the practice of advertising

11.2 The marketing concept 31.2.1 Social marketing and the concept of value – a wider view of marketing 41.3 The marketing process 41.4 The changing marketing environment 41.4.1 Influenc

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List of Contributors xvii

1 Marketing – and the Place of Advertising within It 1

Adrian R Mackay

Learning outcomes 11.1 What does marketing mean? 11.2 The marketing concept 31.2.1 Social marketing and the concept of value – a wider

view of marketing 41.3 The marketing process 41.4 The changing marketing environment 41.4.1 Influencing consumer behaviour 71.5 Customers and their behaviour 71.6 The need for marketing research 91.6.1 Marketing information systems 91.6.2 How marketing research is organised 111.7 The ‘old’ marketing mix 12

John Wilmshurst

Learning outcomes 232.1 What is advertising? 232.2 The role of advertising in ‘selling’ 24

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airline 473.2.3 Developing sales of a regional fast food chain 493.3 The benefits of integration 503.3.1 Creative integrity 503.3.2 Consistency of messages 513.3.3 Unbiased recommendations 513.3.4 Better use of all media 523.3.5 Greater marketing precision 523.3.6 Operational efficiency 533.3.7 Cost savings 543.4 Evaluating the benefits of integrated marketing

communications 553.5 Introducing an integrated marketing programme 553.5.1 Internal structure for integrated marketing 563.5.2 Selecting an agency 563.5.3 Selecting pilot projects or campaigns 57

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4 The Advertiser 59

Peter Beaumont

Learning outcomes 594.1 Who or what is ‘the advertiser’? 594.1.1 The sole trader 614.1.2 The owner/manager 624.1.3 The committee 624.1.4 The sales and marketing manager 634.2 The value of the brief 644.3 Why use an agency? 654.4 So how should an advertiser choose an agency? 664.5 So what of the responsibility of the advertiser? 664.6 Why thank advertisers? 67

5.5.6 Selecting an agency 855.6 The client brief 855.7 Agency remuneration 865.8 Managing client / agency relationships 89

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6.2.1 Recent developments 966.2.2 Television as an advertising medium 986.2.3 Terrestrial channels 99

6.2.5 Channel 4 1036.2.6 Channel 5 (‘Five’) 1046.2.7 Satellite and cable 1056.2.8 Broadcast sponsorship 106

6.6 Outdoor advertising 1136.6.1 Roadside advertising 1136.6.2 Street furniture 1136.6.3 Point of sale 1136.6.4 Transport Media 1146.6.5 Ambient media 1146.7 The internet 1156.8 Discussion points 116

6.10 Summary 117Further reading 117

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7.7 Selling creativity 1287.8 Discussion points 1297.8.1 The importance of copy 1297.8.2 The use of creative pitches 1297.8.3 A role for the client? 1307.8.4 The value of creativity 1307.8.5 Working in the creative world 131

8.2.4 Art buying 1358.2.5 Account management 135

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10 Printing 158

Leslie Claridge

Learning outcomes 15810.1 Introduction 15810.2 Production processes 15910.3 Original image production 15910.4 Paper sizes 15910.5 Desktop publishing 160

10.7 Process printing 16210.8 Printing processes 16310.9 Traditional processes 16310.9.1 Offset lithography 16310.9.2 Flexography 164

10.9.4 Screen process 16610.9.5 Letterpress 16710.9.6 Digital printing 16810.9.7 Colour printing 16810.10 Post-press activities 17010.11 Checklist for production issues 17110.12 Summary 171

Martyn P Davis

Learning outcomes 17311.1 Situation assessment 17311.1.1 Your firm 17411.1.2 Your product or service 17411.1.3 Your market 17411.1.4 Your marketing policy 17511.1.5 Previous activity 17511.1.6 Restraints 17511.1.7 Competition 176

11.2 Setting your specific campaign objectives 17611.2.1 Dangers to avoid 17711.3 Determining your advertising budget 17811.3.1 How much shall we spend? 179

11.3.2 How much extra shall we spend? 17911.3.3 How much are they spending? 179

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11.3.4 How much will it cost? 179

11.4 The advertising brief 18011.4.1 Preparation of campaign proposals 18011.4.2 Media selection 18111.4.3 Media planning 18111.4.4 Overall media planning 18211.4.5 Detailed media planning 18311.4.6 Approval of proposals 18711.5 Putting the plan into effect 18711.5.1 Campaign execution 18711.5.2 On-going improvement 18811.5.3 Buying versus planning 18811.5.4 On-going control 18811.6 Evaluation of results 188

Further reading 310Regular reading 310

Brenda Simonetti

Learning outcomes 31120.1 Defining sales promotion 31120.2 How it all began 31120.3 Setting the objectives 31220.4 Defining the strategy 313

20.7 Techniques and mechanics 31720.7.1 Consumer promotions 32020.7.2 Trade promotions 32020.7.3 Employee Promotions 32020.8 Research and evaluation 321

20.10 Communication 32420.11 Promotion administration 32520.12 Premium sourcing and buying 32620.13 Europe 32820.14 The future 32920.15 Summary 329

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21 Advertising: Self-regulation and the Law 331

Christopher Graham

Learning outcomes 33121.1 Introduction 33121.2 How the self regulatory system works 33221.3 Advertising Standards Authority 33321.4 Committee of Advertising Practice 335

