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Anatomy of Advertising

Consumer Behavior and the

Marketing Function

M. Larry Litwin, APR, Fellow PRSA

© 2009

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Or…

A basic understanding of the

Advertising Profession

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Portions taken from…

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Portions taken from…

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Hmmmmm…

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Or…

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Or…

A basic understanding of the

Advertising Profession

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Types of Markets • A market is a particular type of buyer.• Share of market is the percentage of a

product category’s total market that buys a particular brand.

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Ads for Four Types of Markets

• Which is which?– Consumer– Business-to-

Business– Institutional– Channel

• How are the four ads different?

• How are they the same?

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Marketing 101

Determine what people need (and want) and give it to them.

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Marketing

• The exchange of goods and services from manufacturer to consumer.

• Strategies that employ the various elements of the marketing mix to achieve marketing objectives.

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Marketing Mix

• A plan that identifies the most effective combination of promotional activities (IMC).

• The goal is to achieve synergy.

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Synergy’s Parts

• Advertising• (Sales) Promotion*• Public Relations* • Direct Marketing• Cause Marketing• Sponsorship

(Partnering) Marketing• Positioning (Place)* • Personal Selling*• Price*

• Product itself*• Packaging* • Policy*• Politics* • Mind Share (Brainstorming – Intellectual Property)• Brand Identity• Interactive

* Litwin’s 9 P’s of Marketing

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Integrated (Holistic) Marketing

• Focused on better coordinating all marketing efforts to maximize customer satisfaction.

• All areas of the marketing mix work together to present the brand in a coherent and consistent way.

• The goal is to manage all the messages delivered by all aspects of the marketing mix to present a consistent brand strategy.

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Ogilvy’s Advertising Tenets

• Here are some advertising tenets that David Ogilvy offers:

– “Never write an advertisement you wouldn’t want your own family to read.”

– “The most important decision is how to position your product.”

– If nobody reads or looks at the ads, “it doesn’t do much good to have the right positioning.”

– “Big ideas are usually simple ideas.”– “Every word in the copy must count.”

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Defining Modern Advertising

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Advertising 101

• Paid

• (Non) personal communication

• From identified sponsor

• Using (mass) media

• To persuade or influence

• Audience

(Paid – Controlled)

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Federal Trade Commission

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Reaching the Desired Outcome

• Attitude

• Opinion

Education > Knowledge > Attitude > Behavioral Change > Output =

Desired Outcome

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Litwin’s 9 P’s of Marketing = Synergy

• Product• Place (Positioning)• Price• Promotion (Sales)

• Public Relations• Personal selling• Policy• Politics• Packaging

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Advertising is Synergy

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You Talk – We Listen

Hearing vs. Listening

There is a reason why we have two ears and one mouth – we must listen twice as

much as we speak.

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Audiences (ISPR) or [IFPR]

• Identify• Segment/Fragment

• Demographically• Psychographically• Geodemographically• Behavioristically• Benefits

• Profile• Rank

– Audience Power Structure• Elite (Key Communicators) • Pluralistic or Diffused• Amorphous/Latent

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Demographics – Play 4-6

The vital statistics about the human population, its distribution and its

characteristics (age, gender, income, education, etc.). Used for audience

segmentation and fragmentation.

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Psychographics – Play 4-7

Psychological characteristics many times determined by standardized tests. Used for audience segmentation and fragmentation.

Any attributes relating to personality, values, attitudes, interests or lifestyles. They are also called IAO variables (for Interests, Attitudes

and Opinions). Combined with demographics and geodemographics, psychographics play

a key role in strategic planning.

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Geodemographics – Play 4-8

A contraction of geography and demographics. A method of combining geographic and demographic variables.

The demographics of individu-als or groups who reside in the same

geographic area or region.

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Consumer Decision Process

Low Involvement• Need Recognition• Evaluation of Alternatives• Purchase Decision• Post-purchase Evaluation

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Consumer Decision Process

High Involvement• Need Recognition• Information Search• Evaluation of Alternatives• Purchase Decision• Post-purchase Evaluation

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Can it be said that the brand decision process is the same

for both low and high-involvement decisions?

Yes

No

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Can it be said that the brand decision process is the same for both low and

high-involvement decisions?

a) Yes

b) No

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Strategic Message

Commercial PersuasionOr

Public Relations

“The establishing of reciprocal understanding between an individual (advertiser) and a group.”

Edward Bernays

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Superior tactics cannot overcome a flawed (business) strategy.

