MGT301 - Principles of Marketing - Lecture Handout 33

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Lesson overview and learning objectives:

Objectives settings

Advertising—the use of paid media by a seller to inform, persuade, and remind about its products or organization—is a strong promotion tool. Advertising decision-making is a five-step process consisting of decisions about the objectives, the budget, the message, the media, and, finally, the evaluation of results. Advertisers should set clear objectives as to
whether the advertising is supposed to inform, persuade, or remind buyers. The advertising budget can be based on what is affordable, on a percentage of sales, on competitors' spending, or on the objectives and tasks. The message decision calls for designing messages, evaluating them, and executing them effectively. The media decision calls for defining reach, frequency, and impact goals; choosing major media types; selecting media vehicles; and scheduling the media. Message and media decisions must be closely coordinated for maximum campaign effectiveness. Finally, evaluation calls for evaluating the communication and sales effect of advertising before, during, and after the advertising is placed.

ADVERTISING

A. ADVERTISING

Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor is termed as advertising.

B. The Five M’s of Advertising

The Five M’s of Advertising

The five M’s are basically the different important decisions that are to be taken while designing the advertising campaign. The five M’s of advertising are (1) Mission (that is the basic objective or goal that any company wants to attain by its
advertising campaign), (2) Money (how much money should be spent by the company to achieve the objective of advertising and the basic factors that should be considered while deciding about the budget of the advertising) (3) Message (what specific information company wants to communicate through its advertising, what should be the contents of the message etc) (4) Media (communication of the message to people requires some media that can be print electronic its selection requires certain decisions like selection of type of media, scheduling of media etc) the last M is (5) Measurement (it is something related to evaluation of the advertising campaign that can be done either by considering its impact on sales or profits of the company).

C. Advertising decisions

Marketing management must take five important decisions when developing an advertising program:

  1. Setting advertising objectives.
  2. Setting advertising budgets.
  3. Developing advertising strategy.
    • Message decisions.
    • Media decisions.
  4. Evaluating advertising campaigns.

a. Setting Advertising Objectives

Setting advertising objectives is the first step in developing an advertising program. These objectives should be based on past decisions about the target market, positioning, and marketing mix, which define the job that advertising must do in the total marketing program. An advertising objective is a specific communication task to be accomplished with a specific
target audience during a specific period of time. Advertising objectives can be classified by primary purpose as:

  1. Informative advertising, which is used to inform consumers about a new product or feature or to build primary demand.
  2. Persuasive advertising which is used to build selective demand for a brand by persuading consumers that it offers the best quality for their money.
  3. Comparison advertising which is advertising that compares one brand directly or indirectly to one or more other brands.
  4. Reminder advertising, which is used to keep consumers thinking about a product. This form of advertising is more important for mature products.

b. Setting the Advertising Budget

Setting the Advertising Budget

After determining its advertising objectives, the marketer must set the advertising budget for each product and market. Four commonly used methods for setting promotion budgets were discussed in last Lesson. No matter what method is used, setting the advertising budget is no easy task. How does a company know if it is spending the right amount? Some critics charge that large consumer packagedgoods firms tend to spend too much on advertising and business-to-business
marketers generally under spend on advertising. They claim that, on the one hand, the large consumer companies use lots of image advertising without really knowing its effects. They overspend as a form of "insurance" against not spending enough. On the other hand, business advertisers tend to rely too heavily on their sales forces to bring in orders. They underestimate the power of company and product image in pre-selling to industrial customers. Thus, they do not spend enough on advertising to build customer awareness and knowledge.

Some specific factors that should be considered when setting the advertising budget are:

  1. Stage in the product life cycle. New products typically need large advertising budgets.
  2. Market share. High-market share brands usually need more advertising.
  3. Competition and clutter. More advertising is usually required in a market with many more competitors and their advertising clutter.
  4. Product differentiation. When a brand closely resembles other brands in its product class, more advertising (and therefore budget) is needed.

