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Advertising Management

Introduction
Marketing consists of the strategies and tactics used to identify, create and maintain satisfying relationships with customers that result in value for both the customer and the marketer. Marketing Mix

Place

Promotion

Price

Product

Promotion Mix

Promotion Mix Advertising Personal Selling Sales Promotion Publicity

Advertising Advertising is a non-personal form of promotion that is delivered through selected media outlets that, under most circumstances, require the marketer to pay for message placement.

Advertising
Advertising is a message paid for by an identified sponsor and delivered through some medium of mass communication. Advertising is persuasive communication. Russel and Lane Advertising has long been viewed as a method of mass promotion in that a single message can reach a large number of people. But, this mass promotion approach presents problems since many exposed to an advertising message may not be within the marketers target market, and thus, may be an inefficient use of promotional funds.

Six Basic Components


Paid Non-personal communication Sponsor is identified Using mass media Tries to persuade or influence Reaches large audience

Classifying Advertising

Consumer Advertising

1.National Advertising 2.Retail Advertising 3.Cooperative Advertising 4.End Product Advertising

Advertising to Business and Profession


1.Trade Advertising 2.Industrial Advertising 3.Professional Advertising 4.Corporate or Institutional Advertising

Non Product Advertising


1.Service Advertising 2.Idea Advertising 3.Surrogate Advertising

Functions
In its role as a form of mass communication, it delivers relevant messages to target audiences and by changing mental states, it can perform a number of functions. Functions:-

Stimulate demand:the market.

by informing consumers about th availability of a product in

Strengthens other promotion mix elements:- It does the pre-selling of the


product and makes the job easier of sales people

Develops Brand Preference:- Consistent and persuasive advertising often include


trial or purchase.

Functions Cuts Costs:costs.


It may be instrumental in cutting down the production and selling

Lowers Prices:-

In many market based economies when unit costs go down, competitive pressures force companies to lower the prices for the benefit of the consumers.

Competitive Weapon:- Advertising, by itself and coupled with other promotion mix
elements, may prove to be an extremely potent weapon to counter competitive moves

Functions of Advertising

Conative Affective Conviction Cognitive Knowledge Awareness Preference Liking Purchase

Lavidge and Steiners Hierarchy-of-Effects model

Benefits of Advertising

Information:-

Information about the product, service or organisation is of utmost importance to the consumer, decisions made in absence of information often lead to undesirable results. Through Advertising the information reaches a large number of audience in shortest possible time.

Brand Image Building:- It plays an important role in building the brand image.
Consumers develop mental images of brands that may appeal to different market segments. Favourable images help build brand loyalty

Benefits

Innovation:- Advertising encourages innovation and new product development and


reduces risks. It generates sufficient product demand to the cost of innovation.

Growth of Media:- The acceptance of advertising by media enhances for raising


revenues. This may help in introducing more publications and cater to the needs of different and special interest groups and lead to media expansion.

Economic, Social and Ethical Issues

Economic Issues

Effect on Value of Products or Services:-

It sets of a chain reaction of economic events. Why do consumers prefer advertised brands over unadvertised brands in the same product category? Not because the more advertising makes the product superior but it creates a product image in the mind of the consumer and thus make it more desirable.

Effect on Price:- It seems logical to think that if advertising adds value to products
it also adds cost and affect prices and if this advertising is stopped it will bring down the cost of the product. However this view is not totally correct. Advertising may help lower costs by making marketing mix more effective and there by bringing down sales cost.

Economic Issues Important points


Advertising accounts for a very small percentage of total cost of the product. It is an important element of the distribution system and helps manufacturer to bring down the unit cost of products as manufacturer in order to cater to the enhanced demand produces more goods. Most retail advertising prominently focuses on price and it tends to hold prices down.

Effects on Consumer Demand and Choice:- It is generally agreed that the effect
of advertising and other promotions increase aggregate consumption, but to what extent is highly debated, because besides advertising there are a lot of other factors like technology, level of education, income levels, population size, etc. which affect demand. Advertising can help stimulate demand, however in conducive conditions created by other factors. Demand effect of advertising also depends upon the kind of product.

Effects on Competition:- Economists have a common criticism about advertising


that it creates a barrier to entry of smaller firms with less resources who cannot match the power of large firms with huge advertising budgets. Other school of thought says that more than advertising it is other factors like higher product quality, more effective operations & management and better Competitive Strategies which create Barriers to entry.

