Ch07 planning & strats

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  • 1. Chapter 7Advertising Planning and Strategy 1
  • 2. Learning ObjectivesLearn about major components of theadvertising plan.Understand the importance of settingobjectives.Discuss the success factors of introductoryadvertising and the relationship betweenadvertising and sales.Discuss various budgeting methods used inadvertising. 2
  • 3. The Advertising Planning Cycle 1. Where are we? 2.Why are we there? 3.Where could we be?5. Are we getting there? 4. How could we get there? 3
  • 4. Advertising Planning and Decision Making Situation Consumer/Market Analysis Analysis Competitive Analysis Role of Advertising, Sales Marketing Force, Price, Promotion, Public Program Relations The Objectives/Segmentation/PositioningCommunication/ Advertising Message Strategy and Tactics Persuasion Plan Media Strategy and Tactics Process “Facilitating” Agencies Implementation Social and Legal ConstraintsFigure 2-1 Framework for advertising planning and decision making 4
  • 5. The Advertising Plan An Advertising Plan Matches the RightAudience to the Right Message and Presents It in the Right Medium to Reach That Audience & Has Three Elements.Targeting the Audience: Whom are you trying toreach?Message Strategy: What do you say to them?Media Strategy: When & where will you reach them? 5
  • 6. Understanding of Comm. ProcessA typical communication process modelA model of persuasion process Ad exposure Different functions of advertising messages Brand attitude Purchase behavior 6
  • 7. Developing an Advertising PlanAdvertising objectives and target marketselectionCreative plan: Message strategy and tacticsMedia plan: media strategy and tacticsEvaluation (research)==> IMC approach: identify roles of variousforms of IMC and repeat the process. 7
  • 8. Typical Advertising or Campaign Plan Outline (Tab. 7.1)I. Introduction • Executive Summary or Overview is provided.I. Situation Analysis • Advertising Problems • Advertising OpportunitiesI. Key Strategy Decisions • Advertising Objectives • Target Audience • Competitive Product Advantage • Product Image and Personality • Product Position 8
  • 9. Typical Advertising or Campaign Plan Outline (Tab. 7.1)IV. The Creative PlanV. The Media PlanVI. The Communication Plan • Sales promotion • Public relations • Direct marketing • Personal selling • Sponsorships, merchandising, packaging, etc.IV. Implementation and EvaluationV. EvaluationVI. Budget 9
  • 10. Situation AnalysisOpportunity analysis: to spot andcapitalize on favorable demand trends examples of such trendsCompetitive analysis: to achieve andmaintain a “competitive advantage” examples of competitive advantagesTarget market selection examples of target marketing==> Marketing plan (4Ps) 10
  • 11. Creative Platform & Message StrategyCreative platform is a document thatoutlines the message strategy decisions foran individual ad.Creative platforms combine the basicadvertising decisions – problems,objectives, and target markets – with thecritical elements of the sales messagestrategy – main idea and details about howthe idea will be executed. 11
  • 12. Selling Premises Advertisements that focus on the product Advertisements that focus on the product Product Product itself by looking at attributes. itself by looking at attributes. Product is promoted on the basis of what it Product is promoted on the basis of what it Benefit Benefit can do for customers. can do for customers. Promises that something will happen if you Promises that something will happen if you Promises Promises use the advertised product. use the advertised product. Based on logic and reasoning and clearly Based on logic and reasoning and clearlyReason WhyReason Why states a reason for the benefit gained. states a reason for the benefit gained.Unique SellingUnique Selling A benefit statement that is both unique to the A benefit statement that is both unique to the Proposition Proposition product and important to the user. product and important to the user. Support Support Lends credibility to the selling premise. Lends credibility to the selling premise. 12
  • 13. Defining Advertising Goals for MeasuredAdvertising Results (1962, 1995, S. Dutka) The 6M approach  Merchandise: important benefits to sell  Markets: who to reach  Motives: why people buy or fail to buy  Media: how to reach  Measurements: how to evaluate (time and change)  Messages: key ideas to convey to move 13
  • 14. Setting ObjectivesWhy set objectives?:-- Planning and decision making-- Communication-- Measurement and evaluationSales vs. Communication objectives-- Problems with sales objectives When sales objectives are appropriate-- Challenges with communicationobjectives 14
  • 15. What is Good Objectives? Specify a well- Concrete and defined audience MeasurableAttainable Good Objectives Specify a time period Establish bench- Mark measures Realistic 15
  • 16. Setting Objectives Using theCommunications Effects PyramidProduct: Backstage ShampooTime period: Six monthsObjective 1: Create awareness among 90 percent of target audience. Using repetitive advertising in newspapers, magazines, TV and radio programs. Simple message.Objective 2: Create interest in the brand among 70 percent of target audience. Communicate information about the features and benefits of the brand-I.e., that it contains no soap and improves the texture of the hair 16
