AMKT 454 ADVERTISING Exam 1 Review chapters 1 5

Hello everyone, welcome to Marketing 4.5 for Advertising and Promotion. This is a review for your exam 1. Yeah, review for exam 1, which covers chapters 1 through 5. Chapters 1 through chapter 5. Okay, all right, let's see what we have covered in the first five chapters. As I said, there will be 50 multiple choice questions and you have exactly 60 minutes to take and finish. And once you start, you cannot stop. You have to continue until it's finished. Okay, the test will open on the day of the exam in the wee hours and will stay open for 48 hours for two days and close at the end of the day on the second day. So, please arrange your time to take it. Okay, all right, in chapter 1, we talked about the advertising promotion and you know what is done traditionally. Media advertising, sales promotion were dominant forms of marketing communications. There is a shift from traditional media to digital formats. You're familiar with that. You have experienced that, witnessed that, and witnessed that. And in digital formats, there's online search, paid search, and mobile marketing. Advertising is more globally, more global, and more digital. And this is the AMA definition, marketing. Make sure you know that. It's going to be your test. And marketing, what marketing is about is the key, the central theme is about exchange. Exchange. Exchange something of value and there's a desire and ability to give up to the other party and there is a way to communicate with each other to facilitate change. And then if it's a change of value, it's a marketing of what is a value. What is value? It's the customer's perception of the benefits of the product or service against the cost of getting that. The benefits can be functional, experiential, or psychological. And the marketing, the four Ps of marketing, product, price, place, and promotion. Place, of course, is a channel of distribution. Channel distribution is the place, the four Ps. And the challenges in MC, proliferation of non-traditional media, changing consumer behaviors. And consumers are less responsive to advertising. They are ad blockers, ad blockers in digital advertising. And there is change continuing, marketing revolution, change of rules in marketing. So those are all challenges impacting IMC process. The role of brand branding. Make sure you know what is the brand identity. What is brand identity? What is brand equity? Brand identity, brand equity. And this one shows the promotional mix. I need you to know and understand and remember every one of them. Once you get out of here with a marketing degree and your new employer asks you, I have a product or service I want to promote or market. What are the tools you can tell me to use? You're the marketing student. You need to immediately come up with these tools. These are all the tools in the promotional mix. Advertising, direct marketing, digital, internet marketing, sales promotion, publicity, PR, and personal selling. These should be in your mind. Concentrate. And then advertising. Definition of advertising is a non-personal communication. Why is it non-personal? It involves mass media. Make sure you know that. And there are different classifications of consumer market advertising. National, retail advertising, or local advertising. We talked about that. And then there's a primary versus selective demand advertising versus primary demand versus selective demand. Primary demand for a general product class or the entire industry. Selective demand is the demand for a specific company's brand, one company. And also as to classify business markets, we have B2B advertising. Advertising towards professionals, accountants, lawyers, doctors, dentists. There's also trade advertising about channel members, trade. And direct marketing. Another tool for AMCs is direct marketing. If you know what is the database management, direct selling, direct marketing. Also direct response advertising. And then in digital internet marketing, interactive media, social media, mobile marketing. You should know all these concepts here clearly. And then the interactive nature of digital advertising. You can target specific customer segments and more precise. Sales promotion, sales promotions. What's sales promotions? Well, sales force, distributors, ultimate consumers. The goal in sales promotion is stimulate immediate sales. Immediate sales. Immediate sales, the goal of sales promotion. Advertising also can help sell products, right? But it's not for immediate sales, it's rather for long-term sales. Publicity. What is publicity? It's non-personal communication about the company, product, service. It's not paid for or run under identified sponsorship. Basically, the media, mass media, the media companies did that for you, did that on you. The advantage, highly credible, low cost or no cost. Disadvantage, not under your control. Oftentimes, if you're in the news, it's probably because you have some negative news, negative stories. And it could be very damaging. That's when you need to initiate your PR department to do some remedial activities to remedy the situation. Personal selling. What is personal selling? Person-to-person communication. Seller attempts to assist or persuade buyers to purchase, to act on something. And there's immediate and precise feedback. You can tailor your message, adapt message to a customer's specific needs. That's one huge advantage of personal