North Platte (400 miles away). They wanted to develop an understanding of the type of individual who would venture into a medical supply store, what the person might buy, and what the person would not buy. They also needed to know if they were meeting the needs of physicians and hospitals. With all of these challenges in mind, Sara took a deep breath and started working.

(1)

Name the sources of internal and external data for all three types of customers.

Retail walk-in buyers can provide internal data when they give their names and addresses during the purchase. External data can be collected from credit reports and companies that specialize in providing additional information.

Physician’s offices provide internal data when they complete credit applications and make purchases. External data may be available in the marketing channel and from specialty companies who catalog information about various physicians and clinics.

Hospitals provide internal data when making purchases. Government sources may render some external information along with commercial database services.

(2)

What types of data should Sara collect from each type of customer?

From retail buyers, Sara should collect information regarding how often the customer purchases medical equipment, where it was purchased, and why the customer did or did not purchase from Lincoln Medical Supply (price, service, and availability are three major considerations for walk-in buyers). From physicians offices she should collect information regarding what the office specializes in, how many patients are treated, and how often supplies are purchased. Sara should collect much of the same information from hospitals.

(3)

How can Sara meet the goals imposed on her by the marketing group?

Sara can meet her goals by developing a marketing database for her company that would collect the right forms of data and organize them in a manner that would be easily accessible. She should play a major role in helping the marketing group to

.

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develop a successful IMC plan. For retail customers, name recognition is important.

Loyalty may be established by pointing out the long history the company has in the city and to fight off the competitive threat of the new supplier. For physicians and hospitals, targeting specific needs where the company has a competitive edge through price, availability, service agreements, or quality would be one key. The same data would be valuable for all satellite operations.

(4)

What kinds of marketing programs could be developed from the data that Sara generates? Should the data be separated by customer type or combined into one major database? Why or why not?

The data should be separated by customer type because the products purchased are different and the amount purchased also would vary. The marketing program should be based on any advantages the company holds over the competition, including location, price, brand recognition, quality, service, or other features.

(5)

Is Lincoln Medical Supply a candidate for a CRM program? Why or why not?

Due to the amount of repeat business with physicians offices and hospitals, Lincoln Medical is a logical place to install a CRM program. Done correctly, a CRM program can develop a high level of loyalty among the firm’s best customers.

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Chapter

12

Sales Promotions CHAPTER OBJECTIVES Students should be able to answer the following questions: 12.1 12.2 12.3 12.4 12.5 12.6

What differences exist between consumer promotions and trade promotions?

How can the various forms of consumer promotions help to pull consumers into stores and push products onto the shelves?

How do different types of customers respond to consumer promotions?

What types of trade promotions can help push products onto retailers’ shelves and eventually to end users?

What concerns exist for manufacturers considering trade promotions programs?

What issues complicate international sales promotions programs?

OVERVIEW Sales promotions consist of all the incentives offered to customers and channel members to encourage product purchases.

Consumer promotions are the incentives that are offered directly to a firm's customers or potential customers.

Trade promotions consist of the expenditures or incentives used by manufacturers and other members of the marketing channel to purchase goods for eventual resale.

Huggies Pull-Ups Huggies, a product made by Kimberly Clark, engages in a variety of marketing efforts including newer social media programs combined with traditional sales promotions.

Coupons, discounts, contests, and various trade promotion incentives are included in the process.

Questions for Students: 1. Which consumer promotions, coupons, price-offs, contests, or rebates best fit with pull-up diapers? .

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2. What types of incentives to retail stores should the producers of pull up diapers offer?

3. What do you think of the concept of a “potty dance?”

Objective 12.1:

What differences exist between consumer promotions and trade promotions?

Consumer Promotions vs. Trade Promotions Sales promotions consist of all of the incentives offered to customers and channel members to encourage product purchases.

Sales promotions take two forms: consumer promotions and trade promotions.

Companies offer consumer promotions directly to customers and potential customers.

Consumer promotions are aimed at those who actually use the product, or end users.

They may be individuals or households. Another end user may be a business that consumes the product, when the item is not resold to another business. In other words, companies offer consumer promotions in both consumer markets and business-tobusiness markets.

Trade promotions are only allotted in the distribution channel. Trade promotions consist of the expenditures or incentives used by manufacturers and other members of the marketing channel to purchase goods for eventual resale. Trade promotions provided to other firms help push products through to retailers.

Objective 12.2:

How can the various forms of consumer promotions help to pull consumers into the stores and products onto the store shelves?

Consumer Promotions Figure 12.1 displays the types of consumer promotions: 1.

2.

3.

4.

5.

6.

7.

.

Coupons Premiums Contests and sweepstakes Refunds and rebates Sampling Bonus packs Price-offs

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Coupons A coupon is a price reduction offer to a consumer. It may be a percentage off the retail price such as 25 percent or 40 precent, or an absolute amount (50 cents or $1.00).

Coupon Distribution The methods used to distribute coupons are displayed in Figure 12.2.

Manufacturers distribute 80 percent of all coupons. A total of 88 percent of all coupons are sent out through print media with 80 percent being distributed through free standing inserts (FSI), which are sheets of coupons distributed in newspapers, primarily on Sunday.

Digital coupons are rapidly growing in terms of popularity and use.

Types of Coupons 1.

2.

3.

4.

5.

An instant redemption coupon is distributed in retail stores placed on or in packages.

A bounce-back coupon is placed inside packages so that customers cannot redeem them quite as quickly, which encourages repeat purchases.

Scanner-delivered coupons are issued at a cash register. They are triggered by an item being scanned.

Cross-ruffing is the placement of a coupon for one product on another product.

Response offer coupons are issued following requests by consumers. Requests may be from a 1-800 number or internet inquiries.

Disadvantages of Coupons The drawbacks to the use of coupons as a promotional tactic include the following: •

Reduced revenues. result from a lower ultimate price being charged.

(Note to professors: the following problems were noted in earlier editions but not this one.)

• Mass cutting, which occurs when coupons are “redeemed” through a fraudulent retail outlet that does not exist, except at a mail box set up by an illegal “coupon ring” • Counterfeiting, when coupons are copied and then sent back to the manufacturer for reimbursement • Misredemptions, when coupons are redeemed for an incorrect size for which the discount applies, or when clerks honor coupons for merchandise that was not purchased, which can be an error or can be intentional Question for Students:

.

Do you use coupons? Which ones and which kinds?

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Premiums Premiums are prizes, gifts, or other special offers consumers receive when purchasing products. When a premium is offered, the consumer pays full price for the goods or service.

Types of Premiums There are four major types of premiums as displayed in Figure 12.3.

1. Free-in-the-mail premiums, which are gifts individuals receive for purchasing products. To receive the gift, the customer must mail in a proof-of-purchase to the manufacturer who then mails the gift back to the consumer.

2. In- or on-package premiums are usually small gifts, such as toys in cereal boxes (or Cracker Jacks).

3. Store or manufacturer premiums are gifts given by either the retail store or manufacturer when the customer purchases a product.

4. Self-liquidating premiums are used when the consumer must pay an amount of money for the item, which is usually the amount needed to cover the cost of the premium.

Keys to Successful Premium Programs In building successful premium programs the following items are important, as summarized

by Figure 12.4.

• • • •

Match the premium to the target market.

The best premiums are those that reinforce the firm’s image. They should not be cheap trinkets.

Premiums are more likely to succeed when they are tied into the firm’s products and related in some manner.

It is important to integrate premiums with the other components of the IMC program.

Contests and Sweepstakes Contests and sweepstakes are used in consumer markets as well as business markets. A primary factor in the success of this type of appeal is the prize list.

Contests Contests normally require the participant to perform some type of activity in order to enter.

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Sweepstakes No purchase can be required to enter a sweepstakes, and consumers may enter as many times as they wish.

Question for Students:

With gambling so readily available, do contests and sweepstakes generate any interest?

Perceived Value The perceived value of a prize has two components: 1. Extrinsic value, or the actual attractiveness of the item.

2. Intrinsic value, or values associated with playing or participating.

The Internet and Social Media The internet has become a popular location for contests and sweepstakes.

It provides opportunities for individuals to see a prize’s intrinsic value by creating interactive games to challenge a contestant’s ability.

The internet offers promoters data-capturing capabilities.

Internet contests are less costly to set up and run than other types of promotions.

Goals of Contests and Sweepstakes To create successful contests and sweepstakes, it is important to coordinate the contest promotion with the advertising, POP displays, and other marketing tools.

The primary goals of contests and sweepstakes are often to increase customer traffic and boost sales.

Brand awareness also increases with multiple exposures to an advertisement or contest.

Refunds and Rebates Refunds and rebates are cash returns offered to consumers or businesses following the purchase of a product.

A refund is a cash return on what are called “soft goods,” such as food or clothing.

Rebates are cash returns on “hard goods,” which are major ticket items such as automobiles and major appliances. .

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Problems are associated with these programs: • • •

Costs (lost revenue) The paperwork involved (to file for the money and process the claim) Diminished effectiveness because people expect them

Successful refund or rebate program, must offer a perceived newness or originality. They should generate a significant impact, or enough to cause an action.

Sampling Sampling is the actual delivery of a product to consumers for their use or consumption.

Normally, samples are provided free of charge. In business-to-business markets, companies often provide samples of products to potential clients. Sampling can also be used in the service sector.

Sample Distribution Types of sampling, as shown in Figure 12.5, include: •

In-store distribution, where they are given out in stores

•

Direct sampling, in which samples are mailed or delivered door-to-door to consumers

•

Response samples are those made available to individuals or businesses that respond to a media offer on television, the internet, from a magazine, or some other source

•

Cross-ruff sampling provides samples of one product on another. A laundry detergent with a free dryer sheet attached to the package is a cross-ruff sample.

•

Media sampling means the sample is included in the media outlet. For example, a small sample of perfume may be included in a magazine advertisement.

•

Professional samples are delivered by professionals, such as when a pharmaceutical company provides doctors with free drug samples.

•

Selective samples are samples distributed at a site such as a state fair, parade, hospital, restaurant, or sporting event.

Benefits of Sampling The benefits of sampling include the ability to introduce new products, generate interest in products, and collect information about consumers. .

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Successful Sampling Programs Sampling must be a central part of the IMC plan. The primary purpose of sampling is to encourage a trial use by a consumer or by a business. Sampling is most effective when it is used to introduce a new product or a new version of a product to a market.

Bonus Packs When an additional or extra number of items of a product is placed in a special package, it is called a bonus pack.

Types of Bonus Packs Figure 12.6 identifies the major objectives of bonus packs: • • • • • •

Increase usage of the product Match or preempt competitive actions Stockpile the product Develop customer loyalty Attract new users Encourage brand switching

Keys to Successful Bonus Packs Bonus packs reward customer loyalty and allow them to stockpile.

They may lead to brand switching if the brand has been used previously.

They can build relationships between manufacturers, retailers, and consumers.

Bonus packs do not tend to attract new customers because they increase purchase risk. Some consumers are skeptical of bonus pack offers.

Bonus packs are costly in the sense that additional amounts of product are being sold for the same or a similar price. In addition, new packaging and shipping costs may be incurred.

Price-Offs A price-off is a temporary reduction in the price of a product to the consumer. Price-offs are normally used to stimulate sales of an existing product. Price-offs are easy to implement and can have a sudden impact on sales.

Figure 12.7 identifies the main advantages and disadvantages of price-offs.

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Benefits of Price-Offs Price-offs can stimulate sales. They can encourage brand switching. They provide an immediate reward to customers.

Problems with Price-Offs Pproblems occur with price-off promotions: •

It normally takes at least a 20 percent increase in sales to offset each 5 percent price reduction. Consequently, although a price-off offer may have a large impact on sales, it can be devastating for profit margins.

•

Price-off programs can encourage consumers to become more price sensitive.

•

Too many price-off offers can create a detrimental impact on the firm’s image.

Question for Students:

Do you believe a price-off is really a cut in the price, or did they just raise it first and then lower it later?

Overlays and Tie-Ins When companies combine two or more consumer promotions activities into a single campaign, it is called an overlay.

Another common strategy is to develop a consumer promotion with another product or company, which is called a tie-in.

Intracompany tie-ins are the promotion of two different products within one company using one consumer promotion. An intercompany tie-in is when one company joins with another.

Objective 12.3:

How do different types of customers respond to consumer promotions?

Planning for Consumer Promotions It is vital for consumer promotions to support the brand image and the brand positioning strategy of a product.

Figure 12.8 identifies types of consumers in relation to promotions.

1. Promotion prone consumers, or individuals who regularly respond to coupons, price-off plans, or premiums

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2. Brand loyal consumers, or consumers who purchase only one particular brand and do not substitute regardless of any deal being offered 3. Price sensitive consumers, for whom price is the primary if not the only criterion used in making a purchase decision The type of sales promotions used will be impacted by the consumer group being targeted.

Retailers support manufacturer consumer promotion programs primarily for the following reasons: • Increase store traffic • Increase store sales • Attract new customers • Increase the basket size Objective 12.4:

What types of trade promotions can help push products onto retailer shelves and eventually on to end users?

Trade Promotions Figure 12.9 identifies the types of trade promotions.

Trade promotions are the expenditures or incentives used by manufacturers and other members of the marketing channel to help push products through to retailers.

The best way to understand trade promotions is to note that they are incentives used by members of the trade channel to entice another member to purchase goods for eventual resale.

The difference between trade promotions and consumer or sales promotions is that the latter involves a sale to an end-user or customer.

Trade Allowances Figure 12.10 identifies the types of trade allowances.

Trade allowances provide financial incentives to other channel members to motivate them to make purchases.

Off-Invoice Allowances When financial discounts are given for each item, case, or pallet ordered, it is an off-invoice allowance. They are used often during holiday seasons to encourage retailers to purchase large quantities of various items. .

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About 33 percent of all trade dollars are spent on off-invoice.

Slotting Fees Slotting fees are funds paid to retailers to stock new products. Retailers justify charging slotting fees in several ways, which include the items displayed in Figure 12.11 • •

• • •

Retailers must spend money to add new products to their inventories and to stock the merchandise.

Adding a new product in the retail store means allocating shelf space to it.

Because shelves are always filled with products, adding a new product means either deleting another brand or product or reducing the amount of shelf space allocated to other products.

The fees make it easier for retailers to finalize decisions about new products.

The fees reduce the number of products being introduced each year, which in turn, drastically reduces the number of new product failures.

Slotting fees add to the retailer’s bottom line.

Manufacturers claim slotting fees are practically a form of extortion.

Exit Fees Exit fees are monies paid to remove an item from a retailer’s inventory.

Trade Allowance Complications Although trade allowances are key incentives used to build relationships with retailers, there are some disadvantages.

• • •

Failing to pass along allowances to retail customers Forward buying, when a retailer purchases excess inventory of a product while it is on-deal Diversion, when a retailer purchases a product on-deal in one location and ships it to another location where it is off-deal

Trade Contests Manufacturers sometimes use trade contests. Rewards are given as contest prizes to brokers, retail salespeople, retail stores, wholesalers, or agents.

These funds are known as spiff money.

Contests can be held at various levels: • .

Agents versus agents Page 12- 10

• • • •

Wholesalers versus wholesalers Retail stores within a chain versus each other Retailer store chains versus other retail chains Individual salespersons within retail stores versus each other

Trade Incentives Trade incentives are similar to trade allowances. The difference is that trade incentives involve the retailer performing a function in order to receive the allowance.

Figure 12.12 displays the types of trade incentives.

Cooperative Merchandising Agreements A cooperative merchandising agreement (CMA) is a formal agreement between the retailer and manufacturer to undertake a cooperative effort: • • • •

A certain number of advertisements by the retailer, which also mentions the manufacturer’s brand Featuring the manufacturer’s brand as a price leader Emphasizing the manufacturer’s brand in an in-house offer made by the retail store, or a special shelf display featuring a price incentive A special in-store display that the retailer agrees to use on specific dates or for a specific period

CMAs are popular with manufacturers for the following reasons: • • • •

The manufacturer retains control over the functions performed.

The manufacturer knows that for any type of price reduction a certain percentage of the price discount is being passed on to the consumer.

CMAs allow manufacturers to create annual contracts with retailers.

CMAs allow manufacturers to create trade incentives that support specific marketing objectives and can also be incorporated into an overall IMC plan.

Premiums and Bonus Packs A premium or bonus pack is when, instead of offering the retailer a discount on the price, the manufacturer offers free merchandise.

Cooperative Advertising In a cooperative advertising program, the manufacturer agrees to reimburse the retailer a certain percentage of the advertising costs associated with advertising the manufacturer’s products in the retailer’s ad. Co-op advertising dollars are accumulated through purchases made by the channel member with the manufacturer. .

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Trade Shows Trade shows often present a situation in which the manufacturer’s sales team can meet directly with decision makers and buyers from business-to-business clients.

From the retailer’s perspective, a trade show allows buyers to compare merchandise and to make contact with several perspective vendors in a short period and possibly negotiate special deals.

The types of buyers who attend trade shows are displayed in Figure 12.13. Manufacturers concentrate efforts on three groups: solution seekers, buying teams, and power buyers.

Several differences exist when international companies attend trade shows: • •

International attendees tend to be senior executives with the authority to make purchases or are in the power buyer category.

International attendees spend more time at each manufacturer’s booth to gather and study information in greater detail.

Large national and international shows are being replaced by niche shows. Specialty shows are better in three situations, most notably when one of the following is the goal: 1. To establish a client base quickly 2. To establish a new brand 3. To promote a new product 4.

Objective 12.5: What concers exist for manufacturers considering trade promotions programs?

Concerns with Trade Promotions As company leaders consider ways to include trade promotions into an overall IMC plan, they should be aware of the potential problems associated with trade promotions programs.

• Costs: Management must try to keep these costs at a reasonable level and make sure that the money is being spent wisely.

• The impact on small manufacturers: When the cost to get an item initially stocked is high, large manufacturers have the advantage.

• Overreliance on trade promotions to move merchandise: Overuse of trade promotions has led to a situation in which merchandise does not move until a trade promotion incentive is offered.

• The potential erosion of brand image: As more money is pumped into trade promotions, less money is spent on advertising, thus hurting the brand’s image.

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Objective 12.6:

What issues complicate international sales promotions progams?

International Implications Sales promotions must be both legal and culturally acceptable.

Some citizens take a dim view of promotions such as coupons. Be aware of these viewpoints.

