CHAPTER 17 (http://www.eauc.hk/show.asp?id=318)

MARKETING DEBATE—Has TV Advertising Lost Power?Long deemed the most successful advertising medium, television advertising has received increased criticism as being too expensive and, even worse, no longer as effective as it once was.Critics maintain that consumers tune out too many ads by zipping and zapping and that it’s difficult to make a strong impression. The future, claim some, is with online advertising. Supporters of TV advertising disagree, contending that the multisensory impact of TV is unsurpassed and that no other media option offers the same potential impact.Take a position: TV advertising has faded in importance versus TV advertising is still the mostpowerful advertising medium.

Pro: Marketing managers must begin with an identified target market and the strategic direction of the brand before choosing the advertising program. The selection of TV advertising as the medium should be as a function of: the mission, money, message, media, and measurement. In addition, the marketing manager must understand where the product is in its product life cycle and how the hierarchy of effects affects his products. If these factors are known then the marketing manager can decide if informative advertising, persuasive advertising, reminder advertising, or reinforcement advertising is necessary. Television through its multisensory impact is the best medium for these advertising conditions. In addition to the product’s life cycle, the product’s market share and consumer base,competition and clutter, advertising frequency, and product substitutability affects decisions touse TV.

Properly designed and executed TV programs can improve brand equity by vividlydemonstrating product attributes and persuasively explaining consumer benefits, portrayinguser and usage imagery, brand personality, and other brand intangibles. Critics of TVadvertising may be focusing on the “messenger” rather than on the “message.”Con: Consumers have changed. We are now into the fourth generation of consumers using TVas a marketing communications medium. The proliferation of new technologies has shifted the“power” to the viewer rather than the “transmitter.” Current generations receive informationthrough numerous media channels: the Internet, cell phones, satellite, cable,

radio, and others.The influence that TV once had to stimulate, interest, and build brand loyalty due to itsexclusivity is gone. Today, buyers are more likely to review product performance on theInternet or to ask opinion leaders than they are to “act” because they saw a clever commercial.As a result, with the exception of certain product categories or product lines, TV advertisingno longer reaches target consumers. More importantly, TV commercials do not reach opinionleaders who are increasingly influencing consumer-buying decisions on a greater scale. Toreach this important group, companies must target messages through combinations of othermedia and product usage.

MARKETING DISCUSSIONPick a brand and go to the Web site. Locate as many forms of communications as you canfind. Conduct an informal communications audit. What do you notice? How consistent are thedifferent communications?Student answers will differ depending upon their favorite Web sites.

Marketing Excellence: RED BULL1) What are Red Bull’s greatest strengths and risks as more companies (like Coca-Cola, Pepsi, and Monster) enter the energy drink category and gain market share?

Suggested Answer: Red Bull’s greatest strength has to be its integrated marketingcommunications mix and their ability to reach a select target market with success. Asecond strength is their integrated marketing communications mix that eschewstraditional forms of media—mass media and print.Red Bull’s greatest weakness will be its ability to reach their target market influencers,decision makers amongst increased advertising spend by the major beverage kings.(sense)

2) Should Red Bull do more traditional advertising? Why or why not?

Suggested Answer: Student answers will vary but good students will note that as aproduct moves through its product life cycle, advertising messages and media must adaptto meet the changing demographics and demands of its target market.So, as Red Bull’s target market (young adults) age they’ll be looking for their product inand through traditional media and traditional marketplaces featuring traditional media.

3) Discuss the effectiveness of Red Bull’s sponsorships, for example Bull Stratos. Isthis a good use of Red Bull’s marketing budget? Where should the company drawthe line?

Suggested Answer: Student answers will vary by opinion and good students will not that itwould only take one fatality or disaster to negate all the good public opinion, and goodwillbuilt up by Red Bull’s sponsorship’s in the past. Recent newspaper stories have commentedthat Red Bull has “pulled” this Stratos stunt for the time being.

Marketing Excellence: TARGET

1) What has Target done well over the years in terms of its integrated marketingcommunications strategy? What should it do going forward?

Suggested Answer: Short answer is that Target has done everything well in terms of anintegrated marketing communications strategy—its message is consistent, accessible toconsumers, recognizable to consumers world-wide, strong sales promotions, publicrelations and publicity, events and experiences, interactive and word-of-mouth selling,and direct marketing.Target has developed an effective communication strategy by following the eight stepsrequired: identify, determine objectives, design communications, select the channel,budget, mix, measure results, and manage the process.

2) How does Target compete against mammoth Walmart? What are the distinctdifferences in their IMC strategies?

