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Management is about : - Planning - Decision Making - Control
Framework of Advertising Planning & Decision Making Situation Analysis Marketing Programme Integrated Mar. Com. Plan Advertising Plan Implementation
Process starts with an analysis of the Brand’s external & internal environment Situation Analysis (external and internal) Marketing Programme Market analysis Competitor analysis Brand Analysis- SWOT Advertising Plan Implementation
The Role of Advertising emerges from the Marketing Programme Situation Analysis Marketing Programme Determines the role of each elements of the marketing mix including Marketing Communications Indicates how all elements will be coordinated to support and synergise with each other IMC & Advertising plan Implementation
The Advertising Plan Includes… Situation Analysis Marketing Programme IMC & Advertising Plan Setting Objectives - (Segmentation-positioning) Media – strategy & tactics Message – strategy & tactics Implementation Implementation and Coordination (synergy with other IMC tools)
Framework of Advertising & Decision Making Situation Analysis Marketing Programme IMC /Advertising Plan Implementation Facilitating Agencies Social, legal & other constraints
The Role of Advertising….
The role the Advertising plan can only be in the context of the Marketing Plan
The Advertising Plan must support and synergise with:
the elements of the Marketing Mix
and other elements of the Communication Mix
Need to understand ‘How Advertising Works’
to appreciate the role it plays
How does Advertising work ? Advertising is ‘ persuasive communication’
The Communication Process Message Source Receiver Destination Media WOM Perception Process Message
The Persuasion Process of Advertising is through a variety of advertising effects Awareness/familiarity Brand Benefit / Information Creating image / personality Associating feelings with Brand Linkage of Brand with peers/experts/group norms /culture Reminder / Brand trial inducement Brand Attitude Purchase Behavior The Persuasion Process of Advertising
Setting Advertising Objectives
These must be Operational Objectives
Meaningful Advertising Objectives
Provide criteria for decision making
Serve as a communication and coordination tool
Provide criteria for evaluate performance
Can ‘Sales’ be meaningful Objectives?
‘ Sales’- A Meaningful Advertising Objective??
Difficult to identify the impact of Advtg.on ‘Sales’
‘ Advtg. impact is felt over time
Isolating ad impact from other elements of the marketing mix is difficult
Behavioral decisions (behavioral objectives) that Advertising must influence
The Target Segment
The decision making process that communication must precede to influence behavior
‘Sales Strategy’ the basis for Advertising Objectives
Sales growth comes from -
New customers buying
Old customers staying loyal
Old customers consuming more
Demand Generation - Offensive Strategy
- Sales grow because of new customers buying
‘ Offensive Marketing Strategies’
Primary demand generation
Secondary demand generation
Those not the buying product Existing customers Those buying Other brands
Demand Generation - Defensive Strategy
Sale grow with old customers staying loyal
‘ Defensive Marketing Strategy’
Recall the important brand features
Reinforce use experience
Demand Generation through Increased Consumption
Sales grow with ‘Product form expansion’
More frequent usage / share of requirement (SOR)
New use applications
Secondary Demand -New customers using other brands Primary Demand - Customers trying the category for the first time Existing customers Loyalty More consumption news uses and more usage Behavioral Responses that drive Purchase Marketing / Sales Strategies & Behavioral Objectives Trial Purchase Trial Purchase Loyalty Increased usage / SOR
The Influence of Advertising on Desired Behavior
Advertising is not as effective in directly evoking desired action -‘Purchase’
Advertising causal intervening response
desired behavioral response Sales
Sales Promotions, DM & Retail Advertising should be used in conjunction with Advertising to drive sales
The Persuasion Process of Advertising is through a variety of effects Awareness/familiarity Brand Benefit Information Creating image / personality Associating feelings with Brand Linkage of Brand with peers/experts/group norms Reminder / Brand trial inducement Brand Attitude Purchase Behavior These Intervening Variables between Advertising & Action are more effective Operational Advertising Objectives than Sales
Advertising Objectives (the Intervening Response Variables that are persuasive in its context) are determined by t he type of Sales Strategy and Behavioral Objectives
The Persuasion Process of Advertising is through a variety of effects Awareness / Familiarity Brand Benefit Information Creating image -personality / users Associating feelings with Brand use Linkage with peers / experts/group norms Reminder / Brand trial inducement Purchase These Intervening Variables have a causal relationship between Advertising & Sales Trial Purchase & Loyalty Trial Purchase & Increased usage Loyalty Loyalty Loyalty
Advertising Objectives Reflect the Target Segment
The segment and sub-segment can be defined by –
Behavioral measures – non-users, other brand users, heavy / light / loyal users etc.
Advertising response measures – unaware, not convinced of key benefit, diffused / sharp image, etc
Lifestyle - attitude & opinions, interests
Demographic, psychographics, geographic basis - more relevant for media decisions
‘ Hierarchy of Effects’ Model - DAGMAR Unaware Aware Comprehension & image Attitude Action Cognitive Affective Behavioral DAGMAR Approach – A communication task to be accomplished amongst a defined audience, in a specified period of time
DAGMAR in Practice
Objectives in Black & White to ensure the sated goals contain the crucial aspects of DAGMAR
A specific task indicated clearly – to be measurable
A starting point set – Benchmark against which goal achievement can be measured
A Target Segment specified precisely
The Time Period for achieving the desired response indicated
DAGMAR in Practice
Challenges to DAGMAR
Does not measure Sales
Broad outline does not give enough details (which hierarchical level)
Segmentation is about deciding which consumers the Advertising should be targeted at
The Target Marketing Process Identify markets with unfulfilled needs Determining market segmentation Selecting market to target Positioning through marketing strategies
Five-Step Segmentation Process
1. Finding ways to group consumers according to their needs.
2. Finding ways to group marketing actions , usually the products offered, available to the organization.
3. Developing a market/product grid to relate the market segments to the firm’s products and actions .
4. Selecting the product segments toward which the firm directs its marketing actions.
5. Taking marketing actions to reach target segments .
Bases for Segmentation
State - region - country - climate
Age, sex, income, education, occupation, social class
AIOs, (Activities, Interests, Opinions)
VALS (Values and Lifestyles)
Usage, loyalties, use occasions
Types of specific needs or wants to be satisfied .
