Chapter 19 Measuring the Effectiveness of the Promotional Program © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Last Class Support Media Personal Selling

Today Measuring Promotion Effectiveness  Why do we measure the effectiveness of promotion

Reasons for and Against Measuring Effectiveness Reasons to Measure Reasons Not to Measure Problems With Research Creative Objections Cost of Measurement Disagreement About What to Test Avoid Costly Mistakes Evaluate Strategies Increase Efficiency of Advertising in General Determine If Objectives Are Achieved Problems With Research Cost of Measurement Disagreement About What to Test Avoid Costly Mistakes Evaluate Strategies Increase Efficiency of Advertising in General Determine If Objectives Are Achieved

Where to test Laboratory tests Field tests Where to test Laboratory tests Field tests When to test Pretesting Posttesting When to test Pretesting Posttesting Where to test Laboratory tests Field tests Where to test Laboratory tests Field tests When to test Pretesting Posttesting When to test Pretesting Posttesting What to test Source factors Message variables Media strategies Budget decisions What to test Source factors Message variables Media strategies Budget decisions How to test Testing guidelines Appropriate tests How to test Testing guidelines Appropriate tests What to test Source factors Message variables Media strategies Budget decisions What to test Source factors Message variables Media strategies Budget decisions Measuring Advertising Effectiveness

On-air Tests Dummy Ad Vehicles Consumer Juries Portfolio Tests Physiological Measures Theater Tests Rough Tests Concept Tests Reliability Tests Comprehension and Reaction Tests Pretesting Methods LaboratoryField Dummy Ad Vehicles Consumer Juries Portfolio Tests Physiological Measures Theater Tests Rough Tests Concept Tests Reliability Tests Comprehension and Reaction Tests High control but low generalizability

Recall Tests Inquiry Tests Association Measures Single-Source Systems Tracking Studies Recognition Tests Inquiry Tests Single-Source Systems Association Measures Recall Tests Field Posttesting Methods Methods

Posttesting the Value of a Sponsorship +

Positioning Advertising Copy Testing (PACT) 1. Provide measurements relevant to objectives of advertising 2. Require agreement on how results will be used before each test 3. Provide multiple measures (Single measures aren't adequate) 4. Be based on a model of human response to communications 5. Consider multiple versus single exposure to the stimulus 6. Require alternative executions to have the same degree of finish 7. Provide controls to avoid the biasing effects of exposure context 8. Take into account basic considerations of sample definition 9. Demonstrate reliability and validity

3.Finished Art or Commercial Testing 1.Concept Testing 2.Rough Testing 4.Market Testing (Post- testing) 2.Rough Testing 1.Concept Testing The Testing Process Occurs at Various Stages

Qualitative And/or Quantitative Data Evaluating and Comparing Alternative Concepts Explores Consumers’ Responses to Ad Concepts Expressed in Words, Pictures, or Symbols Alternatives Are Exposed to Consumers Who Match the the Target Audience Reactions and Evaluations Are Sought Through Focus Groups, Direct Questioning, Surveys, Etc. Sample Sizes Depend on the Number of Concepts and the Consensus of Responses Explores Consumers’ Responses to Ad Concepts Expressed in Words, Pictures, or Symbols Alternatives Are Exposed to Consumers Who Match the the Target Audience Reactions and Evaluations Are Sought Through Focus Groups, Direct Questioning, Surveys, Etc. Sample Sizes Depend on the Number of Concepts and the Consensus of Responses Concept Testing Objective Method Output

Rough Art, Copy, and Commercial Testing Number of Ads That Can Be Evaluated Is Limited Preference for Ads Types May Overshadow Objectivity Consumer May Become a Self-appointed Expert A Halo Effect Is Possible Cost Effectiveness Endorsements by Independent Third Parties Achievement of Credibility Comprehension and Reaction Tests Consumer Juries Control AdvantagesDisadvantages Number of Ads That Can Be Evaluated Is Limited Consumer May Become a Self-appointed Expert A Halo Effect Is Possible Control Cost Effectiveness Endorsements by Independent Third Parties Achievement of Credibility Comprehension and Reaction Tests

