ADVERTISING MANAGEMENT

Eastern Institute of Management 2nd Year 1st Semester

Advertising and the Marketing Process

What is Marketing ?
‡ The American Marketing Association Defines Marketing as the Process of Planning and Executing the Conception, Pricing, Promotion, and Distribution of Ideas, Goods, and Services to Create Exchanges That Satisfy the Perceived Needs, Wants, and Objectives of the Customer and the Organization.

The Marketing Plan
A Marketing Plan is a Blueprint of Planned Marketing Activity That Strives to Create a Competitive Advantage for an Individual Product, a Product Line, or an Idea.
Research Stage
Analyze Marketing Environment

Strategic Stage
Develop Objectives and Strategies

Tactical Stage
Specific Tools Are Selected

Implementation Stage
Coordinate Strategy With Marketing Activities

Evaluation Stage
Assess How Well Objectives Were Achieved

The Four Main Types of Marketing

Approaching the Market
Undifferentiated Approach
Develop One Marketing Strategy That Will Appeal to As Many People as Possible. (Gasoline)

Market Segmentation Approach
Divide the Entire Heterogeneous Market Into Segments That Are More Homogeneous, Then Focus on Specific Target Markets Based on Groupings Such As:

Type of Buyer

Consumer Characteristics

Benefits Sought From Product

Product Differentiation

A Competitive Marketing Strategy Designed to Create Product Differences in the Eyes of the Consumer.

Tangible Differences
Product Features, Color, Size, Quality of Performance, Options or Price

Intangible Differences
Image That Implies Difference such as Status, Enjoyment or Masculinity

Marketing Concept
‡ The marketing concept suggests that marketing should focus first on the needs and wants of the customer, rather than finding ways to sell products that may or may not meet customers· needs. ² Step 1. Determine what the customer needs and wants. ² Step 2. Develop, manufacture, market, and service the goods and services that fill those particular needs and wants.

Four Tools of Marketing

Channel of Distribution Influencers
Channel Direct or Indirect? 
Direct Marketing: Companies that distribute products without the use of a reseller. Indirect marketing: product is distributed through a channel structure that includes one or more resellers.

Push, Pull or Combo Strategy? 
Push Strategy: Directs marketing efforts at resellers.  Pull Strategy: Directs marketing efforts to the ultimate consumer.  Combination Strategy: Most often used and combines push and pull strategies.

Market Coverage? 
Exclusive Distribution: Only one distributor is allowed to sell the brand in a market area. i.e.Ethan Allen  Selective Distribution: Increased number of outlets, but limit number to most profitable. i.e. Timex  Intensive Distribution: Places product in every possible outlet. i.e. soft drinks

Pricing
The Price a Seller Sets for a Product is Based Not Only on the Cost of Making and Marketing the Product, But Also on the Seller·s Expected Profit Level.
Customary or Expected Pricing

Psychological Pricing

Pricing Strategies

Price Lining

Marketing Communication Mix
Advertising Packaging
How the Marketer May Communicate With Target Markets.

Personal Selling Sales Promotion

Point-ofSale

Direct Marketing

Public Relations

Marketing Communication
‡ Personal Selling ² Face-to-face contact between the marketer and a prospective customer. ² Most important for companies that sell products requiring explanation, demonstration, and service. ‡ Advertising ² Has a greater ability to reach a larger number of people simultaneously. ² Has less ability to prompt an immediate change in behavior. ‡ Sales Promotion ² Communication devices offered for a limited period of time to generate immediate sales.

Marketing Communication
‡ Public Relations ² Set of activities intended to enhance the image of the marketer to create goodwill. ‡ Direct Marketing ² Interactive system that allows two-way communication. ² Provides a mechanism for the prospect to respond. ² Can occur at any location. ² Provides a measurable response. ² Requires a database of consumer information. ‡ Point-of-Sale/ Packaging ² All the communication devices and marketing messages found at the place where the product is sold.

