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CHAPTER 2: The Role of IMC in the Marketing Process

1. Discuss the difference between a push and a pull strategy. What kinds of firms would bemore likely to employ each strategy? Give examples

Push strategy: is a strategy attract retail customers or consumers, purchase theirproducts by using the marketing tools directly affect creates demand such as:

o Advertising in mass media (newspapers, television, Internet, radio, brochure ...). o Evento Public Relationo Trying to use ! in order to customers but not to sell products, as customer

demand increases, more and more need those products or services immediately.

Through marketing tools, the objective of the manufacturer or service provider is how to

entice impact, attract attention and create the necessary demand, stimulating the desire to

have just the product / service that in mind for our customers. And when necessary,

customers will turn to the intermediate level (agents, distributors) to buy products orservices.

Example: the kind of firm uses this strategy when this firm products fast moving

consumption goods. While company has many competitor

Pull Strategy: As a strategic focus on "pushing" goods from the manufacturer or serviceprovider to the intermediate level, focused on wholesale distribution, the intermediate or

seller.

Normally manufacturers have discount sales to dealers through many forms:

consignment, 100% payment or payment in installments, overlapping products ... Toconvince yourself of sales agents, producers production or service is always available a

team of professional staff such as sales support, supervision and management of the area

... The staff are issued by companies to provide product knowledge, training sales skills,

supervisory skills, management...

In summary, the marketing strategy, manufacturers or service providers often use both

forms of promotion and promotion consistent with program objectives for each time and

industries, each particular product or service.

Example:

To achieve efficiency in marketing, business needs to know the combination of push

and pull strategies in marketing.

When the degree of certainty about the product demand is not high and the integration

of the order does not help cut costs, you should apply the pull strategy.

When you achieve economies of scale by integrating the predicted demand and the

degree of certainty about the high demand, enterprises should adopt strategies to push. This is

typical of foodstuffs processing group. Push strategy will reduce risk when demand is

uncertain.

Decorating industry - furniture includes a variety of product color, size, variety and

uncertainty in demand is low, transport costs will be higher. Enterprises need to differentiate

your product and distribution strategy to reduce transportation costs. By setting the retailstore, the customer orders, orders will be sent to the company and produced in accordance

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with such orders. However, on delivery, in order to achieve economies of scale, these

companies do not deliver the product in order but also to integrate other products to the store

and the business sector. This is a strategy to push - pull combination.

Uncertainty about lower demand, economies of scale tend to be low, short product life

cycles; enterprises should set up push-pull combined; "drag" in the production anddistribution, "push" the the retail market. The Metro is implementing this strategy with

consumer goods manufacturers such as Unilever, Nestle ... together to better control

inventories.

In a push strategy the communication and selling emphasis targets the channel of distributionmembers. Thus, programs are designed to persuade the trade to stock, merchandise, and promotemanufacturers products. The goal of the strategy is to push the product through the channels by

promoting them to the trade. In a pull strategy, the target audience is the end buyer and/orconsumer. The goal is to create demand among consumers and have them demand the productfrom middlemen. Once retailers see the demand, they will request the product from the

wholesaler or manufacturer directly.

Companies may employ either a push or pull strategy. Proctor & Gamblea perennial leader inadvertising to consumerslearned years ago that it must get the products on the shelves to besold. Thus, the company shifted much of its consumer targeted advertising to the trade to insurethat it was stockedthus, pursuing both a pull and push strategy. Others have used a pullstrategyfor example, the Philadelphia Magazine ran an advertising campaign urging consumersto visit a newsstand to demand their magazine be carried. Companies pursuing a push strategytend to rely more on their relationships with the trade, using IMC tools such as advertising, salespromotions, etc. that reach the middlemen. It is not at all uncommon for companies to incentsales employees to push their brands at the retail level.

Decisions as to whether to emphasize a push or pull strategy depend on a number of factorsincluding the companys relation with the trade, the promotional budget and demand for the

product. Companies with favorable channel relationships often use a promotional push strategyand work closely with channel members to encourage them to stock and promote their products.Firms with limited promotional budgets may not have the funds for advertising and promotionthat are required for an effective pull strategy and may find it more feasible to target their effortsto the trade. Products with favorable demand resulting from unique benefits, superior advantagesand/or popularity among consumers may use a pull strategy.

2. A number of approaches to segmentation have been cited in the text. Provide examples of

companies and/or brands that employ each.

A number of approaches to segmentation have been cited in the text such as: Geographic

Segmentation; Demographic segmentation; Psychographic Segmentation; Behavioristic

Segmentation; Benefit Segmentation. Marketers can use one of the segmentation variables or

combine approaches.

