Summary Overview Marketing managers must make specific advertising strategy decisions to guide the work done by the firm and/or its advertising agency. Making specific decisions is very important to ensure that advertising efforts support marketing objectives, not just communication objectives. Advertising Strategy Decisions Target Audience . The marketing manager should be very specific about who the company is trying to reach. Advertising campaigns can be narrowed very accurately to appeal to very specific groups of people through careful selection of words, images, and symbols. It is crucial that marketing provide the advertiser with accurate target market information. Kind of Advertising to Use . There are many kinds of advertising that can be effective in promoting products. Each kind is designed to address the information needs of different groups: channel members, opinion leaders, reference groups, or final consumers, for example. Marketing managers should specify the kinds of advertising that will best support the overall marketing objectives. Instructor’s Note: Kinds of advertising are discussed in greater detail on a subsequent slide. Media to Use . Different target markets use different media and in different combinations. Marketing managers should specify to the advertiser which media should be used to reach the target market. What to Say . While an advertising agency might be hired to develop the “creative” message -- including some specific advertising copy -- the marketing manager should specify the direction of this copy thrust and its link to specific promotion objectives. Who Will Do the Work . Here the marketing manager determines if the firm’s own advertising department or an outside agency will do the work of developing the advertising campaign. This slide relates to the material on pp. 440-441. Instructor’s Note: This slide corresponds to Exhibit 16-1 on p. 441 and Transparency 106.
Summary Overview Advertising spending in the United States in high in absolute dollars (about $200 billion) but represents only about 2.5% of total sales dollars. Advertising is an important element in many promotion plans and often is the primary mechanism for reaching consumers in a growing economy. About 500,000 people are employed in advertising-related work in the US. Setting Advertising Objectives: A Strategy Decision Position Brands . Advertising can communicate product benefits to position the brand (i.e., how consumers think about it. Introduce New Products . Advertising can be an excellent way to help make target markets aware of new products and their benefits. Marketing managers might be even more specific relative to the percentage of the target market that should be aware of the product after a specific period of time. Obtain Outlets . Advertising tells customers where they can buy the product and may help encourage merchants to carry it when they can see the promotional support. Provide Ongoing Contact . Advertising can be a “virtual salesperson” reminding the customer about the product and keeping in touch with them. Prepare for Salespeople . Advertising may serve to “prime the pump” in advance of a sales call. Salespeople can then reference the ad in their presentation. Get Immediate Action . Advertising can be a good way to announce time-dated deals, discounts, or other availability requiring immediate customer action. Maintain Relationships . Advertising can help maintain relationships with satisfied customers and provide further information (and evidence of market presence) that confirms their original purchase decision. This slide relates to the material on pp. 442-445. See Overheads 167-169.
Summary Overview Advertising objectives largely determine which of two basic types of advertising to use -- product or institutional. Kinds of Advertising Institutional Advertising . This type of advertising tries to promote the organization’s image, reputation, or ideas. It supports the overall objective of developing goodwill or improving an organization’s relations with various important groups. Product Advertising . Product advertising tries to sell a product and can be targeted to channel members or final consumers. Key types of product advertising include: Pioneering Advertising. This tries to develop primary demand for a product category rather than demand for a specific product. It is appropriate for the early stages in a product’s life cycle when consumers still need to understand what the product category is all about. Competitive Advertising. This tries to develop selective demand for a specific product (or brand). This become more important as competition increases and the product moves into maturity. The direct type of competitive advertising aims for immediate buying action while the indirect type points out product advantages to consider in future buying decisions. Comparative Advertising goes head-to-head with competitive products by making specific brand comparisons. Reminder Advertising. This type of advertising tries to keep the product’s name before the public. It is useful for supporting successful products well into the maturity and decline stages of the PLC. Coordinating Advertising Efforts . Producers sometimes want advertising efforts to be handled further down the channel. Advertising allowances are price reductions to firms in the channel that encourage members to promote the product. Cooperative advertising involves producers and middlemen sharing in the costs of ads. This slide relates to the material on pp. 445-449. See Overheads 170-171 and Transparency 107.
