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8/3/2019 Advertising Lecture 10
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Advertising Programs
Chapter 10
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Sales Promotion
Includes activities such as coupons, samples, cents-off, etc.
Are short-term actions designed to get immediateresponses from consumers, wholesalers and retailers
Sales promotion to wholesalers and retailers are offered
with the hope that they will push the product consumers orbuyers
These actions get quick response but have their drawbacks
May result in stockpiling of the brand by wholesalers and
retailers . The overall level of sales does not change May induce trail but do little to enhance long-term brandloyalty
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Advertising is a deposit to brand
equity bank, whereas salespromotion activities are a
withdrawal
L. Ross Love, vice president of world wide
distribution
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Advertising
Advertising that communicates unique and
positive message can differentiate the brand
from competitive offerings and help insulatethe brand from price communication
Of various promotion activities, advertising
is clearly the most visible Advertising is mainly used as a pull strategy
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Elements of Advertising Program
ImplementRelevance
Evaluation
Media schedule
Message Design
Tentative Budget
Advertising Objectives
Marketing Strategy
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Advertising Objectives There are two basic reasons to establish objectives to
advertising programs1. Advertising objectives can provide guidance fordevelopment and media decisions
2. Objectives serve as standards for evaluating theperformance of advertising program
Unless managers have defined what advertising effort isdesigned to achieve, there will be no fairway to evaluatethe results
Advertising strategies can serve many functions
Can be used to inform consumers, persuade consumers,
and/or to remind consumers Advertising programs are designed to move consumers
from the point where they are unaware of the brand totrail and repeat purchase
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Hierarchy of effects models
AIDA
Attention
Interest
Desire
Action
Awareness
Interest
Knowledge
Liking
Preference
Conviction
purchase
Innovation Adoption Model
Awareness
Interest
Evaluation
Trail
Adoption
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Hierarchy of Effects The Three models can be classified at three levels
1. Cognitive level: indicate receipt of the message
.Exposure to message
Message recall
Awareness of product
Knowledge of product attributes
2. Affective responses: indicate the development of liking Willingness to seek more information
Interest in product attributes
Favorable evaluation of the product
3. Behavioral responses: indicate the actual actions takenby the members of the target market
Product trail
Product purchase
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A hierarchy model of how advertising works
Brand Loyalty
Brand Equity
Brand/
Company
Image
Attitude
Reinforcement
Beliefs
Trail
Expectation
Awareness
Unawareness
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Over the long run advertisement should help inachieving sales, market share, and profit objectives
Sales and profit are generally inappropriate objectives at-least in the short run
Reasons:1. Sales respond rather slow to advertisement
Most advertisement must be seen more than once beforemessage is received and acted upon
2. Changes in sales and market share are often influencedby environmental factors and competitive actions
What advertisement can do:
Help implement the marketing strategy
Establish advertising objectives to guide the selection ofthe messages and media
Permit program performance to be evaluated
Make a specific contribution to achievement ofmarketing strategy
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Types of Objectives Advertising objectives must include precise statement of
what is expected communication objective: Who, What,
When: Who relates to audience or target market at whom the
message will be aimed
What relates to the effect to be achievedawareness,attitude change, reminder
When relates to the time period during which the objectshould be obtained
Example: The advertising objective for new product launchmight be stated as:
Within three months of the product launch we expect 75
percent of the target market to be aware of the product. To be useful objective must be realistic, to be stated in
quantitative terms
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Types of Objectives The advertising objectives provide a foundation for
subsequent advertising decisions
Therefore advertising objective should be designatedbefore specific decisions of the advertising program ( typeof message, and media) are made
The major reason s why advertising objectives should
precede other program decisions include1. Advertising objectives reflect the consensus of
management concerning what the advertisement should dofor the brand
2. Stating the objectives help set the advertising budget
3. The objective provide standard against which the result canbe compared
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Types of Objectives It is possible to achieve more than one objective during a
given campaign although this can be very difficult and
costly
Each objective is generally more useful in implementing aparticular type of marketing strategy
For the same product there may be different advertising
objectives for different customer group Obtaining trail for a particular product or brand may be the
objective for non-users and/ or new entrants into market
For present users, the objective might be to stimulatedemand for an entire product class or for a particular brand
If more than one objective is employed it is important tomake certain that various objectives are compatible withmarketing strategy
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Types of Objectives
1. Generating awareness2. Reminding buyers to use
3. Changing attitudes about the use of the productform
4. Changing perceptions about the importance ofbrand attributes
5. Changing beliefs about brands
6. Reinforcing attitudes
7. Building corporate and product line image
8. Obtaining a direct response
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I. Awareness:
The primary advertisement objective is
simply to generate or increase recognitionof brand name, brand concept orinformation regarding where or how tobuy a product
This is an important objective in severaldifferent situations
1. When brand enters the market, buyers will
often find it difficult to develop an attitudeif the brand and basic product concept arenot known
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Awareness of the brand and the basic concept must existbefore favorable attitude towards the brand could bedeveloped
2. Managers should also apply awareness objectives whencustomers need to know how to buy, or how to get moreinformation about a product
Consumer products with highly selective distributionsystem need emphasis on this aspect, especially if
competitive brands have intensive distribution3. Awareness and brand recognition are essential objectives
in marketing low perceived risk products, whereminimum search is involved.
