Advertising

Chapter 4: Targeting 4. If you were to design a psychographic study for a new chain of lower-priced coffee stores that are planned to compete against Starbucks, what lifestyle characteristics (i.e., people’s interests, values and activities they participate in) might you consider as indicative of whether they might be interested in your new stores' Psychographic segmentation is a method of dividing markets on the bases of the psychology and lifestyle habits of customers. It is the marketers and the sellers of products and commodities who use this technique in order to decide their marketing strategy. Marketing a product requires a deep understanding of the customers’ psychology, along with their needs, in order for the product to be accepted. Marketers carry out a number of activities in order to better understand the psyche and the habits of the customers, so that they can accurately predict the response to the product they are selling, and thus make accurate sales projections. If I were to design a psychographic study for a new chain of lower-priced coffee stores that are planned to compete against Starbucks, I will consider some psychographic variables such as peoples’ interest, activities, opinions and behavioural patterns. Using these factors as a base, I may be able to determine how a particular group of customers will respond to the launch of my new product and service that is a coffee house. Firstly, I will consider about peoples’ interest about coffee stores in the market. I will appoint a group of researches to carry out a market research about people’s response towards having coffee in shops and find out when do they most love drinking coffee. For instance, if people love to have a cup of coffee before heading to work or school, I would then want to open a store nearby a housing area where it will be accessible easily for the neighbourhood and they would not be stuck in traffic etc. Secondly, I will consider the kind of activities consumers’ indulge in their daily life. I will have to look at the current trend of consumers’ lifestyle and routine. People usually eat and drink based on the kind of activities they are going to do. For instance, construction workers usually have heavy meals because they will be working under the sun all day. Similarly, people who work late at night would want to drink coffee as it will keep them awake and fresh. Therefore, I may consider opening a store in the town itself where people usually work till late at nights or even work on a night shift basis. They will be able to get coffee conveniently nearby their work place. Another factor I will consider before opening a coffee store which is going to be competing against Starbucks is consumers’ opinions and ideas about an ideal coffee store. I will take into consideration about what people generally fancy in a coffee store. Also, I will make my coffee stores a user friendly one. For instance, if people love completing their work in a mode of relaxation, I will design the coffee store to be a very homely place with soothing music as the background. If people would like a coffee store to be a place where they can discuss business, I will have some private rooms for them to do so without any disturbance. Behavioural patterns of consumers’ are equally important to be considered before opening a coffee store that is going to be challenging a well known coffee store like Starbucks. The way a particular consumer responds to a certain brand is important as this will result whether the consumer is interested in the product/service or not. For instance, consumers react differently when they hear the name Starbucks and Nescafe. Generally, they would prefer to have Starbucks because it is tastier and has a class to it. Similarly, before opening my coffee store, I would want to do some promotion and branding in order to target audience. I will make sure the coffee made is of high quality and the product information is available to the consumers. Also, the prices will be reasonable as I would want to attract consumers who will be able to afford the coffee. By strategizing this way, I may be able to catch the attention of regular coffee customers because people would love to have high quality coffee on a cheap price. Based on the above explanation about how I am going to attract consumers’ to my new chained coffee store, I think the strategies implemented will be good enough to make sure the coffee store is successful. People’s attitudes and values should also be taken into consideration before opening a coffee store. Psychographic segmentation is essential as it helps us understand the mind of a consumer and their personal needs in life. Chapter 5: Positioning 5. How is your favourite brand of athletic footwear (Adidas, Nike, Reebok, etc.) positioned' Positioning is what the customer believes about your product's value, features, and benefits. It is a comparison to the other available alternatives offered by the competitors. These beliefs tend to based on customer experiences and evidence, rather than awareness created by advertising or promotion. Marketers manage product positioning by focusing their marketing activities on a positioning strategy. Pricing, promotion, channels of distribution, and advertising all are geared to maximize the chosen positioning strategy. Every product or service offered in the market has its own strategy of being positioned by the company itself. It can be positioned in theory