Major Kinds of Media Television . Television provides an excellent way to demonstrate products and is a good medium for getting attention. Television also offers wide reach. Disadvantages include expense, competition among lots of ads (“clutter”), and less-selective audiences. Advertising sales for television run about $44.5 billion. Newspaper . Newspapers offer flexibility, timely placement, and good local market coverage. Some disadvantages include: may be expensive (for some markets), short life, and no “pass along” readership. Newspaper advertising was about $41.7 billion in 1997. Direct Mail . Direct mail is very flexible, can be personalized, and is very selective. Disadvantages include expense per contact, “junk mail” image, and difficulty retaining attention. Direct mail advertising runs about $36.9 billion. Radio . Radio offers a wide reach, is inexpensive, and appeals to highly segmented audiences. Disadvantages include weak attention, short exposure, and varying rates. Sales: $13.5 billion. Yellow Pages . Yellow Pages reach local customers who are already seeking purchase information. Disadvantages include the fact that competitors are also listed there and differentiation is difficult. Sales: $11.4 billion. Magazine . Magazines are very targeted, provide good detail and excellent graphics, and have high “pass-along” rates, and long shelf life. Disadvantages include inflexibility and long lead times. Sales: $9.8 billion. Outdoor . Outdoor is flexible, inexpensive, and offers repeat exposures. Disadvantages include very short exposure and lack of market segmentation. Sales: $1.5 billion. Internet . Internet ads link to more detailed website information, some with “pay for results” offers to the advertiser. Disadvantages include difficulty comparing the total costs with other types of media. Sales: About $1 billion but expected to grow dramatically. This slide relates to the material on pp. 449-453. See Overheads 172-174. Summary Overview Choosing media requires marketing managers to consider which media fits best with the rest of the marketing strategy in relation to: (1) promotion objectives; (2) target markets; (3) funds available for advertising; (4) the nature of the media in terms of reach, frequency, impact, and cost.
Key Issues in Internet Advertising Many Forms . Advertising on the Internet may take many forms, from displays that look like traditional print ads to button and banner ads. Seek Direct Response . A key aspect of Internet advertising is the fact that viewers actively participate in selecting which aspect of the message they will see. By clicking among different choices available, the viewer self-directs his or her search for more information. Viewers also control the use of bookmarks to make a return to the same site faster and easier. More Exposure . While being on the Internet is a very democratic existence, some points of access (“portals”) are more “equal” than others. High volume access points, such as the home pages of companies like Microsoft, Netscape, and America Online, generate a lot more exposure for advertisers than smaller firms can. Better Targeting of Customers . Part of the self-direction feature of web surfing means that content can be designed for the specific needs of various target markets. This means that the visitors to the site are a better fit for the overall marketing message. Context Advertising . Browser offer advertisers the ability to monitor the content a net surfer is viewing and then serving up related ads. Pointcasting . Another approach that offers more precise targeting is pointcasting. With that approach, ads are displayed only to individuals who meet certain qualifications. Pay for Results Offers . Many web sites now display an ad for free, and charge a fee only if the ad gets results. Note: This is increasingly true for outsourcing providers, such as order processors, who typically set up the order site for free and get paid a percentage of sales from the site. The links from one site to the other are designed to help attract attention and make order fulfillment customer-friendly. This slide relates to the material on pp. 453-456. See Overhead 175. Summary Overview Advertising on the Internet is growing rapidly as mainstream advertisers join the innovators in the quest for a more efficient way to reach target customers with promotion.
Summary Overview In planning the message, the key decision is to develop the right copy thrust -- what the words and illustrations should communicate. The copy thrust should be designed to achieve the promotion objectives. It is very useful to employ the AIDA concept here. Planning the Message Getting Attention . Getting attention is an ad’s first job. This should be an explicit decision: what, specifically, will get the customer’s attention? How? Attention-getting devices include large headlines, shocking statements, attractive models, babies, and special effects. Holding Interest . Holding interest is more difficult. It requires turning that initial interest into something more substantial. This is no easy task: many consumers are looking for reasons NOT to consider the ad! Holding interest typically involves linking the ad message to something important to the reader -- a reference group, core values of the target market, or the customer’s self-interest. Arousing Desire . Moving the customer to really want the product is one of an ad’s most difficult jobs. This requires understanding how the customer thinks, how he or she makes decisions in general and for that particular product or category. Sometimes it is helpful to focus on one unique selling proposition -- something distinctive about the product that sets it apart from other offers. Obtaining Action . Ads are designed to sell -- to get consumers to take action in the form of purchases. Because this is not easy, some ads encourage consumers to do something that is less risky or demanding than actually making a purchase. This approach seeks to get action one step at a time. This slide relates to the material on pp. 456-459.
