MKTM 532 Zemenu Aynadis (Ass. Prof.

An Introduction to Integrated
Marketing Communications
 Discussion

• Why we use the term marketing

communication while we can use
the usual and traditional term
“promotional mix?
 Start up Questions

• What is integration?
• What is marketing Communication?
• What will be integrated in integrated
marketing communication?
• Fragmented vs. Integrated marketing
Communication
• What is synergy?
 Marketing Communication

• The main purpose of marketing

communication is to inform, persuade or
remind the selected target audience of the
market offering (Lamb et al., 2003).
• marketing communication’s ultimate role is to
influence the behavior of the target market,
and not only to inform
inform, persuade or remind
the consumers.
 Cont’d

• Marketing communication should, in fact, lead to

changes in the behavior of the target market in the
purchase of products or loyalty towards the
brand.
• Marketers can use the marketing communication
strategy to convince the selected target market(s)
that the products or services offered provide a
significant and competitive advantage over those of
their rivals (Lamb et al., 2003).
 Cont’d

Marketing communication is a process by which

product information is transmitted to the target
audience

PRODUCT

INFORMATION

TARGET AUDIENCE

Linking product and customers through information

 Cont’d

• Marketing communication is concerned

with messages that deal with buyer-seller
relationships
• A concept of marketing communications
planning that recognizes the added value
of a comprehensive plan that evaluates the
strategic roles of a variety of
communication disciplines and combines
these disciplines to provide clarity
clarity,
consistency and maximum
communications impact.
impact
 Definition of Integrated Marketing Communications

• IMC is a carefully blended mix of

promotional tools (usually called
promotional mix ) in a way that can end
up with very successful communication
that reaches the target market.

• It is coordination of all promotional

activities to produce a unified, customer-
focused promotional message
 Cont’d
A marketing communications planning concept
that recognizes the value of a comprehensive
plan.
A plan that evaluates the strategic roles of several
communications disciplines:
 Media advertising
 Direct marketing
 Interactive/internet marketing
 Sales promotion
 Publicity/Public relations
Combines the disciplines to provide:
 Clarity
 Consistency
 Maximum communications impact
 Cont’d

• It is the concept under which a company

carefully integrates and coordinates its
many communications channels to deliver
a clear, consistent, and compelling message
about the organization and its products.
The Marketing & Promotional Mixes

Marketing Mix:
• Product or Service
• Pricing
• Channels of Distribution
• Promotion
Promotional Mix:
• Advertising
• Direct Marketing
• Interactive/internet marketing
• Sales Promotion
• Publicity/Public Relations
• Personal Selling
 Traditional Marketing Approach

Sales
Special
Point of promotion
events
purchase Interactive
marketing

Media
Packaging
Adver-
tising
Public
relations
Publicity Direct
Direct
marketing response
 Contemporary IMC Approach

Sales Direct
Packaging
promotion response

Media
Point of
purchase Adver-
Public
tising relations
Publicity

Interactive
marketing Direct
Special
marketing
events
 Reasons For Growing Importance of IMC

• Shift from media advertising to other forms of marketing

communication
• Movement away from advertising focused- approaches that
emphasize mass media
• Shift in power from manufacturers to retailers
• Rapid growth of database marketing
• Demands for greater ad agency accountability
• Changes in agency compensation
• Rapid growth of the Internet
• Increasing importance of branding
 Behind the Growing Importance of IMC

From Toward
Media advertising Multiple forms of communication

Mass media Specialized media

Manufacturer Dominance Retailer Dominance

General focus Data-based marketing

Low agency accountability Greater agency accountability

Traditional compensation Performance-based compensation

Limited Internet availability Widespread Internet availability

 IMC Requirements

Awareness of audience’s media habits and

preferences
Understanding of audience’s knowledge and
beliefs about the product
Use of coordinated media blend linked to a
specific objective
Synergy
 Cont’d

• Better use of communication funds

• Improves the company’s ability

– to reach

– the right consumer

– at the right place

– at the right time

– with the right message

 Steps in Developing Effective Marketing
Communication

Identify the target audience

Determine the communication

objectives

Design the message

Choose the media to send the

message

Select message source and

collect feedback
 Identifying the Target Audience

How it
What will
will be
be said
said

When it Where it
will be will be
said said

Who will
say it
Determine the communication objectives

• The goal of marketing is triggering purchase; and it all starts

with understanding customers needs and wants and ends with
convincing customers to purchase the product offering

• Overall the objective will be to influence the customer

(regardless of which buyer readiness stage he/she is) and move to
the last step, purchase
Cont’d
• Consider the introduction of a new product. The marketing
communicator’s target market may be totally unaware of the
product, know only its name, or know only a few things about it.
Thus, the marketer must first build awareness and knowledge.

• Assuming that target consumers know about a product, how do they

feel about it? These stages include liking (feeling favorable about the
Surface), preference (preferring the Surface to competing tablets),
and conviction (believing that the Surface is the best tablet for
them). A combination of promotion mix tools are used to create
positive feelings and conviction

• Finally, some members of the target market might be convinced

about the product but not quite get around to making the purchase.
To help reluctant consumers over such hurdles, the company might
offer buyers special promotional prices and upgrades, and support
the product with comments and reviews from customers.
 Designing a Message (Content)

• Having defined the desired audience response, the

communicator then turns to developing an effective
message.