Geographic Segmentation is an approach that marketers use to divide market into differentgeographic units such as nations, states, regions, area size, density, or even neighborhoods

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o Example: Honda Vietnam has been doing a research about Vietnamese Geographic tounderstand Vietnamese market. From this research, this company can understand this

market to decide amount of product will be produced.

Demographic Segmentation is an approach that marketers use to divide market on the basis ofdemographic such as gender, age, family size, education, income, social class. In thisapproach, company needs to focus more attention on the specific demography group.

o For example: Kotex needs focus on customers who are young (teenagers until 40s)and of course, they are female.

Socioeconomic is a part of demographic segmentation, from this approach, firms can identifynumber of people in this market with their income, occupation, education suit with firms

products.

o Example: President University needs to research about income of potential studentswho are living in rich, podded families with high-level cognition, from that, this firm

can implement suitable marketing plan.

Psychographic Segmentation: Dividing the market on the basis of personality and/orlifestyles. The determination of lifestyles is usually based on an analysis of the activities,

interests, and opinions of consumers. These lifestyles are the correlated with the consumers

product, brand, and/or media usage. For many products and/or services, lifestyles may be best

discrimination between use and nonuse, accounting for differences in food, fashion, among

numerous other consumer behaviors.

o For Example: beverage manufactures recognize that people live in 21st century aremore activity, they decide to manufacture beverage products by using PET, plastic

packaging..

Behavioristic Segmentation: diving the market into groups by according to their usage,loyalties, or buying process to a product..

o Some firms really focus on this segmentation approach are retailer. From thisapproach, retailer can understand consumer behavior and implement right decision.

o DSL companies offering more speed on the Interneto Volvo offering safety; Kia low costo Satellite TV offering better quality than cable.o Usage:

- Lexus and Infinity targeting previous lower cost Toyota and Nissan brands- Computer companies targeting nonusers, first time and more sophisticated

users

3. Recently some marketers have noted that it is easier to develop communications programsto Generation X members than Generations Y. Briefly describe the characteristics of Gen X

and Gen Y, and whether or not you believe this to be true.

There is some debate as to whether Gen Xers (born between 19 65-1978) or Gen Yers (1978 to

1986) is more easily targeted by marketers. Each of these groups has their own identifyingcharacteristics. Generation X consumers are typically characterized as self-confident, yet distrustful

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of those of previous generations (and of marketing practices).They also tend to be less optimisticthan their Gen Y counterparts. They are demanding consumers, less concerned with brand namesand image and more concerned with quality.

Gen Y consumers love to spend. They process information quickly, are quick to adopt newtechnologies and are more optimistic about the future. In the eyes of some, they are shameless

consumers. Compared to Gen X they are less rooted in social mores, and buy because they like todo so.

While marketers may argue that Gen X is hard to relate to and more cynical and skeptical than theYers, once you have their trust, they will become loyal and remain somaking them an attractivesegment. The key is getting their trust. On the other hand, reaching Gen Y is not as hard. They willbuy based on wants rather than needs, focus on image and brands, and consume as a way of life.They are easier to reach given a proliferation of mediaparticularly the Internetand a muchimproved cable selection. They may not stay loyal, but there is always someone behind them withmoney to spend.

And so on the one hand it is brand loyalty versus spontaneous buying on image and appeal. For GenX all you have to do it get their trustnot an easy task. For Gen Y, all that is required is to have astrong brand, create one, or develop an appealing image. This is not easy either.

There are many more issues that might argue for either sides being more easily reached. The onething that is for sure is that both offer attractive options, with a combined purchasing power in thehundreds of billions of dollars.

CHAPTER 1:An Introduction to Integrated Marketing Communications

1. Discuss how integrated marketing communication differs from traditional advertisingand promotions. What some of the reasons more marketers are taking an IMC

perspective to their advertising and promotional programs.

Traditional advertising and promotions focus on majorly mass media advertising. This method is too

wasteful but not effective in marketing.

Integrate marketing communication show fully a marketing plan. From this plan, company evaluates

the strategic roles of several communications disciplines such as: media advertising, direct

marketing, interactive/internet marketing, sales promotion, publicity/public relations and indicates

their effectiveness of each to marketing strategy of company.

Some of reasons more marketers are taking an IMC perspective to their advertising and promotional

programs.

IMC differs from traditional advertising and promotion in that it recognizes the value of using avariety of communication tools rather than just relying primarily on media advertising which mightbe supplemented with tactical promotions. IMC involves coordinating all a companys promotionalelements, as well as marketing activities, in a synergistic manner to send a consistent message to thetarget audience. While traditional advertising relies primarily upon the use of ads through the mass

media to communicate with the target audience, IMC recognizes that consumers perceptions of acompany and/or its brands are a synthesis of the bundle of messages or contacts they have with the

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firm. These contacts include media advertisements, packaging, sales promotion, messages receivedthrough interactive media such as web sites and other digital media, point-of-purchase displays, andother forms of communication. The IMC approach seeks to have all of a companys marketing andpromotional activities project a consistent, unified message and/or image to the market and considerwhich particular element of the promotional mix is the most effective way to communicate with

customers in the target audience.