Social Issues

Social and Cultural Issues:-

Advertising is often criticized for its impact on society, its values and lifestyles. Critics blame that it increases materialism in consumers by manipulating them. However this is not completely true, advertising cant make people buy things that they dont need. People buy things based on income levels and cultures.

Stereotyping in Advertising:- Critics say that advertising ignore differences


among individuals and presents a group in an un-varying way. Women are mostly shown as home makers, mothers, wives, etc. ignoring the change in the roles of the women in the society now a days. However th scenario is fast changing women are increasingly shown to be promoting products which were till recently considered male dominated areas, a good example for this can be financial products.

Ethical Issues

Ethics are morals and moral choices. It focuses on standards, rules and codes of conduct that govern the behavior of individuals and groups. Many laws and regulations are put into force that determine what is permissible in advertising, however, not every issue is controlled by rules. Marketers are often faced with decisions regarding appropriateness of their actions which are based on ethical consideration rather than what is within the law or industry guidelines. It is a highly visible business and any lapse in ethical standards often be risky for the company. Lots of companies around the world have been criticized or even boycotted (in case of Calvin Klein) for using overt sex appeal showing women as sex objects in their adds.

Sex appeals and/or nudity used simply to gain consumers attention and not even appropriate to the product or services being advertised are in poor taste. Even when shown in case of related products, such as contraceptives, people may be offended. However with the increasing levels of clutter in advertising environment, advertisers will probably continue using appeals that attract attention of the consumers, but offend many people. The primary criticism of advertising is that it is misleading and deceptive. Cases like this usually involve smaller companies, who succeed in damaging any reputation they have and also face the Government penalties.

Policing

In India there is an Advertising Standards Council of India (ASCI) to enforce the ethical code. The Council is a non profit organization set up by founder members and has developed a regulating code. In UK- Advertising Standards Authority (ASA) Code of UK. In US- American Advertising Federation (AAF)

Advertising Principles of AAF


1. 2. 3. 4. 5. 6. 7. 8.

Truth Substantiation Comparison Bait advertising Guarantees and warranties Price Claims Testimonials Tastes and Decency

Advertising Departments Role

Planning and budgeting Administration and Execution Coordination within company Coordination with ad agencies and services

Advertising In a Centralised Organization

Company President

Production Department

Finance Department

Marketing Department

R&D Department

HRD

Marketing Research

Product Planning

Advertising Mgt

Sales Mgt

Decentralised System
Marketing Head

Sales Management

Product Management

Marketing Services

Brand Manager 1

Advertising Dept

Market Research

Ad Agency 1 Brand Manager 2 Ad Agency 2

Sales Promotion Package Design Merchandising

Category Management System


Head Product Category

Sub Category 1 Manager

Sub Category 2 Manager

Sub Category 3 Manager

Advertising Managers for individual Brand

In House Advertising Agency


For Companies creating their own Advertisements. This decreases advertising and other promotional cost by exercising greater control over their activities.

Difference
System Advantages More efficient Communication Requires Fewer Personnel Continuity of staff More Involvement of Top Mgt Disadvantages Less Involvement and understanding of overall marketing goals Longer response time Limited ability to handle many product lines

Centralised

Decentralised

Concentrated, individual managers attention Rapid response to problems & opportunities Increased flexibility

Less effective decision making Unhealthy internal conflicts Misallocation of funds Managers lack sufficient authority Less experience Less objectivity Less flexibility

In House Agencies

Cost savings More control on activities and costs Increased coordination

Advertising Agency
Advertising agency is an independent organization that provides one or more specialized advertising and promotion related services to assist companies in developing, preparing and executing their advertising and other promotion programs.

