ADVERTISING CONSUMER BUSINESS CHANNEL STRATEGIES

Advertising consumer business channel strategies:

National Advertising: refers to advertising by the owner of a trademark product brand or service sold through different distributors or stores.  It tends to be general in terms of product information.  National advertisers have begun to identify and reach more narrowly defined market segments and in some cases individual consumers.  The Internet has allowed specifically tailored messages to consumers based on individual lifestyle and product usage.

retail advertising: advertising by a merchant who sells directly to the consumer.  Includes price information, service and return policies, store locations, and hours of operation.  A most important change in retail advertising is consolidation.  Customers are now doing more and more “one-stop shopping” rather than patronizing several independent retailers.  There are significant ramifications for newspaper and local radio stations.  Dramatic advertising spending shifts as retailers move to national promotional plans with a decline in ad pages.  Manufacturers find themselves competing with in-store brands.

End-Product Advertising: branded ingredient advertising building consumer demand by promoting ingredients in a product.  End-Product Advertising began in the 1940s with DuPont and Teflon nonstick coatings.  Successful end-product advertising builds consumer demand for an ingredient that will help in the sale of a product encourages companies to use these ingredients in their consumer products.  Consumers must be convinced that it offers an added value to the final product.  Extensive advertising is required to make consumers aware.   Successful advertisements are those that create meaningful differentiation for consumer purchase decisions.

Direct-Response Advertising is any form of advertising done in direct marketing. Uses all types of media: direct mail, TV, magazines, newspapers, and radio (replaces “mail–order advertising”).  Benjamin Franklin was credited with the 1^st direct-sales catalog published in 1744.  Largest sector is direct mail, which accounts for 1/3 of the total.  The fastest growing area is Internet advertising that is providing a catalyst for future growth.

Advertising to Business and Professions

Business-to-business (B2B) is one of the fastest-growing categories of advertising and it requires a much different strategy.  Personal selling, telemarketing, and other forms of direct response, and the Internet are the methods most often used.  Messages tend to be more fact-oriented with little emotional appeal and are addressed to specific industries and job classifications within those industries.  Profit-oriented appeals are very common.  B2B purchase decisions tend to have distinct differences compared to typical consumer purchases.  Purchase decisions made by companies frequently involve many people.  Organizational and industrial products are often bought according to precise technical specifications that require significant knowledge.  Impulse buying is rare and the dollar volume of purchases is often substantial.

Categories of Business Advertising

Trade Advertising: directed to the wholesale or retail merchants or sales agencies through whom the product is sold.  It emphasizes product profitability and consumer advertising support retailers will receive from manufacturers.  Promotes products/services that retailers need to operate their businesses.  The objectives are to gain additional distribution, increase trade support, and announce consumer promotions.

Industrial Advertising: addressed to manufacturers who buy machinery, equipment, raw materials, and the components needed to produce the goods they sell.  Directed at a very small, specialized audience.  Rarely seeks to sell a product directly.  The purchase of industrial equipment is usually a complex process that includes a number of decision makers.  Often introducing a product or gaining brand awareness.

Professional Advertising: directed at those in professions such as medicine, law, or architecture who are in a position to recommend the use of a particular product or service to their clients.  The primary difference is the degree of control exercised.

Institutional Advertising: advertising done by an organization speaking of its work views, and problems as a whole, to gain public goodwill and support rather than to sell a specific product.  Sometimes called public relations advertising.  Objectives are establishing a public identity, explaining a company’s diverse missions, boosting corporate identity and image, gaining awareness with target audiences for sales across a number of brands, and associating a company’s brands with some distinctive corporate character.

Non-product Advertising

Idea Advertising: used to promote an idea or cause rather than to sell a product or service.  Idea advertising is often controversial.  The increasing ability of media to narrowly target audiences, by ideology as well as product preference, will make this type of advertising prevalent in the future.

Service Advertising: advertising that promotes a service.  Feature tangibles personalized in some way with testimonials of good service.  Feature employees as an important aspect of the company and how they develop trust with customers in a service message featuring real employees.  Stress quality. Advertisements should emphasize consistency and high levels of competency by using words like caring, professional, and convenient in ads.

Government Advertising: In the past 20 years, the growth of government services and programs have resulted in greater use of traditional advertising by government agencies.  Millions of dollars are spent each year.

Brands

Brands are a company’s most valuable assets.  The product is not the brand, the product is manufactured and a brand is created.  Orlando is a brand and has to compete with other cities for convention revenues.  Product may change over time, but the brand remains.

