Download Chapter Overview

CHAPTER 2
IMC ROLE IN MARKETING
Chapter Overview
The purpose of this chapter is to examine the marketing process and the role of advertising and promotion
in an organization’s integrated marketing program. A basic model of the marketing and promotional
process is presented which can be used as a framework for analyzing how advertising and promotion fit
into a company’s marketing program. The chapter examines the various decision areas under each
element of the marketing mix and how they influence and interact with advertising and promotional
strategy. The chapter also introduces and/or refreshes the student on the concepts of target marketing,
segmentation, and positioning. The target marketing process is introduced, and the specific elements of
this process.
Learning Objectives
To examine the marketing process and the role of advertising and promotion in an organization’s
integrated marketing program.
1. To understand the marketing process and the role of advertising and promotion in an organization’s
integrated marketing program.
2. To know how the various decisions of the marketing mix influence and interact with advertising
and promotional strategy.
3. To understand the target market process in an integrated marketing communications program.
4. To recognize the role of market segmentation and its use in an integrated marketing
communications program.
5. To understand the concepts of market positioning and brand positioning.
Chapter and Lecture Outline
I.
INTRODUCTION TO MARKETING AND PROMOTIONS PROCESS MODEL
A model is presented at the beginning of the chapter (Figure 2-1) which is a useful framework for
analyzing how promotion fits into an organization’s marketing program. The model consists of four
components:




The organization’s marketing strategy and analysis
The target marketing process
Marketing planning program development (which includes the promotional decisions)
The target market
The first part of the chapter is devoted to examining the four components of this model and the role
advertising and promotion play in each. As noted in the text, it is important to note that a firm’s
promotional program is directed not only to the final buyer but also to channel or trade members who
distribute its products/services to the ultimate customer. The role of promotion is discussed for building
and maintaining demand not only in the consumer market, but among the trade as well.
Chapter 2 – IMC Role in Marketing
15
II.
MARKET ANALYSIS
The marketing process actually begins with the development of a marketing strategy whereby the
company determines the product or services area and particular markets in which it wants to compete. A
strategic marketing plan usually evolves from an organization’s overall corporate strategy and serves as
a guide for specific marketing programs and policies. The development of a marketing strategy is based
on a situation analysis (as discussed in Chapter 1) from which a firm develops an understanding of the
market, the opportunities it offers, the competition, and various segments or target markets the company
may wish to pursue.
Steps in the Development of a Marketing Strategy
A.
B.
III.
Market Opportunity Analysis—a careful analysis of the marketplace should lead to alternative
market opportunities or areas where the company feels there are favorable demand trends,
where customer needs and/or wants are not being satisfied and where it could compete
effectively. Market opportunities are usually identified by examining demand trends in various
market segments. The discussion can focus on how market opportunities are identified and
recent examples of companies finding and exploiting them. Global Perspective 2-1 discusses
Coca-Cola’s growth internationally which could be an interesting point of departure for a
discussion about the opportunity created by new global markets.
Competitive Analysis—in developing marketing strategies and programs a company must
analyze the competition its products or services face in the marketplace. Competition can range
from direct brand competition to other products and services that satisfy consumers’ needs and/or
compete for their dollars. Competitors’ marketing programs have a major impact on a firm’s
marketing strategy and must be carefully analyzed and monitored. Various aspects of advertising
and promotion such as promotional spending, media and creative strategy, and sales promotion
are often directly affected by competitors.
An important aspect of marketing strategy development is the search for an advantage over the
competition. A competitive advantage refers to something unique or special a firm does or
possesses that gives it an edge over competitors. Competitive advantage can be achieved in a
variety of ways, including having quality products that are differentiated from the competition
and command premium prices, providing superior customer service, having the lowest production
costs, or dominating channels of distribution. Competitive advantage can also be achieved
through having excellent advertising and promotion that creates and maintains product/service
differentiation and brand equity. You might want to discuss how many companies have used
advertising to achieve brand equity. It is also important to note the concerns of many advertising
and marketing people that reductions in media advertising and increased spending in trade
promotions may lead to losses in brand equity and competitive advantage.
THE TARGET MARKETING PROCESS
After evaluating marketing opportunities for products/services in various markets, a company selects one
or more as a target market for which it will develop a marketing program(s). This target market becomes
the focus of the company’s marketing efforts. Selection of the target market is not only a very important
part of a firm’s marketing strategy, but also has implications for advertising and promotional strategy and
tactics. The target market process involves three basic steps: segmenting the market, selecting a target
market and determining the market positioning strategy. From this point, the chapter will go on to discuss
in detail the processes required in each step.
