Marketing Management

Dawn Iacobucci

2010 South-Western, a part of Cengage Learning

Advertising Media and Integrated
Marketing Communications

Chapter 10
Marketing Framework
Advertising Media

Ad budgets are usually fixed, so choices

must be made on how to allocate
resources across media
1. How much do we spend?
2. When do we spend?
3. Which media do we use?
How Much Do We Spend?

Ad budget as a percentage of sales

Use past percentage or industry norm
Make adjustments based on marketing
goals
How Much Do We Spend?

Ad budget approximately on par with

competitors
Service providers track companies ad
expenditures
How Much Do We Spend?

When sales decline, previous

approaches imply budgets should be cut
Smaller ad budgets mean less presence
and a cycle of decreased sales

The strategic advertising goal approach

views advertising as an investment
Determine advertisings goal and work
backward to calculate expenditure
Discussion Question

Should advertising be seen as an

expense or an investment? Why?
Reach, Frequency and GRPs

Reach: the share of your target that has

seen your ad at least once
Frequency: the average number of times
target saw the ad (within set duration)
GRPs: Reach X Frequency
Ad reached 25% of target an average of 3
times - the ad delivered 75 GRPs
Reach & Frequency

For reach, the goal is to expose as many

of the target customers as possible
Find most cost efficient media for reaching
target
For frequency, it depends on the goal
Awareness and memory can probably be
attained with a few ads
Persuasion may take more
If ad/product is readily understood, wear-out
may occur
Media Planning

You pay more to get more--but the

relationship is not perfect
Return on Marketing Investments

Example
Greys Anatomy: 9.3 million TVs
Greys Anatomy: $440,000 per 30 seconds
McDonalds meal contribution: $0.50
$440,000/0.50 = 880,000 meals/breakeven
9.3 million viewers are exposed; thus,
McDonalds needs 9.5% to purchase
880,000 / 9.3 million = 9.5%
The question isIs this reasonable?
Media Planning

Continuous: regularity in ad exposure

Periodicity depends purchase cycles
Coca-Cola, McDonalds, Ford, etc.

Occasional: pop up from time to time

Periodicity depends on purchase cycles

Seasonal: infrequent and focused on the

preterm season for the product
School supplies in August, grills in April, etc.
Discussion Questions

What type of schedule (continuous,

occasional or seasonal) would you use if
you were marketing Coca-cola?

What about your school?

Media Selection

The choice of media outlet is difficult

because
There are more media outlets
e.g., more television stations, more radio
stations via XM, the Internet, etc.
Audiences are fragmented across the many
media and use technology to zip past ads
IMC

IMC: marketing messages must be

seamlessly integrated across media
Positive relationship between IMC and good
brand outcomes
High awareness, brand loyalty, sales, etc.
Some elements should be consistent, some
should vary based on the strengths of the
various media
Difficult to implement because ad
agencies are not full service providers
Discussion Questions

How has Pepsi or Coca-Cola

implemented IMC? Give several
examples.

Can you give any examples of

companies who do not effectively
implement IMC?
Media Strengths-Business
Business Strengths of Media

TV ads are most expensive yet yield the

largest reach
Magazines have broad appeal or can be
targeted
Radio and newspapers are often
purchased nationally, but can be
purchased for local markets
Business Strengths of Media

Radio, newspapers, and magazines are

less expensive than TV, but they also
deliver smaller audiences
Billboards, bus ads, yellow page ads,
etc. are relatively inexpensive and
effective in covering local numbers
Magazines require long lead times for
production but have nice reproduction
quality
Business Strengths of Media

Newspapers and magazines are

nonintrusive but viewers can ignore ads
Online advertising and direct mail have
the best customization options
Online ads are inexpensive and can be
targeted, yet, penetration isnt 100%
Direct mail is relatively inexpensive and
targeted, but it is not efficient (junk mail)
Media Strengths-Ad Content
Ad Content Strengths of Media

TV messages need to be simple and

straightforward; radio messages even
more so
TV allows for vivid, dramatic portrayals
Print vehicles are good for detailed
product information
Discussion Question

If you were a local restaurant, which type

of media would you use to advertise?
Why?
Beyond Advertising

IMC goes beyond integrating across

traditional media. It includes personal
selling, sales promotions, public
relations, etc.
Personal Selling

Personal selling and a companys

sales force are essential
communication vehicles for many
industries

Accounts for 14 million jobs

Over 10% of work force
Personal Selling

Get attention of potential customer

e.g., prospecting, qualifying potential
customers, and approaching them
Get interest
e.g., sales presentations
Get desire
e.g., product demonstrations, handling
customers objections
Get action
e.g., closing deal, following up service
Advertising & Selling
Discussion Question

Do you think marketers of dry erase

boards should use personal selling? Why
or why not?
Designing a Sales Force

How many salespeople do I need?