Suggested Answer: The differences between Walmart and Target lie in their targetmarket distinctions. Target’s target market’s income, education, and lifestyles differ fromWalmart’s target market consumer.The differences in their IMC strategies are simple: Walmart’s is focused on “everydaylow price” and Target’s is “cheap chic.”

3) Did Target do the right thing by tweaking its message to focus more on value andless on trends? Why or why not?

Suggested Answer: Student answers will vary, but good students will probably state thatTarget had no choice but to respond to the economic climate and focus more on value and lesson trends, because they were losing customers and market share to Walmart and other lowprice retailers, like Dollar General, etc.

CHAPTER 18

Marketing Debate: Should Marketers Test Advertising?Advertising creatives have long lamented ad pretesting. They believe that it inhibits theircreative process and results in much sameness in commercials. Marketers, on the otherhand, believe that ad pretesting provides necessary checks and balances as to whether anad campaign is being developed in a way so that it will connect with consumers and bewell-received in the marketplace.

Take a position: Ad pretesting in often an unnecessary waste of marketing dollars vs.ad pretesting provides an important diagnostic function for marketers as to thelikely success of an ad campaign.

Pro: Most advertisers try to measure the communication effect of an ad—that is, itspotential effect on awareness, knowledge, or preference. They would also like to measurethe ad’s sales effect. Communication-Effect Research called copy testing seeks todetermine whether an ad is communicating effectively. Marketers should perform thistest both before an ad is put into media and after it is printed or broadcast.Many advertisers use posttests to assess the overall impact of a completed campaign. If acompany hoped to increase brand awareness from 20 percent to 50 percent and succeededin increasing it to only 30 percent, then the company is not spending enough, its ads are

poor, or it has overlooked some other factor, giving them valuable information at areasonable cost.

Con: Pretest critics maintain that agencies can design ads that test well but may notnecessarily perform well in the marketplace. Proponents of ad pretesting maintain thatuseful diagnostic information can emerge and that pretests should not be used as the soledecision criterion anyway. Widely acknowledged as being one of the best advertisersaround, Nike is notorious for doing very little ad pretesting.

MARKETING DISCUSSIONWhat are some of your favorite TV ads? Why? How effective are the messages and creativestrategies? How are they building brand equity?Student answers will differ depending upon their favorite TV commercials but allanswers should cover the major points of this chapter.

Marketing Excellence: COCA-COLA

1) What does Coca-Cola stand for? Is it the same for everyone? Explain.Suggested Answer: Because Coke believed early on that to gain worldwide acceptance, itneeded to connect emotionally and socially with the masses and be “at arm’s length” witheveryone.

Coco-Cola must understand and recognize that “refreshment” means different things todifferent people around the world. One of Coke’s strengths is how well it weaves the softdrink, Coke, into people’s definitions of refreshment no matter where in the

world theylive.

2) Coca-Cola has successfully marketed to billions of people around the world. Whyis it so successful?

Suggested Answer: Coke has created a highly-current, uplifting global campaign thattranslates well into different countries, languages, and cultures. Coke’s advertising hasprimarily focused on the product’s ability to quench thirst.

3) Can Pepsi or any other company ever surpass Coca-Cola? Why or why not? Whatare Coca-Cola’s greatest risks?

Suggested Answer: Student answers will vary based on their personal opinions and “tastes.”Coke’s greatest risks have to be the managing of its mass communications strategy andreaching the brand’s target market—it is so massive that the right media and marketingmessage is critical.

Marketing Excellence: GILLETTE1) Gillette has successfully convinced the world that “more is better” in terms ofnumber of blades and other razor features. Why has that worked in the past?What’s next?

Suggested Answer: The company’s impressive marketing knowledge and campaignshave helped it reach an international level of success. Gillette uses one global marketingmessage around the world and is closely aligned with sports and sports figures worldwide.

2) Some of Gillette’s spokespeople such as Tiger Woods have run into controversyafter becoming endorsers for the brand. Does this hurt Gillette’s brand

equity ormarketing message? Explain.Suggested Answer: In the long-run these spokespeople should not hurt the brand’s equitydue to the extensive use of sport figures world-wide, and the integrated marketingcommunication strategy—aligning itself with not only sport figures but musicians, videogames, and movies/videos.

3) Can Gillette ever become as successful at marketing to women? Why or whynot?Suggested Answer: Yes, the strategies, tactics, and communication message used to market tome, Gillette can begin to market to women—women who buy personal care products for“their man”!