21.4.2 Funding the self regulatory system 33621.4.3 The CAP code 33621.4.4 Code sanctions 340

Ann Murray Chatterton

Learning outcomes 34822.1 Introduction 34822.2 Characteristics of agency practitioners 34822.3 Background to industry training 34922.4 The industry approach to training 35022.5 The IPA’s Continuous Professional Development

in Advertising Accreditation Standard 35222.6 Professional qualifications 352

22.6.2 CAM Foundation 35322.6.3 The Chartered Institute of Marketing 35422.6.4 The Institute of Direct Marketing 35422.6.5 The Institute of Public Relations 35422.6.6 The Institute of Sales Promotion 35422.6.7 The Market Research Society 35422.7 The provision of academic learning 355

The IPA’s seven stages 356Organisations 356

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Sarah Asprey

Sarah Asprey began her career in marketing and PR before moving intoadvertising 5 years ago Sarah is now client services director of RAA SpragueGibbons, one of the UK’s leading independent recruitment advertising andcommunications agencies Sarah began writing during her PR agency career,and has continued with it at RAA, producing marketing and editorial materialfor RAA, and client documents and papers Sarah is committed to RAASprague Gibbons as one of the few truly independent recruitment advertisingagencies in the UK, in a marketplace dominated by large plcs Sarah’s ideashave helped RAA to become the well-respected agency it is today, in particularwith regard to shaping the client services function Sarah believes that recruit-ment advertising needs to raise its profile to attract a better calibre of peopleinto the industry, and become a more highly respected specialist service andprofession She considers that the existence of more educational text on thesubject will help in this

agen-She is also the Non-executive Director of the Government’s Central Office

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Peter began his career in advertising in 1985 joining Thompson RegionalNewspapers (TRN) working in the tele-ad department for his local paper.Progressing through both the classified and display advertisement depart-ments, he left with colleagues in 1990 to set up his own agency.

Peter has regularly presented seminars and training sessions for both clients andnewspaper groups and was also instrumental in helping Eclipse to become one ofthe first North West agencies to receive the coveted Investor in People Award

Sangeet Kaur Chana

Sangeet Kaur Chana graduated with a Law degree from Leeds University beforegoing on to qualify as a solicitor in 2000 having completed her legal trainingwith Leeds firm, Gordons After a period practising as a commercial litigator,Sangeet chose media law as her niche specialism leaving private practice to joinGranada Media as an in-house lawyer in 2001 Sangeet is involved in mostareas of Granada’s business including advising production departments on legalcompliance of programmes and intellectual property issues, negotiation anddrafting of a wide range of commercial agreements, management and resolution

of legal disputes and other non-contentious matters

Ann Murray Chatterton

Ann Murray Chatterton is Director of Training and Development at the Institute

of Practitioners in Advertising The IPA is the trade body and professional tute for leading agencies in the UK’s advertising, media and marketing commu-nications industry and its role is to define, develop and help maintain the highestpossible standards of professional practice within the business Training anddevelopment is therefore an essential part of its service to the industry Ann hasspent 23 years on the practitioner side, starting out at the multi-national agency,Masius Wynne-Williams & D’Arcy MacManus (latterly known as D’Arcy) andsubsequently running her own agency, Marshall Advertising Ann joined the IPA

insti-in 1999 and, as well as overseeinsti-ing the insti-industry’s growinsti-ing trainsti-ininsti-ing course lio, she launched the IPA’s CPD accreditation standard in 2000 and the first in anew series of IPA professional qualifications in 2003 Ann read French Studies(BA Hons) at Portsmouth Polytechnic and The Science and Techniques ofAudio Visual Communication at Bordeaux University She is a member

portfo-of WACL (Women in Advertising and Communications London) and theMarketing Society

Leslie Claridge

Leslie Claridge is currently a principal lecturer in the School of Printingand Publishing at the London College of Communication He is a printer byprofession and in recent times has worked extensively in electronic imagingand desktop publishing He is a training specialist responsible for vocational

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study in the specialised areas of printing, publishing and media studies He isalso a Fellow of the Institute of Administrative Management.

Martyn is the author of The Effective Use of Advertising Media,

Business-to-Business Marketing and Promotion and Successful Advertising: Key Alternative Approaches as well as numerous articles.

A former member of the National Council of the Advertising Association, hewas also a senior examiner for the Chartered Institute of Marketing andModerator for the CAM Foundation examinations Martyn was also a coursedirector for the Chartered Institute of Marketing Interact International and forPopular Communication Courses, and has worldwide international experience

Nigel Foster

Nigel Foster, Head of TV, J Walter Thompson, originally started his career as

a press production executive Nigel moved to TV production from accountmanagement at Wasey-Campbell Ewald (as was) in 1980 He worked at FCBand KMP (Head of TV) before joining JWT, and over the years has worked onsome of the UK’s most prestigious clients, including British Airways, Dulux,Goodyear Tyres, Vauxhall Motors, British Telecom, Kellogg’s and Esso

Christopher Graham

Christopher Graham is Director General of the Advertising StandardsAuthority (ASA), the body that supervises the self-regulatory system of adver-tising controls in non-broadcast media Christopher joined the ASA in April

2000 from the BBC, where he was Secretary to the Corporation – a role thathad much to do with self-regulation, but nothing to do with advertising.Christopher joined the BBC as a News Trainee and became a current affairsproducer, first in radio and later in TV Away from the BBC, Christopher was a

producer on Channel 4’s A Week in Politics.

