ADVERTISING
Recognize added value of a comprehensive plan
Chapter 1: Introduction to Integrated Marketing
Communications
The Growth of Advertising and Promotion
Advertising and Promotion
• Vital communications system for both consumers
and businesses.
• In 1980, dominant forms of marketing
communication.
• Shift in advertising spending from traditional media
to digital formats:
• Online search, display and video ads, social
media.
• Growth in mobile marketing.
• Increasing globally.
Marketing
• Activity, set of institutions, and processes for
creating, communicating, delivering and exchanging
offerings that have value for:
• Customers, clients, partners, and society at large.
Exchange
• Involves two or more parties with:
• Something of value to one another.
• Desire and ability to give up something to other
party.
• Way to communicate with each other.
Value
• Customer’s perception of benefits of product or
service against cost of acquiring and consuming it.
• Benefits are functional, experiential, and/or
psychological.
• Costs include money paid for:
• Acquiring a product or service or information
about it.
• Making the purchase and learning to use.
• Maintaining and disposing of product.
Marketing Mix
• The four Ps: product, price, place, and promotion.
• To develop an effective marketing mix, marketers
must:
• Be knowledgeable about the issues and options
of each element.
• Know how to combine elements to form
effective marketing program.
• Analyze the market and use data to develop the
marketing strategy and mix.
Integrated Marketing Communications (IMC)
1. Coordinate various promotional elements and
other marketing activities that communicate
with firm’s customers.
2.
that:
• Evaluates the strategic roles of a
variety of communication disciplines.
• Combines the disciplines to provide
clarity, consistency, and maximum
communications impact.
3. Ensures all marketing and promotional activities
project a consistent, unified image
A Contemporary Perspective of IMC
• Criticisms:
• “Inside-out marketing” approach.
• “One look, one voice” approach.
• Contemporary perspective:
• Goal is to generate short-term financial
returns and build long-term brand and
shareholder value.
• Views IMC as ongoing strategic business
process.
Reasons for the Growing Importance of IMC
• Strategically integrates various communications
functions.
• Develops more efficient and effective marketing
communications programs.
• Avoids duplication and takes advantage of
synergy among promotional tools.
• Adapts to changing environment:
• Evolution to micromarketing.
• Consumers’ unresponsiveness to
traditional advertising.
• Changing rules of marketing
The Role of IMC in Branding
• Helps develop and sustain brand identity and
equity.
• Relationship era: Recognizes need for companies
to connect with consumers based on trust,
transparency, and authenticity.
• Sustainability: development that meets needs of
current generation without compromising ability
of future generations to meet their needs.
• Companies are addressing sustainability
by carefully examining social and
environmental impacts of their
marketing strategies.
Promotion
• Coordination of all seller-initiated efforts to:
• Set up channels of information and
persuasion.
• Sell goods and services or promote an
idea.
Promotional Mix
 • Tools that accomplish an organization’s
communication objectives.
1. Advertising
• Any paid form of nonpersonal communication:
• About an organization, product, or
service.
• With an idea from identified sponsor.
• The nonpersonal component:
• Involves mass media.
• Message transmitted to large groups of
individuals.
• No opportunity for immediate
feedback.
Advertising to Consumer Markets
Benefits of Advertising
• Most cost-effective way to reach large numbers
of consumers.
• Television.
• Builds brand equity by influencing consumers’
perceptions.
• Can advertise to consumers, businesses, or to
stimulate demand.
National Advertising
• Done on a nationwide basis or in most regions
of the country.
Retail/Local Advertising
• Shop at a specific store.
• Use a local service.
• Patronize a particular establishment.
Primary- versus Selective-Demand Advertising
• Primary-demand: stimulates demand for
general product class or entire industry.
• Selective-demand: creates demand for specific
company’s brands.
Advertising to Business and Professional Markets
Business-to-Business Advertising
• Targets individuals who buy or influence
purchase of industrial goods or services for their
companies.
Professional Advertising
• Targets professionals, encouraging them to use a
company’s product in their business operations.
