MARKETING MATERIAL
This chapter is very much the stuff of which the popular image of marketing is made. But, its contents are probably directly relevant to only a minority of students and managers. Even so, they should understand the main principles involved, since these are common to many forms of promotion, if not all the details. The objectives are therefore for students to:
1. Gain a sound understanding of the basic principles involved in all promotional activities
2. Obtain an insight into what advertising techniques are available
3. Appreciate how philosophies such as conviction marketing and coarse marketing do and do not make use of these techniques
4. (Optionally) understand advertising practice, in the context of using an advertising agency, and especially how creative and media departments work.
This is, in reality, a specialist chapter - in that its subject matter should apply only to a minority of your students. On the other hand, the principles it illustrates are more generally applicable, and it is what students, and the general public, think marketing is about. As a result it will probably demand more of your, and your students', time than ought to be strictly necessary - but that time can be well spent because it is an area where the 'flavour' of real-life marketing often emerges most strongly.
Indeed, a major problems of teaching this topic is that most of it is eminently practical, and there is very little true theory to provide a sound framework. Much of the work is genuinely creative, media scheduling almost as much as the traditional copy and art departments, which means it is hard to describe what is going on (let alone prescribe what should happen).
[Acetate 9.01]
This is perhaps the most visible manifestation of marketing; even if it is, at least on the large scale, the province of a minority of organizations. There is a well-developed range of theory which addresses how advertising communicates - and the various elements of this are explored in the chapter. They include how messages reach consumers, with models which include encoding as well as those based on diffusion.
These traditional theories are, however, challenged by the use of 'conviction marketing'; which is based as much on personal vision as marketing research - and follows rather different rules. Indeed, by default, the most prevalent practice is 'coarse marketing', which follows few, if any, of the guidelines.
Advertising practice is looked at in terms of both the overall promotional mix and, in some depth, media; with a review of the main media types.
The practice of advertising is, though, mainly described through the workings of advertising agencies; in terms of both creative and media departments.
Perhaps the greatest problem in addressing this chapter will be the high expectations of the students, which you will find difficult to meet. Indeed, the problem may well be that the only way to meet them is to take a populist approach; which would be to miss the point - and to teach lessons which are probably inappropriate.
Advertising has long been seen to be the glamorous end of marketing (right from the days when Hollywood made films about Madison Avenue - seemingly all starring Doris Day and Rock Hudson). Its image may have been eclipsed somewhat by the emergence of that of the city yuppies, but much of the glamour remains. At the same time everyone is an expert on adverts, especially on commercials. We spend a lot of our life seeing them.
To get over all the 'noise' that this history leaves, you will need to be very clear in your approach. It is partly for this reason, but also to put advertising in the simplest possible context, that the chapter opens with the model (from the first chapter) of a dialogue.
[Acetate 9.02]
This is a very widely quoted model of the communication process in general. It is very elaborate, which may confuse students, so it needs careful explanation. It is important, however, since it very clearly demonstrates the many stages, and complexity, which are involved - and this is something which often comes as a revelation to students who do not think of it in these terms (but ignore these processes along with many other 'natural' phenomena).
The consequent potential for the distortion of messages as they pass through this process should be explained.
activity
If you feel adventurous, you could play a game of 'Chinese Whispers' with the students (where a complex message is whispered to one and then progressively passed, by whisper, through the whole class - to see in what distorted form it eventually emerges).
The modification in the text then adds the 'noise' that constantly surrounds messages in whatever communication channel is used.
activity
This may be illustrated by repeating the game, but with three or four messages being transmitted - all while you continue the lecture (with lots of questions directed at the audience), where you may get some very interesting outcomes!
This noise model also illustrates the possible solutions; by increasing the number of transmissions or turning up the 'volume' with more impactful adverts.
This is a final caveat, where much of advertising is seen (not least by its practitioners) to be independent of the rest of marketing. In fact, advertising is just one element of the marketing mix, and must be seen in the context of (and integrated with) the rest.
In particular, the output of the positioning exercise (see chapter 4) should define what is needed of the advertising (what message, placed where) with only the creative treatment left to work on. Indeed, the most important element of the mix must almost inevitably be the product or service itself; any advertising which fails to relate to this will either be ineffective, or to raise expectations which cannot be fulfilled.