Since April 2003, Christopher has been Chairman of the EuropeanAdvertising Standards Alliance (EASA), the ‘single authoritative voice ofadvertising self-regulation in Europe’, which brings together the advertisingself-regulatory systems of the 25 Member States of the European Union Beforebecoming Chairman, he led the Self-Regulatory Committee of EASA

Christopher has been closely involved in the discussions that led to the posal by the new broadcasting and communications regulator Ofcom to contract

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pro-out responsibility for complaints abpro-out TV and radio advertisements to a regulatory body ‘under the banner of the ASA’.

self-He is a non-executive director of Electoral Reform Services Ltd, the for-profit balloting company

He holds a Diploma in Marketing and a Diploma in Management Studies, is

a fellow of the Communications, Advertising and Marketing Foundation,

a member of the Chartered Institute of Marketing, Immediate Past WorldPresident of the International Advertising Association, a board director ofCreston plc, SITEL Inc and of the Advertising Standards Board of Finance,Master Elect of the Worshipful Company of Marketors and a Freeman of theCity of London

Richard Jeans

Richard Jeans was born in 1934 He went to school in Wales, read Classics atOxford and was commissioned into the Intelligence Corps for National Service.Primarily a writer, he spent 8 years with an engineering company, DexionLtd, ending up as Advertising Manager, responsible for all national and inter-national advertising and sales promotion

He left to join Roles & Parker (a pioneer business advertising agency) asSenior Writer

Moved on to become a founder member of Primary Contact, where hewas from time to time Creative Director, Deputy Managing Director andChairman – sometimes all at once It became Europe’s largest business advertis-ing agency, and was sold to Ogilvy

Richard moved on to become founder member and Chairman of CHJS,which he left in 1995 to become a consultant

He has worked on hundreds of business and quite a few consumer accounts,and has performed in most agency functional roles (but cannot do regressionanalysis) He has picked up all the awards you do pick up if you hang aroundlong enough and let people enter the work

Ian Linton

Ian Linton is a professional writer, specialising in business-to-business nications and management books He has handled a wide range of integratedmarketing communications for clients such as Barclays Bank, BP, Cisco, Ford,IBM, ICL, Shell Oils and Siemens, and is the author of more than 20 business

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commu-books, mainly in the fields of customer service and marketing communications.

He is co-author with Kevin Morley, founder of KMM, of Integrated Marketing

Communications, also published by Butterworth-Heinemann.

Robert Love and Jackie Hewitt

Robert Love and Jackie Hewitt both work for Thomson Directories, as part of aStrategic Marketing group Thomson Directories publish the Thomson Localand ThomsonLocal.com

As Marketing Research Manager, Robert carries out research among tory users and advertisers to gain insights essential for strategic planning Withover 10 years’ experience in marketing he has worked on both agency andclient sides of market research

direc-Jackie has spent her whole career in marketing communications working forboth b2c and b2b brands for over 11 years She is a marketing communicationsmanager and specialises in strategy, advertising and public relations

Jackie is a full member of the Chartered Institute of Marketing

Adrian R Mackay

A Life-Science graduate, Adrian R Mackay (Mac) gained significant marketingexperience with Beecham and Nutricia, then worked in Home Counties adver-tising agencies before becoming Marketing Manager within Rhone Poulenc Heestablished Duncan Alexander & Wilmshurst in 1992 – Marketing and TrainingConsultants – and is Managing Partner

Mac is a Faculty Member of the Chartered Institute of Marketing, a fullMember and an examiner with the Chartered Management Institute He hastutored on ISBA courses for advertiser companies and has an enviable reputa-tion as a writer and speaker

He holds a Diploma in Marketing and was one of the first in the UK toachieve a Master’s Degree (MBA) in Strategic Marketing

He co-authored The Fundamentals of Advertising, 2nd Ed (1999) and The

Fundamentals and Practice of Marketing, 4th Ed (2002), both with John

Wilmshurst and published by Butterworth Heinemann

Mark Maguire

Mark Maguire started in the industry as an apprentice hand planner andplatemaker (4-year indentured course) with the Mullis Morgan Group andmoved on to digital pagemakeup systems where he was promoted to ProductionDirector In 2000 he joined TAG (The Adplates Group) and was subsequentlyappointed as Production Director of Tag@Comma, a newly formed joint venturewith Comma (part of the Publicis Group), in March of that year In September

2002 he set up Tag@Ogilvy and Tag@D’Arcy as in-house production facilitiesfor the agencies Ogilvy & Mather and D’Arcy Masius Benton and Bowles,respectively He currently sits on the executive committee of the APPA

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(Advertising and Prepress Association) as Vice Chairman The Association resents a group of companies, engaged in pre-press, digital production and alliedbusinesses in response to an industry demand, to act as a standard bearer for qual-ity and technology for the advertising, publishing and printing industries.

rep-Richard Mayer

Richard Mayer, MA DIPM MCIM (Chartered Marketer), is Senior Lecturer inMarketing at the University of Derby where he is responsible for the manage-ment and teaching of CIM and Masters programmes

Richard is also director of his own training company and has a wide range ofexperience in the running of marketing training programmes in both business

to business and consumer marketing sectors He has recently run courses forHeinz, Michelin, Scottish Widows and Ford in the UK and internationally withBahrain Telecom and The Institute of Banking in Riyadh He directs seminarprogrammes in Principles of Marketing, Business to Business marketing,Marketing Services and Strategic Marketing

Richard has published in a number of marketing journals and is co-author of

two marketing texts: Internet Marketing and Introduction to Marketing He is

also a contributory author for various marketing study guides

Mike Monkman

Mike Monkman began his career in the research department of Odhams Press –part of the original IPC group He then spent 15 years at Masius, first as aresearcher and then as a media planning group head

In 1983 he left Masius to set up his own consultancy Since then he hasreceived commissions from many media owners and media agencies He is thetechnical consultant to the Institute of Practitioners in Advertising on television

research, and is the co-editor with Colin McDonald of the MRG’s Guide to

Media Research, published in 1995.

