Developmental Concepts Full Scale Marketing ~ dcmktg.com

Answer: A recent Stanford University study found that looks count when people judge a website for credibility.
"To look good is to be good--that's the primary test when people assess a Web site's credibility," said B.J. Fogg, Ph.D, who led the Stanford study. "People evaluate TV news and politicians in the same way: presentation matters more than substance. Why should we expect the Web to be any different?"

Question: What's the difference between advertising and promotion?

Answer: Advertising is generally targeted at end consumer (as opposed to the channels of distribution). It can be used for many purposes, including establishing awareness, providing information for knowledge, and creating brand loyalty. In its knowledge role, advertising can communicate a positioning (or modify a positioning) and even promote new uses of a product (think "Orange Juice isn't just for breakfast anymore").

Promotion is a general term. It is so general, in fact, that most communications that are not strictly advertising (paid and non-personal) are characterized as promotions. But this distinction is blurry at times, so looking for a clear definition is useless. It's better to just recognize that there are many types of promotions.

Question: Does advertising really increase sales?

Answer: General findings from advertising studies include the following:
Decreases in the level of advertising do not lead to an immediate decrease in sales. An increase in the level of advertising by itself does not lead to an increase in sales.
On average, half of all ongoing ad campaigns are ineffective.
Changes in the creative, medium, target segment or product itself sometimes lead to change in sales, even though increases in the level of advertising alone do not.
When advertising is effective, it is effective either early on or never. When advertising does affect sales, its impact is not large and is much smaller than that of price. In fact, research shows that the elasticity of sales to advertising is .1, while the elasticity of sales to price is –2.5.

Question: What is the difference between marketing, advertising, and sales?

Answer: This is a common question, and a lot of people confuse these various terms. First of all, marketing encompasses a wide range of both analysis and tactics. For example, marketing involves doing customer analysis, including market segmentation, market perceptions, market sizing, but also competitive analysis and reactions, target segment selection, positioning, branding, advertising, sales, promotions, channel of distribution arrangement and management, product line decisions, sales force management, and more. You can see, marketing involves a number of activities.

Advertising, however, is a tactic in marketing. It involves a number of activities to be sure, but it really focuses on communicating a message to the market (which it partly shares with Public Relations).

Sales is also a tactic of marketing. This is typically what the sales force does. But it is marketing's job to focus the entire marketing effort (of which the sales force is one part) towards providing what customers want and gaining a sustainable strategic advantage.

Question: How much should be spent on advertising versus promotion?

Answer: Magic formulas really don't exist in marketing (even though lots of people may try to get you to believe such magic, tricks, or tips may exist). Having said that, the question you ask is interesting. First, advertising is meant to establish awareness, build interest in the market, educate, change brand attitudes, and influence perceptions of customer consistent with a chosen positioning (assuming you have a clear position in mind). Promotion (and I assume you're not talking about public relations here) is typically of a short term nature that is typically meant to encourage trial. Marketing encompasses both of these activities, and more, so I could really say anything about budget allocation to marketing since it's too broad a term.

But focusing on advertising versus promotion, you need to first think about what is the objectives of the marketing campaign. If it's heavy on getting people to just try your product or service (or web site), then promotion should be heavily weighted. Give stuff away, special deals, etc. These are short term objectives and often just produce short term effects. That makes sense since they are designed to get people to try out something.

Advertising is more designed for longer term objectives, such as establishing awareness or interest as mentioned above. If you really are interested in getting people aware of your offering, then advertising should also be a critical part. The same is true if you want to change customer's perceptions.

Since often companies want to get both awareness, interest, and trial (especially with brand new companies), you have to think about a combination of advertising and promotion. Should it be 50/50, or some other number? That really depends on your best analysis of the market. For example, if you potential market would not be motivated by promotions and gimmicks, or discounted prices, then it makes less sense to put a heavy weight on promotions. If, on the other hand, your customers are an easily defined market such that building awareness could readily be done via certain advertising vehicles (such as magazines, afflilate web sites, etc.), then this suggests putting a higher weight on advertising. In short, as in all things in marketing, the more you know about the customers you will be targeting, the clearer your objectives are for the marketing campaign, the easier it is to know what type of mix between promotions and advertising you should have.

Question: Should I do comparative advertising?

Answer: While we can't provide any specific recommendations with knowing all the aspects of your particular situation, one thing you might want to think about comes from the basic research on comparative advertising. Generally, when you are a market leader it hurts you to mention competitors since it legitimizes their position in the market. On the other hand, when you are a follower it makes sense because it allows you to be categorized along with the industry leaders (this is why you see it with “underdogs.” Thus the benefits of comparative advertising depend heavily on your position in the market.

These general guidelines should help you in your decision making. In general, it is good not to blindly follow what other companies do since they generally just follow other companies, etc., and don't really think through what's best for them.

Question: How do I gain new customers and keep my existing ones?

Answer: The key is to put your marketing brainpower behind saving customers time, money and effort.

Traditional marketing tactics are steadily losing effectiveness. Customers don't have enough time to read--let alone respond to--run-of-the-mill ads and promotions. Running another ad isn't going to solve your problems, and besides, your budgets are probably under pressure anyway.

Want to grab a customer's attention? Want to lock in their loyalty and capture a greater share of their business? Save them time, money and effort.

To do this, just think of LESS:

Learn from your customers, and remember what they tell your firm. Most firms forget 90 percent of what customers tell them. If you can lower this percentage, you gain a remarkable competitive advantage. You'll know what each customer dislikes, and you will have an easier time removing these frustrations from their lives.

Question: I have a very limited budget, but my marketing organization needs an overhaul. What can be done?

Answer: Here are five basic low- or no-cost initiatives you can pursue to shore up your marketing organization:

1. Adjust your business network
2. Build relationships with the media
3. Maintain your house list (your list of prospects and customers)
4. Use your house list--and share it
5. Creat a (real) email newsletter