Advertising is One of Several Marketing Communication Options.

Advertising·s Role in the Marketing Plan

Advertising vis-à-vis Sales
For an advertising agency standpoint, it is very important to realize that they can increase sales with their effort.

AIDA Model
Attract Attention Gain Interest Create a Desire Precipitate Action

Concept of the AIDA Model
‡The AIDA model states that advertising agency should know how to draw attention of a buyer to get the customer interested by exhibiting its advantages, benefits and features. Interest is followed by desire. It is advertising agency·s duty to create a desire in a buyer to buy a specific product. ‡All three steps of the AIDA policy will help you to stimulate the action towards the purchase of a product. AIDA theory guides and leads you to build a better advertising business. BIG B·s of advertising world have followed AIDA to generate good advertisement campaigns.

Consumer Must go through«
Awareness Comprehension (Image/Identity) Conviction (Attitude) Action (Purchase)

DAGMAR Model
Defining Advertising Goals for Measured Advertising Results It emphasizes the communication task of Advertising as contrasted to the Marketing Objectives of the organization. The Advertising goal should be specific«should be written, measurable task involving a starting point, a defined audience and a fixed time period.

DAGMAR Model Concept
‡ ‡ Suppose you are marketing a service or a product and your customer knows nothing about the product. As your client is unaware of the product, the first step is to make him Aware of your product by posting advertisement regarding your product on respective websites. Comprehension is the second step of DAGMAR. Try to know the answers to these following questions. ² a) What is your product about? ² b) What are product·s potential features and benefits of product? ² c) What will your customer get from your product? And how? Answers to all these questions will help you to get a potential customer. Next stage is Conviction and this is very important. Convince your customer by telling him the benefits of your product. After convincing, your next step starts i.e. action, which is not controlled by you. You have to depend on the customer. However, your previous actions will have a major role to play. If you have been able to convince, the customer ad have answered him satisfactorily and then you will definitely be the winner of the day.

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AIDA vs DAGMAR
AIDA 
Awareness  Interest  Desire  Action

DAGMAR 
Awareness  Comprehension  Conviction  Action

Form of Advertising

Content of Advertising

Why Hire an Advertising Agency?
‡ Hiring an agency can result in several benefits: ² Offer objective advice. ² Draw on the collective experience and training of its staff. ² Provide people and management skills to accomplish advertising objectives. ² Provide supportive environment for professional advertising people.

A Walk through an Advertising Agency

Advertising Agency
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Board of Directors (Privately held) CEO/CMD/Chairman/MD Servicing : Client Servicing/Brand Holder Planning : Brand Planner Creative : Copy/Art Media: Planner/Buyer Research : Consumer Behaviour/Pre Test/Post Test Film : Producer/Director/Unit Finance/HR/L&D etc.

CEO of Advertising Agency
Advertiser/ A/c Executive Client Campaign A/c Director Approved Campaign Visualiser Film Maker Producer Research Agency Production House Event Management Radio Outdoor Press TV Others Media Planner Media Buyer Art Director
Brief

A/c Planner Plng. Director

Creative Director

Copywriter

Budget Controller Traffic Controller

Advertising Universe TG Segment

The Advertising Plan
Marketing Objective Planning by Advtg Opportunities TG Behaviour Research Create the Advertisement Advtg Objectives & Strategy Budget

Co-ordinate Marketing Mix Factors

Customers Language

Creative Media Plan

Place the Ad In Media

Pre Test the Ad through Research

Marketing Objectives
‡ Decide what the marketing objectives is out to achieve in terms of: Increase sales of brand x Increase market share Generate 500 new enquiries each month Increase distribution penetration Establish a network of distributors

Communication Planning
‡ ‡ ‡ ‡ Determining the demand factors. Identifying the Target Group. Assess the Competition Legal and Regulatory Environment