A.
Segmenting the Market—Target marketing involves the identification of the needs and wants of
specific groups of people (or segments), selection of one or more of these groups as targets, and
Chapter 2 – IMC Role in Marketing
16
the development of marketing strategies aimed at each. This approach has found increased
applicability for a number of reasons.
A number of bases for segmentation are available to the marketer including the following: (Figure
2-3 will be helpful here.)
 Geographic—the market is divided into geographic units with alternative marketing strategies
targeted to each
 Demographic—division involves demographic variables such as age, sex, family size,
income, education and social class among others
 Psychographic—markets are divided based on the personalities and/or lifestyles of
consumers. (The instructor should note that lifestyles has become a commonly employed
segmentation strategy.) Programs such as VALS, and PRIZM are commonly employed by
marketers for this purpose.
 Behavioristic—this form of segmentation divides consumers into groups according to their
usage, loyalties or buying responses to a product. These characteristics are then usually
combined with one of the previously mentioned bases to develop segment profiles.
 Benefits—specific benefits offered by a product or service may also constitute a basis for
segmentation. In many instances a variety of benefits may be derived for the same product
among different groups. (For example, the instructor might ask students to suggest benefits to
be derived from the purchase of a watch, noting that at certain times of the year these benefits
will change based on the recipient of the watch!)
The Process of Segmenting a Market—This section concludes by reminding the student that
market segmentation is indeed a process that develops over time and is a critical part of the
situation analysis.
B.
Selecting a Target Market—Having conducted the segmentation analysis, the marketer will be
faced with two subsequent decisions:
1. Determining how many segments to enter
2. Determining which segments offer the most potential. The first of these decisions may lead
the marketer to three potential strategies:
 Undifferentiated marketing would involve the decision to ignore the segment differences
and develop one product for the entire market. It should be noted that few firms pursue this
strategy today.
 Differentiated marketing involves the decision to compete in a number of segments,
developing different marketing strategies for each.
 Concentrated marketing takes place when a firm decides to concentrate its efforts on one
specific segment in an attempt to capture a large share of that market. (The example of
Maxwell Business Systems provided in the book will illustrate this point well.)
.

C. Determine the Market Positioning Strategy—Typically, firms will write a marketing
positioning statement in their marketing plan to accurately communicate a market
positioning strategy. As the firm develops its market positioning strategy, it may consider
many combinations of product attributes that research has shown to be acceptable to the
target market. (The instructor may want to refer to Figure 2-4 as an example of market
positioning strategy in the airline industry.)
Chapter 2 – IMC Role in Marketing
17
IV.
MARKETING PROGRAM DEVELOPMENT
The next stage of the marketing process involves combining the various elements of the marketing mix
into a cohesive and effective marketing program. This requires that all elements of the marketing mix be
combined effectively and that they be consistent with one another. It is important to stress that each
element of the marketing mix is multidimensional in nature and includes a number of decision areas. In
discussing the various elements of the marketing mix attention should be given to how each influences
and interacts with the overall IMC program.
A.
B.
C.
Product Decisions—an organization exists because it has some product, service, idea or cause to
offer customers. Discussion can focus on benefits or values offered by the product and the fact
that products and services satisfy not only functional but social and psychological needs as well.
Product decision areas of branding and packaging are particularly important from a promotional
perspective because of the role the brand name and package play in communicating attributes,
information and meaning to the consumer.
1. Branding—choosing a brand name for a product is important from a promotional perspective
because brand names communicate attributes and meaning. One important role of advertising
in respect to branding strategies is creating and maintaining brand equity. Brand equity can
be thought of as an intangible asset of added value or goodwill that results from the favorable
image, impressions of differentiation, and/or the strength of consumer attachment to a
company name, brand name, or trademark.
2. Packaging – the role and function of packaging has changed because of the self-service
emphasis of many stores and the fact that as many as two-thirds of all purchases made in the
supermarket are unplanned. The Duracell package which includes a battery tester (shown in
Exhibit 2-7) is a good example of added attributes beyond the product and conveying the
claim that Duracell batteries last longer.
Price Decisions and IMC—the price variable of the marketing mix refers to what the consumer
must give up in exchange for a product or service, Marketing managers must be concerned with
establishing a price level, developing pricing policies and monitoring consumers’ and
competitors’ reactions to price in the marketplace. Factors a firm must consider in determining
price levels include:
 costs
 demand
 competition
 perceived value
Interesting findings from the PIMS project concerning the relationship between price, product
quality and advertising are discussed in the text.