• Ideally, the message should use the AIDA (Attention-

Interest-Desire-Action) model framework shown in the
slide.
 Message Content – “What to Say”

• The marketer has to figure out an appeal or theme that will

produce the desired response. There are three types of
appeals: rational, emotional, and moral.

– Rational appeal relates to the audience’s self-interest.

• show that the product will produce the desired benefits. Examples are
messages showing a product’s quality, economy, value, or performance

– Emotional appeal is an attempt to stir up positive or negative

emotions to motivate a purchase.
• Communicators may use emotional appeals ranging from love, joy, and
humor to fear and guilt. Advocates of emotional messages claim that they
attract more attention and create more belief in the sponsor and the brand.

– Moral appeal is directed to an audience’s sense of what is right

and proper.
• Moral appeals are often used to urge people to support social causes,
such as a cleaner environment or aid to the disadvantaged.
 Message structure and format (design) is “how to say it.”

One- Vs Two-sided arguments

Conclusion drawing
Order of Presentation
• Marketers must also decide how to manage message structure
issues; sometimes it may be important to draw conclusion (as
part of the communication) and sometimes to leave it to the
audience to make the conclusion themselves based on the
information provided in the communication.
• Research suggests that, in many cases, rather than drawing a
conclusion, the advertiser is better off asking questions and
letting buyers come to their own conclusions.
 Cont’d

• The marketing communicator also needs a

strong format for the message.
• In a print ad, the communicator has to
decide on the headline, copy, illustration,
and colors.
• To attract attention, advertisers can use
novelty and contrast; eye-catching pictures
and headlines; distinctive formats; message
size and position; and color, shape, and
movement.
 Choosing Communication Channel and media

• Formal vs. Informal communication (planned vs. causal

communication)

• Personal vs. Non-personal communication

• Oral vs. Written communication

• Internal vs. External communication
• Traditional vs. Electronic communication

• Verbal vs. non verbal communication (words vs. signs)

Personal communication
•personal communication involves two or more
people communicating directly with each other.
• They are effective because they allow for
personal addressing and feedback.
• Face to face
• Phone
• Mail or e-mail
• Texting or Internet chat
 Cont’d
• Some personal communication channels are controlled directly by the
company. For example, company salespeople contact business buyers.

• But other personal communications about the product may reach buyers
through channels not directly controlled by the company.

• These channels might include independent experts—consumer

consumer
advocates, bloggers, and others—making
others statements to buyers.

• Or they might be neighbors,

ghbors, friends, family members, associates, or
other consumers talking to target buyers, in person or via social media
or other interactive media.

• This last channel, word-of-mouth influence, has considerable effect in

many product areas.
• Buzz marketing involves cultivating
opinion leaders and getting them to spread
information about a product or service to
others in their communities.

• Opinion leaders are people whose

opinions are sought by others.
  Non Personal Communication

• Non-personal communication channels are media that carry messages

without personal contact or feedback, including major media, atmospheres,
and events.

• Major media include print media (newspapers,

newspapers, magazines, direct mail),
mail
broadcast media (television,
television, radio),
radio display media (billboards,
billboards, signs,
posters), and online media (ee-mail and company web sites).
posters sites

• Atmospheres are designed environments that create or reinforce the buyer’s

leanings toward buying a product. Saying nothing but designing the
environment in a way that can trigger customers to purchase and increase
their confidence is interesting approach of non personal and non verbal
communication.

• Events are staged occurrences that communicate messages to target

audiences. For example, public relations departments arrange grand
openings, shows and exhibits, public tours, and other events.
Cont’d
• Non-personal communication affects buyers
directly. In addition, using mass media often
affects buyers indirectly by causing more personal
communication. For example, communications
might first flow from television, magazines, and
other mass media to opinion leaders and then
from these opinion leaders to others.

• Interestingly, marketers often use non-personal

communication channels to replace or stimulate
personal communications by embedding
consumer endorsements or word-of-mouth
testimonials in their ads and other promotions.
Formal-Informal vs. Internal-External
Oral Vs. Written
 Selecting the Message Source
•The message’s impact depends on how the
target audience views the communicator.
• Celebrities
 Athletes
 Entertainers
• Professionals
 Health care providers
• Messages delivered by highly credible sources
are more persuasive. Marketers hire celebrity
endorsers—
endorsers —well-
well-known athletes, actors,
musicians, and even cartoon characters—
characters—to
deliver their messages.
  Collecting Feedback
• Collecting feedback involves the communicator
understanding the effect on the target audience by
measuring behavior resulting from the content.
• After sending the message, the communicator must
research/know its effect on the target audience.

• This involves asking target audience members whether they

remember the message, how many times they saw it, what
points they recall, how they felt about the message, and
their past and present attitudes toward the product and
company.
• The communicator would also like to measure behavior
resulting from the message—how
message many people bought the
product, talked to others about it, or visited the store.

• Feedback on marketing communications may suggest

changes in the promotion program or in the product offer
itself.
Setting the Promotion Budget

• The affordable method sets the promotion budget at

the level the management thinks the company can
afford.

• Small businesses often use this method, reasoning that

the company cannot spend more on advertising than it
has.