selling. Touchpoint. The concept of touchpoint. Every opportunity a customer has to see or hear about your company or your brand, or have the encounter or experience with it, is a touchpoint. Touchpoint. You and the customer touches, right? Or your product touches this customer. It could be company-created touchpoint, could be intrinsic, or it could be unexpected or customer-initiated. This is the summary of the overall IMC audience contact tools. There's a good slide to remember. These are the contact tools you have to reach a target audience. You can use broadcast media, TV radio, print media, papers, magazines, PR publicity, digital media, digital, internet, social media, mobile. You can use direct marketing. You can use sales promotion. You can use product placement and branded entertainment. You can sponsor events. You can use word mouse, viral marketing. Use a point of purchase, POP, point of purchase, point of sales, POS, displays, packaging, personal selling, and out-of-home media. Also, remember for the different touchpoints, the control versus impact. When your ability to control the influence is low and the impact is actually high. This is unexpected, for example. From unexpected to customer-initiated, to intrinsic, to company-created, you can see the ability to control the influence going higher and higher, but the relative impact is getting lower and lower. There's an inverse relationship here. Also, what's a paid media? What's owned media? What's earned media? You have to understand that. Paid advertisement, boom, you can control. Earned, your customer or medium becomes the channel. Marketing plan. What is in a marketing plan? The different elements. You can do a group advertising plan. I want you to use this guideline. That's chapter one. In chapter two, we talk about the role of IMC in the marketing process. In the marketing process, you start with marketing strategy analysis. You choose your target market. You develop your marketing program of the four Ps. Then you promote to the final buyer and towards your ultimate target market. That's the marketing promotion process. The process, again, is identify the market with unfulfilled needs. Determine your segment. Select the target. Select segment. Position through marketing strategy. Segmentation. How do you divide marketing into different segments, smaller segments? You can do behavior segmentation. Their behavior. 80-20 rule. 20% buyers account for 80% of sales volume. Treat those 20% buyers nicely. Benefit segmentation. You can group consumers on the basis of the attributes sought in the product. What kind of attributes? What kind of benefit do they seek in the product? Also, as to how to select your target market, you can use undifferentiated marketing, differentiated marketing, and concentrated marketing. Undifferentiated, just one product service to the entire market. Differentiating several strategies of different segments. Concentrated, capture a large share of one market segment. So you know the concepts and the differences. Repositioning. Sometimes you have to reposition your product. And product decisions, product symbolism. What does the brand or product mean to consumers? What consumer experience in purchasing and using a product? Product planning. Branding. Brand awareness. Brand interest. Attitudes. If you develop attitude, you can have attitude towards brand, product, and brand. Build relationship with the customer and brand. Make them brand loyal. Brand loyalty. Two terms here. Brand identity. Name, logo, symbol, design, packaging, image. All part of the brand identity. Brand equity. Where's brand equity? Intangible assets of added value to the brand. Pricing decisions. Price decisions, what it is, what affects price, cost, demand, competition, value, quality, and pricing. Distribution channels. Marketing channels. Direct channels. And when do you use direct channels? When you're selling expensive and complex products, when you go with direct channels. Indirect channels. Network wholesalers or retailers. Push strategy versus a pull strategy. Push versus pull. Two strategies. In push, you persuade the resellers. Channels. You push it through the channel. You use trade advertising to do that. That's push. Pull strategy. Pull strategy. You target ultimate consumer. You create demand in ultimate consumer and encourage them to request a product from the retailer, from the channel. That's a pull strategy. You pull them through the channel. That's chapter two. In chapter three, we talk about how you organize your advertising. Talk about ad agencies and other communication organizations. These are the participants in the INC process. You have advertiser, agency, media organizations, marketing communication special organizations, and collateral services. The different roles they play. They're all part of participants in the integrated marketing communication process. Advertisers or clients. You have something. You have a product service. You have money. You spend money to pay for this. And you need to develop a plan, a marketing plan. Ad agency specializes in creation, production, and placement of the ad for you. They may facilitate the integrated marketing communications process, but they focus on advertising. Agency of record. What is agency of record? AOR. They are primarily responsible for the service. Media organizations. Specializing marketing services. Direct marketing, sales promotions, digital interactive, and