Remember that differences exist in trade show attendance in international shows. Many times the actual buyers attend international shows, seeking to make deals. This is different than in many domestic U.S. shows.

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR SALES PROMOTION MANAGERS AND MARKETING ACCOUNT EXECUTIVES (Note to professors— these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

SALES PROMOTION MANAGERS Emphasize brand equity. Work with the account executive and client companies to create a balance between what they spend on trade promotions as compared to the rest of the promotions mix.

Visit retail stores that sell the products of manufacturing companies that you represent.

Observe how the product is displayed and how it is treated by retail sales reps. If the manufacturer is not well represented, the company should know. .

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Design contests that match advertising themes and carry the firm’s message to the target level. Each of these has different needs in preferences for contests and prizes.

• • • • •

Distributors Wholesalers Retail buyers Salespersons in retail stores Customers

Help the company establish effective linkages with other firms through cooperative advertising programs. Explain the benefits, and stay involved in the designs of these ads to make sure the client receives the optimal benefit from the expenditures.

Attend trade shows. Observe how various manufacturers, distributors, and wholesalers represent their goods. Note any competitive advantage a company is gaining by being effective in the management of their trade booth.

Help the company set quality goals for trade promotions programs. Link those goals to advertisements and other parts of the promotions mix.

Assist the company, to whatever degree is possible, in assessing the effects of trade promotions incentives and discounts as compared to advertising and other promotions items.

It is your responsibility to help make sure that short-term gains are not made at the expense of long-term success.

MARKETING ACCOUNT EXECUTIVES Help the client company establish clear goals for any sales promotion program. Make sure the tactics (coupons, premiums, price-offs) match the goals. Typical goals include the following: • • • • • • •

Increased sales in the short run Higher brand loyalty Preempt the competition Encouraging larger purchases at the same time Enticing buyers to try a new product Selling the same product to new buyers Strengthening relations with retail outlets or manufacturers

Make sure your own company is in the position to work effectively with sales promotions.

Either establish a working relationship with a firm that provides these programs, or create an in-house department.

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Reexamine the overall IMC program in light of all activities in the promotions mix with clients. Make sure they see the connections between advertising, personal selling, consumer, and trade promotions.

Remind clients that sales promotions can be highly effective tools in business-to-business sales. Remember that the promotions should reach members of the buying center directly.

Find creative ways to place enticements into the hands of influencers and decision makers.

Be certain that any international sales promotion campaign has been carefully scrutinized by someone familiar with the customs, laws, and other key features of the targeted country or region.

REVIEW QUESTIONS 12-1. Define sales promotion. What are the two main categories of sales promotions?

Sales promotions consist of all the incentives offered to customers and channel members to encourage product purchases. Consumer promotions are the incentives aimed at a firm’s customers. The difference between consumer and trade promotions is that trade promotions are activities directed at firms that will resell the manufacturer or firm’s products. Consumer promotions are directed toward individuals or firms that will be using the product.

12-2. Name and describe five types of coupons. Which is the most popular with manufacturers? Which has the highest redemption rate?

The types of coupons available are instant redemption, bounce-back, scannerdelivered, cross-ruffing, and response offer. Instant redemption coupons are when the consumer can immediately redeem the coupon while making the purchase. Bounceback coupons are coupons that are placed within the package for future use. Scannerdelivered coupons are issued at the cash register. Cross-ruffing is the placement of a coupon for one product on another product. Response offer coupons are issued following requests by consumers. Instant redemption coupons are the most popular with manufacturers because they have the highest redemption rage.

12-3. What problems are associated with coupon programs?

Customers who have a brand preference redeem approximately 80 percent of all coupons. Some believe that offering price discounts through coupons to customers who are willing to pay full price does not make sense. Manufacturers, however, argue that these consumers may be willing to stock up on the item, which means they do not buy from the competition. It can also result in the consumer using more of the product. In essence, manufacturers recognize that these brand-preference customer redemptions are a “necessary evil” in mass distribution programs.

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12-4. What is a premium? What types of premium programs can companies use?

A premium is a prize, gift, or any other special offer consumers receive when purchasing products. The four types of premium programs available are free-in-themail, in- or on-package, store or manufacturer, and self-liquidating. Free-in-the-mail premiums are gifts individuals receive for purchasing products. In- or on-package premiums are usually small gifts attached or inside a package. Store or manufacturer premiums are gifts given by either the retail store or manufacturer when the customer purchases a product. Self-liquidating premiums mean the consumer must pay a small amount of money for the item.

12-5. What are the keys to successful premium programs?

Companies can enhance the odds of success by several key factors: • Matching the premium to the target market • Carefully selecting the premium • Picking a premium that reinforces the firm’s product and image • Integrating the premium with other IMC tools • Using premiums to build loyalty more than short-term profit 12-6. What is the difference between a contest and a sweepstakes?

Contests normally require the participant to perform some type of activity. A sweepstakes is simply an entry into a drawing and does not even require a purchase.

12-7. What are the two main components of prizes rendered in contests and sweepstakes?

Intrinsic value, which comes from competing or entering. and extrinsic value, the value associated with the prize itself.

12-8. What role does the internet and social media play in offering contests and sweepstakes?

The internet has become a popular location for contests and sweepstakes. It provides opportunities for individuals to see a prize’s intrinsic value by creating interactive games to challenge a contestant’s ability. The internet offers promoters datacapturing capabilities. Internet contests are less costly to set up and run than other types of promotions.

12-9. How is a refund different from a rebate?

A refund is a cash return on “soft goods” such as food or clothing. A rebate is a cash return on “hard goods,” such as a washing machine or automobile. Rebates can be given on services. .

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12-10. What are the primary types of samples?

Types of sampling programs include the following: • Direct sampling is a program in which samples are mailed or delivered door-todoor to consumers.

• Response samples are those made to individuals or businesses that respond to a media offer.

• Cross-ruffing sample plans provide samples of one product on another. A laundry detergent with a free dryer sheet attached to the package is a cross-ruff sample.

• Media sampling means the sample is included in the media outlet. For example, a small sample of perfume may be included in a magazine advertisement.

• Professional samples are delivered by professionals, such as when a pharmaceutical company provides doctors with free drug samples.

• Selective samples are samples distributed at a site such as a state fair, parade, hospital, restaurant, or sporting event.

12-11. What benefits and problems are associated with sampling?

The benefits of sampling are that they allow a company to introduce a new product, generate interest in a product, and collect information about consumers. The primary disadvantage to sampling programs is the cost involved.

12-12. What are the benefits of offering bonus packs?

A bonus pack is an additional or extra number of items of a product placed in a special package. Bonus pack plans are most effective when they are designed to achieve the benefits of brand switching and cause consumers to stockpile a manufacturer’s products rather than buying from a competitor.

12-13. What benefits and problems are associated with price-off tactics?

Price-off programs can stimulate sales and encourage new customers to try the product. One disadvantage of a price-off program is that although it may increase sales, it will take at least a 20 percent increase in sales to offset each 5 percent price reduction. The programs also encourage consumers to become more price sensitive, which means they will begin to expect a discount and may more regularly switch to the brand that is on sale.

12-14. What is an overlay? A tie-in?

An overlay occurs when two or more consumer promotions activities are combined into a single campaign.

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Developing a consumer promotion with another product or company is another common strategy, called a tie-in. Intracompany tie-ins are the promotion of two different products within one company using one consumer promotion. An alternative method is partnering with another company, which is an intercompany tiein.

12-15. What four categories of consumers can be associated with consumer promotions?

Promotion-prone consumers regularly respond to various consumer promotions and like to purchase products that are on-deal. For price-sensitive consumers, price remains the primary, if not only, criterion used in making a purchase decision. Brand names are not important. Brand-loyal consumers purchase only one particular brand and do not substitute, regardless of any deal being offered. They make whatever effort is necessary to purchase their chosen brand. Brand-preference consumers have a small set of brands for which they have a strong preference.

12-16. What are the major types of trade allowances?

There are four main types of trade allowances: 1. Off-invoice allowances, which encourages channel members to place orders, because they receive financial discounts on each case ordered 2. Slotting fees, which are funds paid to retailers to stock new products 3. Exit fees, which are monies paid to remove an item from a retailer’s inventory 12-17. What is a slotting fee? An exit fee?

A slotting fee consists of monies paid to retailers by manufacturers in return for placing new products on shelves. An exit fee is charge if a new product fails and must be removed from the shelves.

12-18. What is meant by the term on-deal?

It means some type of trade allowance is being offered.

12-19. What complications are associated with trade allowances?

Forward buying occurs when a retailer purchases excess inventory of a product while it is on-deal. It is a problem for manufacturers because it reduces profits and makes revenues uneven when the merchandise of off-deal.

Diversion tactics occur when a retailer buys excess product in one area then ships it to another area. They are used less frequently than forward buying because the shipping costs may not cover the money saved from the lower price.

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12-20. How does the spiff money relate to trade contests?

Spiff monies are rewards given as contest prizes to brokers, retail salespeople, retail stores, wholesalers, or agents.

12-21. What are the main types of trade incentives?

• • •

Cooperative merchandising agreement (CMA) is a formal agreement between the retailer and manufacturer to undertake a cooperative effort.

Premium or bonus pack is when, instead of offering the retailer a discount on the price, the manufacturer offers free merchandise.

Coop advertising means the manufacturer agrees to pay part of the cost of an advertisement in conjunction with a retailer.

12-22. Describe a cooperative merchandising agreement.

A cooperative merchandising agreement (CMA) is a formal agreement between the retailer and manufacturer to undertake a cooperative effort.

12-23. How are premiums and bonus packs used as trade incentives?

Instead of offering the retailer a discount on the price, the manufacturer offers free merchandise 12-24. How can a cooperative advertising benefit both a manufacturers and a retailer?

The advantage that a cooperative advertising program has for manufacturers is that the retailers are promoting the manufacturer’s product. Guidelines for promotions, in order to receive reimbursement, also give the manufacturer a consistent view to the consumer. The advantages to retailers are that the retailers will receive reimbursement for promotion expenditures allowing them to have more advertising for fewer of their own dollars.

12-25. Describe how to effectively utilize trade promotions.

Trade promotions programs have the following problems associated with them: • Costs • Impact on small manufacturers that can’t afford them • Overreliance on the programs to move merchandise • Potential erosion of brand image Manufacturers can overcome these problems by developing a concerted IMC program that balances the promotions mix and identifies clear goals and targets for trade promotions programs.

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A retailer should respond to trade promotions incentives by using them effectively to move merchandise off the shelf and to the consumer. Retailers should not become dependent on promotion incentives. Trade promotions should be taken when they further the retailer’s goals without making the retailer overly dependent on one supplier.

12-26. What problems must be overcome when developing international sales promotions programs?

Sales promotions must be adapted to the cultural and legal system where they will be offered. They must also fit with the company's goals and the country in which that company operates.

CRITICAL THINKING EXERCISES 12-27. The teen and preteen market segments are important because people that age are developing buying habits that marketers hope will turn into brand loyalty later in life. CVS sells established brands such as Cover Girl and Maybelline, but also younger-oriented brands such as Bonne Bell, Jane, and Naturistics.

Drugstores are not typically chosen for the purchase of cosmetics. If you were the marketing manager for CVS, which consumer promotions would be the best to attract teens and preteens to the cosmetics department of CVS? What tie-ins or overlays would you recommend?

One of the best ways might be using samples because teens and preteens may be swayed by something free. Coupons are not likely to work because this group is less likely to read the newspaper. Bonus packs may also have an appeal, along with crossruffing of other teen products.

12-28. Describe in your own words the basic concept of each of the consumer promotions listed in Figure 12.1. Suppose Sonic hired you as a marketing intern.

Discuss each of the consumer promotions in terms of its suitability for Sonic.

Give an example of each that you think is appropriate for Sonic to use.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

The choices are 1. Coupons 2. Premiums 3. Contests and sweepstakes 4. Refunds and rebates 5. Sampling 6. Bonus packs .

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7. Price-offs 12-29. Refer to the list of consumer promotions in Figure 12.1. Discuss each one in terms of your personal usage. Which ones do you use? How often? Why? • • • • • • •

Coupons Premiums Contests and sweepstakes Refunds and rebates Sampling Bonus packs Price-offs

Student choices will vary.

12-30. Design a magazine advertisement with a detachable coupon or premium for one of the following products. Be sure to put an expiration date and other restrictions on the use of the coupon or premium, such as one per customer and one per purchase. You may want to conduct an internet search to see some sample coupons or premiums before you design one. a. b. c. d.

SunBright Tanning Salon Dixie Printing Hamburger Haven BriarPatch Ice Cream

Student ads and approaches will vary.

12-31. The Rawlings Sports Equipment Company plans to increase sales of baseball gloves this season. The company intends to use consumer coupons. Discuss the pros and cons of each method of coupon distribution (Figure 12.2) listed in the chapter for Rawlings. Which method or methods should Rawlings use? Why? Print media or FSI do not seem to match baseball gloves very well because most young people who buy baseball gloves don’t read the paper. A coupon, however, in a sports magazine may work.

In-store coupons may lead to purchases. They do reduce revenues. Because they would be correctly placed in sporting goods stores or sports sections of stores like Walmart and Kmart, they may work well.

Scanner delivered coupons could be used in sporting goods stores to spur future purchases.

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Cross-ruffing may work if the second product was a baseball or bat. The disadvantage would be the cost. The advantage would be placement in a sporting goods store or sports department of a chain, where interested customers would visit.

Internet coupons might work on sports sites. They are low-cost ways to reach consumers, who could order online, visit a store, or call for a glove.

12-32. To maintain its strong brand image, Revlon’s marketing team decided to use a premium for each of its lipstick products. What type of premium would you suggest for Revlon for each of the target markets listed here? Which premium would you use? Justify your answers. a. b. c. d.

Females, ages 60+ Teenagers, ages 14 to 19 College students, ages 18 to 25 Professional females, ages 30 to 50

Student answers will vary. The most popular premium would probably be the in- or on-package premiums, especially for pricey items sold to professional women. Many women are bargain hunters when it comes to personal products. Sampling is another tactic that would work with these groups, especially young women (in this case, college students) who might want to try something before making a larger commitment. Older, brand loyal women (ages 60+) might prefer bonus packs, although they do not offer as much of an advantage to the manufacturer.

12-33. Explain the difference between a contest and a sweepstakes and the difference between extrinsic and intrinsic rewards. The Toggery, a local upscale clothing boutique, wants to use a contest or sweepstake to generate store traffic. What are the pros and cons of each for The Toggery? Which would you suggest for The Toggery? Why? Briefly describe the contest or sweepstakes you envision.

Contests normally require the participant to perform some type of activity in order to enter.

No purchase can be required to enter a sweepstakes, and consumers may enter as many times as they wish.

Student choices will vary.

12.34

How often do you enter contests or sweepstakes? What was the last contest you entered? Why did you enter? Discuss the importance of extrinsic and intrinsic rewards to you in entering contests and sweepstakes. If you seldom or never enter contests and sweepstakes, why? What type of intrinsic and extrinsic rewards would it take for you to enter?

Student answers will vary. This would spur in-class discussion.

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12-35. Video games generate huge revenues for many companies. One manufacturer decided to use sampling as a method to reach the primary target market, males between the ages of 15 and 30. The sampling could have been distributed in one of two ways. First, the actual game could be loaded on a computer for targeted individuals. Second, potential customers could be sent an abbreviated version of the game. Which method of sampling would be the best? Why? Using the list of sampling methods provided in the chapter, discuss the pros and cons of each method of sampling in terms of this new video game. Which type and method of sampling would you recommend? Why? Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

12-36.

Consumers can be divided into three broad categories in terms of how they respond to consumer promotions: (1) promotion prone, (2) brand loyal, and (3) price sensitive. Identify two services or goods that would fit into each category for you personally. For example, you may be promotion prone when you buy soft drinks (your favorite brand is “What’s on Sale”) but be very brand loyal when you buy shoe s(Nike, Reebok . What determines which type of category you fit into for the various products you discussed?.

Student answers will vary.

12-37. Consumers can be divided into four categories based on how they respond to consumer promotions (Figure 12.8). Explain in your own words the characteristics of each group. You are a marketing intern for Chic Shaque, a retailer of contemporary fashions, bedding, bath, gifts and home decor. For each of the consumer promotion groups, identify a consumer promotion that you think is the best. Explain why. Of the four consumer promotions you just identified, which would you recommend for Chic Shaque? Why? Promotion-prone consumers regularly respond to various consumer promotions and like to purchase products that are on-deal. For price-sensitive consumers, price remains the primary, if not only, criterion used in making a purchase decision. Brand names are not important. Brand-loyal consumers purchase only one particular brand and do not substitute, regardless of any deal being offered. They make whatever effort is necessary to purchase their chosen brand. Brand-preference consumers have a small set of brands for which they have a strong preference.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

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12-38. Interview three people who have lived in another country about the use of consumer promotions in those countries. Make a list of promotions that are heavily used and promotions that are not used. Present the findings to your class.

Student answers will vary.

12-39. As with the other consumer promotions, international expansion requires understanding the laws and customs of each country and culture. For example, in Saudi Arabia and other Muslim countries, Clinique had to modify its sampling techniques. In the United States and Western cultures, Clinique provides cosmetic samples in retail outlets for customers to try. In the United States, women normally sell retail cosmetics; in Saudi Arabia, men do. At the same time, Muslim custom prohibits a man from touching a woman if she is not a relative. Female customers must either apply the cosmetics themselves or bring their husbands to the store with them.

Asking a female customer, “What color are your eyes?” would constitute a grave offense in Saudi Arabia because the eyes are believed to be the gateway to the soul. Asking her about skin tone does not make sense because women keep their faces covered. Sampling is important for Clinique in Saudi Arabia.

How would you organize a sampling program in light of these cultural factors?

What other consumer promotions could be used? If you have someone in your class from a Muslim country, ask your classmate to discuss the use of consumer promotions in her home country.

Student answers will vary. Companies would need to identify places where samples would reach the target audience. Cultural assimilators would help with other factors, such as the label on the package and supportive advertising.

INTEGRATED LEARNING EXERCISES 12-40. Coupons are one of the most popular forms of consumer promotions. Access three of the following websites. What are the advantages and disadvantages of each, to a consumer? How do the websites impact manufacturers? How do they impact retailers? a. Coupon Country (www.couponcountry.com) b. CoolSavings (www.coolsavings.com) c. SmartSource (www.smartsource.com) d. Coupons (www.coupons.com) Coupon Country offers direct mail coupon programs. Cool Savings focuses on grocery coupons, pet and baby goods coupons, diet offers, and travel coupons. .