Distribution Decisions and IMC—marketing channels or the place element of the marketing mix
refers to the set of interdependent organizations involved in the process of making a product or
service available to customers. In discussing the latter, the importance of resellers in marketing
and promotional strategy should be introduced. The Internet has become a new channel for a
number of companies, and have had a demonstrable impact on the distribution system. Attention
should be given to the need to develop promotional programs for the trade or resellers to
encourage them to stock and promote a product.
Developing Promotional Strategies: Push or Pull? – When a promotional push strategy is used,
the goal is to persuade the trade to stock, merchandise and promote a company’s products by
aggressively selling and promoting to resellers. This can be done by having the company’s sales
representatives call on resellers and offering special programs such as promotional allowances
Chapter 2 – IMC Role in Marketing
18
and cooperative advertising. Trade advertising in publications that serve the industry may also
be used as part of a push strategy. When a promotional pull strategy is used, the goal is to create
demand among end users which will in turn encourage retailers to carry a brand. Heavy spending
on consumer advertising and sales promotion are an important part of a pull strategy.
D.
IMC Decisions Relating to Market Strategy—The notion of positioning via marketing
communication is the topic to which we now turn.
1. Brand Positioning Strategy—Positioning has been defined as “the art and science of fitting the
product or service to one more segments of the broad market in such a way as to set it
meaningfully apart from competition”. A brand positioning strategy relates to the image of the
product or brand relative to a competing brand. It is a key decision prior to determining the most
effective selling message of the advertising or the IMC. The reactions that consumers have to
promotions is referred to as the brand position.
2. Brand Positioning Strategy Options—Here are various brand positioning strategy options:
a. positioning by product attribute/benefit—setting a product apart by stressing a specific
characteristic or benefit offered.
b. positioning by price/quality—in this strategy price/quality characteristics are stressed.
For example, some products set themselves apart by assuming a very high price/quality
association, while others become "price products."
c. Positioning by use or application—how a product is to be used may in itself lead to a
positioning strategy. The shoe industry example offered in the text, and products such as
Arm and Hammer baking soda and Black & Decker have capitalized on this strategy.
d. positioning by product user—in this strategy the product is positioned at a particular
group of users. The Valvoline example (Exhibit 2-14) demonstrates this strategy in
practice.
e. positioning by product class—the Amtrak example provided in the text in reflects this
strategy in which the product is positioned against others that, while not exactly the same,
provide the same class of benefits. d.
f. repositioning—declining sales or changes in market conditions may lead a firm to
reposition. Companies such Eatons and Tip Top are a few examples of companies that
have attempted unsuccessfully to assume a new position in the market. An example of
successful repositioning is Olay which was originally aimed at an older woman
demographic. Procter and Gamble acquired the brand and repositioned it to younger
women with a multitude of skin care products. Note that the word “Oil” as in Oil of Olay
is disappearing as well. This is a reflection of the repositioning strategy.
3. Brand Positioning Strategy Process—as noted in the text, the development of a positioning
strategy involves six distinct steps:
 Identifying competitors
 Assessing consumers' perceptions of competitors
 Determining competitors' positions
 Analyzing consumers' preferences
 Making the positioning decision
 Monitoring the position
Chapter 2 – IMC Role in Marketing
19
Teaching Suggestions
This chapter is designed to provide the student with an overview of the overall marketing process and the
role advertising and promotion play in the marketing program. The chapter may be somewhat of a review
for some students, particularly those who have had a basic marketing course. However, we feel that this
chapter is more than just a review of marketing principles or fundamentals. We have written the chapter
to show the role advertising and promotion play in the marketing process as well as how promotional
strategy is influenced by and interacts with marketing strategy and the various elements of the marketing
program. Students will benefit from the discussion of the marketing mix from a promotional strategy
perspective even if they have had an introductory marketing course.
We have found that the model of the marketing and promotion process is a very good framework for
analyzing how promotion fits into an organization’s marketing program. The three components of the
model cover the basic areas of marketing and the model shows that promotional programs must be
developed for the trade as well as for the ultimate customer in the target market. It is important to stress to
students the important role resellers play and the need to develop promotional programs to motivate the
trade to get them to stock, merchandise and promote a company’s products. You might point out to
students that the recent trends in the allocation of promotional budgets have seen a shift in monies away
from media advertising and toward trade promotions. Another shift in budgets has been affected by the
advent of the Internet. Students will see that the Internet has both benefited and negatively impacted
traditional media. These issues are discussed is considerable detail in the sales promotion and Internet
chapters.
