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Marketing Management
Dawn Iacobucci
2010 South-Western, a part of Cengage Learning
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Advertising Media and Integrated
Marketing Communications
Chapter 10
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Marketing Framework
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Advertising Media
Ad budgets are usually fixed, so choicesmust be made on how to allocate
resources across media1. How much do we spend?
2. When do we spend?
3. Which media do we use?
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How Much Do We Spend?
Ad budget as a percentage of sales
Use past percentage or industry norm
Make adjustments based on marketinggoals
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How Much Do We Spend?
Ad budget approximately on par withcompetitors
Service providers track companies adexpenditures
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How Much Do We Spend?
When sales decline, previousapproaches imply budgets should be cut
Smaller ad budgets mean less presenceand a cycle of decreased sales
The strategic advertising goal approach
views advertising as an investment Determine advertisings goal and work
backward to calculate expenditure
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Discussion Question
Should advertising be seen as anexpense or an investment? Why?
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Reach, Frequency and GRPs
Reach: the share of your target that hasseen your ad at least once
Frequency: the average number of timestarget saw the ad (within set duration)
GRPs: Reach X Frequency
Ad reached 25% of target an average of 3times - the ad delivered 75 GRPs
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Reach & Frequency
For reach, the goal is to expose as manyof the target customers as possible
Find most cost efficient media for reachingtarget
For frequency, it depends on the goalAwareness and memory can probably be
attained with a few ads Persuasion may take more
If ad/product is readily understood, wear-outmay occur
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Media Planning
You pay more to get more--but therelationship is not perfect
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Return on Marketing Investments
Example Greys Anatomy: 9.3 million TVs
Greys Anatomy:$440,000 per 30 seconds McDonalds meal contribution: $0.50
$440,000/0.50 = 880,000 meals/breakeven
9.3 million viewers are exposed; thus,
McDonalds needs 9.5% to purchase 880,000 / 9.3 million = 9.5%
The question isIs this reasonable?
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Media Planning
Continuous: regularity in ad exposure Periodicity depends purchase cycles
Coca-Cola, McDonalds, Ford, etc.
Occasional: pop up from time to time Periodicity depends on purchase cycles
Seasonal: infrequent and focused on thepreterm season for the product School supplies in August, grills in April, etc.
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Discussion Questions
What type of schedule (continuous,occasional or seasonal) would you use if
you were marketing Coca-cola?
What about your school?
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Media Selection
The choice of media outlet is difficultbecause
There are more media outlets e.g., more television stations, more radio
stations via XM, the Internet, etc.
Audiences are fragmented across the many
media and use technology to zip past ads
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IMC
IMC: marketing messages must beseamlessly integrated across media
Positive relationship between IMC and goodbrand outcomes High awareness, brand loyalty, sales, etc.
Some elements should be consistent, someshould vary based on the strengths of thevarious media
Difficult to implement because adagencies are not full service providers
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Discussion Questions
How has Pepsi or Coca-Colaimplemented IMC? Give several
examples.
Can you give any examples of
companies who do not effectivelyimplement IMC?
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Media Strengths-Business
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Business Strengths of Media
TV ads are most expensive yet yield thelargest reach
Magazines have broad appeal or can betargeted
Radio and newspapers are often
purchased nationally, but can bepurchased for local markets
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Business Strengths of Media
Radio, newspapers, and magazines areless expensive than TV, but they also
deliver smaller audiences Billboards, bus ads, yellow page ads,
etc. are relatively inexpensive andeffective in covering local numbers
Magazines require long lead times forproduction but have nice reproductionquality
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Business Strengths of Media
Newspapers and magazines arenonintrusive but viewers can ignore ads
Online advertising and direct mail havethe best customization options
Online ads are inexpensive and can be
targeted, yet, penetration isnt 100% Direct mail is relatively inexpensive and
targeted, but it is not efficient (junk mail)
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Media Strengths-Ad Content
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Ad Content Strengths of Media
TV messages need to be simple andstraightforward; radio messages even
more so TV allows for vivid, dramatic portrayals
Print vehicles are good for detailed
product information
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Discussion Question
If you were a local restaurant, which typeof media would you use to advertise?
Why?
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Beyond Advertising
IMC goes beyond integrating acrosstraditional media. It includes personal
selling, sales promotions, publicrelations, etc.