• They start with total revenues, deduct operating

expenses and capital outlays, and then devote some
portion of the remaining funds to advertising.
• The percentage-of-sales method sets the
promotion budget at a certain percentage of current
or forecasted sales or as a percentage of the unit
sales price.

• It is simple to use and helps management think

about the relationships between promotion
spending, selling price, and profit per unit.
• The competitive
competitive--parity method sets the
promotion budget to match competitors’
outlays.

• Companies using the competitive-parity

method monitor competitors’ advertising or get
industry promotion spending estimates from
publications or trade associations and then set
their budgets based on the industry average.
• The objective-and-task method develops the
promotion budget by specific promotion objectives
and the costs of tasks needed to achieve these
objectives.

• The most logical budget-setting method is the

objective-and-task method, which entails
1. defining specific promotion objectives,
2. determining the tasks needed to achieve these
objectives, and
3. estimating the costs of performing these tasks.

• The sum of these costs is the proposed promotion

budget.
 Decisions on the Marketing Communication Mix

• The concept of integrated marketing

communications suggests that the company must
blend the promotion tools carefully into a
coordinated promotion mix.

• Companies within the same industry differ greatly

in the design of their promotion mixes.

• Some companies releases most of its

promotion funds on personal selling others
on direct marketing; while some others
spends heavily on consumer advertising.
– The decision on marketing communication mix
highly depends on the nature of product, target
market, nature of promotional mix and
corresponding budget requirement.
requirement

– Therefore, understanding each of the

promotional mix elements is one of the key
considerations and solutions regarding
promotional mix decisions.
 Push vs. Pull Strategy

• Marketers can choose from two basic

promotion mix strategies: push promotion or
pull promotion
• The relative emphasis given to the specific
promotion tools differs for push and pull
strategies.
• A push strategy involves “pushing” the
product through marketing channels to final
consumers. The producer directs its marketing
activities (primarily personal selling and trade
promotion)toward channel members to induce
them to carry the product and promote it to
final consumers.
• Using a pull strategy, the producer directs
its marketing activities (primarily
advertising and consumer promotion)
toward final consumers to induce them to
buy the product.
• If the pull strategy is effective, consumers
will then demand the brand from retailers,
who will in turn demand it from the
producer. Thus, under a pull strategy,
consumer demand “pulls” the product
through the channels.
MKTM 532 Zemenu Aynadis (Ass. Prof.)

Analysis of Marketing
Communication
Process
 What is communication?
• Communication is the activity of conveying information through
the exchange of thoughts, messages, or information, as by speech,
visuals, signals, writing, or behavior.

• Communication requires a sender, a message, and a recipient,

although the receiver need not be present or aware of the sender's
intent to communicate at the time of communication; thus
communication can occur across vast distances in time and space.

• Communication requires that the communicating parties share an

area of communicative commonality.
commonality

• The communication process is complete once the receiver has

understood the message of the sender.
 Basic Model of Communication

SENDER MESSAGE Channel MESSAGE RECIEVER

Barriers decoding
encoding
or
Noise

FEEDBACK RESPONSE
 The party sending the message to
SENDER
another party

MESSAGE The set of messages the sender sends

ENCODING Putting through into symbolic form

CHANNEL Communication channels message is sent through

DECODING The process by which receivers assign meaning to the

sender’s transmitted symbols

RECEIVER The party receiving the message (audience)

RESPONSE Set of reactions following exposure/reception of message

NOISE (Un)planned static or distortion during process of communication

FEEDBACK Part of response transmitted back to the sender

THE RESPONSE PROCESS
 Analyzing Receivers

• To communicate effectively, marketers must

have an understanding of who their target
audience are and how they need to be
communicated with to influence their decision-
making process.

• The relevant audience must be identified as well

as the process consumers go through in
responding to a promotional message.
 Cont’d

• The marketing communications process begins

with the identification of the audience that will
be the focus of the firm’s advertising and
promotional efforts.
• The target audience can be viewed as consisting
of:
– Individuals
– Groups
– Segments
– Mass audience
 The Response Process

• An important aspect of developing effective communication involves

having an understanding of the response process the receiver may
go through and how the promotional efforts of the market might
influence this process

• Three Basic Stages based on which the response processes will be

discussed.
– Cognitive stage (Think
Think): what the receiver knows or perceives
about the particular product or brand.
– Affective stage (Feel
Feel): the receiver’s feelings or affect level for the
particular product or brand.
– Behavioral or Conative /behavioral stage (Do Do): the receiver’s
action toward the particular product or brand.
• There are four ALTERNATIVE response
processes which are specifically known in
relation to IMC.

