Advertising’s Role in Marketing [ EASY STEPS TO UNDERSTANDS HOW IT WORKS BEST ]

 Advertising’s Role in Marketing

 KEY POINTS :-

• Define the role of advertising within marketing
• Explain how the four key concepts in marketing
relate to advertising
• Identify the key players in marketing and how
the organization of the industry affects
advertising
• List and explain the six critical steps in the
marketing process
• Summarize the structure of the advertising
agency industry
• Analyze the changes in the marketing world and
what they portend for advertising

•  Marketing Management

• THE FOUR ELEMENT OF MARKETING

This store shelf is stalking you.

The rumor has it that shelves can now track age and gender of passing customers. That is, in the global supermarket Mondelez they can, thanks to Microsoft Kinect. Sensors placed on the shelves stacked with groceries will track who’s looking at the goods, how old they are, and what’s their gender. The data is intended for marketing purposes, like tailoring specific messages to the target demographic or offering real-time utility as Hellmann’s mayo did in Brazil. Hellman’s used data to assemble recipes on the fly for the customers who put Hellmann’s mayo in their cart. The utility of data doesn’t have to stop there, though: it can potentially be a really good source of research on human decision-making and the influence of the context on the way we choose, making marketing both more efficient for the brands and more useful to consumers.

Ivory represents
one of the all-time
great marketing
stories

MARKETING CONCEPTS

• Marketing should focus first on
identifying the needs and wants of the
customer
• Marketers must focus on the customers’
problems and develop products to solve

Exchange
• The act of trading a desired product or service
to receive something of value in return
Money
Money
Goods
Goods


3

Branding

• Brand equity is reputation, meaning and value
that the brand name or symbol has acquired OVER TIME.

Added Value

• A marketing or
advertising activity
makes a product
more valuable, useful
or appealing

A Motorcycle is a Motorcycle…
But a Harley is Something Different

 Key Players: The Marketer

• The organization, company or manufacturer
producing the product and offering it for sale
• The advertiser or client (from the agency’s
point of view)

 

 Key Players:

Suppliers and Vendors
• Other companies that
manufacture the
materials and
ingredients used in
producing the
product

 Key Players:

Distributors and Retailers
• Various companies
that are involved in
moving a product
from its manufacturer
to the buyer

Brands Become Their Media

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There's a saying in theater: A big part of acting is reacting. This is especially true when we consider how many individuals, brands, and organizations engage on the web today. Instead of seeking inspiration and direction from those around us however, we simply react to activity, which may or may not benefit us in the long run. The democratization of publishing and the equalization of influence allows us to create and connect with a wider reach. Everything starts with a mission, and is fortified by the content we create.
Among the most valuable resources we procure through dedicated publishing is good will, social capital, and influence. It comes at a price however: The cost of production, distribution, and support. In the end, you get out what you put in. The investment represents time, money, creativity, and passion.
Thus, we not only become our media — through production and engagement, we can become influential.

Productive Social Media Must Be Earned

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While establishing a presence is elementary, captivating audiences is artful. In the near future, brands and organizations will create new or augment existing roles for editors and publishers to create timely, relevant, and captivating content on all social media channels. This work is in addition to the other reactive and proactive social media campaigns that are already in progress. A strategic editorial calendar should blend video, audio, imagery, text, updates, and other social objects and networks to reach, inspire, and galvanize communities.

Earned, Paid, and Owned Media

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In media, there are several channels that populate and shape perception — earned, paid, and owned media. Each requires a dedicated management system that actively creates, monitors and stimulates strategic movement.
Recently, Sean Corcoran, an analyst at Forrester Research, published a detailed post that describes the differences between earned, paid and owned. He clarifies the roles for brands who undertake the responsibility of embracing new media. Dave Fleet, a thought leader in new media and public relations, also visualized Corcoran's thoughts through a series of graphics that represent the social media ecosystem.
As Corcoran points out in his recent report:

"Increasingly, interactive marketers are being asked to manage a wide range of paid and unpaid marketing communication —- despite the fact that many marketing departments are still organized around traditional paid marketing channels. All types of online media (whether 'earned,' 'owned,' or 'paid') can play specific roles in meeting marketers' objectives —- especially when seamlessly working together. To find the right balance between these types of media, marketers should take stock of their resources, listen for the impact of earned media, look for opportunities to shift short-term paid media to the role of catalyst, and begin to build out a solar system of long-term owned media touchpoints."

In other words, paid, earned and owned media require thoughtful programming and targeted distribution and must be linked to a systematic review of behavior and activity that surrounds each object. And, the analysis of activity and ultimately the end result should play a monumental role in the creation of future publishing and social activation.
Corcoran uses the word "touchpoint," which by standard definition, refers to any point of contact between a buyer and a seller. Touchpoint is part of the greater opportunity here. But more importantly, these touchpoints require direction and the establishment of a path that offers a complete experience — a beginning, a middle, an end, and a reward.
These experiences are definable by paid, earned, and owned media.