Answers To Discussion Questions
1. Some marketers contend that demographics is not really a basis for segmentation, but a descriptor of
the segment. Discuss examples to support both positions.
While by far the most commonly employed method of segmenting a market, many marketers feel that
demographic segmentation is really more of a descriptor than a segmentation basis. For example, the
most commonly sought demographic in television is the 25-49 year old female. Besides the fact that
this demographic is too broadly defined, some would argue that the fact that one falls into these two
demographic categories is not the reason why one purchases, it just happens to be a common
descriptor of the purchaser. Or they would argue that using demographic segmentation for other
products and services may be misleading as well. For example, the most frequent users of ATM cards
are those under 35. Those of the age 60+ are very low users. Does this mean that once one turns 60
they will quit using their cards? The answer is probably no. And if they do, it will not be because of
their age but because of a change in lifestyles (more time available). Finally, while Doan’s pills are
most commonly used by those 60+ the real basis for segmentation is benefit segmentation (relief of
backache) not age. It’s just that backache is more common among those 60+.
On the other hand, demographics can be a basis for segmentation. Women’s products are one
example. Another is income. Buyers of Mercedes, BMW and Porsche must be able to afford these
automobiles. Thus income does become a useful basis for segmentation.
The key here is that one realizes that demographics may be a useful segmentation criterion in some
instances, but in others it is merely a descriptor. The astute marketer must be able to make this
determination.
2. Establishing brand image is often difficult for new companies. Explain what these companies must do
to establish a strong brand image.
Chapter 2 – IMC Role in Marketing
20
Establishing a brand image has proven to be a difficult endeavor for many companies, and an almost
insurmountable task for Internet companies. While not an easy goal to accomplish, creating a brand
image requires a designed strategy.
As noted in the chapter, developing an image requires positioning. The chapter notes that there are
six questions that must be answered to develop a position—and image. In reviewing these, it becomes
obvious that to create an image, the organization must determine what it wants to be, how it is
different from competitors, and whether or not it can claim and maintain that image. The image then
must be supported by an integrated marketing communications program, with each element designed
to reinforce the image.
Many companies fail to achieve a distinct image in the marketplace for a variety of reasons. First, all
communications efforts do not support this image, due to inconsistencies. Secondly, the brand or
corporate identity does not contribute to the overall image. For example, ConAgra and Navistar do
really not translate directly for consumers, whereas some others may.
Most importantly, building an image takes time. Companies that have been successful in building
and/or changing their images have invested much time and effort into this endeavor, and have stayed
with one consistent strategy through thick and thin. For Internet companies, many which have only
been in operation a few years, have names that don’t reflect their business, and who have not devoted
much time and resources to image creation, it should not be surprising that such an image has not
been established.
3. More and more business to business companies have gone away from purely trade advertising to
advertising in consumer media. Is this likely to be a successful strategy? Why or why not?
Trade advertising provides the business to business marketer with an effective means of reaching the
target audience given that the viewers of these trade media are generally more qualified prospects. In
other words, one is not likely to read the Industry Standard if they have no interest in the Internet, nor
are they likely to read Progressive Grocer if they are not in any way involved in this business. The
high cost of trade advertising, and the limited reach, however, are just two of the characteristics of
trade advertising that may limit its appeal.
As a result, more and more business to business companies are turning to broader audience media in
an attempt to reach customers and potential customers more effectively and efficiently. While these
media may not be as specifically targeted as trade media, the business to business companies are
finding that they can purchase media with a great deal of waste coverage and still hit their target
audiences more cost efficiently than through traditional trade publications. A number of changes in
the media themselves have aided in this cause. For example, cable TV has made it possible to
become more targeted in a broadcast medium than previously was possible. A number of print media,
for example Marketing Magazine, and Business 2.0 are read by both business professionals and a
more general audience, allowing for greater reach.
Changes in message strategies have also led to the adoption of more consumer oriented media.
Creating a brand or corporate image may be easier to do through TV than print, for example. Creating
brand or corporate awareness may be more effectively accomplished in nontraditional business to
business media.
What will determine if a company is able to use consumer media is a function of a number of factors:
(1) the nature of the audience—that is, how many users and potential users are likely to see the ad in a
nontrade medium; (2) the nature of the message—what is the communication goal? If it is to create
awareness and interest, the broader based media may work, if it is narrowly focused, trade media may
be required; (3) the medium itself—how much waste coverage is involved? While media buyers can
Chapter 2 – IMC Role in Marketing
21
live with some waste coverage, at some point, there may be too many from outside the target
audience to warrant the buy; and (4) cost factors—while the cost may be less expensive on a basis of
total reach, when one considers the reach to the target audience, the relative cost may increase
significantly. In addition, the total cost of the consumer medium may be too much to allow for the
necessary frequency to achieve the communications goal.