[Acetate 9.03]
Personal selling is much more important in this context, not least because there are so many more sales people. In the context of intangibility (which makes special demands on the advertising messages), word of mouth (including references) helps overcome the problem of trust - but this poses different objectives for the advertising. Consistency means that even one bad experience (or failure to live up to expectations) can destroy that trust.
It should be clear that all these points apply just as much to non-profit organizations (who are now often among the largest users of advertising).
The main reason for this section is to emphasize that advertising has many roles to play other than that traditionally assumed for it. In recent years corporate advertising has grown substantially. My own belief is that this reflects the unease with which senior management view the prospect of hostile takeovers; where a high share price (helped by corporate advertising) is a sound starting point. But a number of experts would argue that corporate advertising is also very effective in its own right - where the quality of the organization itself is often what counts. Certainly the organizations which have a strong corporate brand name (such as IBM, Ford, etc.) have the best of both worlds.
One lesson which needs to register is that, although separate campaigns (to retailers, to investors, to regulators, to the consumers etc.) will target key issues for each of the groups involved, they must be at least complementary overall. Too often, where they are produced by separate groups (consumer advertising by the main agency, trade by the sales department, financial and regulators by the PR agency), they convey totally different messages - which may even fight one another.
push versus pull [Acetate 9.04]
Where advertising (which is an indirect form of promotion) might be used, often a distribution chain (albeit a one-level, retailer or industrial distributor only, one) is also used. Where this occurs the vendor has the choice of approaching the promotional activity from two opposing extremes:
PUSH - in this case the vendor concentrates on selling to the channel, typically by using sales promotional techniques (especially those revolving around discount offers), on the assumption that the retailer (say) will then put the effort into selling it to the final consumer.
The term 'below the line' is often used, and is a hangover from the days when advertising agencies controlled most of the spend (which is no longer the case) and assigned sales promotional spend to below the line (which mattered to them!) on their accounts.
Push is a technique typically favoured by those without strong brands.
PULL - owners of strong, differentiated brands will typically, on the other hand, spend their money on advertising ('above the line') to 'pull' the product through the channel - by having the purchaser go into the supermarket and demand it.
In practice most suppliers choose a route between the two extremes.
activity
A useful exercise is get the students to look at the brand leaders in a consumer goods market compared with the also rans, and see how the strategies vary.
Before any decisions on advertising can be taken the supplier must first take the higher-level decision as to what promotional methods are to be used (which may, indeed, not even include advertising). Broadly speaking, there are three main categories to be considered;
[Acetate 9.05]
This is simply our way of illustrating the key elements of the promotional mix; and of their relationships to each other. It shows the two key dimensions - personal/impersonal contact (the vertical scale) and short/long term impact (horizontal scale). It is best taught on the basis of the examples shown in the student text.
[Acetates 9.06A - 9.06D]
This is the subject of chapter 11. It is included here for two reasons. The first is to put it into context for the many organizations which spend most of their promotional budgets in this area, and need to see how it fits into the picture (and by comparison how advertising does). The second is to continue the process of placing advertising itself in the wider context.
[Acetate 9.06]
The comment in the student text on 'selling services' is intended to reinforce the overall point.
The introductory comments from Farris and Buzzell are interesting:
[Acetate 9.07]
The first group is almost a textbook definition of what might be expected, as is the second (quality) group, but the third seems to show that some vendors skew the picture by using advertising in an attempt to buy share (especially for new products).
The most generally applicable model of advertising is:
[Acetate 9.08]
Most of these stages should by now be self-evident.
INFORMING (building awareness) - the first task is simply to make the audience aware of its existence, and what it is/does.
PERSUADING (creating favourable attitudes) - the task then is to provide sufficiently powerful reasons for them to switch to it.
REINFORCING (maintenance of loyalty) - but one most important stage (which is often forgotten - not least by creative departments in agencies) is to keep the customers once they have been recruited.
[Acetates 9.08A and 9.08B]
This a development of the 'Competitive Saw', described in chapter 5.
The key to this section is that this form of advertising is usually heavily integrated with other parts of the promotional mix - especially selling (where it may be used to generate sales leads). At the same time the media used may be very specialized.
