CH-16-18 Direct marketing – Advertising and Promotion: An Integrated Marketing Communications Perspective : Book Guide

This Document Contains Chapters 16 to 18 Chapter 16 Direct marketing Answers to Review Questions 1. Explain how companies use database marketing. Name some of the companies that may have your information in their database. Explain how this information is used to reach you. An important factor in the success of direct marketing is that of developing and maintaining a database. Sources for names to include in a database come from a variety of sources, including customers themselves. When you fill out a warranty card, provide information to receive promotions, or even provide information at the cash register, there is a good chance your name will be entered into a database. Once in the database, companies will use your name for a variety of marketing purposes. Sending out notices of sales, phoning members of the database, and sharing your name with other companies or organizations are just some of the activities for which the names will be used. In addition, sophisticated companies spend much time and effort in analyzing their databases. Through their databases they can track sales, determine the impact of sales and promotions, and profile their customers. By selling the names to others, another revenue stream is developed for the company. 2. What is the difference between the one and two-step approaches to direct marketing? Give examples of companies that pursue both methods. In the one-step approach, the direct marketer is trying to get a sale immediately upon exposure to the direct communication. For example, the commercials that ask you to call an 800 number “right now” and place an order would be an example of the one-step approach. Companies selling magazines, gimmicky items, psychic networks, etc. typically use this method. In the two-step approach, two communications are used. Sometimes, as in the case of magazine subscription sales, companies like Publishers Clearing House and others will send a notice of an up-coming sweepstakes, telling the receiver to watch the mailbox to enter, and then send the second piece. Others may use a TV commercial to have the viewer call in for further information, a brochure, etc. then follow-up with another communication to attempt to make the sale. It is interesting to note that some companies that originally used the one-step approach—for example, Publishers Clearing House and Bowflex, now employ the two step model. Bowflex—an extremely successful direct marketer employs a variety of media including TV, coupon inserts in the mail, and the Internet in their direct marketing efforts. 3. Why are loyalty programs considered to be a direct-marketing program rather than a sales promotion? Loyalty programs are established activities within an organization that facilitate the ongoing relationship with its customers. Sales promotions are short-term events that are started and stopped with a prescribed time period. This distinction is a primary characteristic that is very important to point out. As part of this, it should be noted that a simple card keeping track of purchase like coffee where a consumer would get free one after buying ten is not a loyalty program since it does not fulfill the characteristics outlined in the chapter. In all likelihood, this kind of card is akin to a sales promotion since it can be discontinued so very simply by no longer distributing them. A loyalty program operates with customer registration and executes communication and loyalty transactions via the use of a data base. This is substantially more involved and institutionalized compared to a coupon event or running a price discount for a few weeks. 4. One of the disadvantages associated with direct marketing media is the high cost per exposure. Some marketers feel that this cost is not really as much as a disadvantage as is claimed. Argue for or against this position. While the higher cost per exposure is often considered a disadvantage associated with direct marketing media, in many cases this cost may be warranted. While most other media have lower costs, their value lies primarily in creating exposure, interest and/or providing information. Direct marketing media actually seek a response. Thus, the higher cost is warranted if there is a higher, more direct behaviour associated with the communication. The ability to target market, and eliminate waste coverage is another factor in support of the higher cost of direct marketing media. When one factors in the minimal waste coverage, the cost per exposure may be more in line with competitive media. Finally, the ability to tailor the message may result in a more effective message. If this is true, and it improves the likelihood of a behaviour, again the higher cost is warranted. 5. How does direct marketing influence each stage of the consumer decision-making process as it works with other IMC tools? Direct marketing messages and media can influence every stage of the decision-making stage. No doubt some attempts work at the need recognition stage. For example, direct mailings to households for household services encourage consumers to use a service rather than doing it oneself (e.g., snow removal, lawn maintenance). Consumers may be on an email list for a retailer and receive notification of a sales event or new merchandise and begin the process of information search by visiting the store. A follow-up phone call from a car dealership, along with brochures sent or picked up, assist consumers in the alternative evaluation stage. Essentially, virtually any direct response media could be used as each of the stages assuming the right message is associated with the deliever and there are no logistical difficulties to turn off the consumer as they progress through the stages. Answers to Applied Questions 1. Construct a list of variables that a fashion brand might desire in its database to mark to students in college or university. The starting point for this question would be Figure 16-2. Students would add or delete from the list of variables. Given it is a fashion product, the database might be include lifestyle variables that would be related to design etc. If possible the database would include the styles liked or other preferences that its clientele might desire. 2. Collect any direct mail delivered to your household and evaluate whether it is effective. This is another experiential exercise designed so that students can understand the marketing stimuli they encounter on a regular basis. Students can examine the material and assess the degree to which there may be category need, awareness, attitude, and purchase intention effects. As part of this evaluation instructors can link the creative decisions covered earlier to illustrate that they are operational in this media much like other print, TV, and online messaging. 