Trade Advertising
• Targets marketing channel members,
encouraging them to stock, promote, and resell
manufacturer’s branded products to their
customers.
2. Direct Marketing
• Communicating directly with target customers
to generate a response and/or transaction.
Involves:
• Database management.
• Direct selling.
• Telemarketing.
• Direct-response advertising.
• Encourages consumer to purchase
directly from the manufacturer.
• Through direct mail, online, and
various broadcast and print media.
• Increased use due to rapid growth of
mobile devices to access the Internet.
• Companies use omnichannel
retailing. (- is a strategy in which
retailers engage customers through
multiple digital and physical
touchpoints.)
• Extensive databases of customer
names and information.
3. Digital/Internet Marketing
Interactive media:
• Allow users to participate in and modify the
form and content of information they receive
in real time.
Social media:
• Online means of communication and
interactions used to create, share, and
exchange content.
Mobile marketing:
• Messages delivered are specific to consumer’s
location or consumption situation.
Advantages of Digital/Internet Marketing
• Interactive nature.
• Capability to precisely measure the effects of
advertising and other forms of promotion.
4. Sales Promotion
• Marketing activities that provide extra value or
incentives to the:
o Sales force.
o Distributors.
o Ultimate consumer
• Aids in stimulating immediate sales.
• Categories:
• Consumer-oriented.
• Trade-oriented
Reasons for Increased Emphasis of Sales Promotion
 • Declining brand loyalty.
• Increased consumer sensitivity to promotional
deals.
• Retailers’ demand for more trade promotion
support from vendors.
5. Publicity
• Nonpersonal communications regarding an
organization, product, service, or idea not
directly paid for or run under identified
sponsorship.
Advantages:
 High credibility and low cost.
Disadvantages:
 Not always under the control of an
organization.
 Negative stories are highly damaging.
Public Relations
• Evaluates public attitudes.
• Identifies policies and procedures of an
individual or organization with the public
interest.
• Goal is to establish and maintain positive image
among various publics.
6. Personal Selling
• Person-to-person communication in which seller
attempts to assist and/or persuade prospective
buyers to:
• Purchase a company’s product.
• Act on an idea.
• Allows seller to tailor messages to customer’s
specific needs or situation.
Involves immediate and precise feedback.
Touch Point
• Every opportunity customer has to see or hear
about a company and/or its brands or have an
encounter or experience with it.
• Categories:
• Company-created.
• Intrinsic.
• Unexpected.
• Customer-initiated.
IMC Audience Contact Tools
IMC Touch Points: Control vs. Impact
IMC Involves Audience Contacts
• Paid media:
• Channels marketers pay to leverage.
• Includes traditional advertising media (TV,
radio, print, etc.).
• Owned media:
• Channels of marketing communication that a
company controls.
• Websites, blogs, apps, social media channels.
• Earned media:
• Exposure for a company (free).
• Viral marketing.
Integrated Marketing Communications Management
• Planning, executing, evaluating, and controlling
use of promotional-mix elements to effectively
communicate with target audiences.
Integrated Marketing Communications Plan
• Developing, implementing, and controlling the
organization’s IMC program.
IMC Planning Process
The first five steps in the IMC planning model are
review of marketing plan, analysis of promotional
program situation, analysis of communication process,
budget determination, and develop integrated
marketing communications program, which consists of
three substeps (objectives, strategy, and message and
media strategy tactics) for the following IMC elements:
advertising, direct marketing, digital/Internet
marketing, sales promotion, PR/publicity, and personal
selling. The final two steps are integrate and implement
marketing communications strategies, and monitor,
evaluate, and control integrated marketing
communications program.
Marketing Plan
• Describes overall marketing strategy and programs
for organization
• Elements include:
• Detailed situation analysis.
• Specific marketing objectives with time frame
and mechanism for measuring performance.
• Selection of target market(s) and plans for each
element of the marketing mix.
• Program for implementing the marketing
strategy.
• Process for monitoring and evaluating
performance and providing feedback.
Review of the Marketing Plan
• Examining overall marketing plan and objectives.
• Identifying the role of advertising and promotion.
• Performing competitive analysis.
