ADVERTISING MANAGEMENT

Eastern Institute of Management2nd Year 1st Semester

Advertising and the Marketing Process

What is Marketing ?

• The American Marketing Association Defines Marketing as the Process of Planning and Executing the Conception, Pricing, Promotion, and Distribution of Ideas, Goods, and Services to Create Exchanges That Satisfy the Perceived Needs, Wants, and Objectives of the Customer and the Organization.

Research StageAnalyze Marketing Environment

Strategic StageDevelop Objectives and Strategies

Tactical StageSpecific Tools Are Selected

Implementation StageCoordinate Strategy With Marketing Activities

Evaluation StageAssess How Well Objectives Were Achieved

The Marketing PlanA Marketing Plan is a Blueprint of Planned Marketing Activity That Strives to Create a Competitive Advantage for an Individual Product, a Product Line, or an Idea.

The Four Main Types of Marketing

Undifferentiated ApproachDevelop One Marketing Strategy That Will Appeal to As

Many People as Possible. (Gasoline)

Undifferentiated ApproachDevelop One Marketing Strategy That Will Appeal to As

Many People as Possible. (Gasoline)

Type of BuyerType of Buyer ConsumerCharacteristics

ConsumerCharacteristics

Market Segmentation ApproachDivide the Entire Heterogeneous Market Into SegmentsThat Are More Homogeneous, Then Focus on Specific

Target Markets Based on Groupings Such As:

Market Segmentation ApproachDivide the Entire Heterogeneous Market Into SegmentsThat Are More Homogeneous, Then Focus on Specific

Target Markets Based on Groupings Such As:

Benefits SoughtFrom Product

Benefits SoughtFrom Product

Approaching the Market

A Competitive Marketing Strategy Designed to Create Product Differences in the Eyes

of the Consumer.

A Competitive Marketing Strategy Designed to Create Product Differences in the Eyes

of the Consumer.

Intangible Differences

Image That Implies Difference such as

Status, Enjoyment or Masculinity

Intangible Differences

Image That Implies Difference such as

Status, Enjoyment or Masculinity

Tangible DifferencesProduct Features, Color,

Size,Quality of Performance,

Options or Price

Tangible DifferencesProduct Features, Color,

Size,Quality of Performance,

Options or Price

Product Differentiation

Marketing Concept

• The marketing concept suggests that marketing should focus first on the needs and wants of the customer, rather than finding ways to sell products that may or may not meet customers’ needs.– Step 1. Determine what the customer needs and

wants.– Step 2. Develop, manufacture, market, and

service the goods and services that fill those particular needs and wants.

Four Tools of Marketing

Market Coverage?Push, Pull or ComboStrategy?

Channel Direct or Indirect?

Channel of Distribution Influencers

Exclusive Distribution: Only one distributor is allowed to sell the brand in a market area. i.e.Ethan Allen

Selective Distribution: Increased number of outlets, but limit number to most profitable. i.e. Timex

Intensive Distribution: Places product in every possible outlet. i.e. soft drinks

Direct Marketing: Companies that distribute products without the use of a reseller.

Indirect marketing: product is distributed through a channel structure that includes one or more resellers.

Push Strategy: Directs marketing efforts at resellers.

Pull Strategy: Directs marketing efforts to the ultimate consumer.

Combination Strategy: Most often used and combines push and pull strategies.

Customary or ExpectedPricing

Customary or ExpectedPricing

Psychological Pricing

Psychological Pricing

PriceLiningPrice

Lining

Pricing StrategiesPricing

Strategies

PricingThe Price a Seller Sets for a Product is Based Not

Only on the Cost of Making and Marketing the Product, But Also on the Seller’s Expected Profit

Level.

PackagingPackaging

AdvertisingAdvertising

Public RelationsPublic

Relations

Point-of-Sale

Point-of-Sale

PersonalSelling

PersonalSelling

DirectMarketing

DirectMarketing

Sales Promotion

Sales Promotion

How the Marketer May Communicate With

Target Markets.

How the Marketer May Communicate With

Target Markets.