There are many reasons why the IMC approach is becoming so popular among marketers. Probablythe most fundamental reason is that marketers are recognizing the value of strategically integratingthe various communication functions rather than having them operate autonomously. Bycoordinating their marketing communication efforts, companies can avoid duplication, takeadvantage of synergy among various communication tools, and develop more efficient and effectivemarketing communication programs. The movement toward IMC is also being driven by changes inways companies market their products and services. As discussed on pages 12-16 of the text, there isan ongoing revolution that is changing the rules of marketing and the role of traditional mediaadvertising. Important aspects of this revolution include: a shifting of marketing dollars from media

advertising to other forms of promotion, a movement away from relying on advertising-focusedapproaches (which rely on mass media such as television and magazines) to solve communicationproblems, a shift in marketplace power from manufacturers to retailers, the rapid growth of databasemarketing, demand for greater accountability from advertising agencies and the way they arecompensated, and the rapid growth of the Internet.

The growth of the integrated marketing communications is very likely to continue as it is beingdriven by fundamental changes in the way companies market their products and services resultingfrom the ongoing revolution that was discussed above. Moreover, many marketers and advertisingagencies recognize the importance of taking an IMC approach and are becoming advocates ofintegration. The move to integrated marketing communications also reflects an adaptation bymarketers to a changing environment, particularly with respect to consumers, technology and media.

Major changes are occurring among consumers, particularly with respect to media use and buyingand shopping patterns. Many consumers are turned off by traditional advertising which is leadingmarketers to look for alternative ways to communicate with their target audiences. The continuedfragmentation of media markets and rapid growth of interactive media and online services are alsocreating new ways for reach consumers. While IMC will continue to have its critics and may undergosome changes, it is very unlikely that we will see a return to the traditional system where advertisingin mass media dominates and advertising and other forms of promotion function autonomously.

2. Discuss the changes which are leading to the fragmentation of media markets. How aremarketers responding to media fragmentation?

Media fragmentation is a trend increasing choice and consumption of a range of media in term of

different channels (source: internet)

The change which is leading to the fragmentation of media market mostly is Internet or using

Internet.

Nowadays, internet is increasing very fast, more and more popular. There are a lot of people using

internet frequently. Thus advertisement on TV, radio channels are not one kind to approach

audience, customer (audiences are divided)

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Responding to media fragmentation, marketers should know how to combine advertising by using

internet as an instrument to communicate and other marketing instruments effectively by indicating,

recognizing, and reaching target audiences.

There are a number of factors which are contributing to the fragmentation of media markets. Cable

and digital satellite systems have vastly expanded the number of channels available to televisionviewers. The average household in the U.S., as well as many other countries, now receives more than100 channels. The proliferation of channels as well the penetration of new technologies such asDVRs video-on-demand, and iPods are also making it difficult to reach consumers by advertising ontraditional TV shows or radio stations. The rapid penetration of the Internet is another developmentwhich is leading to media fragmentation as hundreds of millions of consumers now surf the worldwide web and can visit a myriad of different web sites. However, time spent on the Internetcompetes for time spent with traditional media such as television, radio, newspapers and magazines.Fragmentation is also occurring among magazines as there are more than 6,000 consumersmagazines published in the U.S. alone. Only 10 percent of these magazines are general interest titlesas most are targeted to specific topics, occupations, activities, interests and lifestyles.

Marketers are responding to the increasing fragmentation by spending their budgets on highlytargeted media that reach specific market segments. Monies that have traditionally been spent inbroadly targeted mass media are now being allocated to more specialized media that reach specificmarket segments. Marketers are also recognizing that it has become increasingly difficult to reachconsumers through the mass media and are using a variety of other IMC tools such as sponsorships,branded entertainment, publicity/public relations, digital devices such as the Internet and mobilephones, and in-store media to reach consumers.

3. Why is it important for those who work in marketing to understand and appreciate allthe various integrated marketing communication tools and how they can be used?

Understanding and appreciating all the various integrated marketing communication tools is

important because:

- Marketers have to understand advantages and disadvantages of each marketing communicationmethod; based on that, they can the value of strategically integrating the various

communications functions.

- In many cases, the communication of the company will target markets and will have to usemultiple media. In fact, companies may need to use different messages, as well as various

instruments to target objects are perceived in the different steps in the buying process.