• Assessing environmental influences.
Internal Analysis
• Assesses relevant areas involving the
product/service offering and the firm itself.
• Assessment of:
• Capability to develop and implement
promotional program in-house.
• Brand image and implications for promotion.
• A product’s relative strengths and
weaknesses.
• Reviews previous promotional programs and
results.
External Analysis
• Assesses characteristics of firm’s customers, market
segments, positioning strategies, and competitors,
through:
• Customer analysis.
• Competitive analysis.
• Environmental analysis.
Analysis of Communication Process
Involves analyzing:
• Receiver’s response processes.
• Source, message, and channel factors.
Establishes communication goals and objectives.
Marketing objectives:
• Determine what is to be accomplished by
overall marketing program in terms of sales,
market share, or profitability.
• Communication objectives:
• Determine what the firm seeks to accomplish
with its promotional program.
• Nature of the message to be
communicated.
• Specific communication effects to be
achieved.
Budget Determination
• Set tentative marketing communications budget.
• Allocate tentative budget across different media,
geographic markets, and time periods.
• Budget may not be finalized until specific
promotional-mix strategies are developed.
Developing the Integrated Marketing Communications
Program
• Involves deciding role and importance of each
promotional-mix element.
• Aspects of an advertising program include:
• Creative strategy: Determining the basic
appeal and message to be conveyed to target
audience.
• Media strategy: Determining which
communication channels to use to deliver the
message.
Monitoring, Evaluation, and Control
• Determining how well program is:
• Meeting communication objectives.
• Helping the firm accomplish its overall
marketing goals and objectives.
• Evaluating promotional program
results/effectiveness.
• Taking measures to control and adjust
promotional strategies.
Chapter 2: The Role of IMC in the Marketing Process
Marketing and Promotions Process Model
A. Marketing Strategy and Analysis
Strategic Marketing Plan
• Guides allocation of organization’s resources.
• Guides specific marketing programs and policies.
• Evolves from organization’s overall corporate
strategy.
• Allows for understanding of market opportunities,
competition, and market segments.
 • Market segments: Distinct consumer
groups within a market who have
common needs.
Opportunity Analysis
• Market opportunities are areas where:
• There are favorable demand trends.
• Customers’ needs and opportunities are not
being satisfied.
• Firm can compete effectively.
• Steps to identify market opportunities:
• Examine the marketplace.
• Observe demand trends and competition in
various market segments.
Competitive Analysis
• Analyzing competition in the marketplace and
searching for competitive advantage.
• Competitive advantage: Attributes that give a
firm an edge over competitors.
• Better quality products.
• Superior customer service.
• Low production costs and lower prices.
• Dominating channels of distribution.
• Advertising.
Target Market Selection
• Done after evaluating market opportunities and
doing a competitive analysis.
• Can select one or more target markets.
• Has direct implications on firm’s advertising and
promotional efforts.
B. The Target Marketing Process
Identifying Markets
• Marketer identifies specific needs of groups of
people (or segments).
• Selects one or more of these segments as a
target.
• Isolates consumers with similar lifestyles,
needs, and the like.
• Increases marketer’s knowledge of consumers’
specific requirements.
Market Segmentation
• Dividing a market into distinct groups with
common needs, who respond similarly to a
marketing situation.
• Bases for segmentation:
• Geographic: Dividing market on basis of
region, city size, metropolitan area, and/or
density.
• Demographic: Dividing market on basis of
age, sex, family size, marital status, etc.
• Psychographic: Dividing market on basis
of personality, lifecycles, and/or lifestyles.
• Behavioristic segmentation: Dividing
consumers into groups according to usage,
loyalties, or buying responses to a
product.
80-20 rule: 20 percent of buyers account
for 80 percent of sales volume.
• Benefit segmentation:
Grouping of consumers on basis of
attributes sought in a product.
The process of segmenting a market.
• Marketers determine as much as they can about
the segment.
• Companies offer research services to define
markets and develop strategies targeting them.
• Clusters consumer households into
distinct “microgeographic” segments.
Selecting a Target Market
Determine how many segments to enter.