New media necessitates a collaboration between all teams involved in creating and distributing content, including advertising, interactive, communications, brand, and marketing — with an editorial role connecting the dots. We are competing for attention and our success is dependent on our ability to not compete against each other. Producing content and lobbing it over the firewall to an "audience" will only confuse communities. Therefore, we are obligated to build pipelines that carry strategic communications, each with calculated intents, targets and outcomes.
If we examine the differences between earned, owned, and paid, we can visualize necessary programming and dedicated channels for each.
Owned media is essentially that which we control. If we designed the object, we own the content within the object. Most likely, we also own (or lease) the distribution channels that present these objects to our target communities. We do not however, control the impression and perception of our objects. We lose that control at the point of distribution.
For example, in addition to standard web pages, social media presences contribute to our portfolio of owned media including Twitter accounts, Facebook Fan Pages, Blogs, YouTube channels, etc. By creating presences in the communities where our customers, prospects, partners, and influencers congregate and collaborate, we can lay the foundation to contribute "earned" social objects of value.
Social hubs are also gaining prominence in social media plans as brands weigh options for directing traffic. The creation of strategic landing pages can extend the rich, interactive experience within social networks (channels which we partially own) to pages we do own. This shapes the experience in a way that maintains interactivity and targeted options for action. I'm not necessarily recommending the creation of microsites, unless it's warranted in the overall program. But a bridge that connects the social experience to a valuable destination is important.
Forrester's Corcoran recommends that brands create a "solar system" of owned media. However, I suggest that brands instead create a focused ecosystem of media that establishes presences where their communities are already active — a brand or organization-specific social media ecosystem. This requires research. In the process, we uncover not only locations that require our engagement, but also how, where, when and to what extent to participate. We just may find that the given locations for social profiles represent only part of the many opportunities rife within the Conversation Prism.

Paid media represents the visibility we purchase, such as display ads, paid search, and sponsorships. When paired with owned and earned media programs, paid media can complement, reinforce, and polish a brand's voice, directives, mission, and stature. While many argue over the future and fate of advertising, what's clear is that online paid presences can benefit initiatives where action and experiences are defined and promoted through the click path. Current trends reflect a shift away from branding programs and place emphasis on sparking desired activity, empowering viewers and their social graph to share in the experience all in ways that measure the cost per action.
Earned media is the result of our owned, paid, and participatory media programs and is reflected in the blog posts, tweets, status updates, comments, and ultimately actions of our consumers, peers, and influencers. Earned media is linked to owned media campaigns as well as proactive initiatives that attempt to incite viral and word-of-mouth activity. Garnered visibility is also tied to communications and public relations programs as they continually seek to gain the attention of reporters, bloggers, analysts, and influencers who can drive awareness and behavior.
This isn't a one way street however. Success is absolutely conditional on the techniques and methodologies that inspire dedicated programs focused on outreach, relations, and hopefully the engendering of productive and mutually beneficial relationships. Crowd-powered visibility also merits an official and devoted listening and response initiative to ensure that each respective community aligns with the mission.
Participatory media is an extension of earned and owned media. It takes the shape of a hosted hub where brand representatives and our communities can interact and collaborate. Good examples of this are Dell's IdeaStorm and Starbucks' "My Idea" network, which resemble branded wikis designed to elicit responses and establish community-focused governances. Participatory media equalizes the balance of power, providing a dedicated platform the gives voice to the consumer and a channel for their ideas.
Sponsored media is a new category that fuses owned, paid, and earned media. Sponsored media is championed by companies like Izea, Ad.ly, and Twittad, among others, and is creating a new medium for packaging messages through trusted voices within highly visible and social channels. Sponsored media can take the form of paid tweets, blog posts, appearances, and featured objects on targeted profiles. And, whether you agree or disagree with the idea, the reality is that it works, and seems to benefit all parties involved, from the brand, to the paid affiliates, to their communities. In fact, Forrester's Josh Bernoff and Sean Corcoran shared their thoughts on why sponsored media is worthy of consideration.
Sponsored objects fuse earned, paid, and owned media, as technically: 1) The messages are owned; 2) The voices are paid, and; 3) With more thoughtful approaches, the responses within targeted communities can inspire a positive wave of earned media.
Disclosure: My company works with Ted Murphy, Founder/CEO of izea.com.

Influence

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As media, brands earn prominence and hopefully influence as rewards for contributing meaningful content. On Twitter, brands can earn legions of loyal and responsive followers, who in turn become brand advocates and ambassadors, extending the messages, mission and purpose of the brand to their followers as well. On Facebook, brands can cultivate vibrant and dedicated communities where interaction inspires increased responses — each reverberating across new social graphs. On Ustream and YouTube, we can earn global audiences of viewers who tune in to watch our programming and interact with brand representatives in a live community that spills over other social networks. And of course, our blog is more important than we may realize. Through our posts, we can establish a strong alliance of subscribers who hope to learn new things and participate in the discussion of a brand's future.
As Tom Foremski points out, we have the ability to earn noteworthy, equal, and in some cases, greater influence than those authorities whom we've relied on over the years to help us reach greater audiences and communities. As influence is equalized, our ability to earn presence and relationships is derived from how we program, manage, and participate in all forms of media. And, it is through a balance of media and engagement that we also establish the foundation for affinity. People align with movements they can believe in, and it is the human, intellectual, and financial investment in genuine content that defines experiences, and hopefully one day earns the significance your brand deserves.

More business resources from Mashable:

Marketing

Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling that product or service.
From a societal point of view, marketing is the link between a society’s material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that also benefit the organization and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value.
There are five competing concepts under which organizations can choose to operate their business; the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The four components of holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. The set of engagements necessary for successful marketing management includes, capturing marketing insights, connecting with customers, building strong brands, shaping the market offerings, delivering and communicating value, creating long-term growth, and developing marketing strategies and plans.

Marketing concepts

Earlier approaches

The marketing orientation evolved from earlier orientations, namely, the production orientation, the product orientation and the selling orientation.