• These response models are all about the process

that customers will pass through before the final
purchase.
 1. Traditional Response Hierarchy Models

• The AIDA Model

– Attention -> Interest -> Desire -> Action
– AIDA model depicts the stages in the personal selling process
– E.g. Personal Selig in Addis Street
• The Hierarchy-of-Effects Model
– Awareness -> Knowledge -> Liking -> Preference -> Conviction -> Purchase
– Hierarchy of effects model shows the process by which advertising works
– A newly introduced product…. Telebirr
• The Innovation-Adoption Model
– Awareness -> Interest -> Evaluation -> Trial -> Adoption
– Innovation adoption model shows the stages a consumer passes through in the
process of adopting a new product
– Mobile and internet banking case in Ethiopia
• The Information-Processing Model
– Presentation -> attention -> comprehension -> yielding -> retention ->
behavior
– Information processing model a model of the process through which a
consumer must pass to be influenced by advertising
– Eg. Sales promotion at bazzars in Addis by Indian and Turkey citizens
 2. Alternative Response Hierarchy Models
(Three Orders Model)

• Standard learning hierarchy

– In many purchase situations, consumers go through the
response process in the manner depicted by the
traditional communications models or sequence or
hierarchy.
– learn  feel  do
– The receiver is viewed as an active participant in the
communications process who actively seeks or gathers
information through “active learning.”
• Buying Cars, House
• Dissonance/attribution hierarchy
– In some situations, consumers may behave first then develop
attitudes or feelings as a result of that behavior and learn or process
information that supports their attitudes and behavior.
– do  feel  learn
– When customers purchase based on recommendation/
attribution
– This hierarchy usually occurs when consumers are trying to
reduce post-purchase dissonance or apprehension that results from
doubt or concern over a purchase.
– This dissonance reduction process involves “selective learning”
whereby the receiver seeks information that supports the choice
made and avoids information that does not bolster the wisdom of
the decision.
• Buying Food items
• Low-involvement hierarchy
– The low involvement hierarchy is thought to characterize situations
of low consumer involvement in the purchase process and consists
of the following sequence.
– learn  do  feel
– The receiver is viewed as engaging in “passive learning” and
“random information catching” rather than active information
seeking.
– A popular creative strategy used by advertisers of low
low--involvement
products is what advertising analysts calls VIP, or visual image
personality. Basically, advertisers use symbols that lead consumers
to identify and retain ads.
 Source, Message and Channel Factors
Persuasion Matrix
• It is a model that tries to explain how mass media
communication helps in persuading people
• The persuasion matrix helps marketers to see how each
controllable element of the communication process interacts
with the consumer’s response process.
process
• The persuasion matrix focuses mainly on
the persuasion aspect of advertising. As competition increases,
this form of advertising becomes more important.

• During persuasion advertising, the company's goal is to build

demand for their brand. The persuasion matrix consists of
inputs (columns, independent variables) and outputs (rows,
dependent variables).
 Cont’d

• Therefore, the matrix has two sets of variables.

• Independent variables are the controllable
components of the communication process while
dependent variables are the steps a receiver goes
through in being persuaded.
• The numbers in the cells represent decisions that can
be evaluated using the persuasion matrix that are
discussed in the next slide
Persuasion Matrix
• This above diagram presents specific decisions
that correspond to the numbers in the cells of the
persuasion matrix that were presented
earlier. These include:

• Receiver/comprehension – can the receiver

comprehend the ad? Consideration must be given
to whether the target audience can understand and
comprehend a message.
• Channel/presentation – which media will
increase presentation? How effective is a
particular media vehicle in reaching the
target audience?

• Message/yielding – what type of message

will create favorable attitudes or
feelings? Marketers try to create messages
that will lead to positive feelings toward the
product.
• Source/attention – who will be effective in
getting consumers’ attention? Marketers
select sources that will be effective in gaining
the attention of the target audience such as
celebrities, athletes, or attractive models.
 The communication Process

• This process has three main Factor

• Source Factor
– Source Credibility – knowledge, skill or experience for
internalization
– Source Attractiveness
Attractiveness-- likeability, similarity or familiarity
for identification
– Source Power
Power-- ability to reward/punish for compliance

• Message Factor
– Message Structure
– Message Appeal
• Channel factor
• Credibility – the extent to which the recipient sees the source as having
relevant knowledge skill or experience and trusts the source to give unbiased,
objective information.
– Internalization – the process by which a receiver adopts the position
advocated by the source because it is perceived as accurate and makes it
part of his or her belief system

• Attractiveness – refers to the similarity (with recipient), familiarity, and/or

likeability of the source
– Identification – the process by which an individual is motivated to seek
some type of relationship with the source and thus adopts similar beliefs,
attitudes, or behaviors.
• Power – refers to the ability (real
real or perceived)
perceived of the source to administer
rewards or punishment to the receiver
– Compliance – the process by which the receiver accepts the position
advocated by the source to receive rewards or avoid punishment.
Source Factor
 Source Credibility

Ethical

Knowledgeable Trustworthy

Skillful Source Experienced

Believable Unbiased

Honest
 Source Attractiveness

Similarity Familiarity Likeability

Resemblance Knowledge of the Affection for the

between the source through source resulting
source and repeated or from physical
recipient of the prolonged appearance,
message exposure behavior, or
personal traits
Advertising Risks of Using Celebrities

The celebrity may overshadow

the product being endorsed

The celebrity may be overexposed,

reducing his or her credibility

The target audience may not be

receptive to celebrity endorsers

The celebrity’s behavior may pose

a risk to the company
Meaning Movement & the Endorsement Process
(Why Celebrities are Effective)
 There are three stages of meaning movement
(Effectiveness of Celebrities):

– Stage 1 – celebrities draw these meanings from the

roles they assume in their television, movie, military,
athletic, and other careers. Each new dramatic role
brings the celebrity into contact with a range of
objects, persons, and contexts.

