BUILDING THE BRAND Communicating Marketing Strategy in a Changing World Bases for Segmentation

The currency of business Establishes competitive advantage Is key to creating customer value BRAND

Brands are the set of tangible and intangible attributes perceived by the consumer

Brands are more than just images, logos and ads…. ….they are the culture through which consumers understand, value and experience the product Brands

We as consumers “affiliate” with brands because they meet our expectations. Once we affiliate, we are unlikely to seek any new information that would contradict the “brand culture.” Brands

As a result, powerful brands –Leverages market dominance with the channel and retailers –Protects market share –Builds equity in the company –Facilitates new product entry –Unite consumers around powerful values and ideals Brands

Nike: defined American achievement, dedication and initiative “Just do It” Apple: represents the iconoclastic, creative, independent values of the information age Brands

Brand identity and value are communicated through: Retail channelsManagement & labor PricingPublic relations PackagingSales force ProductAdvertising Internal corporate culture Customer service Warranties and guarantees Brands

Using Advertising to Communicate Brand It’s not enough anymore

Advertising: Creates and Reflects Contemporary Culture Public health issues Economic competition Consumerism Gap between rich and poor Symbolic communication Information overload Economic health Shifting cultural values Selling of political candidates Globalization of American culture Privacy Technology advancements

Common Criticisms Makes people believe they need things they really don’t Promotes stereotypes and poor lifestyles Lulls people into thinking that happiness can be achieved through purchasing Is crass and annoying

Can it also be…? An important tool to solve real business problems A social information tool A driver of capitalism and contributor to GNP A service to inform consumers Essential for competitive marketing and consumer choice Add value to a company through brand building

How do we create advertising to meet marketing/brand objectives? …( and how do we do it in a world that changes every day?)

Advertising vs. Marketing A subset of marketing Concerned with promoting and communicating marketing strategy to consumers Is the “P” of Promotion Defines the art of product strategy Focused on 4 “Ps”- –Price –Product –Place –Promotion

Marketing “The process of planning and executing the development, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organization objectives.” »American Marketing Association

Marketing 4Ps Product: How do we create a product that satisfies the needs of consumers? Price: How do we price the product for consumer benefit (price elasticity of demand)? Placement: How do we distribute the product to reach consumers? Promotion: How do we communicate our product’s benefits to consumers?

Advertising Any paid form of non-personal communication about an organization, product, service or idea by an identified sponsor Is a central component of the promotional mix: what combination of media/communication will we use to deliver the message?

Advertising –Create awareness –Change attitudes –Change behavior

The Growth of Advertising and Promotion © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Traditional Compensation Performance Based Compensation Traditional Compensation Performance Based Compensation Media Advertising Multiple Forms of Communication Mass Media Specialized Media Manufacturer Dominance Retailer Dominance General Focus Data Based Marketing Low Agency Accountability Greater Agency Accountability Limited Internet Availability Widespread Internet Availability Media Advertising Multiple Forms of Communication Mass Media Specialized Media Manufacturer Dominance Retailer Dominance General Focus Data Based Marketing Low Agency Accountability Greater Agency Accountability Marketing Revolution and Shifting Tides FromToward © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Advertising in Transition Globalization –More clients demand agencies offer: Global coverage Wide range of communication services, i.e. advertising, PR, events, direct marketing Total media services: ability to place media in all channels, globally

Advertising in Transition Media Clutter and Fragmentation –More and more media channels in print, broadcast and even alternative media mean its harder to find a mass audience –Advertising needs to be more creative, strategic, guerilla-like to stand apart

Advertising in Transition Budget fragmentation –More and more ad dollars are shifting out of traditional advertising into sales promotions, i.e. coupons, sweepstakes, offers, “deals.”

Advertising in Transition New technology –Internet, cell phones, wireless technology, video games all change the landscape of advertising and change the relationship between the consumer and company –TIVO and other recording devices make it possible to skip over advertising

Advertising in Transition The rise of Integrated Marketing Communications –IMC refers to building a communications campaign through multiple channels, i.e. advertising, sales promotions, PR, direct mail, sales, internet, etc. to extend and amplify the brand message…to create the “brand culture”

IMC–Audience Contact Points Marketing Communications Audience Point of Purchase Publicity Public Relations Packaging Direct Response Direct Response Sales Promotion Events Outdoor Broadcast Media Print Media Direct Mail Internet/ Interactive Media © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Advertising in Transition Consumer fatigue and cynicism –Consumers are “burnt out” by advertising and tune it out –Young consumers, in particular, don’t believe advertising and are cynical bout its attempts to “manipulate” consumers

Advertising in Transition Drive for quantification –More and more clients want to see a return on investment…they want to be able to see that advertising had some effect, i.e. increased sales, generated awareness or a response

Advertising in transition Growing Importance of the “Brand” –Brand loyalty is the “holy grail” of advertising. It ensures repeat customers, stabilizes sales

IMC and Branding Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind Brand Value (Billions of Dollars) 1. Coca-Cola$ Microsoft$ IBM$ GE$ Intel$ Nokia$ Disney$ McDonald’s$ Marlboro$ Mercedes$21.4 IMC plays a major role in the process of developing and sustaining brand identity and equity. © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Advertising in Transition Customization and Relationship Building –Consumers demand a more personalized message and relationship with the companies they buy from

Advertising in Transition Growing Importance of Retailers –Large retailers have more control of how the product is presented to the consumer, what products are carried in the stores –Large retailers now have their own store brands to compete with national brands

