Adv & IMC (Notes)
Adv & IMC (Notes)
Integrated Marketing Communications (IMC) is a marketing concept of the 1990s. It will be necessary for survival in the 21st century. The advent of integration is causing marketers to take a fresh look at all the components of marketing, specifically the unique dimension that public relations bring to the marketing mix. Public relations people in turn are seizing the opportunity that integration offers them to make a difference where it counts most to their companies and clients on the bottom line. IMC is the culmination of the shift that began in the post World War II period, from selling what the companies make to making what the consumers want. IMC is focused on what to know about product and services, not what the marketers want to tell them in order to sell them. Thirty years ago, the president of the American Marketing Association (AMA) said that marketers were wasting too much time and money on advertising, public relations and promotion programmes that were poorly if at all coordinated. He said that these desperate efforts were counter-productive and confusion to consumers and that marketer should start coordinating their marketing programmes.But in those days, there was no compelling reason to get serious about integration especially if it meant shaking up the organization. Those were glory days for marketing and American companies were doing very well. They had money and were in the mood to spend it on all manner of merchandise that was advertised on TV and magazines. Advertisement was king, promotion was underdeveloped, direct marketing was in its infancy and public relations was largely an afterthought. The mass market is now fragmented. Nowadays consumers are better educated, more skeptical, and less vulnerable to a slick sales pitch. We are bombarded with an endless stream of sales messages wherever we go. IMC is a deceptively simple idea. It is, in a word, synergy. In marketing, synergy mans that when all product and corporate messages are strategically coordinated, the effect is greater than when advertising, sales promotion, public relations etc. are planned and executed independently, with each competing for budgets and power and in some cases sending out conflicting messages, according to Tom Duncan, director of the Integrated Communications graduate programme at the University of Colorado. Integrated Marketing Communications (IMC) Defined: The Northwestern Universitys Medill School of Journalism defines IMC as: The process of managing all sources of information about a product/service to which a customer or prospect is exposed which behaviorally moves the customer toward sale and maintains customer loyalty.
In short, Integrated Marketing Communications (IMC) is Joint planning, execution and coordination of all areas of marketing communication and also understanding the consumer and what the consumer actually responds to.
Why many companies are adopting Integrated Marketing Communications (IMC)? Companies look at Integrated Marketing Communications (IMC) as a way to coordinate and manage their marketing communication programmes to ensure that they give customers a consistent message about the company or its brands. IMC represents an improvement over the traditional method of treating the various marketing and communication elements as virtually separate activities. The IMC approach helps companies identify the most appropriate and effective methods for communicating and building relationships with their customer as well as other stakeholders such as employees, suppliers, investors, interest groups and the general public. Factors contributing to IMCs growing popularity Several significant and pervasive changes in the marketing and communications environment have contributed to its growing prominence:
Fragmentation of the media: A huge number of media options are available to marketers. Broadcasting media now offer narrow casting so specific that advertisers can reach consumers at precise locations, such as airports and supermarket checkout counters. The print media has proliferated dramatically as well. Better audience assessment through database technology: The ability of firms to generate, collate and manage databases has created diverse communications opportunities beyond mass media. Databases can be used to create customer and non-customer profiles. This information is important to identify target markets. Consumer empowerment: Todays consumers are more powerful and sophisticated. Empowered consumers are more skeptical of commercial messages and demand information tailored to their needs. Increased advertising clutter: The proliferation of advertising stimuli has diluted the effectives of any single message. Desire for greater accountability: In an attempt to achieve greater accountability for promotional spending, firms have reallocated marketing resources from advertising to more short-term and more easily measurable methods, such as direct marketing and sales promotions.
Integrated Marketing Communications (IMC) is to synergize and start integrating all the communication modes in order to be more competitive in the market place. The important tools of Integrated Marketing Communications are: 1. Advertising Advertising is the most glamorous and elaborate of all marketing tools. Around the world nearly $500 billion is spent annually on advertising, and thats just for media time and space! If you add in all, the costs of producing the advertisements and the salaries of people working in the industry, the amount advertising is well over $1 trillion a year. Advertising means different things to different people. Its a business, an art, an institution and a cultural phenomenon. To a CEO of a multinational corporation, advertising is an essential marketing tool that helps create a brand awareness and loyalty and stimulates demand. To a local restaurant owner, advertising is a way to communicate to the neighborhood. To an art director in an ad agency advertising is the creative expression of a concept. To a media planner, advertising is a way marketer uses the mass media to communicate to current and potential customers.
2. Public Relations (PR) As a part of being a good corporate and community citizen, a firm will use public relations (PR) as a way to create a good image and reputation. PR focuses on communication that can foster goodwill between a firm and its many constituent groups. These constituent groups include customers, stockholders, suppliers, employees, government, entities citizens actions groups and the general public. PR is used to highlight positive events in an organization, such as quarterly sales and profits or noteworthy community service programmes carried out by the firm. Conversely it is used strategically for damage control when adversity strikes an organization. PR uses techniques like press releases, newsletters and community events to reach the target audiences. PR is emerging as a more prominent tool in the promotional mix of many firms. As mass media becomes cluttered with ads and as consumers retain a healthy sceptism of advertising, public relations and communication are being viewed as an important addition to the mix. Objectives of PR: Within the broad guidelines of image building and establishing relationships with constituents, it is possible to identify six primary objectives:
Promoting goodwill Promoting a product or service Preparing internal communications Counteracting negative publicity Lobbying Giving advice and counsel.
Publicity
Nonpersonal communication regarding an Nonpersonal communication regarding an organization, product, service, or idea not organization, product, service, or idea not directly paid for or run under identified directly paid for or run under identified sponsorship. sponsorship.
Advantages of publicity
Credibility Low cost (although not totally free) Often results in word-of-mouth
Disadvantages of publicity
Not always under control of organization Can be negative
Publicity Vehicles
News Releases:
Single-page news stories sent to media who might print or broadcast the content. Larger manuscripts composed and edited for a particular medium. Photographs with content identified and explained below the picture. Meetings and presentations to invited reporters and editors. Sponsorship of events, teams, or programs of public value.
Feature Articles:
Captioned Photos:
Public Relations
The management function which evaluates public The management function which evaluates public attitudes, identifies the policies and procedures of attitudes, identifies the policies and procedures of an individual or organization with the public interest, an individual or organization with the public interest, and executes a program of action to earn public and executes a program of action to earn public understanding and acceptance. understanding and acceptance.
3. Personal Selling (PS) Personal selling is the presentation of information about a firms product or services by one person to another person or to a small group of people. Personal selling can be distinguished from all forms of promotion in that it is the only one to one communication that can deliver a completely customized message based on feedback from the receiver of the message. In other words, if you are in the electronics shop considering the purchase
of a DVD player, the salesperson can tell you about the different brands and focus the message content on the features of each brand based on questions you ask or information you request. No other form of promotion- not even the Internet can customize messages in this way. Personal selling is the dominant variable in the promotional mix of any corporate marketers. Complex products and services, high purchase prices, and negotiated contracts warrant the customized communication of personal selling. In business to business markets there are many instances where advertising sales promotion and other promotional mix variables simply do not achieve the needed communication effect. But this is not always the case in business to business sales. Types of Personal Selling:
Order taking: This involves accepting orders for merchandise or scheduling services either in written form or over the telephone. Order takers deal with existing customers who are lucrative to the firm due to low cost f generating revenue this group. Order takers can also deal with new customers which means that they need to be trained well enough to answer any new question a new customer might have about product or services. Creative Selling: This is the type of selling where customers rely heavily on the salesperson for technical information, advice and service. Team Selling: In this, a group of people from different functional areas within the organization is assembled as a team to call on a particular customer. Sales teams are prevalent in the areas of communication equipment, computer installations and manufacturing equipments. Seminar Selling: This is designed to reach a group of customers, rather than an individual customer, with information about the firms products or services. System Selling: This type of selling entails selling a set of inters related components that fulfill all or a majority of a customers need in a product or service area.
Consumer sales promotion: Here the efforts are directed towards the customer. For example: price discounts, freebies Trade Promotion: These are basically done for distributors in order to push sales through margins and discounts. Business to business promotion: Here promotions are between two companies; one company may offer bulk discounts on the purchase of raw materials in large supplies etc. Sales persons promotions: Here the promotions are targeted to motivate the sale people working for an organization. On achieving their targets, the sales person will win a free holiday or hell receive a non monetary benefits, etc.
