Chapter 5 Objectives Setting

Major Decisions in Advertising

Advertising Objectives Sales Objectives Communications Objectives

Sales Objectives Specific, measurable outcomes within a given time period. E.g. sales volume, market share, profits, or ROI. A good sales objective is quantifiable, realistic and attainable. In addition, it also delineates the target market and time frame.

Appropriate Situations for Sales Objectives Induce an immediate behavioral response Direct-response advertising Retail advertising for special events, e.g. 新光三越, 家樂福. Advertising plays a dominant role in a firm’s marketing program and other factors are relatively stable, e.g. consumer packaged goods.

Sales Objectives are Appropriate for Direct Response Advertising

Problems with Sales Objectives Too many factors influence sales. Carryover effect: for mature, frequently purchases, low-priced products, advertising effect on sales lasts up to 9 months. Offer little guidance to the managers. Induce the managers to take a short-term perspective.

Many Factors Influence Sales Product Quality Promotion Distribution Competition Technology The Economy Price Policy SALES

Communications Objectives Designed to achieve such communications as brand knowledge and interests, favorable attitudes and images, and purchase intentions.

Not all Ads are Designed to Achieve Sales Pampers Toyota Ford 中華汽車

The Response Process Traditional Response Hierarchy Models AIDA model Innovation adoption model Hierarchy of effects model Information processing model Alternative Response Hierarchies The dissonance/attribution model (Dissonance-reducing buying behavior) The low-involvement model (variety-seeking buying behavior & habitual buying behavior)

AIDA Model (Strong, 1925) Attention → Interest → Desire → Action The stages a salesperson must take a customer through in the personal-selling process.

Hierarchy of Effects Model (Lavidge and Steiner, 1961) Awareness → Knowledge → Liking → Preference → Conviction → Purchase A paradigm for setting and measuring advertising objectives Premise: advertising effects occur over a period of time.

Innovation Adoption Model (Rogers, 1962) Awareness → Interest → Evaluation → Trial → Adoption The stages a consumer passes through in adopting a new product or service

Information Processing Model of Advertising Effects (William McGuire, 1978) Presentation → Attention → Comprehension →Yielding → Retention → Behavior Assume that the receiver in a persuasive communication situation like advertising is an information processor or problem solver. McGuire’s model includes a stage not found in the other models: retention, or the receiver’s ability to retain that portion of the comprehended information that he or she accepts as valid of relevant.

Models of Obtaining Feedback Effectiveness Test Persuasion Process Exposure/presentation Circulation reach Circulation reach Exposure/presentation Attention Listener, reader, viewer recognition Listener, reader, viewer recognition Attention Relation to text This slide relates to material on p.147 and Figure 5-4 of the text. Summary Overview This slide shows that there are various stages of the persuasion process that marketers want to attain. Each stage can be measured, providing the advertiser with feedback regarding the effectiveness of various strategies designed to move the consumer closer to purchase. The types of effectiveness tests that can be used to measure each step of the persuasion process are included on this slide. Use of this slide This slide can be used to demonstrate the various methods of obtaining feedback given each stage of the persuasion process. There are a variety of measures that are appropriate to use depending on where the customer is in the persuasion process and the type of communications being used. Comprehension Recall, checklists Recall, checklists Comprehension Message acceptance/ yielding Brand attitudes, purchase intent Brand attitudes, purchase intent Message acceptance/ yielding Retention Recall over time Recall over time Retention Inventory POP consumer panel Scanner data Purchase behavior

Examples of Exposure/Presentation

Hierarchy of effects model Information Processing Models of the Response Process Stages Cognitive Affective Behavioral Models AIDA model Attention Interest Desire Action Hierarchy of effects model Awareness Knowledge Linking Preference Conviction Purchase Innovation adoption Evaluation Trial Adoption Information Processing Presentation Comprehension Yielding Retention Behavior

Three Basic Stages Cognitive stage (think): what the receiver knows or perceives about the particular product or brand. Affective stage (feel): the receiver’s feelings or affect level for the particular product or brand. Behavioral or Conative stage (do): the receiver’s action toward the particular product or brand.

Implications of the Traditional Hierarchy Models Potential buyers may be at different stages in the hierarchy, so the advertiser will face different sets of communication problems. Cognitive, e.g. DHC, Pinky, 3M魔布強效拖把. Affective, e.g. 全國電子, 三菱SAVRIN, 泰國人壽, Pantene Thailand. Behavioral, e.g. Heineken, KFC, www.one.org. It is useful for the measurement of communication effect.