Advertising Objectives
‡ Decide what the Advertising Objectives is out to achieve in terms of: Increasing brand awareness, Positioning the service as the friendliest on the market, Repositioning a beer from an old mans drink to a young mans drink, Maintaining brand X as the preferred brand, Supporting the launch of a new shop by generating 50% awareness in the city, Repositioning the Daily newspaper as an up-market business newspaper, etc.,

Advertising Strategy
‡ How we get there- how the objectives are achieved. Strategy drives the tactics in the same direction. ‡ The strategy summarizes the tactics, by helping to harmonize and integrate all tactical communication tools. The strategy should also include selection of target markets, positioning, selection of communication tools, sequence of communication tools (are different tools used at different stages?), time scales and more. Examples of such strategies include: ‡ The Tupperware direct response campaign that combines personal selling in party format and toll free numbers and catalogues. ‡ The IBM Position the business as a solution provider for all your computing problems, e.g. conferences, published papers, training awareness days etc. ² Daewoo Cars Position Daewoo as a customer focused firm that is happy to deal directly with customers. ‡ Stage 1. Build customer credibility through TV and motoring press ‡ Stage 2. Develop dialogue with customers about current issues about car ownership ‡ Stage 3. Launch brand

Advertising Budget
Setting the budget can be achieved in four main ways: 1. Objective and task approach - Where the cost of implementing the objectives determines the budget. 2. Percentage of sales approach, whereby the budget is determined by a fixed percentage of sales. 3. Competition matching approach, whereby the firm·s budget spend matches that of the competition. 4. Arbitrary approach, where the CEO sets an arbitrary figure that does not take account of the cost of implementation.

Creative Planning
‡ Identify the target audience : Decide whom the message is for. ‡ Determine the response sought : What would the marketer like the audience to do after they get the message? ‡ Choose the message : Write the copy, or produce the appropriate image. ‡ Choose the channel : Decide the most appropriate medium (i.e. TV, radio, or other medium) is most appealing to the audience. ‡ Select the source·s attributes : Decide what it is about the product or company that needs to be communicated. ‡ Collect feedback : Carry out market research to monitor how effective the promotion was.

Media Planning
‡ Determining the media channels to utilise. ² In order to achieve maximum reach (no. of customers). ² The frequency of coverage (no. of times a customer is exposed to the advert). ² The scheduling of coverage (e.g. prime time or early morning for radio and TV.) ² The size of the advert (e.g. half page in a paper) ² The positioning of the advert (e.g. on the front page of a magazine or paper). In Advertising the decision is based on the cost per thousand viewers, listeners or readers. Creating the platform Deciding the basic issues and selling points that the communication must convey. This clarifies the thinking on producing the communication plan. Action Plans to outline the details of the tactics : Detailed action plans implement the tactics in various forms including: Project management skills Time management Prioritising People management An ability to get things done and plan for contingencies Control Plans should identify how progress should be reviewed, monitored, measured and controlled. So measurement systems need to be built in from the start.

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An Example
Months prior to November work with Production, R& D to get the product right in line with Customer Needs and branding exercise done with Agency and Consultant. ‡ December : Press Release to trade press and retailers ‡ January : ² Sales campaign to persuade retailers to stock the product ² Press Release to trade press, TV programs if newsworthy enough ² Begin a teaser campaign ‡ February : Launch Teaser campaign ‡ March : Once 50 per cent retailer penetration has occurred, start public campaign to maximize brand awareness ‡ April : Begin a new campaign to inform consumers about the brand. Possibly use money-off promotion, linked promotions, etc. ‡ May : Review progress using market research. Possibly release PR to specialist trade press