PRs. Collateral services. Support functions used by the advertisers and agencies. In-house agencies. The agency is set up, owned, and operated by the advertising company. The company has the in-house agency. There are downsides or upsides of that. It may not be very objective, but it could be cost-effective, and you have good control. These are the comparisons of different organizational systems in advertising. You can have a centralized system, you have a decentralized system, or in-house agencies. You understand all this here. Ad agencies. What an ad agency is, what they're doing, what they're responsible for, and their super agencies. What are super agencies? Super agencies. There are full service agencies. They perform everything. There are account services. It's a link between agency and the clients. And what is account executive? Account executive. And in marketing services companies, there is a research department. Research account planners and media department just focus on the media. There's creative services. Creative services, that's the key central part of the ad agency. They respond for the creation and execution. They have copywriters come up with the ideas, conceived ideas of ads, headlines, subheads, body of copy. The arts department makes the responsible for the look. The production department could be printers, engravers, other suppliers. There's a traffic department coding all phases of production. Creative boutiques. What does a creative boutique do? It's a small ad agency that provides only creative services. That's what they're good at. They turn out very quick. Great idea, big ideas, marvelous ideas. Then there's some agencies, special services, media specialist companies specialize in buying and media buying. And agency compensation. How do you pay ad agencies? There's the fee arrangement, fixed fee method, or fee commission compensation. You should understand that. There's a cost plus systems, the cost plus margin, or incentive-based compensation. Compensated above their basic cost, you achieve or exceed results as measured by a matrix based on their performance. Why do agencies gain or lose clients? They lose clients because of many, many things. You should understand that. Losing clients. How do they gain clients? Referrals, PR, solicitations, reputations, etc. Direct marketing agencies. There's a sales promotion agency, sales promotions, and PR firms. And digital agencies. The newest one is digital agencies. Web design, development, apps, search engine optimization, banner ads, video, mobile, social media campaigns. That's what they do. That's chapter three. In chapter four, we talk about the perspective on consumer behavior. What is consumer behavior? The whole process, searching for product information, selecting, purchasing, using, evaluating, and disposing of the product. That's the whole part of the consumer behavior. How do consumers make decisions? There's a problem recognition, search for information, evaluated alternatives, make a purchase decision, post-purchase the student evaluation. There's a relevant internal psychological process that accompanies this decision-making process. Motivation corresponds to problem recognition. Information search corresponds to perception. Alternative evaluation, attitude formation. Purchase decision is the old integration to put everything together. Post-purchase evaluation, that's how we learn. We learn about the brand, the company, the product. Problem recognition. What are the sources of problem recognition? Then motivations. What is the motive? Factors that compel a consumer to take a particular action is our motive. Maslow's theory of human motivation. Low-level physiological and safety needs to higher-order needs. Psychoanalytics theory, motivation research, examining how consumers are motivated. The methods to probe the mind of consumers, what is the in-depth interviews, projective techniques, association tests, and focus groups. You've heard a lot more about focus groups. There are other methods that can be used to probe the mind of the consumer. Examine the consumer motivations. There are problems with the psychoanalytic theory and motivation research. There are criticisms on that. There are contributions of that though. Psychoanalytic theories, motivation research, information search, consumer decision-making process, search. Perception. What is perception? Perception depends on internal factors and the characteristic of a stimulus. Perception, interpreting information. As human beings, we have selective perception. Sometimes we do selective perception. Also, we could engage in selective exposure. We choose whether or not to make ourselves available to the information. Also, we choose to focus attention on certain things. We have selective attention, selective exposure, selective attention, selective comprehension, and selective retention. We have selective comprehension. Decide what we try to understand or interpret. And selective retention. We choose what to remember. You may not remember everything. Mnemonics. What is mnemonics? Symbols, rhymes, associations, images that help you with learning and memory. That's called mnemonics. Subliminal perception. What is subliminal perception? You perceive stimulus below the level of conscious awareness, below the level, the threshold for awareness. There's ethical implications here, of course. Advertisers do use subliminal perception. Alternative evaluation