marketing management chapter 14
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Advertising & Sales Promotion
Marketing Management Text and Cases
Excel Books14-1
Advertising &
Sales Promotion
14Chapter
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Advertising & Sales Promotion
Advertising is the structured andcomposed non-personal communication of
information, usually paidforandusually persuasive in nature, aboutorganisations,
products, services, ideas by identified sponsors throughvarious media.
First, advertising is a highly structuredform ofcommunication andemploys both
verbal and non-verbal elements.
Second, thefocus ofadvertising is directedto groups ofpeopleratherthan to
individuals andforthis reason it is non-personal ormass communication.
Third, most advertising is paidforby sponsors forthe media timeorspace ituses
tocommunicate its messages.
Fourth, although most advertising messages are intendedto be persuasivetoaccomplishthedesired selling function, some ads appearonly to inform people,
examples being legal announcements, changeofaddress, obituaries, etc., without
any persuasive intent.
Fifth, an ad identifies its sponsor.
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Product Life Cycle and AdvertisingThedevelopmental stageofa productdetermines theroleofadvertising.As
products pass throughvarious stages oftheir lifecycle, the mannerin whichthe
advertising presents the producttotarget audiences depends largely upon the
degreeofa products acceptance by consumers. Basedon theconceptofproduct lifecycle, one may differentiatethree stages:
Introductory Stage
Competitive Stage
ReminderStage
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Types of AdvertisingScholars have proposedvarious approaches toclassifying thevastvariety of
advertising.An understanding ofthese wouldhelp managers in choosing the
most appropriatetypeofadvertising to achievetheirobjectives.
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Consumer Advertising
Most non-classified advertising is display advertising and is foundthroughout
the newspaperandon many magazine pages.
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Twotypes ofdisplay advertising in newspapers arenational andlocal.
NationalAdvertising
Retail (Local)Advertising
Co-operativeAdvertising
End-ProductAdvertising
Direct-ResponseAdvertising
ClassifiedAds
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Advertising to Business and ProfessionThis typeofadvertising is aimed atre-sellers, and professionals such as,
architects, lawyers anddoctors, etc. The media used is direct mail orprofessional
journals.
TradeAdvertising
IndustrialAdvertising
ProfessionalAdvertising
Corporateor InstitutionalAdvertising
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Non-product Advertising IdeaAdvertising
ServiceAdvertising
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Surrogate AdvertisingIn advertising context when the laws ofa country do not permit advertising ofa
certain productcategory, the advertisers takethe shelterofbrandextension.
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Important Players in Advertising Advertiser
AdvertisingAgency
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Atypical full-service agencyhas fivefunctional departments: accounts
management, creative services, media services, marketing services, and
administration department.
Media-buying services specialise in buying media forclients.
Industry-focussed agencies concentrateon certain fields such as agriculture,
healthcare, drugs and pharmaceuticals, andcomputers etc.
Media Organisations
Collateral Service Providers
Target Audiences
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Planning and Managing Advertising
Advertising planning and managing steps includesituation analysis, identifying
target audience, determining objectives, setting budget, advertising strategy
implementation, and evaluation. In mostcases the ad agencys accounts
executivedevelops the advertising plan orcampaign.
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Effectof
Advertising
on
Consumers
Behavioural
Dimensions
Steps Toward
Purchase
Advertising
for Various Stages
Conative
The realm of motives.
Ads stimulate or
direct desires.
Affective
The realm of emotions,
attitudes, and feelings.
Cognitive
The realm of thoughts.
Beliefs.
Purchase
Conviction
Preference
Liking
Knowledge
Awareness
POP advertising.
Testimonials
Price/quality appeals
Comparative ads.
Argumentative copy.
Image copy. Status,
glamour appeals.
Descriptive copy.
Slogans, jingles, etc.
Ad repetition, teaser ads.
(Figure based on Lavidge and Steiner Model)
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Marketers shouldconsidersome specificfactors when setting the advertising
budget:
Product lifecycle stage
Market share
Intensity ofcompetition andclutter
Advertising frequency
Productdifferentiation
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Advertising Strategy Implementation
Advertising strategy has four importantelements ofcreative mix:
identifying thetarget market anddefining the audience,
deciding the products positioning,
developing advertising message, and
selecting thecommunication media.
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Advertising MessageGreat advertising results by creating a combination ofad likingand its
strategic relevance. Whilethetext andthevisuals carry the ad message,
behindthecreativeteams choiceoftone, words, and ideas, lies an
advertising strategy.
