1. Advertising

2. Challenges The response to advertising is difficult to measure Demand is affected by competition & marketing mix decisions Response may not occur immediately Incentive problems: Must rely on experience of specialists (artists) Difficult to write contracts to align incentives Coordination problems: Many specialists: copy writer, art director, production, media planner, media sales people Compare using an agency versus freelance talent

3. Big Risks 1. A lot of money 2. No salvage value 3. If response is poor may not be advertising enough 4. Bad advertising is bad: can reduce demand – Oldsmobile – Ford inserted advertisements in every other copy of Reader's Digest and reduced the likelihood a reader would buy a Ford.

4. Your Responsibilities 1.Who is the target market? 2.What is your point of differentiation? 3.What image are you trying to project? 4.Control the artists 5.Understand media planning

5. Choose A Positioning who the product is for and what it does for them Examples: For coffee drinkers, Starbucks is the coffee that smells the best. For sports car drivers, Porsche is the car that handles best. For MBA students, marketing is the class that is the most useful. Retain control of this decision: Who it is for should follow from your strategic planning decision What it does for them should follow from your resources

6. Choose An Image the personality of the product Variables in marketing mix must be consistent with the image – Brand – Packaging – Price – Retailers Choose an image that will not need change (Reebok) Customers may consume the image as part of the product: –Coke and Pepsi –Reebok and Nike

7. Nike and Reebok 4 sets of advertisements: Reebok UBU Nike Air Jordan Reebok Physics Behind Physiques Nike Bo Jackson For each advertisement: What is the positioning What is the image

8. Execution: Restrain the Artists Do not try this at home. In one study of 81 winners of the Clio advertising award, 36 of the agencies involved had either lost the account or gone out of business. Analogies are often misunderstood. If possible, include a direct measure of response.

9. Media Planning Advertising to Consumers 1. Repetition is the key 2. If you repeat the message it may get heard Recall biases: selective attention, selective distortion, selective recall 3. Repetition is a signal of quality Repeated advertising of bad products will not lead to loyalty Advertising expenditure is a signal that you know your product is good 4. Dominate a media Do not sacrifice sufficiency for reach Focus on a specific media and a specific time, day, program

10. Media Planning Business to Business Advertising Repetition may be less important if: High involvement customers who search for new products Few information sources Few new customers entering the market

11. Reader Reply Cards Response By Insertion 1 0. 9 P ublic a tio n A P ublic a tio n B P ublic a tio n C 0. 8 0. 7 0. 6 0. 5 1 2 3 4 5 6 7 8 9 10 11 P ublic a tio n A P ublic a tio n B P ublic a tio n C Insertion Index

12. Primary Media Television More powerful and influential than any other medium People watch programs not channels Range of options to control reach Radio Most influential and persuasive medium after television Good control of reach Direct Mail Can be powerful if carefully targeted and well designed A response may take several exposures More useful when combined with television or radio

13. Secondary Media Billboards Useful for reminding, not for persuading Two most important words: NEXT EXIT Newspapers People will read, see, note or recall your ad when they are motivated to buy Reading ads is normally the final step before shopping at your business Several smaller ads is often preferable to a single large one Yellow Pages If your business is done over the phone you need a display ad If your ad is not as big or bigger than your competitor it will not be effective Do not refer to your yellow page ad in other advertising Internet Useful if close to purchase (similar to newspapers) Can force exposure

14. Clorox Current Situation Declining market: particularly in passive products Bait is more effective: customers do not understand this Combat leads the passive market New technology ensures faster death

15. Clorox Target Market Aerosol users who are lapsed or light bait users Current bait users What do we do for them? Gratify need to act out and be assertive Solve long term roach problem

16. Execution options –Grim reaper –Guard dog –Intruder Clorox Customer feedback –Link to category: good for all options –Link to brand: favored Guard Dog –Purchase intent: same for all options and for control –Persuasion: favored Grim Reaper

17. Clorox Results Maintained a 57.8% dollar share Increased price by 8% Raid reduced price by 25% ($6.90 vs. $4.98) Category continues to decline (decline may be slowing)