3. Read up online about an interesting loyalty program and apply Figure 16-4 to identify the characteristics and give an assessment of the program’s value. Students may investigate one of the loyalty programs featured in the chapter, so instructors might want to put constraints on the question. For example, Air Miles is referenced quite a bit so perhaps this one might be skipped. Alternatively, Air Miles could be used as a basis, an in class summary first, and then each student could compare another one to Air Miles. Figure 16-4 represents new material in evaluating loyalty programs as the topic has grown with the maturity of the programs the past couple of decades. Instructors may want to refer to the article as it in very comprehensive shedding new light on a topic that is much more complex than one might expect. In the end, an overall assessment on whether the program fosters loyalty or merely sets up switching cost should be considered and investigated with respect to consumer behavior theory. 4. How might a smartphone service improve its marketing communication with the use of direct marketing? Customers of smartphone service providers can receive regular information flow from email. Conversations via chat can occur when the customer has some kind of difficulty, perhaps simple instructions from a service attendant could alleviate extensive dissatisfaction. Alerts can be given when new product and services are available with both of these options. Glossy communication via a magazine could work as well since the mailing address is in the data base. Also, the personal touch might be helpful with phone calls periodically to answer and questions or concerns. 5. Provide examples for both consumer goods and services of how companies might use direct marketing as part of an IMC program. This is an open question for students to present their findings. They should be encouraged to look for examples that would interest themselves and their fellow students in order to understand how direct marketing works. Instructors need to be prepared to react to the material presented and offer structure on the type of objectives, strategy and tactic that are used, and to draw connections on how the direct marketing effort may be connected to other IMC tools. This assignment could prove to be very interesting to students if the right examples are sought and investigated accordingly. Additional Discussion Questions (not in text) A. Explain how a consumer goods company might employ database marketing. A business-to-business company? A service company? All industries can use of database marketing in a variety of ways. Following are a few examples: • Consumer goods companies—consider the example of bicycle helmet companies. A helmet is purchased, and the warranty card is filled out. The information is entered into a database. The database can then be used to cross sell the customer on additional bike products, offer an insurance policy in case of helmet failure, and sending a thank you for the purchase. Bike helmets are replaced, on the average every three years. Around this time, the database identifies potential new buyers, and direct mail pieces, coupons, reminders, etc. are sent to the prospective buyers. • Business to business companies—the possibilities for relationship building are enormous. Automatic filling and shipping of orders, cross selling and other database tools can be applied. In addition, announcements of new products, sales and/or promotions can be sent from the database. In respect to customer service, the information contained in the database may speed up the entire problem solving process. • Service companies—banks are extensive users of database marketing tools. New banking services designed to specific demographic and/or socioeconomic groups rely on databases to increase the ability to specifically target these groups with new program offerings, important changes, news, events, etc. B. Many marketers felt that the Internet would hurt the direct mail catalog industry. In fact, this has not been the case. Explain some of the similar characteristics of catalog shopping and shopping on the Internet. Then explain why you feel the mail catalog business has not been hurt. When direct marketing began to grow in popularity, some people felt that it would be the end of the retail shopping business. Obviously, this was not the case. Likewise, when the Internet started to take off, some believed that this new medium would be the death of catalogs. Again, not true. The direct marketing people have always felt the Internet would be a boon to the industry—not a threat. The Internet and the catalog are both direct response media. In fact, some websites are online catalogs, seeking orders just as mail catalogs do. Both media satisfy the needs of the consumer, that is, the ability to order direct, save time, etc. In fact, the media complement each other in that shoppers now have two options for shopping and for ordering. Studies have shown that many shoppers will peruse the mail catalogs, finding what they want, and then order through the Internet. These shoppers find it easier to order through this method than via phone or completing the order form. Likewise, many shoppers are still more comfortable with the print medium for seeing and examining products. The fact that the Internet makes catalog shopping easier accounts for much of the fact that it has not hurt the catalog industry. Some companies have found that they have maintained their customers who were previously catalog shoppers, but who now order through the Web. C. Why have companies like Volvo, Cadillac, and General Motors increased their use of infomercials? Is this a wise strategy? The low cost associated with infomercials have attracted many “mainstream” companies to this medium. Compared to prime time television rates as well as other media, infomercials are a CPM bargain. For those in a buying mode, or considering the purchase of an auto, the infomercial can provide valuable information upon which to make a decision. While these persons may not yet be motivated to go to the auto showroom for information, they may be interested enough to watch the infomercial. Whether this is a viable strategy on the part of the auto companies remains to be seen. Some consumers are offended by infomercials while others just don’t like them. Even though the CPM is low, if many consumers are disinterested in this form of advertising/selling, cost efficiencies are lost. Add to this the potential negative impact on image, and one has to question this strategy. Infomercials continue to gain in popularity. Major corporations like GM, Volvo and many computer companies have now found this to be an effective means of communication, and—as noted in the text—a vast majority of television stations report having aired the 30 minute commercials. The infomercial has had an interesting evolutionary process. Originally the domain of smaller direct response companies, the infomercial was a thinly veiled 30-minute advertisement. Amazing Discoveries—a program that appeared as a representation of new inventions—and diet programs in which doctors hyped specific brands that were supposedly more effective in weight loss were the rule. These programs were very inexpensive to produce, and media time was bought at a very low rate. For all intents and purposes, the infomercial was nothing more than an advertisement deceptively presented as a television program. Because of their high level of success, infomercials attracted the eye of major corporations. The result was less deception, more information content and more legitimacy. At the same time, these infomercials were much more sophisticated, with production costs soaring. Media time also increased along with