Ad Analysis (650 words)

Business Finance



Question Description


Read/review the following resources for this activity:

  • Arens & Schaefer: Chapters 4, 5
  • Minimum of 1 reliable resource

Shock and sex appeal are often used to capture the viewers' attention. Marketing executives use these strategies to gain attention, but also differentiate their product. These strategies may cause ethical or civic dilemmas.

Activity Instructions
Select an ad (magazine, TV, radio, etc) that you either LOVE or HATE and has influenced your brand loyalty. Share the ad and analyze the impact it has on potential customers. Does the company sacrifice ethical standards and exploit women to sell their product? Support your ideas with evidence from the readings and other academic resources.

Writing Requirements (APA format)

  • 2-3 pages (approx. 300 words per page), not including title page or references page
  • 1-inch margins
  • Double spaced
  • 12-point Times New Roman font
  • Title page with topic and name of student
  • References page (minimum of 1 resources)

Unformatted Attachment Preview

Chapter Four Segmentation, Targeting, and the Marketing Mix ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Learning Objectives • Learning Objective 4.1: Describe the role of advertising in marketing. • Learning Objective 4.2: Illustrate the methods advertisers use to segment and aggregate markets. • Learning Objective 4.3: Explain how defining a target market enhances marketing strategy. • Learning Objective 4.4: List the elements of the marketing mix and the role advertising plays in each. ©McGraw-Hill Education. Introduction Advertising success is not just about what you say, but to whom you say it. Marketers select specific markets that offer the greatest potential and fine-tune the mix of marketing elements to match the needs and wants of the target market. ©McGraw-Hill Education. Customer Needs and Product Utility Utility: product’s ability to satisfy both functional needs and symbolic or psychological wants Five types of functional utility: • Form: Provides a tangible good • Task: Performs a task • Possession: Available for purchase • Time: Available when wanted • Place: Available where wanted Psychic utility: offers symbolic or psychological need satisfaction, such as status or sex appeal ©McGraw-Hill Education. Exchanges: The Purpose of Marketing and Advertising Exchange: trading one thing for another thing of value Exchanges are facilitated by marketing. Satisfaction leads to: • higher repurchases • positive word of mouth Satisfaction is reinforced by advertising. ©McGraw-Hill Education. The Market Segmentation Process Steps involved in market segmentation: • Identifying groups with shared needs and characteristics • Aggregating (combining) the groups into larger segments through a marketing mix ©McGraw-Hill Education. Target Market and Target Audience Target market: market segment or group within the market segment toward which all marketing activities will be directed Target audience: specific group of individuals to whom the advertising message is directed ©McGraw-Hill Education. Types of Target Markets (1 of 2) Consumer markets • Target of most advertising • Usually sponsored by producers • Consumers: people who buy the product for their own or someone else’s personal use ©McGraw-Hill Education. Types of Target Markets (2 of 2) Business Markets Business advertising: directed at people who buy goods and services for resale, for use in a business or organization, or for manufacturing other products Three specialized advertising types: • Trade: targets resellers to promote distribution • Professional: targets professionals in a given industry • Agricultural: targets farmers and those employed in agribusiness ©McGraw-Hill Education. Market Segmentation Grouping consumers based on shared characteristics to tailor messages to their needs and wants Categories of market segmentation: • Behavioristic • Geographic • Demographic • Psychographic ©McGraw-Hill Education. Behavioristic Segmentation (1 of 3) Segmenting consumers based on the benefits being sought The most common variables are user status, usage rate, purchase occasion, and benefits sought. ©McGraw-Hill Education. Behavioristic Segmentation (2 of 3) User status: Measured by categorizing consumers based on the varying degrees of loyalty to certain brands and products • Sole • Semisole • Discount • Aware nontriers • Trial/rejectors • Repertoire users ©McGraw-Hill Education. Behavioristic Segmentation (3 of 3) Usage rate: the extent to which consumers use a product (light, medium, heavy) • Volume segmentation: defining consumers as light, medium, or heavy users of products Purchase occasion: segmenting markets on the basis of when consumers buy and use a good or service • Affected by frequency of need, fads, seasons Benefits sought: • Benefits: product attributes offered to customers, such as high quality, low price, symbolism • Benefit segmentation: Segments consumers based on the benefits being sought ©McGraw-Hill Education. Geographic Segmentation Segmenting markets by geographic regions based on the shared characteristics, needs, or wants of people within a region ©McGraw-Hill Education. Demographic Segmentation Based on a population’s statistical characteristics with quantifiable factors including: • Gender • Age • Ethnicity • Occupation • Income ©McGraw-Hill Education. Geodemographic Segmentation Combining demographics with geographic segmentation to select target markets in advertising Underlying principles • People in the same neighborhood tend to be demographically similar. • Geographically separated neighborhoods can be placed in the same category based on similar population characteristics. ©McGraw-Hill Education. Psychographic Segmentation (1 of 2) Defining consumer markets based on psychological variables including: • Values • Attitudes • Personality • Lifestyle Psychographics: Grouping of consumers into market segments on the basis of psychological makeup ©McGraw-Hill Education. Psychographic Segmentation (2 of 2) The Values and Lifestyles (VALS) classification system groups consumers based on: • Primary motivation: the pattern of attitudes and activities that help people reinforce, sustain, or modify their social and self-image • Resources: the range of psychological, physical, demographic, and material capacities that consumers can draw upon, including education, income, selfconfidence, health, and eagerness to buy ©McGraw-Hill Education. Limitations of Consumer Segmentation Methods Oversimplify consumer personalities and purchase behavior ©McGraw-Hill Education. Overly complicate the process of identification Segmenting Business and Government Markets (1 of 3) Business markets: organizations that buy natural resources, component products, and services that they resell, use to conduct their business, or use to manufacture another product Special characteristics: • Employ professional buyers and use systematic purchasing procedures • Concentrated geographically • Small number of buyers ©McGraw-Hill Education. Segmenting Business and Government Markets (2 of 3) Business purchasing procedures • More rigid and complex than the consumer purchase process • Buyers willing to pay more for favorite brands • Slow—making a sale can take weeks to years Purchase decisions depend on: • Price and quality • Product demonstrations • Delivery time • Terms of sale and dependability ©McGraw-Hill Education. Segmenting Business and Government Markets (3 of 3) North American Industry Classification System (NAICS) codes: method used by the U.S. Department of Congress to classify all businesses based on broad industry groups, subgroups, and detailed groups of firms in smaller businesses Market concentration: • Markets can be focused in specific regions or areas. • Fewer buyers in business markets ©McGraw-Hill Education. Aggregating Market Segments Involves: 1. Selecting groups that have a mutual interest in the product’s utility 2. Reorganizing and aggregating the groups into larger market segments based on their potential for sales and profit Primary demand trend: projection of future consumer demand for a product category based on past demand and other market influences ©McGraw-Hill Education. Target Marketing Process (1 of 2) Process by which an advertiser focuses its marketing efforts on a target market The first step is assessing which of the newly created segments offer the greatest profit potential and which can be most successfully penetrated. Target market: the market segment or group within the market segment toward which all marketing activities will be directed ©McGraw-Hill Education. Target Marketing Process (2 of 2) The second step is matching products to markets. Product concept: consumer’s perception of a product or service as a “bundle” of utilitarian and symbolic values that satisfy functional, social, psychological, and other wants and needs Marketing mix: four elements that every company has the option of adding, subtracting, or modifying in order to create a desired marketing strategy • Four Ps: product, price, place, and promotion ©McGraw-Hill Education. Product Element The product element is the most important element of the marketing mix: the good or service being offered and the values associated with it—including the way a product is designed and classified, positioned, branded, and packaged. Major activities include: • Design • Classification • Positioning • Branding • Packaging ©McGraw-Hill Education. Exhibit 4.10 - A Product’s Life Cycle ©McGraw-Hill Education. Jump to Appendix 1 long image description Product Life Cycle (1 of 4) Progressive stages in the life of a product—including introduction, growth, maturity, and decline—that affect the way a product is marketed and advertised Early adopters: prospects most willing to try new products and services Primary demand: consumer demand for a whole product category Introductory phase: initial phase of the product life cycle when a new product is introduced, costs are highest, and