Orientation	Profit driver	Western European timeframe	Description
Production	Production methods	until the 1950s	A firm focusing on a production orientation specializes in producing as much as possible of a given product or service. Thus, this signifies a firm exploiting economies of scale until the minimum efficient scale is reached. A production orientation may be deployed when a high demand for a product or service exists, coupled with a good certainty that consumer tastes will not rapidly alter (similar to the sales orientation).
Product	Quality of the product	until the 1960s	A firm employing a product orientation is chiefly concerned with the quality of its own product. A firm would also assume that as long as its product was of a high standard, people would buy and consume the product.
Selling	Selling methods	1950s and 1960s	A firm using a sales orientation focuses primarily on the selling/promotion of a particular product, and not determining new consumer desires as such. Consequently, this entails simply selling an already existing product, and using promotion techniques to attain the highest sales possible. Such an orientation may suit scenarios in which a firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood of changes in consumer tastes that would diminish demand.
Marketing	Needs and wants of customers	1970s to the present day	The 'marketing orientation' is perhaps the most common orientation used in contemporary marketing. It involves a firm essentially basing its marketing plans around the marketing concept, and thus supplying products to suit new consumer tastes. As an example, a firm would employ market research to gauge consumer desires, use R&D (research and development) to develop a product attuned to the revealed information, and then utilize promotion techniques to ensure persons know the product exists.
Holistic Marketing	Everything matters in marketing	21st century	The holistic marketing concept looks at marketing as a complex activity and acknowledges that everything matters in marketing - and that a broad and integrated perspective is necessary in developing, designing and implementing marketing programs and activities. The four components that characterize holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing.

Contemporary approaches

Recent approaches in marketing include relationship marketing with focus on the customer, business marketing or industrial marketing with focus on an organization or institution and social marketing with focus on benefits to society. New forms of marketing also use the internet and are therefore called internet marketing or more generally e-marketing, online marketing, "digital marketing", search engine marketing, or desktop advertising. It attempts to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing. Internet marketing is sometimes considered to be broad in scope, because it not only refers to marketing on the Internet, but also includes marketing done via e-mail, wireless media as well as driving audience from traditional marketing methods like radio and billboard to internet properties or landing page.

Orientation	Profit driver	Western European timeframe	Description
Relationship marketing / Relationship management	Building and keeping good customer relations	1960s to present day	Emphasis is placed on the whole relationship between suppliers and customers. The aim is to provide the best possible customer service and build customer loyalty.
Business marketing / Industrial marketing	Building and keeping relationships between organizations	1980s to present day	In this context, marketing takes place between businesses or organizations. The product focus lies on industrial goods or capital goods rather than consumer products or end products. Different forms of marketing activities, such as promotion, advertising and communication to the customer are used.
Societal marketing	Benefit to society	1990s to present day	Similar characteristics to marketing orientation but with the added proviso that there will be a curtailment of any harmful activities to society, in either product, production, or selling methods.
Branding	Brand value	1980s to present day	In this context, "branding" refers to the main company philosophy and marketing is considered to be an instrument of branding philosophy.

Customer orientation

Constructive criticism helps marketers adapt offerings to meet changing customer needs.

A firm in the market economy survives by producing goods that persons are willing and able to buy. Consequently, ascertaining consumer demand is vital for a firm's future viability and even existence as a going concern. Many companies today have a customer focus (or market orientation). This implies that the company focuses its activities and products on consumer demands. Generally, there are three ways of doing this: the customer-driven approach, the market change identification approach and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no reason to spend R&D (research and development) funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.
A formal approach to this customer-focused marketing is known as SIVA (Solution, Information, Value, Access). This system is basically the four Ps renamed and reworded to provide a customer focus. The SIVA Model provides a demand/customer-centric alternative to the well-known 4Ps supply side model (product, price, placement, promotion) of marketing management.

Product	→	Solution
Promotion	→	Information
Price	→	Value
Place (Distribution)	→	Access

If any of the 4Ps were problematic or were not in the marketing factor of the business, the business could be in trouble and so other companies may appear in the surroundings of the company, so the consumer demand on its products will decrease. However, in recent years service marketing has widened the domains to be considered, contributing to the 7P's of marketing in total. The other 3P's of service marketing are: process, physical environment and people.
Some consider there to be a fifth "P": positioning. See Positioning (marketing).
Some qualifications or caveats for customer focus exist. They do not invalidate or contradict the principle of customer focus; rather, they simply add extra dimensions of awareness and caution to it.
The work of Christensen and colleagues on disruptive technology has produced a theoretical framework that explains the failure of firms not because they were technologically inept (often quite the opposite), but because the value networks in which they profitably operated included customers who could not value a disruptive innovation at the time and capability state of its emergence and thus actively dissuaded the firms from developing it. The lessons drawn from this work include:

• Taking customer focus with a grain of salt, treating it as only a subset of one's corporate strategy rather than the sole driving factor. This means looking beyond current-state customer focus to predict what customers will be demanding some years in the future, even if they themselves discount the prediction.
• Pursuing new markets (thus new value networks) when they are still in a commercially inferior or unattractive state, simply because their potential to grow and intersect with established markets and value networks looks like a likely bet. This may involve buying stakes in the stock of smaller firms, acquiring them outright, or incubating small, financially distinct units within one's organization to compete against them.