the increase in demand. As discussed in the text, the original form of infomercials still are the most popular—i.e., psychic friends networks, amazing products, etc. However, there will continue to be an increase of major companies’ ads—due in large part to a potential crackdown for deception by the FTC. D. Explain why companies like KitchenAid, Soloflex, and others have been successful in adopting direct marketing techniques. Describe the conditions that contribute to the successful implementation of direct marketing programs. The effectiveness of direct marketing has been known for quite some time. Almost as soon as it started through TV, direct marketing has been proven to be a success for smaller companies, start-ups and what might be considered “out of the mainstream”—psychic networks, etc. Now, however, large corporations have found these techniques—particularly the infomercial—to their liking. A number of factors have led to success for these marketers. The low cost of the medium—that is, both production costs and media costs are low. Advertisers can produce an infomercial for a relatively low cost compared to commercials, and the media costs—because of the time periods purchased - are also inexpensive. Beyond the costs, infomercials and other direct marketing tools also offer attractive features. One is the ability to reach the desired target audience. As noted in the text, the infomercial buyer, as well as those who use catalogs and shop online, reflect a range of demographics. It is now possible to reach these potential buyers effectively through these media. Content of the direct response messages is also a positive attribute. For example, a one-hour infomercial can provide the potential car buyer with a lot of information, right in the comfort of their home, and with little effort. The same is true for other products, some of which the buyer may not be familiar with and may become interested once they have acquired more information. In the Monster and Whirlpool examples, the ability to bring in more information—employment quizzes, recipes, cooking tips, etc.—which are useful and interesting to the prospective buyer are also “value-added” components that will keep visitors coming back, and potentially purchasing. Overall, the infomercial, and direct marketing overall, has evolved from its original platform. Once strictly a sales tool, these media have discovered that they can offer the consumer much more, maintaining their interest and satisfaction, generating goodwill, etc., and still generate sales. To some of these companies, the primary goal is not to sell, but to support other marketing efforts. The fact that they lead to additional sales is “icing on the cake.” E. Describe what is meant by a database. What functions do databases perform? A database is a listing of customers and potential customers. These lists may be organized on a variety of factors, including demographic, geographic, and even psychographic. The database has become a powerful marketing tool. Marketers use databases to: • Improve segmentation strategies—lists can demonstrate past purchasers, potential purchasers, and (as noted above) be segmented on a variety of criteria. • Stimulate repeat purchases—many companies arrange databases in a way that allows them to contact customers when a service is due. For example, car dealers letting customers know when their service is due; carpet cleaners notifying customers that it has been a year since their last cleaning etc. • Cross-selling—once a customer is included in the database as a result of a purchase, the opportunity exists for cross-selling. For example, camera companies may sell film or developing to recent camera purchasers; tape and disc companies can cross-sell videotapes, etc. The opportunities for using databases seem endless. A good discussion can ensue on this topic. F. Direct marketing has been beset by a number of problems that have tarnished its image. Discuss some of these and what might be done to improve direct marketing’s image. Perhaps the major problem associated with direct marketing is its image. Putting aside all of its other advantages, image problems continue to plague the industry, making it difficult to shed the “junk mail” role. These problems stem from all direct media. In direct mail, one’s mailbox is full of unwanted catalogs, ads and solicitations. Telemarketers continue to aggressively pursue new business. Infomercials, despite their advances in sophistication, can be perceived as being questionable if not deceptive. The Internet contains pornography and the potential for fraud. While the vast majority of direct marketers are not guilty of such actions, it is the few that reflect negatively on the image of the many. Each news story of fraud and/or deceit associated with direct marketing hurts the overall image. Direct marketers could establish guidelines for appropriate actions, and could work closely with academia and industry as well as the government to help eliminate many of the problems. As more and more large companies become involved, the costs of infomercials will be beyond the reach of many, this too will help. But like any other medium, there will always be those that will attempt to make money in a less than honest fashion. They will never be eliminated; they can only be reduced in numbers G. Why do you think home shopping channels have been so successful? What is the profile of the home shopping channel user? Home shopping—at first thought we picture the stay-at-home TV addict with little or nothing better to do than watch a home shopping channel. In reality this may not be true at all. The profile of the home shopping channel viewer—while watching TV slightly more—is very similar to purchasers of products through the store. Home shopping has increased for the same reasons that direct response purchases have increased in general. The biggest reason is that people don’t have time to shop. Another reason is that to many people shopping has become a hassle. Fight traffic, look for a place to park, fight the crowds—it just a lot easier to sit in your living room and buy. Finally, the offerings on home shopping have increased and improved. Celebrities sell everything from clothing to perfumes—some exclusively through home shopping channels. Turn on the TV; pick up the phone, have the packaged delivered—its simple in an increasingly complicated world. IMC Exercise Catalogues have become an important direct marketing tool, and many catalog companies have opened retail stores. Have students provide examples of these occurrences, bring in example catalogues, and explain why this is occurring. IMC Comprehensive Project Explain whether the product could be marketed through direct response media. If not explain why not. If so, include in the plan the direct media to be used, the cost, budget allocation for their inclusion should be provided. Chapter 17 Internet media Answers to Review Questions 1. How has Internet media threatened other media? How has Internet media assisted other media? Many dire predictions of the demise of traditional media have not come true. In fact, just the opposite has come true. The Internet may be one of the best things to ever happen to traditional media. Internet marketers very quickly learned that they needed traditional media to promote their sites, and that promoting on the Internet alone would not be sufficient. The result is that traditional media have received the rewards of the Internet companies’ expenditures, and are bringing in revenues at a very high rate. Recent events have demonstrated that for Internet companies to survive, they will need to adopt more traditional marketing methods, and employ even more traditional media. Traditional media brands are finding ways to deliver content on the internet which has expanded their revenue base. In fact, news readership is stronger with two avenues for consumption. Its only serious decline is the loss of its lucrative classified to online versions. TV encourages interaction with its programming via social media and its revenue has steadily grown, as does radio to some degree. Out-of-home has resurged with the GPS technology connecting to consumers’ smartphones. 