Wednesday, 16 October 2013

Key Areas of Advertising.

Target Market

Identify the Target Market

Target markets are groups of individuals separated by distinguishable and noticeable aspects.

Target markets can be separated into:
  • Geographic segmentations (address, their location climate region)
  • Demographic or socioeconomic segmentation (gender, age, income, occupation, education, household size, and stage in the family life cycle)
  • Psychographic segmentation (similar attitudes, values, and lifestyles)
  • Behavioral segmentation (occasions, degree of loyalty)
  • Product-related segmentation (relationship to a product)
In addition to the above segmentations, market researchers have advocated a needs-based market segmentation approach to identify smaller and better defined target groups. A seven step approach proposed by Roger Best is as follows:
  • Select the target audience - The customers are grouped based on similar needs and benefits sought by them through the purchase of a product.
  • Identify clusters of similar needs - Demographics, lifestyle, usage behavior and pattern is used to differentiate between segments.
  • Apply a valuation approach - Market growth, barriers to entry, market access, and switching is used to valuate segments.
  • Test the segments - A segment storyboard is created to test the attractiveness of each segment’s positioning strategy.
  • Modify marketing mix - The segment positioning strategy is expanded to include all aspects of the marketing mix.

Your Target Market and Your Target Audience Might Differ

In marketing and advertising, a target audience is a specific group of people within the target market at which a product or the marketing message of a product is aimed at. (Kotler 2000).
For example, if a company sells new diet programs for men with heart disease problems (target market) the communication may be aimed at the spouse (target audience) who takes care of the nutrition plan for her husband.
A target audience can be formed of people of a certain age group, gender, or marital status. A combination of factors can also make a target audience, as in the case with men aged 20 to 30. Other groups, although not the main focus, may also be interested.
Discovering the appropriate target market(s) and determining the target audience is one of the most important activities in marketing management. The biggest mistake that it's possible to make in targeting is trying to reach everybody and ending up appealing to no one.

Consumer Influence
Marketing organisations must facilitate the consumer to act on their purchase intentions. The organisation can use a variety of techniques to achieve this. The provision of credit or payment terms may encourage purchase, or a sales promotion such as the opportunity to receive a premium or enter a competition may provide an incentive to buy now. The relevant internal psychological process that is associated with purchase decision is integration. Once the integration is achieved, the organisation can influence the purchase decisions much more easily.
Increasingly, marketers are finding that consumers are influenced by the purchasing decisions of other consumers. A recent study found that 10% of consumers are influencing the buying decisions of a large chunk of other consumers, making them top influencers. Much of this influence is through online means such as social media. As a result, marketers usually find and target these 'top influences' and ensure that they do their bit in influencing the behavior of other consumers.
There are 5 stages of a consumer buying process. It shows the complete process that a consumer will most likely, consciously or unconsciously, go through when they go to buy a product. These stages are:
  1. The problem recognition stage, meaning the identification of something a consumer needs.
  2. The search for information stage, which means searching one's knowledge bases or external knowledge sources for information on the product.
  3. The possibility of alternative options stage, which means checking whether better or cheaper products are available.
  4. The choice to purchase the product stage
  5. The actual purchase of the product stage
The Hierarchy of Effects Model - Effective advertising will aim to influence consumer behaviour at each and every stage of the consumer buying process. There are many different types of advertising that firms can employ to do this:
  1. Commercial advertisers often seek to generate increased consumption of their products or services through branding, which involves the repetition of an image or product name in an effort to associate certain qualities with the brand in the minds of consumers.  The annual Super Bowl football game in the United States is known as the most prominent advertising event on television. The average cost of a single thirty-second TV spot during this game has reached US$3.5 million (as of 2012). Some television commercials feature a song or jingle that listeners soon relate to the product. The Budweiser Frogs are three life-like puppet frogs named "Bud", "Weis", and "Er", who began appearing in American television commercials for U.S. Budweiser Beer ( Figure 1) during Super Bowl XXIX in 1995. The commercial is one of the most popular international beer and alcoholic beverage advertising campaigns.
  2. Radio advertising is a form of advertising via the medium of radio. Airtime is purchased from a station or network in exchange for airing the commercials. While radio has the limitation of being restricted to sound, proponents of radio advertising often cite this as an advantage. Radio is an expanding medium that can be found not only on air, but also online. According to Arbitron, radio has approximately 241.6 million weekly listeners, or more than 93 percent of the U.S. population.
  3. An infomercial is a long-format television commercial, typically five minutes or longer. The main objective of an infomercial is to create an impulse purchase, so that the consumer sees the presentation and then immediately buys the product through the advertised toll-free telephone number or website. Infomercials describe, display, and often demonstrate products and their features, and commonly have testimonials from consumers and industry professionals. 