> Brands that most widely recognized will tend to have thelargest market share
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II. Reminder to use:
For discretionary items with regular usage
patterns, an appropriate marketing strategy may beto stimulate primary demand by increasing the rateof usage
The primary role of advertising in implementing
the strategy is to remind the buyers to use theproduct or restock the product
The purchase may decline because the product ishighly discretionary and consumer has no ready
stock to act as a reminder to use the product
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III. Changing attitudes about the use of the product
form
The objective is designed to support primary-demand strategies that attract new users or
increase the number of uses
Advertising programs to implement these
strategies usually take one of two forms
1. Advertising campaigns may demonstrate new
ways to use products or new usage occasions
2. Some advertising campaigns have been designedto overcome negative perceptions about product
categories
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IV. Changing perceptions about the importance ofbrand attributes
An effective way to acquire new customers
through differentiated positioning is to advertise a unique selling proposition
For an attribute to be determinant in buyerschoice process the attribute must:
be important buyer must perceive alternative differ in degree to
which they possess the attribute
If a brand has a unique attribute, advertising may
be used to stress the importance of attribute tomake it determinant
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V. Changing Beliefs about Brands
If an attribute (benefit) is already important,
buyers will examine the degree to which eachalternative brand possesses that attribute
The advertising objective would be to improve
buyers rating of a brand on important attributes
or to change the relative rating of competitivebrands on the attribute
As the attribute is not unique to a brand,
advertising designed to demonstrate this relativesuperiority would be supporting marketing
strategy of head-to-head competition
VI Attit d R i f t
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VI. Attitude Reinforcement
Brands with strong market position and with no majorcompetitive weaknesses are more likely to be concernedwith customer retention strategies
By assuring customers that the brand continues to offergreatest level of satisfaction on the most importantbenefits, advertising can reinforce attitudes and maintainbrand preferences and loyalty
VII. Corporate and Product line Image Building
Advertising is used to establish or change perceptions oforganizations or broad product lines, but without focusingon specific product attributes or benefits
VIII. Obtaining a direct response
In direct marketing the organization communicates directlywith target customer with the objective of generating directresponse or a purchase
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The Budgeting Process General approach includes the following steps:
1. Establish a base line budget2. Based on the advertising objectives, estimate the
message design and media cost requirements
3. If time and resources permit, run experiments to
obtain a rough estimate of the impact of
proposed program
4. Revise the budget (or objectives) as necessary
on the basis of cost of the task, the results ofexperiments, and the costs and expected impact
of other marketing programs
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Establishing Baseline Budget
In most organizations, the total advertising
budget does not vary greatly from year to
year
A possible approach is to use previous
year budget, or industrys advertising tosales ratios as guideline
Realistically managers will adjust budgets
each year because of a number of factors
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Establishing Baseline Budget
1. Product objectives determine which products shouldreceive increased, sustaining, or reduced support.Managers may modify budgets to reflect any changes inproduct objectives
2. Product profitability should be a major consideration inbudgeting. The greater the contribution margin, thesmaller the increase in sales that will be needed to cover
the costs of increased advertising budgets3. Productivity judgments combined with profitability
analysis can be useful in determining the effects ofchanges in increased advertising budgets
Many advertisers believe it is necessary to keep their
advertising budgets ( or share of voice ) at a consistentratio of expenditures with total advertising expenditure ofthe product category if they maintain their market share
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Establishing Baseline Budget
This type of competitive parity approach would
require that company increase its share ofvoice to the same percentage level as the
desired market share
This form of budgeting may be misleading for
two reasons:
1. It ignores the possibility that there may be limits
to the market share that is attainable
2. This approach doesnt take into consideration themany other buying behavior factors influencing
the brands sales response function
