Marketing and Advertising

It has been suggested that Product marketing be merged into this article or section. (Discuss)

Marketing "is the process of planning and executing the pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals." American Marketing Association.

Prior to the advent of market research, most companies were product-focused, employing teams of salespeople to push their products into or onto the market, regardless of market desire. A market-focused, or customer-focused, organization instead first determines what its potential customers desire, and then builds the product or service. Marketing theory and practice is justified on the belief that customers use a product/service because they have a need, or because a product/service has a perceived benefit.

Two major aspects of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (base management).

An emerging area of study and practice concerns internal marketing, or how employees are trained and managed to deliver the brand in a way that positively impacts the acquisition and retention of customers.

Once a marketer has converted the prospective buyer, base management marketing takes over. The process for base management shifts the marketer to building a relationship, nurturing the links, enhancing the benefits that sold the buyer in the first place and improving the products/service continuously to protect her business from competitive encroachments.

Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Market research underpins these activities. Through advertising, it is also related to many of the creative arts.

Types of markets

The word market originally meant the place where the exchange between seller and buyer took place. Today we speak of a market as either a region where goods are sold and bought or particular types of buyer (summarized from Wells, Burnett, Moriarty, pg. 65–66). When strategizing specialists in marketing comment about markets they are usually referring to the different groups of people and/or organizations. The four major market groups are 1) consumer, 2) business to business, 3) institutional, and 4) reseller.

Product, price, promotion, and placement

In popular usage, the term "marketing" refers to the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning that recognizes that marketing is customer centered. Products are often developed to meet the desires of groups of customers or even, in some cases, for specific customers. McCarthy divided marketing into four general sets of activities. His typology has become so universally recognized that his four activity sets, the Four Ps, have passed into the language.

The Four Ps are:

• Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual good or service, and how it relates to the end-user's needs and wants.
• Pricing: This refers to the process of setting a price for a product, including discounts.
• Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand, or company.
• Placement or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing.

These four elements are often referred to as the marketing mix. A marketer can use these variables to craft a marketing plan. The four Ps model is most useful when marketing low value consumer products. Industrial products, services, high value consumer products require adjustments to this model. Services marketing must account for the unique nature of services. Industrial or b2b marketing must account for the long term contractual agreements that are typical in supply chain transactions. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions.

Technique

For a marketing plan to be successful, the mix of the four "p's" must reflect the wants and desires of the consumers in the target market. Trying to convince a market segment to buy something they don't want is extremely expensive and seldom successful. Marketers depend on marketing research, both formal and informal, to determine what consumers want and what they are willing to pay for. Marketers hope that this process will give them a sustainable competitive advantage. Marketing management is the practical application of this process.

Most companies today have a customer orientation (also called customer focus). This implies that the company focuses its activities and products on customer needs. Generally there are two ways of doing this: the customer-driven approach and the product innovation approach.

In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no point spending R&D funds developing products that people will not buy. History attests to many products that were commercial failures inspite of being technological breakthroughs.

The next big thing is a concept in marketing that refers to a product or idea that will allow for a high amount of sales for that product and related products. Marketers believe that by finding or creating the next big thing they will spark a cultural revolution that results in this sales increase.

In a product innovation approach, the company pursues product innovation, then tries to develop a market for the product. Product innovation drives the process and marketing research is conducted primarily to ensure that a profitable market segment(s) exists for the innovation. The rationale is that customers may not know what options will be available to them in the future so we should not expect them to tell us what they will buy in the future. It is claimed that if Thomas Edison depended on marketing research he would have produced larger candles rather than inventing light bulbs. Many firms, such as research and development focused companies, successfully focus on product innovation. Many purists doubt whether this is really a form of marketing orientation at all, because of the ex post status of consumer research. Some even question whether it is marketing.

Diffusion of innovations research explores how and why people adopt new products, services and ideas.

A relatively new form of marketing uses the Internet and is called internet marketing or more generally e-marketing, affiliate marketing or online marketing. It typically tries to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing.

Criticism of marketing

Some aspects of marketing, especially promotion, are the subject of criticism. See the main article Criticism of marketing.

Related lists

See List of marketing topics for an extensive list of the marketing articles on Wikipedia.

• list of management topics
• list of human resource management topics
• list of economics topics
• list of finance topics
• list of accounting topics
• list of information technology management topics
• list of production topics
• list of business law topics
• list of international trade topics
• list of business ethics, political economy, and philosophy of business topics
• list of business theorists
• list of economists
• list of corporate leaders
• list of companies

External links

Wikiquote has a collection of quotations related to:

Marketing

• KnowThis.com - Marketing Virtual Library – an extensive marketing reference site
• SOSIG Marketing directory – a directory of marketing topics available on the web
• Media and Advertising Directory
• Study notes on core marketing topics
• Knowledge-Community.com - The Community of Knowledge-Workers worldwide

Generally speaking, advertising is the promotion of goods, services, companies and ideas, usually by an identified sponsor. Marketers see advertising as part of an overall promotional strategy. Other components of the promotional mix include publicity, public relations, personal selling and sales promotion.

