Presentation on Advertising Management

Prepared by: Ashish Mishra IIPM SEC SEMESTER 09711411576 ashisharrives@gmail.com

Promotion Mix:

Also called Marketing Communication Mix. Promotion mix is a specific blend of Advertising, Sales Promotion, Public Relations, Personal Selling and Direct Marketing tools that the company uses to pursue its advertising and marketing Objectives.

Promotion Mix

Advertising

Sales Promotion

Personal Selling

Public Relation

Direct Marketing

What is Advertising:

According to American Marketing Association: Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor.

Basic Functions Of Advertising:

Advertising performs 3 basic functions: 1. 2. 3. Inform Function Persuasive Function Reminder Function

Advertising Planning Framework:

MESSAGE DECISION:

OBJECTIVE SETTING:

BUDGET DECISION:

Communication Objective Sales Objective

Affordable Approach Percent of sales Competitive parity Objective & task

Message strategy Message execution

CAMPAIGN EVALUATION

MEDIA DECISION:

Communication impact Sales impact

Reach ,frequency, impact, timing, media vehicles or types

Step:1: Setting Advertising Objective

The advertising objectives must be stated clearly in a precise and measurable terms. The objectives stated clearly and precisely enable the advertiser to measure the extent upto which the objectives have been met or achieved. The advertising objectives can be sales oriented or communication oriented. Although the long term objective of each ad is to have an increase in sales, all ad campaigns are not designed with this specific objective. Some ad campaigns may focus on increasing the awareness about the product or service, changing the attitude, informing the new product etc.

Step:2: Setting the advertising budget

Methods: Affordable approach Percentage of sales method Competitive parity method Objective & task method

Step:3: Creating advertising message

Just to gain and hold attention, advertising messages must be better planned, more imaginative, more entertaining and more rewarding to consumers. creativity plays an important role in developing effective message. A creative strategy focus on what the advertising message says or communicate and guides the development of all messages used in the advertising campaign.

Advertising Appeal:
The advertising appeal refers to the basis or approach used in the advertisement to attract the attention or interest of consumer and to influence their feelings towards the product, service or cause. Advertising appeals can be broken down into 3: Informational appeal Emotional appeal Moral appeal

Step:4: Media planning:

A media planner needs to answer the following question: What audiences do we want to reach? When & how to reach them? Where to reach them? How many people should be reached? How often do we need to reach them? What will it cost to reach them.

Types of Media Vehicles:

Print media: Newspaper, magazines, pamphlets, visiting cards, yellow pages etc. Broadcast media: Radio, T.V, Cinema. Out door Advertising: Bill boards, hot air balloons, wall writings, hoardings etc. Transit advertising: buses, loud speakers Specialty advertising: T-shirts, caps, cups etc. Internet

Step:5:Evaluating the effectiveness of advertisements:

The advertising program should evaluate both the communication effect and the sales effect of advertising regularly. Measuring the communication effects of an advertisement-copy testing- tells whether the ad is communicating well. The sales effect of advertising are often harder to measure than the communication effect because sales are effected by many factors besides advertising- such as product features, price and availability.

5 Ms of advertising:

MONEY

MISSION

MESSAGE

5 Ms

MEASURE MENT

MEDIA

Advertising Agency:
The American Association of Advertising Agency (AAAA) defines an advertising agency as an independent organization of creative people and business people who specialize in developing and preparing advertising plans, advertisements and other promotional tools. Types of Advertising Agencies: Full service agency: Full service agencies are geared to provide complete range of services to its clients, which includes services such as strategic planning, creative development, production, media planning, media buying and other related services. In India, HTA, Clarion, Lintas are some of the Full Service agencies.

Types of Advertising Agency (conti):

2.

Limited service agency: They concentrate on creative aspect of advertising. They are well appreciated and used by clients looking for high quality creative work while depending on other sources for media planning and execution of the campaign. They are also known as creative boutiques or creative shops.

3.

House agency: The house agency is an advertising agency established by a company to look after its advertising requirements. eg. Mudra Communication pvt ltd,- owned by reliance.

