Mgt170

MANAGING ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS AND DIRECT MARKETING

ZYREEN LOU B. FARAMIRAN

MA. JOHANNA ELLA A. FACON

DEVELOPING AND MANAGING AN ADVERTISING PROGRAM

Setting the Advertising Objectives

Deciding on the advertising budget

WHAT IS ADVERTISING?

the use of paid media by a seller to communicate persuasive information about its products, services, or organization—is a potent promotional tool.

Advertising takes on many forms (national, regional, local, consumer, industrial, retail, product, brand, institutional, etc.)

designed to achieve a variety of objectives (awareness, interest, preference, brand recognition, brand insistence).

SETTING THE ADVERTISING OBJECTIVES Informative advertising

aims to create awareness and knowledge of new products or new features of existing products. (DOVE, SURF, NIDO, AVON)

Persuasive advertising aims to create liking, preference, conviction, and purchase of a

product or service. Uses comparative advertising (TIDE, JOY, Pampers)

Reminder advertising aims to stimulate repeat purchase of products and services. (OLAY ,

Palmolive, Ponds, JOY) Reinforcement advertising

aims to convince current purchasers that they made the right choice. (PANTENE,CHOWKING PORK, KOI, SURF)

DECIDING ON THE ADVERTISING BUDGET

Stage in the product life cycle New products typically receive large advertising budgets to

build awareness and to gain consumer trial. Market share and consumer base

high market share brands usually require less advertising expenditure as a percentage of sales to maintain share.

Competition and clutter a brand must advertise more heavily to be heard. Even

simple clutter from advertisements not directly competitive to the brand creates need for heavier advertising

Advertising frequency the number of repetitions needed to put across the brand’s

message to consumers has an impact on the advertising budget.

Product substitutability brands in a commodity class require heavy advertising to

establish a differential image.

CHOOSING THE ADVERTISING MESSAGESteps to develop a creative strategy:

Message generationMessage evaluation and selectionMessage execution Social responsibility review

MESSAGE GENERATION Linking the brand directly to a single benefit.

(SLENDA, Optic White Colgate) Create a character that express the product’s

benefits (Slim woman, Model with white teeth) Developing a narrative story with a problem,

episodes related to the problem and outcomes. (Cebuana Lhuilier, M Lhuilier)

MESSAGE EVALUATION AND SELECTION A good ad normally focuses on one core selling

proposition. Desirability, exclusiveness and believability The advertiser should conduct market research to

determine which appeal works best with its target audience

Creative brief- (elaboration of positioning statement) includes key message, target audience, communication

objective, benefits to promise, support to the promise, and media to be used

MESSAGE EXECUTION Message impact depends not only on what it is

said but more important on How it is said:Rational positioning- explicit feature or benefitEmotional positioning- (McDo’s Kuya. KAREN)

Can be decisive to highly similar products:Detergents, coffee, vodkaSlice of life, lifestyle, fantasy, mood or image, musical,

personality symbol, technical expertise, scientific evidence, and testimonial.

Television Ads Radio Ads Print Ads Testimonials Celebrity endorsement

SOCIAL RESPONSIBILITY REVIEW Make sure that creative advertising does not

overstep social and legal norms

Republic Act No. 7394 THE CONSUMER ACT OF THE PHILIPPINES

McDonald’s Commercial banned

DECIDING ON MEDIA AND MEASURING EFFECTIVENESS

Deciding on Reach, Frequency, and Impact

Choosing Among Major Media Types

New media

Allocating the budget

Selecting specific vehicles

Deciding on the media timing

Deciding on the geographical allocation

Deciding on reach, frequency and impact

Media selection is finding the most cost- effective media to deliver the desired number and

type of exposures to the target audience.Reach

the number of different persons or households exposed to a particular media schedule at least once during a specified time period.

Frequency the number of times within the specified time period that an average

person is exposed to the message. Impact

the qualitative value of an exposure through a given medium.

CHOOSING AMONG MAJOR MEDIA TYPESMedium Advantages Limitations

Newspapers Flexibility; timeliness; good local market coverage; broad acceptance; high believability

Short life; poor reproduction quality; small “passalong” audience

Television Combines sight, sound, and motion; appealing to the senses; high attention; high reach

High absolute cost; high clutter; fleeting exposure; less audience selectivity

Direct mail Audience selectivity; flexibility; no ad competition within the same medium; personalization

Relatively high cost; “junk mail” image

CHOOSING AMONG MAJOR MEDIA TYPES Target-audience media habits: for example, radio and

television are the most effective media for reaching teenagers.

