2. Sales Promotion
Includes activities such as coupons, samples, cents-off, etc.
Are short-term actions designed to get immediate responses from
consumers, wholesalers and retailers
Sales promotion to wholesalers and retailers are offered with the
hope that they will push the product consumers or buyers
These actions get quick response but have their drawbacks
May result in stockpiling of the brand by wholesalers and
retailers . The overall level of sales does not change
May induce trail but do little to enhance long-term brand loyalty
3. Advertising is a deposit to brand
equity bank, whereas sales
promotion activities are a
withdrawal
L. Ross Love, vice president of world wide
distribution
4. Advertising
Advertising that communicates unique and positive message
can differentiate the brand from competitive offerings and
help insulate the brand from price communication
Of various promotion activities, advertising is clearly the
most visible
Advertising is mainly used as a pull strategy
5. Elements of Advertising Program
Marketing Strategy
Advertising Objectives
Tentative Budget
Message Design
Media schedule
Relevance Implement
Evaluation
6. Advertising Objectives
There are two basic reasons to establish objectives to
advertising programs
1. Advertising objectives can provide guidance for
development and media decisions
2. Objectives serve as standards for evaluating the
performance of advertising program
Unless managers have defined what advertising
effort is designed to achieve, there will be no fairway
to evaluate the results
Advertising strategies can serve many functions
Can be used to inform consumers, persuade
consumers, and/or to remind consumers
Advertising programs are designed to move
consumers from the point where they are unaware of
the brand to trail and repeat purchase
8. Hierarchy of Effects
The Three models can be classified at three levels
1. Cognitive level: indicate receipt of the message
.Exposure to message
Message recall
Awareness of product
Knowledge of product attributes
2. Affective responses: indicate the development of liking
Willingness to seek more information
Interest in product attributes
Favorable evaluation of the product
3. Behavioral responses: indicate the actual actions taken by the
members of the target market
Product trail
Product purchase
9. A hierarchy model of how advertising works
Brand Loyalty
Brand Equity
Attitude
Reinforcement
Brand/
Beliefs Company
Image
Trail
Expectation
Awareness
Unawareness
10. Over the long run advertisement should help in achieving sales,
market share, and profit objectives
Sales and profit are generally inappropriate objectives at-least
in the short run
Reasons:
1. Sales respond rather slow to advertisement
Most advertisement must be seen more than once before
message is received and acted upon
2. Changes in sales and market share are often influenced by
environmental factors and competitive actions
What advertisement can do:
Help implement the marketing strategy
Establish advertising objectives to guide the selection of the
messages and media
Permit program performance to be evaluated
Make a specific contribution to achievement of marketing
strategy
11. Types of Objectives
Advertising objectives must include precise statement of what is
expected communication objective: Who, What, When:
Who relates to audience or target market at whom the message
will be aimed
What relates to the effect to be achieved – awareness, attitude
change, reminder
When relates to the time period during which the object should
be obtained
Example: The advertising objective for new product launch might
be stated as:
“ Within three months of the product launch we expect 75 percent
of the target market to be aware of the product.”
To be useful objective must be realistic, to be stated in
quantitative terms
12. Types of Objectives
The advertising objectives provide a foundation for subsequent
advertising decisions
Therefore advertising objective should be designated before
specific decisions of the advertising program ( type of message,
and media) are made
The major reason s why advertising objectives should precede
other program decisions include
1. Advertising objectives reflect the consensus of management
concerning what the advertisement should do for the brand
2. Stating the objectives help set the advertising budget
3. The objective provide standard against which the result can be
compared
13. Types of Objectives
It is possible to achieve more than one objective during a given
campaign although this can be very difficult and costly
Each objective is generally more useful in implementing a
particular type of marketing strategy
For the same product there may be different advertising objectives
for different customer group
Obtaining trail for a particular product or brand may be the
objective for non-users and/ or new entrants into market
For present users, the objective might be to stimulate demand for
an entire product class or for a particular brand
If more than one objective is employed it is important to make
certain that various objectives are compatible with marketing
strategy
14. Types of Objectives
1. Generating awareness
2. Reminding buyers to use
3. Changing attitudes about the use of the product form
4. Changing perceptions about the importance of brand
attributes
5. Changing beliefs about brands
6. Reinforcing attitudes
7. Building corporate and product line image
8. Obtaining a direct response
15. I. Awareness:
The primary advertisement objective is simply to generate
or increase recognition of brand name, brand concept or
information regarding where or how to buy a product
This is an important objective in several different
situations
1. When brand enters the market, buyers will often find it
difficult to develop an attitude if the brand and basic
product concept are not known
16. Awareness of the brand and the basic concept must exist before
favorable attitude towards the brand could be developed
2. Managers should also apply awareness objectives when
customers need to know how to buy, or how to get more
information about a product
Consumer products with highly selective distribution system
need emphasis on this aspect, especially if competitive brands
have intensive distribution
3. Awareness and brand recognition are essential objectives in
marketing low perceived risk products, where minimum
search is involved.