Indias 10 leading advertisers by media spend:

Hindustan Lever($376 m) Paras Pharmaceuticals ($120 m) Procter & Gamble ($114 m) Coca-Cola company ($95 m) Godrej industries ($80m) Colgate-palmolive ($67 m) Pepsico ($62 m) Nirma chemicals ($52 m) Nestle ($50 m) Dabur India ($49 m)

Indias 10 leading advertising/PR companies of India:

Ogilvy & mather J walter Thompson India Mudra Communivation Pvt Ltd FCB Ulka advertising Ltd. Rediffusion- DY&R Erickson India Ltd. RK Swamy/BBDO advertising Ltd. Grey worldwide(I) Pvt. Ltd. LEO Burnett India Pvt Ltd. Contract advertising India Ltd.

Conclusion
(Key to good advertising)

The most important step lies in deciding what your advertising should say and to whom it should say it. All you need to do is to decide who buys and uses your products and why. In order to spend your media RUPALLIES wisely, you must know what they read or watch so that they will see your ads.

An Introduction to Integrated Marketing Communications

2003McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

IMCAudience Contact Points Point of Purchase Internet/ Interactive Media Publicity Public Relations Packaging

Direct Mail

Marketing Communications Audience

Direct Response Sales Promotion

Print Media

Broadcast Media

Outdoor

Events

Traditional Approach to Marketing Communications

Sales Promotion Packaging Direct Response Interactive Marketing

Point of Purchase Special Events Public Relations

Publicity

Media Advertising

Direct Marketing

Contemporary IMC Approach

Sales Promotion Direct Response

Packaging

Point of Purchase Publicity

Media Advertising

Public Relations

Interactive Marketing

Direct Marketing

Special Events

Marketing Revolution and Shifting Tides From

Media Advertising Mass Media Manufacturer Dominance General Focus Low Agency Accountability Traditional Compensation Limited Internet Availability

Toward
Multiple Forms of Communication Specialized Media Retailer Dominance Data Based Marketing Greater Agency Accountability
Performance Based Compensation

Widespread Internet Availability

Dell Focuses on Building a Relationship With Customers

IMC and Branding

Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumers mind.

IMC plays a major role in the process of developing and sustaining brand identity and equity.

Basic Elements of the Promotional Mix Advertising Direct Marketing Interactive/ Internet Marketing Sales Promotion

Publicity/Public Relations
Personal Selling

An Example of B-to-B Advertising

Direct Marketing is Part of IMC

Direct Mail Internet Sales Direct Response Advertising

Direct Marketing
Shopping Channels Catalogs Cataloging

Telemarketing

Bose Uses Direct Response Advertising

Using the Internet as an IMC Tool

The Internet

Educates or Informs Customers

A Persuasive Advertising Medium

A Sales Tool or an Actual Sales Vehicle

Obtains Customer Database Information

Communicates and Interacts With Buyers

Provides Customer Service and Support

Builds and Maintains Customer Relationships

American Airlines Encourages Customers to Do It All Online

Sales Promotion Tools

Coupons
Samples Premiums Trade Allowances

POP Displays

Contests/Sweepstakes
Refunds/Rebates Training Programs Trade Shows Coop Advertising

Bonus Packs
Loyalty Programs Events

Consumeroriented
[For end-users]

Trade-oriented
[For resellers]

