By Arshad Husain
Advertising is an integral but relatively small part of the marketing plan. Traditionally, businesses plan their marketing initiatives by examining the marketing mix, a blend of activities such as designing the product and its package, pricing the product, distributing the product so that it is accessible to customers, and promoting or communicating about the product.
Types of Markets
The word market originally meant the place where the exchange between seller and buyer took place. Today we speak of a market as either a region where goods are sold and bought or a particular type of buyer.
When marketing strategists speak of markets, they generally refer to groups of people or organizations. The four main types of markets are:
(2) Business-to-business (industrial)
We can further divide each of these markets by size or geography, such as local, regional, national, or international.
Consumer Markets. Consumer markets consist of people who buy products and services for personal or household use.
Business-to-Business (Industrial) Markets. Business-to-business markets consist of companies that buy products or services to use in their own businesses or in making other products.
Institutional Markets.Instructional markets include a wide variety of profit and nonprofit organizations – such as hospitals, government agencies, and schools – that provide good and services for the benefit of society. Universities, for example, are in the market for furniture, cleaning suppliers, computers, office supplies groceries, audiovisual material, and paper towels and toilet paper, to name a few. Such ads are very similar to business-to-business ads in that they are heavy on copy and light on visuals.
Reseller Markets. The reseller market is made up of what we call intermediaries. Resellers are wholesaler, retailers, and distributors who buy finished or semi finished products and resell them for a profit.
Approaching the Market
Marketing planners need to develop a strategy for approaching the market. The figure below shows that the marketer’s first step is to assess the needs of the market.
Undifferentiated and Segmentation Approaches When planners treat the market as homogenous, they purposely ignore differences in the market and use one marketing strategy that will appeal to as many people as possible. This market strategy is known as an undifferentiated or market aggregation strategy.
Product Differentiation. Regardless of whether a marketer employs an undifferentiated or a segmentation approach, there remains a need to distinguish a brand from that of competitors.
Positioning. Determining what place a product should occupy in a given market is called positioning. It means a marketer strategically combines the product’s tangible and intangible attributes in order to create a relative picture of the product.
Marketers can position a product, service, or idea:
- By application
- By product user
- By product class
- By attributes
- By price
- By its ability to surpass the competition
THE MARKETING CONCEPT AND RELATIONSHIP MARKETING
Another element that underlies how marketers approach the market is how they view the role of the customer. Historically, especially when products were scarce because of limited distribution, manufacturers made products and customers were glad to be able to buy them.
THE FOUR TOOLS OF MARKETING
Marketers use the four main elements of the marketing mix to achieve their objectives. Communication, which includes advertising, is one of these marketing elements. As indicated, it is just one part of marketing, no more important than product, price, or distribution.
Product: Includes product design and development, branding, and packaging.
Distribution: Includes the channels used in moving and storing the product from the manufacturer to the buyer.
Price: Includes the product at which the product or service is offered for sale and establishes the level of profitability.
Communication: Includes personal selling, advertising, public relations, sales promotion, direct marketing, point-of-sale, and packaging.
Product in Relationship to Advertising
The product is both object of the advertising and the reason for marketing. Marketing begins by asking a set of questions about the product offering. These questions must always be asked from the consumer’s perspective.
Branding. What product name comes to mind when you picture a copy machine? Do you think of a product name when you think of salt? When you think of facial tissues, what product name occurs to you?
Packaging. The package is another marketing tool. In today’s marketing environment, a package is much more than a container; it is the message. When the package works in unison with consumer advertising it catches attention, presents a familiar brand images, and communicates critical information. Many consumers make purchase decisions on the basis of how the product looks on the shelf.
Creating Packages That Communicate
To make packages that grab attention and send a message, consider these suggestions:
– Use a design that underscores the brand image and sends advertising messages that correspond with mass-media messages.
– Make the package as functional as possible.
– Make sure the product package and the advertising dovetail.
– Make the package colorful and distinctive.
Channel of Distribution
It does little good to manufacture of fantastic product that will meet customers’ needs unless you have a mechanism for delivering and servicing the product and receiving payment. The people and institutions that move products from producers to customers make up the channel of distribution.
Indirect marketing means the product is disturbed through a channel structure that includes one or more resellers.
Cooperative advertising allowances, the produces and resellers share the cost placing the advertisement.
pull strategy directs marketing efforts at the consumer and attempts to pull the product through the channel.
A push strategy directs marketing efforts at resellers, and success depends on the ability of these intermediaries to market the product, which they often do with advertising.
In contracts, push strategy directs marketing efforts at resellers, and success depends on the ability of these intermediaries to market the product, which they often do with advertising.
With exclusive distribution, only one distributor is allowed to sell the brand in a particular market.
