1 Advertising

2 Outline n Promotional mix n Advertising –objectives, budgeting, message / media strategy n Integrated marketing communication n Global advertising

3 The Promotional Mix n Advertising n Sales promotion n Direct marketing n Public relations n Personal selling

4 Advertising n Non-personal forms of communication, conducted through paid media under clear sponsorship

5 Advertising n Objectives (Mission) n Budget (Money) n Program Planning –Message –Media n Measurement

6 Hierarchy of Objectives n Operational –get message through to consumer n Intermediate –brand awareness, communicate attributes n Super-ordinate –increase loyalty, influence purchase/usage

7 Objectives of Advertising: By Stage of DMP –Awareness –Information search »establish image, modify position –Evaluation »change trade-offs made by consumer –Purchase »develop intent, promote new usage –Post-purchase

8 Advertising Budgeting n Heuristic approaches –competitive parity –percentage of sales –increase over previous year

9 Advertising Budgeting n Are you over advertising? –“I know 50% of my advertising dollars are wasted, I just don’t know which half.” n Reasons for over advertising –agency incentives, asymmetric risk, poor measurement n Reasons for under advertising?

10 Message Strategy n Communication process n Advertising appeals n Advertising execution

11 Communications Process n Source –credibility, attractiveness, power n Message –structure, appeal n Channel –personal / non-personal, alternative media

12 Advertising Appeals n Information / news –new product, sale price, reminder to use n Logical persuasion –solution to problem, comparative advantage, favorable price n Image / Emotional persuasion –transformational (associate experience with psychological state)

13 Advertising Execution n Factual message n Demonstration n Comparison n Testimonial n Slice of life n Humor

14 Media Planning n Reach –unduplicated portion of audience exposed to an ad at least once n Frequency –average number of times the audience reached by the campaign is exposed to the ad

15 Media Planning n Gross Rating Point (GRP) = Reach x Frequency –TRP refers to target audience only n Effective Rating Point (ERP) = R x F x Impact –Impact depends upon vehicle

16 Reach and Frequency

17 Advertising Evaluation n Measure against hierarchy of objectives: –exposure –reception –retention (e.g., day-after recall) –acceptance –behavior

18 Does it pay to advertise? n Short term –measurable response to advertising is negligible n Long term –drop in recognition, loyalty for drastic cuts in advertising n An argument for experimentation

19 Integrated Marketing Communications (IMC) n Old approach: separated by function –advertising »educate, reinforce image –direct marketing »acquire customers, deliver incentives

20 Integrated Marketing Communications (IMC) n IMC: coordinate promotional mix elements –existing customers: build loyalty »advertising, direct marketing –new customers: encourage switching »advertising, direct marketing

21 Global Advertising n Advantages: –economies of scale –lower advertising production costs –consistent international image –simplified coordination and control

22 Global Advertising n Disadvantages –difficulty of implementation –e.g., Parker Pen

23 When is Global Advertising Appropriate? n Messages with visual appeal n Brand images with universal appeal n New technologies not culturally bound