Summary Overview Measuring advertising effectiveness is often difficult. It is important to remember that the different types of advertising do not always work toward the same goal. Also, advertising effectiveness needs to be considered in relation to its specific objective. For example, an ad campaign that is designed to increase awareness should not be judged a failure because it does not increase desire for the product (AIDA). A key element to effective measurement is to quantify and specify the objective of the ad. Key Elements for Measuring Advertising Effectiveness Consider the Total Mix . Advertising is part of the overall marketing mix. As such, effectiveness of one element is hard to separate from the effectiveness (or the effects of) the other elements. For example, a great advertisement can not be faulted for failing to sell a lousy product. Use Research and Testing to Improve the Odds . Advertising is a form of mass communication, a tricky and imperfect process under the best conditions. Marketing managers should try variations on their overall advertising message to see which combination of message variables is the most effective. Teaching Tip: Remind students that presidential election campaigns use focus groups to review several variations of a potential campaign so as to run the most effective message quickly, sometimes a single day after a major event. Hindsight Leads to Foresight . Advertising effectiveness is rarely successful in a vacuum. What consumers tell you about ads, what they remember (good and bad) should be used as input into the refinement of subsequent advertisements. This slide relates to the material on pp. 461-462.
Summary Overview Sales promotion includes those activities other than advertising, publicity, and personal selling that are designed to stimulate interest, trial, or purchase by final customers or others in the channel. Sales promotion typically seeks an immediate response. Issues in Managing Sales Promotion Complement Other Promotion Tools . Sales promotion offers the marketing manager another tool for stimulating demand. Mass selling and personal selling efforts tend to take longer and have long-term effects, while sales promotions can be launched quickly and lead to more immediate results. Growth in Spending . More companies are using a greater percentage of their promotion dollars on sales promotion. Part of this trend relates to more products being in mature markets where tough competition requires extra incentives to sell. Changes in retail situations (an increase in store brands), technology (improved sales promotion techniques), and availability (more specialized marketing support firms to design and implement sales promotion programs) are all reasons for this increase in spending. Effect on Brand Loyalty . Many marketing managers worry about whether or not sales promotion erodes long-run brand loyalty. Some are concerned that in mature markets, customers and middlemen “surf” between competing brands to catch the best sales promotion discount at a particular time. However, brands in such a situation may have little other choice. Difficult to Manage . Sales promotions can be an area where developing skill can be difficult. Because sales promotions are often one-shot deals, a company may have a hard time transferring lessons from one situation to the next. Also, sales promotion activities can have unintended consequences, stimulating demand among non-targets who use the savings to become new, and unofficial, middlemen for the product. This slide relates to the material on pp. 464-467. See Overhead 179.
Notes There are many different types of sales promotion, but what type is appropriate depends on the situation and objectives. The sales pattern shown in this slide might occur if Hellmann’s issues coupons to help clear its excess mayonnaise inventory. Some consumers might buy earlier to take advantage of the coupon, but unless they use extra mayonnaise their next purchase will be delayed. This slide relates to the material on p. 465. Instructor’s Note: This slide corresponds to the series of slides shown in Exhibit 16-6 on p. 465 and Transparency 108.
Notes There are many different types of sales promotion, but what type is appropriate depends on the situation and objectives. The sales pattern shown in this slide might occur if kids convinced their parents to eat more Big Macs while McDonald’s has a Beanie Babies promotion. But when the promotion ends, things go back to normal. This slide relates to the material on p. 465. Instructor’s Note: This slide corresponds to the series of slides shown in Exhibit 16-6 on p. 465 and Transparency 108.
Notes There are many different types of sales promotion, but what type is appropriate depends on the situation and objectives. The sales pattern shown in this slide might occur if free samples of Burger King’s new french fries quickly pull in new customers who like what they try and keep coming back after the promotion ends. This is a Burger King marketer’s dream come true and the kind of long-term result that is the aim of effective advertising. This slide relates to the material on p. 465. Instructor’s Note: This slide corresponds to the series of slides shown in Exhibit 16-6 on p. 465 and Transparency 108.