advtg mgmt
Post on 17-Oct-2014
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The Field of Advertising Management
Market / Consumer Behavior
Government
Competition
Ad Agency
Media
Research Agency
Advertiser
Control Inst. Facilitating Inst.
Institutions Involved in the Field of Advertising
Research Suppliers
Advertiser Ad agency Media
Role of the Facilitating Institutions
Advertising Management
Management is about :- Planning
- Decision Making- Control
Framework of Advertising Planning & Decision Making
Situation Analysis
Marketing Programme
Integrated Mar. Com. Plan
Advertising Plan
Implementation
Process starts with an analysis of the Brand’s external & internal environment
Situation Analysis
(external and internal)
Marketing Programme
Market analysis
Competitor analysis
Brand Analysis- SWOT
Advertising Plan
Implementation
The Role of Advertising emerges from the Marketing Programme
Situation Analysis
Marketing Programme
Determines the role of each elements of the marketing mix including Marketing Communications
Indicates how all elements will be coordinated to support and synergise with each otherIMC & Advertising plan
Implementation
The Advertising Plan Includes…
Situation Analysis
Marketing Programme
IMC & Advertising Plan
Setting Objectives - (Segmentation-positioning)
Media – strategy & tactics
Message – strategy & tactics
Implementation
Implementation and Coordination (synergy with other IMC tools)
Framework of Advertising & Decision Making
Situation Analysis
Marketing Programme
IMC /Advertising Plan
Implementation
Facilitating Agencies
Social, legal & other constraints
The Role of Advertising….
The role the Advertising plan can only be in the context of the Marketing Plan
– The Advertising Plan must support and synergise with:• the elements of the Marketing Mix
• and other elements of the Communication Mix
Need to understand ‘How Advertising Works’
to appreciate the role it plays
How does Advertising work ?
Advertising is
‘persuasive communication’
The Communication Process
MessageSource Receiver Destination
Media WOM
Perception Process
Message
The
Persuasion
Process of
Advertising
is through
a variety
of
advertising
effects
Awareness/familiarity
Brand Benefit / Information
Creating image / personality
Associating feelings with Brand
Linkage of Brand with peers/experts/group norms /culture
Reminder / Brand trial inducement
BrandAttitude
PurchaseBehavior
The Persuasion Process of Advertising
Setting Advertising Objectives
These must be Operational Objectives
Meaningful Advertising Objectives• Provide criteria for decision making
• Serve as a communication and coordination tool
• Provide criteria for evaluate performance
Can ‘Sales’ be meaningful Objectives?
‘Sales’- A Meaningful Advertising Objective??
Difficult to identify the impact of Advtg.on ‘Sales’– ‘Advtg. impact is felt over time
– Isolating ad impact from other elements of the marketing mix is difficult
New customers
Advertising Immediate Sales Future sales
Change attitude / improve image
Developing Advertising Objectives Involves 3 considerations -
• Behavioral decisions (behavioral objectives) that Advertising must influence
• The Target Segment
• The decision making process that communication must precede to influence behavior
‘Sales Strategy’ the basis for Advertising Objectives
Sales growth comes from -• New customers buying
• Old customers staying loyal
• Old customers consuming more
Demand Generation - Offensive Strategy
Market dynamics:
- Sales grow because of new customers buying
‘Offensive Marketing Strategies’
• Primary demand generation
• Secondary demand generation
Those not the buying product
Existing customers
Those buyingOther brands
Demand Generation - Defensive Strategy
Market dynamics:
– Sale grow with old customers staying loyal
‘Defensive Marketing Strategy’
• Recall the important brand features
• Reinforce use experience
• Consumer promotions
Demand Generation through Increased Consumption
Market dynamics:
Sales grow with ‘Product form expansion’ • More frequent usage / share of requirement (SOR)
• New use applications
Secondary Demand-New customers using other brands
Primary Demand - Customers trying the category for the first time
Existing customers Loyalty
More consumption news uses and more usage
Behavioral Responses that drive Purchase
Marketing / Sales Strategies & Behavioral Objectives
Trial
Purchase
Trial
Purchase
Loyalty
Increased usage / SOR
The Influence of Advertising on Desired Behavior
Advertising is not as effective in directly evoking desired action -‘Purchase’
Advertising causal intervening response
desired behavioral response Sales
Sales Promotions, DM & Retail Advertising should be used in conjunction with Advertising to drive sales
The
Persuasion
Process of
Advertising
is through
a variety
of effects
Awareness/familiarity
Brand Benefit Information
Creating image / personality
Associating feelings with Brand
Linkage of Brand with peers/experts/group norms
Reminder / Brand trial inducement
BrandAttitude
PurchaseBehavior
These Intervening Variables between Advertising & Action are more effective Operational Advertising Objectives than Sales
Advertising Objectives (the Intervening Response Variables that are persuasive in its context) are determined by the type of Sales Strategy and Behavioral Objectives
The
Persuasion
Process of
Advertising
is through
a variety
of effects
Awareness / Familiarity
Brand Benefit Information
Creating image -personality / users
Associating feelings with Brand use
Linkage with peers / experts/group norms
Reminder / Brand trial inducement
Purchase
These Intervening Variables have a causal relationship between Advertising & Sales
Trial Purchase
& Loyalty
Trial Purchase &
Increased usage
Loyalty
Loyalty
Loyalty
Advertising Objectives Reflect the Target Segment
The segment and sub-segment can be defined by –
• Behavioral measures – non-users, other brand users,
heavy / light / loyal users etc.