Sales promotion is the use of the incentive techniques that create a perception of greater brand value among consumers, the trade and business buyers. The intent is to create a short term increase in sales by motivating trail use and encouraging larger or repeat purchases. Free samples, coupons, premiums, sweepstakes and contests, rebates and price discounts are some of the primary methods of sales promotion in the consumer market. Sales promotion may not seem as stylish and sophistication as mass media advertising, but expenditures on this tool are impressive. It is important to realize that full advertising agencies specializing in advertising planning, creative planning and media placement typically do not prepare sales promotion materials for clients. These activities are normally assigned to sales promotion agencies that specialize in couponing, vent management, premiums or other forms of sales promotion that require specific skills and creative preparation. The rise in the use of sale promotion and the enormous amount of money being spent on various programmes make it one of the most prominent forms of marketing activity.
Sales Promotion
Marketing activities that provide extra Marketing activities that provide extra value or incentives to the sales force, value or incentives to the sales force, distributors, or ultimate consumers and distributors, or ultimate consumers and can stimulate immediate sales. can stimulate immediate sales. Consumer-oriented Trade-oriented Targeted toward marketing Targeted to the ultimate intermediaries such as users of a product or retailers, wholesalers, or service distributors
Coupons Sampling Premiums Rebates Contests Sweepstakes POP materials Promotion allowances Merchandise allowances Price deals Sales contests Trade shows
5. Direct Marketing (DM) Direct marketing is an interactive system of marketing that uses one or more advertising media to affect a measurable response and or transaction at any location. This definition distinguishes direct marketing from other primary promotional tools in three ways:
Direct Marketing uses a combination of media: Any media can be used in a direct marketing, and a combination of media is often used to increase effectiveness.
Direct Marketing is often used to elicit a direct response: An example of this would be getting the message receiver to phone or mail in an order .Other forms of promotion like traditional advertising, public relations or an event sponsorship are not designed to elicit immediate action. The buyers home by mail or literally any place where the consumer can communicate with the marketer.
Today the primary methods of direct marketing are direct mail, telemarketing, telephone sales solicitation and direct response advertising in magazines, newspapers, and on television and radio. Online ordering via the internet is another form of direct marketing and has come to known as e-commerce because of the totally electronic communication between and buyers and sellers. E-commerce is business conducted between buyers and sellers using electronic exchange media. E-commerce is quickly emerging as a significant form of direct marketing. In addition, trade markets are emerging where buyers in specific industries are creating e-market places to enhance the efficiency of the exchange process. The Emerging Tools of IMC
Classification of Advertising Advertising can be classified by target audience, geographic area, medium, and purpose.
1. Target audience
Consumer advertising: Aimed at people who buy the product for their own or someone elses personal use. Business advertising: Aimed at people who buy or specify goods and services for use in business: Industrial Trade Professional Agricultural (farm)
2. Geographic area
Local (retail) advertising: Advertising by businesses whose customers come from only one city or local trading area.
Regional advertising: Advertising for products sold in one area or region, but not the whole country. National advertising: Advertising aimed at customers in several regions of the country. International advertising: Advertising directed at foreign markets.
3. Medium
Print advertising: Newspaper, magazine. Broadcast (electronic) advertising: Radio, TV. Out-of-home advertising: Outdoor, transit. Direct-mail advertising: Advertising sent through the mail.
4. Purpose
Product advertising: Intended to promote goods and services. Nonproduct (corporate or institutional) advertising: Intended to promote firms mission or philosophy rather than a product. Commercial advertising: Intended to promote goods, services, or ideas with the expectancy of making a profit. History of advertising
For the first, Volney Palmer established the first advertising agency in 1841. The ad agency industry growth quickly led to the growth of brandings importance for companies, as well as to the growth of ad campaigns. Then in 1850, Robert Bonner, with his New York Ledger newspaper, started the first major advertising campaign. In 1869, George Rowell published the American Newspaper Directory, containing accurate lists of all the newspapers and periodicals published in the United States and territories, and the dominion of Canada, and British Colonies of North America, together with a description of the towns and cities in which they are published. This directory opened new ways for the advertisers and agencies to easily contact and promote their products nationwide. Because of the fast growth of the advertising industry, people in the industry soon started to get more fame as time passed. One of the first "stars" of advertising industry was John Powers, a copywriter. The first modern full-service advertising agency was launched by Albert Lasker in 1904.
The next big step in advertising history came in and around 1926, when commercial radio programs debuted. In similar fashion, 1947 saw the first commercial television broadcasts. On the fundaments of advertising side, Rosser Reeves invented the concept of USP (unique selling proposition) in 1950. Also, the famous David Ogilvy invented the concept of Brand Image during the same year. Of the recent history in advertising, the advertising industry in the 1990s was an era when creativity & brand building dominated the scene.
Which, only means more freedom for you to practise your craft or carry on your business effectively. As a member of ASCI, you can mould the course of Self-Regulation and participate in the protection of healthy, effective advertising. You can have a say, through the Board of Governors, in the further development of the Code and future appointments to the Consumer Complaints Council (CCC). Membership of the ASCI (open only to
Firms ) entitles you to appoint your nominee to discharge your function as a member, including standing for election to the Board of Governors and voting at general meetings. In India, as in several advanced economies, there is only ONE BODY for Self-Regulation in Advertising the ASCI, which is concerned with safeguarding the interests of consumers whilst monitoring/guiding the commercial communications of Practitioners in Advertising on behalf of advertisers, for advertisements carried by the Media, in their endeavours to influence buying decisions of the Consuming Public.
Objectives
Registered in Oct. 1985, u/s 25, as a Not-For-Profit Co., under the Companies Act 1956
The main objects to be pursued by the Company on its incorporation are... To monitor administer and promote standards of advertising practices in India with a view to ensuring the truthfulness and honesty of representations and claims made through advertising and safeguarding against misleading advertising. ensuring that Advertising is not offensive to generally accepted norms and standards of public decency. safeguarding against the indiscriminate use of advertising for the promotion of products or services which are generally regarded as hazardous to society or to individuals or which are unacceptable to society as a whole. ensuring that advertisements observe fairness in competition and the canons of generally accepted competitive behaviour. To codify adopt and from time to time modify the code of advertising practices in India and implement, administer and promote and publicize such a code. To provide facilities and machinery in the form of one or more Consumer Complaints Councils having such composition and with such powers as may be prescribed from time to time to examine complaints against advertisements in terms of the Code of Advertising practices and report thereon. To give wide publicity to the Code and seek adherence to it of as many as possible of those engaged in advertising. To print and publish pamphlets, leaflets, circulars or other literature or material that may be considered desirable for the promotion of or carrying out of the objects of the Company and disseminate it through any medium of communication.
Consumer Complaints Council The Board of Governors shall appoint Consumer Complaints Council, the number of members of which shall not be more than twenty one. The Consumer Complaints Council shall examine and investigate the complaints received from the consumers and the general public, including the members of the Company, regarding any breach of the Code of Conduct and/or advertising ethics and recommend the action to be taken in that regards
Power of the Consumer Complaints Council Each Council shall be entitled to receive complaints from the Board of Governors, the Consumers, the general public and members of the Company. Each Council shall enquire, investigate and decide upon the complaints received by it within the frame work of the Code of Conduct adopted by the Company. All the decisions of each Council shall be by simple majority, in writing and may specify the action to be taken in respect of the offending advertisement.
