Advertising’s Role in

Marketing
Part 1: Foundations
Chapter 2
Key Points 2

• Define the role of advertising within marketing

• Explain how the four key concepts in marketing
relate to advertising
• Identify the key players in marketing and how the
organization of the industry affects advertising
• List and explain the six critical steps in the
marketing process
• Summarize the structure of the advertising
agency industry
• Analyze the changes in the marketing world and
what they portend for advertising
What is Marketing? 3

•The way a product is

designed, tested,
produced, branded,
packaged, priced,
distributed, and promoted
Key Concepts in Marketing 4

•The marketing • Marketing should focus

first on identifying the
concept needs and wants of the
customer
•Exchange • To compete effectively,
•Branding marketers must focus on
the customers’ problems
•Added value and try to develop
products to solve them
Key Concepts in Marketing 5

• The act of trading a

•The marketing desired product or
concept service to receive
something of value in
•Exchange return
• Money is exchanged for
•Branding goods or services

•Added value
Key Concepts in Marketing 6

•The marketing • The process of creating a

distinctive and special
concept meaning for a product
•Exchange • Brand equity is
reputation, meaning, and
•Branding value that the brand
name or symbol has
•Added value acquired over time
Key Concepts in Marketing 7

•The marketing • A marketing or

concept advertising activity
makes a product more
•Exchange valuable, useful, or
•Branding appealing

•Added value
The Key Players and Markets 8

• The organization,
•The marketer company, or
manufacturer producing
•Suppliers and the product and offering
it for sale
vendors • The advertiser or client
•Distributors and (from the agency’s point
of view)
retailers
The Key Players and Markets 9

•The marketer • Other companies that

manufacture the
•Suppliers and materials and ingredients
used in producing the
vendors product

•Distributors and
retailers
The Key Players and Markets 10

•The marketer • Various companies

that are involved in
•Suppliers and moving a product
vendors from its manufacturer
to the buyer
•Distributors and
retailers
Types of Markets

• Market
• Where the exchange Business-
between buyer and Consumer to-
seller takes place
business
• A particular type of
buyer
• Market share
• The percentage of the
total market in a Institutional Channel
product category that
buys a particular brand

11
The Marketing Process 12

1. Conduct research and develop a situation

analysis
2. Set objectives for the marketing effort
3. Assess consumer needs and wants
4. Differentiate and position the product
5. Develop the marketing mix strategy
6. Evaluate the effectiveness of the strategy
Marketing Mix Strategies 13

• The product is both the

•Product object of the
•Place advertising and the
reason for marketing
•Price • Product category
• A class of similar
•Promotion products
Marketing Mix Strategies 14

•Product • The channels used in

moving the product
•Place from manufacturer to
buyer
•Price
•Promotion
Marketing Mix Strategies 15

•Product • Based on the cost of

making and marketing
•Place the product and on
expected profit
•Price • Customary
• Psychological
•Promotion
Marketing Mix Strategies 16

•Product • Use face-to-face

contact between
•Place marketer and
prospective customer
•Price • Used to create
immediate sales
•Promotion
Question to Ponder 17

Which element of the marketing

mix does advertising and IMC
have the most impact on?
How Agencies Work 18

Full-Service Agencies Specialized Agencies

• Include the four major • Specialize in certain
staff functions functions, audiences,
• Account management industries or markets
• Creative services • Creative boutique
• Media planning and • Media-buying services
buying
• Account planning
• Also have accounting,
traffic, production, and
HR departments
How Agencies Work 19

Account Management Creative Development

• Acts as a liaison • People who write
between the client and • People who design
the agency ideas for ads and
• Responsible for commercials
interpreting the client’s • People who convert
marketing strategy these ideas into
commercials
How Agencies Work 20

Media Planning/Buying Account Planning

• Recommends to the • Gathers all information
client the most on the market and
efficient means of consumers and acts as
delivering the message the voice of the
• Responsible for buying, consumer
planning, and research • Prepares
comprehensive
recommendations
How Agencies Work 21
Internal Agency Revenues and Profits
Services • Commission
• Traffic department • Fee
• Print production • Retainer
department
International Marketing 22

• An international brand is available

virtually anywhere in the world
• The shift requires new tools for
advertisers, including one language, one
control mechanism, and one strategic plan
• The choice of an agency depends on the
decision to standardize messages or
localize them to accommodate local
cultures
The Dynamics of Modern Marketing 23

• Integrated marketing
• All areas of the marketing mix work closely
together to present the brand in a coherent
and consistent way
• Relationship marketing
• Marketing that considers all the firm’s
stakeholders
• Permission marketing
• Inviting prospective customers to self-select
into a brand’s target market in order to
receive marketing communication