History

Advertisements painted on the side of buildings were common in the early-20th century U.S. This instance, now faded from lack of upkeep, is an example of a ghost ad.

In ancient times the most common form of advertising was 'word of mouth'. However, commercial messages and election campaign displays were found in the ruins of Pompeii. Egyptians used papyrus to create sales messages and wall posters. Lost-and-found advertising on papyrus was common in Greece and Rome. As printing developed in the 15th and 16th century, advertising expanded to include handbills. In the 17th century advertisements started to appear in weekly newspapers in England.

These early print ads were used mainly to promote books (which were increasingly affordable) and medicines (which were increasingly sought after as disease ravaged Europe and Britain). Quack ads became a problem, which ushered in regulation of advertising content.

As the economy was expanding during the 19th century, the need for advertising grew at the same pace. In America, the classified ad became popular, filling pages of newspapers with small print messages promoting all kinds of goods. The success of this advertising format led to the growth of mail-order advertising. In 1843 the first advertising agency was established by Volney Palmer in Philadelphia. At first the agencies were just brokers for ad space in newspapers, but by the 20th century, advertising agencies started to take over responsibility for the content as well.

The 1960's saw advertising transform into a modern, more scientific approach in which creativity was allowed to shine, producing unexpected messages that made advertisements interesting to read. The Volkswagen ad campaign featuring such headlines as "Think Small" and "Lemon" ushered in the era of modern advertising by promoting a "position" or "unique selling proposition" designed to associate each brand with a specific idea in the reader or viewer's mind.

Today, advertising is evolving even further, with "guerrilla" promotions that involve unusual approaches such as staged encounters in public places, giveaways of products such as cars that are covered with brand messages, and interactive advertising where the viewer can respond to become part of the advertising message.

Media

One crude but effective advertising method is to pay someone to stand on a corner and wave a sign all day

Commercial advertising media can include billboards (outdoor advertising), street furniture components, printed flyers, radio, cinema and television ads, web banners, web popups, skywriting, bus stop benches, magazines, newspapers, town criers, sides of buses, taxicab doors and roof mounts, musical stage shows, subway platforms and trains, elastic bands on disposable diapers, stickers on apples in supermarkets, the opening section of streaming audio and video, and the backs of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver their message through a medium is advertising. Covert advertising embedded in other entertainment media is known as product placement.

The TV commercial is generally considered the most effective mass-market advertising format and this is reflected by the high prices TV networks charge for commercial airtime during popular TV events. The annual Super Bowl football game in the United States is known as much for its commercial advertisements as for the game itself, and the average cost of a single thirty-second TV spot during this game has reached $2.3 million (as of 2004).

Increasingly, other mediums such as those discussed below are overtaking television due to a shift towards consumer's usage of the Internet as well as devices such as TiVo.

Advertising on the World Wide Web is a recent phenomenon. Prices of Web-based advertising space are dependent on the "relevance" of the surrounding web content and the traffic that the website receives.

E-mail advertising is another recent phenomenon. Unsolicited bulk E-mail advertising is known as "spam". A message is spam only when it is unsolicited and in bulk.

Some companies have proposed to place messages or corporate logos on the side of booster rockets and the International Space Station. Controversy exists on the effectiveness of subliminal advertising (see mind control), and the pervasiveness of mass messages (see propaganda).

Unpaid advertising (also called word of mouth advertising), can provide good exposure at minimal cost. Personal recommendations ("bring a friend", "sell it by zealot"), spreading buzz, or achieving the feat of equating a brand with a common noun ("Hoover" = "vacuum cleaner", "Kleenex" = "tissue" , "Scotch Tape" = "Clear Tape", "iPod" = "MP3 Player ) -- these must provide the stuff of fantasy to the holder of an advertising budget.

The most common method for measuring the impact of mass media advertising is the use of the rating point (rp) or the more accurate target rating point (trp). These two measures refer to the percentage of the universe of the existing base of audience members that can be reached by the use of each media outlet in a particular moment in time. The difference between the two is that the rating point refers to the percentage to the entire universe while the target rating point refers to the percentage to a particular segment or target. This becomes very useful when focusing advertising efforts on a particular group of people. For example, think of an advertising campaign targeting a female audience aged 25 to 45. While the overall rating of a TV show might be well over 10 rating points it might very well happen that the same show in the same moment of time is generating only 2.5 trps (being the target: women 25-45). This would mean that while the show has a large universe of viewers it is not necessarily reaching a large universe of women in the ages of 25 to 45 making it a less desirable location to place an ad for an advertiser looking for this particular demographic.