Other caveats of customer focus are:

• The extent to which what customers say they want does not match their purchasing decisions. Thus surveys of customers might claim that 70% of a restaurant's customers want healthier choices on the menu, but only 10% of them actually buy the new items once they are offered. This might be acceptable except for the extent to which those items are money-losing propositions for the business, bleeding red ink. A lesson from this type of situation is to be smarter about the true test validity of instruments like surveys. A corollary argument is that "truly understanding customers sometimes means understanding them better than they understand themselves." Thus one could argue that the principle of customer focus, or being close to the customers, is not violated here—just expanded upon.
• The extent to which customers are currently ignorant of what one might argue they should want—which is dicey because whether it can be acted upon affordably depends on whether or how soon the customers will learn, or be convinced, otherwise. IT hardware and software capabilities and automobile features are examples. Customers who in 1997 said that they would not place any value on internet browsing capability on a mobile phone, or 6% better fuel efficiency in their vehicle, might say something different today, because the value proposition of those opportunities has changed.

Organizational orientation

In this sense, a firm's marketing department is often seen as of prime importance within the functional level of an organization. Information from an organization's marketing department would be used to guide the actions of other departments within the firm. As an example, a marketing department could ascertain (via marketing research) that consumers desired a new type of product, or a new usage for an existing product. With this in mind, the marketing department would inform the R&D (research and development) department to create a prototype of a product or service based on the consumers' new desires.
The production department would then start to manufacture the product, while the marketing department would focus on the promotion, distribution, pricing, etc. of the product. Additionally, a firm's finance department would be consulted, with respect to securing appropriate funding for the development, production and promotion of the product. Inter-departmental conflicts may occur, should a firm adhere to the marketing orientation. Production may oppose the installation, support and servicing of new capital stock, which may be needed to manufacture a new product. Finance may oppose the required capital expenditure, since it could undermine a healthy cash flow for the organization.

Herd behavior

Herd behavior in marketing is used to explain the dependencies of customers' mutual behavior. The Economist reported a recent conference in Rome on the subject of the simulation of adaptive human behavior. It shared mechanisms to increase impulse buying and get people "to buy more by playing on the herd instinct." The basic idea is that people will buy more of products that are seen to be popular, and several feedback mechanisms to get product popularity information to consumers are mentioned, including smart card technology and the use of Radio Frequency Identification Tag technology. A "swarm-moves" model was introduced by a Florida Institute of Technology researcher, which is appealing to supermarkets because it can "increase sales without the need to give people discounts." Other recent studies on the "power of social influence" include an "artificial music market in which some 19,000 people downloaded previously unknown songs" (Columbia University, New York); a Japanese chain of convenience stores which orders its products based on "sales data from department stores and research companies;" a Massachusetts company exploiting knowledge of social networking to improve sales; and online retailers such as Amazon.com who are increasingly informing customers about which products are popular with like-minded customers.

Further orientations

• An emerging area of study and practice concerns internal marketing, or how employees are trained and managed to deliver the brand in a way that positively impacts the acquisition and retention of customers, see also employer branding.
• Diffusion of innovations research explores how and why people adopt new products, services, and ideas.
• With consumers' eroding attention span and willingness to give time to advertising messages, marketers are turning to forms of permission marketing such as branded content, custom media and reality marketing.

Marketing research

Marketing research involves conducting research to support marketing activities, and the statistical interpretation of data into information. This information is then used by managers to plan marketing activities, gauge the nature of a firm's marketing environment and attain information from suppliers. Marketing researchers use statistical methods such as quantitative research, qualitative research, hypothesis tests, Chi-squared tests, linear regression, correlations, frequency distributions, poisson distributions, binomial distributions, etc. to interpret their findings and convert data into information. The marketing research process spans a number of stages, including the definition of a problem, development of a research plan, collection and interpretation of data and disseminating information formally in the form of a report. The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information.
A distinction should be made between marketing research and market research. Market research pertains to research in a given market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing. Thus, market research is a subset of marketing research.

Marketing environment

Staying ahead of the consumer is an important part of a marketer's job. It is important to understand the "marketing environment" in order to comprehend the consumers concerns, motivations and to adjust the product according to the consumers needs. Marketers use the process of marketing environmental scans, which continually acquires information on events occurring out side the organization to identify trends, opportunities and threats to a business. The six key elements of a marketing scan are the demographic forces, socio-cultural forces, economic forces, regulatory forces, competitive forces, and technological forces. Marketers must look at where the threats and opportunities stem from in the world around the consumer to maintain a productive and profitable business.
The market environment is a marketing term and refers to factors and forces that affect a firm’s ability to build and maintain successful relationships with customers.Three levels of the environment are: Micro (internal) environment - forces within the company that affect its ability to serve its customers. Meso environment – the industry in which a company operates and the industry’s market(s). Macro (national) environment - larger societal forces that affect the micro environment.

Market segmentation

Market segmentation pertains to the division of a market of consumers into persons with similar needs and wants. For instance, Kellogg's cereals, Frosties are marketed to children. Crunchy Nut Cornflakes are marketed to adults. Both goods denote two products which are marketed to two distinct groups of persons, both with similar needs, traits, and wants. In another example, Sun Microsystems can use market segmentation to classify its clients according to their promptness to adopt new products.
Market segmentation allows for a better allocation of a firm's finite resources. A firm only possesses a certain amount of resources. Accordingly, it must make choices (and incur the related costs) in servicing specific groups of consumers. In this way, the diversified tastes of contemporary Western consumers can be served better. With growing diversity in the tastes of modern consumers, firms are taking note of the benefit of servicing a multiplicity of new markets.
Market segmentation can be viewed as a key dynamic in interpreting and executing a logical perspective of Strategic Marketing Planning. The manifestation of this process is considered by many traditional thinkers to include the following;Segmenting, Targeting and Positioning.

