advertising planning & strategy

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1 Chapter 7 Advertising Planning and Strategy

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Page 1: Advertising Planning & strategy

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Chapter 7

Advertising Planning and Strategy

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Learning Objectives

Learn about major components of the advertising plan.Understand the importance of setting objectives.Discuss the success factors of introductory advertising and the relationship between advertising and sales.Discuss various budgeting methods used in advertising.

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The Advertising Planning Cycle

1. Where are we? 2.Why are we there?

3.Where could we be?

4. How could we get there?5. Are we getting there?

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Advertising Planning and Decision Making

SituationAnalysis

MarketingProgram

AdvertisingPlan

Implementation

TheCommunication/

PersuasionProcess

Consumer/Market Analysis

Competitive Analysis

Role of Advertising, Sales Force, Price, Promotion, Public Relations

Objectives/Segmentation/Positioning

Message Strategy and Tactics

Media Strategy and Tactics

“Facilitating” Agencies

Social and Legal Constraints

Figure 2-1 Framework for advertising planning and decision making

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The Advertising Plan

An Advertising Plan Matches the Right Audience to the Right Message and Presents

It in the Right Medium to Reach That Audience & Has Three Elements.

Targeting the Audience: Whom are you trying to reach?

Message Strategy: What do you say to them? Media Strategy: When & where will you reach them?

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Understanding of Comm. Process

A typical communication process model

A model of persuasion processAd exposureDifferent functions of advertising messages Brand attitude Purchase behavior

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Developing an Advertising PlanAdvertising objectives and target market

selection

Creative plan: Message strategy and tactics

Media plan: media strategy and tactics

Evaluation (research)

==> IMC approach: identify roles of various forms of IMC and repeat the process.

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Typical Advertising or Campaign Plan Outline (Tab. 7.1)

I. Introduction• Executive Summary or Overview is provided.

II. Situation Analysis• Advertising Problems• Advertising Opportunities

III. Key Strategy Decisions• Advertising Objectives• Target Audience• Competitive Product Advantage• Product Image and Personality• Product Position

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Typical Advertising or Campaign Plan Outline (Tab. 7.1)

IV. The Creative PlanV. The Media PlanVI. The Communication Plan

• Sales promotion• Public relations• Direct marketing• Personal selling• Sponsorships, merchandising, packaging, etc.

VII. Implementation and EvaluationVIII. EvaluationIX. Budget

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Situation AnalysisOpportunity analysis: to spot and capitalize on favorable demand trendsexamples of such trends

Competitive analysis: to achieve and maintain a “competitive advantage”examples of competitive advantages

Target market selectionexamples of target marketing

==> Marketing plan (4Ps)

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Creative Platform & Message Strategy

Creative platform is a document that outlines the message strategy decisions for an individual ad.Creative platforms combine the basic advertising decisions – problems, objectives, and target markets – with the critical elements of the sales message strategy – main idea and details about how the idea will be executed.

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Product Product

Benefit Benefit

PromisesPromises

Reason Why Reason Why

Unique Selling Proposition

Unique Selling Proposition

SupportSupport

Advertisements that focus on the product itself by looking at attributes.

Advertisements that focus on the product itself by looking at attributes.

Product is promoted on the basis of what it can do for customers.

Product is promoted on the basis of what it can do for customers.

Promises that something will happen if you use the advertised product.

Promises that something will happen if you use the advertised product.

Based on logic and reasoning and clearly states a reason for the benefit gained.

Based on logic and reasoning and clearly states a reason for the benefit gained.

A benefit statement that is both unique to the product and important to the user.

A benefit statement that is both unique to the product and important to the user.

Lends credibility to the selling premise. Lends credibility to the selling premise.

Selling Premises

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Defining Advertising Goals for Measured

Advertising Results (1962, 1995, S. Dutka)

The 6M approach Merchandise: important benefits to sell Markets: who to reach Motives: why people buy or fail to buy Media: how to reach Measurements: how to evaluate (time and

change) Messages: key ideas to convey to move

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Setting ObjectivesWhy set objectives?:

-- Planning and decision making

-- Communication

-- Measurement and evaluation

Sales vs. Communication objectives

-- Problems with sales objectives When sales objectives are appropriate

-- Challenges with communication objectives

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What is Good Objectives?

Good Objectives

Concrete andMeasurable

Specify a well-defined audience

Attainable Specify a timeperiod

Establish bench-Mark measures Realistic

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Setting Objectives Using the Communications Effects Pyramid

Product: Backstage Shampoo

Time period: Six monthsObjective 1: Create awareness among 90 percent

of target audience. Using repetitive advertising in newspapers, magazines, TV and radio programs. Simple message.