Focus of Advertisements

Advertisements make propositions to consumers. They are not just words, product puffery, or window dressing. Each advertisement must say: "Buy this product, and you will get this specific benefit."
The proposition must be one that the competition cannot or does not offer. It must be unique, relative to the brand, or make a claim not otherwise made in that particular field of advertising. It must differentiate. The proposition must be strong enough to move the masses, pulling new customers to the product. This is known as the "unique selling point or proposition."

The Unique Selling Point or Proposition

The Unique Selling Point or Proposition (USP) is a marketing concept that was first proposed as a theory to understand a pattern among successful advertising campaigns of the early 1940s. The term was invented by Rosser Reeves of Ted Bates & Company and states that certain campaigns make unique propositions to customers to convinced them to switch brands. Today the term is used in other fields to refer to any aspect that differentiates one object from similar objects.
The term USP has also been largely replaced by the concept known as a Positioning Statement. Positioning determines what place a brand (tangible good or service) should occupy in the consumer's mind in comparison to its competition. A position is often described as the meaningful difference between the brand and its competitors.

Focus on the USP

When preparing an advertisement, the product's USP must be defined. To find a USP, ask "How is this product different?" By making a list of the product's pros and cons the message that the ad should communicate will become clear.
Positioning is an attempt to place a product into a certain category in consumers' minds. Types of positioning are BestAgainst (Hertz vs. Avis, 7-Up vs. Coke), Niche(a sub-division of a category), New, and Traditional.

Brand Character

A brand character statement sets the tone for an entire campaign. A simple way to start preparing an advertisement is with this statement: "Advertising will (A) (B) that (C) is (D). Support will be (E). Tone will be (F)." In this case, A is a verb, B is a target demographic, C is the product, D is an adjective or phrase, E is the core of the ad, F is the "attitude." For example, "Advertising will convince artistic types age 18-35 that Apple computers are hip and cool. Support will be two men discussing Macs and PCs. Tone will be humorous."
The next part of this strategy statement is the target audience. Advertisers use many methods to gain information about this group, including demographics, psychographics (how the target thinks), and focus groups.
Next is the product itself. Important questions to ask are "Why would anybody buy this?" "What is the product's advantage?" and "What is the client's image?" The last one is important to consider in order to make sure the ad coincides with the public perception the company has created for itself. For example, hip or edgy ads probably won't go over well with a company that has a public image of being "conservative" and/or "family friendly."
Support is anything that demonstrates or otherwise backs upthe premise presented in the first sentence. Some examples are facts, images, or a scenario, such as the following:
  • Reason Why: How a product delivers a benefit.
  • Combination: Two or more benefits are demonstrated.
  • Permission to Believe: A clever story or characters make claims that are believable.
  • Nine-Wheel Logic: Specious support used when real support would be too awkward.
  • Image: An attitude or lifestyle that advertiser attempts to link to product.

Advertising Focus Models

Several models help define the focus of advertisement. The FCB Grid, created by Richard Vaughn, categorizes messages as "thinking" and "feeling", "low" and "high."

  • Low Feel commercial demonstrates the pleasure obtained by using the product. This approach is popular for foods.
  • High Feel commercial emphasizes how the product makes the consumer hip or cool. This approach is popular for advertising products like clothing, shoes, or sports cars.
Tom Harris created the Harris Grid for measuring a product's level of interest in consumers versus the level of interest in mass media.

 The Ladder type of advertising messages are arranged in a hierarchical ladder, based on what perspective they use to discuss the product.

The Communication Process
The most basic form of communication is a process in which two or more persons attempt to consciously or unconsciously influence each other through the use of symbols or words to satisfy their respective needs. Likewise, integrated marketing communications uses this communications process to persuade target audiences to listen and act on marketing messages. Our ability to receive, communicate, and process information from other communicators and outside stimuli enables us to perceive the advertising and promotional messages central to integrated marketing communications.

Audience Roles

People play different roles – friend, parent, boss, client, customer, or employee – depending on the exchange during the communications process. The nature of the role directly affects the nature of communication. Communication theory points to the fact that each communicator is composed of a series of subsystems. The input subsystem permits the communicator to receive messages and stimulus from external sources as well as from other communicators. It involves the reception of light, temperature, touch, sound, and odors via our immediate senses. These stimuli are evaluated and recognized using our ears, eyes, skin, nose, and taste buds. Thus, we input and perceive advertising messages – a television commercial or a salesperson’s pitch – using this process of perception.
Thus, organisations must keep in mind the different subsystems of their target audiences when devising integrated marketing communications strategies. Companies must also consider other consumer stimuli such as past experiences, education, health, and genetics when developing communications for certain target markets. Some people may process the humor in a company advertisement more quickly than others due to factors such as age or culture.
Communication systems also exist within an environment such as a corporate office or school. The environment is everything internal and external to the communication system that can affect the system (family, school, competing advertisements, and so on). Each of the factors within the environment interacts with the communication system to a different degree. As a result, where and when consumers interact with company advertisements and promotional tools will also affect their perception of the brand.