2. Explain the different advertising formats that advertisers use with Internet media. Discuss the advantages and disadvantages associated with each. A variety of options are available to those who wish to advertise on the Internet. Display Ads—banner ads are the most common form of advertising and moved to a new standard known as Universal Ad Package (CAUP in Canada). Rich media ads are growing with a new standard known as Rising Star Display Units. Research shows these are substantially more effective with their interactive capabilities. Other rich media ads are Pop-ups/Pop-unders which are small message boxes that appear on one’s screen. Interstitial ads appear while content is downloading. Similarly ads shown when a viewer arrives at a website are splash page ads. Ads are good for awareness and the brand is read and presumably processed at a low level of involvement. An extremely small percent are clicked indicating a small portion desire further information at a website or social media vehicle. Paid Search Ads—search engine prompts of key words provides links to related web-sites. These links are essentially an extremely primitive form of a display ad that encourages additional action of the user desiring to process the message further at website or any social media vehicle potentially. These clearly assist in the shopping for consumers at the information search stage or alternative evaluation stage. Directing to the appropriate website can naturally contribute to brand awareness and brand attitude objectives. Classified and Directory Ads—a substitution of ads from newspapers (e.g., classifieds) and directory books (e.g., Yellow Pages) occurred over the past decade. General (e.g., Kijiji) and specialty websites (e.g., Autotrader) offer advertisers similar targeting options like other media. Similar to search ads, these assist in the directing consumer while shopping. Video and Audio Ads—streaming of video messages via internet media increased with broadband growth and penetration giving rise to greater advertising opportunities. Online Video Ads—television-like commercials are available for viewing in many locations such as webs-sites and web-portals. Video available for viewing can include television-like ads that users can view prior to receiving the content. These ads are seen without TV show like content. Digital Video Ads—commercials are placed within programming on major TV networks like CTV. In this respect, consumers view the ads as the “cost” of seeing content not paid for. Podcasting—audio communication is sponsored by advertisers with the effect simulating radio ad. The growth of video message in many ways and in many social media vehicles allow for brand building such that sophisticated brand positioning strategy opportunities now exist for promotional planners. This explosion of video will certainly challenge TV in this regard, however targeting will continue to be a difficulty with Internet media. Mobile Ads—penetration level of smartphones provides a growth opportunity for advertisers for short message service (SMS), display, search, and apps. In many respects, each of these is the portable manifestation of what occurs in advertising when one accesses Internet media via a non-mobile device with the exception of apps perhaps. All communication effects can be achieved with substantial levels with mobile ads, however the brand image will be curtailed to a degree due to the smaller screens sizes. However, the on-demand nature of phones, combined with all the different advertising format described above at the touch of one’s fingers at any point in time, anywhere, opens the door for considerable brand communication. 3. Explain the three ways in which a promotional planner can achieve positive marketing communication effects in social media. Popular terminology is “owned” media, “paid” media, and “earned” media. All three of these existed historically, but like many things, their saliency heightens with a change in the environment. Owned media exists with a brand’s own Facebook page (or website from a non-social media view). Companies have always distributed its own media in different ways; notably collateral material like brochures which represented “owned” media. A brand can have its own presence in social media with its own Facebook page, Twitter feed, or YouTube channel. Presently, a reasonable use of these social media can avoid paying the “paid” media features. Of course, if a brand chose to do so, it could make it marketing communication message go through each of these social media vehicles and pay for the delivery of ads just like what is done broadcast and print. Finally, media publicity represented “earned” media originally, and now it is seen with social media activity like tweeting or retweeting, sending links of YouTube messages to others or communicating via many Facebook options. In essence we witness an electronic manifestation of word-of-mouth communication, a key feature of “earned” media for a century or more. 4. Describe the ways that marketers measure the effectiveness of their use of Internet media. How do these measures relate to more traditional measures? Internet marketers have a number of exposure measures that include: • Page impression—number of users exposed to a webpage • Visits—number of user sessions • Unique visitors—number of different visitors to a site in a specific time period • Ad Impressions—number users exposed to an ad • Clicks—number of users interactions with an ad • Click-through rate—percentage of ads exposed that users click Internet marketers have a number of processing measures that include: • Average time per visit—length of times spent on webpage (note error in text) • Average time per visitor— (note error in text) Marketers also adapt other media measures for communication effects to assess awareness and attitudinal results. Behaviour is tracked with respect to repeat visits, frequency and recency. 