Types of Advertising Agencies

Full- Service Agencies


Functions

Account Services Marketing Services Creative Services Management and Finance

Media Buying Services Creative Boutiques

Agency Compensation

Commission
Negotiated Fee Percentage Charge

Ways of Acquiring New Clients

Referrals Solicitations Presentations

Marketing Communications
Coordinated promotional messages delivered through one or more channels such as print, radio, television, direct mail, and personal selling. Flow of Communication:

External Flow Internal Flow

Marketing Communication Flow


Marketing Communication

External Flow

Internal Flow

Target Audience

Target Audience

Customers Past Present Potential Companies Competing Non-Competing

Channel Members Wholesalers Retailers Others Government Private Agencies Experts

Company Departments

Employees

Stockholders

Communication Process

SENDER
Intended Message Encoding

RECEIVER
Perceived Message Decoding

Noise

Sent Message

Channel

Received Message

Awareness/ Attitude Change/ Action

Types Of Communication Systems

Interpersonal Communication
Low Complexity, High Contact, Short Feedback Time, Adjustments High

Impersonal Communication
Mass Communication:- High Complexity, Low Contact, Long Feedback Time, Adjustments Low Organisational Communication:- Moderate Complexity, Moderate Contact, Moderate Feedback Time, Adjustments Moderate Public Communication:- High Complexity, Low Contact, Long Feedback Time, Adjustments Moderate

Integrated Marketing Communication


A management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation.

Buyers Decision Process


The Consumer Decision Making Process

Stimuli Marketer Activities Others External Search

Problem Recognition Search Evaluation Of Alternatives Formation of Intentions

Environmental Influences Culture Social Class Reference Groups Personal Characteristics Evaluation Criteria Attitude Formation

Internal Search

Purchase

Consumption

Outcomes

Problem Recognition
This results when there is a difference between ones desired state and ones actual state. Consumers are motivated to address this discrepancy and therefore they commence the buying process. Sources of problem recognition include: An item is out of stock Dissatisfaction with a current product or service Consumer needs and wants Related products purchase Marketer induced New products

Information Search
Once the consumer has recognised a problem, they search for information on products and services that problem. Consumers undertake both an internal (memory) and an external search. Sources of information include: Personal sources Commercial sources Public sources Personal experience

Alternative Evaluation
At this stage the consumer compares the brands and products that are in their evoked set. How can the marketing organisation increase the likelihood that their brand is part of the consumers evoked set. Consideration is in terms of Functional benefits Psychological benefits Marketing organisation

Buyers Decision

Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount

Post - Purchase Behaviour

Satisfaction Actions Use and Disposal

Exposure and Familiarity Model

Exposure, Salience, Familiarity Zajonc Exposure Preference is created by mere exposure Salience TOMA for mature brands. Reminder advertising for others Familiarity Comfort, Security, Ownership, Intimacy Implications High level of ad repetition for low involvement products

Response Hierarchy Models

AIDA Model Hierarchy Model Innovation Adoption Model Information Processing Model

AIDA Model
Awareness

Interest

Desire

Action

Information Processing Model


Presentation

Attention Comprehension

Yielding

Retention

Behaviour

Hierarchy of Effects model

Awareness Knowledge

Liking
Preference

Conviction
Action

Innovation Adoption Model

Awareness

Interest

Evaluation

Trial

Adoption

Low-Involvement Learning Model

Low Involvement Learning- Krugman, Ray For normal products Cognitive Attitudinal

Behavioural

For L.I. products Cognitive Behavioural

Attitudinal

Implications For L. I. products, greater awareness and branding is required to build preference (Wayne D. Hoyer)

Familiarity Attitude Grid


High Imported goods, Endorsement products Popular FMCG Big brands

Recently launched products Low Low Familiarity

Paints, Lubricants, etc

High

Foote, Cone and Belding (FCB) Model

This Model uses involvement (high-low) and think/feel as the two dimensions for classifying product categories. This classification suggests that purchase decisions are different when thinking is mostly involved and others are dominantly involved with feeling. Different situations also exist, resulting in decision-making processes which require either more or less involvement. Over time High involvement changes to Low Involvement and Thinking changes to Feeling.

Central vs Peripheral routes to processing


Central processing Depth of information processing Rational and logical thinking High involvement Peripheral processing Holistic thinking Associating ve or +ve cues from ads Cognitive short-cuts

Elaboration Likelihood Model


Elaboration Likelihood Model Richard E. Petty and John T. Cacioppo

Consumers are more likely to process centrally when motivation and ability to process is high. When either or both is low, peripheral processing is likely to take place.