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Public Communication• Public communication is at the heart of our economy,

society and politics. Studios use it to promote their films. Politicians use it to get elected. Businesses use it to burnish their image. Advocates use it to promote social causes.

• It is a field built on ideas and images, persuasion and information, strategy and tactics. No policy or product can succeed without a smart (strategic) message targeted to the right audience in creative and innovative ways at the ideal time using the proper channel. The ability to communicate this way – to communicate strategically – is what Public Communication is all about.

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M AC Triad

M

+P+T

A C

M =M essage A=Audience C =C hannel P=Purpose T=T im ing

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MAC Triad Plus cont.

• Informization– Disseminating information (message) to

target audience through the proper channel at the best possible time.

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Through targeting – an advertiser can:

• Design specific communication strategies to match audience needs and wants

• Best select the right media

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7 C’s of Communication

• Credibility

• Context

• Content

• Clarity

• Continuity and Consistency

• Channels

• Capability

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Advertising is Synergy

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Synergy

The whole is greater than the sum of its parts

orThe whole works better than

any one of its parts.[To achieve our goal, we should

achieve synergy.]

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Ad Clutter

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Ad Clutter

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Diffusion Process – AITEA/R

• Create AWARENESS

• Generate INTEREST

• Encourage TRIAL

• EVALUATION

• ADOPTION/Rejection

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AIDA

• Create ATTENTION

• Generate INTEREST

• Develop DESIRE

• Initiate ACTION

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Emerging Marketing Strategies

• Relationship Marketing• Permission Marketing• Experience Marketing• Guerilla Marketing• Digital Marketing• Viral Marketing• Mobile Marketing• Social Network Marketing

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Consumer behavior can be best described as:

a) How individuals or groups select, purchase, use, or dispose of products

b) Why individuals or groups select, purchase, use, or dispose of products

c) The process of satisfying needs and wants through purchase

d) Communicating needs and wants through advertising

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Consumers can be defined as:

a) Specific types of people who buy a particular type of brand or product or patronize a specific type of store

b) The target locations to place the advertising message

c) Those consumers who have little to no response to advertising messages

d) People who buy or use products or adopt ideas that satisfy their needs and wants

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In reality, customers are specific types of consumers

a) True

b) False

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In reality, customers are specific types of consumers

a) True

b) False

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Is it accurate to say that buyers may not be the users

and users may not be the buyers?

a) Yes

b) No

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Is it accurate to say that buyers may not be the users

and users may not be the buyers?

a) Yes

b) No

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Social influences on consumer decisions may

include:a) Perception, learning, motivation,

attitude, and personalityb) Social class, reference groups, family,

and demographicsc) Frequency and innovativeness of

brand usaged) Placement of advertising message in

geographic location

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Psychological influences on consumer decisions may

include:a) Perception, state of mind, needs,

wants, motivations, and attitudesb) Social class, reference groups, age,

family status, and demographicsc) Frequency and innovativeness of

brand usaged) Placement of advertising message in

geographic location

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In many product categories, a small number of users may

buy a large percentage of the products

a) True

b) False

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In many product categories, a small number of users may

buy a large percentage of the products

a) True

b) False

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Market segmenting means all but:

• Targeting the most profitable prospects

• Dividing the market into groups of people who have similar characteristics

• Key characteristics make groups more alike than different

• Key characteristics define how groups are different from others

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Are niche markets really just

sub-segments of more general markets?

a) Yes

b) No

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Are niche markets really just

sub-segments of more general markets?

a) Yes

b) No

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Emerging Marketing Strategies

• Relationship Marketing• Permission Marketing• Experience Marketing• Guerilla Marketing• Digital Marketing• Viral Marketing• Mobile Marketing• Social Network Marketing

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Strategy

• Advertisers direct ads to identified audiences

• Advertisers create messages that speak to the audience’s concerns

• Advertisers run ads in the most effective media to reach the audience

• The logic and planning behind the ad that give it direction and focus

• Advertisers develop ads to meet objectives

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Superior tactics cannot overcome a flawed (business) strategy.

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How Agency Are Paid• Commissions

– A percentage of the media cost

• Fees– Hourly fee or rate plus expenses and travel

• Retainers– Amount billed per month based on projected amount

of work and hourly rate charged

• Performance-based– Based on percentage of sales or marketing budget

• Profit-based– Greater risk if campaign doesn’t have desired impact

• Value Billing– Based on value of creative strategy or ideas

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Questions ???

M. Larry Litwin, APR, Fellow PRSAlarry@larrylitwin.comwww.larrylitwin.com

© 2009