A Priori basis : the market is segmented before any data on the market place is examined
Empirical Segmentation : created on the basis of differences in
Attitude and benefits sought
life-style - AIO
Both are used together but in different order
A priori segmentation starts with variables such as income etc and then examines attitudes and benefits
Empirical segmentation starts with benefit segmentation and then see how these clusters are different in terms of demographics
Selecting a Target Market Segmentation Strategies
D etermining how many segments to enter
Undifferentiated Marketing – offering one product or service to the entire market
Differentiated marketing – competing in a number of segments with separate marketing strategies for each
Concentrated Marketing – focusing on one market segment
Determining Which Market Segments Offer the Most Potential
Identify the group that is most likely to respond to the brand offering
Determine sales potential of the segment
Determine opportunities for growth of the market segment.
Analyze the competition in the segment (segments not being served well by competition)
Analyze the company’s ability to compete in the market segment
Decide how to compete in the market segment
Segmentation Decision Check List
Can the size of the market segment be measured?
Is the market segment large and profitable enough to serve? (large and growing in size)
Is the segment identified accessible? Can it be reached effectively and efficiently?
Can effective marketing programs be developed to attract and serve the segment identified?
TM and Media Reach Approaches
Controlled Coverage – using niche media to reach only the desired segment e.g. trade magazines
Customer Selection – using mass media to Reach is directed at mass audiences
Positioning It gives the consumer a clear idea of what the Brand stands for
The Positioning Process Positioning Concept The desired perception or association management wants target customers to have for a firm and/or its products Positioning Effectiveness The extent to which management’s positioning objectives are achieved in the market target Positioning Strategy The combination of marketing actions used to portray the positioning concept to targeted buyers Positioning of the brand The positioning of the brand by the buyers in the market target Market Target
Positioning Strategy Development Process - Background Analysis 1. Identify the competitors 2. Assess perceptions of competitors 3. Determine their positions 4. Analyze consumer preferences 6. Monitor the position 5. Make the positioning decision
Product/Service and Brand Positioning
BASIC QUESTIONS TO ASK
1. What position, (if any) do we currently hold in the mind of customers?
2. What position do we want to hold?
3. Whom do we have to compete against to establish this position?
4. Do we have the resources to occupy and hold the position?
5. Can we stay with one consistent positioning strategy?
6. Does our marketing and advertising match our positioning strategy?
Positioning Strategy Approaches
Product/Service or Brands can be positioned by single or multiple approaches:
Product attributes or consumer benefit
Use or application
Positioning Decision – Check Points
Select and Evaluate the position
An economic analysis
Appeals to a large and growing segment
Penetration possibilities – competitive edge to attack competition
Don’t be what you are not
Monitor the position
Positioning Decision -Imperatives
Stick with the Advertising that works
Consider using symbols
Positioning Strategy Execution
A relative concept that must indicate the position of the brand vis-a-vis other brands - differentiation
It determines the nature of the elements of the marketing mix
Best communicated through Advertising
A product is a bundle of benefits or values that satisfies the needs of consumers
Product symbolism refers to what a product or brand means to customers
Product quality, branding, packaging, and company name contribute to product image
Brand name communicates attributes and meaning
Advertising creates and maintains brand equity which results from the image and/or impression of a brand
The Value of Strong Corporate and /or Brand Identity
Strong corporate/brand equity :
Creates more options for competing (particularly against lower-priced competitors)
Can facilitate brand and line extensions
Allows companies to sell products/services at a premium price and maintain larger profit margins
Builds customer loyalty
Makes it easier to withstand economic fluctuations and marketing crises
Makes customer response more inelastic to price increases and elastic to price decreases
Traditional functions of packaging:
economy, protection, storage
Packaging has become increasingly important because:
self service emphasis of many stores
buying decisions made at point-of-purchase
often customers first exposure to product
Packaging is a way to communicate to consumers
Price must be consistent with perceptions of the product
Higher prices communicate higher product quality
Lower prices often reflect bargain or “value” perceptions
A product positioned as high quality while carrying a lower price than competitors may confuse customers
Price, advertising and distribution must be unified to create the position for the product or service.
Distribution Channel Decisions
Channel decisions involve:
Determining the type of channel system:
Selecting, managing and motivating marketing intermediaries such as
Push Versus Pull Push Policy Pull Policy Information Flow Producer Retailer Consumer Wholesaler Producer Wholesaler Retailer Consumer
Point of sale displays, racks, stands
Trade deals, special displays
Dealer premiums, prizes, gifts
Cooperative advertising deals
Advertising materials, mats, inserts
Push money or "spiffs"
Collaterals, catalogs, manuals
Trade shows, conventions, meetings
Sampling, free trial
Premiums or gifts
Marketing and Promotions Process Model Competitive analysis Target marketing Identifying markets Market segmentation Selecting a target market Positioning through marketing strategies Product decisions Pricing decisions Channel of distribution decisions
Marketing Strategy and Analysis Target Marketing Process Marketing Planning Program Development Promotion to final buyer Target Market Purchase Promotion to trade