– Stage 2 – celebrities bring their meanings and image

into the ad and transfer them to the product they are
endorsing.

– Stage 3 – the meanings the celebrity has given to the

product are transferred to the consumer.
Energy & Power – The Athlete and the Product
 Choosing a Celebrity Endorser

Match with
Trust
audience

Match w/product Risk

Factors

Image Familiarity

Cost Likability
 Source Power

Perceived Perceived Perceived

control concern scrutiny

Compliance
 Source Power
Source power depends on several factors:
1. The source must be perceived as being able to
administer positive or negative sanctions to the
receiver (perceived
perceived control
control)
2. The receiver must think the source cares about
whether or not the receiver conforms (perceived
perceived
concern).
3.The receiver’s estimate of the source’s ability to
observe conformity is also important (perceived
perceived
scrutiny).
scrutiny
These three factors lead to influence/compliance
• When a receiver perceives a source as having power,
influence occurs through a process known as
compliance.

• The receiver accepts the persuasive influence of the

source and acquiesces to his or her position in hopes of
obtaining a favorable reaction or avoiding punishment.
 Message Structure

Order of Presentation
Recall

Beginning Middle End

 Message Appeal Choices

Appeal to audience’s sense of

Morality , what is right and proper.

Appeal to the logical, Appeal to the feelings

rational minds of and emotions of
consumers consumers

Appeal to both
 Message Appeal Options

Comparative Fear Humor

Ads Appeals Appeals

• Especially • May stress • Can attract and

useful for new physical danger hold attention
brands or threats to
health
• Often the best
• Often used for remembered
brands with • May identify • Put consumers
small market social threats
in a positive
share
• Can backfire if mood
• Used often in level of threat
political is too high
advertising
 Humor Appeals

Pros Cons
Aids attention and Does not aid persuasion in
awareness general

May aid retention of the May harm recall and

message comprehension

Creates a positive mood May harm complex copy

and enhances persuasion registration

May aid name and simple Does not aid source

copy registration credibility

May serve as a distracter, Is not effective in bringing

reducing counterarguing about sales

May wear out faster than

non-humorous ads
Channel Factors

Personal Nonpersonal

•Flexible • No personal
contact
•Powerful
• Geared to a
•Real time large audience

• Static
Differences in Information Processing

Self-Paced Externally
Media Paced Media

• Newspapers • Radio

• Magazines vs. • Television

• Direct Mail

• Internet
 The IMC Planning Process

• Developing an integrated marketing

communications plan requires

Planning
Executing
Evaluating
Controlling
 Model of the IMC Planning Process
Review of marketing plan

Analysis of Promotional program situation

Analysis of communications process

Budget determination

Develop integrated marketing communications program

Sales PR/ Personal Direct Internet/

Advertising
promotion publicity selling marketing interactive

Develop objectives and strategy for each

Develop message, media strategy, and tactics

Integrate and implement marketing communications strategies

Monitor, evaluate and control IMC Program

 Integrated Marketing Communications
Planning Model
Review of Marketing Plan

Promotional Program Situation Analysis

Analysis of the Communications Process

Budget Determination

Develop Integrated Marketing Communications Programs

Sales PR/ Personal Direct Internet/

Advertising
Promotion Publicity Selling Marketing Interactive

Advertising Sales PR/ Personal Direct Internet/

Promotion Publicity Selling Marketing Interactive
Objectives Objectives Objectives Objectives Objectives Objectives

Message Sales PR/ Personal Direct Internet/

Promotion Publicity Selling Marketing Interactive
Strategy Strategy Strategy Strategy Strategy Strategy

Integration & Implementation of Marketing Communications Strategies

Monitor, Evaluate & Control Promotional Program

 Advertising

• Advertising is the non-personal communication of

information usually paid for and usually
persuasive in nature about products, services or
ideas by identified sponsors through the various
media.
• The mass communication tool designed to in
infform
orm,
persuade and/or remind customers; paid by an
identified sponsor.
 Types of Advertising

Classified according to:

1. Target audience.

2. What is being advertised.

3. The objectives sought.

 1. Advertising to Target Audiences

• Consumer advertising:
– Generally appears in mass media
– Directed to end consumers
– May be product or institutional in nature

• Business-to-business advertising:
– Often called trade advertising
– Directed to a business market
 2. What is Being Advertised?

• Product advertising:
– Designed to promote the sale of a specific
product or service
– May be direct action  quick-response
– May be indirect action  over a longer time

• Institutional or corporate advertising:

– Promotes the firm or tries to create a positive
image
– May be customer-service
– May be public-service
 3. What are the Objectives?