> Brands that most widely recognized will tend to have the
largest market share
17. II. Reminder to use:
For discretionary items with regular usage patterns, an
appropriate marketing strategy may be to stimulate
primary demand by increasing the rate of usage
The primary role of advertising in implementing the
strategy is to remind the buyers to use the product or
restock the product
The purchase may decline because the product is highly
discretionary and consumer has no ready stock to act as a
reminder to use the product
18. III. Changing attitudes about the use of the product form
The objective is designed to support primary-demand
strategies that attract new users or increase the
number of uses
Advertising programs to implement these strategies
usually take one of two forms
1. Advertising campaigns may demonstrate new ways to
use products or new usage occasions
2. Some advertising campaigns have been designed to
overcome negative perceptions about product
categories
19. IV. Changing perceptions about the importance of brand
attributes
An effective way to acquire new customers through
differentiated positioning is to advertise a “ unique
selling proposition”
For an attribute to be determinant in buyer’s choice
process the attribute must:
be important
buyer must perceive alternative differ in degree to which
they possess the attribute
If a brand has a unique attribute, advertising may be used
to stress the importance of attribute to make it
determinant
20. V. Changing Beliefs about Brands
If an attribute (benefit) is already important, buyers will
examine the degree to which each alternative brand
possesses that attribute
The advertising objective would be to improve buyers’
rating of a brand on important attributes or to change
the relative rating of competitive brands on the attribute
As the attribute is not unique to a brand, advertising
designed to demonstrate this relative superiority would
be supporting marketing strategy of head-to-head
competition
21. VI. Attitude Reinforcement
Brands with strong market position and with no major
competitive weaknesses are more likely to be concerned with
customer retention strategies
By assuring customers that the brand continues to offer greatest
level of satisfaction on the most important benefits, advertising
can reinforce attitudes and maintain brand preferences and loyalty
VII. Corporate and Product line Image Building
Advertising is used to establish or change perceptions of
organizations or broad product lines, but without focusing on
specific product attributes or benefits
VIII. Obtaining a direct response
In direct marketing the organization communicates directly with
target customer with the objective of generating direct response
or a purchase
22. The Budgeting Process
General approach includes the following steps:
1. Establish a base line budget
2. Based on the advertising objectives, estimate the
message design and media cost requirements
3. If time and resources permit, run experiments to
obtain a rough estimate of the impact of proposed
program
4. Revise the budget (or objectives) as necessary on the
basis of cost of the task, the results of experiments,
and the costs and expected impact of other marketing
programs
23. Establishing Baseline Budget
In most organizations, the total advertising budget does not
vary greatly from year to year
A possible approach is to use previous year budget, or
industry’s advertising to sales ratios as guideline
Realistically managers will adjust budgets each year
because of a number of factors
24. Establishing Baseline Budget
1. Product objectives determine which products should receive
increased, sustaining, or reduced support. Managers may
modify budgets to reflect any changes in product objectives
2. Product profitability should be a major consideration in
budgeting. The greater the contribution margin, the smaller the
increase in sales that will be needed to cover the costs of
increased advertising budgets
3. Productivity judgments combined with profitability analysis can
be useful in determining the effects of changes in increased
advertising budgets
Many advertisers believe it is necessary to keep their advertising
budgets ( or share of voice ) at a consistent ratio of expenditures
with total advertising expenditure of the product category if
they maintain their market share
25. Establishing Baseline Budget
This type of competitive parity approach would
require that company increase its “ share of voice” to
the same percentage level as the desired market share
This form of budgeting may be misleading for two
reasons:
1. It ignores the possibility that there may be limits to the
market share that is attainable
2. This approach doesn’t take into consideration the
many other buying behavior factors influencing the
brands sales response function
