0. MKTG 303: Advertising and Promotion Promotions Opportunity Analysis October 15-20, 2009 Zeynep Gürhan-Canlı

1. THE BIG PICTURE execute product service STP segment price business
objective
marketing
objective
source of
volume
evaluate
target
place
position
promotion

2. THE BIG PICTURE execute product service STP segment price business
search
experience
credence
segment
price
main variable
dynamic variable
business
objective
marketing
objective
source of
volume
evaluate
value or
competitive
target
entity
goal
competence
retention
acquisition
steal share
demand-
stimulation
TA description
place
position
5-box
positioning
statement
length
breadth
depth
promotion
Awareness
Information
Image
Behavior

3. THE BIG PICTURE execute product service STP segment price business
objective
marketing
objective
source of
volume
evaluate
target
entity
goal
competence
place
position
promotion

4. Business Objective Who are we? What are we good at?
Fundamental Entity (FE)
Core Business
What are we good at?
Core competence
Where are we going?
Goal & Time Frame

5. Fundamental Entity (FE)
Retail/Corporate Brand
Citibank, Opet
Umbrella Brand
Arçelik, Beko, Motorola
Distinct Branding
Celebrex, Lipitor, Viagra, Visine
Hybrid/Sub-branding
Danone, Danone Vital, Petite Danone
Tikveşli, Hayat, Şaşal, Birtat

6. Branding Example: Virgin
Also: limos, cosmetics, bridalwear, wines, fitness clubs, balloon rides, virginstudent.com,…

7. Core Competence
A skill that leads to a sustainable competitive advantage
Requires significant resource investment
Generates strategic assets that in turn generate products
Refer to core competence article

8. Core Business Old: Industry/Product New: Benefit/Consumer
Newspaper, Railroad
New: Benefit/Consumer
Transportation, Information

9. Core Competence

10. Business Objective Goal Time Frame share profit unit or dollar volume
short or long-term
In every box of the BP there will be a goal
New name:
Overarching goal
Superordinate goal
Top-level goal
Highest order goal

11. Business Objective Goal Criteria measurable time frame realistic
single-minded
integrated with lower and higher-level goals
Any goal in any box must meet these criteria
We do quantitative analysis after the conceptual/strategic analysis
Lay the tools on top of the conceptual goal
Choosing a goal requires making tradeoffs – choose the goal that maximizes your future profits

12. THE BIG PICTURE: Marketing Objective
execute
product
service
STP
segment
price
business
objective
marketing
objective
source of
volume
evaluate
target
entity
goal
competence
retention
acquisition
place
position
promotion

13. A Customer-Based Model
costs
prospects
new customers
existing customers
acquisition
retention
revenue

14. Relationship of FE to current customer definition
Nike Golf Shoe
purchaser
Nike
Umbrella
Nike Individual
Sports
Nike Golf
Nike Team
Sports
Nike Basketball
Nike Running
Nike Soccer
Nike Fashion
Nike Apparel
Nike Casual
Shoes

15. Customer Definition What constitutes a customer? purchase behavior
purchase frequency
purchase quantity
purchase amount
brand relationship
commitment to brand
knowledge/understanding of brand positioning

16. Customer Acquisition
Acquiring or re-acquiring customers into our brand franchise
new customers
trier-rejectors
former customers

17. Acquisition Activities
Advertising (Awareness & trial)
New product development
Trial promotions
Viral marketing

18. Retention Indicator of long-term viability of a firm
product/service performance
strong customer loyalty
Less expensive to maintain
estimated to be 4-10 times more expensive to acquire than to retain a customer
awareness already achieved
brand loyalty/inertia

19. Retention Activities Advertising (Brand Image) Continuity Promotions
Loyalty Programs
Customer Service
Product improvements & line extensions
Community building

20. Relationship to Business Objective
Acquisition
Retention
Core Competence
new product development, marketing
customer service, market research
Business Objective
revenues,
share
profit
Time
Frame
long-term
short-term

21. THE BIG PICTURE execute product service STP segment price business
objective
marketing
objective
source of
volume
evaluate
target
entity
goal
competence
retention
acquisition
steal share
demand-
stimulation
place
position
promotion

22. Stimulate Primary Demand
emphasize category benefit
brand name not as important
Leader benefits when category benefits
“Consideration set” is important “

23. Stimulating Primary Demand
new users
new volume (same users, increased volume)
new value (same users, higher price paid)

24. New Users

25. Stimulate Primary Demand

26. New Volume – New Use Situations

27. Arçelik Refrigerators
New Value
Arçelik Refrigerators

28. Steal Share Typically a #2 brand strategy
Realistic assessment of relative strengths
From whom?
Dominate on what variable?