This well-known model is more detailed than the previous one, because it is much more concerned with what messages are to be created at each stage in a campaign. Indeed, it addresses only the first two stages of the previous model (ignoring the 'reinforcement' needed after the initial sale).
[Acetate 9.09]
AWARENESS - this is the basic task. If consumers are not aware of the product or service all else fails.
It is also the area where the 'black magic' element of creativity is most evident. There are no rules here - except perhaps to be first with the new idea, and to be simple - as the Perrier ad clearly shows (to adopt Mies Van De Rohe's comment made about architecture, 'less is more').
activity
Ask the students to think through recent trends in advertising - they should find that much of it plagiarizes successful ideas by others.
But beware advertising agencies who are interested only in achieving the initial impact. David Ogilvy's comments are worth following (as they are on most aspects of advertising - he is one of the few people who can put into words the creative processes involved).
INTEREST - at this stage marketing research should come into its own (aided by the creative department's talents for turning the concepts which emerge from this into memorable advertising), for this tells the marketer what will interest the consumer (at least in terms of what will make them buy - and that is what is important in this process).
UNDERSTANDING - the creative talent emerges again at this stage (based on sound research), since it is immensely difficult to condense all you need to say, to explain fully what the product or service does for the consumer, into just fifty words. But it is possible - Perrier typically condensed it down to only two or three!
ATTITUDES - again, this persuasion process is down to the copywriter's art.
BUYING DECISION - what is not obvious, but is important, is that the actual decision to buy may be somewhat separated from the previous steps - the purchaser has to be in the supermarket rather than at home in front of the television (and it may be several months later when the need to buy eventually emerges), so the groundwork carried out by the earlier stages has to be very well executed.
activity
It might be a useful exercise to examine some suitable (press) advertisements to see how they fare at each of these stages (and to judge if that was what the vendor, and the advertising agency, intended).
Almost all the other models are also 'stepwise' models which see the consumer's view of the product progressively (and rationally) developing.
The most widely quoted, especially in selling, is AIDA:
[Acetate 9.10]
In the advertising industry itself the DAGMAR model is also widely quoted:
[Acetate 9.11]
A major criticism of such sequential, stepwise models is that they do not take into account many of the features seen in real life. In particular, by ignoring the complexities introduced by time and experience (where they do not even address the reinforcement needed to maintain loyalty after recruitment as consumers) they do not reflect the more gradual changes which it is claimed occur in practice.
The USP may come from a number of directions, and this section is again one which tries to analyse creativity (and once more it is David Ogilvy who makes the best job of this). The three main approaches are summarized by:
[Acetate 9.12]
This is a brief, but very important, section. Many agencies want to introduce new campaigns every year, and are not overly worried whether these complement earlier campaigns. Unfortunately, the consumer usually has a longer memory than the creative department - and any clash of messages will be counter-productive.
[Acetate 9.12A]
This develops the concept further, to look at it in terms (in theory at least) of the longer-term , 'financial' implications.
[Acetate 9.12B]
In an age of increasing consumer cynicism, it is important to take account of just how believable are the advertiser's claims; across a range of component elements, from the reputation of the company itself to the impact of the customer's peer group in the marketplace.
The stepwise models look only to direct effects. But some academics propose a two-step model, whereby the promotion (usually the advertising) works on a small group of consumers. These are the more adventurous 'opinion leaders' who try the product and then recommend it to others by word of mouth.
This has very different implications for advertisers, since it implies that only this small group of opinion leaders are productive targets. Unfortunately, these opinion leaders are not easy to target, or even to identify. It used to be assumed (in social science 'trickle down' theory) that they were in the upper classes, and use then trickled down to lesser mortals. But recent evidence shows that they are within the same class as the people they lead.
This very brief section emphasizes the importance of these informal communications links - and suggests the complexity of the process as a whole (complexity which is not allowed for in the popular models - and not in practice).
One very unexpected observation, which came from Leon Festinger, was 'cognitive dissonance' - that consumer interest reaches its peak after the purchase. This has interesting implications for advertisers - but, more important in the teaching context, it seems so strange that it is one thing students remember long after they have forgotten everything else.