Various Uses of Sales Promotion

Get Existing Customers to Buy More

Introduce New Products

Combat Competition

Attract New Customers

Sales Promotion
Enhance Personal Selling Maintain Sales In Off Season

Tie In Advertising & Personal Selling

Increase Retail Inventories

Advertising Versus Publicity Factor Control Advertising Great Publicity Little

Credibility
Reach Frequency

Lower
Measurable Schedulable High/Specific High Specifiable

Higher
Undetermined Uncontrollable
Low/Unspecified

Cost
Flexibility Timing

Low Tentative

Publicity Vehicles

Feature Articles
News Releases

Publicity Vehicles

Interviews

Press Conferences

Special Events

Public Relations Tools

Publicity Vehicles

Special Publications

Community Activities

Corporate Advertising

CausMarketin Cause-related ge-related Marketing

Public Affairs Activities

Special Event Sponsorship

DuPont Uses Advertising to Enhance Its Corporate Image

Integrated Marketing Communications Planning Model

Review of Marketing Plan Promotional Program Situation Analysis Analysis of the Communications Process Budget Determination Develop Integrated Marketing Communications Programs Advertising Advertising Objectives Message Strategy Sales Promotion Sales Promotion Objectives Sales Promotion Strategy PR/ Publicity PR/ Publicity Objectives PR/ Publicity Strategy Personal Selling Personal Selling Objectives Personal Selling Strategy Direct Marketing Direct Marketing Objectives Direct Marketing Strategy Internet/ Interactive Internet/ Interactive Objectives Internet/ Interactive Strategy

Integration & Implementation of Marketing Communications Strategies Monitor, Evaluate & Control Promotional Program

The Marketing Plan

1. A detailed situation analysis

2. Specific marketing objectives

3. A marketing strategy and program

4. A program for implementing the strategy

5. A process for monitoring and evaluating performance

HOW ADVERTISING WORKS

How Advertising Works: A Planning Model Revisited

Classic model used by Foote, Cone & Belding. First proposed in 1980.

FCB Grid (Richard Vaughn, 1980)

THINK FEEL

HIGH INVOLVEMENT

1 3

2 4

LOW INVOLVEMENT

FCB Grid
Quadrant 1: THINK / HIGH INVOLVEMENT

INFORMATIVE (economic) Classical hierarchy-of-effects: Awareness Knowledge Liking Preference Conviction Purchase Learn Feel Do.

FCB Grid
Quadrant 2: FEEL / HIGH INVOLVEMENT

AFFECTIVE (psychological) Products fulfilling self-esteem, subconscious, ego-related impulses. Requires perhaps more emotional communication. Feel Learn Do.

FCB Grid
Quadrant 3: THINK / LOW INVOLVEMENT

HABITUAL (responsive) Routine consumer behavior. Learning occurs most often after exploratory trial purchase. Learning by doing. Do Learn Feel.

FCB Grid
Quadrant 4: FEEL / LOW INVOLVEMENT

SATISFACTION (social) Personal taste Lifes little pleasures Peer-oriented items. Do Feel Learn.

FCB Grid
THINK FEEL

HIGH INVOLVEMENT

1 3

2 4

LOW INVOLVEMENT

FCB Grid
THINK FEEL

INFORMATIVE HIGH INVOLVEMENT (economic) Learn Feel Do

2 4

LOW INVOLVEMENT

FCB Grid
THINK FEEL

HIGH INVOLVEMENT

1 3

AFFECTIVE (Psychological) Feel Learn Do

LOW INVOLVEMENT

FCB Grid
THINK FEEL

HIGH INVOLVEMENT

1
HABITUAL (Responsive) Do Learn Feel

2 4

LOW INVOLVEMENT

FCB Grid
THINK FEEL

HIGH INVOLVEMENT

1 3
Do

2
SATISFACTION (Social) Feel Learn

LOW INVOLVEMENT

FCB Grid
THINK FEEL

INFORMATIVE HIGH INVOLVEMENT (economic) Learn Feel Do

AFFECTIVE (Psychological) Feel Learn Do

HABITUAL LOW INVOLVEMENT Do (Responsive) Learn Feel

SATISFACTION (Social) Do Feel Learn

FCB Grid
We may not now, or ever, know definitively how advertising works. But we do know it works in some definable ways well enough to make more effective advertising.

How Advertising Works: What Do We Really Know?

Reviews 250+ articles / books 7 types of models & findings Example: FCB Grid would be an integrative model ([C][A][E]) 5 generalizations about how advertising works Directions for future research

Generalization 1

Experience (E), affect (A), and cognition (C) are the three intermediate advertising effects, and the omission of any one can lead to overestimation of the effect of the others Demonstrated in the evolution of models from simple (C) to more complex ([C][A][E]).