Larger with an aggressive launch

Where do I deploy them?

How do I compensate them?

Proportion of salary and commission
Designing a Sales Force

Pull relies on advertising and sales

promotions
Direct promotional efforts to consumers

Push relies more on personal selling

Direct promotional efforts to channel members
Trade allowances: price reductions to
intermediaries for allocating space, etc.
May be passed on to retailers salespeople as cash,
training and product demonstrations, free
merchandise, conventions, etc.
Discussion Questions

How might Maytag implement a push

strategy? What about a pull strategy?

Do you think they do both? Why or why

not?
Public Relations

PR communications are the attempt of

an organization to reach
Customers, suppliers, stockholders,
government officials, employees, general
community

PRs intention is to convey a positive

image and to educate a constituency
about the companys objectives
Generate goodwill on behalf of the company
PR People

Issue press kits - news releases when

anything newsworthy is happening
Features news (e.g., product launch),
company information, bios, history, etc.

Maintain information on web site

Arrange events
Speaking engagements, sponsorships,
philanthropy, etc.
Publicity

Communication tool that the company

doesn't pay for

It has the appearance of objectivity

PR can prepare press releases, but there is
no guarantee that they will be picked up

Publicity can be negative or positive

because companies cannot directly
control it
Discussion Questions

Can you describe the effects of negative

publicity?
For example, describe the effects Ford and
Firestone experienced following the SUV
tire blow-out incidents.

Can negatively publicity be managed? If

so, how?
Product Placement

Product placement is when products are

integrated into shows
More subtle than ads
e.g., Hannah Montana with Adidas

Becoming increasingly popular as

consumers increasingly zap ads
Over $1 billion annually
Is currently illegal in most of Europe
Event Sponsorship

Event sponsorship can occur in sports,

cultural or artistic endeavors
Brands draw from their positive valence and
high positive energy
Nascar racing

Not clear that sponsorship is cost-

effective
When Coca-Cola sponsors the Olympics, do
they really need the exposure?
Sales Promotions

Sales promotions activate purchase

interest, thus effecting short-term sales
Coupons
Rebates
Promo prices
Trade-ins
Deals for loyalty programs
Free trial-sized products
Contests/sweepstakes
Discussion Question

Why might Nationwide Insurance

allocate money to sponsor Nascar
instead of allocating money for
sweepstakes?
IMC Choices Depend on

1. The target audience

2. The companys goals
Awareness
Information about features and benefits
Enhancement of brand attitudes
Strengthening of preferences
Stimulation of purchase trial
Encouragement of repeat purchasing
Attraction of brand switchers
Questions to Ask

Should we schedule continuously,

occasionally or seasonally?
What is the consumers purchase cycle?
What is the level of saturation desired?
What life cycle stage is the product in?
What can we afford?
What is best for our target?
What do we want the target to know?
Example: IMC Schedule
Media Effectiveness

If goal is awareness, reach matters

Can be measured by viewership, readership,
circulation numbers, traffic indices, etc.

If goal is attitude adjustment, use surveys

It can be difficult to assess ROMI

because customers cant always tell you
where they saw the ad
Media Effectiveness

If you spend more on advertising, do you

see more in sales?
Increasing ad budget relative to the
competition doesnt increase sales in general
Qualitative differences, such as better ad
copy, can increase the likelihood that TV
advertising will positively affect sales
Ads that evoke positive and not negative
feelings have been related to sales
Media Effectiveness

Online advertising
Track click-thru rates, downloads, inquiries,
purchases, returns, etc. & compare with cost
per click, per download, per acquisition, etc.
Online ad cost effectiveness is not great, but
cost is low
Discussion Question

If increased advertising spending does

not lead directly to increased sales, why
do it?