The Role and Functioning of the ASCI The Role and Functioning of the ASCI & its Consumer Complaints Council (CCC) in dealing with Complaints received from Consumers and Industry, against Ads which are considered as False, Misleading, Indecent, Illegal, leading to Unsafe practices, or Unfair to competition, and consequently in contravention of the ASCI Code for Self-Regulation in Advertising. ASCI is a voluntary self-regulatory council, registered as a not-for-profit Company under section 25 of the Indian Cos. Act. The sponsors of the ASCI, who are its principal members, are firms of considerable repute within Industry in India, and comprise Advertisers, Media, Ad. Agencies and other Professional /Ancillary services connected with advertising practice. The ASCI is not a Government body, nor does it formulate rules for the public or for the relevant industries. The Purpose and the Mission of the ASCI is spelt out clearly in the literature provided. You will appreciate that if an AD is to be reviewed for its likely impact on the sensibilities of individual viewers of TV, or readers of press publications, we require to convey to the Advertiser concerned, the substantial issues raised in the complaint, in the
exact context of the specific Ad, as conveyed by the perception of the complainant, and to elicit the appropriate response by way of comments from the Advertiser. Only then will the CCC, of the ASCI, be in a position to deliberate meaningfully on the issues involved, and to arrive at a fair and objective conclusion, which would stand the scrutiny of all concerned with the right to freedom of expression, and the freedom of consumers to choose the products /services made available to them in the market-place. For this we require in each case a clearly readable copy or clipping of the Ad under complaint, with full particulars of name and date of publication, or a printout of an Ad or promotion on a Website or in case of a T.V. Commercial, the channel, date and time or programme of airing, and a description of the contents of the TVC, along with a hard copy of the complete complaint preferably signed by the complainant. As a policy it does not disclose the identity of the complainant to the Advertiser. The ASCI receives and processes complaints against Ads, from a cross section of consumers, the general public and Industry, in the interests of all those who rely on advertising as a commercial communication, and this covers individuals, practitioners in advertising, advertiser firms, media, ad. agencies, and ancillary services connected with advertising. In the case of complaints which were Upheld by the CCC, during the past year, it may interest you to know that over 80% of such Ads have been withdrawn or modified appropriately by the Advertisers/Agencies involved, and the concerned Media have also confirmed that they would not carry such offending Ads/TVC. Legal issues in advertising Indias constitution, set up at the time of independence in 1947, has a provision for freedom of speech and expression, though commercial advertising was excluded from this provision in a Supreme Court Ruling in 1960 (Venkateswaren,1993: 60, quoted in Pashupati and Sengupta,1996). A number of laws helped define the limitations of advertising. In 1969 the Monopolies and Restrictive Trade Practices Act included misleading advertising in the definition of unfair trade practices, including misrepresentation regarding price, quality and also prohibited the practice bait and switches. In 1954 the Drugs and Magic Remedies Act restricted advertising of some contraceptive devices or those that would facilitate miscarriages, along with the banning of false claims from drugs and medication. The Indecent Representation of Women Act in 1986 endeavoured to restrict exploitation of women by the media and was a response to consumer demands. Other acts restrict the use of certain emblems and names; the conduct of promotions and competitions for prizes (1955); comparative advertising that involves defamation, and financial advertising claims. There are also ethical codes of conduct established by the Advertising Standards Council of India and the India Newspaper Society (Pashupati and Sengupta, 1996). The following acts/rules guides and monitors the advertisement in our country. Advertisers should be well versed with these acts before preparing advertisements.
(1) Drugs and Cosmetics Act, 1940. (2) Drugs Control Act, 1950. (3) Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954. (4) Copyright Act, 1957. (5) Trade and Merchandise Marks Act, 1958. (6) Prevention of Food Adulteration Act, 1954. (7) Pharmacy Act, 1948. (8) Prize Competition Act, 1955. (9) Emblems and Names (Prevention of Improper Use) Act, 1950. (10) Consumer Protection Act, 1986. (11) Indecent Representation of Women (Prohibition) Act,1986. (12) AIR/Doordarshan Code. (13)Code of Ethics for advertising in India issued by the Advertising Standard Council of India. (14)Code of 'Standards in relation to the advertising of medicine and treatments. (15)Standards of practice for Advertising Agencies.
Some critics view advertising as a waste of time, talent and money In their view, not only does advertising have no value of its own, but its influence is entirely harmful and corrupting for individuals and society. Sometimes advertisements depict false assertions which create a false impact in individuals and society. a) Economic Harms of Advertising Advertising can betray its role as a source of information by misrepresentation and by withholding relevant facts. Sometimes the information function of media can be subverted by advertisers' pressure More often, advertising is used not simply to inform but to persuade and motivate to convince people to act in certain
ways, buy certain products or services This is where particular abuses can occur. Brand advertising can raise serious problems. Often there are only negligible differences among similar products of different brands, and advertising may attempt to move people to act on the basis of irrational motives like brand loyalty, status, fashion, instead of presenting differences in product quality and price as bases for rational choice. b) Harms of Political Advertising Political advertising can support and assist the working of the democratic system, but it also can obstruct it. This happens when the costs of advertising limit political competition to wealthy candidates or groups Political advertising seeks to distort the views and records of opponents and unjustly attacks their reputations. It happens when advertising appeals more to people's emotions and base instincts to selfishness, bias and hostility toward others, to racial and ethnic prejudice and the like rather than to a reasoned sense of justice and the good of all.
c) Cultural Harms of Advertising Advertising also can have a corrupting influence upon culture and cultural values.. In the competition to attract ever larger audiences and deliver them to advertisers, communicators can find themselves tempted in fact pressured, subtly or not so subtly to set aside high artistic and moral standards and lapse into superficiality Communicators also can find themselves tempted to ignore the educational and social needs of certain segments of the audience the very young, the very old, the poor who do not match the demographic patterns (age, education, income, habits of buying and consuming, etc.) of the kinds of audiences advertisers want to reach. d) Moral and Religious Harms of Advertising Advertising sometimes is used to promote products and inculcate attitudes and forms of behavior contrary to moral norms.
Advertising Objectives Advertising objectives are the communication tasks to be accomplished with specific customers that a company is trying to reach during a particular time frame. Advertising objectives are essential for an effective advertising campaign. They help advertisers know exactly what their targets and goals are, what they aim to achieve, and ensures that theyre going in the right direction. By setting the right advertising objectives you make the first step towards the effective development of your advertising programs, guiding each stage to meet the final goal. Advertising objectives serve in the end as point of reference in measuring the results, making it easier to appreciate the level of success your campaign has achieved. Advertising objectives Inform Informative advertising, seeks to tell the market about the product, explain how the product works, provide information on pricing, and build awareness of both the product and the company. Such objectives are normally pursued at the launch of a new product, or re-launch / up-date of an existing product. Persuade Here objectives are to encourage the target audience to switch brands, make the purchase, and create a preference in the market for the product as opposed to its competition. Advertising of this nature is required in highly competitive markets, where a range of products compete directly with each other. In such circumstances businesses often seek to differentiate their product through Comparison Advertising either directly or indirectly comparing its product to that of its competitors. Remind Reminder Advertising, is used to maintain interest and awareness of a well established product in the market, often in the latter stages of its product life cycle. It is often used at
the Point-of-Purchase to remind consumers of the Brand. Such advertising is used by the likes of Coca-Cola and other leading brands, to maintain their position in the market. Reinforce The final category of advertising objectives seeks to reinforce attitudes that customers already have towards a product. Market leaders (such as Coke or McDonalds) often use this to maintain their market share and volume.
DAGMAR APPROACH & HIERARCHY OF EFFECTS MODEL Russell H Colley (1961) prepared a report for the association of national advertisers titled defining Advertising Goals for Measured Advertising Results (DAGMAR). He developed a model for setting advertising objectives and measuring the results of an ad campaign. According to this model, communications effect is the logical basis for setting advertising objective and goals against which results should be measured. In Colleys words Advertising job purely and simply is to communicate to a defined audience information and a frame of mind that stimulate action. Advertising succeed or fails depending on how well it communi-cate the desired information and attitude to the right time and at the right cost. 1. 2. 3. 4. Awareness Comprehension Conviction Action
There are no significant differences between Colleys proposed model and other important hierarchy of effects models. One important contribution of DAGMAR was its ability to clarify what continuous a good objective. According to Colley, the objective should have the following features: 1. 2. 3. 4. Stated in term of concrete and measurable communication tasks. Specify a target audience. Indicate a benchmark or standard starting point. Specify a time period for accomplishing the objective or objectives.
Concrete measurable tasks The DAGMAR approach requires that the measurement procedure should also be specified. There must be a way to determine whether the intended ad message has been communicated properly to the target audience. If the ad message
communicates that brand X is the best on Q attribute, then a questionnaire may include the request, rank the following brands on best Q attribute. The responses could be quantified to mean percentage of audience who rated brand X as the best on Q attribute. Target audience Another important feature of good objectives is the specification of a welldefined target audience. Though the primary target audience for a companys product or service is describe in situation analysis, yet it may need some refining. For example, user of a product may be further categorized as heavy, medium or light users. Benchmark and degree of change sought It is important to know the target audiences present status with respect to responses variable and then determine the degree of change desired by the advertising campaign.
Assessment and criticism of DAGMAR approach The DAGMAR approach has had an enormous influence on the advertising planning process and objective setting. It has focused the advertisers attention on the important and value of using communication-based objectives as against sales based objectives to measure the impact and success of an ad campaign. The approach has not been totally accepted by everyone in the advertising field. A number of questions have been raised concerning its value as an advertising planning tool. 1. Problems with responses hierarchy 2. Sales as the advertising goal 3. Practicality and costs 4. Inhibits creativity Hierarchy-of-Effects Models Among advertising theories, the hierarchy-of-effects model is predominant. It shows clear steps of how advertising works, even though it has been criticized on some points,
such as that people do not exactly follow these sequences. There are various versions of hierarchy-of-effects model. AIDA model is initiatory and simplest.