- Integrated marketing communication brings effectively a consistent message and fulfillment.- Marketing communications aimed at creating awareness, providing knowledge, create positive

impression, a favorable position in the consumer's mind, creating the interest purchase and sale

transactions.

- The marketing manager can find the most optimal way to allocate financial resources tosupport the product labels, and coordination of all spending to contact points customer receives

a consistent message.

How?

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- Putting ourselves into consumers position while seeking a marketing communicationprogram.

- When selecting media, see where customers are in the buying process. Then use whatevermeans may be targeted to the highest goal you desire. (ex: maximizing the impact of mass-

media)- Maintaining the expanded customer.- While we doing advertising plan, make sure we understand who potential customer is, and

what marketing communication they usually use. Ex: by analyzing customer behavior when

they click ad-on on a website.

A. Advertisingany paid form of nonpersonal communication about an organization, product,service, or idea by an identified sponsor.

Advantages

cost-effective way for communicating, particularly with large audiences ability to create images and symbolic appeals and for differentiating similar products and

services

valuable tool for creating and maintaining brand equity ability to strike responsive chord with audience through creative advertising opportunity to leverage popular advertising campaigns into successful IMC programs which can

generate support from retailers and other trade members

ability to control the message (what, when and how something is said and where it is delivered)Disadvantages:

the cost of producing and placing ads can be very high, particularly television commercials it can be difficult to determine the effectiveness of advertising there are credibility and image problems associated with advertising the vast number of ads has created clutter problems and consumers are not paying attention to

much of the advertising they see and/or hear

The nature and purpose of advertising differs from one industry to another and across varioussituations as does its role and function in the promotional program. The common classifications ofadvertising to the consumer market include national, retail/local and direct-response advertising as

well as primary versus selective demand advertising. Classifications of advertising to the businessand professional market include industrial, professional and trade advertising. These classificationsare described in Figure 1-4.

B. Direct Marketinga system of marketing by which organizations communicate directlywith target customers to generate a response and/or a transaction. Direct marketing has nottraditionally been considered an element of the promotional mix. However, because it hasbecome such an integral part of the integrated marketing communications program of manyorganizations, this text views it as a component of the promotional mix.

Advantages:

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changes in society (two-income households, greater use of credit) have made consumersmore receptive to the convenience of direct-marketed products

allows a company to be very selective and target its marketing communications tospecific customer segments

messages can be customized to fit the needs of specific market segments

effectiveness of direct-marketing efforts are easier to assess than other forms ofpromotion

Disadvantages:

consumers and businesses are being bombarded with unsolicited mail and phone callswhich makes them less receptive to direct-marketing

direct marketing has image problems problems with clutter as their are too many direct-marketing messages competing for

consumers attention

C. Interactive/Internet Marketinginteractive media allow for a back-and-forth flow ofinformation whereby users can participate in and modify the content of the information theyreceive in real time. The major interactive medium is the Internet, which is a global collectionof computer networks linking both public and private computer systems. While the mostprevalent perspective on the Internet is that it is an advertising medium, it is actually amedium that can be used to for other elements of the promotional mix as well including salespromotion, direct marketing, and public relations.

Advantages: the Internet can be used for a variety of integrated marketing communication functions

including advertising, direct marketing, sales promotion, public relations and selling

the Internet can be used to target very specific groups of customers with a minimum of waste messages can be tailored to appeal to the specific interests and needs of the target audience the interactive nature of the Internet leads to a higher degree of customer involvement when

customers are visiting a web site.

the Internet makes it possible to provide customers with a great deal of information regardingproduct and service descriptions and specifications, purchase information and more.Information provided by marketers can be updated and changed continually.

The Internet has tremendous creative potential as a well-designed web site can attract a greatdeal of attention and interest among customers and be an effective way to generate interest ina company as well as its various products and services.

Disadvantages

The Internet is not yet a complete mass medium as about a quarter of U.S. households donot have access to the Internet. In some countries this percentage is much higher.

There are problems with the Internet as an advertising medium as many Internet users donot pay attention to banner ads and the click-through rate on most is extremely low.

There is a great deal of clutter on the Internet which makes it difficult for advertisingmessages to be noticed and/or given attention.

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Audience measurement for the Internet is still a problem as is measuring the effectivenessof banner ads and other promotional messages on the Internet.

D. Sales Promotionmarketing activities that provide extra value or incentive to the salesforce, distributors, or the ultimate consumer and can stimulate immediate sales. Salespromotion is generally broken into two major categories: consumer-oriented and trade-oriented activities.