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Accountexecutivefrom the advertising agency prepares a creative briefto
communicatethe strategy tothecreativeteam. It is a simple written statement
ofthe most significant issues toconsiderand guidetheteam in the
developmentofan advertisementorcampaign. The statement addresses the
following issues:
Who?
Why?
What?
Where, when, and how?
What style, approach, or tone?
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Ogilvy used prestigious individuals toconvey thedesired imageforthe product
in someofhis most well-known campaigns and when possible, he woulduse
testimonials from celebrities.
He prescribed the following eleven commandments for creating advertising
campaigns:
1. What you say is more important than how you say it.2. Unless your campaign is built around a great idea, it will flop.
3. Give the facts. The consumer isnt a moron; she is yourwife. You insult her
intelligence if you assume that a mere slogan and a few vapid adjectives
will persuade her to buy anything. She wants all the information you can
give her.
4. You cannot bore people into buying. We make advertisements that people
want to read. You cant save souls in an empty church.
5. Be well mannered, but dont clown.
6. Make youradvertising contemporary. Cont
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7. Committees can criticize advertisements, butthey cannot writethem.
8. Ifyou are lucky enoughto write a good advertisement, repeat ituntil it
stops pulling.
9. Neverwrite an advertisement, which you wouldnt want yourfamily to
read. Good products can be sold by honest advertising. Ifyoudontthink
the product is good, youhave no business to be advertising it. Ifyoutell lies,orweasel, youdo your client a disservice, you increase your loadof guilt,
and youfan theflames ofpublicresentment againstthe whole business of
advertising.
10. The image andthe brand: it is thetotal personality ofa brandratherthan
any trivial productdifference, whichdecides its ultimate position in the
market.
11. Dont be a copycat. Nobody has everbuilt a brand by imitating somebody
else in advertising.
DavidOgilvy, Confessions of an Advertising Man (Portions ofsome points excluded).
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Rosser Reeves: RosserReeves ofTed Bates agency (now partofSaatchi
group) developedtheconceptofUnique Selling Proposition (USP).
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Advertising Appeals: The advertising appeal is thecentral messageto be
used in the ad.
Rational Appeals: These appeals address theconsumers selfinterest and
focus on negatively originated motives (problem removal orproblem avoidance)
as happens when werun outofsomething andexperience a negative mental
state.
Emotional Appeals: Emotional appeals relatetocustomers social and
psychological needs and stirup positiveornegativeemotions thatcan motivate
purchaseofa productorservice.
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There are many ways in which an advertising messagecan be presented.
Factual messageorstraight sell
Scientificortechnical evidence
Testimonial
Demonstration
Comparison
Sliceof life (problem solution)
Lifestyle
Fantasy
Animation
Humour
Combination
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Media PlanMedia planning involves a series ofdecisions in delivering the ad messageto
the largest numberofthetarget audience in the mosteffective manneratthe
lowestcost. Three important steps involved are media objectives, media
strategy, and media selection.
Afterclosely analysing the media habits oftarget audience, geographic area,and media timing, the planners formulate a particularcombination that would
servethereach, frequency, and impactobjectives successfully andeffectively.
Media class
Media vehicle
Media reach
Media frequency
Media impact
Media scheduling
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Selection among Major Media Types
Media planners considercertain factors in making theirchoices among major
media to achievethedesiredreach, frequency, and impact. Media planners
considerthefollowing factors:
TargetAudienceMedia Habits
ProductCharacteristics
MessageCharacteristics
Media Costs
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General
CharacteristicsofMajorMedia
Types
Media Advantages Disadvantages
Television Offers mass coverage.
High level of reach.
Combined impact ofsight,
sound, and motion.
Prestige value.
Low cost per exposure.
Attracts attention.
Offers low selectivity.
Short span ofmessage life.
High cost.
High production costs.
Creates advertising clutter.
Waste coverage.
Radio Local coverage.
Lower cost.
High frequency.
Focused segment selection.
Low production costs.
Only audio.
Noise.
Low on attention getting.
Message short lived.
Newspapers Mass coverage.
Low cost, large space.Short lead time forad placing.
Ad position choice possible.
Good for current ads.
Reader controls exposure.
Coupons can be inserted.
Short life ofadvertisement.
Clutter.Low attention getting.
Poorproduction quality.
Selective exposure.
Cont
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General
CharacteristicsofMajorMedia
Types
Magazines Potential for focused segmentation.
Very good production quality.
Longevity ofmessage.
High information content.
More readers per copy.
Long lead time forad placing.
Only visual.
Low frequency.
Lack of flexibility.
Outdoor Good forspecific location.
High repetition.
High visibility.
Short exposure time.