4. A number of approaches to segmentation have been cited in the text. Provide example of companies
and/or brands that employ each.
Figure 2-3 lists a number of criteria for segmenting the market. Some examples of the various types
of segmentation and companies employing this strategy include:
Geographic
General Foods—different strengths of coffee for different areas of Canada.
Automobile companies—import cars are purchased more in certain provinces of
the country; Cell phones—urbanites are more prone to adopt than rural dwellers.
Demographic
Age: Doan’ Pills; Viagra; Geritol
Sex: Secret and Soft & Dry Deodorants; Virginia Slims Cigarettes; Right Guard
Deodorant; 212 Cologne for men and 212 for women
Psychographic
Roots, Lucky Brands and Tommy Hilfiger targeting Gen Y.
Rossignol targeting skiiers.
Benefits
Volvo offering safety; Kia low cost
Usage
Lexus and Infinity targeting previous lower cost Toyota and Nissan brands
Computer companies targeting nonusers, first time and more sophisticated users
5. Discuss the concept of competitive advantage. Pick three brands or products and discuss the specific
competitive advantage that they stress.
Competitive advantage may take place from a variety of factors. A specific attribute that a product or
brand has. a strong brand name, even price may lead to competitive advantage. In other words, what
ever it is that sets the product/brand off from others in a positive manner, and provides that
product/brand with an advantage over competitors is its competitive advantage.
Examples of products/brands with competitive advantages:
1. Xerox—the Xerox name is synonymous with copying. So well established is the name the people
often refer to the copying as “Xeroxing”.
2. Volvo—Volvo has positioned itself as the “safety” automobile. In the minds of the consumer,
when one thinks of automobile safety, they most often think of Volvo.
3. Four Seasons Hotel—it sets the standard for customer service.
6. Describe how the market positioning strategy adopted for a brand would need to be supported by all
other elements of the marketing mix.
Positioning requires consistency among all marketing mix elements. For example, it is difficult for
the consumer to perceive that the very best brand/product can also be the least expensive. A high
priced perfume or cologne would certainly lose some of its image if distributed in a Zeller’s. High
quality, high priced products advertised in low cost media might find that their image suffers. For
most consumers, high quality usually means a higher price (and vice versa), upscale (selective or
Chapter 2 – IMC Role in Marketing
22
exclusive) distribution, and quality representation in advertising. Trying to go away from these
consistencies may lead to confusion, and detraction from the positioning platform. The same holds
true for products at other ends of the price/quality spectrum. To maintain margins, intensive
distribution may be required, price discounts, coupons, and other deals may be used more frequently,
and less expensive media may be employed.
7. Discuss the target marketing process. Why is it so important to marketers?
Marketers often develop different marketing strategies to satisfy the needs of various market
segments. Target marketing is important in that all firms have limited budgets. As a result, it is often
not feasible to develop products/services that might appeal to all segments. A choice will be made as
to which segments to compete in or to target. The Henry Ford strategy of undifferentiated products
and services is not likely to work in toady’s marketplace. Thus, by target marketing, organizations can
focus their marketing efforts on those segments likely to return the most rewards, and develop their
marketing strategies more precisely to meet these segments needs and wants.
Today’s media offerings facilitate the opportunity to target market. Television—essentially a mass
medium—has now become more targeted through the advent of cable, allowing the marketer to reach
groups of viewers with specific needs, wants and/or interests. Consider for example, the golf channel,
the travel channel, or the history channel. For a marketer with products or services to offer to these
viewers, it is now quite feasible to target these groups, with a minimum of wasted monies on those
persons that might not be interested in these offerings. The marketer can now reach specific segments
with more targeted offerings, and at a much lower cost. Companies that could not previously enter the
mass market can now do so due to cost efficiencies. The Internet offers yet another medium available
to marketers to target specific interest groups with cost effectiveness.
8. What is meant by brand positioning strategy? Discuss the various approaches and give examples of
companies or brands that use each approach.
A brand positioning strategy relates to the image of the product or brand relative to a competing brand
for a given competitive space as defined by certain product market or category characteristics.
A number of approaches to brand positioning are available:
Positioning by product attributes and benefits—setting the product apart based on specific
characteristics or benefits offered. For example, Volvo-safety; Mercedes-luxury; Apple-ease of use,
etc.