5. Review the limitations of Internet media and assess whether these are as weak as the limitations of other media. Target audience coverage is problematic with Internet media. The placement of one ad on one vehicle is quite limited compared to what may occur with TV for example where a placement of an ad may reach 2% to 4% or upwards of 8% to 10%. A placement of a print ad may be exposed to a few hundred thousand in the case of Canadian Living, but only a few tens of thousands with an online banner ad. Carrying this line of reasoning beyond one placement, reach attained by using multiple vehicles is potentially very strong with TV and other media, but a banner ad with Internet media would require even more ad placements to achieve high levels of reach (e.g., 30% or 40%). Banner ads on many websites produce significant clutter with many of them competing for attention, and this may be similar to newspaper ads, however TV ad placements do not have any other ad playing at one time and many magazine ads are full page without any competing messages. Refer to Figure 11-24 to illustrate the level for receivers’ attention occurs with each media. Much data (e.g., Figure 12-11) shows that many consumers do not view Internet media ads favourably, so from a media image standpoint, ads in Internet media have a long way to go. All of this is quite curious with the growth of Facebook ads and the placement in other Internet media vehicles. 6. Discuss the advantages of Internet media. For which types of advertisers is Internet media best suited? Why? The Internet offers some distinct advantages to the marketer. These include: • Target audience selectivity • Involvement and processing time • Control for selective exposure • Creativity • Costs Most companies may be able to find a way to use the Internet to operate to their advantage. They just need to know how to define what the objectives they are seeking will be in determining its role. Answers to Applied Questions 1. Select a favourite Internet site for a brand and investigate how it achieves the objectives outlined in this chapter. Students should have an enjoyable time applying the objectives outlined in the first section to their website selection. Of course, they may be looking at sites that are directed for transactions versus communication; however, instructors could still quiz them on how the website communicates the brand as part of completing the transactions. Instructors should make note of how well the student draws on all the characteristics of the web design that are consistent with the design elements looked at in Chapter 8. It may be tempting to delve into the technological elements, but instructors should keep the discussion on point with respect to communication. 2. Visit a number of internet media vehicles and evaluate the effectiveness of the display ads in terms of the creativity, message, and ability to reach the intended target audience. Of course students already looked at many different sites in the past; however in all likelihood they have not critically evaluated the ads. This exercise will allow students to apply the creative decisions of Chapter 7 and 8, as well as the segmentation variables in Chapter 3. In order to fully address these points, relevant ideas from Chapter 4 and 5 will have to be applied as well. 3. Investigate the social media use, in as many vehicles as possible, of a favourite brand, and asses which social media appears most effective for that brand. Social media is so pervasive and varied, this exercise encourages student to look at all the major vehicles to see if the message and image portrayed is similar or different to make a conclusion regarding effectiveness. Brands selected could be quite varied and this question could make for a fun class as students went from location to location in their presentation pointing out the key elements. 4. What measures of marketing communication effectiveness are relevant for each of the four types of social media investigated in this chapter? Students should be able to show that all aspects of measurement are relevant. Brands would want to know the numbers participating with the social media, the exposure and processing levels, and also try to figure out if there is any attitudinal influence. Behaviour could be especially interesting to talk about what to measure with so many different activities that are possible with each of the different social media. 5. Given the strengths and limitations of Internet media, how would a promotional planner use all the Internet media options to optimize a digital media plan? As with other media, promotional planners should make sure that they use enough Internet media to influence consumers at every stage of their decision-making process. And if brands consider marketing to customers and non-customers, then they need to consider all the stages for both types of customers. Additionally, brands should ensure that the all communication and behavioral effects are attained with multiple media. 6. Select a product of interest and explain how each of the four types of social media described in this chapter can be integrated effectively with broadcast, print and out-of-home media. TV and radio ads clearly suggest receivers to visit their Facebook page for varying reasons (e.g., information, promotion) and to find the brand’s YouTube channel for example. This covers off two of the four social media classes. It is unclear whether brands direct receivers to the other two, but the option certainly exists if there is a compelling communication objective. Print media commonly show the social media icons and given the reading format of this media, it may be more likely that brands could direct its target audience to a blog or a cause that is using a wiki for example for increased brand communication. Directing receivers to social media from out-of-home media does not appear as likely, perhaps due to its transient nature. However, this appears to be moving in the right direction with the use of mobile technology (e.g., QR codes) and we can expect more signage to be directing receivers to appropriate social media vehicles while consumers are in the process of shopping. Additional Discussion Question (Not In Text) A. One of the most difficult objectives to achieve on the Internet is creating a strong brand image. Discuss the factors that make brand building both difficult and possible. A strong brand image goes beyond just creating awareness. Strong brands convey a very distinct impression of the brand; when their names are mentioned, something immediately comes to mind. Development of a strong brand requires that one have well developed, sustaining and differentiating attributes that distinguishes it from competitors. Brand image does not take place over night, and can change over time. Brand images can also be enduring which require appropriate messaging. The marketer must be committed to the brand, always being consistent in all marketing efforts on its behalf. Traditional media like TV and magazines are currently more effective than the Internet media for purposes of creating brand image. However, Internet media is becoming more like TV and it brand building capabilities will emerge significantly. B. Discuss the objectives marketers may be seeking in their use of the Internet. Which is the Internet best suited for? There may be a number of objectives for employing the use of the Internet. These include communications objectives as well as e-commerce. Communications objectives include: • Develop awareness—establishment of a website immediately provides the potential of worldwide exposure. However, it does not guarantee it. By establishing a web presence, companies with limited budgets may now be discovered by potential customers, and may establish a website for just this