Marginal Analysis
The theoretical underpinning of an advertising-budget decision is based on marginal analysis and is easily expressed. A firm would continue to add to the advertising budget as long as the incremental expenditures are exceeded by the marginal revenue they generate.
probably generate advertising budgets that are somewhat close to the optimal. Everyone could not be too far from the optimal. Furthermore, any departure from the industry norms could precipitate a spending war. * Objective and Task Objective and task, more an approach to budgeting than a simple decision rule, is used by two-thirds of the largest advertisers. An advertising objective is first established in specific terms. For example, a firm may decide to attempt to increase the awareness of its brand in a certain population segment to 50 percent. The tasks that are requited to accomplish this objective are then detailed. They might involve the development of a particular advertising campaign exposing the relevant audience an average of the five times. The cost of obtaining these exposures then becomes the advertising budget. This approach assumes that there is a causal flow from advertising to sales. In effect, it represents an effort to introduce intervening variables such as awareness or attitude, which will presumable be indicators of future sales as well as immediate sales. Steps: 1. Task Definition: The objective of the advertising programme, are to be defined. The objectives may be to - Close an immediate sale - Increase sales - Create awareness - Building company goodwill and corporate image. Determining the type of strategy, media, and amount of exposure, required for efficient satisfying of the task set. Estimating the costs of various elements of advertising that have been considered. Deciding whether the firm can afford the budget taking into account the financial constraints and availability of funds. Target Audience
2. 3. 4.
A target audience is a specified audience or demographic group for which an advertising message is designed. A target audience is the primary group of people that something, usually an advertising campaign, is aimed at appealing to. A target audience can be people of a certain age group, gender, marital status, etc. (ex: teenagers, females, single people, etc.) A certain combination, like men from twenty to thirty is often a target audience. Other groups, although not the main focus, may also be interested. One of the most important stages
involved with market research. Without knowing your target audience advertising and the selling of a particular product can become difficult and very expensive. Steps in identifying target audience 1. 2. Segment the market Select the target market
Market Segmentation It is the process of dividing a market into distinct group of buyers who have distinct needs, characteristics or behaviour and who might require separate product or marketing mixes. Market segment A group of consumers who respond in a similar way to a given set of marketing efforts. For Example: In the car market, consumers who want the biggest, most comfortable car regardless of the price make up one market segment. Consumers who care mainly about price and operating economy make up another segment.
Bases for Segmentation in Consumer Markets Consumer markets can be segmented on the following customer characteristics.
Geographic Segmentation The following are some examples of geographic variables often used in segmentation.
Region: by continent, country, state, or even neighborhood Size of metropolitan area: segmented according to size of population Population density: often classified as urban, suburban, or rural Climate: according to weather patterns common to certain geographic regions
Demographic Segmentation
Age Gender Family size Family lifecycle Generation: baby-boomers, Generation X, etc. Income Occupation Education Ethnicity Nationality Religion Social class
Many of these variables have standard categories for their values. For example, family lifecycle often is expressed as bachelor, married with no children (DINKS: Double Income, No Kids), full-nest, empty-nest, or solitary survivor. Some of these categories have several stages, for example, full-nest I, II, or III depending on the age of the children. Psychographic Segmentation Psychographic segmentation groups customers according to their lifestyle, Personality and Social class. Activities, interests, and opinions (AIO) surveys are one tool for measuring lifestyle. Some psychographic variables include:
Behavioral Segmentation Behavioral segmentation is based on actual customer behavior toward products. Some behavioral variables include:
Benefits sought Usage rate Brand loyalty : none, medium, high User status: potential, first-time, regular, etc. Readiness to buy Occasions: holidays and events that stimulate purchases
Behavioral segmentation has the advantage of using variables that are closely related to the product itself. It is a fairly direct starting point for market segmentation.
which segments to target how many products to offer which products to offer in which segments
Evaluating and selecting the market Segments (factors: Segment size and growth, segment structural attractiveness, company objectives and resources) Single-segment concentrationfirm concentrates on one market only for its one product Selective specializationfirm selects a number of attractive and appropriate segments and develops products that appeal to each segment Product specializationfirm focus is on a product it can sell to several segments Market specializationfirm satisfies multi-faceted needs of one particular group Full market coveragefirm serves all customer groups with products they might need Undifferentiated marketingentire market receives the same program Differentiated marketingdifferent programs for different segments
Levels of market segmentation/ Target marketing strategies Undifferentiated Marketing( mass marketing) One product mix available to all buyers Segment marketinga large identifiable group within a market. Midpoint between mass and individual marketing
Niche Marketinga narrowly defined smaller group whose needs not currently met effectively Local Marketingprograms targeted to the needs and wants of local customer groups Individual Customer Marketingone to one marketing Mass-customization and choiceboard. Customerizationempowering customers with the means to design their own products. Selfa form of individual marketing in which the consumer takes more responsibility for determining which brands and products to buy. (i.e., shopping over the Internet)
Advertising Agency
An advertising agency or ad agency is a service business dedicated to creating, planning and handling advertising (and sometimes other forms of promotion) for their clients. An ad agency is independent from the client and provides an outside point of view to the effort of selling the client's products or services. An agency can also handle overall marketing and branding strategies and sales promotions for its clients. An advertising agency acts in the fist place as a consultant to its client, the advertiser in formulating the advertising plans and translating them into advertising campaigns. The other role of ad agency, namely placing the advertisement, articles from its traditional association with the media. Typical ad agency clients include businesses and corporations, non-profit organizations and government agencies. Agencies may be hired to produce single ads or, more commonly, ongoing series of related ads, called an advertising campaign. Ad agencies come in all sizes, from small one- or two-person shops to large multinational, multi-agency conglomerates such as Omnicom Group or WPP Group. Some agencies specialize in particular types of advertising, such as print ads or television commercials. Other agencies, especially larger ones, produce work for many types of media (creating integrated marketing communications, or through-the-line (TTL) advertising). The "line", in this case, is the traditional marker between media that pay a (traditionally 15%) commission to the agency (mainly broadcast media) and the media that do not.
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Advertising agencies employ experts in many creative fields that provide quality, professional services that conform to the standards of the industry. Copywriters provide the text for print ads, and the scripts for television or radio advertising. Graphic designers are responsible for the presentation of print ads, and the art department is responsible for providing the necessary images for whatever format advertisement is decided upon. Some agencies have in-house photographers and printers, while others regularly employ the services of contractors.
CREATIVE SERVICES
The individuals involved in creative services are responsible for developing the advertising platform, which sets the theme and tone of the ad campaign. The advertising platform should draw upon specific, positive features of the product advertised and extrapolate the benefits the consumer could expect to receive as a result of using the product. The campaign, through the development of this platform, should prove to be eye-catching, memorable, and in some way unique. The advertising that is remembered by consumers is that which stands out from the rest; it is the advertising agency's (and specifically the creative services department's) responsibility to provide this quality for their clients. The final advertising provided by an agency should be fully developed and polished. Television commercials should be produced with professionalism; print ads should be attractive, informational, and attention-getting; radio spots should be focused and of high audio quality. One of the services provided by advertising agencies is the careful placement of finished advertisements in various media, with an eye toward maximizing the potential audience. The research search conducted by the agency will inform any media-buying decisions.