profits are lowest Pull strategy: marketing, advertising, and sales promotion activities aimed at inducing trial purchase and repurpose by consumers Push strategy: marketing, advertising, and sales promotion activities aimed at getting products into the dealer pipeline and accelerating sales by offering inducements to dealers, retailers, and salespeople ©McGraw-Hill Education. Product Life Cycle (2 of 4) Growth stage: period in a product life cycle marked by market expansion as more and more customers make their first purchases while others are already making their second and third purchases • This stage is characterized by rapid market expansion. • Competitors jump into the market, but the company with the early leadership position reaps the biggest rewards. • Advertising expenditures decrease as a percentage of total sales. • Individual firms realize first substantial profits. ©McGraw-Hill Education. Product Life Cycle (3 of 4) Maturity stage: point in product life cycle when the market has become saturated with products, the number of new customers has dwindled, and competition is most intense • Profits diminish. • Selective demand: consumer demand for the particular advantages of one brand over another • Sales increase at expense of competitors. • Market segmentation, product positioning, and price promotion become more important. ©McGraw-Hill Education. Product Life Cycle (4 of 4) Decline stage: stage in the product life cycle when sales begin to decline due to obsolescence, new technology, or changing consumer tastes • Cease promotions • Phase out the product ©McGraw-Hill Education. Product Classifications By rate of By market consumption and tangibility By purchasing habits By physical description Consumer goods Durable goods Convenience goods Packaged goods Industrial goods Nondurable goods Shopping goods Hard goods Services Specialty goods Soft goods Unsought goods Services ©McGraw-Hill Education. Product Positioning and Differentiation (1 of 2) Position: the way in which a product is ranked in a consumer’s mind by the benefits it offers, the way it is classified or differentiated from the competition, or by its relationship to certain target markets Position helps consumers remember the brand and what it stands for. Products may be positioned in different ways. ©McGraw-Hill Education. Product Positioning and Differentiation (2 of 2) Differentiation: calling attention to product differences that appeal to the preferences of distinct target markets Perceptible differences: differences between products that are visibly apparent to consumers Hidden differences: imperceptible but existing differences that may affect the desirability of a product Induced differences: distinguishing characteristics of products effected through unique branding, packaging, distribution, merchandising, and advertising ©McGraw-Hill Education. Branding Marketing function that identifies products and their source and differentiates them from all other products Brand: combination of name, words, symbols or designs that identifies the product and its source and distinguishes it from competing products—the fundamental differentiating device for all products ©McGraw-Hill Education. Types of Brands Individual brand: different brand name for each product a company makes Family brand: group of products that can help each other under one umbrella name. National brands: product brands marketed in several regions of the country Private label: products sold to distributors or dealers to be resold as their own brands at lower prices Licensed brands: brand names that companies can buy the right to use ©McGraw-Hill Education. Role of Branding • Offers recognition and identification of the product • Establishes standards of quality, taste, size, or satisfaction • Offers differentiation • Builds brand loyalty and brand equity: the totality of what consumers, distributors, dealers, and competitors feel and think about a brand over an extended period of time; the value of the brand’s capital ©McGraw-Hill Education. Product Packaging Marketer’s last chance to communicate and promote Four considerations: 1. Identification 2. Containment, protection, and convenience 3. Consumer appeal 4. Economy Copy points: copywriting themes in a product’s advertising ©McGraw-Hill Education. Advertising and the Price Element Price element: in the marketing mix, the amount charged for the good or service—including deals, discounts, terms, warranties, and so on Key factors influencing price: • Market demand for the product • Costs of production and distribution • Competition and corporate objectives • Psychological pricing: influencing a consumer’s behavior or perceptions using price ©McGraw-Hill Education. Direct and Indirect Distribution Place, or distribution, element: how and where customers will buy a company’s product Direct distribution: selling directly to consumers without retailers • Advertising burden carried by manufacturer • Network marketing: individuals act as independent distributors for