Marketing Management Text and Cases Advertising & Sales Promotion

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Advertising & Sales Promotion
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Marketing Management Text and Cases, S H H Kazmi

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Advertising & Sales Promotion

Advertising is the structured and composed non-personal communication of information, usually paid for and usually persuasive in nature, about organisations, products, services, ideas by identified sponsors through various media. First, advertising is a highly structured form of communication and employs both verbal and non-verbal elements. Second, the focus of advertising is directed to groups of people rather than to individuals and for this reason it is non-personal or mass communication. Third, most advertising is paid for by sponsors for the media time or space it uses to communicate its messages. Fourth, although most advertising messages are intended to be persuasive to accomplish the desired selling function, some ads appear only to inform people, examples being legal announcements, change of address, obituaries, etc., without any persuasive intent. Fifth, an ad identifies its sponsor.
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Product Life Cycle and Advertising
The developmental stage of a product determines the role of advertising. As products pass through various stages of their life cycle, the manner in which the advertising presents the product to target audiences depends largely upon the degree of a product¶s acceptance by consumers. Based on the concept of product life cycle, one may differentiate three stages:    Introductory Stage Competitive Stage Reminder Stage

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Types of Advertising
Scholars have proposed various approaches to classifying the vast variety of advertising. An understanding of these would help managers in choosing the most appropriate type of advertising to achieve their objectives.

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Consumer Advertising
Most non-classified advertising is display advertising and is found throughout the newspaper and on many magazine pages.

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Two types of display advertising in newspapers are national and local.       National Advertising Retail (Local) Advertising Co-operative Advertising End-Product Advertising Direct-Response Advertising Classified Ads

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Advertising to Business and Profession
This type of advertising is aimed at re-sellers, and professionals such as, architects, lawyers and doctors, etc. The media used is direct mail or professional journals.     Trade Advertising Industrial Advertising Professional Advertising Corporate or Institutional Advertising

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Non-product Advertising 
 Idea Advertising Service Advertising

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Surrogate Advertising
In advertising context when the laws of a country do not permit advertising of a certain product category, the advertisers take the shelter of brand extension.

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Important Players in Advertising 
 Advertiser Advertising Agency

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A typical full-service agency has five functional departments: accounts management, creative services, media services, marketing services, and administration department. Media-buying services specialise in buying media for clients. Industry-focussed agencies concentrate on certain fields such as agriculture, healthcare, drugs and pharmaceuticals, and computers etc. Media Organisations Collateral Service Providers Target Audiences

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Planning and Managing Advertising
Advertising planning and managing steps include situation analysis, identifying target audience, determining objectives, setting budget, advertising strategy implementation, and evaluation. In most cases the ad agency¶s accounts executive develops the advertising plan or campaign.

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Behavioural Dimensions Conative

Steps Toward Purchase Purchase

Advertising for Various Stages POP advertising. Testimonials Price/quality appeals

Effect of Advertising on Consumers

The realm of motives. Ads stimulate or direct desires.

Conviction Preference Comparative ads. Argumentative copy. ³Image´ copy. Status, glamour appeals. Descriptive copy. Slogans, jingles, etc. Awareness Ad repetition, teaser ads.
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Affective The realm of emotions, attitudes, and feelings.

Liking Knowledge

Cognitive The realm of thoughts. Beliefs.

(Figure based on Lavidge and Steiner Model)

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Marketers should consider some specific factors when setting the advertising budget:      Product life cycle stage Market share Intensity of competition and clutter Advertising frequency Product differentiation

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Advertising Strategy Implementation
Advertising strategy has four important elements of creative mix:     identifying the target market and defining the audience, deciding the product¶s positioning, developing advertising message, and selecting the communication media.

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Advertising Message
Great advertising results by creating a combination of ³ad liking´ and its ³strategic relevance.´ While the text and the visuals carry the ad message, behind the creative team¶s choice of tone, words, and ideas, lies an advertising strategy.

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Account executive from the advertising agency prepares a creative brief to communicate the strategy to the creative team. It is a simple written statement of the most significant issues to consider and guide the team in the development of an advertisement or campaign. The statement addresses the following issues:      Who? Why? What? Where, when, and how? What style, approach, or tone?