Gareth Richards

Gareth Richards was born in 1958 Following a PhD in Plant Biochemistry atKings College in London, he spent two years working for an AmericanUniversity before moving into advertising He joined business-to-businessagency CHJS as an Account Executive and spent 10 years with the agencymanaging integrated campaigns for a range of blue-chip clients – includingEricsson, Digital, and Sony

He then spent two years on the client-side as Marketing CommunicationsManager for broadcast manufacturer Snell & Wilcox

He joined Ogilvy Primary Contact in 1999 as a Business Director ing in New Economy clients He then ran a technology account group, beforebecoming Managing Director in January 2002

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specialis-Brenda Simonetti

Brenda Simonetti has worked in the promotional marketing industry for almost

30 years She is a Past Chairman and Fellow of the Institute of Sales Promotionand, as sales promotions manager of Quaker Oats, served on the sales promo-tion sub-committees of the Advertising Standards Association, the IncorporatedSociety of British Advertisers and the FDF She has also worked for a leadingsales promotion agency, Clarke Hooper and a major supplier, Megaprint.Her wide experience of all aspects of the industry is invaluable in her currentposition as Standards and Practices Consultant to the Institute of Sales Promotion

Roger Stotesbury

Before setting up as Founding Director of the Milton Keynes-based advertising

agency infocus, Roger worked with many of the top London agencies of the

1980s and 1990s On the client-side at BT he helped establish the discipline ofadvertising-led integrated communications He is a graduate of ImperialCollege and previously worked in the film industry In 2003 he established theMilton Keynes Region Marketing Network

Richard K Warren

Richard K Warren has worked in advertising for 15 years During that time he hasworked both in the UK and in the USA, on brands including: Asda, Pirelli, MidlandBank, First Direct, Boots, Cable & Wireless, Snapple and Charles Schwab

In 2000 Richard was a founding partner in the management buyout ofDelaney Lund Knox Warren As Director of Strategy, he has strategic responsi-bility for the HBOS account, including Halifax, Bank of Scotland andBirmingham Midshires brands

He is a regular speaker at conferences and has won both APG and IPAEffectiveness gold awards

John Wilmshurst

John Wilmshurst ran his own marketing consultancy for 25 years with clientsincluding Dun and Bradstreet, Shell International, Smith Kline Beecham, TheMet Office, British Rail and the Open University He conducted many trainingcourses for his own clients and on behalf of the Chartered Institute ofMarketing, of which he is a Fellow

After selling his company (to form Duncan Alexander & Wilmshurst) hebecame a part-time director and chairman of Mustard Group in Kent

He authored Below-the-line Promotion (1993) and co-authored The

Fundamentals of Advertising, 2nd Ed (1999) and The Fundamentals and Practice of Marketing, 4th Ed (2002), both with Adrian ‘Mac’ Mackay and

published by Butterworth Heinemann He is a visiting lecturer at theUniversity of Greenwich

He is also Past-Master of his London Livery Company, the WorshipfulCompany of Carmen

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The Practice of Advertising, fifth edition has been completely revised and

updated building on the original and much respected work of the late Editor,Norman Hart, who guided the text through the former four editions Through

his work, The Practice of Advertising gained its rightful place on the reading

lists of many courses both in the UK and overseas It has for many become astandard text

This new edition has been thoroughly reviewed and updated to addresscrucial issues in today’s advertising industry, presenting a thorough overview

of its components

This fifth edition has been revamped to feature the latest thinking with modernexamples, thereby illustrating key points and supporting underlying principles Awide spectrum of topics is covered, including:

The roles of the advertiser and advertising agency

Media

Creativity

Research

Planning and budgeting

Integrated Marketing Communications

pro-in your hands today I extend a personal thanks to them all on your behalf formaking their specialist subject so engaging

Final thanks must go to Jan Mackay, whose patience and tenacity workingwith the contributors and with the text has made this publication possible – I

am so grateful that I am now married to the right woman!

Adrian R Mackay

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Advertising within It

Adrian R Mackay

Learning outcomes

By the end of this chapter you will:

● Understand what marketing means

● Have a clear idea of what is meant by the ‘marketing concept’

● Recognise the complex pattern of buying influences and that advertising isjust one factor in the arena

● Understand the place of marketing research and the information needs itcan fulfil

● See that the four Ps of marketing is out of date and explore the modernseven C model of the marketing mix

● Explore how the marketing mix fits within strategic marketing planning andthe place of marketing communications

Marketing is the management process responsible for identifying, anticipating andsatisfying customer requirements profitably

Chartered Institute of Marketing Definition

Before going any further, look back at the definition above What for you is thekey word in the definition?

Is it customer? Indeed, marketing is about customers The whole purpose of

many an organisation has to do with meeting customer requirements andmaking a profit

So is it profitable? Certainly, one needs to profit from the interaction

between customers and the organisation and so much the better if both thecustomer and the organisation are satisfied by some sort of ‘profit’

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So perhaps you feel that the key word is satisfying? Well, no business is

going far without satisfying the needs of someone from those with a financialstake in the business, the creditors and the employees; and these are satisfied inthe long term when customers continue to be satisfied But how do we knowwhat they need?

Then, does identifying needs seem paramount? Clearly this is going to be

crucial, yet so will many other organisations be aiming to identify the sameneeds so there may be more than just satisfying identified needs alone

Thus, anticipating needs suggests that if we can do this better than our

com-petitors, we will keep ahead So, perhaps that is the most fundamental Butwithout being able to satisfy the current need, the organisation may not survivelong enough to deal with those anticipated needs!