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Message Design and Media costs
Given an advertising objective, a manager canestimate
Message development cost:
- Production costs, technical fees, royalties toparticipants)
Media costs- Print space, radio or television time
Media costs are influenced by
Size of target market
The size and length of the advertisement
The number of times the advertisement ispresented
Specific cost of each media vehicle
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Experimentation and Revision When feasible, the proposed budget should
be in limited market area to determineWhether objectives are achieved
Estimate the sales response
These tests can provide insights intowhether historical advertising effects areoptimistic, pessimistic relative to presentprogram
Experiments usually indicate only the short-run effects of the program
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Experimentation and Revision Experiments are useful in determining the effects
of alternate media and copy
Revisions may also be necessary because of theimpact of other programs
To some degree advertisement competes with
sales, sales promotion and product developmentfunds
Price changes will lead to changing contributionmargins
Changes in the budgets of other programs mayforce to modify advertisement budgets to staywithin the resources available for products
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Design The advertising message includes two basic elements
1. The appeals: copy claims that represent the central idea of the
message and2. Method of presentation (execution style)
Contents of an effective message:
Three major requirements of effective message are; desirability,exclusiveness, and believability
Desirability and exclusiveness are firms means to emphasizethose determinant attributes that provide an advantage
If desirability is a problem , the usefulness of the product insolving the problem be portrayed
Exclusiveness may be demonstrated through comparison (director indirect) once the real and perceived differences are known
Believability: important in situations where product benefit orattribute is difficult to demonstrate or highly subjective or itrequires a major change in usage pattern
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Copy Claim Alternatives
Motivational arguments or descriptive
statements contained in the message These claims can be of three types
1. Claims that describe the physical attributes ofthe product
2. Claims that describe the functional benefits thatcan be obtained from the product
3. Claims that characterize the product in terms ofthe type of people who use it, the results ofobtaining the functional benefits or moods
Statement of firms advertising objective willguide in selection of type of claim
Copy Claim Alternatives
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Copy Claim Alternatives The advertising objective should clearly state the:
Specific feature that generate buyer awareness or
The specific attributes or benefits on which perception are to bechanged or reinforced
Some objectives may focus on exclusiveness , whereas others mayfocus on believability
Given the objectives copy could be prepared that will support the
desirability, exclusiveness or believability of the attribute andbenefit being featured
In developing copy the type of brand concept involved must beconsidered.
Products can be classified in terms of one of the following needs
1. Functional needs: products that resolve consumption relatedproblems
2. Symbolic needs: products that fulfill internally generated needssuch as self enhancement or ego identification
3. Experiential needs: products that provide sensory pleasures, variety
or other kinds of stimulation
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Execution style Style in which copy claims are presented to target audience
Common execution styles:
Symbolic association- Provides means of dramatizing intangible benefits by
associating the product or service with certain type ofindividuals or a tangible object
Functional benefits can be communicated in a variety of
ways- Testimonials
- Product demonstrations or recipes
- Slice of life: portraying buyers in problem solvingsituations
- Case histories: documenting the benefits of a product- Humor
- Fear
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Media Scheduling Media scheduling decisions are extremely important for
two reasons:
1. Purchase of radio and television time, magazine andnewspaper space represent the largest element of cost inthe advertising budget
2. An advertisements success in achieving the advertisingobjectives depends largely on how well each show or
magazine reaches target market segment The major steps involved in developing media scheduleare:
1. Selecting the type of medium to use
2. Selecting specific vehicles for consideration
3. Determining the size, length, and position of anadvertisement
4. Determining desired reach, frequency, and distributionof message
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Selecting the type of medium Each medium has unique characteristics that
may or may not be appropriate for the kindof message to be presented and for the kind
of target segment to be reached.
