Promotional Management - Wasik Ali Khanwasikalikhan.weebly.com/uploads/4/6/1/7/46176699/3._mkt...Marketing Services 1. Research –Research, since understanding client’s customers

MKT 337: WSK Organising for Advertising and Promotion

Promotional Management

Chapter 3: Organising for Advertising and Promotion


Participants in IMC Process


THE ADVERTISER (CLIENT)


The Client’s Role

• Factors of how MARCOMM efforts are organised

– Size, number of products, role of advertising in mkt mix, budget,

marketing organisation structure

• In-house Agency


In-House Agencies

• In an effort to reduce cost and maintain greater control over agency

activities

• Advertising agency set up, owned and operated by the client

[Example: PRAN, Otobi, Square]

• Square’s agency now handles other brands as well


Pros and Cons of an In-House Agency

PROS

• Cost savings

• More Control

• Increased coordination

• Access to top management

• Stability

CONS

• Less experience

• Less Objectivity

• Less flexibility

• Less access to top creative talent


ADVERTISING AGENCIES


The Ad Agency’s Role

• Reasons for using an agency

– Specialists in their chosen field

• [artists, writers, media analysts, industry experts]

– Objective view

• not subject to internal biases/limitations

• Draw on experience from solving other marketing problems



Departments and Services in an Agency

Services

Account Services

Marketing Services

Creative Services

Management and Finance


Full-service Agencies

Account/Client Services

– Link between the agency and client [liaison]

– Responsible for understanding client’s marketing and promo needs and

interpreting them to agency personnel

– Coordinates the agency’s efforts in planning, creating and producing ads

– Presents agency’s ideas and recommendations and gets client approval



Marketing Services

1. Research

– Research, since understanding client’s customers is crucial

– Concept Testing

2. Account/Strategic Planning

– Gather information for development of creative strategy

– Work with client, account exec, creative, media planners, researchers

– Develop architecture of the brand

– Provide Creative Brief to the creative department

– Provide insights into consumers and how to communicate with them



Marketing Services

3. Media

– Analyses, selects and contracts for space and time in the media

– Most of the budget is spent on media

– Need to communicate with right audience

– Needs to be cost effective

– Media Planners: info on demographics, readership, listenership, viewing

patterns

– Media Buyers: purchase the actual time and space

4. Sales Promotion, Direct-marketing, Packaging, PR, Digital Media



Creative Services

– Creation and execution of advertisements

• Copywriters

– conceive ideas, write headlines, subheads and body copy

– Also involved in developing the basic appeal

• Art Department

– Responsible for how the ad looks

– Prepare layouts to show how the ad will look

– Prepare storyboards for TV commercials

– Everyone works under the Creative Director



Management and Finance

– Must manage basic operating and admin functions such as accounting,

finance and HR

– Must attempt to generate new business

– Managing personnel is imperative

– Most revenue goes to salary and benefits


AGENCY COMPENSATION


Commission-based System

• Agency receives a specified commission [15%] from the media on any

advertising time or space it purchases for its clients

• Critics

– Encourages agencies to suggest high-priced media

– Tied to media costs, which have been skyrocketing

– Encourages agencies to suggest mass-media advertising, while avoiding

noncommissionable IMC tools

• Advocates

– Easy to administer

– Services are proportional to the size of the commission

– More flexible than one thinks as agencies perform other services at no extra charge


Fee-based System

• Fee arrangement

– Charges Basic monthly fee and credits any media commission earned

back to the client

– Agree on the specific work to be done

– Need to carefully assess the costs of servicing the client for a period or

project and then add desired profit margin


Incentive-based System

• Incentive-based compensation

– Value-based compensation: compensated above basic costs, if they

achieve or exceed results as measured by agreed-upon metrics

• Costs: task, staffing required, hourly rates

• Objective Measures: sales or market share

• Subjective Measures: quality of creative work

• Agency requires complete control


EVALUATING AGENCIES


Evaluating Agencies

• Financial Audit

– Verify costs and expenses, the number of personnel hours charged to

an account, payments to media and outside suppliers

• Qualitative Audit

– Efforts in planning, developing and implementing the IMC programme

and the results achieved

[See Figure 3-10, page 93]

• Subjective and informal/Systematic and formal


How Agencies Add Value to Client’s Business

1. Developing and producing creative ideas that are fresh and unexpected.

2. Ensuring that agency disciplines and functions are integrated and that agency

teams and divisions collaborate well on behalf of the client.

3. Working in a collaborative way with the client by creating an environment of

low egos and high mutual respect.

4. Developing ideas and programs that can be integrated into multiple

communications channels.

5. Assigning its best people to the client's business and making its top executives

available when needed.

6. Elevating brand drivers like awareness, consideration, and purchase intent

7. Providing guidance and solutions in new media and technologies.


Why Agencies Lose Clients

• Poor performance or service

• Poor Communication

• Unrealistic demands by the client

• Personality conflicts

• Personnel changes

• Changes in size of the client or

agency

• Conflicts of interest

• Changes in the client’s corporate

and/or marketing strategy

• Declining sales

• Conflicting compensation

philosophies

• Changes in policies

• Disagreement over marketing

and/or creative strategy

• Lack of integrated marketing

capabilities


How agencies gain clients

• Referrals

• Solicitations

• Presentation (Pitch)

• Public Relations

• Image and Reputation


SPECIALISED SERVICES


Specialised Services

• Direct-Marketing Agencies

• Sales Promotion Agencies

• PR Firms

• Digital Agencies


PR Firms

• Manage publicity, image, and

affairs with consumers and other

stakeholders

• Analyses relationships, determines

how policies affect them, develops

PR strategies and programmes,

implement programmes, and

evaluates effectiveness

• The activities include

– Planning PR strategy and

programme

– Generating publicity

– Conducting lobbying and PR

affairs efforts

– Becoming involved in community

events

– Preparing news releases

– Promoting and managing special

events

– Managing crises


COLLATERAL SERVICES


Collateral Services

• Marketing research [qualitative and quantitative]

• Package design

• Consultants

• Photographs

• Printers

• Video production houses

• Event marketing services


INTEGRATED MARKETING COMMUNICATION SERVICES


IMC services

• Must decide whether to use various different agencies or one large

advertising agency offering all services under one roof

• In the past, agencies offered all services but not integrated

– Creative specialists preferred developing TV ads instead of designing

coupons or direct-mail material


Pros and cons of Integrated services

• Proponents

– Learning to work together for consistent image

– Greater synergy

– Convenient for clients to coordinate

• Critics

– Wrangling over budgets

– Do communicate well, no synergy

– Only an attempt to hold business


End of Chapter

Documents

Promotional Management - Wasik Ali Khanwasikalikhan.weebly.com/uploads/4/6/1/7/46176699/3._mkt...Marketing Services 1. Research –Research, since understanding client’s customers