This, as a final reprise, repeats the message of simplicity ('less is more').
This is an important section, on a topic which is rarely discussed. It is more general than promotion (it could be considered under strategy) but it is included here because its key features revolve around promotion (indeed this is almost the whole of conviction marketing).
Although superficially it seems to share many of the characteristics of traditional marketing it is in fact quite different. Thus, it usually focuses firmly on the consumer - but in terms of what the organization believes the consumer should want. It makes little use of marketing research (the hallmark of conventional marketing) to find out what the customer actually needs and wants. Instead it knows, with conviction (of an almost religious fervour), what the customer ought to want.
Most organizations of this type rapidly disappear into obscurity - because their offering in fact meets the needs of very few customers. Occasionally, however, one of them stumbles, almost by pure chance, upon an offering which is genuinely popular with a large number of customers.
activity
Ask your students to try to identify some examples - though this will be difficult, since most conviction marketers tend to ascribe their success to other things (only the most arrogant of individual leaders spell out the true factors at work).
Under these circumstances, though, conviction marketing can be a very powerful approach. Its greatest strength is indeed the fervour of the conviction, which is usually conveyed to the whole organization (offering the most potent form of inner marketing) and often to the consumers themselves (to the extent that their loyalty also becomes almost religious).
As the text says, the power of the campaign is thus dependent upon the power of the idea behind it.
The most successful conviction offerings therefore tend to incorporate:
[Acetate 9.13]
distinctive, and rich, identity
To justify the conviction the product or service should be unique; preferably rather idiosyncratic so that its adherents can revel in its eccentricities.
clarity, and simplicity, of the idea
To be communicable (which is the essence of conviction marketing) the idea needs to be very simple and clear ('less is more' applies here too).
believability of the 'communicators'
Conviction marketing is (almost always) associated with very charismatic leaders, and the obvious strength of their own conviction gives the lead for everyone else - conviction marketing is a very personal, and often personalized, technique.
strength of the opponents
The most important element in the organization's external environment is the lack of direct competitors to cloud the issues involved. Once established, it is likely that the competitors which then do emerge will be just as mesmerized - and will willingly commit themselves to being pale copies!
match to consumer needs
This, the traditional strength of marketing, is only an enabling factor - it matters only in the beginning, the product must meet some need - but thereafter it takes a back seat.
Conviction marketing can be divided into two broad approaches;
[Acetate 9.14]
PRODUCT BASED - in the simplest of these the conviction is in the product or service itself (Apple Computers, Fox Television Channel in the US). This offers a very tangible focus for the conviction, but it also means that the organisation can become outdated when its product does (and, without any commitment to marketing research, there is usually no alternative).
VALUE BASED - these organizations have the strongest conviction, which also lasts the longest since it is based upon strongly held philosophies about how they should do business (McDonald's and IBM - before it lost its convictions).
The essence of conviction marketing is the power of its persuasion. It is the sermon preached from the pulpit rather than the dialogue which is the model in the rest of the student text. That is why it is in this chapter. It is also why Philip Kotler called it 'propagandist' marketing.
As hinted above, conviction marketers spawn competitors who are content to imitate. Many organizations are quite content to be dedicated followers - they never pioneer, but they make some sort of living by following the pioneers. This is much less than IBM's 'constructive following', which is (despite its deliberately late entry) a proactive policy. Dedicated followers only react, and cannot expect to gain any form of leadership.
Much marketing, though, is conducted in ignorance of any theory! Thus, most 'marketing', even that in organizations which know the theory, is based upon the pragmatic application of simple commonsense rather than theory. As the text says:
Real-life marketing, therefore, revolves around the application of a great deal of commonsense, to handle a limited number of factors based on imperfect information and limited resources (complicated by uncertainty and tight timescales). Use of marketing techniques, in these circumstances, is inevitably partial and uneven.
and it goes further:
The successful marketer will, in this context, be the one who trains his or her 'gut-reaction' to simulate that of the average customer!
The point of this section, and the lesson to convey to the students, is that marketing is much more practical than most student texts allow for. As with any form of management, decisions have to be taken immediately in the field, not after lengthy discussion in the classroom. This is an important qualification on the whole marketing process - and one the students need to appreciate.