Marketing Communication Mix

Marketing Communication• Personal Selling

– Face-to-face contact between the marketer and a prospective customer.

– Most important for companies that sell products requiring explanation, demonstration, and service.

• Advertising– Has a greater ability to reach a larger number of people

simultaneously.– Has less ability to prompt an immediate change in

behavior.• Sales Promotion

– Communication devices offered for a limited period of time to generate immediate sales.

Marketing Communication• Public Relations

– Set of activities intended to enhance the image of the marketer to create goodwill.

• Direct Marketing– Interactive system that allows two-way communication.– Provides a mechanism for the prospect to respond.– Can occur at any location.– Provides a measurable response.– Requires a database of consumer information.

• Point-of-Sale/ Packaging– All the communication devices and marketing messages

found at the place where the product is sold.

Advertising’s Role in the Marketing Plan Advertising is One of Several Marketing Communication

Options.

Advertising vis-à-vis SalesFor an advertising agency

standpoint, it is very important to realize that they can increase

sales with their effort.

AIDA Model

Attract Attention

Gain Interest

Create a Desire

Precipitate Action

Concept of the AIDA Model

•The AIDA model states that advertising agency should know how to draw attention of a buyer to get the customer interested by exhibiting its advantages, benefits and features. Interest is followed by desire. It is advertising agency’s duty to create a desire in a buyer to buy a specific product.•All three steps of the AIDA policy will help you to stimulate the action towards the purchase of a product. AIDA theory guides and leads you to build a better advertising business. BIG B’s of advertising world have followed AIDA to generate good advertisement campaigns.

Consumer Must go through…

Awareness

Comprehension (Image/Identity)

Conviction (Attitude)

Action (Purchase)

DAGMAR Model

Defining Advertising Goals for Measured Advertising Results

It emphasizes the communication task of Advertising as contrasted to the Marketing Objectives of the organization.

The Advertising goal should be specific…should be written, measurable task involving a starting point, a defined audience and a fixed time period.

DAGMAR Model Concept• Suppose you are marketing a service or a product and your

customer knows nothing about the product. • As your client is unaware of the product, the first step is to make

him Aware of your product by posting advertisement regarding your product on respective websites.

• Comprehension is the second step of DAGMAR. Try to know the answers to these following questions.– a) What is your product about? – b) What are product’s potential features and benefits of product? – c) What will your customer get from your product? And how?

• Answers to all these questions will help you to get a potential customer.

• Next stage is Conviction and this is very important. Convince your customer by telling him the benefits of your product. After convincing, your next step starts i.e. action, which is not controlled by you. You have to depend on the customer.

• However, your previous actions will have a major role to play. If you have been able to convince, the customer ad have answered him satisfactorily and then you will definitely be the winner of the day.

AIDA vs DAGMAR

Awareness

Interest

Desire

Action

AIDAAIDA DAGMARDAGMAR

Awareness

Comprehension

Conviction

Action

Form of Advertising Content of Advertising

Why Hire an Advertising Agency?

• Hiring an agency can result in several benefits:– Offer objective advice.– Draw on the collective experience and

training of its staff.– Provide people and management skills to

accomplish advertising objectives.– Provide supportive environment for

professional advertising people.

A Walk through an Advertising Agency

Advertising Agency

• Board of Directors (Privately held)• CEO/CMD/Chairman/MD• Servicing : Client Servicing/Brand Holder• Planning : Brand Planner• Creative : Copy/Art• Media: Planner/Buyer• Research : Consumer Behaviour/Pre Test/Post

Test• Film : Producer/Director/Unit• Finance/HR/L&D etc.

