Advertising Principles and Practices Strategic Planning

Questions We’ll Answer What is the difference between objectives, strategies, and tactics in strategic planning? How is a campaign plan constructed, and what are its six basic sections? What is account planning and how is it used in advertising? In what ways does an IMC plan differ from an advertising plan?

Repositioning Kodak for the Digital Age Kodak’s specialty was making film; it defined their brand. The “Gallery” campaign emphasized that Kodak is about pictures, no matter what the technology. \ Kodak/frog pic Visit the Site Prentice Hall, © 2009 7-3

Strategic Planning For marketing communication, strategic planning is the process of identifying a problem that can be solved with marketing communications, determining objectives, deciding on strategies, and implementing tactics. Objective—a goal you want to accomplish. Strategy—means, design, or plan for accomplishing objectives. Tactics—actions that execute the plan, such as how an ad is designed or written.

Strategic Planning from Top to Bottom The business plan and marketing plan provide direction for advertising planning and other areas. Prentice Hall, © 2009 7-5

Strategic Planning: the Business Plan May cover an SBU (strategic business unit) which is a line of products or all offerings of a brand. The objective is profit or Return-on-Investment (ROI). ROI is revenue earned above the amount invested. Business planning starts with a a mission statement; an expression of goals and policies. Prentice Hall, © 2009 7-6

Sample Mission Statement This mission statement for Tom’s of Maine helps its managers develop specific business objectives and goals. It also guides all of the company’s marketing communication efforts. Visit the Site Prentice Hall, © 2009 7-7

Strategic Planning: the Marketing Plan Developed for a brand or product line, usually annually. Parallels the business strategic plan and contains many of the same components. A market situation analysis assesses the environment affecting marketing. Objectives are focused on sales levels and share of market. Prentice Hall, © 2009 7-8

Strategic Planning: the Advertising or IMC Plan Advertising or IMC plan also includes objectives, strategies, and tactics (like business and marketing plan). The focus is on the communication program supporting a brand.

A Campaign Plan More tightly focused on solving a particular problem in a particular time frame. Includes a variety of messages carried in different media and sometimes targeted to different audiences. Typical Campaign Plan Outline Situation analysis Key strategic decisions Media strategy Message strategy Other tools Campaign management See pg. 197 for detail.

Campaign Plan: Situation Analysis Backgrounding Research and review the state of the business that is relevant to the brand and gather all pertinent information A problem statement identifies the problem to be solved SWOT Analysis Strengths, Weaknesses, Opportunities, Threats Principle: Analysis of SWOT means finding ways to address the weaknesses and threats and leverage the strengths and opportunities.

Declining Cheese Consumption The DDB Agency found that a barrier to purchasing cheese was the lack of good recipe ideas using cheese products. The American Dairy Association responded by offering more recipes through advertising and its Web site. Visit the Site Prentice Hall, © 2009 7-12

Campaign Plan: Situation Analysis Key problems and opportunities Analyze the market situation for communication problems that hinder successful marketing and find opportunities advertising can create or exploit. Advertising can’t solve problems related to price, availability, or quality; but it can address the perception of high prices or portray limited distribution as exclusivity. Principle: Advertising can only solve message-related or perception problems.

Campaign Plan: Objectives Objective—formal goal statement outlining what the message is supposed to achieve and how it will be measured The six categories of effects or facets can serve as a basis for common consumer-focused objectives. Perception, emotion, cognition, persuasion, association, behavior

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Campaign Plan: Objectives Some objectives are tightly focused on a single effect; others require a complex set of effects. A campaign to create brand loyalty must have both cognitive (rational) and affective (emotional) effects, and it must move people to repeat buying (behavioral). Advertising is effective if it creates an impression, influences people to respond, and separates the brand from the competition. Special K Ad 2

Campaign Plan: Objectives Objectives must be measurable so advertisers know if the campaign or advertising is effective. Five requirements of a measurable objective: Specific effect that can be measured A time frame A baseline (where we are, where we begin) The goal (realistic estimate of change to be created) Percentage change (subtract the baseline from the goal; divide the difference by the baseline) Sample Objective: “The goal of this campaign is to increase customer awareness of Kodak’s digital products from 20% to 25% in 12 months.”

Campaign Plan: Targeting Marketing communications strategy is based on accurately targeting an audience that will respond to a particular message. Targeting is identifying and profiling an audience. Targeting is also getting inside the heads and hearts of the audience to find out what kind of message will motivate them.

Campaign Plan: Positioning A brand’s position its place in consumers’ minds where the product or brand stands in comparison to the competition. Factors that define the competitive situation: Product features and attributes, both tangible and intangible. Feature analysis is used to assess features relative to competitors’ products. Competitive advantage is where 1) the product has a strong feature, 2) in an area that is important to the target, and 3) where the competition is weaker. Differentiation is a strategy that focuses attention to product differences that distinguish the company’s product from all others in the eyes of consumers.