Generalization 2

Short-term advertising elasticities are small and decrease during the product life cycle. Lower than promotions Weaker than product usage (E) effects Greater for new brands

Generalization 3

In mature, frequently purchased packaged goods markets, returns to advertising diminish fast. A small frequency, therefore (1-3 per purchase cycle), is sufficient for advertising an established brand. Diminishing returns First exposure is most influential.

Generalization 4

The concept of a space of intermediate effects is supported, but a hierarchy (sequence) is not. Significance of intermediate effects (C, A, and E) depends on context. Hierarchy framework does not allow for interactions between effects.

Generalization 5

Cognitive bias interferes with affect measurement. Affect can be more important than cognition. Cognitive bias understates the role of affect and misreports reality.

Advertising's Role in Capitalist Markets: What Do We Know and Where Do We Go from Here?

9 misconceptions about advertising. Advertising is essential for free markets. Where do we go from here?

Misconception 1: Advertising is a powerful force in shaping

consumer preferences.

Some advertisements are. Potential is there. Most advertising is lost in the noise (or worse, adds to the noise). Even success is quickly imitated.

This is the nature of a free, competitive market.

Misconception 2: Even if advertising does not work

immediately, repetition will ensure its ultimate effectiveness.

Consumers havent seen it, they need more time, etc. Escalation of commitment

If advertising doesnt work in a reasonably short time it is unlikely to ever work.

Misconception 3:
Advertisements take time to wearin.

Wearin = improvement of effectiveness during first few weeks. Wearout = decline in effectiveness as campaign ages.

Wearin is short or nonexistent and wearout starts right away.

Misconception 4: The effects of advertising last for years and

even decades.

We remember old ads. Old research used inappropriate data.

Effects of advertising are rather fleeting.

Misconception 5: Even if advertising seems ineffective,

stopping would be dangerous.

Argue that suspension could be disastrous. Or that competitors ads would be more effective.

Argument is not tested.

Misconception 6:
Weight (or intensity or frequency) is critical.

The most expensive item in the ad budget is the advertising buy expressed as weight.

Big changes in weight may not result in even small changes in effectiveness. Changes in target segments, media, message, and especially creative content result in biggest change in effects. Ad response is highest for product improvement or new products.

Misconception 7:
Advertising is highly profitable.

Spurious correlation between advertising intensity and market share.

Because of the competitive activity, much advertising cancels out. Beware over-advertising: adding to costs more than to profits.

Misconception 8: Logic or argument is the most effective advertising appeal.

Consumers like to think of themselves as rational decision makers who make good if not wise decisions.

Emotional ads are more interesting, more easily remembered, more prone to lead to action, and less likely to arouse consumers defenses.

Misconception 9: Advertising is amoral in its practice, corrupts

peoples values, or is unnecessary for free markets.

As a relatively weak market force (see misconceptions 1-8), advertising probably has little effect on values. Essential for free markets: the means by which an innovative firm can communicate its brands competitive superiority to consumers.

Effects on mental processes

Multiple routes to persuasion ELM (central vs. peripheral processing) Power of emotional appeals. Consistency of cues enhances persuasion. Difficult translating/integrating lab results to the field.

Effect on sales / market share

Move away from aggregate data. Focus on content, message, cues, and creativity rather than message weight.

Versus sales promotion

1. 2.

Misses two key points: How to use both jointly. Discount price may be competitive price.

Advertising and pricing

1. 2. 3.

Advertising may Increase price competition. Lower prices. Increase consumers price elasticity.

Advertising and brand equity

How and when does this process work?

