The Field of Advertising Management

Market / Consumer Behavior

Government

Competition

Ad Agency

Media

Research Agency

Advertiser

Control Inst. Facilitating Inst.

Institutions Involved in the Field of Advertising

Research Suppliers

Advertiser Ad agency Media

Role of the Facilitating Institutions

Advertising Management

Management is about :- Planning

- Decision Making- Control

Framework of Advertising Planning & Decision Making

Situation Analysis

Marketing Programme

Integrated Mar. Com. Plan

Advertising Plan

Implementation

Process starts with an analysis of the Brand’s external & internal environment

Situation Analysis

(external and internal)

Marketing Programme

Market analysis

Competitor analysis

Brand Analysis- SWOT

Advertising Plan

Implementation

The Role of Advertising emerges from the Marketing Programme

Situation Analysis

Marketing Programme

Determines the role of each elements of the marketing mix including Marketing Communications

Indicates how all elements will be coordinated to support and synergise with each otherIMC & Advertising plan

Implementation

The Advertising Plan Includes…

Situation Analysis

Marketing Programme

IMC & Advertising Plan

Setting Objectives - (Segmentation-positioning)

Media – strategy & tactics

Message – strategy & tactics

Implementation

Implementation and Coordination (synergy with other IMC tools)

Framework of Advertising & Decision Making

Situation Analysis

Marketing Programme

IMC /Advertising Plan

Implementation

Facilitating Agencies

Social, legal & other constraints

The Role of Advertising….

The role the Advertising plan can only be in the context of the Marketing Plan

– The Advertising Plan must support and synergise with:• the elements of the Marketing Mix

• and other elements of the Communication Mix

Need to understand ‘How Advertising Works’

to appreciate the role it plays

How does Advertising work ?

Advertising is

‘persuasive communication’

The Communication Process

MessageSource Receiver Destination

Media WOM

Perception Process

Message

The

Persuasion

Process of

Advertising

is through

a variety

of

advertising

effects

Awareness/familiarity

Brand Benefit / Information

Creating image / personality

Associating feelings with Brand

Linkage of Brand with peers/experts/group norms /culture

Reminder / Brand trial inducement

BrandAttitude

PurchaseBehavior

The Persuasion Process of Advertising

Setting Advertising Objectives

These must be Operational Objectives

Meaningful Advertising Objectives• Provide criteria for decision making

• Serve as a communication and coordination tool

• Provide criteria for evaluate performance

Can ‘Sales’ be meaningful Objectives?

‘Sales’- A Meaningful Advertising Objective??

Difficult to identify the impact of Advtg.on ‘Sales’– ‘Advtg. impact is felt over time

– Isolating ad impact from other elements of the marketing mix is difficult

New customers

Advertising Immediate Sales Future sales

Change attitude / improve image

Developing Advertising Objectives Involves 3 considerations -

• Behavioral decisions (behavioral objectives) that Advertising must influence

• The Target Segment

• The decision making process that communication must precede to influence behavior

‘Sales Strategy’ the basis for Advertising Objectives

Sales growth comes from -• New customers buying

• Old customers staying loyal

• Old customers consuming more

Demand Generation - Offensive Strategy

Market dynamics:

- Sales grow because of new customers buying

‘Offensive Marketing Strategies’

• Primary demand generation

• Secondary demand generation

Those not the buying product

Existing customers

Those buyingOther brands

Demand Generation - Defensive Strategy

Market dynamics:

– Sale grow with old customers staying loyal

‘Defensive Marketing Strategy’

• Recall the important brand features

• Reinforce use experience

• Consumer promotions

Demand Generation through Increased Consumption

Market dynamics:

Sales grow with ‘Product form expansion’ • More frequent usage / share of requirement (SOR)

• New use applications

Secondary Demand-New customers using other brands

Primary Demand - Customers trying the category for the first time

Existing customers Loyalty

More consumption news uses and more usage

Behavioral Responses that drive Purchase

Marketing / Sales Strategies & Behavioral Objectives

Trial

Purchase

Trial

Purchase

Loyalty

Increased usage / SOR

The Influence of Advertising on Desired Behavior

Advertising is not as effective in directly evoking desired action -‘Purchase’

Advertising causal intervening response

desired behavioral response Sales

Sales Promotions, DM & Retail Advertising should be used in conjunction with Advertising to drive sales

The

Persuasion

Process of

Advertising

is through

a variety

of effects

Awareness/familiarity

Brand Benefit Information

Creating image / personality

Associating feelings with Brand

Linkage of Brand with peers/experts/group norms

Reminder / Brand trial inducement

BrandAttitude

PurchaseBehavior

These Intervening Variables between Advertising & Action are more effective Operational Advertising Objectives than Sales