• Undifferentiated marketing: Offering just one
product or service to entire market.
• Differentiated marketing: Developing separate
marketing strategies for different segments.
• Concentrated marketing: Attempting to
capture a large share of one market segment.
Determine which segments offer potential.
• Select most attractive segment through:
o Sales potential of segment.
o Opportunities for growth.
o Competition analysis.
o Ability to compete.
o Ability to market to this group.
Market Positioning
• Positioning: Fitting product or service to one or
more segments of a broad market to make it
unique within the marketplace.
• Approaches:
• Focus on consumer: Linking product with
benefits consumer will derive.
• Focus on competition: Positioning product
by comparing benefit it offers to the
competition.
C. Developing a Positioning Strategy
Positioning by Product Attributes and Benefits
• Sets brand apart from competitors on basis of
specific characteristics or benefits offered.
• Salient attributes: Important to consumers
and are basis for making a purchase decision.
Positioning by Price/Quality
• Cost is secondary to quality.
• Quality or value at a very competitive price.
Positioning by Use or Application
• Used to enter market or expand usage
Positioning by Product Class
Positioning by Product User
Positioning by Competitor
Positioning by Cultural Symbols
• Makes the brand easily identifiable and
differentiated from others.
Repositioning
• Altering a product’s or brand’s position due to:
• Declining or stagnant sales.
• Anticipated opportunities in other market
positions.
• Difficult to accomplish because of entrenched
perceptions and attitudes toward the product or
brand.
D. Developing the Marketing Planning Program
Product Decisions
• Product symbolism:
• What a product or brand means to
consumers.
• What consumers experience in purchasing
and using a product.
• Branding
• Builds and maintains brand awareness and
interest.
• Develops and enhances attitudes toward
the company or product.
• Builds relationships between consumer and
brand.
• Brand identity:
• Combination of name, logo, symbols,
design, packaging, image, and
associations held by consumers.
• Brand equity:
• Intangible asset of added value.
• Packaging
Many companies view the package as an
important way to communicate with
consumers and create an impression of the
brand in their minds.
• Traditionally provided functional benefits—
economy, protection, and storage.
• Role and function have changed due to:
• Self-service emphases of many stores.
• More buying decisions at point of
purchase.
• Used to communicate with consumers and
create an impression of the brand.
Price Decisions
• Price variable: What consumer has to give in
exchange for purchase.
• Factors that determine price:
• Costs.
• Demand factors.
• Competition.
• Perceived value.
• Product quality.
• Advertising
Distribution Channel Decisions
• Marketing channels: Interdependent
organizations involved in making a product or
service available for use.
• Direct channels: Directly deal with customers.
• Driven by direct-response ads,
telemarketing, Internet.
• Used when selling expensive and
complex products.
• Indirect channels: Network of wholesalers
and/or retailers.
Promotional Push Strategy
• Programs designed to persuade resellers to
stock, merchandise, and promote a
manufacturer’s products.
• Trade advertising: Used to motivate
wholesalers and retailers to purchase
products for resale.
Promotional Pull Strategy
• Spending money on advertising and sales
promotion efforts directed toward the ultimate
consumer.
• Goals:
• Create demand among consumers.
• Encourage consumers to request
product from retailer.
CHAPTER 3: Organizing for Advertising and Promotion:
The Role of Ad Agencies and Other Marketing
Communication Organizations
A. Participants in the Integrated Marketing
Communications Process
A
dvertisers or Clients
• Have the products, services, or causes to be
marketed.
• Provide the funds that pay for advertising and
promotions.
• Responsible for developing marketing program.
Advertising Agency
• Specializes in creation, production, and/or
placement of communications messages.
 • May facilitate integrated marketing
communications process.
Media Organizations
• Provide information, entertainment, or
environment for firm’s marketing
communications message.
Specialized Marketing Communication Services
• Direct-marketing agencies.
• Sales promotion agencies.
• Digital/interactive agencies.
• Public relations firms.
Collateral Services Organizations
• Support functions used by advertisers,
agencies, media organizations, and specialized
marketing communication firms.
