1. Anatomy of AdvertisingConsumer Behavior and theMarketing FunctionM. Larry Litwin, APR, Fellow PRSA 1 2009 OrA basic understanding of the Advertising Profession 21

2. Portions taken from3 Portions taken from42 3. Types of Markets A market is a particular type of buyer. Share of market is the percentage of aproduct categorys total market that buys aparticular brand.5 Ads for Four Types of Markets Which is which? Consumer Business-to- Business Institutional Channel How are the fourads different? How are they thesame? 663 4. Marketing 101 Determine what people need (and want) and give it to them.7 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.84 5. Marketing Mix A plan that identifies the most effective combination of promotional activities (IMC). The goal is to achieve synergy.9Synergys Parts Advertising Product itself* (Sales) Promotion* Packaging* Public Relations* Policy* Direct Marketing Politics* Cause Marketing Mind Share Sponsorship (Brainstorming (Partnering) Marketing Intellectual Positioning (Place)* Property) Personal Selling* Brand Identity Price* Interactive * Litwins 9 Ps of Marketing10 5 6. 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.11 Ogilvys Advertising Tenets Here are some advertising tenets thatDavid Ogilvy offers: Never write an advertisement you wouldnt 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 doesnt do much good to have the right positioning. Big ideas are usually simple ideas. Every word in the copy must count.126 7. Defining Modern Advertising 13 Advertising 101 Paid (Non) personal communication From identified sponsor Using (mass) media To persuade or influence Audience(Paid Controlled)147 8. Federal Trade Commission 15Reaching the Desired Outcome Attitude OpinionEducation > Knowledge > Attitude> Behavioral Change > Output = Desired Outcome168 9. Litwins 9 Ps of Marketing = Synergy Product Public Relations Place (Positioning) Personal selling Price Policy Promotion (Sales) Politics Packaging 17 Advertising is Synergy 189 10. 19 You Talk We Listen Hearing vs. ListeningThere is a reason why we have two ears andone mouth we must listen twice asmuch as we speak.20 10 11. Audiences (ISPR) or [IFPR] Identify Segment/FragmentDemographicallyPsychographicallyGeodemographicallyBehavioristicallyBenefits Profile Rank Audience Power Structure Elite (Key Communicators) Pluralistic or Diffused Amorphous/Latent21Demographics 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.22 11 12. Psychographics Play 4-7Psychological characteristics many timesdetermined by standardized tests. Used foraudience segmentation and fragmentation. Any attributes relating to personality, values, attitudes, interests or lifestyles. They are alsocalled IAO variables (for Interests, Attitudes and Opinions). Combined with demographics and geodemographics, psychographics play a key role in strategic planning.23 Geodemographics Play 4-8 A contraction of geography and demographics. A method of combining geographic and demographic variables.The demographics of individu-als orgroups who reside in the same geographic area or region.2412 13. 25 2613 14. Consumer Decision ProcessLow Involvement Need Recognition Evaluation of Alternatives Purchase Decision Post-purchase Evaluation 27 Consumer Decision Process High Involvement Need Recognition Information Search Evaluation of Alternatives Purchase Decision Post-purchase Evaluation 28 14 15. Can it be said that the branddecision process is the same forboth low andhigh-involvement decisions?YesNo29 Can it be said that the branddecision process is the same for both low andhigh-involvement decisions? a) Yesb) No30 15 16. Strategic MessageCommercial Persuasion OrPublic Relations The establishing of reciprocal understanding between an individual (advertiser) and a group.Edward Bernays31 Superior tactics cannot overcome a flawed (business) strategy.3216 17. 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. 33MAC Triad M+P+TA C M=Message A=Audience C=ChannelP=Purpose T=Timing 3417 18. MAC Triad Plus cont. Informization Disseminating information (message) to target audience through the proper channel at the best possible time. 35Through targeting an advertiser can: Design specific communicationstrategies to match audience needs andwants Best select the right media3618 19. 7 Cs of Communication Credibility Context Content Clarity Continuity and Consistency Channels Capability37 Advertising is Synergy38 19 20. Synergy The whole is greater thanthe sum of its parts orThe whole works better thanany one of its parts.[To achieve our goal, we should achieve synergy.]39 Ad Clutter40 20 21. Ad Clutter4142 21 22. Diffusion Process AITEA/R Create AWARENESS Generate INTEREST Encourage TRIAL EVALUATION ADOPTION/Rejection43AIDA Create ATTENTION Generate INTEREST Develop DESIRE Initiate ACTION44 22 23. Emerging Marketing Strategies Relationship Marketing Permission Marketing Experience Marketing Guerilla Marketing Digital Marketing Viral Marketing Mobile Marketing Social Network Marketing45 Consumer behavior can bebest 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 andwants through purchase d) Communicating needs and wantsthrough advertising46 23 24. Consumers can be defined as: a) Specific types of people who buy aparticular type of brand or product orpatronize a specific type of store b) The target locations to place the advertisingmessage c) Those consumers who have little to noresponse to advertising messages d) People who buy or use products or adoptideas that satisfy their needs and wants 47 In reality, customers are specific types of consumersa) Trueb) False48 24 25. In reality, customers arespecific types of consumersa) Trueb) False 49 Is it accurate to say that buyers may not be the users and users may not be the buyers?a) Yesb) No 50 25 26. Is it accurate to say that buyersmay not be the users and usersmay not be the buyers?a) Yesb) No51 Social influences on consumerdecisions may include: a) Perception, learning, motivation,attitude, and personality b) Social class, reference groups, family,and demographics c) Frequency and innovativeness ofbrand usage d) Placement of advertising message ingeographic location52 26 27. Psychological influences onconsumer decisions may include: a) Perception, state of mind, needs,wants, motivations, and attitudes b) Social class, reference groups, age,family status, and demographics c) Frequency and innovativeness ofbrand usage d) Placement of advertising message ingeographic location 53In many product categories, asmall number of users may buy alarge percentage of the productsa) Trueb) False 5427 28. In many product categories, a small number of users may buy a large percentage of the productsa) Trueb) False 55 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 others5628 29. Are niche markets really justsub-segments of moregeneral markets?a) Yesb) No 57 Are niche markets really justsub-segments of moregeneral markets?a) Yesb) No 5829 30. Emerging Marketing Strategies Relationship Marketing Permission Marketing Experience Marketing Guerilla Marketing Digital Marketing Viral Marketing Mobile Marketing Social Network Marketing59 Strategy The logic and planning behind the ad that give it direction and focus Advertisers develop ads to meet objectives Advertisers direct ads to identified audiences Advertisers create messages that speak to the audiences concerns Advertisers run ads in the most effective media to reach the audience 60 30 31. Superior tactics cannot overcome a flawed (business) strategy.61 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 amountof work and hourly rate charged Performance-based Based on percentage of sales or marketing budget Profit-based Greater risk if campaign doesnt have desired impact Value Billing Based on value of creative strategy or ideas 6231 32. Questions ???M. Larry Litwin, APR, Fellow PRSA larry@larrylitwin.comwww.larrylitwin.com 2009 6332