Marketing Management Chapter 14

8/9/2019 Marketing Management Chapter 14

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Excel BooksMarketing Management Text and Cases,S H H Kazmi14-1

Advertising & Sales Promotion

Marketing Management Text and Cases

Excel Books14-1

Advertising &

Sales Promotion

14Chapter


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Advertising is the structured andcomposed non-personal communication of

information, usually paidforandusually persuasive in nature, aboutorganisations,

products, services, ideas by identified sponsors throughvarious media.

First, advertising is a highly structuredform ofcommunication andemploys both

verbal and non-verbal elements.

Second, thefocus ofadvertising is directedto groups ofpeopleratherthan to

individuals andforthis reason it is non-personal ormass communication.

Third, most advertising is paidforby sponsors forthe media timeorspace ituses

tocommunicate its messages.

Fourth, although most advertising messages are intendedto be persuasivetoaccomplishthedesired selling function, some ads appearonly to inform people,

examples being legal announcements, changeofaddress, obituaries, etc., without

any persuasive intent.

Fifth, an ad identifies its sponsor.


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Product Life Cycle and AdvertisingThedevelopmental stageofa productdetermines theroleofadvertising.As

products pass throughvarious stages oftheir lifecycle, the mannerin whichthe

advertising presents the producttotarget audiences depends largely upon the

degreeofa products acceptance by consumers. Basedon theconceptofproduct lifecycle, one may differentiatethree stages:

Introductory Stage

Competitive Stage

ReminderStage


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Types of AdvertisingScholars have proposedvarious approaches toclassifying thevastvariety of

advertising.An understanding ofthese wouldhelp managers in choosing the

most appropriatetypeofadvertising to achievetheirobjectives.


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Consumer Advertising

Most non-classified advertising is display advertising and is foundthroughout

the newspaperandon many magazine pages.


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Twotypes ofdisplay advertising in newspapers arenational andlocal.

NationalAdvertising

Retail (Local)Advertising

Co-operativeAdvertising

End-ProductAdvertising

Direct-ResponseAdvertising

ClassifiedAds


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Advertising to Business and ProfessionThis typeofadvertising is aimed atre-sellers, and professionals such as,

architects, lawyers anddoctors, etc. The media used is direct mail orprofessional

journals.

TradeAdvertising

IndustrialAdvertising

ProfessionalAdvertising

Corporateor InstitutionalAdvertising


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Non-product Advertising IdeaAdvertising

ServiceAdvertising


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Surrogate AdvertisingIn advertising context when the laws ofa country do not permit advertising ofa

certain productcategory, the advertisers takethe shelterofbrandextension.


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Important Players in Advertising Advertiser

AdvertisingAgency


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Atypical full-service agencyhas fivefunctional departments: accounts

management, creative services, media services, marketing services, and

administration department.

Media-buying services specialise in buying media forclients.

Industry-focussed agencies concentrateon certain fields such as agriculture,

healthcare, drugs and pharmaceuticals, andcomputers etc.

Media Organisations

Collateral Service Providers

Target Audiences


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Planning and Managing Advertising

Advertising planning and managing steps includesituation analysis, identifying

target audience, determining objectives, setting budget, advertising strategy

implementation, and evaluation. In mostcases the ad agencys accounts

executivedevelops the advertising plan orcampaign.


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Effectof

Advertising

on

Consumers

Behavioural

Dimensions

Steps Toward

Purchase

Advertising

for Various Stages

Conative

The realm of motives.

Ads stimulate or

direct desires.

Affective

The realm of emotions,

attitudes, and feelings.

Cognitive

The realm of thoughts.

Beliefs.

Purchase

Conviction

Preference

Liking

Knowledge

Awareness

POP advertising.

Testimonials

Price/quality appeals

Comparative ads.

Argumentative copy.

Image copy. Status,

glamour appeals.

Descriptive copy.

Slogans, jingles, etc.

Ad repetition, teaser ads.

(Figure based on Lavidge and Steiner Model)


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Marketers shouldconsidersome specificfactors when setting the advertising

budget:

Product lifecycle stage

Market share

Intensity ofcompetition andclutter

Advertising frequency

Productdifferentiation


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Advertising Strategy Implementation

Advertising strategy has four importantelements ofcreative mix:

identifying thetarget market anddefining the audience,

deciding the products positioning,

developing advertising message, and

selecting thecommunication media.


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Advertising MessageGreat advertising results by creating a combination ofad likingand its

strategic relevance. Whilethetext andthevisuals carry the ad message,

behindthecreativeteams choiceoftone, words, and ideas, lies an

advertising strategy.