purpose. • Disseminate information—perhaps one of the most effective uses of the Internet is that of providing information. No other medium can provide more information, at a faster pace and for less cost than the Internet • Build a brand image—websites can also assist a company in providing the market an image or to communicate their positioning • Facilitate interaction—all aspects of Internet media facilitate interaction (e.g., reciprocal, responsive, speedy, non-verbal information, page 493 of text). All of the above constitute objectives for using the Internet. Depending on the nature of the company, each may be more useful. For example, for a small company with a limited budget, the ability to gain awareness may be the most valuable objective. For a large company, with an extensive advertising budget, the ability to provide information may be most important. At any given time, these objectives may also change. IMC Exercise Have students visit websites in both the consumer and business-to-business sectors. Have them evaluate the sites based on the communication objectives discussed in the text, critiquing the site and offering suggestions for improvement. IMC Comprehensive Project Develop the Internet strategy. Describe what the website will look like (or design one), and which advertising and promotions forms will be employed. Will the site include public relations sections? How will it contribute to social media usage with respect to the brand? Chapter 18 Regulatory, ethical, social, and economic issues for IMC Answers to Review Questions 1. Explain why you agree or disagree with the rulings of the rulings of the ASC presented in this chapter regarding the Ford Focus and Kia automobile ads. The answers to this question are subjective. Arguments for or against should be based on students’ interpretation of Clause 14 of the Code and principles of the Guideline. Instructors might want to contrast these cases with the others listed, or possibly focus on contrasting these two cases with a few others that have had many complaints. The search function on the ASC website allows for instructors to call up different examples from the past ten years or so. The intention of this question is to open the door for students to understand the content of the code. 2. Evaluate the arguments for and against advertising to children. Do you feel restrictions are needed for advertising and other forms of promotion targeted to children? There are numerous arguments that are offered by those individuals or groups opposed to advertising to children. They argue that children, especially young ones, are vulnerable to advertising because they lack the necessary experience and knowledge to understand and evaluate critically the purpose of persuasive advertising appeals. They also argue that many preschool children cannot differentiate between commercials and television programs and do not perceive the persuasive, selling intent of commercials, and cannot distinguish between reality and fantasy. It has also been argued that advertising directed toward children creates materialism, stifles creativity, creates conflict between the parent and child, and hinders the development of moral and ethical values. In addition to advertising, marketers use various other forms of promotion to target children such as premium offers and entertaining web sites on the Internet. Self-regulatory groups as well as government agencies have passed guidelines and legislation to ensure that control the use of these promotional tools in marketing toward children. Numerous arguments can be offered in favor of advertising to children. It can be argued that advertising is a part of life and children must learn to deal with it as part of the consumer socialization process. Advertising serves as an information source and teaches children the consumption skills necessary to function in the marketplace. It is also argued that it is the responsibility of the parents to help children interpret advertising, to monitor the shows their children watch and ultimately to decide whether or not to purchase a particular product for their children. 3. Discuss how attitudes toward the use of sex in advertising differ between men and women. Discuss the implications of these attitudinal differences for marketers who are developing ads for each sex. The results of an online survey of 200 men and 200 women conducted by Media Analyzer Software & Research in September 2005 are shown in Figure 22-2. The results concerning general opinions about sex in advertising revealed that it is a very polarizing issue. While almost half of men indicated that they like sexual ads, very few women felt this way. Nearly two-thirds of the men indicated that sexual ads have high stopping power and get their attention while only a quarter of the women thought the same. Women were also more likely to feel that there is too much sex in advertising, that sexual ads promote a deterioration of moral and social values, and that ads with sexual themes are demeaning of the female models that appear in them. Only a small percentage of both men and women indicated that ads with sexual themes make them purchase a product. However, a higher percentage of men than women indicated that ads with sexual themes make them look at them and remember a brand. The results of this survey indicate that men are much more receptive to the use of sexual appeals than are women. Men are much more likely than women to notice an ad that has a sexual theme and remember the brand. They also like sexual ads more and are less likely to view them as demeaning to women. These finding suggest that ads with sexual appeals may be an effective way to get the attention of males and to register a brand name. However, the findings do not suggest that a sexual themed ad will be effective in getting either sex to purchase a product. For women, the results suggest that sexual appeals may not be as effective as they are less likely to notice the ad, even less likely to remember the brand and purchase interventions are extremely low. Moreover, the results show that women do not like ads with sexual themes and find them demeaning to women. Of course it would be interesting to analyze these findings by age to determine if younger women were more open to sexual themed ads than older women. More detail on the results of this study can be found in an article in the October 17, 2005 issue of Adweek (pp. 14-17). 