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Advertising’s Role in
Marketing

Part 1: Foundations
Chapter 2
Key Points
 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
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What is Marketing?

The way a product is

designed, tested,
produced, branded,
packaged, priced,
distributed, and promoted

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Key Concepts in Marketing
The  Marketing should focus
first on identifying the
marketing needs and wants of
the customer
concept  To compete
effectively, marketers
Exchange must focus on the
customers’ problems
Branding and try to develop
products to solve them
Added value
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Key Concepts in Marketing
The  The act of trading a
desired product or
marketing service to receive
something of value in
concept return
 Money is exchanged
Exchange for goods or services

Branding
Added value
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Key Concepts in Marketing
The  The process of
creating a distinctive
marketing and special meaning
for a product
concept  Brand equity is
reputation, meaning,
Exchange and value that the
brand name or symbol
Branding has acquired over time

Added value
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Key Concepts in Marketing
 A marketing or
The advertising activity
marketing makes a product more
valuable, useful, or
concept appealing

Exchange
Branding
Added value
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The Key Players and Markets
 The organization,
The company, or
marketer manufacturer
producing the product
and offering it for sale
Suppliers  The advertiser or client
and vendors (from the agency’s
point of view)
Distributors
and retailers
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The Key Players and Markets
The  Other companies that
manufacture the
marketer materials and
ingredients used in
Suppliers producing the product

and vendors
Distributors
and retailers

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The Key Players and Markets
The  Various companies
that are involved in
marketer moving a product from
its manufacturer to the
Suppliers buyer

and vendors
Distributors
and retailers
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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
product category that
Institutional Channel
buys a particular
brand

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The Marketing Process
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

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Marketing Mix Strategies
 The product is both
Product the object of the
advertising and the
Place reason for
marketing
Price
 Product category
Promotion  A class of similar
products

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Marketing Mix Strategies
 The channels used
Product in moving the
product from
Place manufacturer to
buyer
Price
Promotion

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Marketing Mix Strategies
 Based on the cost
Product of making and
marketing the
Place product and on
expected profit
Price  Customary

Promotion  Psychological

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Marketing Mix Strategies
 Use face-to-face
Product contact between
marketer and
Place prospective
customer
Price
 Used to create
Promotion immediate sales

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Question to Ponder

Which element of the marketing

mix does advertising and IMC
have the most impact on?

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How Agencies Work
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
buying services
 Account planning
 Also have accounting,
traffic, production, and
HR departments

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

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

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Strawberry Frog

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International Marketing
 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

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The Dynamics of Modern Marketing
 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
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