26. Message Design and Media costs
Given an advertising objective, a manager can estimate
Message development cost:
- Production costs, technical fees, royalties to
participants)
Media costs
- Print space, radio or television time
Media costs are influenced by
Size of target market
The size and length of the advertisement
The number of times the advertisement is presented
Specific cost of each media vehicle
27. Experimentation and Revision
When feasible, the proposed budget should be in limited
market area to determine
Whether objectives are achieved
Estimate the sales response
These tests can provide insights into whether historical
advertising effects are optimistic, pessimistic relative to
present program
Experiments usually indicate only the short-run effects of the
program
28. Experimentation and Revision
Experiments are useful in determining the effects of
alternate media and copy
Revisions may also be necessary because of the impact of
other programs
To some degree advertisement competes with sales,
sales promotion and product development funds
Price changes will lead to changing contribution margins
Changes in the budgets of other programs may force to
modify advertisement budgets to stay within the
resources available for products
29. Design
The advertising message includes two basic elements
1. The appeals: copy claims that represent the central idea of the message
and
2. Method of presentation (execution style)
Contents of an effective message:
Three major requirements of effective message are; desirability,
exclusiveness, and believability
Desirability and exclusiveness are firm’s means to emphasize those
determinant attributes that provide an advantage
If desirability is a problem , the usefulness of the product in solving the
problem be portrayed
Exclusiveness may be demonstrated through comparison (direct or
indirect) once the real and perceived differences are known
Believability: important in situations where product benefit or attribute is
difficult to demonstrate or highly subjective or it requires a major change
in usage pattern
30. Copy Claim Alternatives
Motivational arguments or descriptive statements
contained in the message
These claims can be of three types
1. Claims that describe the physical attributes of the
product
2. Claims that describe the functional benefits that can be
obtained from the product
3. Claims that characterize the product in terms of the
type of people who use it, the results of obtaining the
functional benefits or moods
Statement of firm’s advertising objective will guide in
selection of type of claim
31. Copy Claim Alternatives
The advertising objective should clearly state the:
Specific feature that generate buyer awareness or
The specific attributes or benefits on which perception are to be changed or
reinforced
Some objectives may focus on exclusiveness , whereas others may focus on
believability
Given the objectives copy could be prepared that will support the
desirability, exclusiveness or believability of the attribute and benefit being
featured
In developing copy the type of brand concept involved must be considered.
Products can be classified in terms of one of the following needs
1. Functional needs: products that resolve consumption related problems
2. Symbolic needs: products that fulfill internally generated needs such as self
enhancement or ego identification
3. Experiential needs: products that provide sensory pleasures, variety or
other kinds of stimulation
32. Execution style
Style in which copy claims are presented to target audience
Common execution styles:
Symbolic association
- Provides means of dramatizing intangible benefits by associating
the product or service with certain type of individuals or a
tangible object
Functional benefits can be communicated in a variety of ways
- Testimonials
- Product demonstrations or recipes
- Slice of life: portraying buyers in problem solving situations
- Case histories: documenting the benefits of a product
- Humor
- Fear
33. Media Scheduling
Media scheduling decisions are extremely important for two
reasons:
1. Purchase of radio and television time, magazine and newspaper
space represent the largest element of cost in the advertising
budget
2. An advertisement’s success in achieving the advertising
objectives depends largely on how well each show or magazine
reaches target market segment
The major steps involved in developing media schedule are:
1. Selecting the type of medium to use
2. Selecting specific vehicles for consideration
3. Determining the size, length, and position of an advertisement
4. Determining desired reach, frequency, and distribution of
message
34. Selecting the type of medium
Each medium has unique characteristics that may or may not
be appropriate for the kind of message to be presented and
for the kind of target segment to be reached.