Objectives

Whereas marketing aims to identify markets that will purchase a product (business) or support an idea and then facilitate that purchase, advertising is the paid communication by which information about the product or idea is transmitted to potential consumers.

In general, advertising is used to convey availability of a "product" (which can be a physical product, a service, or an idea) and to provide information regarding the product. This can stimulate demand for the product, one of the main objectives of advertising. More specifically, there are three generic objectives of advertisements : communicate information about a particular product, service, or brand (including announcing the existence of the product, where to purchase it, and how to use it), persuade people to buy the product, and keep the organization in the public eye (called institutional advertising). Most advertising blends elements of all three objectives. Typically new products are supported with informative and persuasive ads, while mature products use institutional and persuasive ads (sometimes called reminder ads). Advertising frequently uses persuasive appeals, both logical and emotional (that is, it is a form of propaganda), sometimes even to the exclusion of any product information. More specific objectives include increases in short or long term sales, market share, awareness, product trial, mind share, brand name recall, product use information, positioning or repositioning, and organizational image improvement.

Examples of the ideas, informative or otherwise, that advertising tries to communicate are product details, benefits and brand information. Advertising usually seeks to find a unique selling proposition (USP) of any product and communicate that to the user. This may take the form of a unique product feature or a perceived benefit. In the face of increased competition within the market due to growing numbers of substitutes there is more branding occurring in advertising. This branding attributes a certain personality or reputation to a brand, termed brand equity, which is distinctive from its competition. Generally, brand equity is a measure of the volume and homogeneity of, as well as positive and negative characteristics of, individual and cultural ideas associated with the product.

Effective advertising will stimulate demand for a product and build brand equity and brand franchise. When enough brand equity is created that the brand has the ability to draw buyers (even without further advertising), it is said to have brand franchise. The ultimate brand franchise is when the brand is so prevalent in people's mind (called mind share), that it is used to describe the whole category of products. This phenomena is sometimes known as "hyperbranding." Kleenex, for example, can distinguish itself as a type of tissue or a label for a category of products. That is, it is frequently used as a generic term. One of the most successful firms to have achieved a dominant brand franchise is Hoover, whose name was for a very long time synonymous with vacuum cleaner (and Dyson has subsequently managed to achieve similar status, having moved into the Hoover market with a more sophisticated model of vacuum cleaner). The strength of a brand franchise can be established to a greater or lesser degrees in various markets. In Texas, for example, it is common to hear people refer to any soft drink as a Coke, regardless of whether it is actually produced by Coca-Cola or not (more accurate terms would be 'cola' or 'soda').

A legal risk of the dominant brand franchise is that the name can become so widely accepted that it becomes a generic term, and loses trademark protection. Examples include "escalator", "aspirin" and "mimeograph". (See genericized trademark)

Political uses

The control of advertising translates into the control of money and power. Thus, it can and has been used for political purposes. The American culture wars between fundamentalist religious organizations on one hand, and organizations supporting the freedom of homosexual expression on the other, are one example. In spring of 2005, the American Family Association threatened a boycott of Ford products to protest Ford's perceived support of "the homosexual agenda and homosexual marriage." Later in the year Ford announced it was curtailing ads in a number of major gay publications, an action it claimed to be determined not by cultural but by economic factors. That statement was contradicted by the AFA, which claimed it had a "good faith agreement" that Ford would cease such ads. Soon afterwards, as a result of a strong upcry from the gay community, Ford backtracked and announced it would continue ads in gay publications, in response to which the AFA denounced Ford for backing out of the agreement and renewed threats of a boycott.Anti-Gay Group Renews Ford Boycott Threat

Techniques

Advertisement for the movie Spider-Man 2 as seen on the stairs of the Kyoto train station in 2004.

Advertisers use several recognizable techniques in order to better convince the public to buy a product and shape the public's attitude towards their product. These may include:

• Repetition: Some advertisers concentrate on making sure their product is widely recognized. To that end, they simply attempt to make the name remembered through repetition.

• Bandwagon: By implying that the product is widely used, advertisers hope to convince potential buyers to "get on the bandwagon."

• Testimonials: Advertisers often attempt to promote the superior quality of their product through the testimony of ordinary users, experts, or both. "Three out of four dentists recommend..." This approach often involves an appeal to authority.

• Pressure: By attempting to make people choose quickly and without long consideration, some advertisers hope to make rapid sales: "Buy now, before they're all gone!"

