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• Is a form of communication intended to persuade its viewers, readers or listeners to take some action
• Any paid form of non-personal communication
• Usually directed at the mass
• Specific messages that someone or some organization has placed in an attempt to persuade audience
• Copy of commercials
• Final product of advertising process
Consistent investment spending is the key factor underlying
successful advertising.
Informing
Persuading
Reminding
Adding Value
Assisting Other Company Efforts
Informing
• Makes consumers aware, educates them about the features and benefits, and facilitates the creation of positive brand images
• Facilitates the introduction of new brands and increases demand for existing brands
• Performs another information role by teaching new uses for existing brands (Usage expansion advertising)
Persuading
• Persuades customers to try advertised products and services
• Primary demand- creating demand for an entire product category
• Secondary demand- the demand for a specific company’s brand
Reminding
• Keeps a company’s brand fresh in the consumer’s memory
• Influences brand switching by reminding consumers who have not recently purchased a brand that the brand is available and that it possesses favorable attributes
Adding Value
• Three basic ways by which companies can add value – innovating
– improving quality
– altering consumer perceptions
• Advertising adds value to brands by influencing consumers’ perceptions
Assisting Other Company Efforts
• Advertising is just one member of the marketing communications team
• Sometimes, an assister that facilitates other company efforts in the marketing communications process – i.e. a job of a salesperson at the PoP or direct
marketing would be easier once consumer have been exposed to the brand/product through advertising
Above the line ◦ Usually refers to advertising using the mainstream
media such as electronic media (TV and radio) and print (newspaper and magazine)
Below the line ◦ Include other supporting medium such as outdoor
advertising, telemarketing
Advertisers ◦ Those who have something to advertise ◦ i.e. manufacturer, individual, reseller
Ad agencies ◦ Organizational of professional who provide
creative and business services to clients related to planning, preparing and placing ad.
External Facilitators ◦ Those who provide specialized services to
advertiser or agencies ◦ i.e. professional photographers, editors
Media Organizations ◦ i.e. broadcast stations, newspaper, magazine
publishers
Advertising Strategy
• Setting Objectives (+ Targets)
•Formulating Budgets
•Creating Ad messages
•Selecting Ad Media and Vehicles
Strategy Implementation
Assessing Ad Effectiveness
To increase sales
To increase awareness level
To encourage trial of the brand
To increase the customer loyalty
Include a precise statement of who, what, and when
Be quantitative and measurable
Specify the amount of change
Be realistic
Be internally consistent
Be clear and put it in writing
Refer Topic 1 & 2
The best(optimal) level of any investment is the level that maximizes profits(MR=MC)
Advertisers should continue to increase their advertising investment as long as it is profitable to do so
What is the Ad objective?
How much are competitors spending?
How much money is available?
Percent-of-Sales Budgeting
Objective-and-Task Method
Competitive Parity Method
(match competitors method)
Affordability Method
A company sets a brand’s advertising budget by simply establishing the budget as a fixed percentage of past or anticipated sales volume
Criticized as being illogical
Sales=f(Advertising) (o)
Advertising=f(Sales) (x)
The most sensible and defendable advertising budgeting method
Specify what role they expect advertising to play for a brand and then set the budget accordingly
Sets the ad budget by basically following what competitors are doing
Only the funds that remain after budgeting for everything else are spent on advertising
Only the most unsophisticated and impoverished firms
However, affordability and competitive considerations influence the budgeting decisions of all companies
Sound
Strategy
Consumer’s
View Persuasive
Doesn’t
Overwhelm
Deliver on
Promises
Break
Clutter
Effective
Advertising
The Role of Creativity
Characteristics of
creative campaigns
Differentiates itself
Out-if-the-ordinary
Energizer Batteries
Energizer Batteries keep going, and going, and going…
Like the drum-beating bunny that reinforces the argument
Characteristics of
creative campaigns
Differentiates itself
Out-if-the-ordinary
Energizer Batteries
Pepsi-Cola
Pepsi-Cola
commercial
pokes fun at its
competitor,
Coca-cola
and subtly
conveys the
message that
perhaps
Pepsi is better
than Coke
Characteristics of
creative campaigns
Differentiates itself
Out-if-the-ordinary
Energizer Batteries
Pepsi-Cola
Volkswagen Golf
Characteristics of
creative campaigns
Differentiates itself
Out-if-the-ordinary
Energizer Batteries
Pepsi-Cola
Volkswagen Golf
Bud Light
The Role of Creativity
• Spuds MacKenzie campaign • Budfrogs • Louie and Frank • Whassup?!