 Informative Advertising
– Usually pioneering stage of product category
– To build primary demand
– Need to inform consumers of product
• Selective demand advertising:
– Intended to encourage purchase of a particular brand or the
products and services of a specific firm

• Cooperative advertising:
– Involves the sharing of the cost of advertising by two or
more sponsors  A manufacturer and retailers (vertical) or
a group of retailers (horizontal)
Cont’d
 Persuasive Advertising
– Competitive stage of product
– Build selective demand for a particular brand
 Remainder Advertising
– Maturity Stage of PCL
– Remind people to purchase
– e.g Coca-Cola
 Reinforcement Advertising
– Assure current purchase that they have made
the right choice
– e.g Automobile ads with satisfied customers
Setting Advertising Objectives

 An advertising objective is a specific

communication task to be accomplished with a
specific target audience during a specific time
 Objectives are classified by primary purpose
– Inform

– Persuade

– Remind
 Cont’d
Informative advertising is used when introducing a new
product category; the objective is to build primary
demand
• Comparative advertising directly or indirectly compares
the brand with one or more other brands
Persuasive advertising is important with increased
competition to build selective demand

Reminder advertising is important with mature products to

help maintain customer relationships and keep customers
thinking about the product
 Advertising Mediums

• Television Advantages
– Large Coverage Area
– Can target specific audience
– Audio and Visual
– Large repeat exposure
– Rapid reach potential
– Possible High entertainment value of ad.
 Advertising Mediums

• Television Disadvantages
– Can be costly to produce and air
– Time limitations limit message
– Need for repetition(short ad recall)
– Clutter (excessive advertising message every
day)
 Advertising Mediums

• Radio Advantages
– Can target a specific audience
– Immediate/timely/multiple exposures
– Possible high entertainment value of ad
– DJ or Journalist endorsements
– Time and content flexible
 Advertising Mediums

• Radio Disadvantages
• Time limitations restrict message
• Need for repetition
• Clutter (excessive advertising message every day)
• Button pushers between breaks
• Short ad exposure
• Need to advertise on multiple stations
 Advertising Mediums

• Magazines Advantages
• Potentially large coverage area
• Can target specific audience
• Can use color
• Flexibility in size and cost
• Visibility of product
• Couponing opportunity
• Large repeat and pass along readership
 Advertising Mediums

– Magazines Disadvantages
• Cost associated with repeat exposure
• Lack of movement and sound
• Not immediate-may be weekly/monthly
• Long lead time required for purchase
• Can be expensive
 Advertising Mediums

– Newspapers Advantages
• Potentially large coverage area
• Low cost relative to other media
• Immediacy
• Access to large socio groups
• Targetability via specialty sections
• Can use color
• Flexibility in size and cost
• Visibility of product
• Couponning
• Short Lead time
 Advertising Mediums

– Newspaper Disadvantages
• Inconsistent reproduction
• Typically 1 day exposure
• Clutter
• Lack of movement and sound
• May be limited to Black and White
• Readership declining and production costs
increasing
 Advertising Mediums

– Outdoor Advantages (billboard and

related displays on visible area like taxis, buses,
highways etc)
• Large audience exposure
• Use of color
• Continuous exposure 24/7
• Good directional
• Many new opportunities due to
technology (LEDs)
• May get additional exposure at no
extra cost if other advertisers don’t
buy up inventory
 Advertising Mediums

• Outdoor Disadvantages
– Limited message length of 9-11 words
recommended
– Initial production and preparation costs can be
high
– Ideal sites difficult to access
 Advertising Mediums

• Internet Advantages
– Information available 24/7
– Customers access at their convenience
– Relatively cost effective
– Targetability
– Message can be timely
– Ads can be interactive
– Ability to coupon
– Color
 Advertising Mediums

• Internet Disadvantages
– High maintenance necessary
– Not effective as stand alone strategy
– Difficult to gauge impact (getting better)
– Cost of development and maintenance can vary
– Not everyone has access to internet
 Advertising Mediums

• Direct Mail Advantages

– Can be personalized
– Can target specific audiences
– Opportunity to educate customer on
product/service benefits
– Couponning
 Advertising Mediums

• Direct Mail Disadvantages

– Expensiveness per piece
– Difficult to obtain “clean” mailing list
– Perceived as “junkmail”/often discarded
– Long lead time needed for printing and mailing
 Advertising Mediums

• Point of Sale Advantages

• Can influence impulse purchases
• Helps aproduct stand out among
competitors
• Customer has opportunity for direct
response at time of ad presentation
(Purchase)
 Advertising Mediums

• Point of Sale Disadvantages

– Can be expensive
– Clutter (product can be lost among other point
of sale items)
 Major Decisions in Advertising during
advertising program development
• Advertising budget is one of the major
decisions in advertising
Setting the Advertising Budget

Factors to consider when setting the budget

Product life-cycle stage

• New products require larger budgets
• Mature brands require lower budgets
Market share
• Building or taking market share requires larger
budgets
• Markets with heavy competition or high advertising
clutter require larger budgets
• Undifferentiated brands require larger budgets
 Budget Decisions

• Establishing the budget

• Budgeting approaches

• Allocating the budget

 Establishing the budget

• Marginal Analysis

• Sales response models

• Additional factors in budget setting

 Marginal Analysis
 Marginal analysis is an examination of the additional benefits of an
activity compared to the additional costs incurred by that same activity.
 Companies use marginal analysis as a decision-making tool to help
them maximize their potential profits.
 budget decision based on Cost vs. benefit analysis

Sales Gross Margin

Sales
in $

Ad. Expenditure

Profit

Point A
Advertising / Promotion in $
 BASIC Principles of Marginal Analysis

• Increase Spending . . . IF:

The increased cost is less than the incremental
(marginal) return.
• Decrease Spending . . . IF:
The increased cost is more than the incremental
(marginal) return.
• Hold Spending Level. . . IF:
The increased cost is equal to the incremental
(marginal) return.
 Problems with Marginal Analysis

• Assume that sales are a direct measure of

advertising and promotional efforts.