Advertising Objectives (the Intervening Response Variables that are persuasive in its context) are determined by the type of Sales Strategy and Behavioral Objectives

The

Persuasion

Process of

Advertising

is through

a variety

of effects

Awareness / Familiarity

Brand Benefit Information

Creating image -personality / users

Associating feelings with Brand use

Linkage with peers / experts/group norms

Reminder / Brand trial inducement

Purchase

These Intervening Variables have a causal relationship between Advertising & Sales

Trial Purchase

& Loyalty

Trial Purchase &

Increased usage

Loyalty

Loyalty

Loyalty

Advertising Objectives Reflect the Target Segment

The segment and sub-segment can be defined by –

• Behavioral measures – non-users, other brand users,

heavy / light / loyal users etc.

• Advertising response measures – unaware, not

convinced of key benefit, diffused / sharp image, etc

• Lifestyle - attitude & opinions, interests

• Benefits sought

• Demographic, psychographics, geographic basis -

more relevant for media decisions

‘Hierarchy of Effects’ Model - DAGMAR

Unaware

Aware

Comprehension & image

Attitude

Action

Cognitive

Affective

Behavioral

DAGMAR Approach – A communication task to be accomplished amongst a defined audience, in a specified period of time

DAGMAR in PracticeObjectives in Black & White to ensure the sated goals

contain the crucial aspects of DAGMAR

• A specific task indicated clearly – to be measurable

• A starting point set –Benchmark against which goal

achievement can be measured

• A Target Segment specified precisely

• The Time Period for achieving the desired response

indicated

DAGMAR in Practice

Challenges to DAGMAR

• Does not measure Sales

• Broad outline does not give enough details (which

hierarchical level)

• Measurement is a problem

• System noise – other factors affecting goal

• Model may not hold good in every situation

Other Persuasion Models

IADA Hierarchy Innovation of Effects Adoption

Attention Awareness

KnowledgeAwareness

Interest

Desire

Liking

Preference

Conviction

Interest

Evaluation

CognitiveStage

Affective

Stage

Action

StageAction Purchase

Trial

Adoption

Segmentation and Positioning

Segmentation is about deciding which consumers the

Advertising should be targeted at

The Target Marketing Process

Identify markets with unfulfilled needsIdentify markets with unfulfilled needs

Determining market segmentationDetermining market segmentation

Selecting market to targetSelecting market to target

Positioning through marketing strategiesPositioning through marketing strategies

Five-Step Segmentation Process

1. Finding ways to group consumers according to their needs.

2. Finding ways to group marketing actions, usually the products offered, available to the organization.

3. Developing a market/product grid to relate the market segments to the firm’s products and actions.

4. Selecting the product segments toward which the firm directs its marketing actions.

5. Taking marketing actions to reach target segments.

Bases for Segmentation

• Geographic Segmentation– State - region - country - climate

• Demographic Segmentation– Age, sex, income, education, occupation, social class

• Psychographic Segmentation – AIOs, (Activities, Interests, Opinions)– VALS (Values and Lifestyles)– Personality traits

• Behavioristic Segmentation– Usage, loyalties, use occasions

• Benefit Segmentation– Types of specific needs or wants to be satisfied.

Segmentation Approaches

– A Priori basis : the market is segmented before any data on the market place is examined

• Age

• Income

• Usage

• Loyalty

• Geo-location

– Empirical Segmentation : created on the basis of differences in • Attitude and benefits sought

• life-style - AIO

• culture

Approach Implementation

Both are used together but in different order• A priori segmentation starts with variables such as

income etc and then examines attitudes and benefits

• Empirical segmentation starts with benefit segmentation and then see how these clusters are different in terms of demographics

Selecting a Target Market

Segmentation Strategies

Determining how many segments to enter

Undifferentiated Marketing – offering one product or service to the entire market

Differentiated marketing – competing in a number of segments with separate marketing strategies for each

Concentrated Marketing – focusing on one market segment

Determining Which Market Segments Offer the Most Potential

Identify the group that is most likely to respond to the brand offering

Determine sales potential of the segment

Determine opportunities for growth of the market segment.

Analyze the competition in the segment (segments not being served well by competition)

Analyze the company’s ability to compete in the market segment

Decide how to compete in the market segment

Segmentation Decision Check List Can the size of the market segment be

measured?

Is the market segment large and profitable enough to serve? (large and growing in size)

Is the segment identified accessible? Can it be reached effectively and efficiently?

Can effective marketing programs be developed to attract and serve the segment identified?