Elaboration Likelihood Model

Advertisement

Motivation to process Information


Yes Ability to process information Yes Central route

No Peripheral cue present No

Peripheral route

Factors that shape motivation and ability


Ad medium Involvement or motivation (ad story) Knowledge level Comprehension Distraction Emotion Need for cognition

The Cognitive Response Model

The Cognitive Response Model

Advertising exposure and processing leads to consumers forming Support Arguments and Counter Arguments. These are the thoughts that go on in the consumers mind which are cognitive responses

Support Arguments change beliefs and attitudes Counter Arguments strengthen existing beliefs and attitudes

Cognitive response
Product/Message thoughts

Attitudes

Purchase intention

Brand attitudes

Exposure to Advertisement

Source-oriented thoughts

Purchase Intention

Advertisement Execution thoughts

Attitude towards Advertisement

Cognitive Response Model

Implications of the CR model


The objective of the advertiser would be to stimulates S.As and minimise C.As

Therefore this is to be managed Repetitions. C.As rise and S.As fall with too much repetition. Therefore there is an optimal level beyond which advertising should not take place (ad wear out) Dont expect to win over a hostile audience easily Strength of argument promotes S.As Emotion Positive moods generates S.As

Controlling Zapping and Zipping


Zapping is the use of a remote control device (RCD) to avoid commercials by switching to another channel. The process is often paired with "zipping," fast-forwarding through the commercials in recorded programs. Although zapping and zipping have received much attention recently, viewers have always avoided commercials by changing channels, leaving the viewing area or simply shifting their attention away from the set. Advertisements placed either at the beginning or the end of the commercials were less prone to be affected by clutter than ads placed in the middle. An ad must be interesting for the target audience to attract their attention

Strategic Positioning
Strategic positions that provide competitive advantage are based on the activities that a firm chooses to perform and on where it chooses to perform them. From these positions, a firm can deliver unique value to its customers. A position is based on a set of activities that combine to create unique value for a market. Porter has identified three classifications for strategic positions.

Positioning Strategies

Positioning Positioning Positioning Positioning Positioning Positioning

by by by by by by

Corporate Identity Brand Endorsement Use, Occasion and Time Price-Quality Product Users Competitor

Repositioning
This is usually considered when there are attractive opportunities or brand sales stagnate. A very successful repositioning example is that of Milkmaid. Milkmaid was positioned as a tea or coffee whitener. Subsequently it has been repositioned as a recipe for desserts

Determining Positioning Strategy


Identify Competitors Assessment of Consumers Perceptions of Competition Determining Competitors Position Analysing the Consumers Preferences Making the Positioning Decision Monitoring the Position

Requirements for Effective Segmentation


Measurable Sizable Accessible Actionable

Consumer Market Segmentation

Geographic Different geographical regions, cities, countries Demographic Age, sex, income, education, occupation, religion, race, nationality Psychographic Social class, lifestyles, personalities Behavioral Purchase occasion, benefits sought, user status, usage rate, loyalty

How Many Segments to Enter

Undifferentiated Marketing Differentiated Marketing Concentrated Marketing

Brand Awareness
The likelihood that consumers recognize the existence and availability of a company's product or service. Brand awareness is an important way of promoting commodity-related products. This is because for these products, there are very few factors that differentiate one product from its competitors. Therefore, the product that maintains the highest brand awareness compared to its competitors will usually get the most sales.

Brand Attitude And Feelings


Does the brand have an attitude? Brand attitude is how you portray the attitude of the brand and how the consumers think about it. Basically the brand portrays an image and message in order to show the attitude of the brand to the consumers. Positive message and image is a necessity in order to have a positive brand attitude that can connect to the consumers. It is indeed a branding and communication strategy used in order to establish a connection with the consumers.

Brand Equity
Brand Equity (like company equity) is the set of brand assets and liabilities linked to a brand that add or subtract from the brand value. Five Major Drivers Of Brand Equity 1. Name Awareness 2. Perceived Quality 3. Brand Loyalty 4. Positive Associations 5. Other Assets

Five Major Drivers Of Brand Equity


1. Name Awareness - Share of mind 2. Perceived Quality - Seen as better / best fit for me (functionality, trust, long lasting) 3. Brand Loyalty - Enduring preference 4. Positive Associations - Sponsorships, admired people using the product, corporate citizenship 5. Other Assets - Trade marks, exclusive channels, merchandising systems

Brand Equity
It is the sum total of impressions created by the brand in the consumers mind is brand image. The key in brand image research is to identify or develop the most powerful images and reinforce them through subsequent brand communications. The term "brand image" gained popularity as evidence began to grow that the feelings and images associated with a brand were powerful purchase influencers, though brand recognition, recall and brand identity. It is based on the proposition that consumers buy not only a product (commodity), but also the image associations of the product, such as power, wealth, sophistication, and most importantly identification and association with other users of the brand. Good brand images are instantly evoked, are positive, and are almost always unique among competitive brands.