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Smart Source offers print-down coupons in conjunction with contest entries. Each gives access to manufacturers who can reach more interested coupon users than the general public because an effort must be made to obtain the coupon. Retailers are forced to redeem the coupon while making sure they are legitimate.

12-41. Sweepstakes and contests are excellent methods for building customer traffic to a retail outlet and to build interest in a brand. Certain firms assist in the development of sweepstakes and contests. This is important due to the variety of legal restrictions imposed by different states. Access the following websites. What types of services does each offer? How do the companies assist in developing a contest or sweepstakes? Which firm would you choose if you were responsible for developing a contest or a sweepstakes program for a new brand of cosmetics? a. Promotions Activators, Inc. (www.promotionactivators.com) b. Compliance Sweepstakes Services (http://www.compliancesweeps.com/) c. Ventura Marketing and Promotion (www.sweepspros.com) Promotion Activators is a company that provides contests, sweepstakes, instant win games, internet promotions, premiums, refunds, and rebate programs. Centra Marketing focuses more on strategic aspects of business, including an overall promotion management program, and product development. Ventura offers premiums and promotions, and the website also notes an international component, which is not found in the others.

12-42. Examine the following company websites. Identify all of the promotions offered on the site. Provide a screenshot of each promotion you see. What are the objectives of each consumer promotion? Do the promotions on the websites mesh with the company’s advertising and consumer promotions at retail outlets? Explain. a. b. c. d.

Taco Bell (www.tacobell.com) Hershey’s (www.hersheys.com) Huggies (www.quakeroats.com) Papa John’s (www.papajohns.com)

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

12-43. Use a search engine to find and examine the websites for Huggies, Pampers, The Honest Company, and Luvs. What types of promotions are available on each? Provide a screen shot of each promotion. What are the objectives of the various consumer promotions? Which site has the best promotions?

Why? .

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Huggies offers coupons and a sweepstakes. Pampers offers a rewards program for frequent purchases. The Honest Company offers “convenience, savings, and peace of mind” when making purchases. Luvs also offers coupons and a sweepstakes. The objectives are to encourage repeat business and preempt the competition. Student evaluations of the sites will vary.

Student Project: Creative Corner Students are assigned to visit the website for the Springfield Cardinal minor league baseball team and then to design advertising programs for a series of key dates during the baseball season.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

12-44. Papa John’s: http://blogclowbaack.net/2014/05/12/papa-johns-chapter-12/ 12-45. Brookshire’s: http://blogclowbaack.net/2014/05/12/brookshires-chapter-12/ 12-46. Consumer promotions: http://blogclowbaack.net/2014/05/12/consumerpromotions-chapter-12/

CASES Case 1

Six Flags

12-47. What type of “product” does Six Flags offer?

Fun and family entertainment 12-48. Which consumer promotions would be most useful for the Six Flags? Why? Coupons, premiums on ticket purchases, price-offs, and contests or sweepstakes with tickets as prizes are all possibilities.

Student rationales will vary.

12-49. Of the four types of consumers, which would be most likely to take advantage of consumer promotions for Six Flags? Why? Promotion prone and brand loyal consumers

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12-50. Access the website of Six Flags. Which social media networking sites does Six Flags use? How is each used?

Six Flags uses Facebook and Twitter. Each offers consumer promotions.

12-49. Design a print advertisement that ties a consumer promotion to Six Flags.

Student ads will vary.

Case 2

Marketing Sports Equipment

12-52. What are the primary target markets for Academy Sports + Outdoor?

The primary market is families that participate in sports or outdoor activities along with organizations such as Little League baseball and soccer. The market would also include college students and young adults interested in sports.

12-53 For each of the target markets identified in the preceding question, what types of consumer promotions should Academy Sports + Outdoor offer? Justify your response.

Families, teams, and college students/young adults could be reached with all of the types of promotions.

12-54. Suppose you are the vice president of marketing at Academy Sports + Outdoor.

Examine the list of consumer promotions shown in Figure 12.1. Discuss the pros and cons of each promotion if the target market is active-minded families with children under 18 and incomes between $30,000 and $70,000.

Coupons offer the advantage of a direct response plus the ability to track which types were redeemed. Lost revenue is the disadvantage.

Premiums create excitement and the feeling the consumer is getting a bonus or something free (such as a baseball with the purchase of a glove). Cost and extra shelf space are the disadvantages.

Contests and sweepstakes can attract store traffic and generate excitement.

Consumer information can be collected with entries. Costs of the event plus the loss of interest when the event expires are the problems Refunds and rebates might apply to larger purchases, such as guns or expensive camping equipment. They could lead to the purchase decision. They create a problem when consumers begin to expect them.

Sampling would be less likely, except for smaller items possibility, such as golf balls. .

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Bonus packs would be offered by manufacturers for a variety of products. They encourage consumers to stock up and not buy from the competition. Costs and extra packaging are the problems.

Price-offs may be offered during special seasons (start of the football season, Christmas) to attract consumers to a specific store. Costs are the disadvantage.

Overlays and tie-ins build relationships with suppliers of products.

12.55. From your answer to the preceding question, pick one of the promotions that you feel is the best to reach the designated target market. Design a newspaper ad using that promotion. Be sure to include restrictions such as usage and expiration date.

Student responses and ads will vary.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 12-56. In your own words describe each of the sampling methods listed in Figure 12.5. Suppose you are a marketing intern for Maxwell House and that Maxwell House has developed three new flavors of coffees. Discuss the pros and cons of each method of sampling for Maxwell House coffee. Keep in mind that in addition to getting consumers to try the product, Maxwell House will also want to convince retailers to stock the coffee on its shelves.

12-57. The Rawlings Sports Equipment Company plans to increase sales of baseball gloves this season. The company intends to use a coupon program. Discuss the pros and cons of each method of coupon distribution listed in the chapter for Rawlings. Which method or methods should Rawlings use? Why?

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Bonus Case

NEWMAN’S OWN ORGANICS: SALES PROMOTIONS AND RETAIL RELATIONSHIPS Jason David had recently been promoted to director of sales promotions for Newman’s Own Organics. He was excited to find ways to expand product offerings into a wider variety of retail stores. His assignment was to fine-tune both the consumer and trade promotions that would be offered in various markets.

Newman’s Own Organics is a spin-off from the original Newman’s Own company. In the 1980s, celebrity actor Paul Newman and his friend, writer A. E. Hotchner, decided to concoct a batch of salad dressing to be given to their friends for the Christmas holiday season. The dressing became so popular that the two created the Newman’s Own company to sell the item. The two agreed that proceeds and profits would be given to charity.

Newman’s Own sold more than 10,000 bottles of the salad dressing in its first two weeks on the market. In the first year, Newman’s Own made a profit. The company slowly expanded to a wider variety of salad dressings, and then to salsa, marinara, steak sauce, pizza, and even wine.

Among the more famous charities supported by Newman’s Own are the Hole in the Wall Camps, which bring together children with serious and terminal illnesses for a free summer-camp experience. The Newman’s Own Foundation had given more than $250 million to various charities prior to Paul Newman’s death. The figure now approaches

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$300 million. The company’s mission statement reads, “Shameless Exploitation in Pursuit of the Common Good.”

Newman’s Own Organics was founded by Nell Newman, Paul’s daughter, in 1993.

She became the sole proprietor in 2001. The product line for Newman’s Own Organics includes pretzels, chocolate bars, “Fig Newmans,” Champion Chip Cookies, Chocolate Cups, Newman O’s, Pop’s Corn, Alphabet Cookies, coffee, dried fruit, olive oil and balsamic vinegar, dried fruit, pet food, mints, tea, and soy crisps.

The company’s products are certified to be genuinely organic by Oregon Tilth. This means that the ingredients are grown on farms that have not used artificial fertilizers or pesticides for three years or more. The farms and processors have been certified by an independent third party. Kosher certification is made by the Union of Orthodox Jewish Congregations.

Newman’s Own Organics is described as the “second generation.” The company is for a profit, with a royalty paid to the Newman Foundation based on sales and profits. In this way, the organization is able to capitalize on the popularity of Paul Newman, the strong relationship to charitable giving, and the niche market of organic foods.

Jason’s responsibility was to find and develop retail outlets for Newman’s Own Organics products. Large retailers that sell food products, such as Target and Walmart, constitute one major marketplace. Small grocery stores that are more upscale and feature organic foods are a second. Third would be any specialty stores that offer organic products.

Prospects might be developed by identifying the stores that carry Newman’s Own products. Further, the internet offers the potential to sell products directly to consumers .

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without a retail store but also to direct consumers to stores that carry the items. Various types of promotions for the products and various charities, including the Hole in the Wall Camps, could be promoted on the Newman’s Own Organics website.

Jason knew that he had the advantage of a strong brand, plus connections to the original company that would give him in-roads into meeting with prospective retail customers. He also knew that it would take more than a name to persuade retailers to make room on the shelves for the products. Beyond simple placement, the ultimate goal was to develop bonds and relationships that would lead retailers to feature the products in advertisements and promotions over time.

(1)

What types of consumer promotions would be best suited to end-users of Newman's Own Organics products?

Coupons may be issued, premiums might be used, contests and sweepstakes related to the flavor and quality of the products would be viable. At first, price-off programs and bonus packs would not match the image of the company.

(2)

What types of trade promotions should Jason offer to retailers?

Student answers may vary; however, all options would be viable.

(3)

Would you expect Newman's Own Organics products to sell at a higher price than competitors, match competitor prices, or to compete by lower prices in various ways, including using sales promotions?

Prices would either match or be slightly higher.

(4)

Should Jason explore placing Newman’s Own Organics in restaurants to gain brand recognition? Why or why not?

Student opinions may vary; however, it would be a good approach to build both brand recognition and perceptions of quality.

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(5)

Can you envision any types of trade shows the Jason should attend on behalf of Newman's Own Organics? Access the Trade Shows News Network at www.tsnn.com and BizTradeShows at www.biztradeshows.com for specific trade shows and locations.

Student responses will vary. TSNN.com offers 19,000 events worldwide. One category of events is “food and beverage,” where more than 700 events were listed. Biztrade shows did not list a food category. The closest was “household consumables.”

(6)

Now that Paul Newman has passed away, what challenges will be present as the “second generation” companies moves forward and memories of Paul Newman begin to fade away?

To continue successfully, the brand will need to stand on its own.

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Chapter

13

Public Relations and Sponsorship Programs CHAPTER OBJECTIVES Students should be able to answer the following questions: 13.1 13.2 13.3 13.4 13.5 13.6 13.7

What relationships exist between public relations and the marketing activities performed by a company?

How can the public relations functions build better relationships with all internal and external stakeholders?

What types of positive, image-building programs can companies feature as parts of a public relations program?

What steps can companies take to prevent or reduce image damage when negative events occur?

How can marketers tie sponsorships to public relations efforts to strengthen a customer base?

What roles can event marketing play in creating customer excitement and brand loyalty?

How can companies adapt public relations programs, sponsorships, and event marketing to international settings?

OVERVIEW The traditional marketing mix consists of advertising, personal selling, consumer sales promotions, and public relations efforts.

This first part of this chapter is devoted to the fourth, public relations. Often the public relations function is handled independently of the marketing department and is usually not under the control of the marketing department, which makes it more difficult to integrate with the IMC effort.

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The second part of the chapter addresses sponsorship programs and event marketing. The two programs provide places to make quality contacts with existing customers, new prospects, vendors, and others.

Winning Colors for Interstate Batteries Interstate Batteries has enjoyed a strong relationship with NASCAR that has generated a sponsorship program, public relations events, and positive publicity. The color green was first chosen to help the car stand out— a move that was unusual because green has been associated with bad luck in racing. The program demonstrates how a well-integrated publicity and sponsorship program can benefit a company.

Questions for Students: 1.

2.

3.

Do you watch NASCAR races? Why or why not?

What is the primary target market for the Interstate NASCAR tie-in?

How can Interstate Batteries reach other audiences for its products, or should the company even try?

Objective 13.1:

What is the relationship between public relations and the marketing activities performed by a company?

Public Relations The public relations (PR) department is a unit in the firm that manages items such as publicity and other communications with all of the groups who make contact with the company.

Some marketing experts argue that public relations should be part of the marketing department, just as advertising, trade promotions, and sales promotions are under the jurisdiction of the marketing manager.

Others suggest that public relations is a different function. Therefore, a new division, called a department of communications may be created to oversee both marketing and public relations activities.

Internal versus External Public Relations Deciding who will handle various public relations activities constitutes the first major decision company leaders make. They can be managed by an internal public relations officer or department. Other companies hire public relations firms to complete special projects or all public relations functions.

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Public Relations Tools The primary public relations tools are company newsletters, internal messages, public relations releases, correspondence with stockholders, annual reports, and special events.

A hit is the mention of a company’s name in a news story. Hits can be positive, negative, or neutral.

Objective 13.2:

How can the public relations functions build better relationships with all internal and external stakeholders?

Public Relations Functions The main public relations functions are noted in Figure 13.1: 1.

2.

3.

4.

5.

Identify internal and external stakeholders.

Assess corporate reputation.

Audit corporate social responsibility.

Create positive, image-building activities.

Prevent or reduce image damage.

Identifying Stakeholders A stakeholder is a person or group who has a vested interest in the organization’s well-being.

A list of stakeholders is provided in Figure 13.2.

Internal Stakeholders The primary internal stakeholders are the employees and employee groups within the organization. Most of the time, the public relations department can access internal stakeholders fairly easily.

Public relations people should work carefully with those in the human resource (HR) office to make sure the right kinds of people are being hired and that the reward system emphasizes the IMC theme of the company.

External Stakeholders Company leaders encounter the following external stakeholders: • • • • .

Channel members, including wholesalers and retailers, who have a direct effect on the success of a firm Customers who may be strongly influenced by promotional campaigns The media The local community Page 13- 3

• • •

The financial community The government Special-interest groups

The marketing department tends to create contact points with customers and potential customers. To complement this effort, the public relations department deals with the myriad contact points that are not created or planned, yet are just as critical to the IMC effort.

Question for Students:

Can you give examples of times you were an internal stakeholder? An external stakeholder?

Assessing Corporate Reputation Company leaders should take the time to conduct surveys and interviews about what people think of the organization. This can be done internally or by an external company. Questions should be asked about internal views of the firm as well as opinions of those outside the company.

Figure 13.3 lists examples of activities that affect a company’s image.

Corporate Social Responsibility Corporate social responsibility is the obligation an organization has to be ethical, accountable, and reactive to the needs of society.

A corporate social responsibility audit is performed by managers and departmental leaders.

The company should have • • • •

A corporate or professional code of ethics A list of activities that would be considered unethical Statements about positive activities the company will pursue Access to an ethical hot line for employees with dilemmas or questions

A new trend in corporate social responsibility, purpose marketing, or pro-social marketing, involves advertising that focuses on the values, behavior, and beliefs of the company.

The messages show how the company or brand operates in a socially responsible fashion.

Objective 13.3:

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What types of positive, image-building programs can companies feature as parts of a public relations program?

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Creating Positive Image-Building Activities Image-building activities include the following: • • • • • •

Empowerment of employees Charitable contributions Sponsoring local events Selling environmentally safe products Outplacement programs for displaced employees Support of community events

Cause-Related Marketing Cause-related marketing ties a marketing program in with some type of charity in order to generate goodwill. It can help a firm develop a stronger market presence when brand parity is present.

The cause should result in a tangible benefit to the company and be a good match for the company based on the industry it is in.

Cause-related marketing includes the following benefits: • • • • •

Additional customers Increased profits Consumer goodwill for the future Better relations with governmental agencies Reduced chances of facing lawsuits

Benefits to Nonprofit Organizations An increasing number of nonprofit organizations are competing for contributions and gifts.

Strategic relationships with businesses can boost contributions for a nonprofit organization considerably.

Promoting a cause-related program is tricky. You cannot overemphasize the charity but do need to make sure various publics know of the company’s involvement in the program.

Green Marketing and Pro-Environmental Activities Green marketing is the development and promotion of products that are environmentally safe. To be successful, firms must produce the same level of quality in green marketing products as non-environmentally safe products, and it must be at relatively the same price.

Promoting Green Activities

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Many companies are environmentally concerned. Each will choose the level to which environmentally conscious efforts will be promoted.

A new approach involves creating green products within brand lines.

Greenwashing Faking green, called greenwashing, can damage a company’s reputation when such information is posted on blogs and communicated to consumers.

Question for Students:

Objective 13.4:

Do you believe cause-related and green marketing programs are important? Why or why not?

What steps can companies take to prevent or reduce image damage when negative events occur?

Preventing or Reducing Image Damage Damage control is the defense of an organization’s image when something negative, such as bad publicity, occurs. It includes both reactive and proactive approaches.

Image destroying activities include the following: • • • • • •

Discrimination Harassment Pollution Misleading communications Deceptive communications Offensive communications

Figure 13.4 identifies damage control strategies.

Proactive Prevention Strategies Proactive strategies include entitlings and enhancements.

Entitlings are attempts to claim responsibility for positive outcomes of events. Suggesting that a product helps an athlete win (e.g., Michael Phelps) is an entitling.

Enhancements are attempts to increase the desirable outcome of an event in the eyes of the public. The text notes fat-free products as enhancements. Another example is a low-carb product.

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Reactive Damage-Control Strategies Figure 13.5 identifies various damage control strategies.

Internet Interventions Internet interventions are designed to combat negative word of mouth being spread over the internet. Company members must monitor the internet to see what is being said and respond when something false or negative appears.

Crisis Management Crisis management involves either accepting the blame and offering an apology or refuting the charges in a forceful manner.

Note that Toyota’s slow response to car problems made the situation worse.

Apology Strategy An apology strategy has five elements, as shown in Figure 13.6.

1.

2.

3.

4.

5.

An expression of guilt, embarrassment, or regret A statement recognizing the appropriate behavior and acceptance of sanctions A rejection of the inappropriate behavior Approval of the appropriate behavior with the promise not to violate again An offer of compensation or penance

Question for Students:

Did BP make enough apologies after the Gulf oil spill?