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Ogilvy used prestigious individuals to convey the desired image for the product in some of his most well-known campaigns and when possible, he would use testimonials from celebrities. He prescribed the following eleven commandments for creating advertising campaigns: 1. 2. 3. What you say is more important than how you say it. Unless your campaign is built around a great idea, it will flop. Give the facts. The consumer isn¶t a moron; she is your wife. You insult her intelligence if you assume that a mere slogan and a few vapid adjectives will persuade her to buy anything. She wants all the information you can give her. You cannot bore people into buying. We make advertisements that people want to read. You can¶t save souls in an empty church. Be well mannered, but don¶t clown. Make your advertising contemporary.
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4. 5. 6.

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7. 8. 9.

Committees can criticize advertisements, but they cannot write them. If you are lucky enough to write a good advertisement, repeat it until it stops pulling. Never write an advertisement, which you wouldn¶t want your family to read. Good products can be sold by honest advertising. If you don¶t think the product is good, you have no business to be advertising it. If you tell lies, or weasel, you do your client a disservice, you increase your load of guilt, and you fan the flames of public resentment against the whole business of advertising.

10. The image and the brand: it is the total personality of a brand rather than any trivial product difference, which decides its ultimate position in the market. 11. Don¶t be a copycat. Nobody has ever built a brand by imitating somebody else in advertising.
David Ogilvy, Confessions of an Advertising Man (Portions of some points excluded).
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Rosser Reeves: Rosser Reeves of Ted Bates agency (now part of Saatchi
group) developed the concept of Unique Selling Proposition (USP).

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Leo Burnett: His approach to determining the major selling idea is termed as
³Inherent drama.´ This approach focuses on finding out the product attribute that made the manufacturer to produce it, and the product benefit that motivates the consumer to purchase it.

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Advertising Appeals: The advertising appeal is the central message to be
used in the ad.

Rational Appeals: These appeals address the consumer¶s self interest and
focus on negatively originated motives (problem removal or problem avoidance) as happens when we run out of something and experience a negative mental state.

Emotional Appeals: Emotional appeals relate to customers¶ social and
psychological needs and stir up positive or negative emotions that can motivate purchase of a product or service.

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There are many ways in which an advertising message can be presented.            Factual message or straight sell Scientific or technical evidence Testimonial Demonstration Comparison Slice of life (problem solution) Lifestyle Fantasy Animation Humour Combination
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Media Plan
Media planning involves a series of decisions in delivering the ad message to the largest number of the target audience in the most effective manner at the lowest cost. Three important steps involved are media objectives, media strategy, and media selection. After closely analysing the media habits of target audience, geographic area, and media timing, the planners formulate a particular combination that would serve the reach, frequency, and impact objectives successfully and effectively.       Media class Media vehicle Media reach Media frequency Media impact Media scheduling
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Selection among Major Media Types
Media planners consider certain factors in making their choices among major media to achieve the desired reach, frequency, and impact. Media planners consider the following factors:     Target Audience Media Habits Product Characteristics Message Characteristics Media Costs

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Media
Television

Advantages
Offers mass coverage. High level of reach. Combined impact of sight, sound, and motion. Prestige value. Low cost per exposure. Attracts attention. Local coverage. Lower cost. High frequency. Focused segment selection. Low production costs. Mass coverage. Low cost, large space. Short lead time for ad placing. Ad position choice possible. Good for current ads. Reader controls exposure. Coupons can be inserted.

Disadvantages
Offers low selectivity. Short span of message life. High cost. High production costs. Creates advertising clutter. Waste coverage. Only audio. Noise. Low on attention getting. Message short lived. Short life of advertisement. Clutter. Low attention getting. Poor production quality. Selective exposure.
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General Characteristics of Major Media Types

Radio

Newspapers

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Magazines

Potential for focused segmentation. Very good production quality. Longevity of message. High information content. More readers per copy. Good for specific location. High repetition. High visibility. High level of selectivity. Reader controls exposure. High information content. Opportunity for repeat exposures User controlled. Increased attention and involvement.

Long lead time for ad placing. Only visual. Low frequency. Lack of flexibility. Short exposure time. Short message. Poor image. High cost per contact Clutter. Often thrown as junk mail.

General Outdoor Characteristics of Major Media Types
Direct mail

Internet

Limited creative capabilities.