Brand Personality
Brand Personality describes brands in terms of human characteristics. It is that part of brand image which, in consumers mind, is associated with the brands emotional aspects and symbolism. Brand personality is seen as a valuable factor in increasing brand engagement and brand attachment, in much the same way as people relate and bind to other people. Much of the work in the area of brand personality is based on translated theories of human personality and using similar measures of personality attributes and factors.

Advertising Budget

I know that half of my advertising budget is wasted, but Im not sure which half Lord Leverhulme.
How can a business know whether a specific advertising campaign was effective? As a percentage of sales, advertising expenditure varies enormously from business to business, from market to market. For example, the leading pharmaceutical companies spend around 20% of sales on advertising, whilst business such as Ford and Toyota spend less than 1%. An average for fast-moving consumer goods markets (FMCG) is around 8-10% of sales.

Approaches to setting the advertising budget


Percentage of sales Method
In markets with a stable, predictable sales pattern, some companies set their advertising spend consistently at a fixed percentage of sales. This policy has the advantage of avoiding an advertising war which could be bad news for profits. However, there are some disadvantages with this approach. This approach assumes that sales are directly related to advertising. Clearly this will not entirely be the case, since other elements of the promotional mix will also affect sales. If the rule is applied when sales are declining, the result will be a reduction in advertising just when greater sales promotion is required!

Objective and Task Method


The task approach involves setting marketing objectives based on the tasks that the advertising has to complete. These tasks could be financial in nature (e.g. achieve a certain increase in sales, profits) or related to the marketing activity that is generated by the campaigns. For example: Numbers of enquiries received quoting the source code on the advertisement Increase in customer recognition / awareness of the product or brand (which can be measured) Number of viewers, listeners or readers reached by the campaign

Arbitrary Allocation Method


This method pf budget allocation seems to have no theoretical basis. The management decides the budget on the basis of what is felt to be necessary. However, thee are no criteria to define what is really meant by necessary in the context of advertising budget allocation.

Affordable/Residual Method
The residual approach, which is perhaps the worst of all, is to base the advertising budget on what the business can afford after all other expenditure. There is no attempt to associate marketing objectives with levels of advertising. In a good year large amounts of money could be wasted; in a bad year, the low advertising budget could guarantee a further low year for sales.

Comparative Parity Method


This approach has widespread use when products are well-established with predictable sales patterns. It is based on the assumption that there is an industry average spend that works well for all major players in a market. A major problem with this approach (in addition to the disadvantages set out for the example above) is that it encourages businesses to ignore the effectiveness of their advertising spend it makes them lazy. It could also prevent a business with competitive advantages from increasing market share by spending more than average.

Payout Planning
It is a useful technique to develop a budget when a new product is launched. It is used in conjunction with the budgeting methods to estimate the investment value of advertising. The commitment is to invest heavily in advertising to achieve increased awareness and product acceptance. The basic idea is to develop a projection of revenues that the product will generate and the costs it will incur over a period of two or three years.

Quantitative Models
During the last few decades there has been much progress in the development and use of quantitative techniques which are often used in deciding advertising and other budget allocations but have met with limited success. These methods are based on
mathematical calculations and normally require the use of computer.

Experimental Approach
Promotion managers use tests and experiments in one or more selected markets. The purpose is to determine the impact of input variations that might be used the feedback data from these experiments and tests is used in determining the advertising budget.
The major drawback of this approach is expense and time involved.

Factors affecting Allocation of Ad Budget

Market Size and Potential Market Share Goals

High

SOV effect and Budgeting strategies for individual markets


Decrease: Follow a niche strategy, retreat and focus, reduce ad spending Increase to defend: Follow defensive strategy, increase ad spending to match that of competitor
Maintain a modest ad spending premium: Set your SOV at least at the level of competitor

Competitors Share of Voice

Low

Attack with Large SOV premium: Spend approximately twice that of competitor and sustain for a year or more

Low

Your brands share of market

High

Advertising Objectives
Sales as Advertising Objective
In an advertisers dream world, every ad would trigger an immediate sales response. Sales are a convenient and really attractive advertising objective for many managers, but except in the case of direct action advertising, they are usually unsuitable for most advertising. Maturity from awareness to actual purchase is normally takes quite long. Successful advertising generates lots of attraction but other aspects affect the sale as well.

