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Ad II CA Notes Part 1
Ad II CA Notes Part 1
Adverting is only one element of the promotion mix, but it often considered prominent in the
overall marketing mix design. Its high visibility and pervasiveness made it as an important
social and encomia topic in Indian society.
Advertising strategy created by a firm stimulates consumers to purchase its good or service.
When forming an advertising strategy, advertisers should pay attention to four key elements,
which are target audience, product concept, advertising message, and communications media.
There are five steps in forming an advertising strategy: conducting advertising research, setting
advertising goals, formulating budgets, creating advertising messages, and selecting media.
Advertising Objectives
Each advertisement is a specific communication that must be effective, not just for one
customer, but for many target buyers. This means that specific objectives should be set for each
particular advertisement campaign. Advertising is a form of promotion and like a promotion;
the objectives of advertising should be specific. This requires that the target consumers should
be specifically identified and that the effect which advertising is intended to have upon the
consumer should be clearly indicated. The objectives of advertising is to inform persuade and
remind potential customers of the worth of the product. Advertising seeks to condition the
consumer so that he/she may have a favourable reaction to the promotional message.
Advertising objectives serve as guidelines for the planning and implementation of the entire
advertising programme.
ADVERTISING PLANNING
The advertising management is mainly concerned with planning and decision making. The
advertising manager will be involved in the development, implementation, and overall
management of an advertising plan. The development of an advertising plan essentially
requires the generation and specification of alternatives. Decision making involves choosing
from among the alternatives. The alternatives can be various levels of expenditure, different
kinds of objectives or strategy possibilities, and kinds of options with copy creation and media
choices. Thus, the essence of planning is to find out the feasible alternatives and reduce them
to decisions. An advertising plan reflects the planning and decision – making process and the
decisions that have been arrived at in a particular product and market situation.
Situation Analysis
It involves an analysis of all important factors operating in a particular situation. This means
that new research studies will be undertaken on company history and experience. AT&T, for
example, developed a new strategy for its long-distance telephone services – based on five year
of research. The research encompassed market segmentation studies, concept testing, and a
field experiment. The field experiment increased on testing a new advertising campaign called
“Cost of Visit”. An existing “Reach Out” campaign although successful, did not appear to get
through to a large group of people who had reasons to call but were limiting their calls because
of cost. Research based on annual surveys of 3,000 residential telephone users showed that
most did not know the cost of a long-distance call or that it was possible to make less expensive
calls in off-peak periods. Five copy alternatives were subsequently developed and tested, from
which “Cost of Visit” was chosen. This campaign was credited with persuading customers 20
to call during times that were both cheaper for them and more profitable for AT&T and, overall,
was more effective that the “Reach Out” campaign. One estimate was that by switching 530
million in advertising from “Reach Out” to “Cost of Visit”, an incremental gain in revenue of
$22 million would result in the first year and would top $100 million over five years. This
example highlights that a complete situation analysis will cover all marketing components and
involve finding answers to many questions about the nature and extent of demand, competition,
environmental factors, product, costs, distribution, and the skills and financial resources of the
from.
Competitive Analysis:
Advertising planning and decision making are affected by competition and the competitive
situation facing the advertiser. This involves both the primary and secondary competition
analysis. A secondary competitor can be a smaller company with a less threatening product
offering, one having only a few features in common with your product, or one competing
indirectly with your product. For example, the brick-and-mortar travel agency does not
compete directly with your online travel company, but it is an alternative that should not be
ignored. Competition is such a pervasive factor that it will occur as a consideration in all phases
of the advertising planning and decision making process. It should include an analysis of what
current share the brand now has, what shares its competitors have, what share of a market is
possible, from which competitors the increased share of a market is possible? The planner also
has to be aware of the relative strengths and weaknesses of the different competing companies
and their objectives in the product category. It is important to look at competition as a precursor
to the planning process.
As a product matures, it enters its most profitable stage, while the costs of producing and
marketing decline. However, it inevitably begins to take on increased competition as other
companies emulate its success, sometimes with enhancements or lower prices. The product
may lose market share and begin its decline.
Product
The product is either a tangible good or an intangible service that is seem to meet a specific
customer need or demand. The CORE product is NOT the tangible, physical product. You can't
touch it. That's because the core product is the BENEFIT of the product that makes it valuable
to you. So with the car example, the benefit is convenience i.e. the ease way at which you can
go where you like, when you want to. Another core benefit is speed since you can travel around
relatively quickly.
The ACTUAL product is the tangible, physical product. You can get some use out of it. Again
with the car example, it is the vehicle that you test drive, buy and then collect.
The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is
planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as
it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die
out (decline).
Price
Price involves the actual amount the end user is expected to pay for a product. How a product
is priced will directly affect how it sells. This is linked to what the perceived value of the
product is to the customer rather than an objective costing of the product on offer. If a product
is priced higher or lower than its perceived value, then it will not sell. This is why it is
imperative to understand how a customer sees what you are selling. If there is a positive
customer value, than a product may be successfully priced higher than its objective monetary
value. Conversely, if a product has little value in the eyes of the consumer, then it may need to
be underpriced to sell. Price may also be affected by distribution plans, value chain costs and
markups and how competitors price a rival product.
Place
It not only includes the place where the product is placed but rather all those activities
performed by the company to ensure the availability of the product to the targeted customers.
Availability of the product at the right place, at the right time and in the right quantity is crucial
in placement decisions.
Placement
Distribution channels
Logistics
Inventory
Order processing
Market coverage
selection of channel members
There are many types of intermediaries such as wholesalers, agents, retailers, the Internet,
overseas distributors, direct marketing (from manufacturer to user without an intermediary),
and many others.
Promotion
Planning is the key to any promotional program. A planned program can be accurately
measured to evaluate its progress, and its success or failure. Adequate planning also saves you
money in the long run. It includes all communication and selling activities to persuade future
prospects to buy the product. Promotion decisions include:
Advertising
Media Types
Message
Budgets
Sales promotion
Personal selling
Public relations/publicity
Direct marketing
Sponsorship
The elements of the promotions mix are integrated to form a coherent campaign.