Positioning by price/quality—positioning the brand on the basis of high quality and or as a price
product (though positioning on price still requires quality) Examples include: Rolex watches
(quality); Lexus (quality); Sanyo (price) and Kia (price)
Positioning by use or application—associating the product with a specific use or application. For
example, Black & Decker SnakeLight; WD-40, Windex Outdoor Window Cleaner.
Positioning by product user—Associating the product with a particular group of users (Applegraphics users); Nikon (expert camera users); BMW (Yuppies—though not by desire or design!)
Positioning by competitor—Positioning against a specific brand in the product class. Examples:
Apple-IBM; Mercedes-Infinity; Crest-Colgate.
Positioning by product class—rather than positioning against another brand, a different product class
(which may be a competitor) is compared against. Examples: Yogurt (fruit), pork (white meat);
potatoes(vegetables); Amtrak (airlines)
9. What factors would lead a marketer to the use of a repositioning strategy. Find a product or service
that has been repositioned recently and analyze the strategy.
Chapter 2 – IMC Role in Marketing
23
Probably the most common factors leading to repositioning would be a loss of sale, a growing market,
and/or the entry of a new product into the marketplace. Other factors might include an erosion of the
product image, a desire to enter new markets and/or even management desires.
An example of successful repositioning is Olay which was originally aimed at an older woman
demographic. Procter and Gamble acquired the brand and repositioned it to appeal to a younger
woman with a multitude of skin care products. Note that the word “Oil” as in Oil of Olay is
disappearing as well. This is a reflection of the repositioning strategy.
Additional Discussion Questions (not in text)
10. Discuss the process involved in segmenting a market. What are some factors one must consider in
determining how to segment the market?
The market segmentation process involves five distinct steps:(1) finding ways to group consumers
according to their needs; (2) finding ways to group the marketing actions (3) developing a marketproduct grid to relate the market segments to the firms products or actions;(4) selecting the target
segments toward which the firm directs its marketing actions; and (5) taking marketing actions to
reach target segments.
A number of factors must be considered in the segmentation process. The more the market is
segmented, the more precise is the marketers’ understanding of it. However, the more segmented it
becomes, the less individuals there are in each segment. Marketers must determine how far to take
this process. Secondly, the marketer must consider whether the segment will support a marketing
effort. There is always a trade-off between knowledge and specialized program offerings and the
ability of the market to support such efforts. Marketers must also determine if the segment is
accessible. That is can the segment be reached with a communications program, can the organization
offer such a program, and can it afford to do so? Finally, once a segment has been determined, the
marketer must establish the basis upon which it will compete in that market. A number of
segmentation strategies might be considered.
11. Discuss the differences between a promotional push and a promotional pull strategy. What factors
influence a firm’s decision to use either a push or a pull strategy?
A promotional push strategy is one whereby a company has a program to encourage channel members
to stock and promote its products. The goal of this strategy is to push the product through the
channels of distribution by aggressively selling and promoting to resellers.
A promotional pull strategy creates demand on the consumer end by spending monies on advertising
and promotion directed at the ultimate consumer. The goal of this strategy is to pull the product
through the channels as favorable demand from consumers will motivate the trade to stock and
promote it.
Decisions as to whether to emphasize a push or pull strategy depend on a number of factors including
the company’s relation with the trade, the promotional budget and demand for the product.
Companies with favorable channel relationships often use a promotional push strategy and work
closely with channel members to encourage them to stock and promote their products. Firms with
limited promotional budgets may not have the funds for advertising and promotion that are required
for an effective pull strategy and may find it more feasible to target their efforts to the trade. Products
with favorable demand resulting from unique benefits, superior advantages and/or popularity among
consumers may use a pull strategy.
Chapter 2 – IMC Role in Marketing
24
12. Many organizations segment on the basis of demographics. Discuss three products that might
segment on this basis, then explain what other segmentation criteria they might also employ.
As noted in the chapter, many firms have found that demographics may be more of a descriptor of a
segment than a basis for segmentation itself. On the other hand, there are clearly some products that
have segmented on demographics and have been quite successful. For example, cigarettes (Virginia
Slims), deodorants (Dry Idea, Secret) and ski boots (Lange). Some others:
1. Autos—BMW has successfully targeted women. Volvo has focused attention on families, and the
new Catera by Cadillac has segmented on both age (38-45) and sex (females). One might also argue
that each of these has focused on lifestyles as well.
2. Fast foods—most fast food shops segment on the basis of age, with most going after the 18-45
year groups. At the same time, others they have also employed lifestyle segmentation (fast service)
and benefit segmentation (quality of food, fat content, etc.)