MEDIA BUYING
An agency will be able to negotiate the terms of any contracts made for placing ads in any of various media. A full-service agency will deal confidently with television, radio,
newspapers, and magazines. Some agencies are also branching into direct mail marketing and point of purchase incentives; some agencies have expanded into Internet advertising; and some agencies will also place an ad in the local yellow pages, or utilize outdoor advertising or one of the more creative avenues of incidental advertising, such as commercial signs on public buses or subways or on billboards. The media-buying staff of an advertising agency will draw on specific research done for the client, as well as on past experience with different media. Through this research and careful consideration, the agency will develop a media plan: this should be a fully realized plan of attack for getting out the client's message. Some factors to be considered in the development of the media plan include: Cost Per Thousand: This refers to the cost of an advertisement per one thousand potential customers it reaches. Media-buyers use this method to compare the various media avenues they must choose between. For example, television ads are considerably more expensive than newspaper ads, but they also reach many more people. Cost per thousand is a straightforward way to evaluate how to best spend advertising dollars: if a newspaper ad costs $100 and potentially reaches 2,000 customers, the cost per thousand is $50. If a television ad costs $1000 to produce and place in suitable television spots, and reaches a potential of 40,000 viewers, the cost per thousand is only $25. Reach: This term is used when discussing the scope of an advertisement. The reach of an ad is the number of households which can safely be assumed will be affected by the client's message. This is usually expressed as a percentage of total households. For example, if there are 1,000 households in a town, and 200 of those households receive the daily paper, the reach of a well-placed newspaper ad could be expressed as 20 percent: one-fifth of the households in the community can be expected to see the advertisement. Frequency: The frequency of a message refers to how often a household can be expected to be exposed to the client's message. Frequency differs widely between media, and even within the same medium. Newspapers, for example, are read less often on Saturdays, and by many more households (and more thoroughly) on Sundays. Fluctuation like this occurs in all media. Continuity: The media-buyer will also need to consider the timing of advertisements. Depending on the client's product, the ads can be evenly spread out over the course of a day (for radio or television advertisements), a week (for radio, television, or print advertisements), or a month (radio, television, print, or other media). Of course, seasonal realities influence the placement of advertisements as well. Clothing retailers may need to run more advertisements as a new school year approaches, or when new summer merchandise appears. Hardware stores may want to emphasize their wares in the weeks preceding the Christmas holiday. Grocery stores or pharmacies, however, might benefit from more evenly distributed advertising, such as weekly advertisements that emphasize the year-round needs of consumers.
MEDIA
Role of Media
Media has a vital role in the process of advertising communication. Effective advertising is possible only if suitable media are available. Some important roles of media: i. It helps in communicating the message to the target customers. ii. It generates awareness among audiences. iii. It disseminates information among target customer. iv. It help in building brand image v. It works as reminder for the audiences. vi. It provides the detailed information about the product Television Advantages: High reach High frequency potential Low cost per contact Quality creative opportunities High intrusion value Segmentation possibilities through cable Disadvantages: Clutter Channel surfing during commercials Short amount of copy High cost per ad Low recall Television has always been a popular medium for consumer products. Recently, however, more business-to-business ads are appearing on television. Television ratings are calculated as follows: Rating = number of households turned to a program / total number of households in a market Television share is calculated as follows:
Share = number of households turned to a program / number of households with a television turned on Radio Advantages: Lower cost per spot than television Low production costs Background music can match station format High segmentation Flexible Intimacy which means listeners can develop a closeness to the DJs and other radio personalities Creative opportunities Mobile Disadvantages: Short exposure time Low attention Few national audiences Target duplication when several stations use the same format Radio advertising is a low-cost option for a local firm. Radio remotes, where the station broadcasts from a business location, have been popular methods of attracting attention. For business-to-business advertisers, radio provides the opportunity to reach businesses during working hours or while business people are in transit to or from work. Outdoor Out door media Definitions: Any outdoor sign that publicly promotes a product or service, such as billboards, movie kiosks, etc. Any advertising done outdoors that publicizes your business's products and services. Outdoor advertising includes various types of promotional displays, from highway billboards to transit posters and arena placement, all geared towards communicating a message to the public.
There are many kinds of outdoor advertising: 1. 2. 3. 4. 5. Billboards. Bus benches Bus shelters Sporting events and arenas, Taxicabs, buses, railways, subways and wall murals
Advantages: Large, spectacular ads possible Able to select key geographic areas Accessible for local ads Low cost per impression Broad reach High frequency on major commute routes Long life Disadvantages: Legal limitations Short exposure time Brief messages Limited segmentation possible Cluttered travel routes Internet The Internet is the fastest growing medium in history. Advantages: Creative possibilities Short lead time to develop or modify ads Simplicity of segmentation High audience interest Easier to directly measure responses Disadvantages: Clutter on each site Difficult procedures to place ads and buy space Only reaches computer owners Low intrusion value Hard to retain interest of surfers
Interstitial advertising, which interrupts a person on the Internet without warning, is controversial. An analysis of click-throughs suggests that the Internet may not be as successful as advertisers first thought. Few surfers are clicking on ads to go to the advertisers Web site. Magazines Advantages: High market segmentation Target audience interest by magazine High color quality Special features available Long life Direct response techniques Read during leisure time Disadvantages: Long lead time to ad appearance Low flexibility High cost Higher clutter Declining readership Magazines have proliferated even as the problems of declining readership have occurred. Although business-to-business marketers are increasingly using other mediums, trade journals and business magazines still remain an effective method of reaching their target markets. Newspapers Advantages: Priority for local ads Excellent location for coupons and special-response features High credibility Strong audience interest Longer copy/message possible Flexibility Cumulative volume discounts Disadvantages: Internet classified competition Major clutter (especially near Christmas) Short life span
Poor color quality Limited audience (few under 25 years old) Poor buying procedures
Most major city newspapers are now owned by chains such as Gannet. For many smaller local firms, newspaper ads, billboards, and local radio programs are the only viable advertising options. A new threat to newspapers is the Internet. One strategy that newspapers can use to counter the trend of classified advertisements moving to the Internet is to establish their own Internet classified sites. Newspapers have not been a major medium for business-to-business marketers primarily because of the local nature of newspapers. Direct Mail Advantages: For consumer markets, it normally lands in the hands of the person who opens the mail and that person usually makes a significant amount of family purchasing decisions Direct response programs, so results are quickly measured Can be targeted to geographic market segments Effective method of reaching business buyers Disadvantages: Cost Clutter The nuisance factor Reputation issues Direct mail remains a favorite marketing tool for business-to-business marketers. It provides a method of bypassing gatekeepers when the names of actual members of the buying center can be obtained. Alternative Media Other forms of advertising media include: Leaflets, brochures, and carry home menus Carry home bags from stores (grocery stores and retail outlets) T-shirts and caps (promotional giveaways and products sold) Movie trailers both in theaters and on home video rental products
Small, freestanding road signs Self-run ads in motel rooms on television, ashtrays, towels, ice chests, etc. Yellow pages and phone book advertisements Mall kiosks Ads sent by fax Ads shown on video replay scoreboards at major sports events In-house advertising magazines placed by airlines in seats Walls of airports, subway terminals, bus terminals, and inside cabs and busses (or transit advertising)
Also note: product placements in movies and television programs and guerilla marketing, or using low-cost, creative strategies to reach consumers.
MEDIA PLANNING
The media plan is the guide for media selection. Media planning refers to the process of selecting media time and space to disseminate advertising messages in order to accomplish marketing objectives.1 Media planning helps to determine which media to use be it television programs, newspapers, bus-stop posters, in-store displays, banner ads on the Web. It also tells when and where to use media in order to reach your desired audience. Developing the media plan: Steps 1. 2. 3. 4. Market analysis Establishment of media objectives Media strategy development and implementation Evaluation and follow-up.
1. Market analysis and target market identification The market has to be analysed and target market should be identified. The company must decide on the persons to whom they shall advertise. Target market identification can be done on the following parameters
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2. Establishing Media Objectives Media objectives are the goals for the media programme and should be limited to those that can be accomplished through media strategies. The various media objectives can be -To create awareness -To remind -To reinforce -To persuade
3. Developing and Implementing Media Strategies Having determined what is to be accomplished; media planners consider how to achieve these objectives. Criteria considered in the development of media plans/strategies a) b) c) d) e) f) The media mix Target market coverage Scheduling Reach Vs frequency Gross rating point and TRP Budget considerations
Reach Reach
Frequency Frequency
Cost per Cost per Contact Contact Reach Reach Frequency Frequency Audience Audience Selectivity Selectivity
b) Target Market coverage
The cost of reaching one The cost of reaching one member of the target market. member of the target market. The number of target consumers The number of target consumers exposed to a commercial at least exposed to a commercial at least once during a time period. once during a time period. The number of times an individual The number of times an individual is exposed to a message during a is exposed to a message during a time period. time period. The ability of an advertising The ability of an advertising medium to reach a precisely medium to reach a precisely defined market. defined market.
The media planner determines which target market should receive the most media emphasis. Marketing coverage possibilities: Full market coverage
c) Scheduling The primary objective of scheduling is to time promotional efforts so that they will coincide with the highest potential buying times. The scheduling methods are2: Continuous Flighting Pulsing Media Scheduling Continuous Flighting Pulsing
The most comprehensive study on scheduling indicates that continuity is more effective than flighting. Why? Because it is important to get exposure to the message as close as possible to when the consumer is going to make the purchase decision. Continuous Schedule Used for advertising for food products, laundry detergent, or other products consumer on an ongoing basis without regard for seasonality.