[Acetate 9.16]
COVERAGE/OTS
The basic theory of media selection revolves around these two measures, which to a certain extent are alternatives - to achieve high coverage you may have to sacrifice some frequency, and vice versa. In terms of theory even the students taking this optional section do not need to know much more than this.
In practice the spread of frequencies is a much better measure, but that is beyond the level needed here.
This is a listing, mainly for reference, of the main types, and is summarized by the acetates:
[Acetates 9.17 and 9.18]
This section takes a last look at the overall mix, and the factors that will tend to determine its final profile:
[Acetate 9.20]
activity
It is an interesting exercise to take some suitable examples of products or services and get the students to suggest a promotional mix for each - and draw out the main points on this list.
budget available - this factor is ignored by many marketing texts, but the amount of money you have available to spend will be a critical factor. If you have only a few thousand dollars you will never be in a position to use television; if you have a few million you simply couldn't spend it all in the trade press!
promotional message - this may be an important factor. Thus, if demonstration is needed it will be difficult to find anything other than television. If careful explanation is needed magazines may be most suitable.
complexity of product or service - if the product is very complex to sell then face-to-face selling may be unavoidable.
market size and location - small, specialized markets unsurprisingly indicate specialist press.
distribution - in the first stages the choice may be determined as much by which one (usually television) will impress the retailers where distribution is desperately sought.
life cycle - the introduction and growth phases often demand a more aggressive media coverage (television, say, rather the press) to build awareness rapidly.
competition - and, of course, you may have to match your competitors.
One of the most important aspects of advertising for most managers involved in marketing will not be the theory of advertising, no matter how important this may be, but will be how the advertising agency (with which they will deal, and to which they will typically delegate all advertising matters) works. This section examines how a typical mainline agency might work. It uses the example of the leading international agency, Leo Burnett (and the two campaigns of Perrier and Biactol), to illustrate this.
[Acetates 9.21 and 9.22]
In very general terms the three main functions are highlighted in these acetate 9.22. But there are also a number of subsidiary control functions listed which differ significantly from those found in normal organizations.
The work of turning the finished artwork into blocks ready to go to press, and commercials into finished copies ready for transmission, takes a significant amount of administrative effort - in the production department. As there are typically a large number of projects under way at any one time within the agency overall, the project control department (usually simply called control) is also very important.
The client sees most of this side of the agency (often over lunch - believed by many agencies to put their clients in a good mood for an afternoon meeting, but more usually just putting them to sleep). Apart from the obvious account contact role, which is very much a conventional (complex) sales role, the account team (usually account executive reporting to a director) manage the internal work on the account - a very important (but often overlooked) part of their role (which may well come into conflict with their sales role).
This is the main reason for the existence of agencies. Historically they evolved as the agents of the media (which is why they receive commission from the media, which often largely pays for their services), and added on creative services to attract clients; but now this add-on has taken them over.
The exact make-up of the creative team will vary from agency to agency, and even from creative team to creative team, but in general it will include:
[Acetate 9.23]
Traditionally the creative idea comes from the copywriter, and then is 'visualised' (turned into the visual ad) by the artist on the team. In practice these two tend to work so closely that it is often difficult to see who is contributing what elements. TV producers (who may be freelance), on the other hand, tend to limit themselves to the production of the commercials following the script already worked out.
The stages in working out the creative treatment are:
[Acetate 9.24]
The most important point for most students/managers to note is that the degree to which the client can influence matters (without incurring high cost penalties) rapidly decreases through this process; and this means that they should get involved at the earliest time possible (at roughs stage, which should in any case be presented to them to decide which of the alternative treatments is wanted). In effect no significant changes can be made at proof stage.
As with any marketing activity a plan is needed, but in this case it is particularly important so that the agency - which may not be party to all the internal discussions - knows what is expected of it. The three main questions it addresses should be:
The last two factors reflect the need to check (by research) that any advertising campaign does actually reach the objectives set for it.
The budget processes follow a pattern which should now be familiar - and will recur in later planning sections.
Needless to say, the correct approach should be the objective and task approach that will almost certainly never used in practice (because it is very difficult to establish these).
[Acetate 9.30]
hits