• Assume that sales are determined solely by

advertising and promotion.
Advertising Sales/Response Functions

B. S-Shaped
A. Concave- Response
Downward Function
Response Curve

Sales

Middle Level

High Spending
Initial Spending
Sales

High Effect

Little Effect
Little Effect

Range A Range B Range C

Advertising Expenditures
Advertising Expenditures
 Budgeting Approaches

• Top-down budgeting

• Bottom-up budgeting
Top-Down Budgeting

Top Management Sets the

Spending Limit

The Promotion Budget Is Set to Stay

Within the Spending Limit
Top-Down Budgeting

• Arbitrary allocation- dependent on the management's

discretion and hence has no theoretical basis
• The affordable method- what ever left over to ads
• Historical Method- previous allocation as a base
• Percentage of Sales- sales revenue as a base
• Competitive parity- competitors as a vase
• Return on investment (ROI) – ROI as a base
 The Affordable Method
• It is used when a company allocates
whatever is left over to advertising.
• It is common among small firms and certain
non-marketing-driven large firms.
• Companies using this approach don’t value
advertising as a strategic imperative.
• Logic: we can’t be hurt with this method.
• Weakness: it often does not allocate enough
money.
 Historical Method

• Historical information is the source for this

common budgeting method.
• The inflation rate and other marketplace
factors can be used to adjust the advertising
amount.
• This method, though easy to calculate, has
little to do with reaching advertising
objectives.
 Percentage-of-Sales Method
• It compares the total sales with the total
advertising budget during the previous year
or the average of several years to compute a
percentage.
• Two steps
– Step 1: past advertising dollars/past sales = %
of sales.
– Step 2: % of sales X next year’s sales forecast =
new advertising budget.
 Percentage-of-Sales Method

• Based on (future or past) sales dollar or unit

product cost

Method 1: Straight Percentage of Sales

2007 Total dollar sales $1,000,000
Straight % of sales at 10% $100,000
2008 Advertising budget $100,000
Method 2: Percentage of Unit Cost
2007 Cost per bottle to manufacturer $4
Unit cost allocated to advertising $1
2008 Forecasted sales, 100,000 units
2008 Advertising budget (100,000*$1) $100,000
 Percentage-of-Sales Method

• Pros
– Financially safe
– Reasonable limits
– Stable
• Cons
– Reverse the cause-and-effect relationship between
advertising and sales.
– Stable?
– Misallocation
– Difficult to employ for new product introductions.
– Sales↓ → Advertising budget↓
 Competitive-Parity Method

• This method uses competitors’ budgets as benchmarks

and relates the amount invested in advertising to the
product’s share of market.
• Logic: share of media voice → share of consumer
mind → share of market.
• Share of media voice: the advertiser’s media presence.
• The actual relationship above depends to a great
extent on factors such as the creativity of the message
and the amount of clutter in the marketplace.
 Competitive-Parity Method

• Pros
– Take advantage of the collective wisdom of the
industry
– Spending what competitors spend helps prevent
promotion wars.
• Cons
– Companies differ greatly.
– There is no evidence that budgets based on
competitive parity prevent promotion wars.
(Prisoners’ Dilemma)
 Return on Investment (ROI)

• In this method, advertising and promotions are

considered investment, like plant and equipment.
Thus, the budgetary appropriation leads to certain
returns.

• ROI has received a great deal of attention by

practitioners over the past few years, with many still
disagreeing as to how it should be measured.

• While the ROI method looks good on paper, the

reality is that it is rarely possible to assess the returns
provided by the promotional effort – at least as long
as sales continue to be the basis for evaluation.
Developing Advertising Strategy
Advertising strategy is the strategy by which
the company accomplishes its advertising
objectives and consists of:

• Creating advertising messages

• Selecting advertising media

 Creating the Advertising Message

Advertisements need to break through the clutter/mess:

• Gain attention
• Communicate well
Advertisements need to be better planned, more
imaginative, more entertaining
imaginative entertaining, and more rewarding
to consumers
• Merging ads with entertainment
Cont’d

Message strategy

Creative concept

Message execution
Message Strategy Alternatives

• Subjective Claims
• Expansion Advertising
• Comparative Advertising
• Emotional Appeals
• Fear Appeals
• Celebrity Endorsement
• Humor Appeals
• Subliminal Advertising
• Advertorial
• Infomercial
• Product Placement Advertising
 Cont’d
Message strategy is the general message that will be
communicated to consumers
• Identifies consumer benefits

Creative concept is the idea that will bring the message

strategy to life and guide specific appeals to be used in an
advertising campaign
Characteristics of the appeals include:
• Meaningful
• Believable
• Distinctive
Cont’d
• Message execution is when the advertiser turns the
big idea into an actual ad execution that will
capture the target market’s attention and interest.

• The creative team must find the best approach,

approach
style, tone, words, and format for executing the
message.
Roles of Advertising

Marketing Role •Marketing is the process a business uses to

satisfy consumer needs and wants through
goods and services.