B. Organizing for Advertising and Promotion in the
Firm: The Client’s Role
Factors Affecting How Companies Organize for IMC
• Size of organization.
• Number of products it markets.
• Role of advertising and promotion in the
marketing mix.
• Allocated budget.
• Marketing organization structure.
The Advertising Department under a Centralized
System
The Centralized System
• Marketing activities are divided along functional
lines.
• Advertising manager is responsible for:
• Administration and execution.
• Coordination with other departments.
• Coordination with outside agencies and
services.
A Decentralized Brand Management System
The Decentralized System
• Used by firms with multiple divisions and many
different products.
• Each product or brand is assigned to a brand
manager.
• Brand manager: Responsible for total
management of the brand, including
planning, budgeting, sales, and profit
performance.
• Category management system:
Additional layer of management above
brand managers.
In-House Agencies
• Advertising agency that is set up, owned,
and operated by the advertiser.
• Reduces advertising and promotion
costs.
• Allows companies to maintain tighter
control.
• Critics worry about experience and
objectivity.
C. Advertising Agencies
Ad Agency
• Service organization that specializes in
planning and executing advertising
programs for its clients.
Agency Consolidation
• Superagencies: Large agencies that merged
with or acquired other agencies and support
organizations.
• Have evolved into 4 major agency holding
companies.
• Account for more than half of U.S.
agency revenue.
The Ad Agency’s Role
• Reasons for using an agency:
• Highly skilled specialists.
• Specialization in particular industries.
• Objective viewpoint of market.
• Broad range of experience
Types of Ad Agencies
• Full-service agencies:
• Marketing, communications, and
promotions services.
• Nonadvertising services.
• Account services:
• Link between ad agency and its
clients.
• Account executive: Understands
advertiser’s marketing and promotion
needs and interprets them to agency
personnel.
Full-Service Agency Organizational Chart
• Marketing services
• Research department: Gathers, analyzes,
and interprets useful information.
• Account planners: Gather information
that is relevant to client’s product or
service.
• Media department: Analyzes, selects,
and contracts for space or time in the
media.
• Creative services:
• Responsible for creation and execution
of advertisements.
• Copywriters: Conceive ideas for ads and
write headlines, subheads, and body
copy.
• Art department: Responsible for how the
ad looks.
• Traffic department: Coordinates all
phases of production.
• Management and finance:
• Basic operating and administrative
functions such as accounting, finance,
and human resources.
• Agency organization and structure:
• Departmental system: All agency
functions are set up as a separate
department.
• Group system: Individuals from each
department work together in groups to
service particular accounts.
Other Types of Agencies and Services
• Creative boutiques:
• Small ad agencies that provide only
creative services.
Advantages:
• Turn out inventive creative
work quickly.
• Provide more attention and
better access to creative talent.
• Media specialist companies:
• Specialize in buying media.
• Agencies and clients develop media
strategy.
• Media buying organizations implement
strategies and buy time and space.
• Rapid growth of programmatic buying:
• Wide range of technologies
that automate the buying,
placement, and optimization of
advertising media.
D. Agency Compensation
Compensation Methods
• Commissions from media.
• Fee, cost, and incentive-based systems.
• Percentage charges.
Commissions from Media
• Commission system:
• Receiving specified commission from
media on any advertising time or space
purchased for the client.
• Negotiated commission system:
• Based on a sliding scale that becomes
lower as clients’ media expenditures
increase.
Fee, Cost, and Incentive-Based Systems
• Fee arrangement.
• Fixed-fee method: Basic monthly fee
charged for services provided and media
commissions earned are given to client.
• Fee-commission combination: Media
commissions received are credited
against the fee.
• Cost-plus system:
• Agency pays a fee based on costs of its
work plus some agreed-on profit margin.
• Incentive-based compensation:
• Agencies compensated above their basic
costs, if they achieve or exceed results as
measured by agreed-upon metrics.
Percentage Charges • Disagreements over marketing and/or
• Adding a markup of percentage charges to creative strategy.
various services purchased from outside • Lack of integrated marketing capabilities.
providers. • How agencies gain clients:
• Markups—usually ranging from 17.65 to 20 • Referrals.
percent—are added to client’s bill. • Solicitations.