3. Snowboards—snowboards have definitely targeted the younger generation (the vast majority of
snowboarders are young, and most young prefer snowboarding to skiing). Snowboard
manufacturers have also appealed to lifestyles and attitudes—successfully targeting Generation X
and Y’ers.
In sum, it might be said that all demographic segments have other bases for segmentation, as it is not
the fact that one is of a certain sex or age that serves as the reason for using a product as much as it is
the benefit or use of the product itself.
13. Generation Xers have their own purchasing motives. One such motive may be to differentiate
themselves from others through the projection of a specific image. Describe one product that has been
adopted by this market segment and what image it creates.
Perhaps the classic example of a Generation X product is snowboards. Studies by various ski
associations have shown that the fastest growing segment of the skiing population is the snowboarder
segment. In fact, the vast majority of new skiers in the Generation X age segment choose
snowboarding over regular skis. As a result, ski resorts have had to accommodate these snowboarders
by allowing them on mountains where they were previously banned, creating snowboard trails, etc.
The snowboarder not only has a different way to get down the mountain (snowboards v. skis), but has
a completely different look as well. The name brands of equipment popular in the ski industry are not
popular among snowboarders. The clothing of the snowboarder is actually quite uniform, and
different than the “regular” skier. Long jackets, typically in browns, blacks or olive greens are
common. Lively colors, short jackets and one piece ski suits are not.
As a result of their distinctive appearances, snowboarders are quite noticeable on the mountains. They
tend to group with other snowboarders, often stay away from their traditional counterparts, and are
stayed away from in return. In some cases there may even be conflicts among the groups. Even when
there is not, it is easy to tell a snowboarder—even without his(her) equipment.
A few other products are distinctively common among Generation Xers (though not exclusive to this
segment. These include tattoos (watch any college sporting event), and rings—anywhere from the
ears to the belly button to the nose. While these products are worn by other segments, the incidence of
their use is much higher among Generation Xers.
14. Explain how the distribution channel may affect the image of a brand.
Take a moment to think about the image that comes to mind if someone tells you that they purchased
an article of clothing at Zeller’s. Does it leave a different impression upon you (even if you have not
seen the product) than if you were told the purchase came from Birks or Holt Renfrew? What if some
Chapter 2 – IMC Role in Marketing
25
told you that they purchased stereo equipment from WalMart? Even if the same products/brands were
sold in these stores, the image evoked may be different.
Companies have learned (some the hard way) that distribution influences the image and perceptions
of products. General Foods determined long ago that the image of coffee sold in fast food chains was
that of a lower quality than that served in a restaurant—even if the reverse was true. Acura found that
by placing its top-of-the line Legend next to their lower priced autos, the image of the Legend would
suffer. Some top name manufacturers will refuse to place their top brands in discount stores like
Costco or Wal-Mart, fearing a negative impact on image.
The environment in which a product is sold is essentially a part of the overall perception of that
product.
15. Marketers have increased their efforts to reach ethnic markets. Explain why this may be occurring.
Bring to class examples of ads targeted to various ethnic groups.
Marketers are increasing their efforts to reach ethnic markets as part of their market segmentation
strategies. Many marketers have come to the realization that ethnic markets represent important
market segments that can be targeted most effectively with specific marketing and promotional
programs. There are media vehicles that reach specific ethnic markets such as Chinese, Italian and
Greek and the consumption patterns and decision making criteria of these groups are often different
from the mass market. Students should be encouraged to find magazines or newspapers that reach
specific ethnic markets and bring in examples of some of the ads that appear in these publications.
16. Changes in the marketing environment often lead to market opportunities. Cite examples of recent
market opportunities that have been created by changing environmental factors.
Market opportunities represent areas where a company feels there are favorable demand trends, where
customer needs and/or wants are not being satisfied adequately and where it can compete effectively.
Market opportunities are often created by changing environmental factors. For example, a change in
the demographic environment that is creating many marketing opportunities is the aging of the baby
boomers. As baby boomers get older they are changing their life style and consumption patterns.
Many of the boomers have married and have families and are purchasing products and services such
as minivans, life insurance and family vacations. Another example is changes in technology that have
drastically lowered the price of personal computers. As personal computers drop in price and become
easier to use they are expanding their penetration of the home market.
17. The text cites examples of brands that have increased and those that have decreased in value in recent
years. Discuss some of the factors that lead to increases and/or decreases in brand value.