The primary questions to be answered during the budget process are how much to spend and what impact is expected or acceptable. This process is difficult because measurement techniques of effectiveness rarely give precise answers.

c. Developing Advertising Strategy

Advertising strategy consists of two major elements:

  1. Creating advertising messages
  2. Selecting advertising media.

In the past, companies often viewed media planning as secondary to the message-creation process. The creative department first created good advertisements, and then the media department selected the best media for carrying these advertisements to desired target audiences. This often caused friction between creatives and media planners.
Today, however, media fragmentation, soaring media costs, and more focused target marketing strategies have promoted the importance of the media-planning function. In some cases, an advertising campaign might start with a great message idea, followed by the choice of appropriate media. In other cases, however, a campaign might begin with a good media opportunity, followed by advertisements designed to take advantage of that opportunity. Increasingly, companies are realizing the benefits of planning these two important elements jointly.
Thus, more and more advertisers are orchestrating a closer harmony between their messages and the media that deliver them. Media planning is no longer an after-the-fact complement to a new ad campaign. Media planners are now working more closely than ever with creative to allow media selection to help shape the creative process, often before a single ad is written. In some cases, media people are even initiating ideas for new campaigns.

a) Creating the Advertising Message

No matter how big the budget, advertising can succeed only if commercials gain attention and communicate well. Good advertising messages are especially important in today's costly and cluttered advertising environment. If all this advertising clutter bothers some consumers, it also causes big problems for advertisers. Until recently, television viewers were pretty much a captive audience for advertisers. Viewers had only a few channels from which to choose. But with the growth in cable and satellite TV, VCRs, and remote-control units, today's viewers have many more options. They can avoid ads by watching commercial-free cable channels. They can "zap" commercials by pushing the fast-forward button during taped programs. With remote control, they can instantly turn off the sound during a commercial or "zip" around the channels to see what else is on. In fact, a recent study found that half of all television viewers now switch channels when the commercial break starts.
Thus, just to gain and hold attention, today's advertising messages must be better planned, more imaginative, more entertaining, and more rewarding to consumers. Some advertisers even create intentionally controversial ads to break through the clutter and gain attention for their products.

i. Message Strategy

The first step in creating effective advertising messages is to decide what general message will be communicated to consumers—to plan a message strategy. The purpose of advertising is to get consumers to think about or react to the product or company in a certain way. People will react only if they believe that they will benefit from doing so. Thus, developing an effective message strategy begins with identifying customer benefits that can be used as advertising appeals. Ideally, advertising message strategy will follow directly from the company's broader positioning strategy. Message strategy statements tend to be plain, straightforward outlines of benefits and positioning points that the advertiser wants to stress. The advertiser must next develop a compelling creative concept—or "big idea"—that will bring the message strategy to life in a distinctive and memorable way. At this stage, simple message ideas become great ad campaigns. Usually, a copywriter and art director will team up to generate many creative concepts, hoping that one of these concepts will turn out to be the big idea. The creative concept may emerge as visualization, a phrase, or a combination of the two.
The creative concept will guide the choice of specific appeals to be used in an advertising campaign. Advertising appeals should have three characteristics: First, they should be meaningful, pointing out benefits that make the product more desirable or interesting to consumers. Second, appeals must be believable—consumers must believe that the product or service will deliver the promised benefits. However, the most meaningful and believable benefits may not be the best ones to feature. Appeals should also be distinctive—they should tell how the product is better than the competing brands.

ii. Message Execution

The advertiser now has to turn the big idea into an actual ad execution that will capture the target market's attention and interest. The creative people must find the best style, tone, words, and format for executing the message. Any message can be presented in different execution styles, such as the following:

  • Slice of life: This style shows one or more "typical" people using the product in a normal setting.
  • Lifestyle: This style shows how a product fits in with a particular lifestyle.
  • Fantasy: This style creates a fantasy around the product or its use.
  • Mood or image: This style builds a mood or image around the product, such as beauty, love, or serenity. No claim is made about the product except through suggestion.
  • Musical: This style shows one or more people or cartoon characters singing about the product.
  • Technical expertise: This style shows the company's expertise in making the product.
  • Scientific evidence: This style presents survey or scientific evidence that the brand is better or better liked than one or more other brands.
  • Testimonial evidence or endorsement: This style features a highly believable or likable source endorsing the product.

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