Impression Management Impression management is the attempt to control images that are projected in social interactions. Tactics for responding to negative publicity include the following: • • • •

Expressions of innocence (we didn’t do this—someone else caused it) Excuses (out of our control) Justifications (logic reduces the degree of negativity) Other explanations (problem wasn’t represented fairly)

Objective 13.5:

How can marketers tie sponsorships to public relations efforts to strengthen a customer base?

Sponsorships Sponsorship marketing means that the company pays money to sponsor someone or some group that is participating in an activity. In recent years, it has included sports stadiums. .

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Forms of Sponsorships Some of the main forms of sponsorships include the following: • • • • •

Arts Festivals and fairs Entertainment, tours, and attractions Causes Sports

Figure 13.7 provides a breakdown of expenditures on sponsorships.

In choosing a sponsorship, it is important to match the audience profile with the company’s target market. It is much easier to be remembered if the firm is the only sponsor compared to one of many sponsors.

Sports teams and musical groups are common sponsorship marketing areas. Some organizations have moved away from sports sponsorships toward more cultural events, such as classical music groups and jazz bands, visual art exhibits by noted painters, dance troupes, actors for various theater performances, and even rodeos performers.

Social Media and Blogs The newest format is sponsoring bloggers.

Sponsorship Objectives Sponsorships are used to accomplish many different objectives for organizations.

• • • • • •

Enhance a company’s image.

Increase the firm’s visibility.

Differentiate a company from its competitors.

Showcase specific goods and services.

Help the firm develop closer relationships with current and prospective customers.

Sell excess inventory.

To achieve the maximum impact for the sponsorship, the message should be combined with other advertising and promotional efforts. When conducting a sponsorship program, the marketing team should try to incorporate other trade and consumer promotions.

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Objective 13.6:

What roles can event marketing play in creating customer excitement and brand loyalty?

Event Marketing Event marketing occurs when the company supports a specific event. This often includes setting up a booth or display and having some type of physical presence at the event. Event marketing is closely related to lifestyle marketing.

The company should determine, prior to selecting an event, the goals it wishes to accomplish.

Some typical goals include the following: • • •

Help the firm maintain its current market share.

Build strong presence in the marketplace.

Enhance the product or firm’s image.

To meet these goals, it is important for the sponsoring firm to match the event with firm’s customers, vendors, and employees.

Selecting Sponsorships and Events Several key steps are involved in selecting a sponsorship or an event.

To ensure the maximum benefit, companies should follow the steps highlighted in Figure 13.8.

Determining Objectives These can include rewarding customers, rewarding employees and boosting morale, maintaining market share, and building a brand presence or brand image.

Matching Audience to the Company’s Target Market The publics include customers, vendors, and employees.

Promoting the Event Make sure there are public relations releases and that contacts are made with interest groups that would benefit from the event.

Advertising at the Event The company’s name and logo plus product information should appear on all the paperwork of the event (brochures, programs, tickets).

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Tracking Results Find quality methods for discovering if event objectives were met.

Cross-Promotions A cross-promotion is a marketing event that ties together companies and activities around a specific theme.

Objective 13.7:

How can companies adapt public relations programs, sponsorships, and event marketing to international settings?

International Implications Make sure the company is viewed in a positive light in other nations.

Be aware of international events (such as terrorism) and the impact on the company.

Make sure no cultural problems arise with public relations activities.

Adapt sponsorships and events to local cultures and customs, including which events are popular (soccer, automobile racing).

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

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IMPLICATIONS FOR PUBLIC RELATIONS MANAGERS (Note to professors—these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

Get yourself in the loop. Know what is happening in marketing planning meetings. Make sure you can create messages that support the firm’s IMC theme.

Regularly pull out a list of stakeholders for your company. Update it when necessary. Ask yourself the following questions: • • • •

How do we make contact with this group?

How does this group make contact with us?

What does this group think of us?

What can we do to upgrade our image with this public?

Update and examine the methods by which you send messages to various groups. Make sure you are fully utilizing new technologies: • • •

The internet and the firm’s website Teleconferencing Emails

Randomly check contact points where unplanned messages arrive. Make sure employees are sending out the right messages and responding correctly when someone or another firm contacts your organization.

Go over all altruistic plans and cause-related marketing efforts with the marketing department and top management. Become a skeptic. Ask if these programs are going to be perceived as being based on good intentions or are simply opportunistic attempts to gain some free publicity.

Be acutely aware of the proactive and reactive methods available for damage control when negative publicity occurs. Assign experts to manage this important ingredient in keeping a firm’s image strong.

Carefully consider sponsorship programs. Use a cost/benefit model when evaluating them.

Think in terms of the following: • • • • • .

Expenditures Revenues (if any) gained from the sponsorship The number of people who are exposed to the person or event Opportunities for direct, interpersonal contacts with customers Long-term image and brand equity development potential Page 13- 11

•

Benefits of a long-term association with the same event or group

REVIEW QUESTIONS 13-1. Describe the role of the public relations department. How is it related to the marketing department? Should both departments be called the “department of communications?” Why or why not?

The role of the public relations department is to manage items such as publicity and other communications with all of the groups who make contact with the company. It is related to the marketing department because they provide some of the same functions. The marketing department and the PR department may be combined and called the department of communications. The department of communications would oversee both public relations and marketing activities, making sure that each sends a uniform company message or theme.

13-2. What is a stakeholder?

A stakeholder is a person or group that has a vested interest in the organization’s well-being. Stakeholders are both internal and external publics.

13-3. Name the major internal stakeholders in organizations.

The major internal stakeholders in organizations are employees and employee groups.

13-4. Name the major external stakeholders in organizations. Describe each one’s major interest in the company.

The major external stakeholders in organizations are channel members, customers, the local community, the financial community, government, and special-interest groups. Channel members, including wholesalers and retailers, have an interest in a company’s success because they are reliant on it for business. Customers have an interest in the company because they prefer the products and want a continuing supply. The local community receives tax revenues and the company provides jobs for residents. The financial community receives loan payments. Government and special-interest groups have interests in the way the company pays tax revenues and relates to ethical issues, respectively.

13-5. What is corporate social responsibility? How is it related to public relations activities?

Corporate social responsibility is the obligation an organization has to be ethical, accountable, and reactive to the needs of society. The public relations office should

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be certain that internal publics know about the company’s socially responsible activities and also inform external publics of those activities.

13-6. What is cause-related marketing? How can company leaders create effective cause-related marketing programs?

Cause-related marketing ties a marketing program in with some type of charity in order to generate goodwill. The key is to support causes that are related to the company’s main business. It is best to avoid controversial causes in most instances.

Then, the marketing and publicity teams will try to promote the link to the cause without making it seem like the firm is simply taking advantage of the cause to promote products.

13-7. What is green marketing? How environmentally friendly activities?

do

different

companies

promote

Green marketing is the development and promotion of products that are environmentally safe. To be successful, firms must produce the same level of quality in green marketing products as non-environmentally safe products, and it must be at relatively the same price.

Some companies actively promote that fact that they are green, others promote the product first and then mention that the product is also environmentally friendly, and others still downplay the things that they do on behalf of the environment due to the fear that it may hurt sales to promote green activities.

13-8. What is greenwashing?

It is faking green, or pretending to be environmentally friendly when the company really is not.

13-9. What reactive damage control techniques are available to the public relations team?

The techniques include damage control internet interventions, crisis management apology strategies, and impression management.

13-10. Describe entitlings and enhancements.

Entitlings are attempts to claim responsibility for positive outcomes of events.

Enhancements are attempts to increase the impact of the desirable outcome of an event in the eyes of the public.

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13-11. What five elements are parts of an apology strategy?

(1) An expression of guilt, embarrasment, or regret, (2) a statement recognizing the inappropriate behavior and acceptance of sactions for wrong behavior, (3) a rejection of the inappropriate behavior, (4) approval of the appropriate behavior and a promise not to engage in in appropriate behavior, (5) an offer of compensation or pennance to correct the wrong 13-12. What four forms of impression management are available to the public relations team?

Impression management is the attempt to control images that are projected in social interactions. Tactics for responding to negative publicity include the following: • • • •

Expressions of innocence (we didn’t do this—someone else caused it) Excuses (out of our control) Justifications (logic reduces the degree of negativity) Other explanations (problem wasn’t represented fairly)

13-13. What is sponsorship marketing?

Sponsorship marketing occurs when a company pays money to sponsor someone or some group that is participating in an activity.

13-14. Describe an event marketing program. What must accompany the event in order to make it a success?

Event marketing is similar to sponsorship marketing except that an event marketing program occurs when the company supports a specific event such as a rodeo, car race, or symphony performance. To achieve the maximum success from an event marketing program you must determine the objective of sponsoring events; match each event with customers, vendors, or employees; cross-promote the event; make sure the company is included in all events advertising and brochures; track results; and evaluate the investment following the event.

13-15. What are cross-promotions? How are they related to event marketing programs?

A cross-promotion is a tie-in between a company and an event. They are related to event marketing programs because a specific brand or product will be tied in with an event.

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13-16. How are public relations programs and sponsorship adapted to international companies?

First, the growing number of international firms creates the need to make sure the company will be viewed in a positive light in every country in which it does business.

Second, the impact of terrorism and war over the past decade has heightened sensitivities between many nations. Third, whenever there are differences among cultures, the potential exists to offend without intending to do so.

Corporate social responsibility also has no national boundaries. Many sponsorships now contain an international flavor. Some of the more visible are found in sports, most notably automobile racing and soccer.

CRITICAL THINKING EXERCISES 13-17. Watch the news on television, read a local paper, or access the internet for news about a local or national business. Was the report positive or negative? Did the news report affect your attitude toward the company? Watch one of the many special investigative shows, such as 60 Minutes. What companies did they investigate?

Student answers will vary. They may choose defense of innocence, justifications, apologies, and other strategies through press releases, public statements, mailings, advertisements, and on a company’s website.

13-18. Locate a newscast or news article that presents negative information about a company or brand. Describe the information on the newscast or news article.

How should the company react to this negative story? Justify your response.

Student answers will depend on the article chosen.

13-19. One of the vice presidents of a small but highly respected bank in a local community was charged with sexual harassment by a female employee. What type of communications should be prepared for each of the constituencies listed in the chapter? Which stakeholders would be the most important to contact?

Why? Messages to external publics (channel members, media, community, etc.) should reinforce a positive image, noting company policies and efforts to keep the problems from occurring again. For internal publics, the marketing team and company leaders should make a point of the punitive action taken and highlight the company’s policy about harassment. Messages should state how the behavior is counter to the company’s well-being.

13-20. Is the local community important to a manufacturing firm that sells 99 percent of its products outside the area? Does it really matter what the local people say .

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or believe about the manufacturer as long as the firm’s customers are happy?

Explain your answer.

The company should be aware of how it is viewed by the community. Local businesses will provide them with some goods, financial resources, and employees. A company with a bad reputation may have difficulty recruiting quality local employees and receive less cooperation from the local government as well as nearby companies.

13-21. Assume you are a marketing intern for a local clothing boutique retail store.

List the benefits of cause-related marketing for the retail store. Identify two causes in your community you think the store should become involved with.

Explain why. Should the clothing retailer become involved in green marketing? Why or why not? Identify at least one way the store could become involved in green marketing.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Student answers will depend on the causes they choose and preferences regarding green marketing.

13-22. What causes do you support or are special to you? Do you know which corporations sponsor or support the cause? If not, see if you can find literature or a website that contains that information. Why do you think the corporation chooses a particular cause to support? What benefits do corporations receive from sponsorships?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

13-23. When Starbucks opened its first coffee shop inside a public library, ten percent of all proceeds from coffee sold there went to support the operation of the library. Describe the benefits to Starbucks of this type of sponsorship. What benefits accrue to the library? Some consumers feel this type of sponsorship is inappropriate because it involves a for-profit company selling products in a government entity. Examine the various methods of damage control. Which method or methods should a library use to reduce the criticism and to prevent any negative fallout? Justify your choice.

Doughnuts are messy. Too many products in a library may make it a noisy place.

Public libraries are not the same things as Books-a-Million or other bookstores with coffee shops. Therefore, the organization would need to carefully consider partners.

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13-24. In your own words, describe the steps in an apology strategy. Suppose a local retailer’s computer system was hacked and a large number of credit card numbers were stolen. Go through each of the steps in the apology strategy explaining the actions or information for this local retailer. Be specific.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

An apology strategy includes the following: 1.

2.

3.

4.

5.

An expression of guilt, embarrassment, or regret A statement recognizing the appropriate behavior and acceptance of sanctions A rejection of the inappropriate behavior Approval of the appropriate behavior with the promise not to violate again An offer of compensation or penance

13-25. Managers are often the most difficult group for the public relations department to reach. To entice employees to reach departmental goals, managers often communicate using memos or verbal messages. These messages may conflict with the IMC theme. For example, in an effort to trim costs, a manager may send a memo to all employees telling them to only use standard production procedures. Through verbal communications, employees learn that anyone caught violating or even bending the policy to satisfy a customer will be immediately reprimanded. The manager’s action suggests that even though he wants employees to provide customer service, in actuality, they had better not do anything that is not authorized. Employees soon get the message that management only cares about costs, not the customer. Any advertising message about customer service will be perceived by employees as a big joke. Write a memo to employees that will support the IMC goal of high customer service, yet alert them to the need to follow standard operating procedures. Is there anything else you would do to ensure that this is not a conflicting message being sent to employees?

Actual student memos will vary. On a larger scale, the communications department could implement a program stating that any internal messages should be sent through the department for disbursement. This would allow the communications department to be aware of what was being sent to the employees.

13-26. A shortage of state funds for universities and colleges has led many administrators to consider using sponsorships to generate revenue. What would you think about your university having the stadiums and different sports having corporate names? Discuss the pros and cons of your school using corporate sponsors to fund athletics.

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Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

INTEGRATED LEARNING EXERCISES 13-27. Although some firms handle public relations activities internally, many firms retain public relations firm to work on special projects and to handle unique situations. The Public Relations Society of America (PRSA) is one of the major associations for PR individuals. In Canada, the primary association is the Canadian Public Relations Society. Access the websites of these two organizations at www.prsa.org and www.cprs.ca. What types of information does each provide? What types of services are offered? How would these organizations be beneficial to various companies?

The Public Relations Society of America site has a wide variety of news and information available. The three main parts of the opening page address public relations news in general, news about PRSA, and information about upcoming professional development events. The front page also links to the place to join the organization, networking possibilities, and more information about local chapters.

The CPRS site prominently displays its code of professional standards on the opening page. Numerous links are available to basic information pages, methods to join, governance, accreditation programs, education, careers, and a link to a global alliance. The site is available in both English and French.

13-28. Access the online version of PRWeek at www.prweek.com. What type of information is available? How would this site be valuable to a PR practitioner? How could it be used by a firm seeking a public relations agency? How could it be used by a marketing manager?

The opening page of the site asks you to choose a country or region, from the United States to the United Kingdom, Germany, and Asia Pacific. The U.S. page has a breaking news scroll on one side, along with other features, news stories, and reports. There is a directory for a company seeking an agency.

13-29. The American Institute of Philanthropy ranks many charities. Access the website at www.charitywatch.org. How does the Institute rate the charities?

How can this information be used by a company to determine which charities to support?

Groups included on the CharityWatch Top-Rated list generally spend 75 percent or more of their budgets on programs, spend $25 or less to raise $100 in public support, do not hold excessive assets in reserve, have met CharityWatch’s

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governance benchmarks, and receive “open-book” status for disclosure of basic financial information and documents to CharityWatch.

13-30. Pick two causes that you have been involved with or support. Go to the

American Institute of Philanthropy at www.charitywatch.org. Write a report on each of the causes you identified providing the charities ratings, governance and transparency, analysts’ notes, salaries, and alerts or articles.

Which of the two appears to the best for your support? Explain why. (If one or both of the causes you support are not listed at charitywatch.org, then pick two that are listed.)

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

13-31. A number of companies offer services to help firms plan and develop sponsorships. One company is IEG. Access the website at www.sponsorship.com. Review the site. Access each of the menu tabs and describe the information on each page. What types of services does IEG offer. If you were the marketing manager for a company that wanted to develop a sponsorship program, how could IEG help? Be specific.

IEG offers sponsorship consulting, sponsorship valuation, sponsorship measurement, and sponsorship research. The website has the following notes: “Specifically, we work with clients to: • •

Enhance and/or create digital content, platforms and distribution channels Understand and mine data to build stronger relationships with audiences and partners”

13-32. A number of companies participate in sponsorship and event marketing.

Access the following agencies. What type of services does each offer? What is your evaluation of each of the companies? If you were hosting an event in your community, which company would you hire? Why? a. GMR Marketing (https://gmrmarketing.com) b. Tandem Partnerships (http://tandempartnerships.com) c. EMC Outdoor (http://www.emcoutdoor.com) Answers will vary depending on the agency chosen.

13-33. Corporate sponsorships are important to nonprofit organizations. Without their financial assistance, many nonprofits would not exist. Look up two

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organizations from the following list of nonprofits. Who are their corporate sponsors? What benefits do the companies receive from these sponsorships? a. b. c. d. e. f. g.

American Cancer Society (http://www.cancer.org) Arthritis Foundation (http://www.arthritis.org) Multiple Sclerosis Society (http://www.mssociety.org.uk) United Cerebral Palsy (http://www.ucp.org) Alliance for the Wild Rockies (http://www.wildrockiesalliance.org) National Wildlife Federation (http://www.nwf.org) Trout Unlimited (http://www.tu.org)

Answers will vary.

Student Project: Creative Corner The assignment is to develop cause-related marketing, event marketing, and sponsorships for the Circle K ranch, which sells, trains, and boards horses.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

13-34. Interstate Batteries—http://blogclowbaack.net/2014/05/05/interstatebatteries-chapter-13/ 13-35. Adidas—http://blogclowbaack.net/2014/05/05/adidas-chapter-13/ 13-36. Crisis Management—http://blogclowbaack.net/2014/05/05/crisis-managementchapter-13/

CASES Case 1

Advertising on NBA Jerseys: Is It Worth It?

13-37. Describe the stakeholders and the positions of each group involved in this story.

Stakeholders include players (employees), fans (customers), team owners, sponsoring companies, competing companies, and watchdog organizations.

Money would be the primary driving factor for positions, except for fans that want to keep the game “pure.”

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13-38. Which would have been a more valuable approach: To allow for-profit advertising on jerseys or to instead feature cause-related messages, such as for cancer research or anti-drug and -violence messages?