“A brand represents the most powerful link between the offer and consumer.”– Antonio Marazza Landor

Every product, service, and PR Company with a recognized brand name stands for something slightly different from anything else in the same product category.

“A brand for every intent and purpose is a promise that it will help the user make money, look better or feel great.-Allen Adamson

For example, Dove promises women they will feel gorgeous and Volvo vows to deliver your family safely.  Manufacturers have to offer the best deal to wholesalers to get their products distributed creating a squeeze of profits.  The result is that some manufacturers decided to differentiate their products from the competition giving their products names then obtained patents to protect their exclusivity and used advertising to take the news about them to consumers over the heads of the wholesalers and retailers.

In the mid-1880s during the rise of great brands such as Maxwell House coffee in 1873 and Budweiser in 1876, advertising was going through its first true paradigm shift from making a connection in the mid 19^th century to the disconnection caused by technology.

“Branding is about the idea that should be the organizing principle and it should inform everything you do to help consumers grasp your brand promise in whatever channel you’re using to reach them.”-Michael Mendenhall 

In the digital age, it is absolutely critical to understand the value of each branding channel and its relevance to a particular audience.  In today’s digital world, your brand and brand organizations must perform, behave, and satisfy the consumer’s needs as they expected.  Integrated marketing communications are the integration of all communications culminates from a single strategic platform and will generate a significantly greater return on the communication investment than would be the case with traditional independent media executions.  IMC refers to all the messages directed to the consumer on behalf of the brand.

Brand equity: the values of how people such as consumers distributors, and salespeople think and feel about a brand relative to its competition.  The most important factor in determining the actual value of a brand is its equity in the market.

Young & Rubicam: brand asset valuator [BAV] is a diagnostic tool for determining how a brand is performing relative to all other brands.  BAV demonstrates that brands are built in a very specific progression of four primary consumer perceptions of differentiation, relevance, esteem, and knowledge.

• Differentiation is the basis for choice as the essence of the brand and source of margin.
• Relevance relates to usage and subsumes the five P’s of marketing related to sales.
• Esteem deals with consumer respect, regard and reputation and relates to the fulfillment of perceived consumer promise.
• Knowledge is the culmination of brand-building efforts and relates to consumer experiences.  A brands vitality lies in a combination of differentiating and relevance [lack of relevance reason fads come and go].  The components of brand stature are esteem and familiarity.  BAV is based on the fact that almost every successful brand began by being very simple according to Steve Owens.  A market is a group of people who can be identified by some common characteristic, interest or problem (use a certain product to advantage, can afford to buy it, and be reached through some medium).

Steps for creating advertisements for a brand

1. Brand Equity Audit Analysis
2. The market context of what is our market and with whom do we compete; what are other brands and product categories; are products highly differentiated.  This question helps us understand the statue and role of brands in a given market
3. Brandy equity weaknesses and strengths: brand awareness, brand sensitivity, and brand loyalty
4. Brand equity descriptions of the personal relationship between the consumer and the brand provide the most meaningful description of brand equity.

First, review all the available research to get as close a feeling as possible on how consumers view the brand and how they feel about it.  You must analyze in depth our brands and its competitor’s communications over a period of time.  Provide a clear summary of the current communication strategies and tactics of our brand and of key competitors.  Include an analysis of all integrated communication in relation to brand equity [assessment of problems and opportunities]

Strategic options drawn on the conclusions from the analysis of communication objectives [primary goal of message], Audience [who speaking to], Source of business [where customers going to come from], Brand position and benefits [benefits of brand to build equity], Marketing mix [mix of advertising], Rationale [how plan effects brand equity].

Do brand equity research for proprietary, qualitative research.  Determine which elements or elements of brand equity must be created, altered, or reinforced to achieve our recommended strategy and how far we can stretch each of these components without risking the brands’ credibility.

Make a Creative Brief as a short statement that clearly defines our audience, how the consumer thinks or feel and behave; what the communication is intended to achieve, and the promise that will create a bond with the consumer.  Synthesize all the information and understanding into an action plan for the development of all communication or the brand.

• The key observations-most important market factory that dictates the strategy.
• Communications objective-primary goal the advertising aims to achieve.
• Consumer insight-consumer hot button our communication will trigger.
• Promise-what the brad should represent t in the consumer’s mind.
• Support-reason the promise is true].
• Audience-who we are speaking and how they feel about the brand.
• Mandatory-items used as compulsory constraints].  There isn’t only one approach to developing an integrated strategic plan for a brand.