For low involvement products television and radio
advertisements are better
For high involvement products print media is better suited
35. Selecting the Possible Vehicle
A vehicle is a specific magazine, newspapers, radio or television
program
Each vehicles ability to reach the target market segment should be
well understood in selecting specific vehicle
Advertising agencies conduct research on such information
Vehicles must be well understood for their likely effectiveness of
specific product and message
Cost is usually an important consideration in the selection of the
final media
The cost of insertion in various media can be obtained from direct
contact, media buying specialists
The actual cost per insertion would depend on size, length, and
position of the advertisement
36. Determining size, length, and position
The cost is calculated in terms of number of people reached by
each vehicle
The most common method used to measure the cost of an
advertisement is cost per thousand (CPM)
The CPM s calculated by dividing the cost of advertisement by
number of people it reaches
In some cases Targeted CPM is used i.e. cost per thousand for
members of specific target
The basic measure to estimate CPM for television is the rating
point
The rating point is calculated by dividing the number of household
watching the program by number of households
37. Media Objectives
For a given planning period, advertising expenditures can be
distributed as:
1. According to the timing of the expenditures
2. According to reach and frequency
1. Timing of Expenditures:
Timing reflects the manner in which expenditures are
distributed over the course of planning period
Managers can schedule advertisement so that bulk of the dollar
expenditures coincides with the peak sales period
There are three alternatives to the timing of the message:
i. Continuous schedule: allocate approximately equal amount of
money for each time period
ii. Pulsing schedule: size can change each month
iii. Flighting schedule: similar tp pulsing but some periods may
not receive funds
38. 2. Measuring Reach and Frequency
Reach is the percentage of target market that is exposed
to advertising in some defined time period (4 weeks)
Frequency is the average number of times a member of
the target audience is exposed to the message at-least
once in four weeks
If an advertiser places an ad in a magazine that is
published every 4 weeks and only has one ad in each
issue.
The reach would be the number of people reading the
magazine and frequency is one
In case where advertiser uses multiple media:
39. An ad for the product on two prime time television
shows
The audio version of the commercial during drive-time
radio
An ad is placed in the major Newspaper
Reach is the probability that person will be exposed to
the message atleast once through one of the vehicles
Frequency is the average number of times a person is
exposed to the message
Example: if commercial is aired in your favorite
program every Saturday for a four week period and you
watched the program all four weeks the frequency is
four
40. When multiple media are used, frequency is estimated as the
average number of times an individual is exposed to the
message
Example : if 40% of the target audience is reached once, 30
% is reached twice, and 10% were reached three times, 80
% of the target market were and average frequency would be
reached
( .4 x1) +( .3 x 2) + (1x3) = 1.63
.80
> 80% of the target population would be exposed message an
average of 1.63
41. Advertising reach and frequency easily defined but in
practice are complicated to calculate
Probability distributions are needed to indicate the likelihood
that a member of the target market will be exposed to the
message
Computerized models for estimates of reach and frequency
are utilized
42. Gross Rating Point
Gross rating Points (GRPs) are used to:
Set media goals
Evaluate alternate vehicles
Media schedules
GRPs are calculated by multiplying reach times frequency
43. Gross Rating Point
Given that a particular media schedule will reach 80% of the
target market with a frequency of 2.5 times the GRP is
GRP = reach x frequency = 800 x 2.5 = 200
An increase of either reach or frequency will increase GRPs
A criticism of GRP is that each exposure is considered to have
same effect
Effective Reach is based on the notion that an advertisement is
effective only if it reaches the target market the correct number of
time: neither too few or too many
The American National Advertisers consider the rule for effective
reach is 3
44. Setting Media schedules
Computer routines are used to allocate budgets among
acceptable vehicles that provide the largest number of
GRPs for a given budget
:These budget routines take into consideration:
budget limitations,
target audience,
desired frequency and reach
cost per insertion
for a given length and position
audience demographics for each acceptable vehicle are
used
45. Procedures for evaluating effectiveness
1. Procedures for evaluating specific advertisement
i. Recognition task
Estimate the percentage of people claiming or have read a
magazine who recognize the ad when it is shown to them
ii. Recall test:
Estimate the percentage of people claiming to have read a
magazine who can (unaided) recall the ad and its content
iii. . Opinion Tests:
Potential audience members are asked to rank alternative
advertisement as most interesting, most believable and best
liked
iv. Theater Test
Theater audience is asked for brand preferences before and
after an ad is shown in context of TV show
46. 2. Evaluating Specific Advertising Objectives
i. Awareness:
Potential buyers are asked to indicate brands that
come to mind in a product category.
A message is used in the ad campaign is given and
buyers are asked to identify the brand that was
advertised using the message
ii. Attitude:
Potential buyers are asked to rate competing or
individual brands on determinant attributes, benefits,
and characteristics using rating scale
47. 3. Evaluating Motivational impact
i. Intentions to buy:
Potential customers are asked to indicate the
likelihood they will buy the a brand (on a scale from “
definitely will” to “ definitely will not”
ii. Market Test
Sales changes in different markets are monitored to
compare effects of different messages, budget levels