This is a good in-class discussion question. Student responses will vary. Note that many players have limited careers, and any additional money might be valuable to them.

13-39. How should NBA league officials respond to complaints about the program?

Student answers should focus on reactive strategies. Internet interventions seem to be likely (Twitter, team home pages, NBA.com).

13-40. What should happen when a player does not wish to have the advertising appear on his jersey?

Another good class discussion question. Most will probably say the player should get an exemption.

Case 2

Olive Garden: Meet the Girls Next Door

13-39. Who are Olive Garden’s internal and external stakeholders that have been affected by this turn of events?

Internal stakeholders include management, employees, and specific departments, including marketing and public relations. External stakeholders include customers, any cooperative advertisers, and interest groups (especially those with moral concerns).

13-40. For casual observers of media, would the “Sexiest Girls of Olive Garden” appear to be a sponsorship?

Chances are, yes.

13-41. Is this event an instance in which damage-control programs were in order? If so, which one(s)?

Damage control may be in order but carefully delivered. The company probably should not “apologize” per se. IMPRESSION MANAGEMENT Impression management tactics may work best, especially expressions of innocence (we didn’t do this—someone else caused it), excuses (out of our control), justifications (logic reduces the degree of negativity; “this was all just in fun by some outsiders”), and other explanations (problem wasn’t represented fairly).

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13-42. Kendra Wilkinson said she believed Oliver Garden could afford to appear to be a little “edgy” without detracting from its family-friendly brand. Do you agree or disagree? Why? Student answers will vary. This is a good in-class discussion question. Dividing answers by gender might prove interesting.

13-43. If you were the public relations agency for the Olive Garden, how would you handle this situation? What steps would you take and what tactics would you use to ensure Olive Garden’s image is not adversely affected.

Besides damage control, the company could engage in internet interventions and advertise heavily to counteract the effects on the company’s image and brand.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 13-44. When Starbucks opened its first coffee shop inside a public library, ten percent of all proceeds from coffee sold there went to support the operation of the library. Describe the benefits to Starbucks of this type of sponsorship. What benefits accrue to the library? Some consumers feel this type of sponsorship is inappropriate because it involves a for-profit company selling products in a government entity. Examine the various methods of damage control. Which method or methods should a library use to reduce the criticism and to prevent any negative fallout? Justify your choice.

13-45. Suppose you are the new marketing intern for a local CPA accounting firm that has both business and consumer customers. List the steps in selecting a sponsorship or event. Identify a sponsorship or event in your community that you believe would be a good fit for the CPA firm. Explain why. For each of the steps you listed, discuss the how it would apply to the CPA firm. For instance, for determining objective, what objective do you think is relevant based on the event or sponsorship you picked? Do the same for each of the other steps.

Bonus Case

CAN THIS RESTAURANT BE SAVED? If there is any one industry in which word-of-mouth can do great damage in a hurry, that industry would be food service, especially restaurants. A single round of food poisoning .

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can drive away customers for months. Any tale of contamination or unsanitary conditions that circulates in a local community creates a major crisis for a restaurant owner.

Juan and Bonita Gonzales knew the risks when they opened their new restaurant, The Mexican Villa, in a small shopping center in North Canton, Ohio. With the recent wave of Mexican immigrants to the area, two other successful Mexican restaurants had opened across town. The couple believed that if they provided high-quality food in a pleasant atmosphere, their restaurant could succeed.

The business opened in the fall of 2007. First-year sales were better than expected. A mixture of Hispanic and Caucasian customers regularly dined at The Mexican Villa. The restaurant had two distinct serving areas: the dining room and the cantina. In the dining room, authentic Mexican music played softly in the background. There was plenty of room between tables. The floors were carpeted and clean. Servers were dressed in bright colored clothing and were carefully trained to be pleasant, efficient, and helpful. In the cantina, the music was louder. The floors were tile. Smoking was permitted in a bar-type atmosphere. Television sets were tuned to sports programs. In both areas, customers were quickly greeted and served salsa and chips at no charge. The menu was the same for both areas.

Both the cantina and the dining room had regular customers who ate at the Villa as often as once a week. The Villa also had a strong lunch business, where a lighter menu with lower prices was featured. The restaurant was near a business district and shopping center, which provided access to many potential lunch guests.

The crisis occurred after The Mexican Villa had been open for 15 months. In the spring of 2009, one of the Villa food preparers contracted an infectious case of hepatitis. .

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Hepatitis is highly contagious and dangerous. The local health authorities discovered the problem and forced the Villa to close for seven days. Word was sent out in the newspaper, on the radio, and on the local television news that anyone who had eaten at the Villa in the past two weeks should contact the government health authorities to be tested. Word spread quickly through North Canton about the episode, both in the Spanish-speaking community and to other groups.

Fortunately, no one was infected. The employee had worn protective gloves while preparing food. The safety precautions used at the restaurant had kept the disease from spreading to others.

Juan and Bonita had a limited budget for advertising. Once the news stories had run, the media quickly lost interest. It was impossible for the couple to capture the same audience to tell people that the health crisis had passed. The number of customers who returned after the weeklong closure dropped dramatically. Sales had been down for more than a month. The couple began to wonder if people would ever come back.

1.

What kinds of public relations tactics should be used to help The Mexican Villa?

Three of the reactive damage control strategies are possible. Crisis management would be accepting the blame and offering an apology. An apology strategy could be used, or some form of impression management, such as the excuse, this was beyond our control, the guy got infected somewhere other than here and also they could point out that safety techniques kept him from infecting anyone else. The only method that would probably not apply is an internet intervention.

2.

Is there any kind of cause-related or event marketing program that might bring people back to the restaurant?

Some form of health awareness cause or event might be possible.

3.

Do you believe The Mexican Villa can be saved, or is it a lost cause? Why? Student answers will vary, but in reality, they are in pretty big trouble.

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Chapter

14

Regulations and Ethical Concerns CHAPTER OBJECTIVES Students should be able to answer the following questions: 14.1 Which agencies and laws regulate marketing communications?

14.2 What are the relationships between puffery, deception, and substantiation?

14.3 What legal remedies can agencies use to correct deceptive communicationspractices?

14.4 How do the three major industry regulatory agencies help keep advertising and business practices from injuring customers or other businesses?

14.5 What ethical criticisms have been registered against advertising and marketing practices?

14.6 Which marketing tactics raise ethical concerns?

14.7 How can marketers apply the various ethical frameworks and ethics programs to their activities and actions?

14.8 What international issues influence the discussion of legal and ethical marketing 2 What are the relationships between puffery, deception, and substantiation? activities? at legal remedies can agencies use to correct deceptive communications practices?

OVERVIEW The final level of an IMC program includes making certain the communications program meets ethical and legal requirements and is properly evaluated.

Figure 14.1 displays the final, top level of an IMC program in relation to the other elements.

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Reebok Pays $25-Million Settlement Reebok paid $25 million in a settlement with the Federal Trade Commission. The company had made specific claims about its Easy Tone line of shoes regarding weight loss and physical conditioning that could not be proven. Later Skechers made a similar settlement.

Questions for Students: 1. What made the claims by Reebok stand out to draw FTC attention?

2. Do you believe advertisements about physical fitness and weight loss on other products? Why or why not?

3. Was the Reebok advertising program illegal, unethical, or both?

The first part of this chapter describes the legal environment surrounding marketing and marketing communications The second part features views of ethics, morals, and social responsibility as they relate to marketing, advertising, and promotions.

Objective 14.1:

Which agencies and laws regulate marketing communications?

Marketing Communications Regulations The U.S. Federal government has passed a considerable amount of legislation designed to keep companies from taking advantage of consumers.

Governmental Regulatory Agencies Various governmental agencies are listed in Figure 14.2: • • • •

Food and Drug Administration (FDA) regulates food and drug safety issues, packaging, and labels.

Federal Communications Commission (FCC) regulates television, radio, and the telephone industry.

U.S. Postal Service (USPS) has jurisdiction overall mailed marketing materials.

Bureau of Alcohol, Tobacco, and Firearms (ATF) has oversight of the sale of alcohol and tobacco.

The Federal Trade Commission The FTC was created in 1914 with the original intention of enforcing anti-trust laws and protecting businesses from one another.

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Unfair and Deceptive Marketing Practices The Wheeler–Lea Amendment (1938) to Section 5 of the FTC Act prohibits false and misleading advertising, when: • •

A substantial number of people, or the “typical person,” is left with a false impression or misrepresentation that relates to the product The misrepresentation induces people or the “typical person” to make a purchase

Objective 14.2:

What are the relationships between puffery, deception, and substantiation?

Deception versus Puffery Puffery exists when a firm makes an exaggerated claim about its products or services, without making an overt attempt to deceive or mislead. Terms normally associated with puffery include words such as “friendliest,” “best,” “greatest,” and “finest.” Deception occurs when a firm makes a claim that is untrue, false, or misleading. Puffery is acceptable, but deception is not.

Question for Students:

Can you think of other puffery terms?

Substantiation of Marketing Claims Marketers must be able to substantiate claims through competent and reliable evidence.

The FTC assumes consumers read ads broadly and do not pay attention to find print and qualifying language.

Substantiation evidence must be for the exact product being tested, not a substitute.

Evidence should come from experts in the relevant area.

The FTC will consider the totality of the evidence, not just one study.

How Investigations Begin When an unfounded marketing claim is made, an FTC investigation can be triggered through various types of complaints. These include problems noticed by • • • .

Consumers Businesses Congress Page 14 - 3

•

The media

Consent Orders If the FTC believes a law has been violated, a consent order is issued. If accepted, the accused agrees to stop the disputed practice without admitting guilt.

Objective 14.3:

What legal remedies can be used to correct deceptive communications practices?

FTC Settlements Occasionally, rather than agreeing to a consent order, company leaders accept a settlement with the FTC. Administrative Complaints If a consent agreement cannot be reached, the FTC may issue an administrative complaint. A formal proceeding similar to a court trial is held before an administrative law judge who then makes a ruling. If the judge feels a violation of the law has occurred, a cease and desist order is prepared.

Courts and Legal Channels If the company is not satisfied with the initial decision of the administrative law judge, the case can be appealed to the full FTC commission. Companies not satisfied with the ruling of the full FTC commission can appeal the case to the U.S. Court of Appeals and further to the U.S. Supreme Court.

Occasionally, the FTC uses the court system to stop unfair and deceptive advertising and communications practices when a company violates FTC cease and desist orders. The FTC can also seek an injunction to stop a company’s operations by freezing assets and appointing a receiver pending the final hearing.

Corrective Advertising In rare situations in which the FTC feels that discontinuing a false advertisement will not be a sufficient remedy, the FTC can require the firm to produce corrective ads to bring consumers back to a neutral state held prior to the false or misleading advertisement.

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Trade Regulation Rulings Trade regulation rulings are findings that implicate an entire industry in a case of unfair or deceptive practices. The FTC normally holds a public hearing and accepts both oral and written arguments.

Trade regulation rulings have been used to make sure people are aware of fees and time limits on gift cards.

Trade regulation rulings have also been used to make sure bloggers and other internet/media endorsers disclose when they are paid to say good things about a product or company.

Objective 14.4:

How do the three major industry regulatory agencies help keep advertising and business practices from injuring customers or other businesses?

Industry Oversight of Marketing Practices As shown in Figure 14.4 and in the text, the common industry agencies for regulating marketing communications are: 1. Council of Better Business Bureaus 2. National Advertising Division( NAD) of the Council of Better Business Bureaus 3. National Advertising Review Board (NARB) is utilized when the NAD does not resolve a complaint or the advertiser appeals the decision of the NAD. 4. Children's Advertising Review Unit (CARU) Council of Better Business Bureaus This organization is a resource available to both consumers and businesses to report unethical business practices or unfair treatment. The other three organizations are subsets of the council.

Question for Students:

Have you ever used the Better Business Bureau to complain about a company or check on a company?

National Advertising Division Complaints about advertising or some aspect of marketing communications are referred to the National Advertising Division (NAD) of the Council of Better Business Bureaus for review. The NAD reviews the specific claims.

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National Advertising Review Board When a complaint cannot be resolved by the NAD or the advertiser appeals the NAD’s decision, it goes to the National Advertising Review Board (NARB). The NARB is composed of advertising professionals and prominent civic individuals Children’s Advertising Review Unit This unit investigates and monitors all forms of advertising directed toward children under the age of 12.

Figure 14.5 lists the CARU guidelines for advertising to children.

Advantages to Using Self-Regulation Industry-based actions are designed to control the marketing communications environment and limit legal actions that will be required by the courts or a governmental agency.

Figure 14.6 highlights the benefits industry regulatory agencies offer.

The cases are normally heard sooner and are less costly for the companies involved.

The complaints are heard by attorneys and business professionals with experience in advertising.

Objective 14.5:

What ethical criticisms have been registered against advertising and marketing practices?

IMC and Ethics Morals are beliefs or principles that individuals hold concerning what is right and what is wrong.

Ethics are moral principles that serve as guidelines for both individuals and organizations.

Ethics and Advertising Figure 14.7 lists some of the major concerns and criticisms regarding advertising.

Two of the common complaints are that advertising 1. Causes people to buy more than they can afford 2. Overemphasizes materialism

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Critics also argue that advertising increases the costs of goods and services.

Perpetuating Stereotypes Advertisements often portray a market segment as one-dimensional rather than reflecting the complexities of specific gender, racial, or age segments.

Examples: Teens are depicted as rebellious, carefree, and sexually starved. Asian Americans are shown in advertising as technological experts—knowledgeable, savvy, and even mathematically adept or intellectually gifted.

Advertising Unsafe Products Ethical issues revolve around advertising of alcohol and tobacco.

Offensive Advertisements There has been social commentary that some products should not be advertised because they are sensitive gender issues.

Others complain about the misuse of children in advertising, placing them in sexually suggestive situations.

Advertising to Children The primary ethical debate is in regard to the volume of commercials targeted at children.

Question for Students: Objective 14.6:

What marketing tactics do you think are the most unethical?

Why?

What marketing tactics raise ethical concerns?

Marketing and Ethics Figure 14.8 lists six key areas where ethical issues in marketing exist.

Brand Infringement Creating a brand that is close to a successful brand is infringement (Korrs, Victor’s Secret).

Domain squatting and cyber squatting are attempts to profit from well-known names by buying the domain name and reselling it to the person who should have it.

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Marketing of Professional Services When medical professionals seek to expand their clientele, they may use terms such as “skin rejuvenation” without noting it is part of a medical practice.

Other problem areas include that advertising of drugs in general, advertising drugs related to sexual dysfunction, and the marketing of herbs and supplements.

Gifts and Bribery in Business-to-Business Marketing Programs The sizes of gifts create ethical questions. Bribes are legal in some countries and not in others.

Spam and Cookies Tracking of consumer surfing habits creates both legal and moral questions.

Interstitial advertising intrudes on a person using the internet.

Ambush Marketing The rise of dollars spent on sponsorships of sports and the use of athletes as endorsers has been accompanied by a rise in ambush marketing, which is “a brand’s attempt to associate itself with a team or event without buying the rights to do so.”

Figure 14.9 identifies levels of recall of official and nonofficial Olympics sponsors.

Figure 14.10 lists types of ambush marketing.

Direct ambush marketing occurs when firms intentionally design advertising or marketing campaigns to capitalize on a major sporting event.

Indirect ambush marketing occurs when a firm suggests or hints it is associated with a sporting event when it is not.

Allusion ambushing means an organization creates an impression that is a sponsor when it is not.

Distractive ambushing means a company designs a promotion or event near a major sporting event.

Saturation ambushing occurs when a firm increases advertising and marketing during a major event, such as the NCAA basketball tournament. .

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Incidental ambushing occurs when a brand is associated with an event without any intentional or indirect effort on the part of the company.

Stealth Marketing Stealth marketing is used to overcome clutter by enticing consumers to look at a product through a personal contact without them realizing the person making the pitch is actually being paid or compensated in some way.

Objective 14.7:

How can marketers apply the various ethical frameworks and ethics programs to their activities and actions?

marketers apply the various ethical frameworks and ethics programs to

Responding to Ethical Challenges Philosophies of life affect ethical reasoning: • Hedonism— maximize pleasure, minimize pain • Homeostasis— seek balance The law offers guidelines by geographic area.

Religions offer the Golden rule.

Ethics Programs Various individuals and groups have responded to the need for a more ethical environment by creating ethics training programs, codes of ethics, and ethics consulting systems.

These attempts are designed to assist individual employees, managers or supervisors, and others within a company facing ethical challenges or dilemmas.

Ethics Training Programs Ethics training programs can take place in college or as part of the corporate world.

Codes of Ethics Codes of ethics can be developed by individual companies and professional organizations.

Ethics Consulting Systems Ethics consulting can take place through hot lines and other outside sources.

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Objective 14.8:

What international issues influence the discussion of legal and ethical marketing activities?

International Implications Legal systems vary by nation.

• • •

Common law is based on local customs, traditions, and precedents.

Civil law is present when a broad set of legal principles and codes guide actions.

Theocratic law is based on religious teachings.

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR MARKETING PROFESSIONALS (Note to professors— these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

Before entering the field, make sure you are well versed in what is legal and what is not.

Understand the role puffery plays and know where the line is that should not be crossed.

Join the Better Business Bureau and other professional organizations for both ethical and legal guidance.

Assess which philosophy of ethics best explains your worldview.

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Acknowledge the roles that individual company leaders, governmental agencies, and managers can play in creating a socially responsibility company.

Know what actions you can and should take if you believe a company is acting illegally or unethically.

REVIEW QUESTIONS 14-1. Name the governmental agencies that oversee marketing programs.

• • • • •

Food and Drug Administration (FDA) regulates food and drug safety issues, packaging, and labels.

Federal Communications Commission (FCC) regulates television, radio, and the telephone industry.

U.S. Postal Service (USPS) has jurisdiction overall mailed marketing materials.

Bureau of Alcohol, Tobacco, and Firearms (ATF) has oversight of the sale of alcohol and tobacco.

Federal Trade Commission oversees advertising and marketing communications.

14-2. What role did the Wheeler–Lea Amendment play in regulating advertising practices?

It expanded the original Federal Trade Commission Act from oversight over the antitrust laws and protecting businesses from one another to regulating unfair and deceptive marketing practices.

14-3. When does an ad or message become false or misleading?

An ad or message becomes false or misleading when • A substantial number of people or the “typical person” is left with a false impression or misrepresentation that relates to the product.