The Future of Agency Compensation • Presentations.
• Decreased use of traditional media. • Public relations.
• Reduction of budgets all around. • Image and reputation.
• Agencies held more accountable for
fees they charge. E. Specialized Services
• Increased emphasis on procurement- Direct-Marketing Agencies
driven cost cutting. • Provide a variety of services:
• Media rebates. • Database analytics and management.
Evaluating Agencies • Direct mail.
Financial Audit Qualitative Audit • Research.
• Media services.
• Cost and expenses. • Planning, developing, • Creative and production capabilities.
• Personnel hours and implementing • Three main departments:
billed. program. • Account management.
• Payments to media. • Results achieved. • Creative.
• Payments to outside • Media.
suppliers. Sales Promotion Agencies
• Develop and manage sales promotion
programs.
• Provide a variety of services:
How Agencies Add Value to a Client’s Business • Promotional planning.
• Creative research.
• Tie-in coordination.
• Fulfillment.
• Premium design and manufacturing.
• Catalog production.
• Contest/sweepstakes management.
Public Relations Firms
• Develops and implements programs to
manage organization’s:
• Publicity.
• Image.
Gaining and Losing Clients • Affairs with consumers and other relevant
• Why agencies lose clients: publics:
• Poor performance or service. • Employees, suppliers,
• Poor communication. stockholders, government, labor
• Unrealistic demands by the client. groups, citizen action groups, and
• Personality conflicts. general public.
• Personnel changes. • Performs a variety of services:
• Changes in size of the client or agency. • Planning the PR strategy and program.
• Conflicts of interest. • Generating publicity.
• Changes in the client’s corporate and/or • Lobbying and public affairs efforts.
marketing strategy. • Community activities and events.
• Declining sales. • News releases, other communications.
• Conflicting compensation philosophies. • Research.
• Changes in policies. • Special events.
• Managing Crises
Digital Agencies H. Foundations of the 2020 Agency
• Development and strategic use of various digital
marketing tools:
• Website design and development.
• Apps.
• Search engine optimization (SEO).
• Banner ads.
• Video.
• Mobile marketing.
• Social media campaigns.

F. Collateral Services
• Marketing research.
• Package design.
• Consultants.
• Photographers.
Chapter 4: Perspectives on Consumer Behavior
• Graphic designers.
Overview of Consumer Behavior
• Talent agencies.
Consumer Behavior
• Video production.
• Process and activities people engage in with
• Event marketing.
relation to products and services to satisfy their
needs and desires.
G. Integrated Marketing Communications Services
• Searching for.
Pros and Cons of Integrated Services
• Selecting.
• Pros:
• Purchasing.
• Greater synergy.
• Using.
• Convenience.
• Evaluating.
• Single image for product or service.
• Disposing of.
• Cons:
• Budget politics.
Basic Model of Consumer Decision Making
• Poor communication.
• No synergy.
Responsibility for IMC: Agency versus Client
• Key obstacles to IMC implementation:
• Lack of people with a broad perspective
and skills to make it work.
• Internal turf battles. A. The Consumer Decision-Making Process
• Agency egos. Problem Recognition
• Fear of budget reductions. • Consumer perceives a need and gets
• Some agencies adding to resources, while others motivated to solve the problem.
seek specialization. • Caused by difference between consumer’s
Preparing for the Future ideal state and actual state.
• Traditional advertising agencies competing • Sources:
against: • Out of stock.
• Specialist companies, particularly in digital • Dissatisfaction.
marketing and information technology. • New needs or wants.
• Clients who are bringing IMC functions in- • Related products or purchases.
house. • Marketer-induced problem
• Agencies must prove their value to clients and recognition.
provide solutions, not just services. • New products.
• Foundations of the 2020 agency. Examining Consumer Motivations
• Helps understand the reasons underlying
consumer purchases.
 • Motives: Factors that compel a
consumer to take a particular action.