Flighting
The flight scheduling approach alternates advertising across months, with heavy advertising in certain months and no advertising at all in other months. For example, a board game maker like Parker Brothers might concentrate its advertising in the fall when it knows that many people buy board games as gifts for the holidays.3
Pulsing Pulse scheduling combines the first two scheduling methods, so that the brand maintains a low level of advertising across all months but spends more in selected months. For example, an airline like United Airlines might use a low level of continuous advertising to maintain brand awareness among business travelers. United Airlines might also have seasonal pulses to entice winter-weary consumers to fly to sunny climes.
How do media planners select among continuity, flight, and pulse scheduling approaches? The timing of advertising depends on three factors: seasonality, consumers' product purchase cycle, and consumers' interval between decision-making and consumption. The first, and most important, factor is sales seasonality. Companies don't advertise fur coats in summer and suntan lotions in winter. Likewise, some products sell faster around specific holidays, such as flowers on Mother's Day, candy on Halloween, and ornaments around Christmas. Companies with seasonal products are more likely to choose flight scheduling to concentrate their advertising for the peak sales season. Other goods, however, such as everyday products like milk and toothpaste, may lack a seasonal pattern. Everyday goods may be better served by a continuity approach. Media planners can use a breakdown of sales by month to identify if their brand has seasonal fluctuations, which can serve as a guide for the allocation. They can allocate more money to high-sales months and less to low-sales months. 4 The second factor that affects when advertising is scheduled is the product purchase cycle: the interval between two purchases. Fast-moving consumer goods such as bread, soft drinks and toilet paper probably require continuous weekly advertising in a competitive market to constantly reinforce brand awareness and influence frequentlymade purchase decisions. In contrast, less-frequently purchased products such as carpet cleaner or floor polisher may only need advertising a few times a year. A third factor that affects media scheduling is the time interval between when the purchase decision is made and when a product or service is actually bought and consumed. For example, many families who take summer vacations may plan their trips months before the actual trips. That is, they make purchase decision in advance. Thus, travel industry advertisers will schedule their ads months before the summer, as we saw in the Wyoming example. Destination advertising has to be in sync with the time of decision making, instead of the actual consumption time. New product launches usually require initial heavy advertising to create brand awareness and interest. The launch period may last from a few months to a year. As mentioned earlier, P&G launched its Gillette six-bladed Fusion shaving system with advertising on Super Bowl XL, the most expensive form of advertising in the world. If consumers like the product, then personal influence in the form of word-of-mouth or market force (brand visibility in life and media coverage) will play a role in accelerating the adoption of a new brand. Personal influence and market force are "unplanned" messages, which often play an important role in new product launches. Media planners should take advance of these "unplanned" messages in a new product launch campaign. d) Reach Vs Frequency
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(Details discussed in subsequent pages) e) GRPs and TRPs (Details discussed in subsequent pages) f) Budget considerations: One of the important decisions in the development of media strategy is cost estimating Advertising and promotional costs can be categorized in two ways: The absolute cost of the medium or vehicle is the actual cost required to place the message. Relative cost refers to the relationship between the price paid for the advertising time or space and the size of the audience delivered; it is used to compare media vehicles. Determining relative cost of media Cost per thousand (CPM) (Details discussed in subsequent pages) Daily Inch rate For news papers, cost effectiveness is based on the daily inch rate, which is the cost per column inch of the paper.
4. Evaluation and follow-up All plans require some evaluation to assess their performance. The media plan is no exception. We have to assess whether the objectives which were set were attained or not.
Media Terminology Medium (Media Class)the general category of available delivery systems Broadcast media (radio, TV) Print media (newspapers, magazines) Direct mail Out-of-home Support Media (i.e. directory advertising) Media Vehiclethe specific carrier within a medium Womans Day magazine The Amazing Race on CBS ESPN Radio Dan Patrick Show
Reacha measure of the number of different audience members exposed at least once to a media vehicle in a given period of time (usually four weeks); expressed as a percent. Ratingestimated percentage of the universe that is tuned to a broadcast program or exposed to a print medium at once. Ratings are expressed as a percent. Frequencyrefers to the number of times the receiver is exposed to the media vehicle in a specified period Gross Impressionsthe total exposures of the audience to an advertisement
Relative Costs CPM (Cost Per Thousand) Allows to marketers to compare all media classes and vehicles using the same yardstick Used for all mediums, but primarily print M stands for 1,000 Should not be the only consideration when selecting media Measures cost efficiency, not effectiveness Be careful of intermedia comparisons
Relative Costs CPM (Cost Per Thousand)
Newspaper/Magazine
CPM =
Television
CPM =
Media Selection Television HUT (Households Using Television)Households Using Television for five or more minutes as a percentage of all homes with a TV (also known as TV Households) HUT = No. of Households with TVSets in Use 100 Universe Estimate (All TV Households)
RatingEstimated percentage of the universe of TV households (or other specified group) tuned to a program at once. Ratings are expressed as a percent. Rating PointA value equal to one percent (one rating) of a population or universe. The universe of all U.S. television households is 111,348,110. GRP (short for Gross Rating Point) is the sum of ratings achieved by a specific media vehicle or schedule. It represents the percentage of the target audience reached by an advertisement.5 If the advertisement appears more than once, the GRP figure represents the sum of each individual GRP. In the case of a TV advertisement that is aired 5 times reaching 50% of the target audience, it would have 250 GRP = 5 x 50% -- ie, GRPs = % reach x frequency.6 Households Viewing Program 100 Universe Estimate (All TV Households)
Rating =
ShareThe percent of households (or persons) using television who are tuned to a specific program, station or network in a specific area at a specific time. 7 or Share = Share = Households Viewing Program 100 Number of Households Using TV Rating 100 HUT (Households Using Television)
Media Selection Radio Measurement Tools Use AQH(Average Quarter Hour) Personsthe estimated average number of persons who listened to a station for a minimum of five minutes within a selected daypart. The estimate is the average of the reported listening for the total quarter-hours the station was on the air during the selected daypart. This estimate is expressed in hundreds (00). AQH (Average Quarter Hour) RatingsThe Average Quarter-Hour Persons estimate expressed as a percentage of the appropriate estimated population.
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AQH (Average Quarter Share-The Average Quarter-Hour Persons estimate for a given station expressed as a percentage of the Total Average Quarter-Hour Persons estimate within a selected daypart. CumeThe estimated number of different persons who listened to a station for a minimum of five minutes in a quarter-hour of a selected daypart. (Cume estimates may also be referred to as cumulative, unduplicated or reach estimates). This estimate is expressed in hundreds (00).
Selection of Media Vehicles Media buyers can use tools, like the one shown below, to make the process of selecting a media vehicle easier. To use the selection tool shown in Figure below, develop a list of the potential vehicle candidates you are considering. Then, select several quantitative and qualitative characteristics that are relevant to reach and frequency considerations, such as quantitative characteristics like CPM or GRP, and qualitative characteristics like reputation and added value. Next, make a table that lists the vehicle candidates in rows and the characteristics in columns. Now you can rate each of the characteristics of each vehicle on a scale of 1 to 3. Then add all the numbers in each row, dividing by the total number of characteristics (columns) to arrive at the rating for each vehicle. The best media vehicles to choose are those with the highest index numbers. In the Figure, Vehicle 2 and Vehicle 3 are the best ways to reach the target audience. Figure: Selection of Media Vehicle Based on Quantitative and Qualitative Characteristics Qn1 Qn2 Qn3 Ql1 Ql2 Ql3 Index V1 V2 V3 V4 3 1 1 1 2 2 3 1 1 2 3 2 3 2 1 1 1 2 1 2 1 3 3 1 1.8 2.0 2.0 1.3
Positioning
Positioning is the act of designing the companys offering and image to occupy a distinctive place in the mind of the target market.8 As per Ries and Trout Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect Often a product is positioned in the following ways by a companyBest quality, best performance, best service, best styling, lowest price, safest, fastest, more reliable etc Positioning begins with actually differentiating the companys marketing offer so that it will give consumers a superior value. Differentiation is done on the following parameters I. Product differentiation A. Featurescharacteristics that supplement the products basic function B. Performance qualitythe level at which the products primary characteristics operate C. Conformance qualitythe degree to which all the produced units are identical and meet the promised target specifications D. Durabilitymeasure of the products expected operating life under natural or stressful conditions E. Reliabilitya measure of the probability that a product will not malfunction or fail within a specified period F. Repairabilitya measure of the ease of fixing a product that malfunctions or fails G. Stylethe products looks and feel to the buyer H. Design: the integrating forcethe totality of features that affect how a product looks and functions in terms of customer requirements Services differentiation A. Ordering ease B. Deliveryspeed, accuracy, and care C. Installationmaking a product operational D. Customer traininginstruction on proper and efficient use E. Customer consultingdata, information systems, and advising services
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IV. V.