stage in consumer decision-making. We evaluate different alternatives, comparing different brands. What is the evoked set? The evoked set is a subset of all brands which consumers are aware when they need. It's a set that comes to mind, a brand that comes to mind. Also, top-of-mind awareness. Top-of-mind awareness of what advertisers try to do, to create top-of-mind awareness of my brand in the minds of consumers. Attitudes. What is attitude? In the consumer decision-making process, we form attitude. Attitude towards brand, the company, the product. Attitude is a learned predisposition to respond to an object. Remember, it's learned. You're not born with an attitude. You learn that. It's learned predisposition. It could be a negative or positive feelings. It also has behavior tendencies. Because we have the attitude, we tend to do certain things in a certain way, by certain things, not other things. Multi-attribute attitude model. Multi-attribute attitude model. I'm sure you know that. What are the salient beliefs? Attitudes change strategies. How do you change a consumer's attitude? How do you change somebody's attitude? You can change the strength of belief rating of a brand on an important attribute. You can change a consumer's perception of the importance of that attribute. You can add new attributes. You can change the perception of belief ratings of a competing brand. Then you can change their attitude. Purchase intention. What's purchase intention? Brand loyalty. What's brand loyalty? Brand equity, brand identity, and brand loyalty. I need you to be able to fluently use these concepts. Know the concepts and use concepts. Post-purchase evaluation. What is cognitive dissonance? What is cognitive dissonance? The psychological tension experienced after a difficult purchase choice. Sometimes advertisers need to reassure. Post-purchase communication is important to reinforce their wisdom of decision. Help them settle down. No regret. Behavior approach. Learning. How do consumers learn? Learning occurs as a result of responses to external stimuli in the environment. There is a psychoanalytical process. There's classical conditioning. Conditional stimulus elicits a conditioned response. And there's also the instrumental conditioning. Instrumental conditioning, or called operant conditioning. That's when learning occurs when an individual actively operates or acts on some aspect of the environment. We also learn something. It's called instrumental conditioning, or operant conditioning. Reinforcement. That's a reward or favorable consequences associated with a particular response. Reinforcement. In operant conditioning, you can do schedules for reinforcement. You can do continuous, partial, or intermittent ones. Make sure you understand what is shaping. Shaping is a reinforcement of successive acts that lead to desired behavior pattern or response. It's called shaping. Cognitive learning theory. That's along the mental process of underlying consumer decision making. Also, there are environmental influences on consumer behavior. Culture is one. Subculture and also social class. Upper, middle, lower social classes at broad levels in the United States. Reference group. What is a reference group? Groups whose presumed perspective or values are being used by individuals as a basis for judgment, opinion, or actions. The three different types of reference groups. Associative groups. The one you belong to. Aspirational groups. The one you want to go to, you want to join in the future. And dissociative groups that you want to leave, stay away from. Situational determinants. Make sure you remember them. Family decision process. Make sure you know what's the initiator in family. Initiator. Information provider. Influencer. Decision maker. Purchasing agent. And consumer. In chapter four. In chapter five, we talk more on the communication process itself. What is communication? Passing information along. Exchange ideas. There's a sender. There's a receiver. And whether you can succeed in communicating depends on many factors. Language is a barrier. This is the model of communication process. Source. Sender. To channel and message. To decoding. To receiver. There's a field of experience of the sender and field experience of the receiver. And there's a noise. There are always noises. And there is the feedback and response loop here. That's the model of communication. Source. Encoding. Do you know that? Messages. The channel. There is a non-personal channel for mass media. Mass media like broadcast, print. Broadcast and print mostly. And the then there's a personal channel. Non-personal and then personal. Personal channel. Word of mouth. You know what is the word of mouth? W-O-M. And what is buzz marketing? Buzz marketing. You want to create, generate positive buzz about your company or product. Viral marketing. Viral marketing. What is the seeding? Seeding, seeding, seeding. And the influencer marketing. What is influencer marketing? Social media influencers. Who are they? And what are they doing? And the receiver decoding. Receiver decoding process. Make sure you know what is the common ground. And what is the ageism? Ageism in the industry. Noise. Unplanned distortion. Unplanned distortion. Response and feedback. And target audience. What are the target audience? Analyze your receiver, right? Receiver of your persuasive communication. You need to have a target audience. Target audience from the