CEO of Advertising Agency

Advertiser/Client

Creative DirectorA/c PlannerPlng. Director

A/c ExecutiveA/c Director

CopywriterVisualiser Art Director

Traffic Controller

Media PlannerBudget Controller

Radio Outdoor Press TV Others

Advertising UniverseTG Segment

Brief

ApprovedCampaign

Campaign

Media Buyer

Film MakerProducer

Production House

Research Agency

EventManagement

Marketing Objective

Planning by Advtg OpportunitiesTG BehaviourResearch

BudgetAdvtg Objectives& Strategy

Co-ordinateMarketingMix Factors

Create the Advertisement

CreativeMediaPlan

CustomersLanguage

Place the AdIn Media

Pre Test theAd through Research

The Advertising Plan

Marketing Objectives

• Decide what the marketing objectives is out to achieve in terms of:· Increase sales of brand x· Increase market share· Generate 500 new enquiries each month· Increase distribution penetration· Establish a network of distributors

Communication Planning• Determining the demand factors.• Identifying the Target Group.• Assess the Competition• Legal and Regulatory Environment

Advertising Objectives

• Decide what the Advertising Objectives is out to achieve in terms of:· Increasing brand awareness, Positioning the service as the friendliest on the market, Repositioning a beer from an old mans drink to a young mans drink, Maintaining brand X as the preferred brand, Supporting the launch of a new shop by generating 50% awareness in the city, Repositioning the Daily newspaper as an up-market business newspaper, etc.,

Advertising Strategy • How we get there- how the objectives are achieved. Strategy drives

the tactics in the same direction. • The strategy summarizes the tactics, by helping to harmonize and

integrate all tactical communication tools. The strategy should also include selection of target markets, positioning, selection of communication tools, sequence of communication tools (are different tools used at different stages?), time scales and more. Examples of such strategies include:

• The Tupperware direct response campaign that combines personal selling in party format and toll free numbers and catalogues.

• The IBM Position the business as a solution provider for all your computing problems, e.g. conferences, published papers, training awareness days etc.– Daewoo Cars Position Daewoo as a customer focused firm that is

happy to deal directly with customers.• Stage 1. Build customer credibility through TV and motoring

press• Stage 2. Develop dialogue with customers about current

issues about car ownership • Stage 3. Launch brand·

Advertising Budget

Setting the budget can be achieved in four main ways:

1. Objective and task approach - Where the cost of implementing the objectives determines the budget.

2. Percentage of sales approach, whereby the budget is determined by a fixed percentage of sales.

3. Competition matching approach, whereby the firm’s budget spend matches that of the competition.

4. Arbitrary approach, where the CEO sets an arbitrary figure that does not take account of the cost of implementation.

Creative Planning

• Identify the target audience : Decide whom the message is for.

• Determine the response sought : What would the marketer like the audience to do after they get the message?

• Choose the message : Write the copy, or produce the appropriate image.

• Choose the channel : Decide the most appropriate medium (i.e. TV, radio, or other medium) is most appealing to the audience.

• Select the source’s attributes : Decide what it is about the product or company that needs to be communicated.

• Collect feedback : Carry out market research to monitor how effective the promotion was.

Media Planning • Determining the media channels to utilise.

– In order to achieve maximum reach (no. of customers).– The frequency of coverage (no. of times a customer is exposed to the

advert).– The scheduling of coverage (e.g. prime time or early morning for

radio and TV.)– The size of the advert (e.g. half page in a paper)– The positioning of the advert (e.g. on the front page of a magazine

or paper).• In Advertising the decision is based on the cost per thousand viewers,

listeners or readers. • Creating the platform Deciding the basic issues and selling points that

the communication must convey. This clarifies the thinking on producing the communication plan.

• Action Plans to outline the details of the tactics : Detailed action plans implement the tactics in various forms including:· Project management skills· Time management· Prioritising· People management· An ability to get things done and plan for contingencies

• Control Plans should identify how progress should be reviewed, monitored, measured and controlled. So measurement systems need to be built in from the start.

An Example

Months prior to November work with Production, R& D to get the product right in line with Customer Needs and branding exercise done with Agency and Consultant.