All that is left is ‘management process’ If one takes a moment of reflection,

how do any of the above happen without someone making sure that they do?How can an organisation identify, anticipate or satisfy any given customerrequirement and make a profit without someone managing the process? Thus,the management process is the foundation for all successful marketing

So, in the definition, it is the management process that is responsible for

‘identifying, anticipating and satisfying customer requirements profitably’ thatenables everything else to happen And it is the duty of all the people in anorganisation whose activities make up all the processes that ultimately deliverwhat the customer needs These are the marketing people and they are not justconfined to the ‘marketing’ department

However, the term ‘marketing’ is used in different ways by different people;

so, let us disentangle these differences at the outset Commonly, there are threeways in which people use the term:

1 As a description for some part of the organisation or in a person’s tion or job title, such as the ‘marketing department’ or the ‘marketing director’

func-2 To describe certain techniques used by the organisation Such activities

as advertising, market research and sometimes sales or product ment, can be conveniently described by the collective term ‘marketing’

develop-to distinguish them from other activities coming under the heading of

‘production’, ‘finance’ and similar main sub-divisions of an organisation.Some organisations feel that producing an advertisement or launching aweb page is ‘doing the marketing’

3 To indicate a particular approach to business, or a management attitude, inrelation to customers and their needs This ‘business philosophy’ hasbecome known as the ‘marketing concept’

It is in this third way that the term is mainly used here, and the meaning andimplication of the marketing concept are discussed below

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1.2 The marketing concept

Many activities are particularly concerned with a company’s relations with itscustomers – for example, market research, public relations, customer enquiriesand advertising Often these activities are grouped together under the collectiveterm ‘marketing’

Since we all see advertising, buy products and services, or get direct mailthrough our letterboxes, we all ‘consume’ great volumes of ‘marketing’ and,therefore, become immediate experts Since it appears so simple to the ‘man(or woman) in the street’ the role is often added to some poor hapless indi-vidual’s task list with varying, and often poor, results

However, marketing in its fullest sense must motivate the whole companyfrom the managing director, through to keyboard operators, all must be con-cerned with marketing To put the marketing label on some parts of the businessmight suggest that they and only they are concerned with marketing This in turn

would mean that they and only they are concerned about the customers on which

the business depends The saying ‘Marketing is too important an activity to be trusted to the marketing department’ contains a great deal of truth A fairly com-

mon solution to the problem is to label these specialist departments ‘MarketingServices’

Be that as it may, we do commonly find within a company structure amarketing department set up something along the following lines

Marketing is one of the three basic areas of activity in the typical industrialbusiness It begins by influencing the format of the product to secure maximumacceptance in the market It also defines the prices at which and the quantities

in which it should be offered in any given period to secure the maximum return

to the business in the long term

It normally includes:

1 An evaluation of the market and estimates of sales

2 Development of the marketing approach or policy

3 The planning and operation of the marketing function over all – internaland external – for maximising sales and for dealing with customers

4 All forms of promoting sales

5 Setting budgets for the marketing activity

6 The evaluation of results by reference to internal data and the results ofmarket research

This is a perfectly valid and worthwhile approach, provided it does notobscure the need for the whole company to be committed to the managementprocess that ‘identifies, anticipates and satisfies customer requirements effi-ciently and profitably’

In its fullest sense, the marketing concept is a philosophy of business.Simply stated, it means that customers seeking satisfaction becomes the

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economic and social justification of a company’s existence So, all companyactivities in production, engineering, and finance, as well as in marketing, must

be devoted first to determining what the customer’s wants are and then to fying those wants while still making a reasonable profit

satis-1.2.1 Social marketing and the concept of value – a wider

mar-is involved with the organmar-isation and has some interest in the ‘output’ of what it

is doing and will interact with that organisation to a varying degree Since such

‘customers’ have a stake in what is going on, the term stakeholder has been

used to help understand how the organisation may add value to the actional relationship for the other party

trans-While any organisation that is legal has a right to exist, no organisation has aright to the support that is required if it is to exist Therefore, do not be skilful

in making a customer suit the interest of the business – be skilful in convincingand then making the business do what suits the interests of the customer.From this philosophy will come the concept of ‘customer advocacy’ – that isthe support the organisation needs to prosper

1.3 The marketing process

We can view marketing as a constant series of actions and reactions betweencustomers and the marketing organisations trying to satisfy their needs.Customers make their needs and/or problems known while organisations make

it their business to receive the information They use their resources (money,materials, skills and ingenuity) to develop ways of satisfying the needs Firmsmust then communicate the existence of the ‘solutions’ back to the customers,whose needs created the ‘problems’ (Figure 1.1) Customers will gladly pay forsolutions to their problems or satisfaction of their needs

1.4 The changing marketing environment

The object of marketing is to satisfy consumer needs Those needs consist notmerely of physiological urges (to eat, sleep and be warm) but such other needs

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as to be loved and respected, to feel secure and not threatened and to developone’s personality to the fullest extent possible.