Types of market research

Market research, as a sub-set aspect of marketing activities, can be divided into the following parts:

• Primary research (also known as field research), which involves the conduction and compilation of research for a specific purpose.
• Secondary research (also referred to as desk research), initially conducted for one purpose, but often used to support another purpose or end goal.

By these definitions, an example of primary research would be market research conducted into health foods, which is used solely to ascertain the needs/wants of the target market for health foods. Secondary research in this case would be research pertaining to health foods, but used by a firm wishing to develop an unrelated product.
Primary research is often expensive to prepare, collect and interpret from data to information. Nevertheless, while secondary research is relatively inexpensive, it often can become outdated and outmoded, given that it is used for a purpose other than the one for which it was intended. Primary research can also be broken down into quantitative research and qualitative research, which, as the terms suggest, pertain to numerical and non-numerical research methods and techniques, respectively. The appropriateness of each mode of research depends on whether data can be quantified (quantitative research), or whether subjective, non-numeric or abstract concepts are required to be studied (qualitative research).
There also exist additional modes of marketing research, which are:

• Exploratory research, pertaining to research that investigates an assumption.
• Descriptive research, which, as the term suggests, describes "what is".
• Predictive research, meaning research conducted to predict a future occurrence.
• Conclusive research, for the purpose of deriving a conclusion via a research process.

Marketing planning

The marketing planning process involves forging a plan for a firm's marketing activities. A marketing plan can also pertain to a specific product, as well as to an organization's overall marketing strategy. Generally speaking, an organization's marketing planning process is derived from its overall business strategy. Thus, when top management are devising the firm's strategic direction or mission, the intended marketing activities are incorporated into this plan. There are several levels of marketing objectives within an organization. The senior management of a firm would formulate a general business strategy for a firm. However, this general business strategy would be interpreted and implemented in different contexts throughout the firm.

Marketing strategy

The field of marketing strategy considers the total marketing environment and its impacts on a company or product or service. The emphasis is on "an in depth understanding of the market environment, particularly the competitors and customers."
A given firm may offer numerous products or services to a marketplace, spanning numerous and sometimes wholly unrelated industries. Accordingly, a plan is required in order to effectively manage such products. Evidently, a company needs to weigh up and ascertain how to utilize its finite resources. For example, a start-up car manufacturing firm would face little success should it attempt to rival Toyota, Ford, Nissan, Chevrolet, or any other large global car maker. Moreover, a product may be reaching the end of its life-cycle. Thus, the issue of divest, or a ceasing of production, may be made. Each scenario requires a unique marketing strategy. Listed below are some prominent marketing strategy models.
A marketing strategy differs from a marketing tactic in that a strategy looks at the longer term view of the products, goods, or services being marketed. A tactic refers to a shorter term view. Therefore, the mailing of a postcard or sales letter would be a tactic, but changing marketing channels of distribution, changing the pricing, or promotional elements used would be considered a strategic change.

Buying behavior

A marketing firm must ascertain the nature of customers' buying behavior if it is to market its product properly. In order to entice and persuade a consumer to buy a product, marketers try to determine the behavioral process of how a given product is purchased. Buying behavior is usually split into two prime strands, whether selling to the consumer, known as business-to-consumer (B2C), or to another business, known as business-to-business (B2B).

B2C buying behavior

This mode of behavior concerns consumers and their purchase of a given product. For example, if one imagines a pair of sneakers, the desire for a pair of sneakers would be followed by an information search on available types/brands. This may include perusing media outlets, but most commonly consists of information gathered from family and friends. If the information search is insufficient, the consumer may search for alternative means to satisfy the need/want. In this case, this may mean buying leather shoes, sandals, etc. The purchase decision is then made, in which the consumer actually buys the product. Following this stage, a post-purchase evaluation is often conducted, comprising an appraisal of the value/utility brought by the purchase of the sneakers. If the value/utility is high, then a repeat purchase may be made. This could then develop into consumer loyalty to the firm producing the sneakers.

B2B buying behavior

Relates to organizational/industrial buying behavior. Business buy either wholesale from other businesses or directly from the manufacturer in contracts or agreements. B2B marketing involves one business marketing a product or service to another business. B2C and B2B behavior are not precise terms, as similarities and differences exist, with some key differences listed below:
In a straight re-buy, the fourth, fifth and sixth stages are omitted. In a modified re-buy scenario, the fifth and sixth stages are precluded. In a new buy, all stages are conducted.

Use of technologies

Marketing management can also rely on various technologies within the scope of its marketing efforts. Computer-based information systems can be employed, aiding in better processing and storage of data. Marketing researchers can use such systems to devise better methods of converting data into information, and for the creation of enhanced data gathering methods. Information technology can aid in enhancing an MKIS' software and hardware components, and improve a company's marketing decision-making process.
In recent years, the notebook personal computer has gained significant market share among laptops, largely due to its more user-friendly size and portability. Information technology typically progresses at a fast rate, leading to marketing managers being cognizant of the latest technological developments. Moreover, the launch of smartphones into the cellphone market is commonly derived from a demand among consumers for more technologically advanced products. A firm can lose out to competitors should it ignore technological innovations in its industry.
Technological advancements can lessen barriers between countries and regions. Using the World Wide Web, firms can quickly dispatch information from one country to another without much restriction. Prior to the mass usage of the Internet, such transfers of information would have taken longer to send, especially if done via snail mail, telex, etc.
Recently, there has been a large emphasis on data analytics. Data can be mined from various sources such as online forms, mobile phone applications and more recently, social media.