  • 17. Setting objectives using thecommunications effects pyramidObjective 3: Create positive feelings about the brand among 40 percent and preference among 25 percent of the target audience. Create favorable attitudes by conveying information, promotions, sampling, etc.Objective 4: Obtain trial among 20 percent of the target audience. Use sampling and cents-off coupons along with advertising and promotionsObjective 5: Develop and maintain regular use of Backstage Shampoo among 5 percent of the target audience. Use continued reinforcement advertising, fewer coupons and promotions 17
  • 18. Factors Related to Success ofAdvertising for New Products1.Communicating that something is different about the product. Successful introductory commercials communicated some point of difference for the new product2.Positioning the brand difference in relation to the product category. Successful commercials positioned their brand’s difference within a specific product category. For example, a new breakfast product was positioned as the “Crispiest cereal”or a new beverage as the “smoothest soft drink.” 18
  • 19. Factors Related to Success ofAdvertising for New Products3.Communicating that the product difference is beneficial to consumers. Nearly all of the successful commercials linked a benefit directly to the new product’s difference.4.Supporting the idea that something about the product is different and/or beneficial to consumers. All the successful commercials communicated support for the product’s difference claim or its relevance to consumers. Support took the form of demonstrations of performance, information supporting a uniqueness claim, endorsements, or testimonials. 19
  • 20. Several Ways to Increase Sales(what mktg.comm. can do to help?)New customers from other brandsNew customers from other categoriesIncreasing share of requirements (SOR)Increasing brand loyalty and reducingattrition and price elasticityIncreasing usage 20
  • 21. McDonald’s Advertising Response Function se a S l Advertising 21
  • 22. Relationship of Adv. to Sales & Profits In consumer goods marketing, increases in market share are closely related to increases in the marketing budget. There are minimum levels below which advertising expenditures have no effect on sales. Sales normally increase with additional advertising. At some point, however, the rate of return declines. There will be some sales even with no advertising. Sales response to advertising may build over time, but the durability of advertising is brief, so a consistent investment is important. Culture and competition impose saturation limits above which no amount or advertising can increase 22 sales.
  • 23. Advertising Budgeting MethodsObjectives-and-tasks methodPercentage-of-sales methodCompetitive parity methodAll-you-can-affordArbitrary allocationQuantitative or experimental model 23
  • 24. The Advertising Budgeting Methods •Common budgeting method. •Common budgeting method. •May be based on last year’s with •May be based on last year’s with Historical Method Historical Method aapercentage increase. percentage increase. •Nothing to do with advertising •Nothing to do with advertising objectives. objectives.Task-Objective Method: •Most common method. •Most common method.Task-Objective Method: •Looks at objectives set for each •Looks at objectives set for each Bottom-Up Bottom-Up activity, and determines the cost activity, and determines the cost of accomplishing each objective. of accomplishing each objective. Percentage-of-Sales Percentage-of-Sales •Compares total sales with the total •Compares total sales with the total advertising (or marketing advertising (or marketing Method Method communication) budget during aa communication) budget during previous time period to compute aa previous time period to compute percentage. percentage. 24
  • 25. The Advertising Budgeting Methods •Relates the amount invested inCompetitive MethodsCompetitive Methods •Relates the amount invested in advertising to the product’s share advertising to the product’s share of market. of market. •Must understand share-of-mind. •Must understand share-of-mind. •Allocates whatever is left over toAll You Can AffordAll You Can Afford •Allocates whatever is left over to advertising. advertising. Method Method •Companies who use this don’t •Companies who use this don’t value advertising very much. value advertising very much. 25
  • 26. Top-10 Beer Brands’ SOMs and SOVs (1997) Media Total Sales Expenditure Brand ($ Billions) SOM ($ Millions) SOV1. Budweiser $ 35.6 29.2% $ 98.4 20.4%2. Bud Light 22.8 18.7 55.7 11.53. Miller Lite 16.2 13.3 149.0 30.84. Coors Light 13.7 11.2 91.9 19.05. Busch 7.9 6.5 2.4 0.56. Natural Light 7.1 5.8 0.1 0.07. Miller Genuine Draft 5.5 4.5 21.5 4.48. Miller High Life 4.7 3.9 61.1 12.69. Busch Light 4.5 3.7 0.0 0.010. Milwaukee’s Best 3.9 3.2 3.1 0.6TOTAL $ 121.9 100% $483.2 100% 26
  • 27. ReviewLearn about major components of theadvertising plan.Understand the importance of settingobjectives.Discuss the success factors of introductoryadvertising and the relationship betweenadvertising and sales.Discuss various budgeting methods used inadvertising. 27