• December : Press Release to trade press and retailers • January :

– Sales campaign to persuade retailers to stock the product – Press Release to trade press, TV programs if newsworthy

enough – Begin a teaser campaign

• February : Launch Teaser campaign • March : Once 50 per cent retailer penetration has occurred, start

public campaign to maximize brand awareness • April : Begin a new campaign to inform consumers about the

brand. Possibly use money-off promotion, linked promotions, etc. • May : Review progress using market research. Possibly release

PR to specialist trade press

The Brief

Brief

Types of Advertising - Client• Institutional/Corporate – promotes organizational

images and ideas not specific products eg : Union Bank • Advocacy – promotes a company’s position on a public

issue eg : Tata Motors on Singur Isssue• Brand/Products/Service – promotes a product use,

feature or benefit, Service, Brand eg : Vodafone, Vivel, Jet Airways etc.,

• Pioneer – promotes a product category rather than a brand eg : Apple i-pod, i-phone etc

• Political – promotes polictical party idealogy, messages eg : BJP Campaign, US Presidential Election

• Public Service/Social Service – promotes the cause of social awareness, urges action eg : Teach for India from TOI

Types of Advertising - Media• Print Advertising – Newspapers, Magazines,

Brochures, Fliers • Outdoor Advertising – Billboards, Kiosks,

Tradeshows and Events • Broadcast/Electronic Media Advertising –

Television, Radio and the Internet • Covert Advertising – Advertising in Movies :

James Bond and Sony Erickson Cybershot• Non - conventional Methods – Village Hailers,

Slides in Movie Halls, Van Publicity, • Brand Experience : Promos in Malls, Retail

Advertising at POP

Types of Advertising - Type

• Reminder – reminds consumers about an established brands features, benefits, characteristics, uses

• Reinforcement – assures consumers that they have made the right choice

• Competitive – promotes a brands competitive features w.r.t another brand

• Comparative – compares two or more brands on the basis of one or more characteristics

• Celebrity Advertising

• Surrogate Advertising – Advertising Indirectly

Advertising Campaign

• The creation and execution of a series of advertisements that communicate to a particular target audience• Thematic Campaign – Brand Promise (Pull

Strategy)• Tactical Promotion – Brand Sale (Push

Strategy)• Relaunch Campaign • Repositioning Campaign

Thematic Campaign

Thematic Campaign

Thematic Campaign

Tactical (Promotion) Campaign

Brooke Bond

Repostioning (Brand Image)

India’s Pride Power & Control

Relaunch

New India Kings Pack

Advertising LayoutCompany Logo

Brand Logo

Headline

Body Copy Baseline

Creating a Campaign

• Identify and analyze target audience (need, problem etc)

• Define advertising objectives (what would it do)• Create the advertising content (based on a brief)• Determining the Advertising Appropriation• Pre-test with a sample size• Evaluate the results and rework if necessary• Develop media plan and budget• Run the campaign• Evaluate its effectiveness

Identifying and Analyzing TG

• TG is group of similar people to whom the advertisement is aimed at• Demographic• Psychographic• Lifestyle• Attitudes

Defining the Objectives

• What does the firm hope to accomplish with the campaign• Objectives should be clear, precise and

measurable• Increase in sales ?• Increase in awareness ?

Advertising Content

• Basic issues or selling points that must be included in the campaign• Simple• One or two such points• Must be important to the TG

Advertising Appropriation

• Advertising Budget for a specified period• The size of the market and the geographic

spread will determine the budget• Budgeting Approach

• Objective and Task : Determining the objectives and the cost needed to attain them

• Percent of Sales : What percent of past sales determines the budget

• Competitive Matching• Arbitary

Top 10 US SpendersCOMPANY SALES USD

MILLIONADVERTISING SPEND USD MLN

% OF SALES

General Motors 132399 3374 2.5

Procter & Gamble 20334 2541 12.5

Ford 108296 2408 2.2

Pepsi Co 18295 2210 12.1

Pfizer 19932 2189 11.0

Daimler Chrysler 72708 1985 2.7

AOL Time Warner 32676 1885 5.8

Phillip Morris 52098 1816 3.5

Walt Disney 20970 1757 8.4

Johnson & Johnson

20204 1618 8.0

For 2002

Pretesting

• Pretesting is a research method that seeks to minimize mistakes by getting consumer reactions to ad messages before they are placed in the media.