4. Discuss the two major perspectives of the economic impact of advertising: “advertising equals market power” and “advertising equals information.” The Advertising Equals Market Power perspective reflects traditional economic thinking and views advertising as a way of changing consumers’ tastes, lowering their sensitivity to price, and building brand loyalty among buyers of advertised brands. This results in higher profits and market power for large advertisers, reduces competition in the market, and leads to higher prices and fewer choice alternatives for consumers. High prices and excessive profits give advertisers even more incentive to advertise their products and output is restricted compared with conditions of perfect competition. Proponents of this model are generally negative in their perspective regarding the economic impact of advertising. The Advertising Equals Information perspective views advertising as providing consumers with useful information, increasing their price sensitivity which moves them toward lower-priced products, and increasing competition in the market. Advertising is viewed as a means of communicating with consumers and telling them about a product and its major features and benefits. More informed and knowledgeable consumers results in pressure on companies to provide high quality products at lower prices, and efficient firms remain in the market, whereas inefficient firms leave as new entrants appear. Proponents of this model assume that the economic effects of advertising are favorable and view it as contributing to more efficient and competitive markets. Answers to Applied Questions 1. Why are the laws for advertising regulation not applied to sponsorship and some other IMC tools? The crux of this question pertains to the fact that advertising is heavily regulated however other IMC tools are not under such scrutiny, yet have similar objectives (e.g., awareness, attitude) for communication and behavior (e.g., trial, repeat purchasing). For example, alcohol advertising is not permitted to have a role model for as a source of the message. However, alcohol companies are permitted to sponsor Hockey Canada even though Hockey Canada acts as an important role model in the life of children’s hockey. Hockey Canada certifies the coaches and administers all aspects of children’s hockey. Other examples are likely to be found. It would be incumbent upon the instructor to look at the regulations and see if there is a similar type of message delivered via other IMC tool that appears to skirt the regulations found in advertising. Instructors might draw on the experience of tobacco promotion where much of it is prohibited from advertising to sponsorship to point-of-purchase displays. 2. Find examples of three ads that you find irritating, offensive, or in bad taste. Discuss the basis of your displeasure with these ads. The Canadian author devotes a day to this material at the end of term with this question as the assignment given at the start of the term, with many reminders throughout the course as ethical issues arise when discussing advertising. Often students have difficulty finding examples, a testament to the fact that much of advertising is perfectly acceptable and it is a very small percentage that truly offends people. The minimal number of complaints the ASC actually receives is also an indicator. Even further, students who do find examples are hard pressed to find Canadian examples where something is exceptionally offensive. Instructors looking for an extreme case to discuss can follow the story of Fluid Hair Salon based in Edmonton. Its story is documented in the ASC complaints report, and follow-up news stories presents an interesting example for interpretation. 3. Explain which position do you agree? “Advertising determines Canadian consumers’ tastes and values and is responsible for creating a materialistic society” or “Advertising is a reflection of society and mirrors it tastes and values” This question presents the classic dilemma of whether advertising is responsible for creating materialistic values in consumers or whether it merely reflects or mirrors the values of society rather than molding or shaping them. Those who agree with the first position argue that advertising encourages materialistic values by seeking to create needs rather than merely showing how a product or service fulfills them; surrounding consumers with images of the good life and suggesting that the acquisition of material possessions leads to contentment and happiness and adds to the joy of living; and suggesting that material possessions are symbols of status, success and accomplishment and/or will lead to greater social acceptance, popularity, sexual appeal and so on. Those supporting the second position argue that consumers’ values are defined by the society in which they live and value systems are the result of extensive long-time socialization or acculturation. They argue that advertisers develop ads in response to prevailing values and are thus reflecting tastes and values rather than molding or shaping them. 4. Do you believe advertising power has ever restricted choice in buying products? Some critics argue that advertising has a negative impact on consumer choice, as large advertisers use their power to limit consumers’ options to a few heavily advertised brands. They argue that advertising is used to achieve differentiation and brand loyalty, which occurs at the expense of smaller brands. Defenders of advertising argue that it does not create brand monopolies and reduce opportunities for new companies and/or brands to enter the market. The opportunity to advertise gives companies the incentive to introduce new brands and improve existing ones. Advertising is viewed as playing a critical role in informing consumers about new products and making it possible for new companies to enter the market. Thus, it helps expand consumer choice rather than limiting it. Arguments that advertising increases the costs of products and services include the fact that the large sums of money spent on advertising constitute a business expense that must be covered and thus is passed on to consumers in the form of higher prices. Advertising can also result in higher prices by increasing product differentiation and adding to the perceived value of the product in the mind of the consumer. Brands that have achieved high levels of differentiation or perceived value can command a premium price. Proponents of advertising argue that it can actually result in lower costs of products and services by helping firms achieve economies of scale in production, distribution and marketing by stimulating demand among mass markets. Advertising can also lead to lower prices by making a market more competitive, which usually leads to greater price competition. Studies of several industries have shown that advertising results in lower consumer prices. Additional Discussion Questions (not in text) A. Discuss the role of ethics in advertising and promotion. How do ethical considerations differ from legal considerations? While many laws and regulations determine what advertisers can and cannot do, not every issue is covered by a rule or guideline. Ethics involve the use of moral principles and values in evaluating a decision or action. Ethical considerations are very important in advertising as the use of a particular type of ad or the targeting of a specific group may be legal but may not be ethical. Ethical issues must be considered in making advertising and promotion decisions as a lapse in ethical standards or judgment can result in actions that are highly visible and often very damaging to a company’s image or reputation. Ethical considerations differ from legal considerations in that ethics involves individual or group moral principles or values and can be very subjective while legal considerations are generally much more objective. Legal considerations can be enforced through the regulatory process while ethical problems can only be remedied by voluntary actions of those who are responsible for the unethical actions. B. A common criticism of advertising is that it stereotypes women. Discuss how advertising might