The Brief

Brief

Types of Advertising - Client
‡ Institutional/Corporate ² promotes organizational images and ideas not specific products eg : Union Bank ‡ Advocacy ² promotes a company·s position on a public issue eg : Tata Motors on Singur Isssue ‡ Brand/Products/Service ² promotes a product use, feature or benefit, Service, Brand eg : Vodafone, Vivel, Jet Airways etc., ‡ Pioneer ² promotes a product category rather than a brand eg : Apple i-pod, i-phone etc ‡ Political ² promotes polictical party idealogy, messages eg : BJP Campaign, US Presidential Election ‡ Public Service/Social Service ² promotes the cause of social awareness, urges action eg : Teach for India from TOI

Types of Advertising - Media
‡ Print Advertising ² Newspapers, Magazines, Brochures, Fliers ‡ Outdoor Advertising ² Billboards, Kiosks, Tradeshows and Events ‡ Broadcast/Electronic Media Advertising ² Television, Radio and the Internet ‡ Covert Advertising ² Advertising in Movies : James Bond and Sony Erickson Cybershot ‡ Non - conventional Methods ² Village Hailers, Slides in Movie Halls, Van Publicity, ‡ Brand Experience : Promos in Malls, Retail Advertising at POP

Types of Advertising - Type
‡ Reminder ² reminds consumers about an established brands features, benefits, characteristics, uses ‡ Reinforcement ² assures consumers that they have made the right choice ‡ Competitive ² promotes a brands competitive features w.r.t another brand ‡ Comparative ² compares two or more brands on the basis of one or more characteristics ‡ Celebrity Advertising ‡ Surrogate Advertising ² Advertising Indirectly

Advertising Campaign
‡ The creation and execution of a series of advertisements that communicate to a particular target audience ‡ Thematic Campaign ² Brand Promise (Pull Strategy) ‡ Tactical Promotion ² Brand Sale (Push Strategy) ‡ Relaunch Campaign ‡ Repositioning Campaign

Thematic Campaign

Thematic Campaign

Thematic Campaign

Tactical (Promotion) Campaign

Brooke Bond

Repostioning (Brand Image)

India·s Pride

Power & Control

Relaunch

New India Kings Pack

Advertising Layout

Company Logo

Headline Brand Logo Body Copy Baseline

Creating a Campaign
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Identify and analyze target audience (need, problem etc) Define advertising objectives (what would it do) Create the advertising content (based on a brief) Determining the Advertising Appropriation Pre-test with a sample size Evaluate the results and rework if necessary Develop media plan and budget Run the campaign Evaluate its effectiveness

Identifying and Analyzing TG
‡ TG is group of similar people to whom the advertisement is aimed at ‡ Demographic ‡ Psychographic ‡ Lifestyle ‡ Attitudes

Defining the Objectives
‡ What does the firm hope to accomplish with the campaign ‡ Objectives should be clear, precise and measurable ‡ Increase in sales ? ‡ Increase in awareness ?

Advertising Content
‡ Basic issues or selling points that must be included in the campaign ‡ Simple ‡ One or two such points ‡ Must be important to the TG

Advertising Appropriation
‡ Advertising Budget for a specified period ‡ The size of the market and the geographic spread will determine the budget ‡ Budgeting Approach ‡ Objective and Task : Determining the objectives and the cost needed to attain them ‡ Percent of Sales : What percent of past sales determines the budget ‡ Competitive Matching ‡ Arbitary

Top 10 US Spenders
COMPANY General Motors Procter & Gamble Ford Pepsi Co Pfizer Daimler Chrysler AOL Time Warner Phillip Morris Walt Disney Johnson & Johnson SALES USD MILLION 132399 20334 108296 18295 19932 72708 32676 52098 20970 20204 ADVERTISING SPEND USD MLN 3374 2541 2408 2210 2189 1985 1885 1816 1757 1618

For 2002

% OF SALES 2.5 12.5 2.2 12.1 11.0 2.7 5.8 3.5 8.4 8.0

Pretesting
‡ Pretesting is a research method that seeks to minimize mistakes by getting consumer reactions to ad messages before they are placed in the media.