Developing the Media Plan

• Specifies media vehicles (press, tv, radio, billborads etc.,) and the schedule for running the advertisements

• Plan objectives focus on the reach and frequency that the budget will allow• Reach – the percentage of consumers in a

target market exposed to an advertisement in a specified period

• Frequency - The number of times the TG is exposed to the ad

Developing the Media Plan

• Cost Comparison Indicator – A means of comparing the cost of vehicles in a specific medium in relation to the number of people reached

• The indicator is stated a the cost of exposing one thousand people to an ad in a medium and its unit is CPM

Percentage of Media Spend

MEDIUM USD MILLION SPEND % of TOTAL

Television 59231 24.3

Newspaper 49050 20.1

Direct Mail 44591 18.3

Radio 19295 7.9

Yellow Pages 13228 5.4

Magazines 12370 5.1

Business Prss 4915 2.0

Internet 4333 1.8

Outdoor 1758 0.7

Miscellaneous 34919 14.4

TOTAL 243680 100.0

2000 USA

Strategy & Creative Content

• Consumer Insight – Brand Idea – Execution Idea –

• Copy – The verbal portion of advertisements, Headline, BaseLine, Body Copy etc.,

• Art – The visual portion of the advertisement• Story Board – A mock up combining copy and

visual material to show the sequence of major scenes in a TV commercial

Creative Content• Artwork – An advertisements illustration and

layout – rendering to printable form• Illustrations – Drawing, photos, charts, graphs

and tables used to spark the TG’s interest level• Layout – The physical arrangement of an ad’s

illustration and copy

Account ManagementDevelops Campaign’s

Strategy for Client

Specialists Who Create Advertising Campaigns

Creative ServicesDreams Up and Produce

the Ads

Media PlanningDetermines Effective

Communication Vehicles

Research & Marketing Services

Collect and Analyze Information to Help Develop a Strategy

An Advertising Campaign is a Coordinated, Comprehensive Plan that Carries Out Promotion Objectives and Results in a Series of Advertisements Placed in Media Over a Period of

Time.

Setting Message Goals

Setting Budget Goals

Increasing Brand

Awareness Increasing Salesby a CertainPercentage

Changing the Image of a

Product Recognizing a Need for the

Product

Establish Message and Budget Objectives

Unique Selling PropositionHumorous

Appeals

Fear Appeals

ComparativeAdvertising

Demonstration

Testimonial

Designing the Ad

Advertising Appeals

Slice-of-LifeLifestyle

Sex Appeals

Choosing Media

Types of Media:Where to

Say It

Computer Media Television

Out-of-Home Media Radio

Magazines

Directories Newspaper

Media Scheduling: When to Say It

• A media schedule specifies the exact media to use, when, and how often the message should appear.

• Assess advertising exposure - degree to which the target market will see an advertising message in a specific medium and depends on the following two factors:

Continuous ScheduleSteady Stream of Advertisinge.g. shampoo

FlightingAdvertising Appears in Short,

Intense Bursts AlternatingWith Periods of Little or

No Activity

Pulsing ScheduleVaries Adverting Depending

on Product Demande.g. suntan lotion

Media Scheduling:How Often to Say It?

Terminology

Terminology

Evaluating Advertising

• Post testing is research conducted on consumers’ responses to actual advertising messages they have seen or heard.

• Three ways to measure the impact of an advertisement are:• Unaided recall• Aided recall• Attitudinal measures.

Erosion of Brand Loyalty

Technology Gives Power Back to the People

Greater Emphasis on Point-of-Purchase Factors

The Rules Are Changing

The Advertising Environment is Cluttered

Some Consumers Are Turned Off by Advertising

Challenges Facing the Advertising Industry

Global ReachEstablishing Brand Images Globally

DiversityReflecting Cultural Diversity of Target

Markets

TechnologyCustomizing Advertising to Customer

Preferences

How the Advertising Industry is Meeting these

Challenges ?