This chapter discusses key components of developing an effective advertising plan, including conducting a situation analysis, setting objectives, developing creative and media strategies, and implementing and evaluating the plan. It emphasizes the importance of setting specific, measurable objectives and matching the right message to the right audience through the right media. The chapter also explores factors that contribute to new product advertising success, the relationship between advertising and sales, and various methods for budgeting advertising expenditures.

1. Chapter 7
Advertising Planning and Strategy
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2. Learning Objectives
Learn about major components of the
advertising plan.
Understand the importance of setting
objectives.
Discuss the success factors of introductory
advertising and the relationship between
advertising and sales.
Discuss various budgeting methods used in
advertising.
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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?
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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/Positioning
Communication/ Advertising Message Strategy and Tactics
Persuasion Plan
Media Strategy and Tactics
Process
“Facilitating” Agencies
Implementation Social and Legal Constraints
Figure 2-1 Framework for advertising planning and decision making 4

5. The Advertising Plan
An Advertising Plan Matches the Right
Audience 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 to
reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?
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6. Understanding of Comm.
Process
A typical communication process model
A model of persuasion process
 Ad exposure
 Different functions of advertising messages
 Brand attitude
 Purchase behavior
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7. Developing an Advertising
Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of various
forms of IMC and repeat the process.
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8. Typical Advertising or Campaign
Plan Outline (Tab. 7.1)
I. Introduction
• Executive Summary or Overview is provided.
I. Situation Analysis
• Advertising Problems
• Advertising Opportunities
I. 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 Plan
V. The Media Plan
VI. The Communication Plan
• Sales promotion
• Public relations
• Direct marketing
• Personal selling
• Sponsorships, merchandising, packaging, etc.
IV. Implementation and Evaluation
V. Evaluation
VI. Budget 9

10. Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
 examples of such trends
Competitive analysis: to achieve and
maintain a “competitive advantage”
 examples of competitive advantages
Target market selection
 examples of target marketing
==> Marketing plan (4Ps)
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11. Creative Platform & Message Strategy
Creative platform is a document that
outlines the message strategy decisions for
an individual ad.
Creative platforms combine the basic
advertising decisions – problems,
objectives, and target markets – with the
critical elements of the sales message
strategy – main idea and details about how
the idea will be executed.
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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 clearly
Reason Why
Reason Why states a reason for the benefit gained.
states a reason for the benefit gained.
Unique Selling
Unique 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.
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13. Defining Advertising Goals for Measured
Advertising 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
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14. Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
 When sales objectives are appropriate
-- Challenges with communication
objectives 14

15. What is Good Objectives?
Specify a well-
Concrete and
defined audience
Measurable
Attainable Good Objectives
Specify a time
period
Establish bench-
Mark measures Realistic
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16. Setting Objectives Using the
Communications Effects Pyramid
Product: Backstage Shampoo
Time period: Six months
Objective 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
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17. Setting objectives using the
communications effects pyramid
Objective 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 promotions
Objective 5: Develop and maintain regular use of
Backstage Shampoo among 5 percent of the
target audience. Use continued reinforcement advertising,
fewer coupons and promotions
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18. Factors Related to Success of
Advertising for New Products
1.Communicating that something is different
about the product. Successful introductory
commercials communicated some point of difference
for the new product
2.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.”
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19. Factors Related to Success of
Advertising for New Products
3.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.
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20. Several Ways to Increase Sales
(what mktg.comm. can do to help?)
New customers from other brands
New customers from other categories
Increasing share of requirements (SOR)
Increasing brand loyalty and reducing
attrition and price elasticity
Increasing usage
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21. McDonald’s Advertising Response Function
se a S
l
Advertising
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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
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sales.

23. Advertising Budgeting
Methods
Objectives-and-tasks method
Percentage-of-sales method
Competitive parity method
All-you-can-afford
Arbitrary allocation
Quantitative or experimental model
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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.
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25. The Advertising Budgeting
Methods
•Relates the amount invested in
Competitive Methods
Competitive 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 to
All You Can Afford
All 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.
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26. Top-10 Beer Brands’ SOMs and SOVs (1997)
Media
Total Sales Expenditure
Brand ($ Billions) SOM ($ Millions) SOV
1. Budweiser $ 35.6 29.2% $ 98.4 20.4%
2. Bud Light 22.8 18.7 55.7 11.5
3. Miller Lite 16.2 13.3 149.0 30.8
4. Coors Light 13.7 11.2 91.9 19.0
5. Busch 7.9 6.5 2.4 0.5
6. Natural Light 7.1 5.8 0.1 0.0
7. Miller Genuine Draft 5.5 4.5 21.5 4.4
8. Miller High Life 4.7 3.9 61.1 12.6
9. Busch Light 4.5 3.7 0.0 0.0
10. Milwaukee’s Best 3.9 3.2 3.1 0.6
TOTAL $ 121.9 100% $483.2 100%
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27. Review
Learn about major components of the
advertising plan.
Understand the importance of setting
objectives.
Discuss the success factors of introductory
advertising and the relationship between
advertising and sales.
Discuss various budgeting methods used in
advertising.
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