Developing the Media Plan
‡ Specifies media vehicles (press, tv, radio, billborads etc.,) and the schedule for running the advertisements ‡ Plan objectives focus on the reach and frequency that the budget will allow ‡ Reach ² the percentage of consumers in a target market exposed to an advertisement in a specified period ‡ Frequency - The number of times the TG is exposed to the ad

Developing the Media Plan
‡ Cost Comparison Indicator ² A means of comparing the cost of vehicles in a specific medium in relation to the number of people reached ‡ The indicator is stated a the cost of exposing one thousand people to an ad in a medium and its unit is CPM

Percentage of Media Spend
2000 USA

MEDIUM Television Newspaper Direct Mail Radio Yellow Pages Magazines Business Prss Internet Outdoor Miscellaneous TOTAL

USD MILLION SPEND 59231 49050 44591 19295 13228 12370 4915 4333 1758 34919 243680

% of TOTAL 24.3 20.1 18.3 7.9 5.4 5.1 2.0 1.8 0.7 14.4 100.0

Strategy & Creative Content
‡ Consumer Insight ² Brand Idea ² Execution Idea ² ‡ Copy ² The verbal portion of advertisements, Headline, BaseLine, Body Copy etc., ‡ Art ² The visual portion of the advertisement ‡ Story Board ² A mock up combining copy and visual material to show the sequence of major scenes in a TV commercial

Creative Content
‡ Artwork ² An advertisements illustration and layout ² rendering to printable form ‡ Illustrations ² Drawing, photos, charts, graphs and tables used to spark the TG·s interest level ‡ Layout ² The physical arrangement of an ad·s illustration and copy

Specialists Who Create Advertising Campaigns
An Advertising Campaign is a Coordinated, Comprehensive Plan that Carries Out Promotion Objectives and Results in a Series of Advertisements Placed in Media Over a Period of Time.

Account Management
Develops Campaign·s Strategy for Client

Creative Services
Dreams Up and Produce the Ads

Media Planning
Determines Effective Communication Vehicles

Research & Marketing Services
Collect and Analyze Information to Help Develop a Strategy

Establish Message and Budget Objectives
Setting Message Goals
Increasing Brand Awareness

Increasing Sales by a Certain Percentage

Changing the Image of a Product

Recognizing a Need for the Product

Setting Budget Goals

Designing the Ad
Humorous Appeals Unique Selling Proposition Comparative Advertising Advertising Appeals

Sex Appeals

Demonstration

Fear Appeals

Testimonial

Lifestyle

Slice-of-Life

Choosing Media
Computer Media Television

Out-of-Home Media

Directories

Types of Media: Where to Say It
Magazines

Radio

Newspaper

Media Scheduling: When to Say It
‡ A media schedule specifies the exact media to use, when, and how often the message should appear. ‡ Assess advertising exposure - degree to which the target market will see an advertising message in a specific medium and depends on the following two factors:

Media Scheduling: How Often to Say It?
Continuous Schedule
Steady Stream of Advertising e.g. shampoo

Pulsing Schedule
Varies Adverting Depending on Product Demand e.g. suntan lotion

Flighting
Advertising Appears in Short, Intense Bursts Alternating With Periods of Little or No Activity

Terminology

Terminology

Evaluating Advertising
‡ Post testing is research conducted on consumers· responses to actual advertising messages they have seen or heard. ‡ Three ways to measure the impact of an advertisement are: ‡ Unaided recall ‡ Aided recall ‡ Attitudinal measures.

Challenges Facing the Advertising Industry
Erosion of Brand Loyalty Technology Gives Power Back to the People Greater Emphasis on Point-of-Purchase Factors The Rules Are Changing The Advertising Environment is Cluttered Some Consumers Are Turned Off by Advertising

How the Advertising Industry is Meeting these Challenges ?
Global Reach
Establishing Brand Images Globally

Diversity
Reflecting Cultural Diversity of Target Markets

Technology
Customizing Advertising to Customer Preferences

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