Advertising in Transition Consolidation of ad agencies –More than 60% of all advertising revenue is controlled by 4 large ad conglomerates –Publicis (Paris) –WPP (London) –Interpublic (New York) –Omnicom (new York)

1. A detailed situation analysis 2. Specific marketing objectives 3. A marketing strategy and program 4. A program for implementing the strategy 5. A process for monitoring and evaluating performance 1. A detailed situation analysis 3. A marketing strategy and program 4. A program for implementing the strategy 2. Specific marketing objectives The Marketing Plan © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Advertising Direct Marketing Interactive/ Internet Marketing Interactive/ Internet Marketing Sales Promotion Publicity/Public Relations Publicity/Public Relations Personal Selling Advertising Direct Marketing Interactive/ Internet Marketing Interactive/ Internet Marketing Sales Promotion Publicity/Public Relations Publicity/Public Relations Basic Elements of the Promotional Mix © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Primary vs. Selective Demand Advertising Business-to-Business Advertising Organizations National Advertising Retail/Local Advertising Professional Advertising Trade Advertising National Advertising Retail/Local Advertising Business-to-Business Advertising Professional Advertising Classifications of Advertising Consumers © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Direct Response Advertising Direct Response Advertising Direct Response Advertising Direct Response Advertising Direct Mail Direct Mail Cataloging Telemarketing Internet Sales Internet Sales Shopping Channels Shopping Channels Direct Mail Direct Mail Telemarketing Catalogs Shopping Channels Shopping Channels Direct Marketing is Part of IMC Direct Marketing © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Builds and Maintains Customer Relationships Obtains Customer Database Information Communicates and Interacts With Buyers Provides Customer Service and Support Educates or Informs Customers A Persuasive Advertising Medium A Sales Tool or an Actual Sales Vehicle Obtains Customer Database Information Communicates and Interacts With Buyers Provides Customer Service and Support Educates or Informs Customers A Persuasive Advertising Medium A Sales Tool or an Actual Sales Vehicle Using the Internet as an IMC Tool The Internet © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Consumer- oriented [For end-users] Trade-oriented [For resellers] Sales Promotion Tools Events Loyalty Programs Bonus Packs Refunds/Rebates Contests/Sweepstakes Premiums Samples Coupons Coop Advertising Trade Shows Training Programs POP Displays Trade Allowances © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Introduce New Products Get Existing Customers to Buy More Attract New Customers Maintain Sales In Off Season Increase Retail Inventories Tie In Advertising & Personal Selling Enhance Personal Selling Combat Competition Introduce New Products Get Existing Customers to Buy More Attract New Customers Maintain Sales In Off Season Increase Retail Inventories Tie In Advertising & Personal Selling Enhance Personal Selling Various Uses of Sales Promotion Sales Promotion Sales Promotion © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Interviews Feature Articles Feature Articles Special Events Special Events Press Conferences Press Conferences News Releases News Releases Feature Articles Feature Articles Special Events Special Events News Releases News Releases Publicity Vehicles © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Corporate Advertising Cause-related Marketing Publicity Vehicles Community Activities Public Affairs Activities Special Publications Special Event Sponsorship Publicity Vehicles Community Activities Public Affairs Activities Special Publications Public Relations Tools © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Typical Full-Service Agency Organization © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Writers Art Directors Traffic TV Produciton Traffic Print Production VP Creative Services Account Executive Account Supervision VP Account Services MediaResearch Sales Promotion VP Marketing Services PersonnelAccountingFinance Office Management VP Management and Finance President Board of Directors

Services Provided by Agencies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Agency Services The link between agency and client Managed by the Account Executive The link between agency and client Managed by the Account Executive Research department may design and execute research programs Media department may analyze, select and contract media resources Research department may design and execute research programs Media department may analyze, select and contract media resources Creation and execution of ads Copywriters, artists, other specialists Creation and execution of ads Copywriters, artists, other specialists Marketing Services Account Service Creative Services Marketing Services Account Service

Commissions Method Commissions Method Cost-Plus Agreements Cost-Plus Agreements Percentage Charges Percentage Charges Fee Arrangements Fee Arrangements Incentive-Based Payment Incentive-Based Payment Commissions Method Commissions Method Cost-Plus Agreements Cost-Plus Agreements Percentage Charges Percentage Charges Fee Arrangements Fee Arrangements Methods of Agency Compensation © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Compensation Methods Compensation Methods

Positioning Through Marketing Strategies Selecting Market To Target Determining Market Segmentation Identify Markets With Unfulfilled Needs Selecting Market To Target Determining Market Segmentation Identify Markets With Unfulfilled Needs The Target Marketing Process © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Behavior Benefits Outlets Benefits Outlets Behavior Psychographic Geographic Demographic Psychographic Demographic Geographic Bases for Segmentation Customer Characteristics Customer Characteristics Socioeconomic Buying Situation Buying Situation Usage Socioeconomic © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

What Position Do We Have Now? Do We Have the Money To Do the Job? What Position Do We Want To Own? From Whom Must We Win This Position? Do We Have the Tenacity To Stay With It? Do We Have the Money To Do the Job? From Whom Must We Win This Position? What Position Do We Want To Own? What Position Do We Have Now? Does Our Creative Strategy Match It? Developing a Positioning Strategy © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Position The Position

By Attributes and Benefits? By Price or Quality? By Use or Application? By Product Class? By Product User? By Competitor? By Cultural Symbols? By Attributes and Benefits? By Price or Quality? By Use or Application? By Product Class? By Product User? By Competitor? Positioning Strategies © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin How should we position?