Services marketing

Services marketing relates to the marketing of services, as opposed to tangible products. A service (as opposed to a good) is typically defined as follows:

• The use of it is inseparable from its purchase (i.e., a service is used and consumed simultaneously)
• It does not possess material form, and thus cannot be touched, seen, heard, tasted, or smelled.
• The use of a service is inherently subjective, meaning that several persons experiencing a service would each experience it uniquely.

For example, a train ride can be deemed a service. If one buys a train ticket, the use of the train is typically experienced concurrently with the purchase of the ticket. Although the train is a physical object, one is not paying for the permanent ownership of the tangible components of the train.
Services (compared with goods) can also be viewed as a spectrum. Not all products are either pure goods or pure services. An example would be a restaurant, where a waiter's service is intangible, but the food is tangible.

The Market Research Process: 6 Steps to Success

The market research process is a systematic methodology for informing business decisions.  The figure below breaks the process down into six steps:

The Market Research Process

Step 1. Define the Objective & Your “Problem”
Perhaps the most important step in the market research process is defining the goals of the project.  At the core of this is understanding the root question that needs to be informed by market research.  There is typically a key business problem (or opportunity) that needs to be acted upon, but there is a lack of information to make that decision comfortably; the job of a market researcher is to inform that decision with solid data.  Examples of  “business problems” might be “How should we price this new widget?” or “Which features should we prioritize?”
By understanding the business problem clearly, you’ll be able to keep your research focused and effective.  At this point in the process, well before any research has been conducted, I like to imagine what a “perfect” final research report would look like to help answer the business question(s).  You might even go as far as to mock up a fake report, with hypothetical data, and ask your audience: “If I produce a report that looks something like this, will you have the information you need to make an informed choice?”  If the answer is yes, now you just need to get the real data.  If the answer is no, keep working with your client/audience until the objective is clear, and be happy about the disappointment you’ve prevented and the time you’ve saved.
Step 2. Determine Your “Research Design”
Now that you know your research object, it is time to plan out the type of research that will best obtain the necessary data.  Think of the “research design” as your detailed plan of attack.  In this step you will first determine your market research method (will it be a survey, focus group, etc.?).  You will also think through specifics about how you will identify and choose your sample (who are we going after?  where will we find them?  how will we incentivize them?, etc.).  This is also the time to plan where you will conduct your research (telephone, in-person, mail, internet, etc.).  Once again, remember to keep the end goal in mind–what will your final report look like?  Based on that, you’ll be able to identify the types of data analysis you’ll be conducting (simple summaries, advanced regression analysis, etc.), which dictates the structure of questions you’ll be asking.
Your choice of research instrument will be based on the nature of the data you are trying to collect.  There are three classifications to consider:

Exploratory Research – This form of research is used when the topic is not well defined or understood, your hypothesis is not well defined, and your knowledge of a topic is vague.  Exploratory research will help you gain broad insights, narrow your focus, and learn the basics necessary to go deeper.  Common exploratory market research techniques include secondary research, focus groups and interviews.  Exploratory research is a qualitative form of research.

Descriptive Research – If your research objective calls for more detailed data on a specific topic, you’ll be conducting quantitative descriptive research.  The goal of this form of market research is to measure specific topics of interest, usually in a quantitative way.  Surveys are the most common research instrument for descriptive research.

Causal Research – The most specific type of research is causal research, which usually comes in the form of a field test or experiment.  In this case, you are trying to determine a causal relationship between variables.  For example, does the music I play in my restaurant increase dessert sales (i.e. is there a causal relationship between music and sales?).

Step 3. Design & Prepare Your “Research Instrument”
In this step of the market research process, it’s time to design your research tool.  If a survey is the most appropriate tool (as determined in step 2), you’ll begin by writing your questions and designing your questionnaire.  If a focus group is your instrument of choice, you’ll start preparing questions and materials for the moderator.  You get the idea.  This is the part of the process where you start executing your plan.
By the way, step 3.5 should be to test your survey instrument with a small group prior to broad deployment.  Take your sample data and get it into a spreadsheet; are there any issues with the data structure?  This will allow you to catch potential problems early, and there are always problems.
Step 4. Collect Your Data
This is the meat and potatoes of your project; the time when you are administering your survey, running your focus groups, conducting your interviews, implementing your field test, etc.  The answers, choices, and observations are all being collected and recorded, usually in spreadsheet form.  Each nugget of information is precious and will be part of the masterful conclusions you will soon draw.
Step 5. Analyze Your Data
Step 4 (data collection) has drawn to a close and you have heaps of raw data sitting in your lap.  If it’s on scraps of paper, you’ll probably need to get it in spreadsheet form for further analysis.  If it’s already in spreadsheet form, it’s time to make sure you’ve got it structured properly.  Once that’s all done, the fun begins.  Run summaries with the tools provided in your software package (typically Excel, SPSS, Minitab, etc.), build tables and graphs, segment your results by groups that make sense (i.e. age, gender, etc.), and look for the major trends in your data.  Start to formulate the story you will tell.
Step 6. Visualize Your Data and Communicate Results
You’ve spent hours pouring through your raw data, building useful summary tables, charts and graphs.  Now is the time to compile the most meaningful take-aways into a digestible report or presentation.  A great way to present the data is to start with the research objectives and business problem that were identified in step 1.  Restate those business questions, and then present your recommendations based on the data, to address those issues.
When it comes time to presenting your results, remember to present insights, answers and recommendations, not just charts and tables.  If you put a chart in the report, ask yourself “what does this mean and what are the implications?”  Adding this additional critical thinking to your final report will make your research more actionable and meaningful and will set you apart from other researchers.
While it is important to “answer the original question,” remember that market research is one input to a business decision (usually a strong input), but not the only factor.
So, that’s the market research process.  The figure below walks through an example of this process in action, starting with a business problem of “how should we price this new widget?”