Photomatic Rough Animatic Rough Live-action Rough Photomatic Rough Animatic Rough Rough Testing Terms Terms

An Animatic Example from Airwalk

Resulting Spot from the Animatic Rough

Based on Syllables Per 100 Words Other Factors Also Considered A Laboratory Method Includes Test and Control Ads Portfolio Test Have Problems Based on Syllables Per 100 Words Other Factors Also Considered A Laboratory Method Includes Test and Control Ads Portfolio Test Have Problems Pretesting Finished Print Ads Readability Tests Portfolio Tests Dummy Advertising Vehicles Based on Syllables Per 100 Words created including articles, and test and non-test ads

Theater Tests Measures changes in product preferences May also measure... Interest in and reaction to the commercial Reaction from an adjective checklist Recall of various aspects included Interest in the brand presented Continuous (frame-by- frame) reactions Measures changes in product preferences May also measure... Interest in and reaction to the commercial Reaction from an adjective checklist Recall of various aspects included Interest in the brand presented Continuous (frame-by- frame) reactions On-Air Tests Insertion in TV programs in specific markets Limitations are imposed by “day-after recall” Physiological Measures Insertion in TV programs in specific markets Limitations are imposed by “day-after recall” Physiological Measures Theater Tests Pretesting Finished Broadcast Ads

Recall Tests Inquiry Tests Recognition Tests Tracking Studies Recall Tests Recognition Tests Inquiry Tests Market Testing Print Ads Testing

Starch-Scored reflect.com Magazine Ad + Noted score– the percentage of readers who remember seeing the ad Seen-associated score—the percentage who remember seeing or reading any part of the ad identifying the product or brand Read most score—the percentage of readers who report reading at least half of the copy portion of the ad. The Reflect.com ad did well in the first of these two categories, but not as well (10%) in the read most categories.

Starch-Scored Nature’s Accents Ad + Natures Accents did well on the noted and advertiser associated measures, particularly in respect to the Reflect.com ad shown in the previous slide

Test Marketing Day After Recall Tests Persuasive Measures Diagnostics Comprehensive Measures Single-source Tracking Tracking Studies Single-source Tracking Test Marketing Comprehensive Measures Diagnostics Persuasive Measures Day After Recall Tests Market Testing Broadcast Commercials Testing

Comprehensive Testing by Ipsos-ASI + Ipsos-ASI provides a variety of research services for print and broadcast measurement, including diagnostics and comprehensive measures

Use a Consumer Response Model Use Pretests and Posttests Use Multiple Measures Understand and Implement Proper Research Establish Communications Objectives Use Multiple Measures Use Pretests and Posttests Use a Consumer Response Model Essentials of Effective Testing Testing

Talking about product placements lms.asp#134 lms.asp#134

Next Class! International Advertising To do!  Read Chapter 20

Chapter 20 International Advertising and Promotion © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Barca's most difficult game is about to begin

Competition Has Become Global and Marketers Must Be Able to Compete Globally International Markets Offer Growth Opportunities for Many Companies International Markets Offer Growth Opportunities for Many Companies Many Companies Rely on Foreign Markets to Survive, Particularly Those With Small Domestic Markets Domestic Markets for Many Products and Services Are Stagnant International Markets Offer Growth Opportunities for Many Companies International Markets Offer Growth Opportunities for Many Companies Many Companies Rely on Foreign Markets to Survive, Particularly Those With Small Domestic Markets Domestic Markets for Many Products and Services Are Stagnant Reasons for the Importance of International Markets