The toga-clad “Pizza,
Pizza” man captures
and holds the viewer’s
attention and provides
Little Caesar’s with a
unique image vis-a-vis
its more laid-back
competitors
This simple ad dramatizes that the Volkswagen Golf is a roomy car while holding the viewer’s
attention in an entertaining manner
Advertising plan
Provides the framework for systematic
execution of advertising strategies
Advertising strategy
An advertising message that communicates the brand’s primary
benefits or how it can solve a consumer’s problem
Key Fact
A single-minded statement from the
customer’s points of view that identifies
why consumers are or are not
purchasing the brand
States the problem from
the marketer’s point of view
What effect the advertising is intended
to have on the target market and how it should persuade consumers
Define the target market
Identify the primary competition
Choose the positioning statement
Offer reasons why
Relatively technical and uncreative
It reminds the advertiser to include the corporate slogan or logo, any regulatory requirements and so on
Advertising strategy is the formulation of an ad message that communicates the brand’s primary benefit or how it can solve the consumer’s problem ◦ Effective Ad Strategies
◦ Alternative Creative Strategies
◦ Message Appeals and Endorses
Take 5
Effective advertising is usually creative
Creative means being different from the other advertisements
Guidelines ◦ Must take consumer view
◦ Have a unique way to stand out from the rest
◦ Promise only what it can deliver
Sound
Strategy
Consumer’s
View Persuasive
Doesn’t
Overwhelm
Deliver on
Promises
Break
Clutter
Effective
Advertising
Superiority claims based on unique physical feature or benefit
Definition
Most useful when point of difference cannot be readily matched by competitors
Conditions
May force competitors to imitate or choose more aggressive strategy
Competitive
Implications
Claims based on psychological differentiation, usually symbolic association
Definition
Best for homogeneous good where differences are difficult to develop; easily duplicated
Conditions
Most often involve prestige
claims; rarely challenge
competition directly
Competitive
Implications
Attempts to evoke stored experiences of prospects to endow product with relevant meaning or significance
Definition
Best for socially visible goods; requires considerable consumer understanding to design messages
Conditions
Few direct limitations on competitor’s options; most likely competitive response is imitation
Competitive Implications
Attempts to provoke involvement or emotion through ambiguity, humor without strong selling emphasis
Definition
Best suited to discretionary items; effective use depends on competitor response
Conditions
Competitors may imitate to undermine strategy of difference or pursue other alternatives
Competitive Implications
Straight product or benefit claim
with no assertion of superiority
Definition
Monopoly or extreme dominance
of product category
Conditions
Brand attempts to become
synonymous with product
category
Competitive
Implications
Generic claim with assertion of
superiority
Definition
Growing or awakening market where competitive advertising is generic or nonexistent
Conditions
May be successful in convincing
customer of superiority
Competitive
Implications
Two Forms
Image advertising
Issue or advocacy advertising
A aimed at creating an image of a specific corporate personality in the minds of the general public and seeking maximum favorable images amongst selected audiences. It attempts to increase a firm’s name recognition, establish goodwill or identify itself with some meaningful and socially acceptable activity
Jaguar
A company takes a position on a controversial social issue with the intention of swaying public opinion.
It does so in the manner that supports the company’s position and best interests while expressly or implicitly challenging the opponent’s position and denying of their facts
Creative Advertising Appeals ◦ Endorsers
Celebrity Endorses
Typical Person endorsers
◦ Humor
◦ Fear
◦ Guilt
◦ Sex
◦ Use of Music
Advertisers are willing to pay huge salaries to celebrities who are liked and respected by target audiences and who will favorably influence consumers’ attitudes and behavior toward the endorsed products
Illustration
using a
celebrity
Illustration
using a celebrity
Michael Jordan
is a popular
endorsement figure
Show regular people using or endorsing products
Avoid the backlash from using “beautiful people” who may be resented
Real personal experience of the benefits of the particular brand possess a degree of credibility
Effective using multiple people rather than a single individual
Illustration of a
typical-person
endorsement
Illustration of a
typical-person
endorsement
Illustration of a
typical-person
endorsement
An Illustration of
typical-person
endorsers
Another
illustration of
typical-person
endorsers
Attracts attention
Enhances liking of ad and brand
Does not hurt comprehension
Does not harm persuasion
Does not enhance source credibility
Nature of product affects the appropriateness of using humor
Effective only when consumers’ evaluations of the advertised brand are already positive
Effect of humor can differ due to differences in audience characteristics
Humorous message may be so distracting that receivers ignore the message content
Eastpak
backpacks
•Appeal to fear is effective as a means of enhancing motivation
•Appeal by identifying the negative consequences of:
Not using the product
Engaging in unsafe behavior (example drinking and driving)
Stimulates audience involvement with a message
Promotes acceptance of message arguments
Takes the forms of either
Social disapproval or
Physical danger
Fear-Appeal
Fear-Appeal
An insurance
company’s
appeal to fear
A drug company’s
use of fear appeal
Guilt appeals motivate emotionally mature individuals to undertake responsible action leading to a reduction in the level of guilt
Generally, they focus on one’s past or future transgressions or failure to care for others
An illustrative
guilt appeal
Initial attention lure
Enhance recall of message point
Evoke emotional responses
The use of sexual
suggestiveness
in advertising
Illustration of the
stopping-power
role of sex
Attention lure
Calvin Klein’s
Obsession
Inappropriate use of
sex appeals
Attracts attention
Promotes positive mood
Increase receptivity of message
Communicates meanings
Help to enhance the image and recall of advertised
brand
Once the creative planning has been implemented, the next step in advertising management process is to select the most appropriate media to place the advertisements
Broadcast ◦ TV, radio
Print ◦ Magazine, direct mail, newspaper
Interactive Media ◦ Online computer services ◦ Home-shopping broadcasts
Support Media ◦ Event sponsorships ◦ PoP display
End of chapter
Direct Marketing
Many business firms including not-for-profit organizations have faith in advertising. In general, advertising is valued because it is recognized as performing five critical communication functions of informing, persuading, reminding, adding value and assisting other company's efforts ◦ a) Elaborate how advertising add value to the brand and assist
other company’s effort. Provide examples where necessary
◦ b) Firms must be very careful when setting objective for their advertising campaign. Why do you think this advertising objective statement is not appropriate - “ Brand Y’s advertising objective this year is to increase sales revenue.” What are the criteria of a good advertising objective?