or positioned in practice depending on the company’s choice. Athletic footwear companies such as Adidas, Nike, Reebok, etc have their own ways of positioning their products in the market. One of the obvious positioning strategies used by athletic footwear companies is effective positioning statement. Effective positioning statements, as well as product or service positioning, can be expressed in many ways, from a simple slogan to an entire campaign. In most cases, these athletic footwear companies such as Nike, Adidas and Reebok express a slogan in every advertisement, perhaps as the tagline, or as a brand character, or even a sound. Positioning is that one descriptive sentence or slogan or image the brand is known for, that one specific idea that first comes to mind about the product, and that one characteristic that sets the service apart from competitors. For instance, in every Nike advertisement be it on the billboard, television or magazines, there is always the ‘Just Do It’ tagline. By just reading that tagline, consumers will know that this is a Nike product. Nike also uses a specific logo in a form of a tick on every product of their company. All footwear’s designed by Nike have that logo whether it is placed in the shoes or on it. This shows that all Nike footwear conveys a consistent message to its customers and motivates them to action i.e. Just Do It. On the other hand, Adidas also has its own positioning statement which is ‘Impossible is Nothing’. This slogan suggests that customers who use their athletic footwear will be able to achieve anything and everything because nothing is impossible. Customers who read this slogan will have the tendency of believing that the footwear will help them to perform better in sports. Another positioning strategy used by athletic footwear companies is benefit positioning. Positioning with respect to brand benefits can be accomplished by appealing to basic consumer needs which is based on functional needs, symbolic needs and experiential needs. All of the three athletic footwear companies positions their product based on functional needs. These companies (Nike, Adidas and Reebok) attempts to provide solutions to consumers current consumption-related problems or potential problems by communicating that the brand possesses specific benefits capable of solving those problems. For instance all athletic footwear designed by Nike is said to be lightweight, comfortable and odour-resistant footwear. Meanwhile, footwear designed by Adidas is said to be of high quality and long lasting. Another strategy that Nike, Adidas and Reebok use is positioning based on symbolic needs. This includes self-image enhancement while using a certain product. For instance, someone feels superior while wearing Nike footwear compared to an ordinary one. Nike, Adidas and Reebok uses this strategy to position their product in the market as their products are always worn by famous and well known athletes around the world. Moreover, wearing branded footwear gives the person a sense of belongingness and social meaningfulness. Another strategy used by these athletic footwear companies is positioning based on experiential needs. Consumers’ experiential needs represent their desires for products that provide sensory pleasure, variety and cognitive stimulation. For instance, Nike footwear is promoted as being out of the ordinary and high in sensory value. A consumer who wears a Nike shoe feels wonderful and looks classy compared to when he wears an ordinary shoe. The feeling of wearing high end footwear gives him the confidence and allows him to perform better. Furthermore, a brand can be positioned in terms of a particular attribute or feature, provided that the attribute represents a competitive advantage and can motivate customers to purchase that brand rather than a competitive offering. Product attributes can be distinguished as either product-related or non-product-related. Nike, Adidas and Reebok use product-related positioning by having sleeker product designs, superior materials, and attractive colour options for their footwear. All these three companies design attractive footwear in order to get the attention of consumers. In conclusion, every company have their own way of positioning their product in the market. Similarly, well known athletic footwear companies such as Nike, Adidas and Reebok position their products using certain strategies as discussed above. Chapter 7: Overview of Advertising Management 4. Present arguments for and against using advertising agencies. An advertising agency is a professional firm that focuses on advertising from every aspect and ensures to place the good or service at a correct place in the market. A fully developed advertising agency has different departments to perform specific functions and some of the agencies even help to produce unique advertisements for the clients. The role of an ad agency is really dynamic because the agency can do all the work from production of an advertisement to placement of the ad. An advertising agency is a service dedicated to creating, planning and handling advertisements and other forms of promotions for its clients. An ad agency is independent from the client and provides an outside point of view to the effort of selling the client's products or services. An agency can also handle overall marketing and branding strategies and sales promotions for its clients. Typical ad agency clients include businesses