Avrett, Free and Ginsberg’s planning cycle:

1. Brand market status
2. Brand mission
3. Strategic development
4. Strategy
5. Creative exploration
6. Brand valuation
7. Brand vision-some other typical steps agencies and clients take in the planning process:

• Current brand status [evaluate brands overall appeal]
• Brand insight [agency use a series of tools designed to help it develop insights to better understand the customer’s view] 3. Brand vision [strategic planners look or the consumers hot button to identify the most powerful connection between brand and consumer]
• A big idea [creative expression of the brand vision – the foundation of all communication briefs]
• Evolution [essential aspect of communications planning is accountability] the consumer has to be an important part of the strategic planning process.  How the advertiser engages consumers is critical to the process.

“Just do it” -Scott Bedbury, brand builder for Nike

A great brand is in it for the long haul.  By using a long-term approach a great brand can create economies of scale by which you can earn solid margins over the long term.  A great brand can be anything [almost any product offers an opportunity to create a frame of mind that is unique].  A great brand knows itself [keep the brand vital by doing something new and unexpected related to the brand’s core position].  A great brand invents or reinvents an entire category [brand aims to dominate their entire category ex: Disney, Apple, Nike].  Great brand taps into emotions [it is an emotional connection that transcends the product].  A great brand is a story that’s never completely told [stories create the emotional context people need to locate themselves in a larger experience].  A great brand is relevant to ideas that need to satisfy peoples wants and perform the way they want. Advertisers need to have a clear understanding of the product and consumer wants and needs when making strategic advertising strategies’.  The developmental stage of a product determines the advertising message.  As products pass through the stages, the manner in which advertising presents the product to consumers depends largely on the degree of acceptance the product has earned with its life cycle.  It is the degree of acceptance that determines the advertising stage of the product.

Pioneering Stage: the advertising stage of a product in which the need for such a product is not recognized and must be established or in which the need has been established but the success of the commodity in filling that need has to be established.  Advertising in the pioneering stage must show that methods once accepted as the only ones possible have been improved and that the limitations long tolerated as normal have now been overcome.

Purposes of the Pioneering stage of a products life cycle:

• Educate consumers about the new product or service
• To show that people have a need they did not appreciate before and that the advertised product fulfills that need
• To show that a product now exists that is actually capable of meeting a need that already had been recognized but previously could not have been fulfilled
• Many new products are simply advertisers trying to get a piece of the pie in an established product category [ during the past 25 yrs almost 60% of companies on fortune 500 list have been replaced]
• Companies’ success is based on the fact that they created new markets or reinvented existing ones [ex: Procter and gable introduced tide, the first disposable diaper, and the first shampoo conditioner combo].  New ideas travel through cultures at much slower rates, especially if the ideas require throwing something away and replacing it with something else, relearning skills, or coordination by large independent organizations.

Pioneering expense: in the early introduction of a new product, heave advertising and promotional expenses are required to create awareness and acquaint the target with the product benefits.  Usually, the main advantage of being a pioneer is that you become the leader with a substantial head start over others [Aleve emerging as an original pain reliever before aspirin, Tylenol. Advil].

COMPETITIVE STAGE [the advertising stage a product reaches when its general usefulness is recognized but its superiority over similar brands has to be established in order to gain preference].  In the short term, the pioneer usually has an advantage of leadership that can give dominance in the market.  Generally, in the early competitive stage, the combined impact of many competitions, each spending to gain a substation market position, creates significant growth for the whole product category [if the pioneers grew, it can more than makeup for the earlier expense associated with its pioneering efforts].  The purpose of competitive stage advertising is to communicate the position of the product or differentiate it to the consumer; the advertising features the differences of the product.

RETENTIVE STAGE [the third advertising stage of a product, reached when its general usefulness is widely known, its individual qualities are thoroughly appreciated and it is satisfied to retain its patronage merely on the strength of its past reputation].  The chief goal of advertising may be to retain those customers by making a brand name for themselves.  Ad goal is to maintain market share and ward off consumer trial for the products.  Generally, products in the retentive stages are at their most profitable level because developmental costs have been amortized, distribution channels established and sales contacts made

REMINDER ADVERTISING: it simply reminds consumers that the brand exists [usually highly visual and is the basic name advertising giving little reason to buy the product].  If your product is alone in the retentive stage, this is cause for alarm because it may mean the product category is in decline and competition sees little future in challenging you for consumers.  Advertisers goal in the retentive stage is to maintain market share and ward off consumer trial for the products.  Products in the retentive stage do not successfully cut back on their advertising expenditures but they adopt different marketing and promotional strategies than those used in the pioneering and competitive stages.  Generally, products in the retentive stage are at their most profitable levels because developmental costs have been amortized, distribution channels established and sales contracts made.