For low involvement products televisionand radio advertisements are better
For high involvement products print media
is better suited
Selecting the Possible Vehicle
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Selecting the Possible Vehicle A vehicle is a specific magazine, newspapers, radio or
television program
Each vehicles ability to reach the target market segmentshould be well understood in selecting specific vehicle
Advertising agencies conduct research on such information
Vehicles must be well understood for their likelyeffectiveness of specific product and message
Cost is usually an important consideration in the selectionof the final media
The cost of insertion in various media can be obtainedfrom direct contact, media buying specialists
The actual cost per insertion would depend on size, length,and position of the advertisement
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Determining size, length, and
position The cost is calculated in terms of number of people
reached by each vehicle
The most common method used to measure the cost of anadvertisement is cost per thousand (CPM)
The CPM s calculated by dividing the cost ofadvertisement by number of people it reaches
In some cases Targeted CPM is used i.e. cost per thousandfor members of specific target
The basic measure to estimate CPM for television is therating point
The rating point is calculated by dividing the number ofhousehold watching the program by number of households
di bj i
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Media Objectives For a given planning period, advertising expenditures
can be distributed as:
1. According to the timing of the expenditures2. According to reach and frequency
1. Timing of Expenditures:
Timing reflects the manner in which expenditures are
distributed over the course of planning period Managers can schedule advertisement so that bulk of thedollar expenditures coincides with the peak sales period
There are three alternatives to the timing of the message:
i. Continuous schedule: allocate approximately equal
amount of money for each time periodii. Pulsing schedule: size can change each month
iii. Flighting schedule: similar tp pulsing but some periodsmay not receive funds
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2. Measuring Reach and Frequency
Reach is the percentage of target market that isexposed to advertising in some defined time
period (4 weeks)
Frequency is the average number of times amember of the target audience is exposed to themessage at-least once in four weeks
If an advertiser places an ad in a magazine that ispublished every 4 weeks and only has one ad ineach issue.
The reach would be the number of people readingthe magazine and frequency is one
In case where advertiser uses multiple media:
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An ad for the product on two prime time televisionshows
The audio version of the commercial during drive-
time radioAn ad is placed in the major Newspaper
Reach is the probability that person will beexposed to the message atleast once through one
of the vehicles Frequency is the average number of times a personis exposed to the message
Example: if commercial is aired in your favoriteprogram every Saturday for a four week periodand you watched the program all four weeks thefrequency is four
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When multiple media are used, frequency isestimated as the average number of times anindividual is exposed to the message
Example : if 40% of the target audience isreached once, 30 % is reached twice, and10% were reached three times, 80 % of the
target market were and average frequencywould be reached
( .4 x1) +( .3 x 2) + (1x3) = 1.63
.80> 80% of the target population would be
exposed message an average of 1.63
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Advertising reach and frequency easily
defined but in practice are complicated to
calculate Probability distributions are needed to
indicate the likelihood that a member of the
target market will be exposed to themessage
Computerized models for estimates of reach
and frequency are utilized
G R i P i
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Gross Rating Point
Gross rating Points (GRPs) are used to:
Set media goals
Evaluate alternate vehicles
Media schedules
GRPs are calculated by multiplying reach
times frequency
G R ti P i t
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Gross Rating Point Given that a particular media schedule will reach 80% of
the target market with a frequency of 2.5 times the GRP is
GRP = reach x frequency = 800 x 2.5 = 200
An increase of either reach or frequency will increaseGRPs
A criticism of GRP is that each exposure is considered to
have same effect Effective Reach is based on the notion that an
advertisement is effective only if it reaches the targetmarket the correct number of time: neither too few or toomany
The American National Advertisers consider the rule foreffective reach is 3
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Setting Media schedules
Computer routines are used to allocate budgets
among acceptable vehicles that provide the largestnumber of GRPs for a given budget
:These budget routines take into consideration:
budget limitations,
target audience,
desired frequency and reach
cost per insertion
for a given length and position audience demographics for each acceptable
vehicle are used
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Procedures for evaluating effectiveness1. Procedures for evaluating specific advertisement
i. Recognition task
Estimate the percentage of people claiming or have reada magazine who recognize the ad when it is shown tothem
ii. Recall test:
Estimate the percentage of people claiming to have reada magazine who can (unaided) recall the ad and itscontent
iii. . Opinion Tests:
Potential audience members are asked to rankalternative advertisement as most interesting, mostbelievable and best liked
iv. Theater Test
Theater audience is asked for brand preferences before
and after an ad is shown in context of TV show
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2. Evaluating Specific Advertising Objectives
i. Awareness:
Potential buyers are asked to indicate brandsthat come to mind in a product category.
A message is used in the ad campaign is given
and buyers are asked to identify the brand that
was advertised using the message
ii. Attitude:
Potential buyers are asked to rate competing or
individual brands on determinant attributes,benefits, and characteristics using rating scale
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3. Evaluating Motivational impact
i. Intentions to buy:
Potential customers are asked to indicate thelikelihood they will buy the a brand (on a scalefrom definitely will to definitely will not
ii. Market Test Sales changes in different markets are
monitored to compare effects of differentmessages, budget levels