F. Maintenance and repairkeeping products in good working order G. Miscellaneous servicesfinding other ways to add value Personnel differentiation A. Competence B. Courtesy C. Credibility D. Reliability E. Responsiveness F. Communication Channel differentiation Image differentiation A. Identity versus imagecompany intentions versus consumer perceptions B. Symbolslogos, objects, people, colors C. Written and audiovisual mediato convey company or brand personality D. Atmospherephysical space in which the organization produces or delivers its products E. Eventssponsorships
Choosing a Positioning strategy The positioning task consists of the following steps: 1. 2. 3. Identifying possible competitive advantages. Choosing the right competitive advantages Selecting an overall positioning strategy.
1. Identifying possible competitive advantages. Competitive advantage is achieved through Product differentiation, Services differentiation, Channel differentiation, Personnel differentiation, and Image differentiation. A company must undertake the above differentiations and find out the areas in which it has advantage over its competitors. 2. Choosing the right competitive advantages A company in order to choose the right competitive advantages must decide on: How many differences to promote? Which differences to promote? A difference is worth establishing if it satisfies the following criteria: Important, Distinctive, Superior, communicable, Preemptive, Affordable and profitable.
3. Selecting an overall positioning strategy. Different positioning strategies a) Using product characteristics or customer benefits Probably the most used positioning strategy is to associate an object with a product characteristics or customer benefit. Toyota and Honda have emphasized economy and reliability and have become in the number of units sold. b) Price- benefit approach c) Use or application approach Another way to communicate an image is to associate the product with an use or application. Campbells soup for many years positioned itself as a lunch time product and used noon time radio extensively. d) Product user approach Another positioning strategy is to associate a product with a user or a class of users. Nike used Michael Jordan for its products. e) Product-class approach Some products need to make critical positioning decisions that involve product class associations. For example, Maxim freeze-dried coffee, the first one in market, needed to position itself with respect to regular and instant coffee. f) Cultural symbol approach Many advertisers use deeply entrenched cultural symbols to differentiate their brand from competitors. For example, Marlboro cigarettes choose the American cowboy as the central focus to help differentiate its brand from competitors and developed the Marlboro Man. g) Competitor approach. In most positioning strategies, an explicit or implicit frame of reference is one or more competitors. Perhaps the most famous positioning strategy of this type was the Avis We are number two, we try harder campaign. The message was that Hertz company was so big that they did not need to work hard.
Fear
Fear appeals are used because they work. Fear increases both the viewers interest in an advertisement and the persuasiveness of that ad. When using fear, a key decision is how strong to make the appeal. Most advertisers believe a moderate level of fear will be the most effective.
Humor
Humor is effective in both getting attention and keeping it, which helps the ad cut through clutter. Humor is used in about 30% of all advertisements. The success of humor as an advertising tactic is based on causing consumers to: Watch Laugh Most importantly, remember In recall tests, humorous ads are often the most remembered. To be successful, the humor should be directly connected to the products benefits. Unfortunately, humorous ads can also backfire. Advertisers must be careful to avoid letting the humor overpower the advertisement. When humor fails, it is usually because the joke in the ad is remembered but the product or brand is not. Sarcasm and jokes made at someones expense are often popular with younger audiences, but are not well received by baby boom and older generations. Another potential danger of humor is offending an ethnic minority (e.g., Dinky, Taco Bells highly visible Chihuahua).
Musical Appeals
Music gains attention and increases the retention of visual information at the same time. Most consumers remember the song along with images of the product or company. Music can lead to a better recall of the visual and emotional aspects of an ad. Music can also increase the persuasiveness of argument. Musical memories are often stored in long-term recall areas of the brain. Several decisions are made when selecting music for ads, including answers to these questions: What role will music play in the ad? Will a familiar song be used, or will something original be created? What emotional pitch should the music reach? How does the music fit with the message of the ad? Music can be: An incidental part or the primary theme of the ad Used to misdirect the audience so a surprise ending can appear Anything from whimsical, to dramatic, to romantic An important decision involves the selection of a familiar tune versus creating original music for the ad. Well-known songs have an advantage: Consumers already have developed an affinity for the song that they can transfer to the product. Popular songs are often costly and some musicians refuse to sell them. Some advertisers now look for new, less-well-known musicians to reduce costs.
Rational Appeals
Rational appeals are normally based on either: The Elaboration Likelihood Model The Hierarchy of Effects model The ELM approach assumes consumers use rational thought processes when making purchase decisions.
A rational appeal often follows the Hierarchy of Effects stages of awareness, knowledge, liking, preference, conviction, and purchase. To be successful, rational appeals rely on consumers actively processing the information presented in an advertisement. Print media offers the best outlets for rational appeals, because they give the readers a greater opportunity to process copy information. Print media are used extensively by business-to-business advertisers to take advantage of rational appeals. Conventional advertising wisdom is that rational appeals are well suited for high involvement and complex products. High involvement decisions require considerable cognitive activity and consumers spend more time evaluating the attributes of the individual brands. Complex products require more time to absorb key information. Rational appeals are effective when consumers are willing to pay attention to the advertisement.
Emotional Appeals
Emotional appeals are based on three ideas. 1. Consumers ignore most advertisements. 2. Rational appeals go unnoticed unless the consumer is in the market for a particular product at the time it is advertised. 3. Emotional advertising can capture a viewers attention and help develop an attachment between a consumer and a brand. Most creatives view emotional advertising as the key to developing brand loyalty. In 1998, 21 of the 34 Effie Gold Awards presented by the New York Chapter of the American Marketing Association used emotional appeals. The most common approach used by winners was to combine humor with emotions. Business-to-business advertisers are using more emotional appeals. In the past only 5% to 10% of all business-to-business ads utilized an emotional appeal. Today, that percentage is around 25%. The rationale for changing to more emotional business-to-business ads is the idea that emotions affect all types of purchase decisions, so they will also affect members of the buying center. Television is one of the best media for emotional appeals, because it has intrusion value and can utilize both sound and sight. Facial expressions can convey emotions and attitudes.
Emotions can be tied with humor, fear, music, and other appeals to make a compelling case for a product.