Product characteristics: media types have different potentials for demonstration, visualization, explanation, believability and color.

Message characteristics Cost- television is expensive, whereas newspaper

advertising is relatively inexpensive.

SELECTING SPECIFIC VEHICLES Circulation- the number of physical units carrying the

advertising. Audience- the number of people exposed to the vehicle. Effective audience- the number of people with target

audience characteristics exposed to the vehicle. Effective ad- exposed audience- the number of people

with target audience characteristics who actually saw the ad.

DECIDING ON MEDIA TIMING Carryover – the rate at which the effect of an

advertising expenditure wears out the passage of time.

Habitual behavior- indicates how much of the buyers repeat their brand choice in the next period.

Timing pattern BUYER TURNOVER- the rate at which new buyers

enter the market, the higher the rate thermore continuous the advertisement should be.

PURCHASE FREQUENCY- the number of times during the period that the average buyer buys the product.

FORGETTING RATE- the rate at which the buyer forgets the brand.

In launching the product Continuity- is achieved by scheduling exposures evenly

throughout the given period. Concentration- calls for spending all the advertising money in

a single period (one selling season or holiday) Flighting- advertising for some period, followed by hiatus

with no advertising, followed by a second period of advertising activity.

Pulsing- continuous advertising at low-weight levels reinforced periodically by waves of heavier activity.

DECIDING ON GEOGRAPHICAL ALLOCATION a) National versus international National buys- places an ads on national TV

networks or in nationally circulated magazines.

Spot Buys- when it buys TV times in just a few markets or in regional editions of magazines.

Local Buys- when it advertises in local newspapers, radio or outdoor sites.

EVALUATING ADVERTISING EFFECTIVENESSMethods of advertising pretesting

Communication-effect research—copy testing, consumer feedback, portfolio tests, laboratory tests

Sales-effect research—share of voice and share of market, historical approach, experimental design

Advertising effectiveness: a summary of current research

SALES PROMOTION

SALES PROMOTION

Consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker and/or greater purchase of particular products/services by consumers or the trade

PURPOSE OF SALES PROMOTION

Varying purposes and results, depending on degree of brand awareness/loyalty

INCENTIVE TYPE PROMOTION- to attract new triers, to reward customers, to increase repurchase rates of occasional users.

SALES PROMOTION- to attract brand switchers, who are primarily looking for low price, good value, or premiums.

Farris and Quelch sales-promotion benefits —testing to lead to varied retail formatsEnables manufacturers to adjust to short term variation in supply and demand.

Enable manufacturers to test how high a list price they can charge, because they can always discount it.

MAJOR DECISIONS IN SALES PROMOTION

Establishing objectives Consumers- encouraging purchase of larger- sized

units, building trial and attracting switchers away from competitor brands.

Selecting the sales-promotion tools Selecting consumer- promotion tools Selecting trade - promotion tools Selecting business and sales -force -promotion tools

Developing the programPretesting, implementing, controlling and

evaluating the program

Selecting consumer- promotion tools

Samples Coupons Cash Refund Offers (Rebates) Price packs Premiums (Gifts) Frequency Programs Prizes Patronage awards Free trials Product warranties Tie-in promotions Cross promotions Point of Purchase Display and Demonstrations

Selecting trade- promotion tools

Price- off Allowance

Advertising allowance Display allowance

Free Goods

Selecting business- and - sales -force -promotion tools

Trade Shows and Conventions Sales Contests Specialty advertising

DEVELOPING THE PROGRAM

Determine the size of the incentive, Marketing managers should establish conditions

for participation (incentives for everyone or selected groups)

Decide on the duration of the promotion (optimal frequency is about three weeks per quarter)

Choose distribution vehicle (package, stores, mail)

Establish the timing of promotion Determine the total sales-promotion budget

Administrative cost Incentive cost Multiplied by the expected number of units that

will be sold

PRETESTING, IMPLEMENTING, CONTROLLING AND EVALUATING THE PROGRAM

Pretest- should be conducted to determine if the tools are appropriate, the incentive size optimal, and the presentation method efficient. (rate or rank possible deals, trial test can be run in limited area)

Implementation and control for promotion that cover lead time and sell-in time Lead time- the time necessary to prepare the program

prior to the launching it. Sell-in time- begins with the promotional launch and

ends when approximately 95% of the deal merchandise is in the hands of consumers.

Evaluation Consumer surveys Experiments Scanner data