• Appeal to emotion: Various techniques relating to manipulating emotion are used to get people to buy a product. Apart from artistic expression intended to provoke an emotional reaction (which are usually for associative purposes, or to relax or excite the viewer), three common argumentative appeals to emotion in product advertising are wishful thinking, appeal to flattery, and appeal to ridicule. Appeals to pity are often used by charitable organizations and appeals to fear are often used in public service messages and products, such as alarm systems or anti-bacterial spray, which claim protection from an outside source. Emotional appeals are becoming increasingly popular in the health industry, with large companies like 24 Hour Fitness becoming increasingly adept at utilizing a potential customers fear to sell memberships; selling not necessarily the actual gym, but the dream of a new body. Finally, appeals to spite are often used in advertising aimed at younger demographics.

• Association: Advertisers often attempt to associate their product with desirable imagery to make it seem equally desirable. The use of attractive models, a practice known as sex in advertising, picturesque landscapes and other alluring images is common. Also used are "buzzwords" with desired associations. On a large scale, this is called branding.

• Advertising slogans: These can employ a variety of techniques; even a short phrase can have extremely heavy-handed technique.

• Controversy, as in the Benetton publicity campaign.

• Guerilla advertising: Advertising by association. Done in such a way so the target audience does not know that they have been advertised to, but their impression of the product is increased (or decreased) if that is the intent of the advertiser. The focus is to promote the products or services in a way that revolves around ingenuity rather than finances in order to make a large impact, while spending as little money as possible.

• Subliminal messages: It was feared that some advertisements would present hidden messages, for example through brief flashed messages or the soundtrack, that would have a hypnotic effect on viewers ('Must buy car. Must buy car.') The notion that techniques of hypnosis are used by advertisers is now generally discredited, though subliminal sexual messages are extremely common, ranging from car models with SX prefixes to suggestive positioning of objects in magazine ads and billboards.

During the 1990s, advertisers have increasingly employed the device of irony. Aware that today's media-savvy viewers are familiar with -- and thus cynical about -- the traditional methods listed above, advertisers have turned to poking fun at those very methods. This "wink-wink" approach is intended to tell viewers, "We know that YOU know we're trying to sell you something, so bear with us and let's have fun." The ultimate goal of such advertising is to convey a sense of trust and confidence with viewers, by essentially saying, "We respect your intelligence, and you should respect us because we're not trying to fool you." Common television examples include most beer advertising and the commercials of the Geico insurance company.

Public service advertising

The same advertising techniques used to promote commercial goods and services can be used to inform, educate and motivate the public about non-commercial issues, such as AIDS, political ideology, energy conservation, religious recruitment, and deforestation.

Advertising, in its non-commercial guise, is a powerful educational tool capable of reaching and motivating large audiences. "Advertising justifies its existence when used in the public interest - it is much too powerful a tool to use solely for commercial purposes." - Attributed to Howard Gossage by David Ogilvy

Public service advertising, non-commercial advertising, public interest advertising, cause marketing, and social marketing are different terms for (or aspects of) the use of sophisticated advertising and marketing communications techniques (generally associated with commercial enterprise) on behalf of non-commercial, public interest issues and initiatives.

In the United States, the granting of television and radio licenses by the FCC is contingent upon the station broadcasting a certain amount of public service advertising.

Public service advertising reached its height during World Wars I and II under the direction of several U.S. government agencies.

Social impact

Regulation

Main article: Advertising regulation

There have been increasing efforts to protect the public interest by regulating the content and the reach of advertising. Some examples are the ban on television tobacco advertising imposed in the USA, and the total ban on advertising to children under twelve imposed by the Swedish government in 1991. Though that regulation continues in effect for broadcasts originating within the country, it has been weakened by the European Court of Justice, which has found that Sweden was obliged to accept whatever programming was targeted at it from neighbouring countries or via satellite.

In Europe and elsewhere there is a vigorous debate on whether and how much advertising to children should be regulated. This debate was exacerbated by a report released by the Henry J. Kaiser Family Foundation in February 2004 which suggested that food advertising targeting children was an important factor in the epidemic of childhood obesity raging across the United States.

In many countries - namely Europe, New Zealand, South Africa and Canada - the advertising industry operates a system of self-regulation. Advertisers, advertising agencies and the media agree on a code of advertising standards that they attempt to uphold. The general aim of such codes is to ensure that any advertising is 'legal, decent, honest and truthful'. Some self-regulatory organisations are funded by the industry, but remain independent, with the intent of upholding the standards or codes (like the ASA in the UK).

Critiques of the medium

As advertising and marketing efforts become increasingly ubiquitous in modern Western societies, the industry has come under criticism of groups such as AdBusters via culture jamming which criticizes the media and consumerism using advertising's own techniques. The industry is accused of being one of the engines powering a convoluted economic mass production system which promotes