CHAPTER 12

MARKETING DEBATE—With Products, Is It Form or Function?The “form versus function” debate applies in many arenas, including marketing. Somemarketers believe that product performance is the end all and be all. Other marketers maintainthat the looks, feel, and other design elements of products are what really make the difference.Take a position: Product functionality is the key to brand success versus product design is thekey to brand success.Suggested ResponsePro: Consumers buy products to satisfy a need. A consumer uses products and decides on aproduct based upon their own consumption system—the way the product is by the consumer(getting the product, using the product, and disposing of the product). Additionally, thecustomer value hierarchy (core benefit, basic product, expected product, augmented product,and potential product) enters into the decision-making process for a consumer.

Therefore, aproduct must perform to an acceptable level according to the consumer’s perception ofbenefits in their customer value hierarchy. A low price, low function product, like a disposablerazor must at least perform the task to which it was created. A more expensive product, anelectric razor, must meet the function to which it was created, although these functions are at ahigher level than the disposable razor. If either product does not perform to the consumer’sbasic product definition then the product will be discarded and not re-purchased.Con: Products have unique characteristics and specific brand identifications that meetconsumers’ needs that are not related to functionability. Such needs as status, selfactualization,and style appeal to a wide audience. For example, most automobiles willChapter-by-Chapter Instructional Materialperform the task of taking a person from point A to point B. However, it is the design of theautomobile (specific make/type: i.e., sports car, luxury car) that appeals to the buyer. For manyconsumers style plays a more important role, for some, the only role in their buying decision.A well-designed product can also be a point-of-difference in the marketplace aiding consumeracceptance through its ease of use, durability, reliability, or packaging. A well-designedproduct can be a competitive advantage for smaller firms.Whatever, the design, however, the product must at least meet the consumers’ definition of abasic product. Once that definition is met, design can be a powerful marketing asset.MARKETING DISCUSSIONConsider the diverse means of differentiating products and services. Which ones have themost impact on your choices? Why?Student answers will differ according to the product/services chosen. However, studentanswers should encompass the following distinctions:Products differentiation includes:• Form• Features

• Performance quality• Conformance quality• Durability• Reliability• Repairability• StyleServices differentiation includes:• Ordering ease• Delivery installation• Customer training• Customer consulting• Maintenance and repair

Marketing Excellence: CATERPILLAR1) What were some of the key steps that led to Caterpillar’s becoming the industryleader in earth-moving machinery?

Suggested Answer: In terms of the concept of “product,” Caterpillar has re-invented itsproduct—from the physical product, to its services provided, to its research anddevelopment, to its “local” emphasis with its equipment, CAT today has a different lineup of products than the CAT of old. Examples include: 56% of its business is in capitalequipment and the remaining percentage in services. CAT is focused on high-techmachinery i.e.,: hybrid, and has divided its product strategy into three segments to meetthe needs of its customers.

2) Discuss Caterpillar’s future. What should it do next with its product line? Whereis the future growth for this company?Suggested Answer: Student’s answers will vary but good students will cite material fromthis chapter regarding the customer-value hierarchy—core benefit, basic product,expected product, augmented product, and potential product to defend their positions onwhere Caterpillar’s future lies.

Marketing Excellence: TOYOTA

1) Toyota has built a huge manufacturing company that can produce millions of carseach year for a wide variety of consumers. Why was it able to grow so muchbigger than any other auto manufacturer?

Suggested Answer: Toyota has built a huge manufacturing company that can producemillions of cars each year for a wide variety of consumers and has products for differentprice points demanded by consumers.The firm is the master of lean manufacturing and continuous improvement. Its plants canmake as many as eight different models at the same time, bringing huge increases inproductivity and market responsiveness.Designing these different products means listening to different customers, building thecars they want, and then crafting marketing to reinforce each make’s image. Toyota isintegrating its assembly plants around the world into a single giant network. The plantswill customize cars for local markets and shift production quickly to satisfy any surges indemand from markets worldwide.

2) Has Toyota done the right thing by manufacturing a car brand for everyone? Whyor why not?Suggested Answer: Student answers will vary but one opinion is that yes, Toyota hasdone the right thing by manufacturing a car brand for everyone. It has been successfulbecause has products for different price points demanded by consumers. And Toyotaunderstands that each country defines perfection differently—for example in its LexusDivision.

3) No doubt Toyota will feel the impact of its massive recall for a long time. DidToyota grow too quickly as Toyota suggested? What should the company do over thenext year, 5 years, or 10 years? How can growing companies avoid quality problems inthe future?Suggested Answer: Student’s answers will vary but to be consistent with this chapter’sChapter-by-Chapter Instructional Materialsubject, student answers should refer to Toyota’s need to keep their product’s selectionand quality superior to their competition and to deliver to the consumer, the consumer’sdefinition of potential product.