• Hierarchy of needs
• Lower-level physiological and safety
needs must be satisfied before
higher-order needs become
meaningful.
Maslow’s Hierarchy of Needs
• Psychoanalytic theory:
• Influenced modern psychology and
explanations of motivation and
personality.
• Applied to study of consumer behavior.
• Deep motives can only be determined by
probing the subconscious.
• Motivation research:
• Use psychoanalytic techniques to
determine consumers’ purchase
motivations.
Some of the Marketing Research Methods Used to
Probe the Mind of the Consumer
• Problems of psychoanalytic theory and
motivation research:
• Psychoanalytic theory criticized as:
• Very vague.
• Unresponsive to external
environment.
• Too reliant on early development of
the individual.
• Uses small sample for drawing
conclusions.
• Motivation research criticized for:
• Results difficult to verify.
• Lack of experimental validation.
• Findings not generalizable to entire
population
• Contributions of psychoanalytic theory and
motivation research:
• Psychoanalytic theory:
• Insights gained make more effective
strategies than rationally based
appeals.
• Motivation research:
• Helps assess how and why
consumers buy.
• Helps get around stereotypical or
socially desirable responses.
• Forerunner of psychographics.
Information Search
• Internal search: Information retrieval that
involves recalling:
• Past experiences.
• Information regarding various purchase
alternatives.
• External search: Seeking information from
external sources.
• Internet, personal, and public sources.
• Marketer-controlled sources.
• Personal experience.
• Extent of external source to be used depends
on:
• Importance of purchase decision.
• Effort needed to acquire information.
• Amount of past experience relevant.
• Degree of perceived risk associated with
purchase.
• Time available.
Perception
• Receiving, selecting, organizing, and
interpreting information to create meaningful
picture of the world.
• Depends on:
• Internal factors.
• Characteristics of a stimulus.
• Sensation:
• Immediate, direct response of the senses
to stimulus.
• Selecting information:
 • Internal psychological factors determine
what one focuses on and/or ignores.
• Interpreting the information:
• Organizing and categorizing information
influenced by:
• Internal psychological factors.
• Nature of the stimulus.
• Selective perception:
• Selectivity occurs throughout
various stages of consumer’s
perceptual process.
The Selective Perception Process
• Selective exposure:
• Consumers choose whether or not
to make themselves available to
information.
• Selective attention:
• Consumers choose to focus
attention on certain stimuli and not
others.
• Selective comprehension:
• Consumers interpret information on
basis of own attitudes, beliefs,
motives, and experiences.
• Selective retention:
• Consumers do not remember all
information they see, hear, or read
even after attending to and
comprehending it.
• Mnemonics: Symbols, rhymes,
associations, and images that assist
in the learning and memory process.
• Subliminal perception:
• Ability to perceive stimulus that is below
the level of conscious awareness.
• Controversial tactic with strong ethical
implications.
Alternative Evaluation
• Comparing brands that have been identified as
capable of:
• Solving the consumption problem.
• Satisfying the needs or motives that
initiated the decision process.
• Evoked set: Subset of all brands of which
consumer is aware.
• Size depends on:
• Importance of the purchase.
• Time and energy spent comparing
alternatives.
• Top-of-mind awareness; reminder
advertising.
• Evaluative criteria and consequences.
• Evaluative criteria: Dimensions or
attributes of a product that are used to
compare different alternatives.
• Objective or subjective.
• Viewed as product or service
attributes.
• Functional consequences: Concrete
outcomes of product or service usage.
• Tangible and directly experienced
by consumers.
• Psychosocial consequences: Abstract
outcomes that are more intangible,
subjective, and personal.
• Subprocesses:
• Process by which consumer
attitudes are created, reinforced,
and changed.
• Decision rules or integration
strategies used to compare brands
and make purchase decisions.
Attitudes
• Learned predispositions to respond to an object.
• Theoretically summarize consumer’s evaluation
of an object.
• Represent positive or negative feelings and
behavioral tendencies.
• Multiattribute attitude model:
• Attributes of product or brand provide
basis on which consumers form
attitudes.
• Consumers attach different levels of
importance to different attributes.