a manufacturer or private-label marketer Indirect distribution: selling to customers through a distribution channel that includes a network of resellers • Resellers: businesses that buy products from manufacturers or wholesalers and then resell the merchandise to consumers or other buyers • Distribution channel: network of all the firms and individuals that take title, or assist in taking title, to the product as it moves from the producer to the consumer ©McGraw-Hill Education. Intensive, Selective, and Exclusive Distribution Intensive distribution: making goods available at every possible location so that consumers can buy with a minimum of effort Selective distribution: limiting the number of outlets or dealers to reduce distribution and promotion costs • Cooperative (co-op) advertising: sharing of advertising costs by the manufacturer and the distributor or retailer Exclusive distribution: limiting the number of wholesalers or retailers who can sell a product in order to gain a prestige image, maintain premium prices, or protect other dealers in a geographic area ©McGraw-Hill Education. Vertical Marketing System (VMS) A system in which the main members of a distribution channel— producer, wholesaler, retailer—work together as a cooperative group Corporate: one company owns multiple levels. Administered: one member is dominant and calls the shots. Contractual: formal agreement between various levels • Retail cooperative: group of independent retailers who establish a central buying organization (wholesaler) to acquire discounts from manufacturers and gain economies from joint advertising and promotion efforts • Franchising: retail dealers pay a fee to operate under guidelines and direction of parent company or manufacturer ©McGraw-Hill Education. The Promotion (Communication) Element Includes all market-related communications between the seller and buyer Marketing communications: various efforts and tools companies use to communicate with customers and prospects Major marketing tools include: • Advertising • Personal selling • Sales promotion • Direct marketing • Public relations © McGraw-Hill Education Factors Important for Advertising Success • Strong primary demand trend • Potential for significant product differentiation • Hidden qualities important to consumers • Opportunity to use strong emotional appeals • Substantial funds available to support advertising ©McGraw-Hill Education. Advertising Chapter 4 The End ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Chapter Five Communication and Consumer Behavior ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Learning Objectives • Learning Objective 5.1: Explain how advertising differs from the basic communication process. • Learning Objective 5.2: Outline the consumer perception process and explain why advertising people say “perception is everything.” • Learning Objective 5.3: Explain how product involvement influences the decision-making process and the advertising approach. • Learning Objective 5.4: Describe the fundamental motives behind consumer purchases. • Learning Objective 5.5: Discuss the various influences on consumer behavior. ©McGraw-Hill Education. Exhibit 5.1 - The Human Communication Process ©McGraw-Hill Education. Applying the Communication Process to Advertising (1 of 3) Source: party that formulates an idea, encodes it in a message, and sends it via some channel to the receiver Message: the idea formulated and encoded by the source and sent to the receiver • Encoded: translating an idea or a message into words, symbols, and illustrations. • Semiotics: study of how humans use words, gestures, signs, and symbols to convey feelings, thoughts, ideas, and ideologies ©McGraw-Hill Education. Applying the Communication Process to Advertising (2 of 3) Channel: means by which the encoded message is sent to the receiver • Personal channels: involve direct contact between the parties • Nonpersonal channels: do not involve interpersonal contact between the sender and the receiver Receiver: consumer who receives the advertiser’s message • Decode: to interpret a message by the receiver • Noise: sender’s advertising message competing with other commercial and noncommercial messages ©McGraw-Hill Education. Applying the Communication Process to Advertising (3 of 3) Feedback: message that acknowledges or responds to an initial message Interactive media: permit consumers to give instantaneous, real-time feedback on the same channel used by the sender ©McGraw-Hill Education. Consumer Behavior Activities, actions, and influences of people who purchase and use goods to satisfy particular needs and wants ©McGraw-Hill Education. Exhibit 5.3 - The Basic Consumer Decision Process ©McGraw-Hill Education. Jump to Appendix 1 long image description Consumer Decision Process (1 of 2) Series of steps a consumer goes through in deciding to make a purchase Personal processes: three internal human operations— perception, learning and persuasion, ...
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