Selective distribution expands the number of outlets but restricts participation to outlets that prove most profitable to the manufacturer.
Intensive distribution means placing the product in every possible outlet (even vending machines) to attain total market coverage.
The price a seller sets for a product is based only on the cost of making and marketing the product but also on the seller’s expected profit level. Certain psychological factors also affect the price.
Psychological pricing strategies try to manipulate the customer’s judgment.
Advertising, personal selling, sales promotion, public relations, direct marketing point-of-sale and packaging are the main elements marketers use to reach target markets. These techniques are collectively called marketing communication. It is the fourth element in the marketing mix, and consists of persuasive communication designed to send marketing related messages to a target audience.
Advertising. Advertising differs from the other marketing communication elements in several ways.
Personal Selling Personal selling is face-to-face contact between the marketer and a prospective customer. Its intent is to create immediate and repeat sales. The different types of personal selling include sales calls at the place of business by field representative (field sales), assistance at an outlet by a sales clerk (retail selling), and calls by a representative who goes to consumers’ homes (door-to-door selling).
Sales Promotion Sales promotion aims to generate immediate sales for a limited period of time. Simply stated, sales promotion is an extra incentive to buy now- or soon. Price discounts, coupons, product sampling, contests, sweepstakes, and rebates are all sales promotions.
Public Relations Public relations seeks to enhance the company’s image, and includes publicity (placing stories about the company or product in the media), news conferences, company-sponsored events, open houses, plant tours, and donation.
Direct Marketing As we said earlier, direct marketing is a communication tool that allows the customer to purchase the product directly, without going through a reseller Direct marketing is a rapidly changing field and its definition is evolving. However, it does have five basic characteristics: (1) It is interactive, meaning the marketer and customer share information in real time: (2) It provides a mechanism for a customer to respond; (3) it can occur anywhere; (4) it provides a measurable response from the customer, and (5) it requires a database of consumer information.
Point-of-Sale /Packaging Point-of-sale (POS) and packaging attempt to drive sales at he place where the product is sold. The message-delivery capabilities of the package come into play here. POS materials include sign, posters, display, and other materials designed to influence buying decisions at the point-of-purchase.
AD AGENCIES: COMBINING MARKETING AND ADVERTISING
Advertising is the most important tool in the marketing communication mix.
Why Hire an Agency?
Many companies hire agencies to plan and execute their advertising efforts. Why should a company sign a contact with an advertising agency? Hiring agency has three main benefits: It provides objective advice, experienced staffing, and tailored management of all advertising activities and personnel.
Why Not Hire an Agency?
Despite the many advantages agencies offer their clients, there are instances when firms are better off doing the work themselves. Some firms have an in-house agency or an advertising department.
Advantages of in house agencies are: (1) They allow individual to become technical experts on the product being advertised, (2) the in-house agency works only for the client and gives priority to the client’s needs, and (3) minimum staffing is required because all the work in focused on one client.
Types of Agencies
Changes in the business environment prompt changes in the types of ad agencies that flourish. Next, we take a look at the different types of agencies to demonstrate the variety that exists in the advertising agency business today.
Full – Service Agencies. In advertising, a full-service agency is one that includes the four major staff functions – account management, creative services, media planning the buying, and account planning, which is also known as research.
Specialized Agencies. Many agencies do not follow the traditional full-service agency approach. They either specialize in certain functions (writing copy, producing art, or media buying), audiences (minority, youth), or industries (health care, computers, agriculture, business-to-business communication). In addition, there are specialized agencies in all marketing communication areas, such as direct marketing, sales promotion, public relations, events and sports marketing, and packaging and point-of-sale.
Industry-Focused Agencies. Numerous agencies concentrate on certain fields or industries, such as agriculture, medicine and pharmaceuticals, health care, and computers. These agencies handle a variety of clients from within that field, so they are able to apply their particular expertise in those areas, making them essentially full service.
Minoritry Agencies. Agencies that focus on an ethnic group, or minority agencies, grew substantially in the 1980s as marketers realized that Africans and Hispanics, the two largest minorities, had preference and buying patterns that differed from those of the general market. These agencies are organized in much the same way as full-service agencies, but they specialize in reaching and communicating with their particular markets.
Creating Boutiques. Creative boutiques are ad agencies usually small (two or three people to a dozen or more), that concentrate entirely on preparing the creative execution of client marketing communications. The focus of the organization is entirely on the idea, the creative product.
Media-Buying Services Media buying services specialize in the purchase of media for clients. They are high demand for many reasons, but three reasons standout. First, media has become more complex as the number of choices grows think of the proliferation of new cable channels, magazines, and radio stations, Second, the cost of maintaining a competent media department has escalated. Third, media-buying services often buy media at the low cost because they can group several clients’ purchases together to develop substantial buying power.