and corporations, non-profit organizations and government agencies. There are several advantages of using an advertising agency and an advertiser must enrol an efficient agency to get positive results. Firstly, an advertising agency can work with a business to develop a campaign that can help create name and brand recognition to potential customers. For small businesses to thrive, especially in a tight economy, it is beneficial to be recognized in the marketplace and to differentiate themselves from the competition. An advertising agency will work with the business to develop a campaign. This can involve everything from coming up with a promotional theme, determining the proper media to use, creating the advertisements, and even negotiating the prices for purchasing the advertising with the various media. This can be extremely beneficial to the business owner who has little or no advertising knowledge or has only used one type of media. Another advantage of using an advertising agency is that the agency has its own creative experts who design advertisements that will have an impact on the audience. Meaningful adverts are crucial for the company to be successful. While business owners may be experts in their particular field, they may possess little or no knowledge of what makes an effective, attention-grabbing advertisement. Advertising agencies are staffed with people whose sole job is to come up with innovative ideas that can be completely original, or based on themes that have worked in the past. This can also help the business owner who is not inclined to think creatively. One of the biggest benefits beyond the creativity is that advertising agencies can save businesses money in the long run because they have the ability to buy media in bulk at rates that a single business cannot obtain. Also, they are educated as to the best times and places to run ads to reach your target market, ultimately minimizing wasted spending. Choosing the correct and specific time to air an advertisement is vital because we do not want to be simply airing an ad without knowing who the audience are. Moreover, an advertising agency can help you tune your target market so that the message is designed to reach those you want to reach. Another reason for a company to hire an advertising agency is that the agency is aware of the current market situation. Business owners may not be strong in the area of market research. The advertising agency can perform much of the legwork in this area by helping to identify the business's target market as well as their key demographics. Thus, the advertising agency may be better suited to determine what type of advertising would be most effective, as well as to whom the ads should be aimed. However, using an advertising agency may also have some disadvantages to a company. Firstly, the company will have to allocate extra money for the advertising agency. Hiring an advertising agency is an expense that some businesses cannot afford, especially during tough economic times. When a company hires an ad agency, they are tapping into the expertise of copywriters, designers and creative directors, all of whom need to be compensated from the commission of the company. For many small businesses, an advertising agency is not an affordable option. Secondly, an advertising agency can be unfamiliar with the product or service of a company. The ad agency may know toothpaste or iPods or microwaves, but it may know little or nothing about your company's product or industry. Given time, you may be able to educate the agency's people about what you do, but there is no guarantee that they will develop a true feel for your business. Consequently, you could end up wasting thousands of dollars on an ad campaign that misses the mark. Another reason for not hiring an advertising agency for your company is that unclear expectations. There is always the risk of disconnection between what the company hopes to accomplish with the ad campaign and what the agency actually delivers. For the campaign to succeed, the company must have a clear objective for what they are trying to accomplish. For example, if the company is looking to increase market share by lowering its prices to attract new customers, the company needs to ensure that an ad campaign highlights the new pricing structure. But an unresponsive agency might offer a different and unsuitable approach which a result to a bad advertising campaign. Furthermore, hiring an advertising agency is not the best option because a company may be given lesser priority compared to other big budget companies. If a company is not regarded as a big client by the ad agency, it may not allocate its best resources to the company’s project. Also, if the agency picks up more big clients after a smaller company has signed on, the company may get pushed even farther down the totem pole. As a result, the project of a small company may be assigned to inexperienced staff members because the best staffs are busy working on bigger budget adverts. In conclusion, there are several advantages and disadvantages of hiring an advertising agency for a company. Sometimes paying more to have an advertising agency manage a campaign increases the returns on advertisement investment. But for many small businesses, budgets only enable internally designed and implemented campaigns. Only you can decide how to balance your time and money against the advantages and disadvantages of advertising agencies.