Table 7.2 How to Do a Feature Analysis Feature Importance to Prospect Product Performance Yours X Y Z Price 1 + – – + Quality 4 – + – + Style 2 + – + – Availability 3 – + – – Durability 5 – + + + The product in Table 7.2 would compete well on both price and style against X, on price against competitor Y, and on style against competitor Z. Competitor X seems the most vulnerable on the two features, price and style, that consumers rate as most important decision points.

Eukanuba Features Breed-specific Dog Food Eukanuba’s “Feed the Breed” campaign featured photos by a famous animal photographer who created artistic images of the unique features of individual breeds, such as this spine of a Rhodesian Ridgeback. Visit the Site Prentice Hall, © 2009 7-21

Campaign Plan: Positioning Two factors used to locate the brand position: Psychological factors Volvo = safety, Coke = authentic, Hallmark = quality, Avis = underdog Consumer decision factors Features or attributes such as fashion, price, quality Planners use a technique called perceptual mapping to plot competitors on a matrix based on two important decision factors Principle: The goal of positioning is to establish a product in the consumer’s mind based on its features and advantages relative to its competition.

A Perceptual Map for Cars

Campaign Plan: Repositioning Repositioning can only work if the new position is related to the brand’s core concept. Although advertising shapes the position, the position is anchored in the target audience’s minds by their personal experiences. The role of advertising in repositioning is to relate the new position to the target market’s life experience and associations.

Brand Communication Strategy How consumers respond to marketing communications messages creates a brand perception. Consumer Response Advertiser’s Objective Perceive Creates brand identity Feel Cue brand personality Think Cue brand position Associate Cue brand image Believe Create brand promise and brand preference Do Inspire brand loyalty Video Snippet Harley-Davidson talks about its brand. Insert Harley-Davidson discussion about brand Noted on Video Snippets sheet.

Brand Communication Strategy Brand identity Must be distinctive and familiar in terms of name, logo, colors, typeface, design, and slogan Brand personality Human characteristics like loving, trustworthy, sophisticated Brand position The soul or essence of the brand; it stands for something that matters to consumers Brand image The mental image consumers construct for a product based on symbols and associations that customer link to a brand Brand promise and brand preference Believing the promise that a brand will meet your expectations leads to brand preference Brand loyalty A connection built over time that leads to repeat purchases

Campaign Strategic Approach Determining how to achieve objectives requires a general strategy statement. May focus on branding, positioning, countering the competition, or creating category dominance Change customer perceptions, price perceptions, or the price-value relationship Increase “share of wallet,” launch a new brand or brand extension, or move brand to a new market Create excitement about a brand promotion Strategies are designed to create a particular consumer responses. Those responses can be tied to the six facets

American Express and Jerry Seinfeld An online mini-film commercial for American Express featuring Jerry Seinfeld was designed to entertain and create brand liking. It also generated buzz, which extended its impact through the power of word of mouth. See the Ad

Campaign Implementation and Management: Budgeting Historical Method Last year’s budget plus inflation; not based on goals Objective-Task Method What do we want to do and what will it cost? Based on goals Percentage-of-Sales Method Compares total sales with total advertising to get ratio Competitive Budgets Use competitors’ budgets as benchmarks and relates to the product’s share of market All You Can Afford Whatever is left over; not a strategic approach

Campaign Implementation and Management: Evaluation The process of determining the effectiveness of a campaign. It’s impossible without established, measurable objectives.

Account Planning Account planning is the research and analysis process used to gain knowledge of the consumer and uncover key consumer insights about how people relate to a brand or product. An account planner is the agency person who uses a disciplined system to research a brand and its consumer relationships to devise messages to effectively address consumer needs and wants. Principle: The account manager is seen as the voice of the client, and the account planner is seen as the voice of the consumer.

Account Planner’s Mission Who? Who are you trying to reach and what insight do you have about how they think, feel, and act? How should they respond to your advertising message? What? What do you say to them? What directions from the consumer research are useful to the creative team? Where? How and where will you reach them? What directions from the consumer research are useful to the media team?

Account Planning: Research Account planners use consumer research to get inside the target’s heads, hearts and lives. The key to effective advertising is a powerful consumer insight. Account planners are information integrators who bring all the info together; and synthesizers who express what it all means in one simple statement.

Consumer Insight: the Fuel of Big Ideas Account planners look at advertising as an “insight factory” instead of an “idea factory.” Consumer insights provide fuel for the big ideas. Account planners use strategic and critical thinking to interpret consumer research to find relevant consumer insights that explain why consumers will care about a brand message.

Insight Mining Finding the “a-ha” in a stack of research reports, data, and transcripts is the greatest challenge for an account planner. Account planners use strategic and critical thinking to interpret consumer research to find relevant consumer insights that explain why consumers will care about a brand message.

The Account Planning Group Founded in 1979, The APG is the longest-established organization representing the interests of account planners worldwide. A non-profit-making members’ organization with around 700 members, APG is open to account planners, communications strategists and anyone with an interest in these areas. Its activities include training, meetings, seminars, social events, publications, and every second year, the APG Creative Planning Awards.  Visit the Site

The Communications Brief The outcome of research, the communication brief (or creative brief) is a document that explains the consumer insight and summarizes the basic strategy decisions. The first step in the creative process, it is designed to spark creativity and serve as a springboard for ideas.