Communication Objective
Communication Effect Pyramid

5% Repurchase/ Regular use 10% Trial

25% Preference

40% Liking

70% Knowledge/Comprehension

90% Awareness

DAGMAR
Term DAGMAR is an acronym for Defining Advertising Goals for Measured Advertising Results. DAGMAR steps are more defined and easy to apply. According to DAGMAR, a sale must carry a potential customer through four stages: I. Awareness II. Comprehension III. Conviction IV. Action

Awareness- suppose you are having a service or product and your

customer knows nothing about the product. As your client is unaware of the product, the first step is to make him aware of your product by posting advertisement regarding your product on respective websites.

Comprehension is the second step of DAGMAR. Try to know the


answers to these following questions.
a) What is your product about?
b) What are products potential features and benefits of product? c) What will your customer get from your product? And how?

Answers to all these questions will help you to get a potential customer.

Next stage is conviction and this is very important. Convince your customer by telling him the benefits of your product. After convincing, your next step starts i.e. action, which is not controlled by you. You have to depend on the customer. However, your previous actions will have a major role to play. If you have been able to convince, the customer ad have answered him satisfactorily and then you will definitely be the winner of the day.

According to Colley, the objectives of advertising should have following features:

Concrete Measurable Task

Target Audience
Benchmark and Degree of Change Sought Specified Time Period

DAGMAR is based on Hierarchy of Effects Model. Lavidge and Steiner is considered as the most preferable.

Advertising effect on Consumers Behavioural dimensions


Conative The realm of motives Ads stimulate or direct desires

Steps toward Purchase Purchase

Advertising for various stages POP advertising Testimonials Price/quality appeals

Conviction
Affective The realm of emotions Attitudes and feelings

Preference Liking

Comparative ads Arguments copy Image copy. Status glamour appeals

Cognitive The realm of thoughts

Knowledge

Descriptive copy Slogans, jingles etc.


Ad repetition, teaser ads

Awareness

Assessment of DAGMAR

Problem with response Hierarchy Sales as the advertising goal Practicality and costs Inhibits creativity

Media Planning and Strategy Market Analysis and Identifying Target Market:
While undertaking the overall promotion planning analysis, a complete review of the internal and external factors is done. While media strategy is being developed, the focus of analysis is on the media and delivering the message. The key questions at this stage are:Who is the target audience for advertising? What internal and external factors may influence the media plan? Where and when to focus the advertising effort?

1. 2. 3.

Market Analysis

Set Media Objective

Media Strategy Development & Implementation

Evaluation & Follow up

Four important steps in the development of media plan

To Whom Do We Advertise?

The media planner must match the target market of the advertised product with users of specific media. Use syndicated data to identify the best media to use Examples Simmons Market Research Bureau and Mediamark Research Inc. (provides data on audience size and composition for various magazines, newspapers, cable and network TV shows, and internet sites)

Where Do We Advertise?

The planner must identify each geographic market to be advertised in and allocate a sum of money to each. What variables should be considered? Brand Development Index Category Development Index BDI and CDI measure the sales strength of a particular brand (or product category) within a specific market relative to its sales strength in the geographic market (India) as a whole.

Brand Analysis

Brand Development Index


% of a brands India sales coming from a market area BDI = % of India population coming from a market area X 100

Category Analysis

Category Development Index % of a product categorys India sales coming from a market area CDI = % of India population coming from a market area X 100

Brand and Category Analysis


High BDI
The market usually represents good The market usually sales potential for both the product represents good sales and the brand.

Low BDI
The product category shows high The product category potential but the brand isnt doing shows high potential but well; the reason should be determined.

High CDI

potential for both the product and the brand.

the brand isnt doing well; the reason should be determined.

Low CDI

The category isnt selling well but the The category isnt selling brand is; may be a good market in well but the brand is; which to advertise but should be may be for good market in monitored a sales decline.

Both the product category and the brand are doing poorly; not likely to be a good place to advertise.

which to advertise but should be monitored for sales decline.