31. Source of Volume key activity: marketing objective source of volume
acquisition
retention
increase consumption among current users
attract new category users
stimulate demand
source of volume
attract new brand users
increase consumption occasions among multi-brand users
steal
share

32. THE BIG PICTURE execute product service STP segment price business
main variable
dynamic variable
business
objective
marketing
objective
source of
volume
evaluate
target
entity
goal
competence
retention
acquisition
steal share
demand-
stimulation
TA description
place
position
5-box
positioning
statement
promotion

33. Segmentation Variables
Main Variable
“Cost of entry” category variable
Will become expected variable
Dynamic Variable
Category Leader: benefit/lifestyle
Secondary Brand: “steal share” feature

34. Competitive Plot: Enter Data

35. Competitive Plot

36. Consumer Segments Demographics Psychographics Generations Geographic
Geodemographics
Benefit
Usage

37. Generation Segmentation
Generation Y (18-24)
Generation X (25-34)
Younger Boomers (35-44)
Older Boomers (45-54)
Empty Nesters (55-64)
Seniors (65+)

38. Target Audience Target Audience Description Rich, complete description
“The person in the chair”
Leverage previous explorations of all types of variables

39. Target Customer: Acquisition
Juan Paz… has never flown Turkish Airlines
Juan Paz, 35, intl sales and marketing mgr., he is married. He has 2 kids, 1 dog. Lives in London in an apartment. His wife works but does not travel on business. His primary destinations are intra-Europe; ocassionally he flies to North and Central America. He normally flies BA, sometimes Iberia. He has heard of TA but has never flown it. He does not have an opinion about TA, feels indifferent about it. He thinks of himself as “European” (sophisticated, organized, open-minded, brand-conscious, health-conscious, likes good food, cultured)
Attitudes:
Juan Paz is concerned about time and quality of life. He looks for customized and differentiated service. Remains up to date and has knowledge of other airlines in the region which allows him to compare. He is demanding with himself and with the others. When he flies he wants to arrive home or to his meeting on time with his suitcase; he expects to have convenient frequent flights; he cares about the appearance and the age/technology of the airplanes he flies; he is technology-conscious and does not ever want to be out of date.

40. Select Position current belief consumer proposition desired belief
currently do
desired do

41. The Positioning Statement
Snickers is a
candy.
current
belief
Snickers is a convenient
way to satisfy your
hunger.
consumer
proposition
Snickers is a
satisfying
snack.
desired
belief
Buy Snickers
occasionally for a
treat.
currently do
Eat Snickers
as a snack when
I’m hungry.
desired do

42. Advertising Objective
basic
awareness
top-of-mind
awareness
information
image
behavior $
$$$$$
increase aided awareness (recognition) among target from 5% to 25%
increase % of “first mentions” from 25% to 60% among target
increase awareness of <information> from 15% to 50%
increase % agreement with “brand x is contemporary” from 10% to 40%
increase retail inquiries from 100/week to 250/week

43. Promotion – Big Picture
advertising objective
marketing objective
acquisition
retention
Awareness
Information
Image
Behavior
stimulate demand
source of volume
Information
Behavior
Top of Mind
Information
Behavior
steal
share

44. Creative Brief The Objective The Target Audience The Message Theme
Advertising objective (consistent with business goals)
The Target Audience
Marketing objective, source of volume, segmentation, and target audience description
The Message Theme
Positioning strategy and 5-box positioning statement
Review of previous campaigns
The Support
Consistent with competencies
The Constraints
Fundamental entity (Branding related constraints)
Legal constraints

45. Factors Impacting Relationship Between Promotions and Sales
Goal of promotion
Threshold effects (sales response function curve)
Carryover effects
Wear out effects
Decay effects
Random events

46. Communications Budget
Percentage of sales
Meet-the-competition
What we can afford
Objective and task
Payout planning (Ratio of advertising to sales or market share)
Quantitative models

47. Marketing Budgets Advertising – 25% Consumer promotions – 25%
Trade promotions – 50%