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Accountexecutivefrom the advertising agency prepares a creative briefto

communicatethe strategy tothecreativeteam. It is a simple written statement

ofthe most significant issues toconsiderand guidetheteam in the

developmentofan advertisementorcampaign. The statement addresses the

following issues:

Who?

Why?

What?

Where, when, and how?

What style, approach, or tone?


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Ogilvy used prestigious individuals toconvey thedesired imageforthe product

in someofhis most well-known campaigns and when possible, he woulduse

testimonials from celebrities.

He prescribed the following eleven commandments for creating advertising

campaigns:

1. What you say is more important than how you say it.2. Unless your campaign is built around a great idea, it will flop.

3. Give the facts. The consumer isnt a moron; she is yourwife. You insult her

intelligence if you assume that a mere slogan and a few vapid adjectives

will persuade her to buy anything. She wants all the information you can

give her.

4. You cannot bore people into buying. We make advertisements that people

want to read. You cant save souls in an empty church.

5. Be well mannered, but dont clown.

6. Make youradvertising contemporary. Cont


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7. Committees can criticize advertisements, butthey cannot writethem.

8. Ifyou are lucky enoughto write a good advertisement, repeat ituntil it

stops pulling.

9. Neverwrite an advertisement, which you wouldnt want yourfamily to

read. Good products can be sold by honest advertising. Ifyoudontthink

the product is good, youhave no business to be advertising it. Ifyoutell lies,orweasel, youdo your client a disservice, you increase your loadof guilt,

and youfan theflames ofpublicresentment againstthe whole business of

advertising.

10. The image andthe brand: it is thetotal personality ofa brandratherthan

any trivial productdifference, whichdecides its ultimate position in the

market.

11. Dont be a copycat. Nobody has everbuilt a brand by imitating somebody

else in advertising.

DavidOgilvy, Confessions of an Advertising Man (Portions ofsome points excluded).


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Rosser Reeves: RosserReeves ofTed Bates agency (now partofSaatchi

group) developedtheconceptofUnique Selling Proposition (USP).


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Advertising Appeals: The advertising appeal is thecentral messageto be

used in the ad.

Rational Appeals: These appeals address theconsumers selfinterest and

focus on negatively originated motives (problem removal orproblem avoidance)

as happens when werun outofsomething andexperience a negative mental

state.

Emotional Appeals: Emotional appeals relatetocustomers social and

psychological needs and stirup positiveornegativeemotions thatcan motivate

purchaseofa productorservice.


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There are many ways in which an advertising messagecan be presented.

Factual messageorstraight sell

Scientificortechnical evidence

Testimonial

Demonstration

Comparison

Sliceof life (problem solution)

Lifestyle

Fantasy

Animation

Humour

Combination


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Media PlanMedia planning involves a series ofdecisions in delivering the ad messageto

the largest numberofthetarget audience in the mosteffective manneratthe

lowestcost. Three important steps involved are media objectives, media

strategy, and media selection.

Afterclosely analysing the media habits oftarget audience, geographic area,and media timing, the planners formulate a particularcombination that would

servethereach, frequency, and impactobjectives successfully andeffectively.

Media class

Media vehicle

Media reach

Media frequency

Media impact

Media scheduling


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Selection among Major Media Types

Media planners considercertain factors in making theirchoices among major

media to achievethedesiredreach, frequency, and impact. Media planners

considerthefollowing factors:

TargetAudienceMedia Habits

ProductCharacteristics

MessageCharacteristics

Media Costs


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General

CharacteristicsofMajorMedia

Types

Media Advantages Disadvantages

Television Offers mass coverage.

High level of reach.

Combined impact ofsight,

sound, and motion.

Prestige value.

Low cost per exposure.

Attracts attention.

Offers low selectivity.

Short span ofmessage life.

High cost.

High production costs.

Creates advertising clutter.

Waste coverage.

Radio Local coverage.

Lower cost.

High frequency.

Focused segment selection.

Low production costs.

Only audio.

Noise.

Low on attention getting.

Message short lived.

Newspapers Mass coverage.

Low cost, large space.Short lead time forad placing.

Ad position choice possible.

Good for current ads.

Reader controls exposure.

Coupons can be inserted.

Short life ofadvertisement.

Clutter.Low attention getting.

Poorproduction quality.

Selective exposure.

Cont


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General

CharacteristicsofMajorMedia

Types

Magazines Potential for focused segmentation.

Very good production quality.

Longevity ofmessage.

High information content.

More readers per copy.

Long lead time forad placing.

Only visual.

Low frequency.

Lack of flexibility.

Outdoor Good forspecific location.

High repetition.

High visibility.