Some brands have been able to increase their value in recent years by taking steps to preserve or
augment their brand equity. Examples include Gillette razors, Compaq computers and Nike athletic
shoes and apparel. Factors that contribute to increases in brand equity include the ability to
differentiate the brand from private label competition, the successful use of brand extensions to
leverage the value of a brand name, the ability to cut costs and remain price competitive, increased
spending on research and development to improve products, and increased spending on advertising
and promotion to differentiate the brand and maintain power over distribution channels.
Factors that are leading to decreases in brand value and equity include intense competition from
private label brands coupled with consumers search for value which is eroding brand loyalty. Many
consumers are no longer brand loyal nor are they willing to pay more for established brand names.
Some companies have also taken actions which have eroded the value of their brands such as cutting
back on advertising and allocating more monies to sales promotion.
Chapter 2 – IMC Role in Marketing
26
18. Discuss the relationship of pricing strategy to advertising. What are some of the price-related factors
that must be considered in developing the promotional program?
Price refers to what the customer must give up to purchase a product or service and is usually
discussed in terms of the dollar amount. There are a number of price related factors to consider in
developing the promotional program including:

costs—promotional expenses such as advertising and sales promotion must be considered in a
firm’s pricing strategy.

demand factors—demand for products at various price levels must be considered. Some firms try
to increase demand through non-price competition by using higher prices and advertising to
create quality images and differentiate their brands.

perceived value—advertising can be used to help convey images of quality and value for products
that are high in price.
The text discusses some interesting findings from the PIMS project concerning the relationship
between price, product quality and advertising.
19. Assume that you are the advertising manager for a new hot cereal product. Perform a competitive
analysis for your brand giving attention to the various forms of competition noted in the text
The various forms of competition discussed in the text range from direct brand competition to other
product forms to more indirect forms of competition such as product substitutes. A new hot cereal
product would compete against other brands of hot cereal such as Quaker Oats Oatmeal, TOTAL
Oatmeal, Cream of Wheat . Hot cereals also must compete against the vast number of traditional
ready-to-eat cold cereals. Competition for a hot cereal also comes from other hot breakfast products
such as pancakes, waffles and French toast. The fact that many companies offer easy-to-prepare
versions of these products that can be heated in a microwave or toaster makes them an important form
of competition for hot cereals. Of course there are numerous other breakfast foods such as eggs, fruit,
pastries and the like that a firm competing in the breakfast market must consider.
20. Discuss the way various aspects of product planning and strategy relate to advertising and promotion.
Product planning involves a number of decision areas that relate to advertising and promotion. First
of all, a product (or service) should be viewed as a bundle of benefits or values that satisfies the needs
of the consumer. These needs are not just functional but may include social and psychological
benefits as well. Advertising is used not only to communicate functional attributes and characteristics
but also to stress symbolic features such as brand image, which is often more important than
functional or utilitarian attributes.
Product planning also involves branding and packaging decisions. Choosing a brand name is very
important from a promotional perspective because of the role brand names play in communicating
product attributes and meaning. Decisions to line extend brand names to new products are also
relevant to advertising. Packaging has become increasingly important, particularly in our self-service
retailing environment. With thousands of items competing for consumers’ attention and many
purchase decisions being made at the point-of-purchase, packaging has become an important aspect
of product strategy. Design factors such as size, shape, color and lettering all communicate with
consumers and create impressions that contribute to and/or reinforce brand image. Packages may also
carry sales promotion messages such as coupons, information on contests or sweepstakes or premium
offers.
Chapter 2 – IMC Role in Marketing
27
IMC Exercise
Each of the so-called generations—Generation Y and X have their own unique values, lifestyles, etc.
Have students discuss these, and then bring in examples of ads designed to appeal to each.
IMC Comprehensive Project
At this point each student or team should have a specific brand of product or service approved by the
instructor for which they will be developing their IMC plan. The first specific assignment for the project
is as follows:
IMC Project Assignment for Chapter 2
Analyze the marketing situation analysis for the product or service you have chosen. You can use the
marketing and promotions process model shown in Figure 2-1 as well as some of the factors shown in
Figure 1-5 from Chapter 1 as a guideline to conducting your situation analysis. Important areas to address
at this stage of the IMC planning process include the marketing strategy and plan for the product/service,
the relevant competition and the marketing program that will be used in terms of various marketing mix
variables, and an analysis of the environmental factors and how they will impact the marketing and
promotion of your brand.
Based on your situation analysis, describe how the market for your product/service can be segmented.
What segmentation strategy do you plan to use? Which segments will be targeted and why? How will you
position your product/service in the segments you have chosen?
Chapter 2 – IMC Role in Marketing
28