Short message.
Poor image.
Direct mail High level ofselectivity.
Reader controls exposure.
High information content.
Opportunity for repeat exposures
High cost per contact Clutter.
Often thrown as junk mail.
Internet User controlled.Increased attention and involvement.
Limitedcreativecapabilities.
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Evaluation of Advertising EffectivenessAdvertising agencies usually pretest ads orcommercials and alsoconduct post-
testing. Some majorpre-testing and post-testing methods are mentioned briefly.
Pre-Testing MethodsPrintAdvertising
Direct Questioning
Focus Group
Portfolio Test
Order-of-Merit Test
Cont
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Pre-Testing Methods
Television andRadioAdvertising
Central Location Test
ClutterTest
TrailerTest
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Post-Testing Methods
Recall
Recognition
Inquiry
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Sales PromotionSales promotion utilises a variety ofincentivetools fora predetermined, limited
periodoftime in orderto stimulatetrial, increaseconsumerortradedemand,
and motivate andreward sales force, such as samples, coupons, discounts,
premiums, refunds andrebates, contest and sweepstakes, tradedeals, andsales contests forsales peopleetc. In mostcases, theobjectives are generally
short-term sales relatedratherthan long-term brand building.
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Reasons for Sales Promotion Growth
Theroleofsales promotion has increaseddramatically within the last 15
years.
IntenseCompetition
Brand Proliferation
Declining Brand Loyalty
Growing PowerofResellers
Advertising has Become Less Effective
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Sales Promotion ToolsManufacturerannouncedconsumerpromotions constitutepull strategy and
retailerpromotions are basedon push strategy. Sales promotions are more
effective when combined with advertising andpull-push strategies areused at
the sametime.
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Consumer Promotions
Sales promotions directed atend-users arecalledconsumersales promotions.
Price Discount (alsocalledcents-off)
Bonus-Pack
Samples
Premiums
RefundorRebate (theterms areused interchangeably)
Frequent-UserReward
Coupons
ConsumerContests, Sweepstakes, andGames
ExchangeorBuy-Back Offers
Point-of-Purchase Displays
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Trade Promotions
Trade promotions aredirected atresellers (distributors, dealers, wholesalers,
andretailers).
The main objectives of trade promotions include:
Build strong relations with channel members.
To stimulate in-store merchandising support, such as arranging
displays, shelfspace, feature advertising etc.
Gain distribution ofnew products.
Gain support for existing brands.
Manipulate levels ofinventory held by wholesalers and retailers. Trade Allowances
BuyingAllowances
Free GoodsCont
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SlottingAllowances (alsocalled stocking, or introductory allowance)
Buy-BackAllowance
AdvertisingAllowances
DisplayAllowance
Contests and Incentives
CooperativeAdvertising
DealerLoader
Training Programme
Trade Promotions
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Internet PromotionsThe numberofcompanies using Internet promotions is increasing. Contests and
sweepstakes are among the mostcommonly usedto motivate peopletovisit
marketers Internet sites.
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Promotions that Blur the LineSome promotions such as speciality advertising, event marketing and
sponsorship are activities that blurthe line between advertising, sales
promotion, and publicrelations.
SpecialityAdvertising
EventMarketing and Sponsorship
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Sales Promotion Planning GuidelinesPlanning process starts with situation analysis. To start with, the promotion
planners must first consider the corporate policy with regard to sales promotion.
Joseph S. Mair has recorded one such policy statement in Handbook of Sales
Promotion, ed. Stanley M. Ulanoff. The policy says:
1. Sales promotion is an integral part of the marketing mix.
2. Sales promotion should be used as an offensive weapon in the brands
marketing arsenal, not merely as a defensive reaction when a problem
arises.
3. Sales promotion should extend and reinforce the brands advertising and
positioning, wheneverpossible.
4. Sales promotion should be developed as campaigns, not as single,
unrelated events.
5. Good sales promotions are built upon sound strategic planning.
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Some of the important objectives ofsales promotion include:
Increase sales volume
Attract new customers
Launch new product and increase trial
Encourage repeat purchase
Clearance of excessive inventories
Motivate dealers to stock and sell more
To gain advantageous shelf-space
To increase store traffic
To block competitors moves
Motivate sales force
Sales Promotion Objectives
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Resellers perceive inventory risk associated with stocking or not stocking the
product on promotion. The following conditions may be t h e cause o f r isk
perception:
When the consumer demand for the product is unpredictable.
When the inventory holding costs are high.
When the product is seasonal.
When the product is likely to go out of fashion quickly.
Which Product to Promote
top related