Objective 2: Create interest in the brand among 70 percent of target audience. Communicate information about the features and benefits of the brand-I.e., that it contains no soap and improves the texture of the hair

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Setting objectives using the communications effects pyramid

Objective 3: Create positive feelings about the brand among 40 percent and preference among 25 percent of the target audience. Create favorable attitudes by conveying information, promotions, sampling, etc.

Objective 4: Obtain trial among 20 percent of the target audience. Use sampling and cents-off coupons along with advertising and promotions

Objective 5: Develop and maintain regular use of Backstage Shampoo among 5 percent of the target audience. Use continued reinforcement advertising, fewer coupons and promotions

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Factors Related to Success of Advertising for New Products

1.Communicating that something is different about the product. Successful introductory commercials communicated some point of difference for the new product

2.Positioning the brand difference in relation to the product category. Successful commercials positioned their brand’s difference within a specific product category. For example, a new breakfast product was positioned as the “Crispiest cereal”or a new beverage as the “smoothest soft drink.”

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Factors Related to Success of Advertising for New Products3.Communicating that the product difference

is beneficial to consumers. Nearly all of the successful commercials linked a benefit directly to the new product’s difference.

4.Supporting the idea that something about the product is different and/or beneficial to consumers. All the successful commercials communicated support for the product’s difference claim or its relevance to consumers. Support took the form of demonstrations of performance, information supporting a uniqueness claim, endorsements, or testimonials.

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Several Ways to Increase Sales (what mktg.comm. can do to help?)

New customers from other brands

New customers from other categories

Increasing share of requirements (SOR)

Increasing brand loyalty and reducing attrition and price elasticity

Increasing usage

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McDonald’s Advertising Response Function

Sal

es

Advertising

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Relationship of Adv. to Sales & ProfitsIn consumer goods marketing, increases in market share are closely related to increases in the marketing budget.There are minimum levels below which advertising expenditures have no effect on sales. Sales normally increase with additional advertising. At some point, however, the rate of return declines.There will be some sales even with no advertising. Sales response to advertising may build over time, but the durability of advertising is brief, so a consistent investment is important.Culture and competition impose saturation limits above which no amount or advertising can increase sales.

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Advertising Budgeting Methods

Objectives-and-tasks method

Percentage-of-sales method

Competitive parity method

All-you-can-afford

Arbitrary allocation

Quantitative or experimental model

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Historical MethodHistorical Method

Task-Objective Method: Bottom-Up

Task-Objective Method: Bottom-Up

Percentage-of-Sales Method

Percentage-of-Sales Method

•Common budgeting method.•May be based on last year’s with a percentage increase.•Nothing to do with advertising objectives.

•Common budgeting method.•May be based on last year’s with a percentage increase.•Nothing to do with advertising objectives.

•Most common method.•Looks at objectives set for each activity, and determines the cost of accomplishing each objective.

•Most common method.•Looks at objectives set for each activity, and determines the cost of accomplishing each objective.

•Compares total sales with the total advertising (or marketing communication) budget during a previous time period to compute a percentage.

•Compares total sales with the total advertising (or marketing communication) budget during a previous time period to compute a percentage.

The Advertising Budgeting Methods

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Competitive MethodsCompetitive Methods

All You Can AffordMethod

All You Can AffordMethod

•Relates the amount invested in advertising to the product’s share of market.•Must understand share-of-mind.

•Relates the amount invested in advertising to the product’s share of market.•Must understand share-of-mind.

•Allocates whatever is left over to advertising.•Companies who use this don’t value advertising very much.

•Allocates whatever is left over to advertising.•Companies who use this don’t value advertising very much.

The Advertising Budgeting Methods

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Top-10 Beer Brands’ SOMs and SOVs (1997)

Brand

Total Sales

($ Billions)

SOM

Media Expenditure ($ Millions)

SOV 1. Budweiser $ 35.6 29.2% $ 98.4 20.4% 2. Bud Light 22.8 18.7 55.7 11.5 3. Miller Lite 16.2 13.3 149.0 30.8 4. Coors Light 13.7 11.2 91.9 19.0 5. Busch 7.9 6.5 2.4 0.5 6. Natural Light 7.1 5.8 0.1 0.0 7. Miller Genuine Draft 5.5 4.5 21.5 4.4 8. Miller High Life 4.7 3.9 61.1 12.6 9. Busch Light 4.5 3.7 0.0 0.0 10. Milwaukee’s Best 3.9 3.2 3.1 0.6 TOTAL $ 121.9 100% $483.2 100%

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Review

Learn about major components of the advertising plan.Understand the importance of setting objectives.Discuss the success factors of introductory advertising and the relationship between advertising and sales.Discuss various budgeting methods used in advertising.