Advertising Planning and Strategy Chapter 7 Advertising Planning and Strategy

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.

The Advertising Planning Cycle 1. Where are we? 2.Why are we there? 3.Where could we be? 5. Are we getting there? 4. How could we get there?

Advertising Planning and Decision Making Situation Analysis Consumer/Market Analysis Competitive Analysis Role of Advertising, Sales Force, Price, Promotion, Public Relations Marketing Program The Communication/ Persuasion Process Objectives/Segmentation/Positioning Message Strategy and Tactics Media Strategy and Tactics Advertising Plan “Facilitating” Agencies Social and Legal Constraints Implementation Figure 2-1 Framework for advertising planning and decision making

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?

Understanding of Comm. Process A typical communication process model A model of persuasion process Ad exposure Different functions of advertising messages Brand attitude Purchase behavior

Developing an Advertising Plan Advertising 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.

Typical Advertising or Campaign Plan Outline (Tab. 7.1) Introduction Executive Summary or Overview is provided. Situation Analysis Advertising Problems Advertising Opportunities Key Strategy Decisions Advertising Objectives Target Audience Competitive Product Advantage Product Image and Personality Product Position

Typical Advertising or Campaign Plan Outline (Tab. 7.1) The Creative Plan The Media Plan The Communication Plan Sales promotion Public relations Direct marketing Personal selling Sponsorships, merchandising, packaging, etc. Implementation and Evaluation Evaluation Budget

Situation Analysis Opportunity analysis: to spot and capitalize on favorable demand trends examples of such trends Competitive analysis: to achieve and maintain a “competitive advantage” examples of competitive advantages Target market selection examples of target marketing ==> Marketing plan (4Ps)

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.

Selling Premises Product Benefit Promises Reason Why Unique Selling Advertisements that focus on the product itself by looking at attributes. Benefit Product is promoted on the basis of what it can do for customers. Promises Promises that something will happen if you use the advertised product. Reason Why Based on logic and reasoning and clearly states a reason for the benefit gained. Unique Selling Proposition A benefit statement that is both unique to the product and important to the user. Support Lends credibility to the selling premise.

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

Setting Objectives Why 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

What is Good Objectives? Specify a well- defined audience Concrete and Measurable Good Objectives Attainable Specify a time period Establish bench- Mark measures Realistic

Setting Objectives Using the Communications Effects Pyramid Product: Backstage Shampoo Time period: Six months Objective 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

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

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.”

Factors Related to Success of Advertising for New Products 3.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.

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

McDonald’s Advertising Response Function Sales Advertising

Relationship of Adv. to Sales & Profits In 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.

Advertising Budgeting Methods Objectives-and-tasks method Percentage-of-sales method Competitive parity method All-you-can-afford Arbitrary allocation Quantitative or experimental model

The Advertising Budgeting Methods Historical Method Common budgeting method. May be based on last year’s with a percentage increase. Nothing to do with advertising objectives. Task-Objective Method: Bottom-Up Most common method. Looks at objectives set for each activity, and determines the cost of accomplishing each objective. Percentage-of-Sales Method Compares total sales with the total advertising (or marketing communication) budget during a previous time period to compute a percentage.

The Advertising Budgeting Methods Competitive Methods Relates the amount invested in advertising to the product’s share of market. Must understand share-of-mind. All You Can Afford Method Allocates whatever is left over to advertising. Companies who use this don’t value advertising very much.

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

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.