So, what shapes these needs and gives emphasis to one desire or another?Only by understanding these mechanisms can marketing ultimately be morethan a mixture of carefully measured trial and error (‘If we sold the goods theymust have been what the customers wanted’)

At present the mechanisms are not wholly understood The science of socialstudies (also called behavioural studies) carries out many research programmes,and the results of these investigations are gradually becoming available Theyare still fragmentary, not always easy to relate to the marketing situation and toocomplex to do more than touch on here But students of marketing should beaware of a pattern of knowledge that is beginning to take shape

Figure 1.2 shows some of the many influences that go to shape a person’sneeds and responses; this has been modified in the light of recent thoughts onthe influences on the individual – see Chapter 2

There are a number of ‘models’ of the way buyer behaviour operates Thesimplest is the ‘economic model’ that takes the view that people act in a purelyrational way to optimise the satisfactions gained from their expenditure,balancing cost with value This is probably true to some extent of industrialpurchases (although how far it is true even there is disputed) But it is largelydiscounted by most marketing experts in the consumer field, especially forlow-cost everyday purchases

Much more favoured is the ‘social–psychological model’, which takes theview that human beings are social animals much influenced by the groups towhich they belong – their family, workmates, their ‘social class’, etc Friends,neighbours and other acquaintances, particularly those they would like to emu-late and to whose life-style they aspire, are our ‘reference groups’ and haveconsiderable influence on our behaviour (‘Keeping up with the Joneses’ is oneeveryday expression of this approach, ‘peer group pressure’ another) SeeSection 2.4.4 – How Advertising Works p31

Market/customers organisationMarketing

Needs

Problems

Resources

Solutions Satisfactions

Information Offer

Money

Figure 1.1 The marketing process

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It is known that some individuals set the pattern within their own circle ofacquaintances They are the ‘opinion leaders’, the trend-setters – the first to have

a home sauna, a digital video camera or a third generation mobile telephone

A person’s purchasing behaviour changes as they move through their lifecycle One definition suggests the following stages:

1 Single

2 Young married or cohabiting couples with no children

3 People with young children

4 Couples or single parents with older children

5 Older people, children left home (the ‘Empty Nesters’)

6 Sole survivors

Fairly obviously, the buying patterns of young married people setting uphome for the first time (carpets, furniture, crockery, pictures) will be quite dif-ferent from those with a young family (baby clothes, different foods, toys) and

Peer group Opinion leadership, etc

Cost to customer Delivery Payment terms Sales service, etc.

Level of knowledge and awareness

Personal or emotional characteristics Motivations Attitudes Emotional intelligence, etc

Individual psychological factors

Buying proposition Product and/or service

Figure 1.2 The complex pattern of buying influences1

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so on Equally clearly, the cultural outlook of the community in which they livewill influence what people spend their money on.

Figure 1.2 above takes all these ideas as having some relevance It shows allthe influences mentioned – cultural, sociological and economic – each having

an influence on the individual’s own psychological make-up, their attitudesand motivations

1.4.1 Influencing consumer behaviour

Listed on Figure 1.2, under the heading ‘Individual psychological factors’, arethree particularly important items: (1) level of knowledge and awareness,(2) motivations (which are closely related to the needs we discussed above) and(3) attitudes This list suggests three very important ways in which we caninfluence consumer behaviour:

1 We can increase the level of knowledge and awareness For example, wecan tell people of the existence of a product they were previously unaware

of, or we can tell them facts about its performance or the benefits it willbring them

2 We can show people how our product will help to satisfy their needs This

is the basis of the ‘emotional appeals’ used in advertising

3 We can change their attitudes The view taken of mobile phones in the early1980s was that most people saw them as unnecessary or even a ratherexpensive extravagance regarded as a gimmick Today, they are largelytaken for granted with an average of over 60 per cent penetration inEurope2

1.5 Customers and their behaviour

Since the customer is the focal point of all business activity, we must be clearabout how customers behave Because marketing is concerned with satisfyingpeople’s needs, we must understand what those needs are and the ways inwhich people go about getting them satisfied

Any individual has a whole range of needs that they must or would like tosatisfy, from the purely physical necessity of food and drink, through the emo-tional wish to be loved and appreciated to the desire to develop their personality –through education, a leisure activity or a fulfilling occupation An Americanpsychologist, A.L Maslow, has expressed these varying levels of need in a waythat is still useful today in the marketing context He has written of the ‘hierar-chy of needs’, the following five-stage progression3:

1 Basic physiological needs (food, sleep, warmth)

2 Safety needs (protection from danger)

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3 The need for recognition (love, belonging).

4 Ego needs (self-esteem, respect from others)

5 Self-fulfilment (realisation of one’s total being, creativity)

It is clear that, as we progress through these stages, we are dealing first withneeds that all people at all times have to some extent or other and have to sat-isfy in order to live At the other end of the scale we have needs that few willever satisfy, mainly because the majority of people are preoccupied with themore pressing needs at the lower levels On the other hand, once a pressingneed is satisfied, it is no longer felt This is why people with sufficient income

to keep them well fed, safe and warm become more and more aware of other,less basic needs, such as egosatisfaction ‘Keeping up with the Joneses’ may ormay not be laudable but it does become a strong need for many people oncethey are fed, housed and clothed to a reasonable level

Thus, individuals will vary widely in the needs that at present preoccupythem Some will be mainly concerned with acquiring the bare necessities (youwill fail to interest them in fancy furnishings), whereas others will be seekingexciting leisure pursuits (no good talking to them about buying their firsttelevision – they already have four!)

We also need to be aware of how people satisfy their needs There is a stage process, which can be expressed as follows:

jaded and need a bit of excitement) or specific (I want to go to the cinematoday)

newspapers and magazines may be scanned for offers that may satisfy theneed (e.g the lists of ‘What’s on’ in entertainment); or one may merelykeep ones’ eyes and ears open and register more keenly than usual anypossible solutions to their need

In more complex situations the search process may be long and deliberate.The family seeking new kitchen equipment will read magazines, talk tofriends, go to showrooms and exhibitions The industrial buyer may ask forsamples, demonstrations and competitive tenders or carry out extensive cost-benefit analysis

alternatives examined, a decision will be taken and the purchase made

does not end when the purchase is made The customer’s need is only fied if the product or service does perform in the expected fashion and doesindeed meet their need, not only initially but, where appropriate, over

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satis-a longer period It must perform in the expected wsatis-ay, satis-and satis-after-ssatis-ales servicemust be adequate Indeed, in some situations, advertising can be used totarget existing customers to maintain their brand loyalty.

