Advertising’s Role in Marketing

Part 1: Foundations

Chapter 2

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Chapter Outline

I. Chapter Key Points

II. What is Marketing?

III. The Key Players and Markets

IV. The Marketing Process

V. How Agencies Work

VI. International Marketing

VII. The Dynamics of Modern Marketing

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Key Points

• Define the role of advertising within marketing• Explain how the four key concepts in marketing

relate to advertising• Identify the key players in marketing and how the

organization of the industry affects advertising• List and explain the six critical steps in the marketing

process• Summarize the structure of the advertising agency

industry• Analyze the changes in the marketing world and what

they portend for advertising

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What is Marketing?

• The way a product is designed, tested, produced, branded, packaged, priced, distributed, and promoted

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Key Concepts in Marketing

• The marketing concept

• Exchange

• Branding

• Added value

• Marketing should focus first on identifying the needs and wants of the customer

• To compete effectively, marketers must focus on the customers’ problems and try to develop products to solve them

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Key Concepts in Marketing

• The marketing concept

• Exchange

• Branding

• Added value

• The act of trading a desired product or service to receive something of value in return

• Money is exchanged for goods

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Key Concepts in Marketing

• The marketing concept

• Exchange

• Branding

• Added value

• The process of creating a distinctive and special meaning for a product

• Brand equity is reputation, meaning, and value that the brand name or symbol has acquired over time

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Key Concepts in Marketing

• The marketing concept

• Exchange

• Branding

• Added value

• A marketing or advertising activity makes a product more valuable, useful, or appealing

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The Key Players and Markets

• The marketer

• Suppliers and vendors

• Distributors and retailers

• The organization, company, or manufacturer producing the product and offering it for sale

• The advertiser or client (from the agency’s point of view)

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The Key Players and Markets

• The marketer• Suppliers and

vendors• Distributors

and retailers

• Other companies that manufacture the materials and ingredients used in producing the product

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The Key Players and Markets

• The marketer

• Suppliers and vendors

• Distributors and retailers

• Various companies that are involved in moving a product from its manufacturer to the buyer

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Types of Markets

• Market– Where the exchange

between buyer and seller takes place

– A particular type of buyer

• Market share– The percentage of the

total market in a product category that buys a particular brand

ConsumerBusiness-to-

business

Institutional Channel

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Types of Markets

• Consumer

• Business-to-business (Industrial)

• Institutional

• Channel

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The Marketing Process

1. Conduct research and develop a situation analysis

2. Set objectives for the marketing effort

3. Assess consumer needs and wants

4. Differentiate and position the product

5. Develop the marketing mix strategy

6. Evaluate the effectiveness of the strategy

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Marketing Mix Strategies

• Product

• Place

• Price

• Promotion

• The product is both the object of the advertising and the reason for marketing

• Product category– A class of similar

products

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Marketing Mix Strategies

• Product

• Place

• Price

• Promotion

• The channels used in moving the product from manufacturer to buyer

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Marketing Mix Strategies

• Product

• Place

• Price

• Promotion

• Based on the cost of making and marketing the product and on expected profit– Customary

– Psychological

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Marketing Mix Strategies

• Product

• Place

• Price

• Promotion

• Use face-to-face contact between marketer and prospective customer

• Used to create immediate sales

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How Agencies Work

Full-Service Agencies• Include the four major

staff functions– Account management– Creative services– Media planning and

buying– Account planning

• Also have accounting, traffic, production, and HR departments

Specialized Agencies• Specialize in certain

functions, audiences, industries or markets– Creative boutique– Media-buying services

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How Agencies Work

Account Management• Acts as a liaison

between the client and the agency

• Responsible for interpreting the client’s marketing strategy

Creative Development• People who write• People who design ideas

for ads and commercials • People who convert

these ideas into commercials

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How Agencies Work

Media Planning/Buying• Recommends to the

client the most efficient means of delivering the message

• Responsible for buying, planning, and research

Account Planning• Gathers all information

on the market and consumers and acts as the voice of the consumer

• Prepares comprehensive recommendations

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How Agencies Work

Internal Agency Services• Traffic department• Print production

department

Revenues and Profits• Commission• Fee• Retainer

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International Marketing

• An international brand is available virtually anywhere in the world

• The shift requires new tools for advertisers, including one language, one control mechanism, and one strategic plan

• The choice of an agency depends on the decision to standardize messages or localize them to accommodate local cultures

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The Dynamics of Modern Marketing

• Integrated marketing– All areas of the marketing mix work closely together to

present the brand in a coherent and consistent way

• Relationship marketing– Marketing that considers all the firm’s stakeholders

• Permission marketing– Inviting prospective customers to self-select into a brand’s

target market in order to receive marketing communication