• The misrepresentation induces people or the typical person to make a purchase.

14-4. What is puffery? When is puffery legal?

Puffery is when a firm makes an exaggerated claim about its goods or services, without making an overt attempt to deceive or mislead.

Puffery is certainly legal, but it can also be in that gray area of the law and be subject to challenges. It may turn out to be costly to defend puffery statements before the FTC or NAD.

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14-5.

What does substantiation mean? How does a company know that the substantiation test has been passed?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Substantiation means claims can be proven through competent and reliable evidence.

The FTC assumes consumers read ads broadly and do not pay attention to find print and qualifying language. Substantiation evidence must be for the exact product being tested, not a substitute. Evidence should come from experts in the relevant area. The FTC will consider the totality of the evidence, not just one study.

14-6. What four groups can trigger an investigation by the Federal Trade Commission?

Consumers, businesses, congress, and the media 14-7. What are the steps of the process when the FTC investigates a claim of false or misleading advertising?

The Federal Trade Commission takes the following steps: 1. Receive a complaint from a consumer or groups.

2. Seek a consent order if it is deemed a violation has occurred.

3. File an administrative complaint if the consent order is not followed.

4. Prepare a cease and desist order.

5. Appeal to a full commission hearing.

14-8. What is a consent order?

A consent agreement, or consent order, occurs when the FTC believes a law to be violated and issues a consent agreement. When the company leaders sign it, they are not admitting guilt but will stop the disputed practice.

14-9. What is an administrative complaint?

An administrative complaint means that a formal proceeding similar to a court trial will be held before an administrative law judge. Both sides may submit evidence and render testimony. Then the judge makes a ruling.

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14-10. What is the purpose of a corrective advertisement?

Corrective ads are used when the FTC believes that discontinuing a false advertisement is not a sufficient remedy. The ad must bring consumers back to a neutral state and is paid for by the violating company.

14-11. What is a trade regulation ruling? How is it different from other FTC rulings?

A trade regulation ruling is when an entire industry is found to be at fault. It is different from other FTC rulings because it affects an entire industry, not just one firm.

14-12. What is the relationship between the Council of Better Business Bureaus and the National Advertising Division?

The National Advertising Division is one part of the BBB. It covers marketing communication and collects information and evaluates data to see if an advertising claim can be substantiated.

14-13. What is the primary function of the National Advertising Review Board?

When a complaint cannot be resolved by the NAD or the advertiser appeals the NAD’s decision, it goes to the National Advertising Review Board (NARB). The NARB comprises advertising professionals and prominent civic individuals 14-14. How does the Children’s Advertising Review Unit operate?

The CARU investigates and monitors all forms of advertising in all media directed toward children younger than 12 years of age. It also monitors only privacy practices of websites that involve children younger than 13 years of age.

14-15. Define ethics and morals.

Morals are beliefs or principles that individuals hold concerning what is right and what is wrong. Ethics are moral principles that serve as guidelines for both individuals and organizations.

14-16. Identify the types of ethical complaints regarding advertising.

Advertising o Causes people to buy more than they can afford o Overemphasizes materialism o Increases the costs of goods and services .

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o Perpetuates stereotypes o Features unsafe products Also, some ads are offensive ,and advertising to children is too pervasive.

14-17. What is brand infringement?

Creating a brand that is close to a successful brand is infringement (Korrs, Victor’s Secret).

14-18. What types of ethical issues have been raised regarding the marketing of professional services?

Criticisms of attorneys for new forms of ambulance chasing and physicians for new forms of medical practice that do not state what they are.

Problem areas include that advertising of drugs in general, advertising drugs related to sexual dysfunction, and the marketing of herbs and supplements.

14-19. Describe the ethical issues associated with internet marketing.

Issues include the use of spamming and cookies leading to tracking of consumer surfing habits that creates both legal and moral questions. Interstitial advertising intrudes on a person using the internet. Cybersquatting involves buying a wellknown name for the purpose of selling it to the legitimate user at a profit.

14-20. Describe all the the forms of ambush marketing.

Direct ambush marketing occurs when firms intentionally design advertising or marketing campaigns to capitalize on a major sporting event.

Indirect ambush marketing occurs when a firm suggests or hints it is associated with a sporting event when it is not.

Allusion ambushing, which means an organization creates an impression that is a sponsor, when it is not.

Distractive ambushing means a company designs a promotion or event near a major sporting event.

Saturation ambushing occurs when a firm increases advertising and marketing during a major event, such as the NCAA basketball tournament.

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Incidental ambushing occurs when a brand is associated with an event without any intentional or indirect effort on the part of the company.

14-21. What is stealth marketing? How does it create an ethics debate?

Stealth marketing is used to overcome clutter by enticing consumers to look at a product through a personal contact without them realizing the person making the pitch is actually being paid or compensated in some way.

14-22. Name the three types of ethics programs that can be used to help marketing professionals cope with moral challenges.

Ethics training programs can take place in college or as part of the corporate world.

Codes of ethics can be developed by individual companies and professional organizations. Ethics consulting can take place through hot lines and other outside sources.

CRITICAL THINKING EXERCISES 14-23. In labeling food products, marketers walk a fine line between promoting the product and truth in content. Phrases such as “low sodium,” “fat free,” “no sugar added,” and “light” may give the impression that a food is healthful, but not reveal the entire truth. How often do you read package labels and make purchases based on their content? On your next trip to the grocery store, examine various labels that have one of the words identified earlier in this question and compare it to other brands. Does it actually contain less than a competing brand?

Student answers will vary based on whether or not they read labels.

14-24. Reread the section “Deception Versus Puffery.” Find three advertisements that you think are examples of either deception or puffery. How difficult is it to differentiate between the two? When does an ad cease to be puffery and become deceptive?

The answer will depend on the advertisements chosen by students.

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14-25. One of the industries closely watched by the FTC is the weight-loss industry.

Find three advertisements from magazines, newspapers, or television that deal with weight loss. What claims were made? Do you believe the claims are truthful and legitimate? How do you, as a consumer, distinguish between what is truthful and what is deceptive?

Student answers will depend on the ads they choose.

14-26. Advertising directed toward children remains a hot topic among parents and educators. Many feel that advertising unfairly targets children and creates materialistic desires. By the time a child is three years old, she already knows many brands of products, such as McDonald’s. What is your opinion of advertising to children? Is the current regulation enough, or should it be more stringent?

Student answers will vary. Some may argue for free speech, while others may emphasize the lack of reasoning ability of young children.

14-27. One of the criticisms of advertising is that it causes people to buy more than they can afford. Each year a large number of people in United States declare bankruptcy, often because they have overspent. Do you agree that advertising causes people to buy more than they can afford, or is advertising just responding to the materialistic desire of individuals? Defend your response.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Some may believe that this is a chicken/egg debate.

14-28. Advertising does increase the cost of goods and services, but a common defense is that advertising provides people with knowledge about availability of products, which allows consumers to make more intelligent decisions. Do you think this is a valid defense of advertising? Why or why not? What other defense could you offer to support why advertising is important?

Student answers will vary. This is an opinion question.

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14-29. Think about advertisements you have seen or heard recently and identify one that you believe is offensive. Why was it offensive? Why do you think the advertiser ran the ad if it offensive? Do you think offensive ads can be effective?

Why or why not?

Student answers will depend on the ads they select. Asking if ads can be both effective and offensive is a good in-class discussion question.

14-30. What is your opinion of alcohol and tobacco advertising? Should alcohol and tobacco companies have the same freedom to advertise as other product manufacturers? Do you think it is a danger for children to see alcohol or tobacco ads? Does it influence their desire to use these products?

Student responses will vary.

14-31. Using sex to sell products is another area that many consumers find offensive.

Locate two print ads or television ads that are highly sexual in nature, one that you consider offensive and one that you consider is appropriate. What makes the difference? Are there too many ads that use sexual themes?

Student answers will depend on the ads they choose and their views of sexuality.

14-32. You have seen advertisements by attorneys and medical professionals. Discuss your opinion about these advertisements? Do you think ads by attorneys just increase the number of lawsuits and bankruptcies? Why do medical professionals such as doctors and dentists advertise? Does it affect your opinion of their professionalism? Why or why not?

Some will say doctors need “brand awareness” as much as any other product. Others will consider them to be “ambulance chasers” and unethical.

14-33. What is ambush marketing? Describe each type of ambush marketing that can be used by brands? What are your thoughts about ambush marketing?

Are they unethical? Why or why not? Which forms of ambush marketing do you believe are legitimate? Why? Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Direct ambush marketing occurs when firms intentionally design advertising or marketing campaigns to capitalize on a major sporting event.

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Indirect ambush marketing occurs when a firm suggests or hints it is associated with a sporting event when it is not.

Allusion ambushing means an organization creates an impression that is a sponsor when it is not.

Distractive ambushing means a company designs a promotion or event near a major sporting event.

Saturation ambushing occurs when a firm increases advertising and marketing during a major event, such as the NCAA basketball tournament.

Incidental ambushing occurs when a brand is associated with an event without any intentional or indirect effort on the part of the company.

14-34. What is stealth marketing? Do you believe stealth marketing is an ethical marketing practice? Why or why not? Under what circumstances would it be acceptable for a brand to use stealth marketing? Explain.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Stealth marketing is used to overcome clutter by enticing consumers to look at a product through a personal contact without them realizing the person making the pitch is actually being paid or compensated in some way.

Student views about acceptability will vary.

14-35. Do you believe that ethics can be learned, or is it something an individual has internally? Why or why not? Suppose a company has hired you to teach ethics to its employees. Discuss the concepts of hedonism, homeostasis, law, religion, and common sense as it would relate to teaching a seminar to new employees on ethics. How would ethics training, code of ethics, and an ethics consulting system be used as part of the training class?

Some students will argue that families raise ethical and unethical kids or that peer pressure can change how a person behaves.

INTEGRATED LEARNING EXERCISES 14-36. The Federal Trade Commission (FTC) is the primary federal agency that oversees advertising and other marketing-related communications. Access the .

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website at www.ftc.gov. What type of information is available on the website for consumers? For businesses? Pick one of the headlines and write a brief report about the article’s contents. Provide the URL of the article.

Student responses will depend on the headline chosen. The FTC offers a vast number of services listed on the opening page.

14-37. The FTC’s Bureau of Consumer Protection works for the consumer to prevent fraud, deception, and unfair business practices in the marketplace. Access the FTC’s website at www.ftc.gov and go to the “For Consumers” section of the site. What information is available? Find an article or recent event from the web ite and write a short report. How does the FTC’s Bureau of Consumer Protection safeguard consumers?

The FTC works to prevent phone fraud and information about credit counseling, among other services.

14-38. Access the FTC’s website at www.ftc.gov. Access each of the following components of the website. What type of information does each section contain? Why is it important? a. About the FTC b. News and Events c. Enforcement d. Policy e. Tips and Advice About the FTC outlines the activities of the organization.

News and events includes a calendar plus recent press releases, social media ties, and other information.

Enforcement describes the actions the organization takes for various infractions.

Policy includes statements about cases and proceedings and commentary.

Tips and advice has sections for consumers and businesses.

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14-39. One of the primary functions of the FTC is to investigate possible false and deceptive advertising and marketing practices. Access the FTC website at www.ftc.gov. Locate the “Commission Actions” section of the site. Read through the list of recent actions. Find two that are interesting. Review the cases and write a brief report on each case. What were the results of the FTC investigation? Provide the URLs of the cases you selected.

Student answers will vary.

14-40. Access the FTC website at www.ftc.gov. Locate the “News” section of the website. Read through the list of recent actions. Find two that are interesting to you. Write a brief report about each case and comment on the benefits to either consumers or businesses. Provide the URLs for the two news items in your report Student reports will vary.

14-41. The Council of Better Business Bureaus is an important industry organization for businesses as well as consumers. Access the website at www.bbb.org. What type of information is available on the site? How can this information help consumers? Be specific.

The site is broken down into assistance for consumers, business-to-business companies, and charities and donors. There is specific information provided for each entity.

14-42. Access the website of the Council of Better Business Bureaus at www.bbb.org.

In the “Find a business” section of the site, type in the name of a local business or a national business that is in your community. Read the report provided by the BBB for that business. Provide a screenshot of the report or save it as a file.

Evaluate the business based on the report provided and discuss its usefulness to consumers.

The four activities offered are (1) to check out a business, (2) file a complaint, (3) learn more about the Better Business Bureau, and (4) to learn about BBB activities associated with the military.

14-43. The National Advertising Division (NAD) of the Council of Better Business Bureaus can be found at www.asrcreviews.org. Locate the NAD section of the website. Look through the recent cases the NAD has investigated. Find two of interest to you. Write a report about each case, discussing the issues and the findings of the NAD. Provide the URLs for the two you selected.

Student answers will vary. .

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14-44. The Children’s Advertising Review Unit (CARU) of the Better Business Bureau can be found at www.asrcreviews.org. Access the CARU section of the site. Look through the recent cases the CARU has investigated. Find two of interest to you. Write a report about each case discussing the issues and the findings of the CARU. Provide the URLs of the cases you selected.

Student answers will vary.

Blog Exercises Access the authors’ blog for this textbook at the URLs provided to complete these exercises. Answer the questions that are posed on the blog.

14-45. Reebok—http://blogclowbaack.net/2014/04/24/reebok-chapter-14-2/ 14.46. Federal Trade Commission—http://blogclowbaack.net/2014/04/24/federaltrade-commission-chapter-14/ 14-47. Better Business Bureau—http://blogclowbaack.net/2014/04/28/bbb-chapter-14/

Student Project: Creative Corner The assignment is to develop an advertisement for Solidax ADX, a weight loss product. The goal is to make sure the information would meet the standards set for the FTC regarding substantiation and deception.

CASES Case 1

The Truth About Yogurt

11-48. How do the concepts of deception, puffery, and substantiation apply to thiscase?

The courts basically ruled the ads were deceptive and that sufficient substantiation had not been presented.

Clinical and scientific would normally be outside the bounds of puffery claims.

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14-49. Could Dannon’s executive team have avoided such an expensive outcome? If so, how?

The issue was settled in the courts. That means an out-of-court settlement may have been possible. Had this been under the realm of either the FTC or CCB, then other options might have been available.

Note to students that the person speaking in the case was the attorney for theplaintiffs.

14-50. Do you agree that the term “clinical studies show” is significantly different from “scientifically proven” or “clinically proven”? Should the judge have been more specific about what wording could or could not be used?

This is a good discussion question. It appears to some that there is no real difference.

14-51. What ethical or moral guidelines, if any, did Dannon violate?

Truthfulness in advertising, making overstated claims.

14-52. What role should advertising and marketing communications play in explaining the health benefits of basic products such as yogurt?

Student responses will vary. The key would be substantiation. If a company is able to claim and prove health benefits, why not market them?

Other students may respond that society shouldn’t make marketing a key part of healthcare. Notice all the ads for pharmaceuticals, such as “restless leg syndrome,” that crop up all the time. Are these companies convincing us, and our doctors, that we need some meds when we really do not?

Case 2

FanDuel and DraftKings

14-53. What role should government play in the oversight of fantasy sports websites?

Student answers will vary. Many states have “gaming institutes.”

14-54. Do you consider fantasy sports games to be “gambling,” or “entertainment?”

Defend your answer.

It is definitely gambling, but it could be considered both.

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14-55. Is advertising of fantasy sports websites on television ethical, when underage fans are likely to be watching?

Hopefully students will say it is not ethical.

14-57. As a marketing professional, what issues would you consider if asked to promote a fantasy sports website?

Ones personal code of ethics would come into play. The insider trading episode may have been reported by a whistleblower

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 14-59. Do you believe that ethics can be learned, or is it something an individual has internally? Why or why not? Suppose a company has hired you to teach ethics to its employees. Discuss the concepts of hedonism, homeostasis, law, religion, and common sense as it would relate to teaching a seminar to new employees on ethics. How would ethics training, code of ethics, and an ethics consulting system be used as part of the training class?

14-60. Describe the responsibilities and role of each of the advertising industry agencies used to regulate the industry: Better Business Bureau, National Advertising Review Board, and Children’s Advertising Review. How do these agencies protect consumers? How do they protect businesses? Overall, do you think the advertising industry can police itself with these agencies?

Why or why not?

Bonus Case

SMART CHOICES One continuing trend in the United States is an interest in the content of food products.

Many consumers want to buy foods that promote good health and nutrition. One recent effort that generated a substantial amount of controversy was the Smart Choices Program,

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which was created by the nonprofit American Society of Nutrition. Ten large food manufacturers enrolled in the program, including Kellogg’s and Kraft.

Under the system, a food product had to meet a specific set of guidelines to qualify for the Smart Choices endorsement. The system was based on the federal Dietary Guidelines for Americans developed by a conglomerate of food industry leaders, academics, nutritionists, and public interest organizations. Accepted products received permission to print a front-of-package or front-of-box label, in the form of a large green checkmark, with the phrase “Smart Choices Program and Guiding Food Choices” underneath. The logo clearly suggested an endorsement of a nutritional program, and many critics believed consumers would interpret the label as carrying a governmental stamp of approval. Any company wishing to place the Smart Choices label and logo was required to pay up to $100,000 per year for the right to do so. Quickly, manufacturers of a series of foods, including sugary cereals, snacks, and sandwich spreads, paid the money.

Among the products that featured the endorsement were Fruit Loops, Kid Cuisine Cheeseburgers, Teddy Grahams, and Kraft Macaroni and Cheese. And as one industry observed noted, the more products receiving the label, the greater the amount of money the American Society of Nutrition was able to collect from a food producer. It did not take long for the reactions to grow strong. Following a CBS Evening News report and other exposures in various media, companies began to withdraw support for the Smart Choices Program logo. Charges were raised that conflicts of interest could not be avoided using the system as it had been implemented. The Food and Drug Administration (FDA) issued a Guidance for Industry letter in October 2010. The agency announced that it .

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would analyze food labels with the intent of identifying any that might be misleading.

The FDA also announced it would develop a universal front-of-packaging labeling system that all food manufacturers must follow. The FDA did not name the Smart Choices Program specifically in the letter, but the program subsequently decided to suspend the use of the logo.

The Friedman Sprout, which is the official student newspaper for the Friedman School for Nutrition Science and Policy, published an article wondering if the school’s reputation had been damaged by the involvement of the school’s dean with The American Society of Nutrition.