a) Add value
◦ Three basic ways by which companies can add value to their offering: Innovating Improving quality Altering consumer perception
◦ Advertising add value to brands by influencing perceptions- effective ads cause brands to be viewed as more elegant, more stylish, more prestigious and of higher quality
Assist other company efforts ◦ Advertising is just one member of the marcom team. It assists in a number of ways: as a
vehicle for delivering coupons and sweepstakes and attracting attention to other promotional tools, presell products and provide salespeople with valuable introductions prior to their personal contacts with prospective customers or enhance the effectiveness of other marcom tools.
b) The objective is too general and emphasizes on a sales objective Good objectives must include these criterias
◦ Include a precise statement of who, what and when ◦ Be quantitative and measurable ◦ Specify the amount of change ◦ Be realistic ◦ Be internally consistent ◦ Be clear and in writing
a) You are the brand manager for an established brand of toothpaste. Last year, you have fought hard to have the advertising budget for your brand to be increased by 10%. You have just received a report for the latest quarter this year that shows sales revenue for your brand of toothpaste do not change despite the increase in advertising spending. The marketing vice-president is concerned about the lack of increase ins ales and wants you to explain the problem. How might you respond?
b) You have been hired as a management trainee in the marketing communication department of a manufacturer. The manager has asked you to suggest the mist appropriate and logical budgeting method that you company can use
a) The response may include ◦ It may be un realistic to expect an immediate impact on sales since it may take a little time
for the rise ins pending to have an impact on the marketplace ◦ Some developments may be occurred during the latest quarter that may have affected the
sales of toothpaste such as competitive advertising-did competitors increase their level of ad or sales promotion activity
◦ Were there any new brands introduced during this period ◦ To rely on advertising alone may not bring an immediate effect on sales whereby advertising
is more effective to achieve a long run goal such as brand loyalty. The combination of ad and sales promotion can be a good alternative. This mean the communication objective should also be looked into rather than just on sales objective alone.
b) The most appropriate method of budgeting is the objective and task method because it is generally regarded as the most sensible and defendable method. In addition, surveys have shown that over 60% of consumer good companies and 70% of industrial good companies use this budgeting method
Steps ◦ Establish specific marcom objectives needed to be accomplished ◦ Assess the tasks required to accomplish the objectives ◦ Determine the cost required to implement each task ◦ Total up the costs to arrive at the total appropriation for the company’s marcom program
a) With relevant examples of existing advertisements, discuss two alternatives creative strategies and indicate the specific conditions under which these alternatives are appropriate: ◦ i) Unique selling proposition ◦ ii) Brand Image strategy
b) What is corporate image and issue advertising? Provide examples to illustrate your understanding.
a) i) USP
◦ Used by an advertiser to make claim of superiority based on unique product attribute that represents a meaningful, distinctive consumer benefits. It is a translation of a unique product feature into a relevant consumer benefits
◦ Best suited for companies whose products possess relatively lasting competitive advantages
ii) BIS ◦ It involves psychological rather than physical differences. Advertising
attempts to develop image for the brand by associating the product with symbols
◦ Developing an image through advertising gives a brand a distinct identity or personality, which is especially important for brands that compete in categories where there are little physical difference among brands
Examples?
b) Corporate image advertising is aimed at creating an image of
a specific corporate personality in the minds of the general public and seeking maximum favorable images amongst selected audiences. It attempts to increase a firm’s name recognition, establish goodwill or identify itself with some meaningful and socially acceptable activity
In issue or advocacy advertising a company takes a position on a controversial social issue with the hope of swaying public opinion.
Examples?