Relationship Marketing & Management

Relationship marketing is a form of marketing that shifts focus away from sales transactions to emphasise customer satisfaction. It refers to a short-term arrangement where both the buyer and seller have an interest in providing a more satisfying exchange. This approach tries to disambiguiously transcend the simple post-purchase exchange process with a customer to make more truthful and richer contact by providing a more holistic, personalised purchase. Thus, relationship marketing uses this experience to create stronger ties between buyer and seller. Relationship marketing is cross-functional, in that it is organised around processes that involve all aspects of the organisation. It can be applied when there are competitive product alternatives for customers to choose from, and when there is an ongoing and periodic desire for the product or service. Examples of markets in which relationship marketing can be crucial include:

  • Internal markets
  • Supplier markets
  • Recruitment markets
  • Referral markets
  • Influence markets
  • Customer markets
With the growth of the internet and mobile platforms, relationship marketing has continued to evolve and move forward as technology opens more collaborative and social communication channels. This includes tools for managing relationships with customers, which go beyond simple demographic and customer service data. The practice of relationship marketing has been facilitated by several generations of customer relationship management software that allow tracking and analysing of each customer's preferences, activities, tastes, likes, dislikes, and complaints. Relationship marketing extends to include inbound marketing efforts, public relations, social media, and application development. It is a broadly recognized, widely implemented strategy for managing and nurturing a company’s interactions with clients and sales prospects. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.

Customer Relationship Management

Customer relationship management (CRM) is a widely implemented model for managing a company’s interactions with customers, clients, and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. Once simply a label for a category of software tools, today CRM generally denotes a company-wide business strategy embracing all client-facing departments and beyond. When an implementation is effective, then people, processes, and technology work in synergy to increase profitability and reduce operational costs. A CRM system may be chosen because it is thought to provide:
  • quality and effeciency
  • a decrease in overall costs
  • an increase in profitability
Successful development, implementation, use, and support of CRM systems can provide a significant advantage to the user, but often there are obstacles that obstruct the user from using the system to its full potential. A CRM attempting to contain a large, complex group of data can become cumbersome and difficult to understand for ill-trained users. The lack of senior management sponsorship can also hinder its success. Stakeholders must be identified early in the process and a full commitment is needed from all executives before beginning the conversion. Additionally, an interface that is difficult to navigate or understand can inhibit the CRM’s effectiveness, causing users to pick and choose which areas of the system to use and which to push aside. This fragmented implementation can cause inherent challenges, as only certain parts are used and the system is not fully functional.

Customer Retention

A key principle of relationship marketing is the retention of customers through varying means and practices to ensure repeated trade. This is accomplished by satisfying customer requirements more effectively than competing companies through a mutually beneficial relationship. Customer retention involves counterbalancing new customers and opportunities with current and existing customers as a means of maximizing profit. Many companies in competitive markets will redirect or allocate large amounts of resources or attention towards customer retention. In markets with increasing competition, it may cost five times more to attract new customers than it would to retain current customers.