• Salient beliefs:
• Beliefs concerning specific
attributes.
• Consequences that are activated
and form basis of attitude.
• Attitude change strategies:
• Changing strength or belief rating of
brand on an important attribute.
• Changing consumers’ perceptions of the
importance or value of attribute.
 • Adding new attributes to the attitude
formation process.
• Changing perceptions of belief ratings for
a competing brand.
Integration Processes and Decision Rules
• Integration processes:
• Combining product knowledge,
meanings, and beliefs to evaluate
alternatives.
• Decision rules: Strategies used to decide among
alternatives.
• Heuristics:
• Simplified decision rules customers
use for purchase decisions.
• Affect referral decision rule:
• Selection is made on basis of overall
impression or summary evaluation
of various alternatives under
consideration.
Purchase Decision
• Purchase intention:
• Predisposition to buy a certain brand by
matching purchase motives with
attributes of brands considered.
• Brand loyalty:
• Preference for a particular brand that
results in repeated purchases.
Post-purchase Evaluation
• Satisfaction occurs when consumer’s
expectations are met or exceeded.
• Dissatisfaction occurs when product
performance is below expectations.
• Cognitive dissonance: Psychological
tension experienced after a difficult
purchase choice.
• Postpurchase communication is
important.
Variations in Consumer Decision Making
• Many purchase decisions based on habitual or
routine choice process.
• Marketers need to keep brands in consumer’s
evoked set.
• Marketers of new brands or those with a low
market share face a challenge.
• A more complicated decision-making process
occurs when consumers have limited experience
in purchasing a particular product or service.
B. The Consumer Learning Process
Behavioral Learning Theory
• Based on the stimulus–response orientation (S–
R).
• Learning occurs as result of responses to
external stimuli in the environment.
• Classical conditioning: Learning is an associative
process with existing relationship between a
stimulus and a response.
• A conditioned stimulus elicits a conditioned
response.
• Contiguity and repetition are necessary.
• Marketers strive to associate their products
and services with positive perceptions,
images, and emotions.
The Classical Conditioning Process
• Operant conditioning:
• Learning occurs when individual actively
operates or acts on some aspect of the
environment.
• Reinforcement: Reward or favorable
consequence associated with a particular
response.
• Reinforced behavior strengthens bond
between stimulus and response.
Instrumental Conditioning in Marketing
• Schedules of reinforcement:
• Continuous—Learning occurs rapidly and
every response is rewarded.
• Behavior is likely to cease when
reinforcement stops.
• Partial or intermittent—Learning occurs
more slowly but lasts longer.
• Only some responses are rewarded.
• Shaping: Reinforcement of successive acts that
lead to desired behavior pattern or response.
 Application of Shaping Procedures in Marketing Roles in the Family Decision Making

• Cognitive learning theory:

• Studies complex mental processes that D. Alternative Approaches to Consumer Behavior
underlie consumer decision making. New Methodologies
• Perception. • Qualitative methods.
• Formation of beliefs about brands. • Linguistic or historical perspective of
• Attitude development and change. communications.
• Integration. • Examining symbolic meanings of advertising and
The Cognitive Learning Process facets of consumption.
New Insights
• Leads to better understanding of:
C. Environmental Influences on Consumer Behavior • Cultural significance of advertising messages.
Culture • Influence of advertising images on society.
• Complexity of learned meanings, values,
norms, and customs shared by members of
society.
Subcultures
• Smaller segments within a culture, whose
beliefs, values, norms, and patterns of behavior
set them apart from the larger cultural
mainstream.
• Social class:
• Homogeneous divisions in a society into
which people sharing similar lifestyles,
values, norms, interests, and behaviors can
be grouped.
Reference Groups
• Group whose presumed perspectives or values
are being used by an individual as basis for
judgments, opinions, and actions.
• Types: Associative, aspirational, or dissociative.
• Can include families.
Situational Determinants
• Specific situation in which consumers plan to
use the product or brand directly affects their
perceptions, preferences, and purchase
behaviors.
• Types: Usage, purchase, and communications
situation.