biggest mass market. Everybody. And then to market segments. Smaller groups. Market niche. Even smaller. To groups. And then to individuals. That's the ultimate segment. Segment of one. Segment of one. One person. One consumer is your ultimate segmentation. Individual. There's a level of audience aggregation for mass market to segments, to niche, to individual or groups. How do consumers respond to advertising or persuasive messages? There are traditional response hierarchy models. IDA model. AIDA model. Innovation adoption model. Hierarchy of effect model. You understand all the differences here. All in your test. And the hierarchy of effect model. How the hierarchy corresponds to the stages in consumer behavior. Cognitive, affective to behavior. And there are alternative response hierarchies. Traditional models go through the basic stage. Three stages. Cognitive, affective, and behavioral. Also, in the alternative response hierarchies, there are two situations. Low involvement versus high involvement. Low involvement versus high involvement. Then we talk about social consumer decision journey. Social networking. Social marketing. Social media marketing. The consumers go through a decision journey somewhat different. So, that's consumer decision making. This is the journey the consumers go through in their social decision making using social media. They start to consider, evaluate, buy, experience, advocate, and bonding. And cognitive response approach to processing of communication. This is the exposure for advertisement to have product message thoughts, source-oriented thoughts, or execution thoughts. That's the cognitive responses. And then there's attitude formation stage. The attitudes towards the brand or towards advertisement. Then they make the decisions to have purchase intention. That's the cognitive response approach. As to the product message thoughts, remember we talked about the counter-arguments versus support arguments. What is the counter-arguments? That's the thoughts opposed to your position. Negative. Support arguments, the thoughts they have, the recipient has, is to affirm information. That's the positive thoughts. Counter-arguments versus support arguments. As to source-oriented thoughts, the thoughts about your source or spokesperson. It could be source derogations or source bolsters. It's a negative and one side, the other is a positive. And then there are execution thoughts. And also attitude toward the ad itself. And this, we talked about elaboration, likelihood, model of persuasion. Elaboration, likelihood, model of persuasion. This is very important. Make sure you understand the whole process. Starting with the persuasive communication and how consumers, are consumers motivated to process it? Yes or no? And do they have the ability to process it? Yes or no? And the nature of their cognitive processing. Do they come up with the unfavorable thoughts or unfavorable thoughts? And then how do their cognitive structure change? Are new combinations adopted or put in their memory? Or are different responses made more salient than previously? So the end result is either enduring positive attitude change, they're persuaded, or enduring negative attitude change, they're not persuaded. So this is an elaboration, likelihood, model of persuasion, ELM. Then we talk about in ELM, elaboration, likelihood, model, we talk about the two routes of attitude change. How do they change? We change our attitude either through a central route to persuasion or to peripheral route to persuasion. Advertisers make use of that, both of them, in their advertisement design. What is the central route to persuasion? That's when our ability and motivation to process is high, and they pay attention to the message content, central route. When our ability and motivation to process a message, to understand the advertising message is low, we focus on the peripheral cue. Peripheral cue. That's called peripheral route of persuasion. So they don't focus on the message itself, but on other things. Maybe a beautiful person on the ad. Peripheral cue. So the implication, also consumer's level of involvement is important. Are we highly involved in this ad, or are we low involvement in the ad? High involvement, the ad should contain strong arguments that are difficult to refute. Low involvement, the peripheral cues are more important. So this ties to the route of route to persuasion, central or peripheral. So that's ELM model. And finally, that's how advertising works. How the framework, how advertising works. Start from advertising input, message, the content, and scheduling your media, and repeat your media advertising. And then we have to go, the message, the input has to go through filters. Are they motivated? Do they have ability? Is this low involvement or high involvement product? There's a lot of filters, and they reach the consumer. They started their cognitive process, and maybe affect change. They have some experience about it. And then these two consumer behavior, the choice of brands or the consumer user product. And then after that, they develop a loyalty or a habit of using that or not. So this is a framework of understanding how advertising works. So that's all I have for these first five chapters. There will be 50, again, there will be 50 multiple choice questions for you to take in your first test. Okay. I'm going to say good luck. Okay. Good luck. You all do well in the first test. Bye.