Communication Role
•Advertising is a form of mass
communication. E.g. Call for religious
festivals.

Economic Role •Two main views about advertising,

either the market power model or the
economics of information theory.

•Informs us about new and improved

Societal Role products, teaches us how to use these
innovations, etc.
Tools of Advertising

• Television
• Radio
• Newspaper
• Magazine
• Billboard
• Internet
Advertising the service

– Setting advertising objectives: the

objectives set in advertising service
should be developed to address the four
variables (Intangibility, variability,
perishability and, inseparability) that

differentiate services from goods; which

are usually the main sources of
uncertainty.
The four characteristics of services
Advertising Campaign
 Developing an Advertising Campaign

• An ad campaign is a set of advertisements that

at
revolve around a single message and are
intended to achieve a particular goal.
goal
• For example, a company might create an ad
campaign to meet one of the following
business objectives:
– Mostly practical marketing
– To create brand awareness for a new product.
– To drive sales of a product or service.
• A campaign consists of all the tasks
involved in transforming a theme into a
coordinated advertising program to
accomplish a specific goal.
• All elements of an advertising campaign
must be consistent with the advertiser’s
corporate and promotional strategies.
 Cont’d

• Before designing a campaign, an

advertiser must:
– Know the target audience.
– Establish overall promotional goals.
– Set the total promotional budget.
– Determine the overall promotional theme.
 Steps in an Advertising Campaign

1. Define the objectives of the campaign

2. Establish a budget for the advertising
3. Create the advertising message
4. Select the media to be used
5. Evaluate the effectiveness of the
advertising
 Advertising Objectives

• Specific objectives are dictated by the

firm’s overall marketing strategy.
• Typical objectives include:
– Supporting personal selling.
– Improving dealer relations.
– Introducing a new product or service.
– Expanding the use of a product.
– Counteracting substitution.
 Establish the Budget

• A difficult process

• Consider the objective and task method

 Creating the Message

• The message must first get the attention of

the target audience.
• It must then influence the audience in the
desired way.
• The message has two elements:
– Appeal – the reason for accepting the message
– Execution – transforming the appeal into words
and visuals
 Selecting the Media
• Advertisers have to decide what type of
media, which category, and which specific
vehicles.
• Certain factors influence the media choice:
– The objectives of the ad
– The audience to be reached
– The requirements of the message
– The time and location of the buying decision
– The cost of placing the advertising in the media
 Characteristics of the Major Media

• Newspapers are flexible and timely, have a

local orientation and wide coverage, low
cost.
• Television is versatile, but audience is now
fragmented, reaches mass audiences.
• Magazines deliver quality advertising to
specific segments, message stays around.
 Cont’d

• Direct mail is personal and selective.

• Radio stations target specific segments, low
cost, local orientation, short message life.
• Out-of-home has a low cost per exposure
and reaches a large percentage of the
population.
• Specialty advertising has a long life.
 The Emerging Media

• Internet advertising is being used in

combination with traditional advertising to
manage fragmentation.
• Infomercials are not widely used, but have
found a role for certain products.
• Place-based media is growing due to
difficulty in reaching certain target
segments, such as young professionals and
dual-career families.
 Evaluating Advertising
• It is difficult to determine the effectiveness of
advertising.
– Ads may have several objectives, work over extended
time periods, and results are usually not observable.
• Direct measurement of effectiveness is possible
where ads stimulate immediate sales.
• Indirect measures are more often used to get at
recognition of the ad, aided and unaided recall
of the advertiser and of the message.
• Much advertising is pre-tested before it
appears.
 Influential Advertising

• Four qualities that make up a good ads

1. Attracts attention: attractive colors ,bold

headings, and pictures

2. Arouses interest: good word choice

3. Creates desire: uses propaganda techniques to

make you believe you want it or need it

4. Causes action: gets results. Sells the product to

the targeted audience.
Techniques in Advertising

• The use of techniques to influence

opinions, emotions, attitudes and
finally behavior.
• The purpose of propaganda
techniques is to persuade
customers
• Bandwagon: invites to join
the crowd.
– E.g. everybody is doing it; do it,
too.
• Testimonial: a claim by
someone who has used the
product that it worked for them
(may be for money).
• E.g.Artist Yigerem’s hair
transplant promotion
• Hyperbole/puffery/exaggeration:
– It is practical;
but not appreciated

• Repetition
– May cause clutter
• Facts and Figures
– E.g. This sanitizer kills 99%
of the viruses and germs;
lifebuoy soup commercial
• Expert Opinions
– Doctors’ prescription or
recommendation of a
product.
• Hidden Fear:
– E.g. you should buy this
product otherwise, something
would happen
• Humor: making people laugh

• Glittering Generalities
Emotional Appeal:
• Name calling:

– Unlike other brands, our beer is

100% free of sugar.
• Slogans/Mottos:
– SMU: Committed to Excellence
• Warm and Fuzzy:

• Using sentimental images of

families, kids and animals to sell
products.
• Beautiful People:

• Using good looking people models

in ads to suggest we will look like
the models if we buy the product.
• Be a hero:
– Patriotic ads; related to emotional
appeal
– Eg. Habesha Beer TV ads

• Problem Solver:
– States a problem and offers their
product as solution.
– E.g. OMO detergent