TM and Media Reach Approaches

– Controlled Coverage – using niche media to reach only the desired segment e.g. trade magazines

– Customer Selection – using mass media to Reach is directed at mass audiences

Positioning

It gives the consumer a clear idea

of what the Brand stands for

The Positioning Process

Positioning ConceptThe desired perception orassociation management wantstarget customers to have for afirm and/or its products

Positioning EffectivenessThe extent to which management’spositioning objectives are achievedin the market target

Positioning StrategyThe combination of marketingactions used to portray thepositioning concept to targetedbuyers

Positioning of the brandThe positioning of the brand bythe buyers in the market target

MarketTarget

Positioning Strategy Development Process - Background Analysis1. Identify the competitors1. Identify the competitors

2. Assess perceptions of competitors2. Assess perceptions of competitors

3. Determine their positions3. Determine their positions

4. Analyze consumer preferences4. Analyze consumer preferences

6. Monitor the position6. Monitor the position

5. Make the positioning decision5. Make the positioning decision

Product/Service and Brand Positioning

BASIC QUESTIONS TO ASK

1. What position, (if any) do we currently hold in the mind of customers?

2. What position do we want to hold?

3. Whom do we have to compete against to establish this position?

4. Do we have the resources to occupy and hold the position?

5. Can we stay with one consistent positioning strategy?

6. Does our marketing and advertising match our positioning strategy?

Positioning Strategy Approaches

Product/Service or Brands can be positioned by single or multiple approaches:

– Product attributes or consumer benefit

– Price-quality

– Use or application

– Users

– Product class

– Cultural symbols

– Competitors

Positioning Decision – Check Points

Select and Evaluate the position

• An economic analysis

– Appeals to a large and growing segment

– Penetration possibilities – competitive edge to attack

competition

• Don’t be what you are not• Monitor the position

Positioning Decision -Imperatives

– Segmentation commitment

– Stick with the Advertising that works

– Consider using symbols

Positioning Strategy Execution

– A relative concept that must indicate the position of the brand vis-a-vis other brands - differentiation

– It determines the nature of the elements of the marketing mix

– Best communicated through Advertising

Product Decisions

A productproduct is a bundle of benefits or values that satisfies the needs of consumers

Product symbolism refers to what a product or brand means to customers

Product quality, branding, packaging, and company name contribute to product image

Branding:• Brand name communicates attributes and meaning• Advertising creates and maintains brand equity which

results from the image and/or impression of a brand

The Value of Strong Corporate and /orBrand Identity

Strong corporate/brand equity:

Creates more options for competing (particularly against lower-priced competitors)

Can facilitate brand and line extensions

Allows companies to sell products/services at a premium price and maintain larger profit margins

Builds customer loyalty

Makes it easier to withstand economic fluctuations and marketing crises

Makes customer response more inelastic to price increases and elastic to price decreases

Packaging

Traditional functions of packaging: economy, protection, storage

Packaging has become increasingly important because: self service emphasis of many stores buying decisions made at point-of-purchase often customers first exposure to product

Packaging is a way to communicate to consumers

Pricing Decisions Price must be consistent with perceptions of the product Higher prices communicate higher product quality Lower prices often reflect bargain or “value” perceptions A product positioned as high quality while carrying a lower

price than competitors may confuse customers Price, advertising and distribution must be unified to create

the position for the product or service.

Distribution Channel Decisions

Channel decisions involve: Determining the type of channel system:

– Direct channels– Indirect channels

Selecting, managing and motivating marketing intermediaries such as – Wholesalers– Distributors– Brokers– Retailers

Information Flow

Push Versus Pull

Push PolicyPush Policy

ProducerProducer

RetailerRetailer

ConsumerConsumer

WholesalerWholesaler

Pull PolicyPull Policy

ProducerProducer

WholesalerWholesaler

RetailerRetailer

ConsumerConsumer

"Push" Techniques

Point of sale displays, racks, stands

Trade deals, special displays

Dealer premiums, prizes, gifts

Cooperative advertising deals

Advertising materials, mats, inserts

Push money or "spiffs"

Collaterals, catalogs, manuals

Trade shows, conventions, meetings

"Pull" Techniques

Sampling, free trial

Coupons

Premiums or gifts

Contests, sweepstakes

Price-off deals

Refunds/rebates

Frequency/loyalty programs

Point-of-purchase advertising

Marketing and Promotions Process Model

Competitiveanalysis

Targetmarketing

Identifyingmarkets

Market segmentation

Selectinga target market

Positioningthrough

marketingstrategies

Productdecisions

Pricingdecisions

Channel ofdistributiondecisions

Promotionaldecisions•advertising•direct marketing•internet/ interactive marketing•sales promotion•publicity and public relations•personal selling

Resellers

Ultimatecustomer•Consumers•Businesses

Marketing Strategy and Analysis

Target Marketing Process

Marketing Planning Program Development

Promotion to final buyer

Target Market

Purchase

Promotion to trade