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Personal Selling
Personal selling and a companyssales force are essential
communication vehicles for manyindustries
Accounts for 14 million jobs
Over 10% of work force
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Personal Selling
Get attention of potential customer e.g., prospecting, qualifying potential
customers, and approaching them
Get interest e.g., sales presentations
Get desire
e.g., product demonstrations, handlingcustomers objections
Get action e.g., closing deal, following up service
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Advertising & Selling
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Discussion Question
Do you think marketers of dry eraseboards should use personal selling? Why
or why not?
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Designing a Sales Force
How many salespeople do I need?
Larger with an aggressive launch
Where do I deploy them?
How do I compensate them? Proportion of salary and commission
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Designing a Sales Force
Pull relies on advertising and salespromotions Direct promotional efforts to consumers
Push relies more on personal selling Direct promotional efforts to channel members
Trade allowances: price reductions to
intermediaries for allocating space, etc. May be passed on to retailers salespeople as cash,
training and product demonstrations, freemerchandise, conventions, etc.
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Discussion Questions
How might Maytag implement a pushstrategy? What about a pull strategy?
Do you think they do both? Why or whynot?
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Public Relations
PR communications are the attempt ofan organization to reach
Customers, suppliers, stockholders,government officials, employees, generalcommunity
PRs intention is to convey a positiveimage and to educate a constituencyabout the companys objectives Generate goodwill on behalf of the company
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PR People
Issue press kits - news releases whenanything newsworthy is happening
Features news (e.g., product launch),company information, bios, history, etc.
Maintain information on web site
Arrange events Speaking engagements, sponsorships,
philanthropy, etc.
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Publicity
Communication tool that the companydoesn't pay for
It has the appearance of objectivity PR can prepare press releases, but there is
no guarantee that they will be picked up
Publicity can be negative or positivebecause companies cannot directlycontrol it
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Discussion Questions
Can you describe the effects of negativepublicity?
For example, describe the effects Ford andFirestone experienced following the SUVtire blow-out incidents.
Can negatively publicity be managed? Ifso, how?
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Product Placement
Product placement is when products areintegrated into shows More subtle than ads
e.g., Hannah Montana with Adidas
Becoming increasingly popular as
consumers increasingly zap ads Over $1 billion annually Is currently illegal in most of Europe
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Event Sponsorship
Event sponsorship can occur in sports,cultural or artistic endeavors Brands draw from their positive valence and
high positive energy Nascar racing
Not clear that sponsorship is cost-effective When Coca-Cola sponsors the Olympics, do
they really need the exposure?
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Sales Promotions
Sales promotions activate purchaseinterest, thus effecting short-term sales
Coupons Rebates
Promo prices
Trade-ins
Deals for loyalty programs
Free trial-sized products
Contests/sweepstakes
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Discussion Question
Why might Nationwide Insuranceallocate money to sponsor Nascar
instead of allocating money forsweepstakes?
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IMC Choices Depend on
1. The target audience
2. The companys goals
Awareness Information about features and benefits
Enhancement of brand attitudes
Strengthening of preferences
Stimulation of purchase trial Encouragement of repeat purchasing
Attraction of brand switchers
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Questions to Ask
Should we schedule continuously,occasionally or seasonally?
What is the consumers purchase cycle? What is the level of saturation desired?
What life cycle stage is the product in?
What can we afford?
What is best for our target?
What do we want the target to know?
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Example: IMC Schedule
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Media Effectiveness
If goal is awareness, reach matters Can be measured by viewership, readership,
circulation numbers, traffic indices, etc.
If goal is attitude adjustment, use surveys
It can be difficult to assess ROMIbecause customers cant always tell youwhere they saw the ad
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Media Effectiveness
If you spend more on advertising, do yousee more in sales?
Increasing ad budget relative to thecompetition doesnt increase sales in general
Qualitative differences, such as better adcopy, can increase the likelihood that TV
advertising will positively affect salesAds that evoke positive and not negative
feelings have been related to sales
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Media Effectiveness
Online advertising
Track click-thru rates, downloads, inquiries,
purchases, returns, etc. & compare with costper click, per download, per acquisition, etc.
Online ad cost effectiveness is not great, butcost is low
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Discussion Question
If increased advertising spending doesnot lead directly to increased sales, why
do it?