Advertising Lecture 10

8/3/2019 Advertising Lecture 10

1/47

Advertising Programs

Chapter 10


2/47

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


3/47

Advertising is a deposit to brand

equity bank, whereas salespromotion activities are a

withdrawal

L. Ross Love, vice president of world wide

distribution


4/47

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


5/47

Elements of Advertising Program

ImplementRelevance

Evaluation

Media schedule

Message Design

Tentative Budget

Advertising Objectives

Marketing Strategy


6/47

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


7/47

Hierarchy of effects models

AIDA

Attention

Interest

Desire

Action

Awareness

Interest

Knowledge

Liking

Preference

Conviction

purchase

Innovation Adoption Model

Awareness

Interest

Evaluation

Trail

Adoption


8/47

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


9/47

A hierarchy model of how advertising works

Brand Loyalty

Brand Equity

Brand/

Company

Image

Attitude

Reinforcement

Beliefs

Trail

Expectation

Awareness

Unawareness


10/47

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


11/47

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


12/47

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


13/47

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


14/47

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


15/47

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


16/47

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


17/47

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


18/47

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


19/47

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


20/47

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


21/47

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


22/47

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


23/47

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


24/47


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


25/47


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


26/47

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


27/47

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


28/47

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


29/47

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


30/47

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


31/47

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


32/47

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


33/47

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


34/47

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


35/47

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


36/47

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


37/47

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


38/47

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:


39/47

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


40/47

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


41/47

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


42/47

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


43/47

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


44/47

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


45/47

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


46/47

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


47/47

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

Advertising Lecture 10

Documents