• Advertising response measures – unaware, not
convinced of key benefit, diffused / sharp image, etc
• Lifestyle - attitude & opinions, interests
• Benefits sought
• Demographic, psychographics, geographic basis -
more relevant for media decisions
‘Hierarchy of Effects’ Model - DAGMAR
Unaware
Aware
Comprehension & image
Attitude
Action
Cognitive
Affective
Behavioral
DAGMAR Approach – A communication task to be accomplished amongst a defined audience, in a specified period of time
DAGMAR in PracticeObjectives in Black & White to ensure the sated goals
contain the crucial aspects of DAGMAR
• A specific task indicated clearly – to be measurable
• A starting point set –Benchmark against which goal
achievement can be measured
• A Target Segment specified precisely
• The Time Period for achieving the desired response
indicated
DAGMAR in Practice
Challenges to DAGMAR
• Does not measure Sales
• Broad outline does not give enough details (which
hierarchical level)
• Measurement is a problem
• System noise – other factors affecting goal
• Model may not hold good in every situation
Other Persuasion Models
IADA Hierarchy Innovation of Effects Adoption
Attention Awareness
KnowledgeAwareness
Interest
Desire
Liking
Preference
Conviction
Interest
Evaluation
CognitiveStage
Affective
Stage
Action
StageAction Purchase
Trial
Adoption
Segmentation and Positioning
Segmentation is about deciding which consumers the
Advertising should be targeted at
The Target Marketing Process
Identify markets with unfulfilled needsIdentify markets with unfulfilled needs
Determining market segmentationDetermining market segmentation
Selecting market to targetSelecting market to target
Positioning through marketing strategiesPositioning through marketing strategies
Five-Step Segmentation Process
1. Finding ways to group consumers according to their needs.
2. Finding ways to group marketing actions, usually the products offered, available to the organization.
3. Developing a market/product grid to relate the market segments to the firm’s products and actions.
4. Selecting the product segments toward which the firm directs its marketing actions.
5. Taking marketing actions to reach target segments.
Bases for Segmentation
• Geographic Segmentation– State - region - country - climate
• Demographic Segmentation– Age, sex, income, education, occupation, social class
• Psychographic Segmentation – AIOs, (Activities, Interests, Opinions)– VALS (Values and Lifestyles)– Personality traits
• Behavioristic Segmentation– Usage, loyalties, use occasions
• Benefit Segmentation– Types of specific needs or wants to be satisfied.
Segmentation Approaches
– A Priori basis : the market is segmented before any data on the market place is examined
• Age
• Income
• Usage
• Loyalty
• Geo-location
– Empirical Segmentation : created on the basis of differences in • Attitude and benefits sought
• life-style - AIO
• culture
Approach Implementation
Both are used together but in different order• A priori segmentation starts with variables such as
income etc and then examines attitudes and benefits
• Empirical segmentation starts with benefit segmentation and then see how these clusters are different in terms of demographics
Selecting a Target Market
Segmentation Strategies
Determining how many segments to enter
Undifferentiated Marketing – offering one product or service to the entire market
Differentiated marketing – competing in a number of segments with separate marketing strategies for each
Concentrated Marketing – focusing on one market segment
Determining Which Market Segments Offer the Most Potential
Identify the group that is most likely to respond to the brand offering
Determine sales potential of the segment
Determine opportunities for growth of the market segment.
Analyze the competition in the segment (segments not being served well by competition)
Analyze the company’s ability to compete in the market segment
Decide how to compete in the market segment
Segmentation Decision Check List Can the size of the market segment be
measured?
Is the market segment large and profitable enough to serve? (large and growing in size)
Is the segment identified accessible? Can it be reached effectively and efficiently?
Can effective marketing programs be developed to attract and serve the segment identified?