stereotype men as well. Find an example of an ad that does this. Advertising has received a tremendous amount of criticism for stereotyping women. Critics argue that advertising generally depicts women as homemakers or mothers and has failed to acknowledge the changing role of women in society. They also note that many ads portray women as decorative objects or sexually provocative figures. While advertising is often criticized for its depiction of women, critics argue that men are often portrayed negatively as well. Some ads poke fun at men’s shortcomings while others use reverse sexism. Critics argue that men are often portrayed as insensitive, as chauvinists, as sexists and as narrow-minded. Several companies have been criticized for using ads that take slaps at men. For example a print ad for the clothing accessory Bodyslimmers used a headline that read, “While you don’t necessarily dress for men, it doesn’t hurt, on occasion, to see one drool like the pathetic dog that he is.” Another example is a print ad for Liz Claiborne shoes that used the tagline, “Aren’t there enough heels in you life?” The American Floral Marketing Council was also criticized for using a negative image to portray men in its point-of-purchase ad campaign. A poster from the campaign featured a floral arrangement in front of some rocks, resting on nuts and bolts, with the tagline, “Romancing a stone? Send him flowers.” Students should be asked to find other examples of ads that might be portraying men in a negative manner. C. Many advertisers complain that the regulatory bodies and TV networks scrutinize commercials more closely than the shows. Do you think that commercials should be held to higher standards than programs? Why or why not? Advertisers often complain about the double standard that exists for commercials versus TV programs, noting that even the most suggestive commercials are bland compared with the sex and violence that appears in many television programs. They argue that the regulatory bodies and networks should be more willing to accept commercials that use techniques such as partial nudity or suggestiveness, given what appears in the programs. The networks argue that they have to scrutinize commercials more carefully because advertising encourages people to imitate behaviours, whereas programs are merely meant to entertain. Network executives also note the complaints of parents who are concerned about their children seeing certain ads, since they cannot always be there to change the channel or turn off the set when a suggestive or provocative ad comes on TV. D. A common criticism of advertising is that it stereotypes women. Discuss the ways this might occur. Do you think the Airwalk ad shown in Exhibit 18-4 is suggestive and symbolizes sexual submission? Advertising has received a tremendous amount of criticism for stereotyping women. Critics argue that advertising generally depicts women as being preoccupied with beauty, household duties and/or motherhood and has failed to acknowledge the changing role of women in society. Another concern is that many ads portray women as decorative objects or sexually provocative figures. The Airwalk ad has been criticized by some women’s groups who argue that it shows a submissive and sexually available woman. A critic argued that the ads contain a number of symbolic cues that are sexually suggestive and combine to reinforce an image of the woman’s sexual submission to the man. Some of these cues include the heart shaped box indicating love; the color red which symbolizes romantic passion; the heavy lipstick which is sexually suggestive as is the tight slinky red dress. A more detailed interpretation of the ad can be found in an article by Aaron C. Ahuvia in the Journal of Advertising, Spring 1998 on p. 150. You might want to ask students their opinions of the ad and then read them the interpretation to them. E. What is meant by shock advertising? Evaluate the arguments for and against the use of shock advertising by marketers. Shock advertising refers to ads in which companies use nudity, sexual suggestiveness, violence, or some other startling images to capture consumers’ interest and intention. One of the primary goals of the “shock-vertising” used by companies is to break through the clutter and ensure that consumers notice their advertising. Most of these ads use various amounts of nudity and/or sexually provocative images that will capture the attention and imagination of readers of their magazines or catalogs. These companies feel that it is necessary to push the envelope and take some risks with their ads. They are very aware that their ads shock and even offend may people, but they feel will argue that most of the younger consumers they are targeting have no problems with the ads. Moreover, the strong visuals used in the ads are seen as a way of creating images for their brands as well as attracting attention to them. Critics of these ads argue that they are offensive and in poor taste. They are particularly concerned with the fact that many of these ads and catalogs are moving beyond various forms of nudity and using themes such as sadomasochism, compromising poses, and pornography stars in their messages. It is very likely that these ads are effective in breaking through the clutter and capturing the attention of readers. However, it may be difficult for these companies to develop a strong brand image and sustainable competitive advantage using this type of advertising. Consumers may eventually become bored with these images over time and the brands they will lose their appeal. IMC Exercise Find several ads that you feel are examples of negative social consequences of advertising discussed in the text such as the following: • Ads that are offensive or in poor taste because of the product or service they advertise, the type of appeal they or the manner of presentation used. • Ads that may have an adverse effect on consumer values by encouraging materialism. • Ads that encourage consumers to purchase a product that they really do not need. • Ads that stereotype women, men, an ethnic groups such as Chinese, South Asians and Blacks or some other group such as the elderly. Be prepared to explain why you feel these ads are examples of negative advertising. How do you think the advertisers might justify the use of the ads you have chosen? IMC Comprehensive Project As a final part of their IMC Comprehensive project, students should be asked to evaluate their advertising and promotional campaigns from a social and ethical perspective. The specific assignment for this chapter is as follows: IMC Project Assignment for Chapter 18 By now you should have developed a completed integrated marketing communications plan for the product or service you chose to promote. The final part of your project requires that you evaluate your IMC plan from a social and ethical perspective. Do you feel you can defend your advertising and promotional plan from a social and ethical perspective? Are there any potential negative social consequences of your advertising and promotional plan? Could any particular group find your advertising offensive or in poor taste? Solution Manual for Advertising and Promotion: An Integrated Marketing Communications Perspective George E. Belch, Michael A. Belch, Michael A. Guolla 9780070891302