The Advertising spiral is an expanded version of the advertising stages of products providing a point of reference for determining which stage or stages a product has reached at a given time in a given market and what the thrust of the advertising message it should be.  Advertising spiral parallels the life cycle of the product.  The development of the new types of products or categories does not take place frequently.  In using the advertising spiral we deal with one group of consumers at a time.  Advertising depends on the attitude of that group toward the product.  Pioneering and competitive advertising could be going on simultaneously.  Products in the retentive stage usually get the least amount of advertising.  As long as the operation of a competitive product does not change, the product continues to be in the competitive stage despite any pioneering improvements [once the principle of this operation changes the product itself enters the pioneering stage].  Whenever a brand in the competitive stage is revitalized with a new feature aimed at differentiating it, pioneering advertising may be needed to make consumer appreciate the new feature.  A product can coast for only a short time before declining.  No business can rely only on its old customers over a period of time and survive.  The retentive stage is the most profitable one for a product and can go 2 ways after:

1. The manufacturer determines that the product has outlived its effective market life and should be allowed to die [manufacturer quits advertising it and withered other types of support].  The product will gradually lose market share but remain profitable to cuts in spending
2. The advertising spiral does not accept the fact that product must decline and product seeks to expand the market into a newer pioneering stage

The newer pioneering stage attempts to get more people to use the product.  Ways to enter the stage: making a product change or complete overhaul of a product, such as a radical model change for an automobile.  Smart advertisers will initiate a change in the direction of their advertising when their product is enjoying great success [show new ways of use].  A product entering the new pioneering stage is actually in different stages in different markets.  Longtime consumers will perceive the product to be in the competitive or retentive stage.  New consumers will perceive it as being a pioneer

The newest pioneering stage focuses on getting more people to use this type of product.  Products in this stage are faced with new problems and opportunities.  The advertising focus on the newer pioneering stage must be on getting consumers to understand what the product is about advertising in the newer competitive stage to get more people to buy the brand.  A product may try to retain its consumers in one competitive area while at the same time seeking new markets with pioneering advertising aimed at other groups.  The life cycle of a product or brand may be affected by many conditions.

Immersive media is one that is involved and fun.  Environments (real or virtual) create involvement and exploration.  Social tie-in should be used with real place ads.  For example, Lays potato chips put chips on ceilings on subways. Some of the best games have been the Monopoly online street games that used Google maps.  Facial Profiling where they pick up your body movements.  Remote tests are ones that you can actually use a remote car control.  Events are the best hands down though.  For example, Sony Vaio Pc.  Other Virtual Places too.  Games that have smartphone capabilities.  iPhone baby that gets prevented.  Pranks: Ex. “Dexter” treatment KEY POINTS: Not information delivery, but involvement.  Should be user-directed where you explore to do things.  This will help connects the brand/ product to everyday life and personal experience. 

Integrated Marketing Communications

Planning and Context: Single ads not seen in isolation and create a bunch of ads.  Campaigns.  Other ads for product/ service.  Ads for your product in other media.  Ads for competitor product/service.  Integrated Marketing Communications (IMC).  All the above + non-advertising media and mentions of product.  New coverage, lawsuits, etc.  Campaigns.  Many separate ads but need continuity/ relationship.  Similarities in Ads.  Visual Similarity.  Similar appearance: Layout, typeface, and style of image.  Verbal Similarity:  Content: key points and same “voice.”  Aural Similarity: Music/song, Announcer’s voice, and sound design.  Attitudinal Similarity: Perspective: stance towards.  Brand personality

Integrated Marketing Communications: A strategic plan to connect all communication activities, Built around existing, compelling story/ situation.  Campaign criteria extended throughout all marketing communications.  They include public relations, events, packaging, direct response, digital, promotions, and sponsorships.

Gatorade Replay: KEY POINTS, Campaign continuity need to have 4 similarities.  IMC.  Media presence.