The precise way in which this process works needs to be understood It willvary from one group of consumers to another, in particular in its time-scale: for

a snack bought to satisfy a sudden pang of hunger the whole process may beover in a few minutes, but for a power station or a new military aircraft it willtake many years The domestic appliance industry in the UK wasted vast sums

on advertising at one stage because it did not clearly appreciate that only whenpeople are in the ‘search’ stage will they be receptive to advertising of this kind

of product

1.6 The need for marketing research

All business is conducted under conditions of risk and uncertainty – particularlyabout the future Obviously, the future cannot be known totally, the uncertaintycannot be completely removed or the risks precisely calculated However, it isasking for trouble not to use whatever information is available Many facts can

be known and unnecessary risk can thus be avoided

For example, while a firm can very easily know how its own sales areprogressing, this information is relatively meaningless without knowledge ofthe total size of the market and whether that is increasing or decreasing Often,information on the total market is freely available – from government statistics,trade associations or similar sources If it is not freely available in this way,market research techniques can be used to get it But, as we shall see inChapters 13 and 14, this is just one example of the vital necessity for informa-tion about the market situation

The overwhelming reason for carrying out market research, however, is tokeep open the channels of communication between customers and ourselves sothat we can more effectively understand and then satisfy their needs

1.6.1 Marketing information systems

In a well-ordered and sophisticated marketing-oriented organisation, ing research will be part of a totally integrated marketing information systemencompassing information derived from:

market-1 The internal accounting system, especially sales analysis

2 Market intelligence, i.e the capturing of information from many sources,including the media, industry reports, etc., regarding matters such as theeconomic situation and competitor activity

3 Market research of all kinds

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The following sections highlight some fundamental marketing informationneeds:

2 What are their marketing strategies?

3 How are their products distributed, advertised, packaged?

4 How does their sales force operate?

5 Are any new competitors likely to enter the market?

1 Who are our customers and what are their needs?

2 Which products do consumers prefer and why?

3 Are proposed new products acceptable?

4 Do consumers have complaints about products presently on the market thatcould indicate a possible new product opportunity?

5 What is the customer’s reaction to new product concepts?

1 Who reads which publications; who watches/listens to which TV/radiochannels?

2 Are existing or proposed advertising campaigns communicating ively?

effect-3 What are the motivations that activate consumers and is our advertisingcorrectly interpreting them?

4 How do customers react to proposed advertising themes (copy-testing)?

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1.6.2 How marketing research is organised

Marketing research is a specialised job While in principle it can be carried out

by anyone, there are serious potential pitfalls, as follows:

1 The necessary objective, unbiased approach needs to be acquired or

‘trained into’ people Salesmen, for example, are usually not suitable forobtaining research information, because their training and instincts aresuch that they are enthusiasts for a particular point of view – partisan fortheir own product If not, they might well be less effective as salesmen

2 Some of the techniques employed demand skills and disciplines that have

so that the operation may become uneconomic But they do provide additionalsecurity of information

Advertising agencies need to prepare advertising campaigns within a totalmarketing plan and in the light of the fullest possible knowledge about mar-kets They also need much detailed information on readership and audiences,

on motivation and on reactions to advertising themes For these reasons manyagencies employ their own marketing research specialists, who work for theagency and its clients Indeed, the agencies had much to do with the wholedevelopment of market research in this country

The trend over many years now has been for these market research units to

be operated as quite distinct departments or completely separate companies.They work for a whole range of clients, in addition to those of the advertisingagency, and normally charge for their services in the same way as a marketresearch agency would (which is what they have in practice become)

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1.6.2.3 Market research agencies

There are many individuals and companies offering their services as marketresearch agencies Some offer a very wide range of services, whereas othersare highly specialised The Market Research Society publishes a list of thesewith an indication of their capability in its annual Yearbook

Among the specialist services available are (a) retail audits and panels,(b) motivation research, and (c) audience measurement Some organisationsspecialise in one stage of the research process, such as interviewing or theprocessing and analysis of data

1.7 The ‘old’ marketing mix

The ‘marketing mix’ is a term developed originally by Neil H Borden todescribe the appropriate combination, in a particular set of circumstances, ofthe four key elements that are at the heart of a company’s marketing pro-gramme They are commonly referred to as the ‘four Ps’ It is easy to see why,

if any one of these elements is wrong, the marketing programme will fail andthe company will not profit from the operation, as it should While an out-moded way of thinking, they are still in common use today So, let us considereach component of the old ‘four Ps’ marketing mix in turn

1.7.1 Product

If the product or service offered does not perform in the required way, tomers will not buy a second time, and the word will get round to prospectivecustomers so that they will not buy even once A car with poor performance orexcessive breakdowns, a ‘tasty snack’ that does not seem very tasty to its con-sumers, a magazine that does not interest its readers or a video rental shop that

cus-is never open when customers want to use it are all examples of faulty ucts (Clearly, to some extent, other items in the marketing mix can act to com-pensate for shortcomings in this area I may decide to accept more breakdowns

prod-in a car if it is cheap enough, or buy the snack I do not like too well if the shop

I am in does not stock the one I prefer.)

1.7.2 Price

No matter how good the product, some people will be unable to pay more than

a certain price Others may be able to afford it but believe that another way ofspending that sum of money would give them greater satisfaction Conversely,

as we have just seen, simply being cheap is not enough – the product mustcome up to some level of expected performance In some situations (luxurygoods, etc.) a high price may even make the product more desirable than

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a lower one The likely response of demand to a change in price (‘elasticity’ ineconomic terms) will affect our decisions on pricing policy.