  Structure of the advertising

agency industry

 FIG OF Full service agency organization 

matrix Organization in advertising AGENCY

THE FOUR ELEMENT OF MARKETING
[The Marketing Mix]

The promotion ( Promotional Mix ) is one out of four basic instruments of business marketing that has the purpose to inform about other instruments of marketing mix and to contribute to sales increase on the long term. The promotional mixis always serving to specific goal through marketing strategy. These goals can be public informing, demand increasing, product differentiation, and product value increasing or sales stabilizing. Usually the promotion is targeting more than one goal.
Promotion is the process of marketing communication between the company that sells the product and the potential customer, with the purpose of influencing the attitudes and behavior. There are specific promotional tool that are supporting chosen promotional goal. The promotional mix represents a combination of different promotional tools. The basic marketing strategy elements of promotional mix are Advertising, Public Relationship, Personal Sales and Sales Promotion.

• Promotional mix is one out of four basic instruments of business marketing that has the purpose to inform about other instruments of marketing mix and to contribute to sales increase on the long term. The promotion is always serving to specific goal of marketing strategy. These goals can be public informing, demand increasing, product differentiation, and product value increasing or sales stabilizing. Usually the promotion is targeting more than one goal.
  

  
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  Advertising is marketing communication with current and potential customers and consumers, done through paid mass media marketing services. The channels of marketing communication can be TV, radio, Internet, billboards, etc.
   
  

• Public Relationship ( PR ) is marketing communication toward public, but is turned more to reputation and image of the company, than to it's products. The PR activity can be a press conference, TV interview with company representative, internet marketing, press article about donation of the company to charity or about latest environmental project.
   
  

• Personal Sales is a way of promotion activity where sales representative is directly contacting the customer. This person-to-person contact has the goal of direct product marketing of the product and conclusion of sales.
   
  

• Sales Promotion represents marketing strategy as a set of different promotional activities that has the goal of animating customers for purchasing. This can be value offer ( discount ), quantity offer ( 2+1 ), prize drawings, merchandising, direct contact by animators in retail outlet, etc.
  

The business marketing approach to promotional mix can be different, depending on marketing strategy. The push strategy is transferring the supply pressure downstream through sales channels. The pull strategy is approaching the consumer directly.
The Promotional Mix than create the consumer's demand is then creating request for product through supply channel upstream. Usually these two marketing strategy approaches are interlacing. In the early stage of product life the pull marketing strategy is more dominant. Later, when the market is saturated with own and competitor's products the push marketing strategy is predominant.

Marketing Management

Marketing Mix: The Price (B)

 

 

What is the Price? What are the pricing goals of marketing mix?

 

Posted: Jul 2009

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The Price is the one of components of Marketing Mix, along with Promotional Mix, Product Distribution and Product. The price is usually defined as financially expressed value of the product or service at the market. Price levels are forming the public opinion about a specific supplier.

For modern shopper the price is not only the expression of money outflow, but also represent a certain value, benefit or satisfaction perceived by certain product / service.
The price has specific relationship with other components of marketing mix. Actually the price is the only component that generates revenue, while other components generate costs. Manufacturing of the product represent the cost.
The distribution of the product also generate the cost. The promotion usually creates the increase of demand for the product/service, but directly also creates costs. All these costs needs to be covered through the price.
Still, the goal of the price is not only to cover the basic costs of manufacturing, distribution and promotion. The function of the price is much more complex and depends on different variables.
Goals of price depends on company's policy against various relationships:

The price is usually defined as financially expressed value of the product or service at the market. Price levels are forming the public opinion about a specific supplier. For modern shopper the price is not only the expression of money outflow, but also represent a certain value, benefit or satisfaction perceived by certain product / service.

Personal Development

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Why is Personal Development Important?
How to Understand Personal Development Needs?
How to Build Personal Development Plan?
Formal Education and Personal Development

Profit oriented goals are including three main variables. Profit maximizing has the goal of extraction of maximal possible profit. Satisfactory profit goals target the specific profit rate. Return on investment pricing is primarily focused on direct return of investment to the investor.
Sales oriented goals can have two main targets. Market share approach is targeting a specific price level that should bring the company to the specific position in the market. Sales maximizing prices is supposed to bring direct increase of profit.
Competition variable is very important, therefore the company can adopt several price policies that should address the competition in appropriate way.
Competition avoiding process have a goal of avoiding clashes ( price wars ) with competition. Repelling prices policy has the aim of discouraging the competition from entering the new market or product category. Stabile prices policy is the common price strategy that brings balance between attractiveness to shoppers and challenge to competition.
Prestige price positioning have relatively high price level. There is a certain segment of customers that are willing to pay high premium price in order to distinguish themselves from the majority of the market. These customers are building their lifestyle image by purchasing exclusive and luxury products.
Status Quo is pricing policy when company does not want to make to make disturbances in the market. This is the case with the products that have the specific position in the market, while any bigger alteration in price policy would not bring much value.