Demographic Changes

Demographics describe the observable characteristics of individuals living in the culture. Demographics include our physical traits, such as gender, race, age, and height; our economic traits, such as income, savings, and net worth; our occupation-related traits, including education; our location-related traits; and our family-related traits, such as marital status and number and age of children.
It is important that marketers understand the demographic segment that they are focusing on. One differentiation is by generation--two of the biggest demographic groups are the baby boomers and generation X. These historically have been of great importance and focus to marketers. More recently, generations Y and Z have emerged, and marketers must ensure they understand how to target them most effectively. One challenge with the younger generations is that many of them are yet to understand their own tastes and desires.
Demographic trait compositions are constantly changing, and no American, Japanese, or Brazilian is "typical" anymore. There is no average family, no ordinary worker, no everyday wage and no traditional middle class. Still, marketing managers must understand consumers intimately. As we see next, some trends are old, others are new. For instance, the aging of the population has been going on for several decades, but births and birth rates in recent years have been much higher than expected. Immigration is also greater than predicted, and so is the backlash against it. In the US, interstate migration to the south and west are old trends. What is new is heavier movement in the US from the northeast rather than from the midwest and rapid growth in the mountain states.
Consider the following demographic changes and how they affect marketing:
  • Households are growing more slowly and getting older. About half of all households are aged 45 and older and growing at an annual rate of one percent compared with nearly two percent in the 1980s. Marketing communicators must plan for a greater number of middle-aged households, consumers who are experienced and have a better understanding of price and value. These consumers have an interest in high-quality household goods and in-home health care.
  • The traditional family barely exists now. Married couples are a slim majority of US households. Only one-third of households have children under 18, and nearly one-fourth of households are people who live alone. However, married couples dominate the affluent market, as the vast majority of very high-income households are married couples. The long-term trend of high growth in nontraditional types of households and lack of growth among married couples can only mean further segmentation of an already segmented marketplace.
  • The continued increase in education. Most adults in the United States still have not completed college (approximately 67 percent), but that number continues to decline. An increasing number of people have attended some college or have an associate or technical degree. More skilled workers mean more knowledgeable and sophisticated consumers who expect more information about product attributes and benefits before making a purchase.
  • Jobs that do not require physical strength keep growing in number. Also, the extremely high cost of employee benefits suggests that the use of temporary workers and independent contractors will continue to grow. Marketing managers must assess whether consumers who do not have corporate benefits will become more risk-averse because they lack the safety net of company-provided pension plans and medical insurance (related: see Figure 1).
  • People in the US are moving south. More than half (54 percent) of US residents live in the ten largest states, and more than half of US population growth between 1990 and 1999 occurred in these ten states. New York had the largest population of all states in 1950, but in the 1990s, fast-growing Texas pushed the barely growing New York to number three. Why? More than half of the four million immigrants that located in the United States between 1990 and 1995 moved to California, Texas, or Florida.
  • The share of aggregate household income earned by the middle 60 percent of households has shrunk from 52 percent in 1973 to 49 percent 25 years later. Meanwhile, the share of such income earned by the top 20 percent (average income USD 98,600) increased from 44 percent to 48 percent. In other words, the total purchasing power of the top 20 percent of US households now equals that of the middle 60 percent.

Targeting Consumers

Target Consumers Where they Spend Time

Since an exchange involves two or more people, it is natural to think of the market in terms of people, individuals, or groups. Clearly, without the existence of people or businesses to buy and consume goods, services, and ideas, there would be little reason for marketing. Since people create markets, it is essential to target clusters of people and the locations they visit to better implement marketing strategies. The World Wide Web has become an important, albeit virtual, location where companies are spending more time and money to target and influence consumers.

The Rise of Social Media

The Internet, or more specifically, the World Wide Web, has eliminated time and geographic constraints for both consumers and businesses looking to connect regardless of physical location. Social media sites have further aggregated user content around similar topics, tasks and people, creating online communities that have proven to be lucrative targets for online advertising. As of December 2012, Facebook boasts over 1 billion active users, with over half accessing the social network via a mobile device. Personal information ranging from birthdays and profession, to family photos and multi-user gaming yield insightful intelligence for marketers looking to improve promotion to niche and hard-to-reach markets.

Targeting Digital Natives and Other Technology Users

Besides the rapid adoption of Internet technologies among consumers and businesses, the world is now seeing a generation of people born after the emergence of the commercial web come into adulthood. Often dubbed, "digital natives," these individuals have only known a world with the Internet, and are just as or more comfortable interacting with brands in online rather than offline environments. More importantly, they understand the value of digital technology and use it to seek out opportunities, whether to initiate friendships, judge a brand or make a purchase.
Consumers are also increasingly accessing information from mobile devices, versus desktop or laptop computers. Busy and hectic schedules are prompting people to view and access brand messaging on the go from their Smartphones, tablets and gaming consoles. The growing legion of mobile users, as well as the increasing sophistication of online purchasers and their preference for relevant, digital content, will continue to push marketers to produce targeted, messaging for the web.

Target Market Characteristics
The different characteristics of a target market are geographic, demographic, psychographic, behavioral, and product related.


A geographic target market can be consumers in a city, state, or country. This is often important when it comes to international advertising. Some products may do well in some countries but not in others. For example, in Japan where they don't have ovens, companies such as Betty Crocker would not focus their products in this geographic target market.

A demographic or socioeconomic target market would focus on a specific gender, age group. income level, or education level. For example, Plato's Closet, a consignment store for young adult clothing, would focus on the teen and young adult demographic. Irish Spring would focus on a male demographic.


A psychographic target market would be a market that has similar attitudes, values, or lifestyle. For example, the televisions station G4 is aimed at men but also gamers in the age 16-34 demographic.


The behavioral target market focuses on occasions and degree of loyalty. Facebook marketing is often focused on loyal customers with specials they can claim by getting a code on Facebook. There are also discount cards available that offer discounts by allowing shoppers to collect points each time they shop at their store.

Product Related Segmentation

Product related segmentation describes a target approach for customers who already own a specific product. For example, accessories for people who own cell phones, tablets, computers, iphones, or gaming systems. Determining a target market approach to sales has many benefits. It can create a more specific marketing campaign, increase sales, and decrease the number of competitors in the market.

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