This chapter will explore the three main components that help build up the study. It will focus on the definition, theories and studies done by other researches regarding the subject. The review discussed in this chapter will address the relationship between market segmentation in interactive advertising towards brand exposure.
2.2 The Basis of Market Segmentation
Today where the world is being recognized as a global village, marketing is a vital ingredient for every business success. Market segmentation has become a central concept in both marketing theory and practice ever since it was introduced and currently acts as an essential element of advertising. “Market segmentation involves viewing a heterogeneous market as a number of smaller homogenous markets, in response to differing preferences, attributable to the desires of consumers for more precise satisfaction of their varying wants.” (Smith, 1956) Many researchers have proposed various methods to segment a market. Consumers may be varied on the basis of demographic, psychographic, behavioral and geographic variables. Individuals have unifying characteristics that tend to influence their media affinity such as age, gender, mother tongue, profession, sexual orientation, location, lifestyle and many others. For several years great effort has been devoted to the study of market segmentation. The focus of recent research by Lynn (2011) suggests that different segments should (1) differ in ways that allow their size and accessibility to be easily measured, (2) be large enough to justify separate targeting efforts, (3) be uniquely reachable via communication media and marketing channels, and (4) be relatively stable and not diminishing in size over time. According to Wedel and Kamakura (2012), there are six criteria that have been frequently put forward as determining the effectiveness and profitability of marketing strategies.
Figure 1: Six criteria for evaluating effective market segments
Market segmentation suggests that not only the volume of advertising matters but also the ability to target ads to distinct groups of consumers. It gives the sense of direction in which the advertisements are specifically targeted to. Selecting the approach that is right for the marketing strategy depends on the aim of the campaign. The purpose behind market segmentation is to effectively design a marketing mix that precisely matches the expectations of the consumers in the targeted segment. In doing so, it provides advertisers the opportunity to creatively craft the production of the content to be presented in a more respective and appropriate manner to reach out to its audience. Hence, increasing the chances in delivering an effective communication and achieving the specified advertising objectives.
2.3 Interactive Advertising
Interactive advertising is a communication-based approach that focuses on the use of integrated bilateral contents that includes an element of feedback or participation from the specified viewers. The notion of interactive advertising is used in the advertising industry to increase the attraction to the ‘new' types of media and means of transmitting advertising messages. (Karimova, 2011) For more than a decade, the advancement of information and communication technologies has made the interaction between customer and advertiser to be easier and faster (Lavrakas, 2010). In Pavlou and Stewart's work (2010) and in related references it was observed that the active role of the consumer in determining the effects of advertising has important implications for how the effects and effectiveness of advertising are measured and how various measures are interpreted. Interactivity is a structural characteristic or perception that embedded in the different entities in which the interactivity by itself is a multi-dimensional construct. (Shrum, Lowrey and Liu, 2009) Interaction between both consumers and advertiser helps increase the effectiveness of delivering the advertising message intended.
The nature of this study goes back to the importance of a two-way communication in this marketing strategy. Consumer participation is the most prominent element in interactive advertising as these feedbacks give the advertiser analytical data that can be used to improve the advertising methods being employed. Interactivity is, therefore, a characteristic of the consumer, and not a characteristic of the medium. (Pavlou & Stewart, 2000) It allows consumers to experience advertising through creative methods where participation is involved and directly giving consumers an impression, awareness and exposure to the product, service or brand according to their marketing aim.
2.4 Brand Awareness – Exposure and Experience
Brand awareness is defined as a fundamental and necessary element of the communication process. It has turned into an important variable that impacts customer's perceptions. Marketing theory dictates that exposure and experience influence the information that consumers gain about brands, thereby influencing consumers' feelings about brands. (Baumann, Hamin, & Chong, 2015) Without brand awareness, it is not possible to achieve the effects of communication. (Yildirim and Aydin, 2012). There is quite a substantial amount of a literature on how consumers relate to brands in various forms and shapes. In particular, it is well established that brand recall is related to a consumer's exposure and experience with a brand (Nedungadi, 2001). A study conducted by Wright and Lynch (1995) found that exposure had a greater impact upon search attributes than experience. Regardless, the constructs of exposure and experience together have been termed ‘brand familiarity' (Delgado-Ballester, 2012).
The importance of brand awareness through exposure and experience has become increasingly significant with the evolution of the Internet and digital technology that exists today. In regards to the statement in one of the above literature, both exposure and experience are believed to have different effects on perceptions of the consumer. However, together in the construct of ‘brand familiarity', both exposure and experience play vital roles in increasing the probability of brand recall, booming the overall impression and improving the efficiency of its advertising strategy.
From the literature review above, it can be observed that there's a form of pattern and relationship between market segmentation, interactive advertising and brand exposure. This pattern will be explored further in the study.
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