Short exposure time.

Short message.

Poor image.

Direct mail High level ofselectivity.

Reader controls exposure.

High information content.

Opportunity for repeat exposures

High cost per contact Clutter.

Often thrown as junk mail.

Internet User controlled.Increased attention and involvement.

Limitedcreativecapabilities.


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Evaluation of Advertising EffectivenessAdvertising agencies usually pretest ads orcommercials and alsoconduct post-

testing. Some majorpre-testing and post-testing methods are mentioned briefly.

Pre-Testing MethodsPrintAdvertising

Direct Questioning

Focus Group

Portfolio Test

Order-of-Merit Test

Cont


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Pre-Testing Methods

Television andRadioAdvertising

Central Location Test

ClutterTest

TrailerTest


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Post-Testing Methods

Recall

Recognition

Inquiry


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Sales PromotionSales promotion utilises a variety ofincentivetools fora predetermined, limited

periodoftime in orderto stimulatetrial, increaseconsumerortradedemand,

and motivate andreward sales force, such as samples, coupons, discounts,

premiums, refunds andrebates, contest and sweepstakes, tradedeals, andsales contests forsales peopleetc. In mostcases, theobjectives are generally

short-term sales relatedratherthan long-term brand building.


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Reasons for Sales Promotion Growth

Theroleofsales promotion has increaseddramatically within the last 15

years.

IntenseCompetition

Brand Proliferation

Declining Brand Loyalty

Growing PowerofResellers

Advertising has Become Less Effective


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Sales Promotion ToolsManufacturerannouncedconsumerpromotions constitutepull strategy and

retailerpromotions are basedon push strategy. Sales promotions are more

effective when combined with advertising andpull-push strategies areused at

the sametime.


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Consumer Promotions

Sales promotions directed atend-users arecalledconsumersales promotions.

Price Discount (alsocalledcents-off)

Bonus-Pack

Samples

Premiums

RefundorRebate (theterms areused interchangeably)

Frequent-UserReward

Coupons

ConsumerContests, Sweepstakes, andGames

ExchangeorBuy-Back Offers

Point-of-Purchase Displays


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Trade Promotions

Trade promotions aredirected atresellers (distributors, dealers, wholesalers,

andretailers).

The main objectives of trade promotions include:

Build strong relations with channel members.

To stimulate in-store merchandising support, such as arranging

displays, shelfspace, feature advertising etc.

Gain distribution ofnew products.

Gain support for existing brands.

Manipulate levels ofinventory held by wholesalers and retailers. Trade Allowances

BuyingAllowances

Free GoodsCont


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SlottingAllowances (alsocalled stocking, or introductory allowance)

Buy-BackAllowance

AdvertisingAllowances

DisplayAllowance

Contests and Incentives

CooperativeAdvertising

DealerLoader

Training Programme

Trade Promotions


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Internet PromotionsThe numberofcompanies using Internet promotions is increasing. Contests and

sweepstakes are among the mostcommonly usedto motivate peopletovisit

marketers Internet sites.


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Promotions that Blur the LineSome promotions such as speciality advertising, event marketing and

sponsorship are activities that blurthe line between advertising, sales

promotion, and publicrelations.

SpecialityAdvertising

EventMarketing and Sponsorship


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Sales Promotion Planning GuidelinesPlanning process starts with situation analysis. To start with, the promotion

planners must first consider the corporate policy with regard to sales promotion.

Joseph S. Mair has recorded one such policy statement in Handbook of Sales

Promotion, ed. Stanley M. Ulanoff. The policy says:

1. Sales promotion is an integral part of the marketing mix.

2. Sales promotion should be used as an offensive weapon in the brands

marketing arsenal, not merely as a defensive reaction when a problem

arises.

3. Sales promotion should extend and reinforce the brands advertising and

positioning, wheneverpossible.

4. Sales promotion should be developed as campaigns, not as single,

unrelated events.

5. Good sales promotions are built upon sound strategic planning.


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Some of the important objectives ofsales promotion include:

Increase sales volume

Attract new customers

Launch new product and increase trial

Encourage repeat purchase

Clearance of excessive inventories

Motivate dealers to stock and sell more

To gain advantageous shelf-space

To increase store traffic

To block competitors moves

Motivate sales force

Sales Promotion Objectives


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Resellers perceive inventory risk associated with stocking or not stocking the

product on promotion. The following conditions may be t h e cause o f r isk

perception:

When the consumer demand for the product is unpredictable.

When the inventory holding costs are high.

When the product is seasonal.

When the product is likely to go out of fashion quickly.

Which Product to Promote

Marketing Management Chapter 14

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