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Chapter 1Advertising Today?
William F. Arens Michael F. Weigold Christian ArensMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
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Chapter Overview
Stresses the importance of IMC to relationship marketing; introduces advertising and distinguishes it from other forms of marketing communication.
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Chapter Objectives
Explain how the basic human communication process is useful in advertising communication
Define advertising and distinguish it from other forms of marketing communications
Explain the importance of relationship marketing
Define integrated market communications (IMC)
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Chapter Objectives
Illustrate advertising’s role in marketing strategy
Identify important categories under promotion: the communication element of strategy
Define marketing and identify the 4 elements of marketing strategy
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Hillary Clinton Election Ad
McCain/Obama Debate
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Q. 1. Define Relationship Marketing.
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Relationship Marketing
Relationship marketing – creating, maintaining, and enhancing long term relationships with stakeholders that result in exchanges of mutual value
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Relationship Marketing
Goals
Manage customer/ company contacts
Maximize value of
profitable customers
Use data to know
customer
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Q. 2. Why is it important for organizations to build
relationships?
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Importance of Relationships
Cost of lost customersLifetime Customer Value (LTCV)
Cost of acquiring new customers
Value of loyal customers
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Q. 3. What are the five levels of relationships?
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Relationship Levels
Partnership
Transactional
Reactive
Accountable
Proactive
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Customer/Profit Relationships
Profit Margins
Number of
Customers
High Medium Low
Many Accountable
Reactive Transactional
Medium
Proactive Accountable
Transactional
Few Partnership
Accountable
Reactive
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IMC Tactics
Mass media
Less advertising in mass media
Target messages
Heavier reliance on targetedmessages
Consumer data
Increased use of consumer data
Expectations
Changed expectations for marketing communication suppliers
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News
Word of
mouth
Web
Expert opinio
nGossip
CEO personalit
y
Financial report
Affects on Customer View
Product
view
IMC helps company manage customer perceptions
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Q. 4. What are the four sources of brand messages?
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4 Sources of Brand Messaging
1. Planned messages(advertising, publicity releases)
Low impact
2. Product messages(product, price, packaging)
Great impact
3. Service messages (employee interactions)
Positive or negative
4. Unplanned messages(news stories, rumors, competitors remarks, disasters)
Company can influence
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Dimensions of IMC
Say
DoConfirm
Planned messages
Unplanned
messages
Product, service
messages
The Integration Triangle
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Q. 5. Define Advertising.
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What is Advertising?
Structured, composed communication Directed to groups Paid for Usually persuasive About products Identified sponsors Transmitted through
a communication medium
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Dimensions of Advertising
Communication
Marketing
Economic
Social/Ethical
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Q. 6. What are the four kinds of advertising media?
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© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Communication Channels
BillboardsNewspapers & Magazines
Radio & TV
Mass
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© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Communication Channels
Direct Mail E-Mail
AddressableMass
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Communication Channels
Direct Mail
Mobile Online
InteractiveAddressable
Billboards
Newspapers & Magazines
Radio & TV
Mass
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Communication Channels
Direct Mail
Mobile
Online
Shopping Carts
BlimpsTattoos
Non-traditional
Billboards
Newspapers & Magazines
Radio & TV
AddressableMass Interactive
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Hudson Taylor (1832-1905)
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Q. 7. What are the various elements in the human
communication process?
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Human Communication Process
Source Encoding Message
Decoding Receiver
Feedback
Channel
Noise
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Interactive Communication Model
Encoder
SourceDecode
r
Message
Decoder
Receiver
Encoder
Feedback
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Stern Communication Model
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Q. 8. What three literary forms are used in advertising messages?
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Communication: Message Dimensions
Autobiography
“I” tell a story aboutmyself to “you,” theimaginary audience
NarrativeThird person persona tells a story about others to imagined audience
Drama Characters act in frontof imagined empathetic audience
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Q. 9. Who are the sources and receivers in a message according
to the Stern model?
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Communication: Source Dimensions
Sponsor • Legally responsible• Has a message
Author• Copywriter, art director,creative group
• Invisible to audience
Persona• Within the text• Lends voice or tone to ad
• Real or imaginary spokesperson
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Receiver Dimensions
Implied consumers
• Every ad or commercial assumes an audience of ideal consumers
Sponsorial consumers
• Decision makers at the sponsor’s organization
• They decide if the ad will run
Actualconsumers
• People in the real world who comprise the target audience
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Feedback and Interactivity
Lets sender know if message received, understood
Sender can tell when communication breaks down
Feedback & Interactivity
RedeemedCoupons
SurveyResponses
PhoneInquiries
IncreasedSales
Visits to Web site
Visits toa store
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The Marketing Dimension
Business Functional Divisions
Operations
Finance & Admin
Marketing
Defines advertising’s role in businessOnly marketing has revenue generation as primary role
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What is Marketing?
• The process of planning and executing…• Concepts, pricing, distribution, and
promotion of• Ideas, goods, and services
• To create exchanges that… • Satisfy the perceived needs, wants,
and objectives of individuals and organizations
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Advertising Classifications
Target Audience
Geographic Area
Medium
Purpose
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Target Markets and Audiences
Consumer MarketsRetail & Public Service
Business/Industrial MarketsTrades, Professions, & Agriculture
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Q. 10. How are the 4Ps related to advertising strategy?
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Marketing: The 4 Ps
Product Categories ofgoods or services
Price Strategies for competitive pricing
Place Distribution and geography
Promotion Communication channels
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Product
Consumer Goods
Advertising
High-TechAdvertising
Service Advertising
Types ofMarketing
Communication
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Price
Image Advertising
Sales and Clearance Advertising
Loss-LeaderAdvertising
Regular Price-line
Advertising
Types ofMarketing
Communication
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Place
Local Advertising
InternationalAdvertising
GlobalAdvertising
Regional Advertising National
Advertising
Types ofMarketing
Communication
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Promotion
Collateral Materials
SalesPromotion
ProductAdvertising
PersonalSelling Public
Relations
Types ofMarketing
Communication
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Marketing: IMC
Integrated Marketing
CollateralMaterials
SalesPromotion
ProductAdvertising
PersonalSelling
PublicRelations
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Frank Caliendo-Impressions of Bush and Clinton