 Home/ Location Based Marketing – Introduction

Location Based Marketing – Introduction

copyrights: 2011-2012

Location-Based Services is the technology that can be used as a platform for marketing purposes. You can call it after The LBMA ‘an integration of people, places and media’ but this simple explanation doesn’t capture that the value added by the spatial dimension to mobile marketing is a total game changer… and the discussion you’ll seeing over the next pages will be a prove of it.

Location-Based Marketing has been present on the market for almost a decade in form of SMS or MMS messages but the development of location aware devices as well as location enabled social media gave marketers new possibilities to interact with highly targeted customers. New mobile media created new platforms of communication between business and customers that allows delivering not only the content, but also the direct feedback, or even performing final transactions. Location-Based Marketing allows targeting customers based on spatio-temporal criteria as well as other contexts that make it possible to deliver relevant value-adding marketing message to the user at the right time, place and situation. Wide range of LBM possibilities makes it possible to reach different target groups, with different level of interaction and engagement.

But the term ‘marketing’ goes far beyond the advertising and promotion. It means to get to know your customers, to make extensive customer insight, and by performing marketing process (which definition  you will find later) to create a strong relationship with the customer getting value in return. But the value doesn’t need to be measured in dollars but also the information. And the information is of the biggest value (financial) for everybody.

 Home / Location-Based Marketing – Definitions

Location-Based Marketing – Definitions

To discuss the term Location-Based Marketing it is necessary to fully understand it’s two components: ‘location-based’ and ‘marketing’. ‘Location-based’ part refers of course to Location-Based Services which I’ve extensively described in the previous chapter. So let us concentrate on the term ‘marketing’ itself.

Marketing was defined by Philip Kotler (marketing academics guru) as “the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return” in other words it is a process through which goods and services move from concept to the customer. Following Kotler marketing process includes several steps:

• market analysis,
• designing a marketing strategy,
• choosing so-called marketing mix,
• managing customer relationship,
• implementation and control.

It is crucial to differentiate between marketing and advertising. While marketing is the overall process, advertising is linked only with promotion of product or service through various communication channels intended to inform or persuade members of a particular audience. Advertising is a part of marketing mix within the marketing process.

Marketing mix however can be described as a set of tools by which marketers can influence the market. The first marketing mix concept described back in 60s is known as the ‘Four Ps’: product, price, place and promotion. There were many variations including 7 Ps… I even heard about 17 Ps. There are 4 Cs : customer value, cost, convenience, communication, and there are as well 7C… But for purposes of this discussion let’s stay with the traditional 4 Ps…

Mobile Marketing Association defines Location Based Marketing as: “any application, service, or campaign that incorporates the use of geographic location to deliver or enhance marketing message/service”. This definition is limiting LBM to a one-way, enhanced communication channel used by marketers to reach customers based on their geographic location.

This is the case of LBM based on sms or mms model which will be discussed further. The definition is however discounting the value of new LBM channels that are integrating Location-Based Services with social media creating a different possibilities for user interaction. Nowadays LBM allows and encourages users to an interactive, two-way communication. In fact effective location-based marketing strategy not only delivers the marketing message or service to the customer but allows to gather consumer insights. One of the most important functions of marketing is not only to communicate the value of a product or service to the market but as well to monitor and control if the campaign target was met as well as the competitors.

Users of LBS and especially Location Based Social Networks like Facebook Places, Foursquare, Twitter or Flickr produce enormous number of social, spatial and temporal data which analysed might answer critical questions for marketers about the customers: Who? Where? When? Why? Providing this information is crucial for solving marketing intelligence issues: determining market opportunities, market penetration strategies, development metrics, investment risks and many others. Further chapters will discuss the whole range of possibilities provided by Location Based Marketing.

Location-based marketing is not geomarketing!!!

Some people confuse Location-Base Marketing with the concept of geomarketing. Geomarketing is a set of tools and methods based on Geographic Information Systems (GIS)  focused mostly on three aspects: analysing spatial customer behavoir, retail location and spatial marketing management. Geomarketing methodology can be used to spatialy analyze and optimize elements of marketing process but it cannot be considered a part of marketing communication channel itself. There it cannot be considered equal to Location-Based Marketing itself.

 Location-Based Marketing – The Concept

Location-Based Marketing – The Concept

Location Based Marketing has been widely used by marketers for several years already but the topic has not been academically investigated. I’ve been doing some significant research in academic and non-academic literature and the only academic description was proposed by Shuguoli Li (in 2011) who proposed the concept that LBM can be described as convergence of three technologies: Location-Based Services, Mobile Marketing and Contextual Marketing.

Mobile Marketing Association defines mobile marketing as “a set of practices that enables organizations to communicate and engage with their audience in an interactive and relevant manner through any mobile device or network”. Mobile marketing is the most personal form of web marketing.

Contextual marketing as a form of targeted advertising that is using behavior or text content imputed by user to provide personalized marketing information with the Internet in real-time, so it’s something what you can observe in gmail, when ads are targeted to what you write. In Location-Based Services as a part of Context-Aware Services the context refers to spatio-temporal data or metadata.

But the is as well different approach and I think that the future marketing will be based to the following premises. Knowing where and when the customer is, it is possible to discover why is he there, so the context of this visit. For example if a customer is at the football stadium during the hour of the match it is highly possible that he is there to support one of teams. This creates whole new way to target specific audience with a context-related information.

Within this model Location Based Marketing could be defined as a mobile marketing utilizing positioning technologies to deliver targeted communication channel where one of the targeting variables (context) is user’s geographic location.