Advantages:

provides extra incentive to consumer or middlemen to purchase or stock and promote abrand

way of appealing to price sensitive consumer way of generating extra interest in product or ads effects can often be more directly measured than those of advertising can be used as a way of building or reinforcing brand equity

Disadvantages:

many companies are becoming too reliant on sales promotion and focusing too muchattention on short-run marketing planning and performance

many forms of sales promotion do not help establish or reinforce brand image and short-term sales gains are often achieved at the expense of long-term brand equity

problems with sales promotion clutter as consumers are bombarded with too manycoupons, contests, sweepstakes and other promotional offers

consumers may become over-reliant on sales promotion incentives which can underminethe development of favorable attitudes and brand loyalty. in some industries promotion wars may develop whereby marketers sales promotion

incentives extensively which results in lower profit margins and makes it difficult to sellproducts at full price

It is important to address the potential terminology problem concerning the use of the termspromotion andsales promotion. In this text the term promotion represents an element of themarketing mix by which firms communicate with their customers and includes the variouspromotional mix elements. However, many marketing and advertising practitioners use the

term promotion in reference to sales promotion activities. We use the term promotion in thebroader sense. When discussing sales promotion activities, we are referring to this onespecific element of the promotional mix.

E. Publicity/Public Relations

Publicitynonpersonal communications about an organization, product, service, or idea thatis not directly paid for nor run under identified sponsorship.

Public Relationsa management function which evaluates public attitudes, identifies thepublic policies and procedures of an individual or organization with the public interest, andexecutes a program of action to earn public understanding and acceptance.

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The distinction should be made between publicity and public relations noting that publicrelations generally has a broader objective than publicity, as its purpose is to establish andmaintain a positive image of the company among its various publics. Publicity is animportant communications technique used in public relations; however other tools may also

be used.

Advantages of Publicity:

credibility of publicity is usually higher than other forms of marketing communication low cost way of communicating often has news value and generates word-of-mouth discussion among consumersDisadvantages of Publicity:

lack of control over what is said, when, where and how it is said can be negative as well as positive

E. Personal Sellingdirect person-to-person communication whereby a seller attempts to assistand/or persuade prospective buyers to purchase a companys product or service or act on an

idea.

Advantages:

direct contact between buyer and seller allows for more communication flexibility can tailor and adapt message to specific needs or situation of the customer allows for more immediate and direct feedback promotional efforts can be targeted to specific markets and customers who are best

prospects

Disadvantages:

high cost per contact ($155 to $300, depending on the industry) expensive way to reach large audiences difficult to have consistent and uniform message delivered to all customers

CHATPER 3: Organizing for Advertising and Promotion: The Role of Ad Agencies and Other

Marketing Communications Organizations

1. Identify the various organizations that participate in the integrated marketingcommunications process and briefly discuss their roles and responsibilities.

Organizations which participate in the integrated marketing communications process are:

- Advertisers or clients are the key participants. It is their product or service that is beingoffered and that must be marketed. The advertiser is responsible for all marketing aspects,

and will ultimately have the final say regarding approval of the proposed promotionalprograms. It is the advertiser who ultimately pays the bills.

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- The advertising agency is an external organization specializing in the creation, productionand placement of the communications messages. They may also provide additional services

designed to facilitate the marketing effort.

- Media organizations provide the advertiser with a channel for their communications. Mediamay include print, broadcast, outdoor, etc., and media organizations attempt to provide theadvertiser with the proper environment for the message.

- Marketing communication specialist organizations provide services in specific areas ofmarketing communications. They include direct response agencies, sales promotion

agencies, public relations firms and interactive agencies.

- Collateral services participants are those who provide a wide range of support servicesincluding marketing research, package design firms, consultants, photographers, event

sponsorship firms, and the like. Their function will vary in accordance with the needs of the

promotional program.

2. Discuss the various methods by which advertising agencies are compensated. Whatfactors will determine the type of compensation arrangement a company uses with an

agency?

Agencies are typically compensated in three ways: through commissions from the media, some type

of fee arrangement or percentage charges. The traditional method of compensating agencies has been

through media commissions whereby the agency receives a specified commission from the media on

any advertising time or space it purchases for the client. There are two basic types of fee

arrangements systems. Under the fixed-fee method the agency charges a basic fee for all of its

services and credits to the client and credits any media commissions earned. Sometimes agencies arecompensated through a fee-commission combination, whereby the media commissions received by

the agency are credited against the fee. Another type of fee-based compensation arrangement is the

cost-plus system whereby the client agrees to pay the agency a fee based on the cost of its work plus

some agreed-on profit margin.