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Evaluation of Advertising Effectiveness
Advertising agencies usually pretest ads or commercials and also conduct posttesting. Some major pre-testing and post-testing methods are mentioned briefly.

Pre-Testing Methods
Print Advertising     Direct Questioning Focus Group Portfolio Test Order-of-Merit Test
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Pre-Testing Methods
Television and Radio Advertising    Central Location Test Clutter Test Trailer Test

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Post-Testing Methods 
  Recall Recognition Inquiry

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Sales Promotion
Sales promotion utilises a variety of incentive tools for a predetermined, limited period of time in order to stimulate trial, increase consumer or trade demand, and motivate and reward sales force, such as samples, coupons, discounts, premiums, refunds and rebates, contest and sweepstakes, trade deals, and sales contests for sales people etc. In most cases, the objectives are generally short-term sales related rather than long-term brand building.

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Reasons for Sales Promotion Growth
The role of sales promotion has increased dramatically within the last 15 years.      Intense Competition Brand Proliferation Declining Brand Loyalty Growing Power of Resellers Advertising has Become Less Effective

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Sales Promotion Tools
Manufacturer announced consumer promotions constitute ³pull´ strategy and retailer promotions are based on ³push´ strategy. Sales promotions are more effective when combined with advertising and ³pull-push´ strategies are used at the same time.

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Consumer Promotions
Sales promotions directed at end-users are called consumer sales promotions.           Price Discount (also called cents-off) Bonus-Pack Samples Premiums Refund or Rebate (the terms are used interchangeably) Frequent-User Reward Coupons Consumer Contests, Sweepstakes, and Games Exchange or Buy-Back Offers Point-of-Purchase Displays
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Trade Promotions
Trade promotions are directed at resellers (distributors, dealers, wholesalers, and retailers). The main objectives of trade promotions include:         Build strong relations with channel members. To stimulate in-store merchandising support, displays, shelf space, feature advertising etc. Gain distribution of new products. Gain support for existing brands. Manipulate levels of inventory held by wholesalers and retailers. Trade Allowances Buying Allowances Free Goods
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such

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arranging

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Trade Promotions 
       Slotting Allowances (also called stocking, or introductory allowance) Buy-Back Allowance Advertising Allowances Display Allowance Contests and Incentives Cooperative Advertising Dealer Loader Training Programme

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Internet Promotions
The number of companies using Internet promotions is increasing. Contests and sweepstakes are among the most commonly used to motivate people to visit marketers¶ Internet sites.

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Promotions that Blur the Line
Some promotions such as speciality advertising, event marketing and sponsorship are activities that blur the line between advertising, sales promotion, and public relations.   Speciality Advertising Event Marketing and Sponsorship

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Sales Promotion Planning Guidelines
Planning process starts with situation analysis. To start with, the promotion planners must first consider the corporate policy with regard to sales promotion. Joseph S. Mair has recorded one such policy statement in Handbook of Sales Promotion, ed. Stanley M. Ulanoff. The policy says: 1. ³Sales promotion is an integral part of the marketing mix.´ 2. ³Sales promotion should be used as an offensive weapon in the brand¶s marketing arsenal, not merely as a defensive reaction when a problem arises.´ 3. 4. 5. ³Sales promotion should extend and reinforce the brand¶s advertising and positioning, whenever possible.´ ³Sales promotion should be developed as campaigns, not as single, unrelated events.´ ³Good sales promotions are built upon sound strategic planning.´
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Sales Promotion Objectives
Some of the important objectives of sales promotion include:           Increase sales volume Attract new customers Launch new product and increase trial Encourage repeat purchase Clearance of excessive inventories Motivate dealers to stock and sell more To gain advantageous shelf-space To increase store traffic To block competitors¶ moves Motivate sales force
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Type of Promotion to Use
There are three types of promotions that can be used, singly, or in combination: (a) (b) (c) (1) (2) Consumer promotion Trade promotion, and Sales force promotion Same for less, and More for the same

There are two major approaches for consumer and trade promotions:

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Which Product to Promote
Resellers perceive inventory risk associated with stocking or not stocking the product on promotion. The following conditions may be the cause of risk perception:     When the consumer demand for the product is unpredictable. When the inventory holding costs are high. When the product is seasonal. When the product is likely to go out of fashion quickly.

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