Scarcity Appeals
Scarcity appeals urge consumers to buy a particular product because of a limitation. The limitation can be a limited number of the products available, or, more often, that the product is available for only a limited time. A scarcity appeal is often used with other promotional tools, such as a price discount to encourage retailers who stock up. The primary benefit of scarcity appeals is that they encourage consumers to take action
Comparative Messages
Use of comparative messages The product is compared directly with a competing product in terms of one or more product features They invite counterarguments by the consumers When does it work? Factual information New brand Credible source Compare positive and negative aspects of brand to competitor. Used to position and differentiate a brand. Direct comparative advertisements-- when one brand is compared specifically with another brand. Should be used by low market share brands. Indirect comparative advertisements. When the comparison brand is not specifically mentioned but instead refers to competitors. Should be used by moderate share brands. High market share brands should avoid comparative ads.9
The Blurb A blurb or a balloon is a display arrangement where the words appear to be coming from the mouth of one of the characters illustrated in the advertisement. At times the complete body copy can be composed of blurbs, as in the case of comic strips. DIT speech bubble having the text Sunoji, today is the last date for payment of Advance Tax Sunti ho Boxes and Panels Boxes or panels are, in fact, captions placed in special display positions so as to get greater attention. A box is a caption that has been lined on all sides and singled out from the rest of the copy. A panel is a solid rectangle in the centre of which the caption is placed either in white or centered in the white space. Boxes and panels are generally used in advertisements containing features such as coupons, special offers and consumer contests. Slogans, Logo Types and Signatures A slogan may refer, for instance, to the age of the advertisers firm, meant for inclusion in every advertisement. A symbol of the company name, seal or trademark is called logotype and is a typical feature of most advertisements. It is also referred to as signature, indicating identification of the company or the brand. A logotype is an important aid in quick recognition of an advertisement and in creating familiarity for the audience. Add a strapline A strapline or tag line usually appears underneath the logo. The strapline summarizes the products benefits in a memorable way. Put the same strapline at the bottom of the ad, on point-of-sale material and on brochures, and you link all the different promotional elements together. Writing a strapline is like writing a headline. You sit down and produce fifteen or more short lines (each two to five words long). Occasionally, a strapline becomes a national saying, but people usually forget which brand it was attached to. Straplines often make good headlines because they summarize a major benefit in a pithy way. Similarly, discarded headlines often make good straplines, though they may have to be shortened Retrieved from http://drypen.in/copywriting/major-elements-of-copy-forcopywriting.html
ADVERTISING EFFECTIVENESS
Testing the effectiveness of advertising is a big business. With the cost of producing a commercial at $500,000 or more -- and media budgets of $50 million -- there is a natural desire, on the part of advertisers, to make sure that the advertising they are running is effective. John Wanamaker's famous quote, "I know that half of my advertising money is wasted I just don't know which half," practically begs for a method to identify effective ad campaigns, commercials, or print ads. Research companies, recognizing this need, have developed a myriad of testing approaches. They use conceptual models of how advertising works, various methods of gathering the data, different response measures, and different analytic approaches. It's safe to say that there is no general consensus, on the part of advertisers or advertising researchers, as to the best way to test advertising.10 The Need to Measure Advertising Effectiveness11 To justify money spent (budgets), ROI To determine if the advertising campaign should be stopped or continued To determine possible areas of modifications in the campaign messages In the longer interest of the profession (some evidence of the relevance of advertising & the practitioners
Problems with Measuring Advertising Effectiveness Irrational consumer behaviour Lack of widely acceptable scientific approach The difficulties of determining consumer influences (multiple factors) The validity and reliability of data gathered Suitability of research methods & instruments used Poor research skills & Sampling issues Inadequate resources/funding Setting non-SMART objectives
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Areas of Assessment of Effectiveness 1. A continuous analysis of past advertising experience, in search of guidelines for an analytical framework, is a very useful first step except in the case of new advertisers or products. 2. Surveys of buyer behaviour and consumer preferences are helpful in developing advertising objectives and strategy. 3. The third area involves pre-testing advertisements before their release. This is very important in the evaluation of advertising effectiveness. Pre-testing provides an indication of the likely acceptance of an advertisement or a campaign by the target audience. Results of pretesting will obviously be used for making improvements and changes as suggested by research. 4. The post-test research involves testing of the reach and impact of advertising after it has been released.
Pre-testing of advertisement12
Pre-testing of advertisement is done in following ways: 1. Concept Testing: A major feature of creative strategy, which has a bearing on ultimate effectiveness of advertising, is the basic communication concept around which a campaign may be developed. Concept testing would usually involve not more than 50 to 100 respondents, using the following techniques a) Qualitative Interviews: Qualitative interviews of an informal nature may be conducted individually, or in groups, from amongst people drawn from a cross-section of ages, occupations and income levels, which may represent the audience for the advertisement in question b) Free-association tests: These are used to pick up secondary associations to names or key words. c) Statement-comparison test: These are used when testing various concepts on small groups. The rank order method consists of respondents ranking the different concepts or themes. In paired comparison method, the preference of the respondents for either of two concepts is determined using a series of pairs of statements associated with product properties and characteristics.
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Mohan, M. Advertising Management Concepts & Cases, Tata McGraw Hill, New Delhi pp 232-234
2. Theme Testing: Advertising themes should be evaluated to check their appropriateness. Motivation research techniques such as depth interview and group discussions, apart from structured tests, may be used for pre-testing of themes. 3. Media factor: The best of the messages may fail in achieving their objectives if the message vehicle is inappropriate or inadequate in terms of reach and coverage. A thorough analysis of the media vehicle is required to ensure effectiveness of advertising campaign. 4. Copy Research: The basic purpose of pre-testing various possible advertisements is to establish whether the message content and presentation are likely to perform their allocated task efficiently, and what changes or improvements may be helpful. The various methods are: a) Consumer Jury: This technique involves an assembly of several people who represent views of potential consumers. These individuals are shown the advertisements or commercials and their comment on specific elements of content and creative approach are obtained. b) Matched samples: Sample group for test purposes that is the same as another group in terms of size, demographics, and psychographics constitute matched sample. The testing procedure involves showing one variation of the pre-test advertising or copy to one group and another variation to the matched group. The variation may be made in any of the elements, viz. themes headlines, slogans, visuals or the body copy. Before and after measures of the perceptions regarding the advertisement is recorded. c) Portfolio tests: The method consists in collecting several advertisements in a portfolio with typical editorial content. Each of these advertisements is for a different product. The portfolio is then individually shown to a representative sample of respondents who are expected to flip through it just the way they would have looked through a magazine or a newspaper. The respondent is then asked to recall the advertisements and any other relevant details. d) Storyboard tests: A procedure similar to portfolio testing can be used for film/television advertisements. It involves developing storyboards into film strips or video cassettes. Film strip storyboards may be shown as single frames. Respondents are usually shown 8 to 10 such experimental advertisements. Following the screening, measurement of recall of
products and brands and also of retention and comprehension of message may be made.
e) Mechanical and other devices There are two types of mechanical devices; those controlling exposure and others providing precise measurements of responses A tachistoscope: It is a timing device like the one used in cameras. It allows the operator to regulate the viewing time of an advertisement. Psychogalvanic response measures: They are made through devices that record change in electrical conductivity. Emotional excitement causes increased sweat secretion which leads to an increase in electrical conductivity of the skin. These increases are recorded through psychogalvano meter.
Post testing13
Post testing aims at ascertaining the extent to which advertising achieves its specified objectives following its release. The following are the methods of post-testing 1. Measure of audience exposure Audience is classified as: Nonreader: A person who does not remember having seen the advertisement in the issue. Noted: A person who remembers seeing the advertisement in the issue. Seen-Associated: A person who not only noted the advertisement, but who also saw or read some or part of it and clearly indicated the brand or advertiser. Read Most: A person who read 50% or more of the written material in the ad. 2. Measuring attitude and attitude change Advertising is aimed at creating a favourable impression for a company and its products. The results may be measured by attitudinal studies. Various techniques that can be used in such attitudinal studies are:
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Mohan, M. Advertising Management Concepts & Cases, Tata McGraw Hill, New Delhi pp 235-238
a) b) c)
3. Analysis of sales and product usage Advertising is expected to stimulate sales, increase profits, or otherwise help attain company goals. The correlation of sales to advertising can be a meaningful measure of effectiveness. Sales are not wholly dependent on advertising. Sales is a function of: Sales = f(advertising, pricing, distribution, the product, and other controllable variables; and competition, legislation, demand, the economy, and other uncontrollable variables) The sales effects of advertising can be most accurately estimated under the following conditions: a) b) c) d) e) f) g) h) i) The product or brand as no direct substitute The buyers of the product can be unambiguously defined, reached easily by advertising and interviewers. The lot size of the purchase remains unchanged from purchase to purchase by the same buyer. The price is constant. Channels of distribution are adequate The influence of personal selling is constant over time and over markets. Special promotions are not undertaken Competitors advertising and marketing policies are relatively constant in all markets. Government controls over product design, price, competition and advertising are minimal, or at least not subject to rapid changes.
4. Enquiries and returns Advertising may be aimed at generating mail orders, inquiries, requests for literature or getting an invitation for a salesman to make a call. 5. Controlled field experiments; Controlled field experiments simulate the approach of laboratory experiment and are run under realistic conditions a) Split run: Used for print advertising. Technique used to test the effectiveness of advertising copy. Two different versions of the same advertisement are printed in the same press run of an issue of a particular publication, so that some of the copies contain one version of the ad and the others
contain the other version. The publication is distributed normally, but the distribution of the advertisements is split according to the request of the advertiser. Some advertisers split their run in alternate bundles; (see alternate bundles run) others prefer to split by geographic location or by subscription versus newsstand sales. The purpose of the split run is to compare the effectiveness of the two alternate ad copies. Advertisers will take advantage of this option when they desire to learn which of two elements used in the advertising will achieve the desired objectives. Elements that are often tested are prices, copy appeal, layout, type of illustration, coupon offered or no coupon offered, or premium or rebate offered or not. The results of split-run testing are revealed by the number of responses to each advertisement. The split-run option is offered as a convenience to advertisers. However, not all publications offer this option. b) Playback audit: It is a means of verifying the wholesale and retail salesmens use of advertising themes or phrases in their own selling efforts.