TM and Media Reach Approaches
– Controlled Coverage – using niche media to reach only the desired segment e.g. trade magazines
– Customer Selection – using mass media to Reach is directed at mass audiences
Positioning
It gives the consumer a clear idea
of what the Brand stands for
The Positioning Process
Positioning ConceptThe desired perception orassociation management wantstarget customers to have for afirm and/or its products
Positioning EffectivenessThe extent to which management’spositioning objectives are achievedin the market target
Positioning StrategyThe combination of marketingactions used to portray thepositioning concept to targetedbuyers
Positioning of the brandThe positioning of the brand bythe buyers in the market target
MarketTarget
Positioning Strategy Development Process - Background Analysis1. Identify the competitors1. Identify the competitors
2. Assess perceptions of competitors2. Assess perceptions of competitors
3. Determine their positions3. Determine their positions
4. Analyze consumer preferences4. Analyze consumer preferences
6. Monitor the position6. Monitor the position
5. Make the positioning decision5. Make the positioning decision
Product/Service and Brand Positioning
BASIC QUESTIONS TO ASK
1. What position, (if any) do we currently hold in the mind of customers?
2. What position do we want to hold?
3. Whom do we have to compete against to establish this position?
4. Do we have the resources to occupy and hold the position?
5. Can we stay with one consistent positioning strategy?
6. Does our marketing and advertising match our positioning strategy?
Positioning Strategy Approaches
Product/Service or Brands can be positioned by single or multiple approaches:
– Product attributes or consumer benefit
– Price-quality
– Use or application
– Users
– Product class
– Cultural symbols
– Competitors
Positioning Decision – Check Points
Select and Evaluate the position
• An economic analysis
– Appeals to a large and growing segment
– Penetration possibilities – competitive edge to attack
competition
• Don’t be what you are not• Monitor the position
Positioning Decision -Imperatives
– Segmentation commitment
– Stick with the Advertising that works
– Consider using symbols
Positioning Strategy Execution
– A relative concept that must indicate the position of the brand vis-a-vis other brands - differentiation
– It determines the nature of the elements of the marketing mix
– Best communicated through Advertising
Product Decisions
A productproduct is a bundle of benefits or values that satisfies the needs of consumers
Product symbolism refers to what a product or brand means to customers
Product quality, branding, packaging, and company name contribute to product image
Branding:• Brand name communicates attributes and meaning• Advertising creates and maintains brand equity which
results from the image and/or impression of a brand
The Value of Strong Corporate and /orBrand Identity
Strong corporate/brand equity:
Creates more options for competing (particularly against lower-priced competitors)
Can facilitate brand and line extensions
Allows companies to sell products/services at a premium price and maintain larger profit margins
Builds customer loyalty
Makes it easier to withstand economic fluctuations and marketing crises
Makes customer response more inelastic to price increases and elastic to price decreases
Packaging
Traditional functions of packaging: economy, protection, storage
Packaging has become increasingly important because: self service emphasis of many stores buying decisions made at point-of-purchase often customers first exposure to product
Packaging is a way to communicate to consumers
Pricing Decisions Price must be consistent with perceptions of the product Higher prices communicate higher product quality Lower prices often reflect bargain or “value” perceptions A product positioned as high quality while carrying a lower
price than competitors may confuse customers Price, advertising and distribution must be unified to create
the position for the product or service.
Distribution Channel Decisions
Channel decisions involve: Determining the type of channel system:
– Direct channels– Indirect channels
Selecting, managing and motivating marketing intermediaries such as – Wholesalers– Distributors– Brokers– Retailers
Information Flow
Push Versus Pull
Push PolicyPush Policy
ProducerProducer
RetailerRetailer
ConsumerConsumer
WholesalerWholesaler
Pull PolicyPull Policy
ProducerProducer
WholesalerWholesaler
RetailerRetailer
ConsumerConsumer
"Push" Techniques
Point of sale displays, racks, stands
Trade deals, special displays
Dealer premiums, prizes, gifts
Cooperative advertising deals
Advertising materials, mats, inserts
Push money or "spiffs"
Collaterals, catalogs, manuals
Trade shows, conventions, meetings
"Pull" Techniques
Sampling, free trial
Coupons
Premiums or gifts
Contests, sweepstakes
Price-off deals
Refunds/rebates
Frequency/loyalty programs
Point-of-purchase advertising
Marketing and Promotions Process Model
Competitiveanalysis
Targetmarketing
Identifyingmarkets
Market segmentation
Selectinga target market
Positioningthrough
marketingstrategies
Productdecisions
Pricingdecisions
Channel ofdistributiondecisions
Promotionaldecisions•advertising•direct marketing•internet/ interactive marketing•sales promotion•publicity and public relations•personal selling
Resellers
Ultimatecustomer•Consumers•Businesses
Marketing Strategy and Analysis
Target Marketing Process
Marketing Planning Program Development
Promotion to final buyer
Target Market
Purchase
Promotion to trade