1.7.3 Place

We must not expect customers to shop around too much in order to find ourparticular product It should be available at the place convenient to them Insome cases, their attachment (brand loyalty) to a particular manufacturer’sproduct may be so strong that they will go miles to find it and refuse to acceptalternatives; but this is unusual If one type of beer is not available, many peo-ple will take another, or if one newspaper is sold out, will buy its rival Thebiggest single factor in deciding which brand of petrol people buy is whichgarage is most convenient for them to stop at Coca-Cola is the world’s best-selling soft drink largely because it is readily available virtually everywhere.Sometimes the best way of making the product easily available is to give peo-ple easy access direct to the product (mail order, freephone ordering usingcredit cards, TV and Internet shopping, etc.)

The potentially negative factors must be avoided For instance, not manypeople will ‘shop around’ to find a product that few stores have in stock Theywill be reluctant to do business with a company whose telephones are notanswered promptly, efficiently and courteously Someone once defined mar-keting as ‘making it easy for people to buy’ There is some truth in this obser-vation, yet many organisations seem to go out of their way to make life difficultfor their customers – complicated forms or administration, inadequate tele-communications systems and unhelpful staff are just some examples

So far we have established the point that a failure in any one of these fourfactors may damage the chances of success in the market place no matter howgood the others are The opposite point needs to be made also Getting any one

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of them right adds to the total chances of success Getting them all right willhave a synergistic effect – the whole is greater than the sum of the parts.There is, however, a complication: what we do to one element in the marketing mix can have an effect on one or more of the others, especiallythe price Thus, if we want to improve the product’s performance, we may have

to build in features that will add to its price On the other hand, the fact that theproduct performs better may make it more acceptable to more people; this inturn will lead to higher sales, bigger production runs and lower unit costs andprices

Price and promotion are linked in this way also Promotion can cost a greatdeal of money and, for example, heavy advertising expenditure can be justifiedonly if either the advertising convinces customers that the higher price (neces-sary to cover advertising costs) is justified by the benefits the product offersthem; or advertising leads to higher sales and therefore lower unit costs Thesavings thus achieved pay for the advertising without an increase in price Boththese situations can apply at the same time, of course, so we may have anand/or rather than an either/or alternative here

1.8 The modern marketing mix

Philip Kotler has suggested that satisfying customer needs through the four Ps

does not go far enough (in an interview for Marketing Business Dec/Jan

1991/1992) We should, he says, be ‘delighting customers’ by using the ‘four Cs’

point of view, becomes the first ‘C’ Customers go after what they value

So, identifying what customers’ value will be paramount

2 Cost to the customer This may include time, effort, inconvenience, etc., as

well as money to satisfy a need

3 Convenience Place, from the customer viewpoint, is convenience Customers

do not see channel management decisions, outlet selection or distributionstrategy

4 Communication The fourth ‘C’ is crucial and better than promotion since it

should be viewed as a two-way mechanism with customers rather than aone-way ‘promotion’ Customers like to be heard, really listened to, ratherthan promoted to

In the early part of this new century and beyond, success will be determined

by the ability to go beyond the bare satisfaction of needs and on to the creation

of ‘delighted customers’ This approach ties in with the concept of Total QualityManagement (TQM), which requires the commitment by everyone in the organi-sation to constant improvement in quality (One major Japanese companyincludes in its quality precepts the statement ‘perfection is not enough’.) Since

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quality is determined by customers’ perceptions and preferences, it is only byworking closely with customers that we can deliver the customer value that willmake them ‘delighted customers’, in Kotler’s phrase.

It has long been recognised that the four Cs were OK for product-based keting operations but when one looks beyond the tangible products that peopleacquire, there is something missing: the service elements that have to do withthe transactions occurring between the ‘consumer’ and the ‘supplier’ For thisreason Kotler added three other Ps that together form part of the ‘mix’ that mar-keters must address to complete the fulfilment of the needs, wants and desires

mar-of the customer However, as we argue, the original thinking did not go farenough to meet the demands of today’s market place

customer interacts with a person delivering that service, it is the ency’ of that person that is crucial Not just people (One of the originalPs) The customer experiences how capable the people are – competent notonly in caring for the customer, but capable of making decisions that solvethe customers’ problems, find the product and deliver a personal – oftenindividual – service So, from an organisation’s management approach, wesee that a competency framework to personnel recruitment, job descrip-tions, performance appraisal, training and development will be better able

‘compet-to deliver exceptional service ‘compet-to cus‘compet-tomers, or ‘best value’ as defined forpublic service organisations

6 Customer relationship management It is not the process (another P) that is

so important to the customer Having purchased a product, the customerdoes not want to be told that there is a system – even if based on the qualitystandard ISO 2004 – that they must follow if they wish to complain Theconcern with many of these processes is that they do not track customers’interaction with the organisation until they have the problem That is notwhat the customer wants More important, we suggest, is the way that the

organisation manages all the customers’ interactions, thus building a

rela-tionship over time Rather than process, we suggest the focus should be on

‘customer relationship management’

7 Context Finally, physical evidence (the final P) of the service delivery is

today becoming less important You may never see the ‘one account’ office

in Norwich, or be particularly bothered by their bright yellow and red tionery, when you open a flexible mortgage with them However, the waythat they do business, how their interactions with you fit with your way ofdoing things is paramount What are the values, meanings, associated sur-roundings or setting for the interactions? In what context are you consider-ing your new financial arrangements? How does the account fit in your lifestyle, job and recreational activities, your savings and plans for the future?

sta-In this situation, context is all-important

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