The type of compensation system a company uses with an agency will depend upon a number of

factors including the size of the advertising budget the role of advertising and their reliance on

traditional media advertising versus other forms of integrated marketing communications. Most

small companies do not have large enough advertising budgets to warrant the use of the traditional

commission system. Thus some type of fee arrangement or cost-plus system is likely to be used.Many large advertisers are moving away from the traditional commission system and using

incentive-based systems where agency compensation is tied to performance. The performance

measures may include objective measures such as sales and/or market share as more subjective

measures such as evaluations of the agencys creative work. As more marketers adopt an integrated

marketing communication perspective and move away from traditional mass media, changes in

compensation systems are taking place. This may include a combination of compensation systems

such as a negotiated set fee or media commission rate as well as incentives.

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Because the type and amount of service an agency performs can vary from one client to another, a

variety of methods are used to compensate them for their services. Various ways for compensating

agencies are shown in this slide and include:

Commission method traditional method whereby the agency receives a specifiedcommission (usually 15%) from the media on any advertising time or space it purchases for its

client.

Cost-plus agreementthe client pays a fee based on the costs of its work plus some agreed-on profit margin (a percentage of total costs). This method requires careful accounting and

detailed records of agency costs

Percentage Charges adding a markup to the various services the agency purchases fromoutside providers. These may include market research, artwork, printing, photography, etc.

and range from 17.65 to 20 per cent.

Fee arrangementthe agency charges a basic monthly fee for all of its services. Agency andclient agree on work to be done and the amount to be paid. This is the primary method

accounting for 68 percent of the compensation plans.

Incentive-basedfee is based on how well the agency meets its performance goals such assales or market share. There is a general movement toward the use of this method by many

companies.

CHAPTER 4: Perspective of Customer Behavior

1. Jerry Olson and J.Paul Peter define two broad categories of evaluative consequences.Describe each of these and provide examples.

Two broad categories of evaluative consequences are Functional consequences and Psychosocial

consequences.

Functional consequences are outcomes of product or service usage that are tangible and directlyexperienced by consumers. Taste of a product, the clarity of a picture on a television set andquality of sound of a stereo system are examples.

Psychosocial consequences are more subjective in nature, less tangible and objective, and

subject to the perceptions of the consumer. The way clothes make one feel when worn would beone such example.

2. Explain the concept of an evoked set. Why is this concept important to marketers? Giveexamples of an evoked set, and how marketers might attempt to influence consumers to

gain consideration

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When one considers the numerous options for purchase in almost any product category, the choicesmay become overwhelming. One way that consumers manage this situation is to consider only asubset of the alternatives available, leading to an evoked set. Often referred to as a consideration set,this subset of brands are those that will be actively considered in the purchase decision process.

This is an important concept for marketers to understand, in that if their brand does not get includedin the evoked set, it is not likely to be purchased. Or, should the consumer become dissatisfied with abrand currently in the evoked set, it might be removed, eliminating it from future purchaseconsideration.

Consider the purchase of a new car. The choice of alternatives runs from low end entries likeHyundai, Kia, etc. to expensive luxury and sports carsnot to mention SUVs and others. It ishighly unlikely that a consumer would consider the entire range of possibilities. The list would benarrowed down given decision criteria to a much smaller grouping, based on purchase criteria. Itmay lead to consideration of only Japanese cars, American cars or German cars. It might be limitedbased on price or past experiences. Whatever the criteria used, the entire list of cars will not beconsidered.

Marketers attempt to gain entry into the evoked set through positioning against others in thecategory, marketing communications and other marketing tools. Their goal is to get thebrand/product to be considered. In other instances, the marketer is concerned with maintainingcustomer satisfaction, recognizing that consumers will buy again, and may or may not consider theexisting product in the evoked set.

3. Figure 4-10 details a number of external influences on consumer behavior. Describe eachof these influences, explaining how it might have an impact on consumer behavior, and

provide an example of each.

As can be seen in Figure 4-10, there are five external influences on consumer behavior such as:

Cultureculture is the complexity of learned meanings, values, norms, and customs shared bymembers of a society. Buying behaviors are directly influenced by cultural values and norms. Forexample, in some cultures it may be improper to bargain over a purchase, whereas in others it may beexpected. In the Latino culture, family is one ofif not themost important values. As a result, adsdepicting families and family values are more widely accepted than are those not showing thesecharacteristics.

Subcultureswithin cultures are smaller groups of people sharing similar beliefs, values, norms,and patterns of behavior that set them apart from other groups. For example, in the U.S. there is theLatino subculture, the various geographic subcultures, age subcultures like Generation X and

Generation Y, etc. These various groups may exhibit many of the same characteristics which impacttheir purchase behaviors. Generation X and Y may be different in their lifestyles and purchasebehaviors. Those living in the South are often different than those in the Midwest, etc. Advertisingagencies have sometimes found it necessary to have field offices in various cities to insure that theirads and commercials are sub culturally correcti.e. not out of touch with the geographicsubculture.