Alternative Response Hierarchies (Michael Ray, 1973) High Involvement Low Involvement High Perceived Product Differentiation Standard Learning Model (C→A→B) Low-Involvement Model (C→B→A) Low Perceived Product Differentiation Dissonance/Attribute Model (B→A→C)

Four Types of Buying Behavior (Henry Assael, 1987) High Involvement Low Involvement Significant Differences Between Brands Complex buying behavior (C→A→B) Variety-seeking buying behavior (C→B→A) Few Differences Dissonance-reducing buying behavior (B→A→C) Habitual buying behavior

Ads for Complex Buying Behavior

Theory of Cognitive Dissonance When a person is confronted with inconsistence among attitudes or behaviors, he or she will take some action to resolve this “dissonance,” perhaps by changing an attitude or modifying a behavior. It helps to explain why evaluations of a product tend to increase after it has been purchased. One implication of this phenomenon is that consumers actively seek support for their purchase decisions.

Ads for Dissonance-Reducing Buying Behavior

Ads for Low-Involvement Behavior

Think In spite of C→A→B, B→A→C and C→B→A, is there another type of response process?

Involvement Concept Possible results of involvement Antecedents of involvement derived from the literature Person factors - Needs - Importance - Interest - Values Object or stimulus factors - Differentiation of alternatives - Source of communication – Content of communication Situational factors -Purchase/use -Occasion Possible results of involvement Elicitation of counterarguments to ads Effectiveness of ad to induce purchase Relative importance of the product class Perceived differences in product attributes Preference of a particular kind Influence of price on brand choice Amount of information on search Time spend deliberating alternatives Type of decision rule used in choice Involvement With advertisements With products With purchase decisions

Decision Rules Compensatory Noncompensatory Simple Additive Rule Weighted Additive Rule Noncompensatory The Lexicographic Rule The Elimination-by-Aspects Rule The Conjunctive Rule

Decision Rules – Compensatory Simple Additive Rule Weighted Additive Rule Fishbein-Ajzen Model k: consumer, j: brand, i: attribute, n: number of attribute, W: weight, B: belief, A: attitude. The Idea-Point Model

A Consumer’s Brand Beliefs about Computers Attribute Memory Capacity Graphics Capability Size and Weight Price A 10 8 6 4 B 9 3 C 5 D 7

Marketing Strategies Alter beliefs about the brand: psychological repositioning, e.g. 蠻牛, DHL, Extra, 萬安生命. Alter beliefs about competitor’s brands: competitive positioning, e.g. 威寶電信, 德恩奈系列牙刷. Alter the important weights, e.g. 台灣啤酒, 薄酒萊. Call attention to neglected attributes, e.g. Extra潔淨無糖口香糖, 聲寶殺菌光. Redesign the product: repositioning, e.g. Arm & Hammer, 綠油精 – 1, 2.

Case: Beaujolais (薄酒萊) 產地：South of Burgundy 品種：Gamay Noir 一般品嚐葡萄酒常強調陳年、厚實。 薄酒萊強調新鮮、果香，利用行銷策略、舉辦「新酒節」等方式，使消費者接受其訴求。

Decision Rule – Noncompensatory The Lexicographic Rule The brand on the most important attribute is selected. The Elimination-by-Aspects Rule (Tversky, 1972) Brands are evaluated on the most important attribute, and specific cutoffs are imposed. Compromise effect, e.g. 菜單上最貴的的菜色(HBR中文版 June 2008, p.38). The Conjunctive Rule Cutoffs are established for each attribute.

A Consumer’s Brand Beliefs about Computers Attribute Memory Capacity Graphics Capability Size and Weight Price A 10 8 6 4 B 9 3 C 5 D 7

Think What factors may affect a consumer’s decision rule?

Setting Objectives Using the Communications Effects Pyramid Product: Backstage Shampoo Time period: Six months Objective 1: 90% awareness Objective 2: 70% interest Objective 3: 40% positive feelings and 25% preference Objective 4: 20% trial Objective 5: 5% main regular use

Inverted Pyramid of Communications Effects 90% Awareness 70% Knowledge 40% Liking 25% Preference 20% Trial 5% Use (Behavioral) Conative Cognitive Affective