Explanation to BDI & CDI

High BDI and high CDI When both are high, this usually points to good sales potential for the product category as well as the brand. High BDI and low CDI Low CDI means the category is not selling well but the brand is selling well. This is probably a good market to advertise but should be monitored for any sales decline. Low BDI and high CDI There exists high potential for product category. The reason why brand is not doing well should be determined to make a decision. Low BDI and Low CDI The potential for both the product category and the brand is poor. Possibly not suited for advertising.

Establishing Media Objective


Media objectives are formulated to help accomplish the advertising communication task and marketing objectives. Media objectives are translated into specific goals for the media program and are limited to those that can be achieved through media strategies. For example, the media objectives can be stated as below:

Use print media to provide coverage of 80% of the target market over six months period, starting July. Reach 60% of the target audience at least three time over the same six months.

When Do We Advertise?

Seasonal timing Holiday timing Days-of-the-week timing Hours-of-the-day timing Other factors frequency objectives, budget, publication frequency

Three Scheduling Methods

Continuity

Flighting

Pulsing

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

In Which Media Classes Should We Advertise?


Target audience media usage habits Selectivity must consider geographic and class selectivity Lead Time the amount of time a medium requires before the advertisement will be run Creative Aspects how well the medium supports the message appeal and style Longevity how long the ad message will last Cost must consider absolute and relative costs

Determining Relative Cost of Media-Print

Cost per thousand (CPM) Cost of ad space (absolute cost) CPM = Circulation X 1,000

Calculating CPM Based on the Target Audience


Time Per page cost Circulation Calculation of CPM $234,000 4.0 million 234,000 x 1,000 4,000,000 $58.5 Newsweek $210,000 3.1 million 210,000 x 1000 3,100,000 $67.74

CPM

Determining Relative Cost of Media-Broadcast

Cost per rating point (CPRP)

Cost of commercial time


CPRP =

Program rating

Audience Measures Used in Media Planning

Reach the percentage of different homes or people exposed to a media vehicle or vehicles at least once during a specified period of time. Average Frequency the average number of times the reached audience is exposed to the media vehicle during a specified period of time. Gross Rating Points a summary measure that combines the program rating and the average number of times the home or person is reached during a specified period of time. Reach x Average Frequency = Gross Rating Points

Program Rating
This is a measure of potential reach of broadcast media and is expressed as percentage. PR= Number of households viewing the program x 100 Total number of households owning TV sets

Gross Rating Points


It is a numerical figure indicating how many potential audience members are likely to be exposed to a series of commercials. This combines program rating and the average number of times the household is reached during the advertising cycle. It is a measure of frequency of exposure and is expressed as GRP= Reach X Frequency

Frequency= Gross Rating Point Reach

Reach= Gross Rating Point Frequency

Reach and Frequency


Reach of one TV Program Reach of two TV Programs

Duplicated reach

Unduplicated reach

Setting Reach and Frequency Objectives

Recognize a trade off between reach and frequency given a limited budget How much reach? Depends on PLC stage, competition, promotions considered, budget. Conventional wisdom says between 50 and 100 percent. How much frequency? Conventional wisdom says between 3 and 10 exposures during a brand purchase cycle. See figures 10-21 and 10-23

Media Characteristics and Evaluation


Media Advantages Disadvantages

Television

Mass coverage, high level of reach, combined effect of sight, sound and motion, prestige value, low cost per exposure and attracts attention
Local coverage, lower cost, high frequency, focused segment selection and low production cost Mass coverage, low cost, large space, short lead time for ad placing, ad position choice possible, good for current exposure and coupons can be inserted Potential for focused segmentation, very good production quality, longevity of message, high information content and more readers per copy

Offers low selectivity, short span of message life, high cost, high production cost and creates advertising clutter
Only audio, noise, low attention getting and message short lived Short lived, clutter, low attention getting, poor production quality and selective exposure Long lead time for ad placing, only visual, low frequency and lack of flexibility

Radio

Newspaper

Magazines

Media Outdoor

Advantages Good for focused segmentation, high repetition and high visibility

Disadvantages Short exposure time, short message and poor image

Direct mail

High level of selectivity, reader controls exposure, high information content and opportunity for repeat exposure

High cost per contact, often thrown as junk mail and clutter

Internet

User controlled, increased attention and involvement

Limited creative capability

General Characteristics of Media