Social Classthe relatively homogeneous division in society into which people sharing similarlifestyles, values, norms, interests and behaviors can be grouped is known as social class. Virtuallyall societies have these stratifications. In the U.S., social class is determined by an index based onoccupational status, educational attainment, and income (other cultures may have different criteria).The three classes in the U.S.upper, middle, and lowerwill exhibit different purchasing

behaviors, media habits, shopping habits, lifestyles, etc. Marketers must identify these patterns tosuccessfully attract these segments.

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Reference Groupsa group whose presumed perspectives or values are being used by an individualas the basis for his or her judgments, opinions and actions are known as a reference group. Thesereference groups can be either associativea group to which one might aspire to belong--, ordissociativea group to which one does not wish to identify or be associated. Both groups mayimpact consumers purchase decisions. For example, members of a group share similar values and

lifestyles, and may purchase similar types of products. Groups to which one aspires may provide amodel for the way the aspirant dresses, acts, etc. Dissociative groups provide standards which theconsumer may wish not to emulate. Smoking, the types of clothes worn, the type of music listenedto, and so forth may be perceived as standards the non-associating member wants to stay away from.

Situational DeterminantsThe specific situation in which the consumer plans to use the product orbrand may directly affect the choice or consumption behavior. For example, consider the purchase ofa bottle of wine for dinner. If dining alone or with the family on a regular night, one brand might beappropriate. On the other hand, for a special occasion with the family, a more expensive choicemight be made. Now consider the situation if friends, associates or fellow-workers were coming fordinnermight the choice change again? The choice of clothes will also be situational. We often buy

new clothes for vacations, special events, parties, etc.

4. A number of factors may lead to problem recognition among consumers. Discuss thevarious causes of problem recognition, and give an example of each.

Problem recognitionthe first step in the consumer decision-making process is that of problemrecognition, which is caused by a difference between the consumers ideal state and actual state.There are various causes of sources of problem recognition. These include:

1. Out of stock.Ex: Rice, the usual things, when its out of stock, people should buy more

2. Dissatisfaction.Ex: when people dont want to use CRT TV anymore because of its mischievousness for eyes, they

tendentiously find another kind of TV more comfortable as LCD TV

3. New needs/wants.Ex: it happens on our life, when we recognize a new need, wants such as you have built a house,have been living in it for years and then you recognize that there is something wrong. You think youshould buy a car to suitable with this house. New want is recognized !

4. Related products/purchasesEx: It happens when you buy a car, you should by instrument relate with, gas, oil...

5.

Marketer induced problem recognitionEx: Last time, CLEAR Men, Romano, X-Men are examples for this phenomenon, they do aadvertisement tells about the problem of Men nowadays is using women shampoo with womenperfume, Men should have distinct shampoo.

6. New productsEx: When 3D mobile was announced, many people feel curious about that and want to own a one

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CHAPTER 5: The Communications Process

1. What is meant by encoding and decoding? Discuss how these two processes differ forradio versus television commercials.

Encoding is the process which begins when sender/source of a communication puts thoughts, ideas,

or information into a symbolic form by using words (verbal), symbols, pictures (graphic), musical(voices, arrangement, instrument..), animation (action/motion, pace/speed, shape/form), and the like

to represent will be delivered to receiver(s) . Then, by receivers field of experiences, they reconvert

the signal or words received from sender into the idea or intention or message as originally intended

by the sender. This process is decoding, receiver understand what received from sender.

The encoding of a television commercial involves the use of visual images, sound, motion, color,

words, as mention before which provide advertisers can make, develop creative ideas in

advertising to achieve the goals that able to be understood correctly by receivers. The encoding of a

radio commercial is limited rather than on TV. In radio commercial, advertiser just can use musical

and verbal to communicate with target audience, which usually comes in the form of words read by

an announcer and/or music instruments. However, advertisers may use a process called image

transfer whereby the images from a TV commercial are planted in a radio spot by using similar, or

even the same, audio portion. The idea is that when consumers hear the radio message, they will

make the connection or realize to the TV commercial images.

In all advertising instrument, advertisers have to understand the perception of target audiences,

because it can effect to decoding process of audiences when they perceived the advertisement.

2. Discuss how semiotics can be of value to the field of integrated marketingcommunications. Select a marketing stimulus such as and advertisement, package, orother relevant marketing symbol and conduct a semiotic analysis of it such as the one

shown in Exhibit 5-3

Semiotics involves the study of the nature of meaning and asks how words, gestures, myth, symbols,products and other phenomenon acquire meaning. Semiotics is important to integrated marketingcommunications since products and brands acquire meaning through the way they are advertised andconsumers use products and brands to express their social identities. Semiotics can be used to helpmarketers better understand the image and meaning of marketing communications such as ads, brandnames, packages, and various signs and symbols.