Markets such as China offer strong growth opportunities for many companies +

Economic Environment Economic Environment Demographic Environment Demographic Environment Cultural Environment Cultural Environment Cultural Environment Cultural Environment Economic Environment Economic Environment Demographic Environment Demographic Environment The International Environment International Marketing And Promotional Decisions International Marketing And Promotional Decisions Political/Legal Environment Political/Legal Environment

International Economic Environment Economic environment Stage of economic development Economic infrastructure Standard of living Per capita income Distribution of wealth Currency stability Exchange rates Economic environment Stage of economic development Economic infrastructure Standard of living Per capita income Distribution of wealth Currency stability Exchange rates International Marketing And Promotional Decisions International Marketing And Promotional Decisions

ICI Dulux Targets Young Households in China

International Cultural Environment Cultural environment Language Lifestyles Values Norms and customs Ethics and moral standards Taboos Cultural environment Language Lifestyles Values Norms and customs Ethics and moral standards Taboos International Marketing And Promotional Decisions International Marketing And Promotional Decisions

International Demographic Environment Economic environment Size of population Number of households Household size Age distribution Occupation distribution Education level Employment rate Income level Economic environment Size of population Number of households Household size Age distribution Occupation distribution Education level Employment rate Income level International Marketing And Promotional Decisions International Marketing And Promotional Decisions

Lay’s Targets China Large Youth Market

International Political/Legal Environment Political/legal environment Government policies Laws and regulations Political stability Nationalism Attitudes toward multinational companies Political/legal environment Government policies Laws and regulations Political stability Nationalism Attitudes toward multinational companies International Marketing And Promotional Decisions International Marketing And Promotional Decisions

Type of Products That May Be Advertised The Content or Creative Approach Used The Media Advertisers Are Permitted to Use The Amount of Advertising One Can Use The Use of Foreign Languages in Ads Use of Ad Materials From Outside the Country Use of Local Versus International Ad Agencies The Specific Taxes Levied on Advertising Use of Local Versus International Ad Agencies Use of Ad Materials From Outside the Country The Use of Foreign Languages in Ads The Amount of Advertising One Can Use The Media Advertisers Are Permitted to Use The Content or Creative Approach Used Type of Products That May Be Advertised Advertising Aspects Subject to Regulation

Global Marketer’s Dilemma Should we offer the same product, marketing, and advertising throughout the world? Should we adapt the product, marketing, and advertising to each of several societies throughout the world?

Lower Costs With Less in Planning and Control Global Marketing and Advertising Advantages Economies of Scale in Production, Distribution Lower Advertising and Production Costs Ability to Exploit Good Ideas Worldwide Ability to Introduce Products Quickly, Worldwide Consistent International Brand, Company Identity Simplification of Coordination and Control Lower Costs With Less in Planning and Control Economies of Scale in Production, Distribution Lower Advertising and Production Costs Ability to Exploit Good Ideas Worldwide Ability to Introduce Products Quickly, Worldwide Consistent International Brand, Company Identity

Gillette Used Global Advertising to Launch the Mach3

Legal Restrictions May Make It Difficult to Develop an Effective Universal Appeal Media Availability or Usage May Vary by Country or Region Consumers Needs and Usage Patterns Often Vary by Country or Region Differences in Culture, Market and Economic Conditions Make It Difficult to Use Global Advertising Media Availability or Usage May Vary by Country or Region Consumers Needs and Usage Patterns Often Vary by Country or Region Differences in Culture, Market and Economic Conditions Make It Difficult to Use Global Advertising Problems With Global Advertising

Brands can be adopted for visual appeal, avoiding problems of translating words into many languages Brands promoted with image campaigns playing to universal appeals such as sex or wealth High-tech products, new to the world, not steeped in the cultural heritage of the country of origin Products with with a nationalistic flavor if the country has a favorable reputation in the field Products appealing to a market segment with universally similar tastes, interests, needs, and values Brands can be adopted for visual appeal, avoiding problems of translating words into many languages Brands promoted with image campaigns playing to universal appeals such as sex or wealth High-tech products, new to the world, not steeped in the cultural heritage of the country of origin Products with with a nationalistic flavor if the country has a favorable reputation in the field When is Globalization Appropriate Globalization Often Works Best For:

