How To Advertise: Analysis of Contemporary Advertising (part 1)

Implementing Marketing Strategy

by

Charles Lamson

Once an organization determines the target market (a particular group of consumers at which a product or service is aimed) for its products, it designs a strategy to serve that market profitability. Marketing strategy is the particular blend, or mix, of strategic elements over which the marketer has control: product concept, pricing, distribution and communication. For ease of memory, marketers often refer to these elements as the 4Ps: product, price, place and promotion. Each of these elements also influences the type of advertising used.

Product: Categories of Goods and Services

For example, for mass-merchandised grocery brands such as Altoids or Tide laundry detergent, companies use a type of advertising called consumer packaged-goods advertising. A BMW/Mini dealer's service center or a tax preparation firm is likely to use service advertising. Manufacturers of scientific and technical products use high-tech advertising. In other words, for virtually every product category, specialists in that area use a specific type of advertising.

Price: Strategies for Pricing

A firm's pricing strategy also affects advertising style. Companies that do not compete on price typically use image advertising to create a particular perception of the company or personality for the brand. Or they may use regular price-line advertising, in which the price of a product is not shown, or at least not highlighted, and the advertising may be aimed at justifying the nondiscounted price. Companies that are more price-competitive may regularly use sale advertising, clearance advertising, or loss-leader advertising. Sale and clearance advertising promotes goods that have been discounted in order to accelerate sales or move seasonal items out of the store. Loss-leader advertising promotes selected goods that have been discounted drastically to create an impression of storewide low prices and thereby increase custom traffic in the store.

Place: The Distribution Element

The third element of marketing strategy, distribution, also affects the type of advertising used. Global marketers such as Coca-Cola, Toyota, and Kodak may use global advertising, in which messages are consistent in ads placed around the world. Other firms may promote their products in foreign markets with international advertising, which may contain different messages and even be created locally in each geographic market.

Companies that market in several regions of the United States and use the major mass media are called national advertisers, and their promotion is called national advertising. Some companies sell only in one part of the country or in two or three states. They use regional advertising, placing their ads in local media or regional editions of national media. Finally, businesses and retailers that sell within one small area typically use local advertising placed in local media or direct mail.

Promotion: The Communication Element

The final element of marketing strategy is communication. Advertising is just one of the tools in the marketing communications tool kit. Marketing communications (often called marcom) typically refers to all the planned messages that companies and organizations create and disseminate to support their marketing objectives and strategies. In addition to advertising, major marketing communication tools include personal selling, sales promotion, public relations activities, and collateral. The extent to which an organization uses any or all of these tools again depends on its marketing needs, objectives and strategy.

Each marketing communication tool offers particular opportunities and benefits to the marketer. Personal selling, for example, in which salespeople deal directly with customers either face-to-face or via telemarketing, offers the flexibility possible only through human interaction. Personal selling is thus an excellent tool for conveying information, for giving demonstrations and particularly for consummating the scale (or exchange) especially on high-ticket items such as cars, real estate and furniture as well as most business to business products. The drawback to personal selling is its high cost, so companies that emphasize personal selling in their marketing mix often spend a lower percentage of sales on advertising than other firms.

As a marketing communications tool, advertising enables marketers to reach more prospects at lower cost than a salesperson could ever do. Further, the creativity inherent in advertising allows the marketer to conjure an image or personality, full of symbolic meaning and benefits for the company's brand. No sales person can do this. In fact, advertising does suffer from credibility gaps. Advertising is used to build brand value. And advertising is usually the marcom tool of choice for creating brand awareness, familiarity, and image, as well as reinforcing prior purchase decisions.

Advertising can be used to satisfy a variety of sponsor objectives. Some advertising is meant to help generate profit for the advertisers, some is sponsored by nonprofit groups. Some ads try to spur the target audience to immediate action, others to create awareness or understanding of the advertisers offering.

For example, to promote their goods and services, companies use product advertising. To sell ideas, though, organizations use nonproduct advertising. A British petroleum (BP) ad for its gasoline is a product ad. So are ads for banking, insurance, or legal services. But a BP ad promoting the company's mission or philosophy (how the company protects the environment while drilling for oil) is called nonproduct, corporate, or institutional advertising. 

Similarly, while commercial advertising seeks profits, noncommercial advertising is used around the world by governments and nonprofit organizations to seek donations, volunteer support, or changes in consumer behavior.

Some ads are intended to bring about immediate action by the reader, others have a longer-time goal. The objectives of awareness advertising, for example, are to create an image for a product to position it competitively with the goal of getting readers or viewers to select the brand the next time they shop.

A direct-mail ad, on the other hand, exemplifies action (or direct-response) advertising because it seeks an immediate, direct response from the reader. Most ads on TV and radio are awareness ads, but some are a mixture of awareness and action. For example, a 60 second TV commercial may devote the first 50 seconds to image building and the last 10 to a toll-free phone number for immediate information.

Sales promotion is a communication tool that offers special incentives to motivate people to act right away. The incentives may be coupons, free samples, contests or rebates on the purchase price. By offering added value, sales promotion accelerates sales. So it is a very effective tool. It is often used in conjunction with advertising---to promote the promotion. However, like personal selling, it is very expensive; it suffers from other drawbacks as well. While ad agencies create and place media advertising, most sales promotion programs are created by firms that specialize in that field.

Public relations (PR) is an umbrella process---much like marketing---responsible for managing the firm's relationships with its various publics. These publics may include customers but are not limited to them. Public relations is also concerned with employees, stockholders, vendors and suppliers, government regulators and the press. So PR is much larger than just a tool of marketing communications. However, as part of their marketing mix, marketers use a number of public relations activities because they are so good at creating awareness and credibility for the firm at relatively low cost. These activities (often referred to as marketing PR) include publicity, press agentry, sponsorships, special events and a special kind of advertising called public relations advertising, which uses the structured, sponsored format of media advertising to accomplish public relations goals. While PR is closely aligned with advertising, it requires very different skills and is usually performed by professionals in PR firms rather than ad agency people. However, advertising people need to understand how important PR activities are.

Companies use a wide variety of promotional tools other than media advertising to communicate information about themselves and their brands. These collateral materials include flyers, brochures, catalogs, posters, sales kits, product specifications sheets, instruction booklets and so on. These materials may be very expensive or frightfully costly. But because they contribute so much information to customers and prospects, they are very important to both closing sales and reinforcing prior sales decisions. The people who produce collateral materials may work for the company's advertising agency, but often they work for outside graphic design firms, packaging specialists, and independent film and video producers.

*SOURCE: CONTEMPORARY ADVERTISING, 2008, WILLIAM F. ARENS, MICHAEL F. WEIGOLD, CHRISTIAN ARENS, PGS. 18-25*

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