Example, in advertising of Red Bull, they usually use image of buffalo or F1 races to represent for

strength, speed, extreme power3. Assume that you are the marketing communications manager for a brand of tissue

paper. Discuss how the low-involvement hierarchy could be of value in developing an

advertising and promotion strategy for this brand.

The marketing plan for this brand may follow these steps:

- Based on models of the response process, we should made brand into consumers min d. Bypropagandizing the function of tissue, how that is important in modern life.

- To make brand become Top-mind brand, using marketing instruments such as: on TVchannels, radio stations, and banner or print image of this brand on some usual things in arestaurants; especially focus on advertisement on TV channels, because this advertising

instrument is the fastest way to get consumers attention about this brand.- Event: Free Trial, makes consumer recognize products advantages, how comfort it is

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- Package should be designed follow the funniest way to make good feeling for consumers.CHAPTER 7: Establishing Objectives and Budgeting for the Promotional Program

1. What is DAGMAR? Explain how marketers might use DAGMAR in establishingobjectives. What are some of the problems associated with the use of DAGMAR?DAGMAR stands for Define Advertising Goals for Measuring Advertising Results is a model to set

an advertising objectives and measuring the results of a campaign against these objectives.

Under DAGMAR an advertising goal involves a communications task that is specific and

measurable. A communications task involves something that can be performed by and attributed to

advertising.

DAGMAR has been criticized on a number of issues:

a. Problems with response hierarchiessome argue that not all consumers adhere to thehierarchy of effects model proposed. Steps may be skipped or in a different sequence.

b. Sales objectivesthere are those who believe that sales should be the only objective ofadvertising, and that communications objectives are irrelevant.

c. Practicality and costsusing DAGMAR requires benchmarking and spending additionaldollars on research. For some companies, this may be just too expensive; leading to thecriticism that DAGMAR is primarily suited for large corporations.

d. Inhibition of creativitycreative argue that the approach is too structured, forcing thecampaign to attempt to reach numbers at the expense of creativity. The long term effects,they say will be to destroy creative campaigns.

Figure 7-1 notes the numerous factors that influence sales. Provide examples of products

and/or services that have been directly influenced by each of these factors.

Negative Positive

Factor influencing sales ProductImpacted

Effect of impact ProductImpacted

Effect ofimpact

Technology (cell phones) Pay phones Lost revenue Cell phones better quality

Economy (recession) Housing Less starts Housing more remodels

Product quality (DVD) VCR Lost sales VCR lower price

Price (rebates) Automobiles no sales whenoff Automobiles Sales increases

Distribution (warehousestores)

Many margindecreases

many Sales increases

Advertising & Promotion cereals Cereals Sales increases

Competition Airlines Lost sales Airline Better service

2. In meeting with your new boss, he informs you that the only goal of advertising andpromotion is to generate sales. Present your argument as to why communications

objectives must also be considered.

The bottom line for for-profit organizations is to increase market share, sales or both. Thus, for many

managers, the goal of advertising is to generate sales. Managers frequently ask the question, If I

increase my advertising budget by X%, what will the impact be on sales? While the ultimate goal of

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the promotional program may be to increase sales, there are a number of reasons communications

objectives must be considered as well:

Communications objectives are intermediary objectives often required to generate sales.Creating brand awareness, interest and favorable attitudes may be required before the

consumer purchases. Communications objectives are measurable, while the relationship between advertising and

sales is often not. It is often very difficult to demonstrate the direct impact of advertising onsales. Its not that we cant measure sales, but rather that establishing a measurable impact isvery difficult.

Other factors beyond advertising contribute to sales. There is an old saying that nothing willkill a poor product faster than good advertising. In other words, if a company has a goodadvertising program but the product is not good, then sales will not increase. Likewise, if theproduct is not available due to distribution problems, then the impact of advertising will notbe known, or if the price is too high, sales will not be affected. Finally, an excellentmarketing program may be negatively impacted by market conditions. Weather, recessions,and other factors may result in a loss or no change in sales even though the advertisingprogram is effective.

Not all advertising is designed to increase sales. Creating brand or corporate image,generating awareness, appeasing stockholders, etc. are just some of the reasons whycompanies advertise. The cause related marketing and advocacy advertising are additionalreasons why companies may advertise other than directly influencing sales. As can be seen,there are a number of reasons why communications objectives may be important. In todays

marketplace, with the heavy emphasis on branding, the argument that advertising may haveother objectives than just selling may be easier to convey.