The American Society of Nutrition continues operations. Its chief officer remains with the organization. The organization has announced intentions to follow new FDA guidelines for labels on packages and to become re-involved with the food manufacturers that had originally participated in the program.1,2 14-52. Why would the FDA become involved in this situation? What legal standard might have been violated?

The FDA might conclude that the label creates deception rather than being puffery.

14-53. What actions could the FDA have taken beyond writing a Guidance for Industry letter?

The organization could have moved toward a cease and desist order for the labels.

14-54. Do you believe the American Society of Nutrition violated any ethical standards? If so, which ones?

Student comments may vary. It seems apparent a conflict of interest may have been present by receiving money to approve items for the label.

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14-55. Do you believe the food manufacturers that sold sugary cereals and junk food carrying the Smart Choices Program label violated any ethical standards? If so, which ones, and why?

Most students will likely conclude something unethical was occurring. The practices seem deceptive and may lead people to eat foods that are less healthy.

14-56. Should the food manufacturers continue associating with the American Society of Nutrition? Why or why not?

Most students will likely argue they should not be associated with the organization. It is tainted by the past.

14-57. Do you believe the dean of the School for Nutrition Science and Policy violated any ethical standards? If so, which ones?

The majority of students will likely believe the individual engaged in a conflict of interest as well.

1

www.nutrition.about.com, www.conagrafoods.com, www.mcdonalds.com,

www.foodproductdesign.com, www.fritolay.com, and www.nlm.nih.gov, all accessed March 13, 2008.

2

Kelly Dumke and Rachel Zavala, “The Controversy Surrounding Smart Choices,” The

Friedman Sprout (http://friedmansprout.wordpress.com/2009/12/02/the-controversysurrounding-smart-choices/), December 2, 2009; Randall Pinkston, “Experts Say Industry Food Labels Deceptive,” CBS Evening News (www.cbsnews.com/stories/2009/09/06/eveningnews/main5291352.shtml), September 6, 2009; “Smart Choices?” CBSNewsOnline (www.youtube.com/watch?v=dWMVcURE-eE, accessed May 18, 2010); Rebecca Ruiz, “Eight Puzzling Food Labels,” Forbes (www.forbes.com/2009/09/23/food-labels-healthy-lifestyle-health-smart-choicesnutrition.html), September 23, 2009.

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Chapter

15

Evaluating an Integrated Marketing Program CHAPTER OBJECTIVES Students should be able to answer the following questions: 15.1 15.2 15.3 15.4 15.5 15.6 15.7

What are the three broad categories of evaluation tools used to evaluate IMC systems?

How do marketing teams match evaluation methods with IMC objectives?

What forms of message evaluations can be conducted to assess IMC programs?

Which evaluation criteria are suggested by the positioning advertising copytesting (PACT) system?

How do online evaluation systems assist advertising managers in assessing the quality of a firm’s internet activities?

What types of behavioral evaluations can be employed to assess IMC programs?

How are evaluation programs adjusted to match international operations?

OVERVIEW This final chapter is devoted to the various methods available for evaluating components of an IMC program. The term used to describe various measures is metrics.

This final chapter considers the various methods available for evaluating components of an IMC program.

Research and media experts spend time and energy seeking to develop new and accurate measures of success, called metrics, that should accurately portray the effectiveness of a marketing communications plan. Three broad categories of evaluation can be used.

Three broad categories of evaluation tools can be used to evaluate IMC systems: message evaluations, online evaluations, and respondent behavior evaluations.

Copyright © 2018 Pearson Education.

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Sands Research, Inc.: Neuro-Marketing on the Cutting Edge Sands Research, Inc., led by its chairman and chief science officer, Dr. Steve Sands, is a leading neuro-marketing firm. The company pioneered applications of cognitive neuroscience technology to provide unique insights into consumer responses to television and print advertisements, product packaging, and digital media.

Questions for Students 1. Do you think brainwaves really tell the story of an advertisement’s effectiveness?

2. What role do you think memory and cognitive maps have in responses to advertisements?

3. Is there a difference between capturing attention and persuading someone to buy a product? Does this technology recognize the difference?

Objective 15.1:

What are the three broad categories of evaluation tools that can be used to evaluate IMC systems?

Evaluation Metrics Message evaluation techniques examine the message and the physical design of the advertisement, coupon, or direct marketing piece.

Online evaluation metrics examine online advertising and marketing campaigns.

Click-throughs represent the number of individuals who clicked on a brand message and were taken directly to the brand’s website Dwell rate measures the proportion of ad impressions that resulted in a user engaging with the ad, such as clicking on it or just mousing over it. Dwell time measures of the amount of time users spend engaged with a particular ad.

Respondent behavior evaluations address visible customer actions, including store visits, inquiries, or actual purchases.

Objective 15.2:

How do marketing teams match evaluation methods with IMC objectives?

Matching Methods with IMC Objectives Levels of analysis include: • •

Short-term outcomes (sales, redemptions rates) Long-term results (brand awareness, brand loyalty or equity)

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• Product-specific awareness • Awareness of the overall company • Affective responses (liking the company and a positive brand image.

• Objective 15.3: What forms of message evaluations can be conducted to assess IMC programs?

Message Evaluations Message evaluations take place at any stage in the development process, as displayed in Figure 15.2.

A storyboard can be studied to see if consumers like the basic structure of an ad.

A test market can be used to measure the quality and impact of an ad or promotion.

Advertising Tracking Research Tracking research examines ads that have launched. It is an in-market research method that monitors a brand’s performance and advertising effectiveness.

Tests can be performed at specific times or intervals, or continuously.

Ad tracking provides a general measure of the effect of the media weight (i.e., spending level), the effectiveness of the media buys, and the quality of the ad’s creative and execution.

Ad Tracking Methodology Research respondents are usually shown a brief portion of an advertisement, or a few stills from a TV ad, with the brand name removed or not visible. Respondents are asked if they recognize the company, which measures brand and ad recognition.

They are then asked to identify the brand being advertised, which measures unaided brand awareness.

Tracking research also measures: • • • •

Memorability Likability Unaided and aided message recall Unaided and aided campaign recall

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Report Cards and Benchmarks Within the second or third week of a new campaign, the ad tracking research provides two types of information about the new ad’s performance.

First, it shows how the new ads perform in comparison to the brand’s competitors.

Second, it indicates show how well the brand performs in relation to previous campaigns.

Copytesting A copytest assesses a finished marketing piece or one in the final stages of development.

Copytesting elicits responses to the main message of the advertisement as well as the presentation format.

Copytests are used when the marketing piece is finished or in its final stages of development prior to production.

Copytests are designed to solicit responses to the main message of the ad as well as the format in which that message will be presented.

The three most common copytesting techniques are portfolio tests, theater tests, and online tests.

Portfolio test is a display of a set of print ads, one of which is being evaluated.

Theater test is a display of television ads, including the one being evaluated.

Both techniques mimic reality in the sense that consumers are normally exposed to multiple messages.

Testing Emotional Reactions In addition to these measures, Millward Brown provides a second-by-second emotional reaction chart that shows how viewers feel about an advertisement to be shown on television.

As they watch the ad on a computer screen, respondents move the computer mouse to indicate their feelings, one direction for positive feelings, the other direction for negative feelings.

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Verbatim Comments Each respondent is asked to present, in his or her own words, thoughts about the advertisement.

Ad tracking does not generate information about why an ad did not perform well or what to do to correct it. Copytesting procedures can provide some of this information.

Copytesting Controversies Some critics contend that copytesting inhibits creativity.

Others say copytests are necessary because of accountability issues. An ad must be shown to have the potential to work before it receives funding.

Emotional Reaction Tests Emotional ads are based on the idea that ads that elicit positive emotions are more likely to be remembered and develop positive attitudes. It is difficult to measure the emotional impact of an advertisement.

A warmth monitor measures emotions by asking consumers to manipulate a joystick while watching a commercial. The movements track reactions to a commercial by making marks on a sheet of paper containing four lines. The four lines are labeled: 1.

2.

3.

4.

Absence of warmth Neutral Warmhearted/tender Emotional

Most of the time, emotions are associated with short-term events, such as the reaction toward a given advertisement. At the same time, emotions are strongly held in the memory banks of most consumers. Emotional reaction tests are self-report instruments.

Another approach to measuring emotional reactions is biometric research, which involves measuring physiological reactions to advertisements and marketing messages.

Biometrics measure actual emotional reactions. Individuals can lie about how they feel with a warmth meter, but bodily reactions to ads are difficult to fake.

Question for Students:

Do you think emotions related to commercials influence purchase decisions? Why or why not?

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Cognitive Neuroscience Cognitive neuroscience is a brain-image measurement process that tracks brain activity.

The power of cognitive neuroscience is that it reveals physiological reactions to a message. It shows where brain activity occurs and, to some extent, the level of activity.

It can identify times when a test subject becomes enthralled with a message. It also indicates when the person merely focuses on the logo or an attractive woman in the commercial.

The methodology identifies positive and negative emotions and the intensity of the emotions by the amount of neurons firing.

This methodology allows scientists (and marketers) to understand the information being processed, where it is processed, and how the individual reacted to the ad or marketing piece. It tracks the flow and movement of electrical currents in the brain.

Objective 15.4:

Which evaluation criteria are suggested by the positioning advertising copytesting (PACT) system?

Evaluation Criteria PACT, or positioning advertising copytesting, sets evaluation criteria. The PACT principles are listed in Figure 15.3: • • • • • • • •

The procedure should be relevant to the advertising objective being tested.

Researchers should agree on how the results are to be used.

Multiple measures should be used.

The test should be based on a theory or model of human response to communication.

Multiple testing exposures should be used.

Alternative ads should be in the same stage of development.

The test sample should mirror target sample.

The testing procedures should demonstrate reliability and validity.

Objective 15.5:

How do online evaluation systems assist advertising managers in assessing the quality of a firm’s internet activities?

Online Evaluation Metrics Figure 15.4 identifies methods to measure website traffic and digital marketing campaigns.

Copyright © 2018 Pearson Education.

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Click-throughs remain the primary method used to measure the impact of online advertising. Dwell rate measures the proportion of ad impressions that resulted in a user engaging with the ad, such as clicking on it or just mousing over it. Dwell time measures of the amount of time users spend engaged with a particular ad.

Page views, page views per visit, and time on each page as well as the site as a whole indicate a level of engagement.

Length of engagement, a newer metric, measures how long the person stays on a website.

It represents a surrogate of a person’s interest in the product and site being visited.

Entry and exist pages display where individuals come to a site and where they leave.

A bounce occurs when a person enters and leaves from the same page.

Conversion ratio and cost-per-conversion statistics allow marketers to compare digital campaigns and different webpage and banner ad designs. Marketers also examine average order value (AOV) and revenue-per-visit (RPV) metrics.

Shopping cart abandonment is a critical metric. It measures the percentage of customers who placed items in a shopping basket but did not complete the order.

Sales Funnel Efficiency The sales funnel efficiency allows marketers to compare multiple digital campaigns, or ad designs to see which are the most effective.

Figure 15.5 provides an example of sales funnel efficiency.

Web Chatter Web chatter includes opinions posted on the web, blogs, Twitter, and social networking sites such as Facebook.

Social Media Metrics Figure 15.6 provides the primary social media metrics organizations use to measure volume of social media traffic, level of engagement, and conversion.

Volume metrics measure the level of traffic to social media sites.

Shares, reposts, re-tweets, likes, and mentions indicate a person liked what he saw and passed it on to other individuals.

A buzz score (or brand buzz) accounts for the number of times a brand receives a mention on social network within a specific time frame.

Copyright © 2018 Pearson Education.

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“Sentiment” refers to whether the buzz was negative or positive.

Objective 15.6:

What types of behavioral evaluations can be employed to assess IMC programs?

Behavioral Evaluations Numerous behavioral evaluation techniques are available.

Sales Universal product codes and scanner data make measuring changes in sales following a marketing campaign easier. Scanner data make it possible for companies to monitor sales and help both the retailer and the manufacturer discover the impact of a particular marketing program.

Figure 15.7 identifies common behavioral measures.

Evaluating Advertising Figure 15.8 lists reasons why advertising is difficult to evaluate: • • • • •

The influence of other factors, including direct and indirect impact A delayed impact of the ad, which happens when consumers encounter ads and are persuaded to purchase the product, but will not actually make the buy until a later time Consumers changing their minds while in the store, even after being persuaded by an ad Whether or not the brand is in the consumer’s evoked set The ad may build brand equity, which in turn will influence future purchases rather than having an immediate impact on sales

Response Rates Some marketing efforts do not result in immediate sales. Instead, customers simply make inquiries through toll-free telephone numbers, email, website, or social media platforms.

Redemption Rates Manufacturers can study the impact of trade promotions by observing changes in sales to the retailers at the time the company offers promotions.

The same holds true for consumer promotions, such as coupons, contests, and point-ofpurchase displays.

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Test Markets Test markets are cost-effective methods to analyze and make changes in marketing efforts before millions of dollars are spent on something that will not accomplish the intended objectives. One major advantage of a test market is that it resembles an actual situation. Test market programs can be used to assess the following: • • • •

Advertisements Consumer and trade promotions Pricing tactics New products

Competitive Responses A competitor can respond to a test market program in one of two ways.

1. By introducing a special promotion in the test market area in order to confound the results 2. By not intervening during the test market period, but rather using the time to prepare a counter marketing campaign Scanner Data Scanner data make it possible for results from test market campaigns to be quickly available. The figures can be studied to determine if test market results are acceptable.

A firm also can design several versions of a marketing campaign in different test markets Question for Students:

Have you ever been part of a test market program?

Purchase Simulation Tests Purchase simulation tests are ways in which consumers can be asked if they would be willing to buy products. Researchers compare the products chosen in a first shopping trip prior to the interventions with those selected in the second.

A major advantage of this methodology is that the test procedures do not rely on opinions and attitudes, but rather simulated purchase decisions.

Objective 15.7:

How are evaluation programs adjusted to match international operations?

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International Implications IMC programs should be assessed in terms of (1) domestic results, (2) results in other countries, and (3) as an overall organization.

Important Note to Professors: The MyLab feature at Pearson will grant you access to the Integrated Campaigns in Action within the Instructor’s Resource section.

The authors’ blog for professors and students may be found at http://blogclowbaack.net/ Both methods contain actual print materials produced for the campaign. Broadcasts material such as video ads, TV ads, and radio ads are embedded using YouTube and Pearson servers.

These features bring to life the exciting process of building integrated advertising and marketing campaigns. Most important, you will have access to insights and background information from the agencies and the companies involved in how the campaigns were created.

IMPLICATIONS FOR MARKETING DEPARTMENT MANAGERS AND ADVERTISING ACCOUNT EXECUTIVES (Note to professors— these materials are not in the text. They provide a method for you to summarize the chapter in a different way.)

Always remember that a plan is never complete until goals are set and performance is measured. In the case of integrated marketing communications programs, goals are generated as the company considers the following: • • • • • • •

Promotions opportunities Brand image Buyer behaviors Advertising design Trade and consumer promotions Public relations efforts All other selling and promotions activities

Match the goal to the level of analysis. Short-term goals should be measured more frequently, and in more detail. Long-term objectives are studied in light of overall trends and more general criteria.

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Don’t overemphasize the short term at the expense of the long range. The lasting impressions made by marketing communications are a key asset.

• • • • • • •

The image and reputation of the brand and of the company Brand loyalty Having one clear voice Quality interactions and communications with all customers Effective internal communications Innovative people and quality technologies The ability to adjust to a changing marketplace

Select tools to measure advertising effectiveness at every stage of development. Don’t let your ego get in the way of your judgment.

Match the type of assessment with the type of message. Some ads tap emotions, others logic. Make sure the instrument you choose is best for the ad or marketing piece that is being developed.

Examine the success rates of ads as compared to the tools that were used to assess them as they were being created. Revise those instruments if needed. Avoid becoming too attached to any one approach.

REVIEW QUESTIONS 15-1. What are the three categories of evaluation tools that can be used to evaluate IMC systems?

Three broad categories of evaluation tools can be used to evaluate IMC systems: message evaluations, online evaluations, and respondent behavior evaluations.

15-2. What common IMC objectives are matched with methods of evaluation?

Several levels are used to analyze an advertising or IMC program. They include the following: • Short-term outcomes (sales, redemption rates) • Long-term results (brand awareness, brand loyalty, or brand equity) • Product-specific awareness • Awareness of the overall company • Affective responses (liking the company and a positive brand image) 15-3. What are message evaluations?

Message evaluation techniques examine the message and the physical design of the advertisement, coupon, or direct marketing piece.

Copyright © 2018 Pearson Education.

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15-4. What is advertising tracking research? What does it help the marketing team assess?

Tracking research examines ads that have launched. It is an in-market research method that monitors a brand’s performance and advertising effectiveness.

Research respondents are usually shown a brief portion of an advertisement, or a few stills from a TV ad, with the brand name removed or not visible. Respondents are asked if they recognize the company, which measures brand and ad recognition. They are then asked to identify the brand being advertised, which measures unaided brand awareness.

15-5. Describe the use of portfolio tests and theater tests in copytesting programs.

A portfolio test is a display of a set of print ads, one of which is the ad being evaluated. A theater test is a display of a set of television ads, one of which is being evaluated. Both are used to solicit responses to the main message of the ad as well as the format in which that message is being presented.

15-6. Describe a warmth monitor and biometric research. What do they measure?

A warmth monitor measures emotions by asking consumers to manipulate a joystick as they watch a commercial Biometric research involves measuring physiological reactions to advertisements and marketing messages. Biometrics measure actual emotional reactions.

Individuals can lie about how they feel with a warmth meter, but bodily reactions to ads are difficult to fake.

15-7. Describe the advantages and uses of cognitive neuroscience as a method for evaluating advertising and marketing programs.

Cognitive neuroscience is a brain-image measurement process that tracks brain activity. The power of cognitive neuroscience is that it reveals physiological reactions to a message. It shows where brain activity occurs and, to some extent, the level of activity. It can identify times when a test subject becomes enthralled with a message. It also indicates when the person merely focuses on the logo or an attractive woman in the commercial. The methodology identifies positive and negative emotions and the intensity of the emotions by the amount of neurons firing. This methodology allows scientists (and marketers) to understand the information being processed, where it is processed, and how the individual reacted to the ad or marketing piece. It tracks the flow and movement of electrical currents in the brain.

Copyright © 2018 Pearson Education.