Saab used a global campaign since its customers are similar around the world + +

British Airways Uses Global Advertising

Standardizing Products “Think Globally, Act Locally” Localizing Ad Messages Differences in Language Differences in Market Conditions Differences in Cultural Differences in Market Conditions Differences in Cultural “Think Globally, Act Locally” Localizing Ad Messages Standardizing Products Global Products, Local Messages An In-between Approach Adapt Messages to Respond To Use of Pattern Advertising

Continental Airlines Used Pattern Advertising to Promote Its Businessfirst Class ++

Organization Creative Decisions Agency Selection Advertising and Market Research Coordination of Other IMC Tools Media Selection Creative Decisions Advertising and Market Research Agency Selection Organization Decision Areas in International Advertising Decision Areas

Budgeting Research Agency Selection Agency Selection Creative Strategy Creative Strategy Media Strategy Media Strategy Campaign Development Campaign Development Campaign Development Campaign Development Research Creative Strategy Creative Strategy Agency Selection Agency Selection Budgeting Centralization of International Advertising Central Authority

Decentralization of International Advertising Central Authority Central Authority Budgets Media Campaigns Creative Research Budgets Media Campaigns Creative Research Budgets Media Campaigns Creative Research Region One Region One Region Two Region Two Region Three Region Three Budgets Media Campaigns Creative Research Region One Region One Budgets Media Campaigns Creative Research Region Two Region Two

Appeals May Have to Be Adapted for Local Market Conditions Specific Appeals and Execution Styles Must Be Selected Copy Platforms Must Be Developed That Include Major Selling Ideas Creative Decisions Should Be Based on Advertising and Communication Objectives Specific Appeals and Execution Styles Must Be Selected Copy Platforms Must Be Developed That Include Major Selling Ideas Creative Decisions Should Be Based on Advertising and Communication Objectives Creative Decisions

Coca Cola Tailors Creativity to Local Markets +

International Media Selection Issues Widely Differing Characteristics Cost Coverage Restrictions Availability Quality Media Information Problems Cost Reliability Circulation Audience Availability Cost Coverage Restrictions Availability Quality

Local Media Reach Specialized Target Audiences +

International Media Provide Broad Coverage +

Market Maturity Trade Structure Economic Development Consumer Perceptions Regulations Trade Structure Consumer Perceptions Market Maturity Economic Development Foreign Market Sales Promotion Programs Major Creation Considerations

Who Allows What Promotions? © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin In-pack premiumsYesYesNo Maybe Yes Multi-purchase offersYesYes Maybe YesYes Extra productYesYes Maybe YesYes Free productYesYesYesYesYes Mail-in offersYesYes No YesYes Purchase-with-purchaseYesYes No YesYes Cross-promotionsYesYes No YesYes ContestsYesYes Maybe YesYes Self-liquidating premiumsYesYes No YesYes SweepstakesMaybe Maybe No Maybe Maybe Money-off couponsYesYes No Yes Maybe Next-purchase couponsYesYes No Yes Maybe Cash rebatesYesYes Maybe Yes No In-store demosYesYesYesYesYes PromotionU.K.SpainGermany FranceItaly

WD-40 Used Samples to Introduce Its Product to Russia +

Central vs. Local Roles in International Sales Promotion

Deal With Specific Issues and Problems the Company May Face in Foreign Markets Serve As Part of the IMC Program and Help Market the Product or Service Present the Company As a Good Corporate Citizen Deal With Local Governments, Media, Trade Associations and the General Public Serve As Part of the IMC Program and Help Market the Product or Service Present the Company As a Good Corporate Citizen Deal With Local Governments, Media, Trade Associations and the General Public Role of Public Relations in Global Marketing

Gillette Products Have Websites for Many Different Countries Such As This Italian Site