Communications Brief Outline Problem: What’s the problem that communication can solve? (establish position, increase loyalty, increase liking, etc.). Target audience: Who do we want to speak to? (brand loyal, heavy users, infrequent users, competition’s users, etc.) . Consumer insights: What motivates the target? What are the “major truths” about the target’s relationship to the product? The brand imperatives: What are the important features and competitive advantage? What’s the position? Also, what’s the brand essence, brand personality and/or image? Communication objectives: What do we want customers to do in response to our messages? (perception, knowledge, feelings, symbolic meanings, attitudes and conviction, action). The proposition or selling idea: What is the single thought that the communication will bring to life in a provocative way? Support: What is the reason to believe the proposition? Creative direction: How can you best stimulate the desired response? How can we best say it? Media imperatives: Where and when should we say it?

What is IMC planning? Integrated Marketing Communications (IMC) planning is similar to advertising planning but is broader in scope and involves more marketing communication areas. The objective is to most effectively use all marketing communications tools and functions and to control the impact of other communication elements. Effective IMC leads to profitable long-term brand relationships.

Differences in IMC Planning Stakeholders The target market in IMC is not just consumers, it’s anyone who has a stake in the company’s success (employees, shareholders). Contact points (touch points) IMC maximizes all contacts stakeholders have with the brand; where a message is delivered. IMC objectives IMC uses interrelated objectives with specific strategies for different tools (e.g., PR to announce, sales promotion to drive action).

Table 7.3 Types of Stakeholder Audiences Corporate Level Marketing Level Marketing Communication Level Employees Consumers Target audiences Investors, financial Customers Target stakeholders community (analysts, Stakeholders Employees brokers, and the Market segments Trade audiences financial press) Distributors, dealers, Local community Government bodies retailers, and others in Media (general, special interest, and agencies the distribution channel trade) Regulatory bodies Suppliers and vendors, Consumer activist groups Business partners including agencies groups Competitors General public Opinion leaders

Table 7.3 Marketing Communication Objectives Communication Area Typical Objectives Public Relations Announce news; affect attitudes and opinions; maximize credibility and likeability; create and improve stakeholder relationships Consumer Sales Stimulate behavior; generate immediate response; intensify needs, Promotion wants, and motivations; reward behavior; stimulate involvement and relevance; create pull through the channel Trade Sales Build industry acceptance; push through the channel; motivate Promotion cooperation; energize sales force, dealers, distributors Point-of-Purchase Increase immediate sales; attract attention at decision point; create interest; stimulate urgency; encourage trial and impulse purchasing Direct Marketing Stimulate sale; create personal interest and relevance; provide information; create acceptance, conviction Sponsorship and Build awareness; create brand experience, participation, interaction, Events involvement; create excitement Packaging Increase sales; attract attention at selection point; deliver product information; create brand reminder Specialties Reinforce brand identity; continuous brand reminder; reinforce satisfaction; encourage repeat purchase

Synergy in IMC Planning IMC planning involves many messages delivered through multiple media at many different contact points. The planner’s biggest concern is creating consistent messages. Synergy means that the brand impact of all messages together is greater than what any one type of message could deliver. Synergy requires cross-functional planning— everyone involved in creating and delivering messages should be involved in planning to ensure consistency.

Discussion Questions

Discussion Question 1 Think of a product you purchased recently. How was it advertised? Which strategies can you discern in the advertising? Did the advertising help to convince you to purchase the product? Why or why not?

Discussion Question 2 The following is a brief excerpt from Luna Pizza’s situation analysis for the next fiscal year. Luna is a regional producer of frozen pizza. Its only major competitor is Brutus Bros. Estimate next year’s advertising budgets for Luna under each of the following circumstances: Luna follows a historical method by spending 40 cents per unit sold in advertising, with a 5% increase for inflation. Luna follows a fixed percentage of projected sales method, using 7%. Luna follows a share-of-voice method. Brutus is expected to use 6% of sales for its advertising budget in the next year. Actual Last Year Estimates Next Year Units sold 120,000 185,000 $ Sales 420,000 580,000 Brutus $ Sales 630,000 830,000

Discussion Question 3 You are assigned to the account for a new hybrid automobile. Use the Communication Brief outline and list the research you need to conduct for each step in the strategic decision-making process. What do you need to do to put together a useful brief for the creative team?

Discussion Question 4 Three-minute debate: You are in a meeting about the strategy for a new automotive client. One of your team members says positioning is an old strategy and no longer useful for modern products. Another person argues strongly that you need to understand the position in the consumer’s mind before you can even begin to develop an advertising strategy. In class, organize into small teams with pairs of teams taking one side or the other. Set up a series of three-minute debates with each side taking half that time to argue its position. Every team of debaters has to present new points not covered in the previous teams’ presentations until there are no arguments left to present. Then the class votes as a group on the winning point of view.

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