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15-8. What are the positioning advertising copytesting principles (PACT) that are used to help advertisers prepare quality ads and campaigns?

The positioning advertising copytesting (PACT) principles help advertisers to prepare quality ads. They are effective in both short-term and long-term evaluations. They generate data that can be used to analyze the effectiveness of an ad.

• • • • • • • •

The procedure should be relevant to the advertising objective being tested.

Researchers should agree on how the results are to be used.

Multiple measures should be used.

The test should be based on a theory or model of human response to communication.

Multiple testing exposures should be used.

Alternative ads should be in the same stage of development.

The test sample should mirror target sample.

The testing procedures should demonstrate reliability and validity.

15-9. What online evaluation metrics can be used to analyze marketing communications?

Click-throughs, dwell rate, dwell time, page views, page views per visit, and time on each page as well as the site as a whole, length of engagement, entry and exit pages, conversion ratio, cost-per-conversion, shopping cart abandonment, sales funnel efficiency, web chatter, and social media metrics 15-10. What social media communications?

metrics

can

be

used

to

analyze

marketing

Volume metrics, shares, reposts, re-tweets, likes, mentions, buzz score (brand buzz), and sentiment 15-11. Define the terms click-throughs, dwell rate, and dwell time. How are these used to evaluate marketing communications?

Click-throughs remain the primary method used to measure the impact of online advertising. Dwell rate measures the proportion of ad impressions that resulted in a user engaging with the ad, such as clicking on it or just mousing over it. Dwell time measures of the amount of time users spend engaged with a particular ad.

15-12. What are the primary forms of behavioral evaluations that can be used to test advertisements and other marketing pieces?

The forms of behavioral evaluations that can be used are sales and redemption rates, test markets, data from test markets, and purchase simulation tests.

Copyright © 2018 Pearson Education.

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15-13. How are behavioral responses to marketing messages measured?

The measures of behavioral responses that were described were sales, redemption rates, response rates, test markets, and purchase simulation tests.

15-14. What items can be evaluated using test markets?

Test markets may be used to evaluate advertisements, promotions and premiums, pricing tactics, and new product acceptance.

15-15. Describe a purchase simulation test.

A purchase simulation test is a simulated shopping experience. The subjects are able to choose from a variety of products they would see on a normal store shelf.

Then, the subjects are shown a TV preview with many ads in the preview. The subjects are unaware of which product and advertisement is being tested. Finally, the subjects take part in a second shopping experience again. The researchers look for differences in purchases.

15-16. What differences occur when international marketing programs are assessed?

IMC programs should be assessed in terms of (1) domestic results, (2) results in other countries, and (3) as an overall organization. Individual advertisements and promotional programs are examined within the countries in which they appear.

Due to differing standards regarding advertising content, they must be evaluated in light of local cultures and purchasing habits. Many times, advertising and promotional programs must be assessed across national boundaries. It is advisable to contract with local advertising agencies to discover which techniques are most viable in other countries. In some nations, using coupons may be viewed as a sign of poverty. Numerous multinational conglomerates assess advertising and promotional efforts through regional offices.

CRITICAL THINKING EXERCISES 15-17. Explain the differences among message evaluation techniques, online evaluation metrics, and respondent behavior evaluations. Discuss why each is important and explain how Maxwell House coffee could use each for the ad campaign shown in this chapter.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

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15-18. Describe in your own words each of the message evaluation techniques: advertising tracking research, copytesting, and cognitive neuroscience. If Victoria Secret’s marketing team wanted to evaluate their latest television ad campaign, how could its advertising agency use each of the message evaluation technique? Which of the three methods would you use? Why? Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

Tracking research examines ads that have launched. It is an in-market research method that monitors a brand’s performance and advertising effectiveness. Ad tracking provides a general measure of the effect of the media weight (i.e., spending level), the effectiveness of the media buys, and the quality of the ad’s creative and execution.

A copytest assesses a finished marketing piece or one in the final stages of development. Copytesting elicits responses to the main message of the advertisement as well as the presentation format. Copytests are used when the marketing piece is finished or in its final stages of development prior to production. Copytests are designed to solicit responses to the main message of the ad as well as the format in which that message will be presented.

Cognitive neuroscience reveals physiological reactions to a message. It shows where brain activity occurs and, to some extent, the level of activity.

15-19. Interview five of your friends or relatives. Ask each person to write down two advertisements they enjoyed and their reasons. Ask individuals to write down two advertisements they dislike and their reasons. Finally, ask them to write down an advertisement they believe is offensive and their reasons. Ask each student to read his or her list comparing ads that were liked, disliked, or those considered offensive. What common elements did you find in each category? What were the differences?

Student answers will vary.

15-20. Review the section of the chapter on cognitive neuroscience. What are your thoughts about using cognitive neuroscience? Besides ads containing sexual content, identify two other situations where cognitive neuroscience would yield superior results to emotional reaction tests or copytests. Explain why.

Student answers will vary. Fear presents a possibility, also fantasy.

15-21. Review the digital metrics shown in Figure 15.4 and discussed in the chapter.

Imagine you are a marketing intern for Chic Shaque (see the ad in this chapter). Your boss asked you to identify the top three web metrics and the Copyright © 2018 Pearson Education.

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top three conversion and campaign metrics. Which would you choose?

Justify your answer.

Student answers will vary.

15-22. Use the following data to calculate the appropriate percentages for a sales funnel efficiency analysis of a banner ad campaign. The average clickthrough rate for banner ads is 0.5 percent. There were 40,000 visits/ impressions and 450 click-throughs. 260 browsed products on the website, 225 placed items in the shopping cart, 196 made a purchase, and 156 created accounts. Which areas would be of most concern to marketers? Why? Variable Visits/Impressions Click-throughs Browse products Shopping cart Purchase Create account

Value 40,000 450 260 225 196 156

Percent 1.13% 57.78% 86.54% 87.11% 79.59%

15-23. Review the social media metrics shown in Figure 15.6 and discussed in the chapter. You are a marketing intern for Visit South Walton and asked to evaluate its social media campaign in Facebook (see the Facebook post shown in the social media section of the chapter). Identify the two most important volume metrics, two most important engagement metrics, and two most important conversion metrics. Justify why you picked the metrics you did.

Student answers will vary. Volume metrics are views, new likes, lost likes, location, and time/day of visit. Engagement metrics include mentions, shares, likes, comments, time on page, visits per day/month, and bounce rate. Conversion metrics are click-through rates, conversion ratio, cost-per-conversion, average order value, revenue per visit, and funnel efficiency.

15-24. Are sales figures important when evaluating integrated marketing communications? How should hard data such as redemption rates, response rates, and store traffic be used in the evaluation of marketing communications? In terms of accountability, how important are behavioral measures of IMC effectiveness?

Sales figures are important because they ultimately decide whether the promotional efforts moved consumers to purchase products. If sales are low, then there was a problem in the IMC plan or advertisement used. Hard data can be used to compare one campaign to another. Changes could result in different redemption rates, which show a positive or negative connotation. Behavioral Copyright © 2018 Pearson Education.

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measures should be viewed in the evaluation effectiveness in a “big picture” manner.

15-25. A clothing manufacturer spends $6 million on trade promotions and $3 million on consumer promotions. How would you measure the impact of these expenditures? If an agency was hired to manage these expenditures, what type of measures would you insist the company utilize?

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

The measures would include message evaluations and behavioral evaluations.

Respondent behaviors might include changes in sales and redemption rates. It is important to make sure the evaluation method matches the IMC method used. For example, if coupons were used, the appropriate method of evaluation would be redemption rate. If off-invoice trade allowances were used, the best evaluation would be the percentage of channel members who took advantage of the trade promotion and the size of their orders.

15-26. In some Asian countries it is improper to talk about oneself. Therefore, people are often too embarrassed to answer questions about feelings and emotions. Those who answer the questions tend to provide superficial answers. Explain the advantages of a simulated purchasing test methodology in this situation. What other methods of evaluating feelings and emotions could an agency use in Asian countries? Justify your choice.

Student answers will vary based on their personal response. Refer to the MyLab for an opportunity to assign this question, and all starred MyLab questions, to a student discussion board.

The advantage of using a simulated purchasing test is that the consumer would not express his or her own opinion, which may be invalid, but rather would actually simulate the purchase of a product. This test shows success not through words, but actions. It would also be possible to use physiological measures.

INTEGRATED LEARNING EXERCISES 15-27. Decision Analysts, Inc., is a leading provider of advertising and marketing research. Access the company’s website at www.decisionanalyst.com. and investigate the various services the company offers. Examine the advertising research services that are available. Write a short report about how advertising research services provided by Decision Analysts could be used by companies to evaluate advertising campaigns.

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The company offers research services, innovation services, syndicated research, stats programs, white papers, economic indices, research advice, and secondary data. The advertising services include CopyScreen, CopyCheck, CopyTest, CopyRecall, and CopyTrack. CopyScreen evaluates advertising ideas as they are being developed. CopyCheck is for ads in early stages. CopyTest predicts the effectiveness of rough and finished commercials. CopyRecall measures memorability of finished ads. CopyTrack measures the effectiveness of ads over time.

15-28. Ipsos-ASI at www.ipsos-asi.com is an advertising research firm that has developed a high level of expertise in ad testing and measurements. Access the company’s products and services. What services are offered? When could the various services be used to evaluate marketing and advertising campaigns? Be specific.

Ipsos-ASI concentrates on the emotional side of advertising. The services include measures for ad pretesting, in-marketing assessments, studies of brand equity, and creative development. These can be used to prepare ads on a worldwide basis, since the company has numerous global locations.

15-29. Adknowledge is a firm that excels at measuring internet traffic and internet advertising. Access the website at www.adknowledge.com. What services does the company offer in terms of digital and social media analysis?

Describe a research project that you feel this company could do successfully to assist in advertising or internet research.

Adknowledge is for surf engine advertisers. It also helps provide key words to make sure surfers reach a company’s site.

15-30. ComScore is a firm that measures mobile, digital, and social media advertising. Access the website at www.comscore.com. What services does the company offer to evaluate mobile, digital, and social media campaigns?

Be specific. Suppose you wanted to evaluate a digital, social, and mobile campaign for Interstate Batteries. Which comScore services would you use?

Why? ComScore customizes programs by industry. The products include a media matrix measure, audience insight measures, campaign analysis, online search solutions, Hispanic services, ad sales networks, local services on markets, and global services.

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15-31. Millward Brown provides marketing and advertising evaluations. Access the company’s website at www.millwardbrown.com. Describe the various services offered by the company. Suppose you want to evaluate an advertising campaign for Forever 21 clothes. Identify and discuss what Millward Brown tools you would use.

At Millward Brown, the site suggests it is passionate about brands. As a leading global research agency specializing in advertising, marketing communications, media and brand equity research, “We’ve been in the business of brands for more than 35 years.”

15-32. Ameritest provides marketing and advertising evaluations. Access the company’s website at http://www.ameritest.net. Describe the various services offered by the company. Suppose you want to evaluate an advertising and digital campaign for Urban Outfitters. Identify four Ameritest tools you could use. Justify your choice of these four evaluation methods.

Ameritest looks largely at emotions. Student answers about Urban Outfitters will vary.

Student Project: Creative Corner Students are asked to assess the effectiveness of advertisement for Ethos Water, a combined effort between PepsiCo and Starbucks.

CASES Case 1

The Vaseline Healing Project

15-33. What message evaluation techniques could be used in evaluating Vaseline Healing Project advertising campaign? Be specific.

Message evaluation techniques examine the message and the physical design of the advertisement, coupon, or direct marketing piece. Choices would include online evaluation metrics that examine online advertising and marketing campaigns. Click-throughs represent the number of individuals who clicked on a brand message and were taken directly to the brand’s website. Dwell rate measures the proportion of ad impressions that resulted in a user engaging with the ad, such as clicking on it or just mousing over it. Dwell time measures of the amount of time users spend engaged with a particular ad. Respondent behavior evaluations address visible customer actions, including store visits, inquiries, or actual purchases.

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15.34. Describe how advertising tracking research could be used to evaluate the Vaseline Healing Project commercials.

Ad tracking research provides two types of information about the new ad’s performance. First, it shows how the new ads perform in comparison to the brand’s competitors. Second, it indicates show how well the brand performs in relation to previous campaigns. In this case, it is a new campaign and there are no direct competitors.

15.35. Describe how cognitive neuroscience could be used in developing and evaluating the healing project campaign.

The power of cognitive neuroscience is that it reveals physiological reactions to a message. It shows where brain activity occurs and, to some extent, the level of activity. It can identify times when a test subject becomes enthralled with a message. It also indicates when the person merely focuses on the logo or an attractive woman in the commercial. The methodology identifies positive and negative emotions and the intensity of the emotions by the amount of neurons firing.

The emotions should be sympathy and the desire to be altruistic (to help).

15.36. Which digital and social media metrics would you use to evaluate the campaign? Explain why.

Brand loyalty, brand recall, and positive sentiments would be the most obvious.

15.37. Which behavioral evaluations would be most useful for evaluating the healing project campaign?

Purchases, contributions, response rates, and visits to the website Case 2

Spych Market Analytics

15-38. Would the concepts used to measure marketing success match with the message evaluation methods presented in this chapter? Why or why not?

Yes, the measurement methods might be slightly different as well as the terminologies used, but the concepts are basically the same.

15-39. Compare the concepts used by Spych with the terms “behavioral response” and “attitudinal response.”

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Engagement is a comparable term to some of the attitudinal responses. Readvertising or sharing is a behavioral response.

15-40. What roles do “emotions” and “logic” play in the Spych approach to marketing communications?

A sense of community is part of the process as is the idea of sharing, which result from emotional responses. Consumers are connected to brands in new ways.

Logic seems to play a lesser role in the Spych approach.

15-41. What roles do social media and hand-held technologies such as smart phones play in today’s marketing environment? How will they evolve in the future?

Most students should agree that the use of these devices will continue to increase as marketers find more innovative ways to employ them. How they will evolve is a discussion question.

MyMarketingLab Go to mymktlab.com for the answers to the following Assisted-graded writing questions: 15-42. Explain the differences between web metrics and conversion and campaign metrics for digital marketing. Explain the differences among volume, engagement, and conversion metrics for social media. Suppose Sonic has launched a digital and social media campaign. Identify the six most important metrics to evaluate both the digital and social media campaign.

Justify your choice.

15-43. ComScore is a firm that measures internet traffic and internet advertising.

Access the website at www.comscore.com. What services does the company offer? Describe a research project you feel this company could do successfully to assist in advertising or internet research.

Bonus Case

CRUISING FOR INCREASED PROFITS Adventure Cruises owns a fleet of ships that tour the Caribbean and the Bahamas and make trips to Hawaii. The company has been in operation for more than 20 years.

Recently, there has been a drop in passengers on each voyage. Adventure’s leadership Copyright © 2018 Pearson Education.

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believes increasing competition in the cruise ship industry, combined with additional new leisure-time activities, have led to the decline. Some worry that cruise ship tours are viewed as something “old people” do and that Disney has taken away the family cruise business.

To combat these problems, the marketing team at Adventure Cruises has decided on two tactics. First, the department will present a new ad campaign highlighting the advantages the company has compared to other lines. Second, a new type of passenger will be recruited, a “working business vacationer.”

Adventure Cruise rebuilt the staterooms on 10 of its ships to accommodate business travelers. These individuals can be members of a company or guests of the company. The idea is to get the customer alone on a ship to conduct business for a series of days, all the while being able to enjoy the many features of cruise travel, including fine dining, gambling, shows, and stops at various ports. The advantage to the company is that it essentially has a “captive audience” when a customer is given a free cruise in exchange for doing business with the company footing the bill. Adventure Cruise intends to take out ads in business magazines and journals, selling these new packages to various business buyers. Adventure Cruise president Henry Crouch points out, “Lots of companies pay really big bucks to rent luxury boxes in football stadiums. They get the customer for what, 4 or 5 hours? We can offer them a chance to keep a customer for 4 or 5 days.”

Henry hired a large international advertising agency to prepare ads for both regular passengers and the new business-to-business market. Lauren Patterson was the account executive who signed the deal, by emphasizing that she would follow the Roper Starch Copyright © 2018 Pearson Education.

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copytesting principles. For cruise ship passengers, the ads would pass muster only if they met the following criteria: 1. The eyes have it. The ads must be clear and easy to follow.

2. Never place copy above an illustration. People see the picture first, so if the copy is higher, it is ignored.

3. Great visuals work. The idea is to capture attention and interest.

4. Make sure the headlines and visuals blend with the copy. Don’t confuse the reader.

5. Don’t use confusing visuals.

6. Don’t use confusing headlines.

7. Testimonials increase believability and readership.

8. Size matters. The ad must be big.

9. Keep it simple. Readers are not as interested in the product as you are, so make the ad easy to follow.

10. Break the rules. Be creative.

In the business-to-business marketplace, three problems routinely occur. Lauren is going to insist that the ads avoid these problems. She calls them the ABC sins in business-to-business marketing. The problems are a. Ads that are not visually appealing b. Ads that are abstract rather than designed with a human appeal c. Ads that fail to emphasize the benefit to the business buyer Henry realizes that these two markets (regular passengers and business customers) are somewhat distinct. Still, he believes Adventure Cruises should speak with one voice. He believes his company has three major advantages: better food, unusual entertainment, and Copyright © 2018 Pearson Education.

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excellent service. He wants to be sure that Lauren incorporates these three elements into the ads that appear on television and in the trade journals that they select.

(1)

Design a print ad for Adventure Cruise’s regular passengers.

Student ads will vary.

(2)

Design a print ad for Adventure Cruise’s business customers.

Student ads will vary. Compare them to the regular passenger ads in class.

(3)

What type of testing should be done during the design phase of the advertisement?

The type of testing that should be done during the design phase of the advertisement would be storyboards and focus groups, where the idea is presented to consumers to obtain reactions and suggestions.

(4)

What type of testing should be done after the ad is designed but prior to placing it in a magazine or other print media?

The type of testing that should be performed after the ad is designed but prior to putting it in a magazine or other print media would be copytests, especially portfolio tests.

(5)

What type of testing should be done after the advertisement is launched?

How can the effectiveness of the advertisement be measured?

The type of testing that should be done after the advertisement is launched would be emotional reaction tests, cognitive neuroscience, and ad tracking. The effectiveness can also be measured through these methods as well as behavioral responses, including changes in sales, changes in inquiries, and changes in bookings.

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