THE WORLD OF ADVERTISING

ADVERTISING

Advertising may be defined as the process of buying sponsor-identified media space or time in order to promote a product, service or an idea. Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Relationship b/w Ads & PLC

Competitive
Comparative Pioneering

Major Decisions in Advertising

How Advertising Works

Types of Communication/Advertising Models:AIDA Model

DAGMAR Model

Hierarchy-Effect Model
FCB Grid

A.I.D.A MODEL
AIDA model is initiatory and simplest. AIDA model was presented by Elmo Lewis to explain how personal selling works. It shows a set of stair-step stages which describe the process leading a potential customer to purchase. The stages, Attention, Interest, Desire, and Action, form a linear hierarchy. Exp:- Reliance Communication GSM Launch. Attention:- can elaborate by advertisement where Mukesh Ambani spoke about the new project being introduced on his fathers 70th birthday. Interest:- is generated as the company spokesperson featured in the ad, as a representative of the company image and also spoke about introducing a new technology GSM.

Contd.

Desire:- was created with various offers like free SMS, 40paise STD calls, 5Rs./day, Lifetime validity and various coupons etc. Action:- In the last stage people are moved to action in the form of buying product/Service etc. It demonstrates that consumers must be aware of a product's existence, Be interested enough to pay attention to the product's features/benefits, and Have a desire to have benefits from the product's offerings. Action, the fourth stage, would come as a natural result of movement through the first three stages.

Advantages

SimplestExplain how Personal Selling worksA set of stair-step stagesDescribe the process leading a potential customer to purchase-

DAGMAR Model

Russell Colley (1961) developed a model for setting advertising objectives and measuring the results. This model was entitled Defining Advertising Goals for Measured Advertising Results- DAGMAR. DAGMAR model suggests that the ultimate objective of advertising must carry a consumer through four levels of understanding: from unawareness to Awareness the consumer must first be aware of a brand or company Comprehensionhe or she must have a comprehension of what the product is and its benefits; Convictionhe or she must arrive at the mental disposition or conviction to buys the brand; Actionfinally, he or she actually buy that product.

Advantages

Define advertising objectives and measuring the resultsunawareness to AwarenessEasy to Understand-

Hierarchy-of-Effects Models

Among advertising theories, the hierarchy-of-effects model is predominant. It shows clear steps of how advertising works Hierarchy of effects Model can be explained with the help of a pyramid.

Contd.

PURCHASE
CONVICTION PREFERENCE LIKING KNOWLEDGE/COMPRIHENSION AWARENESS

Contd.

Awareness:- If most of the target audience is unaware of the object, the communicators task is to build awareness, perhaps just name recognition, with simple messages repeating the product name. Like:- Parle-G. G mane Genius. Knowledge:- The target market might have product awareness but not know much more; hence this stage involves creating brand knowledge. This is where comprehension of the brand name and what it stands for become important. ExpAircel Pocket Internet Liking:- If target market know the product, how do they feel about it? If the audience looks unfavorably towards the product so communicator has to find out why. Exp- India Today- Send Suggestions to us

Contd.

Preference:- The target audience might like the product but not prefer it to others. In this case, the communicator must try to build consumer preference by promoting quality, value, performance and other features. Conviction:- A target audience might prefer a particular product but not develop a conviction about buying it. The communicators job is to build conviction among the target audience. Purchase:- Finally, some members of the target audience might have conviction but not quite get around to making the purchase. They may wait for more information or plan to act later. The communicator must need these consumers to take the final step, perhaps by offering the product at a low price, offering a premium, or letting consumers tried out.

Advantages

PredominantClear steps of how advertising worksEasy to explain/understand-

FCB GRID

FCB grid, is suggested by Dave Berger and Richard Vaughn. This model combines high and low involvement, and left and right brain specialization. It shows a visually coherent matrix which has four quadrants with two factorshigh and low involvement, and feeling and thinking.
The communication response would certainly be different for high versus low involvement products and those which required mainly thinking (left brain) and feeling (right brain) information processing

FCB GRID TELLS ABOUT

High Involvement: Very important decision Lot to lose if you choose the wrong brand Decision requires lot Low involvement : Little to lose if you choose the wrong brand. Decision requires little thought Decision is not mainly logical or objective Decision is not based mainly on functional facts Low Feel or emotional approach Decision does not express ones personality Decision is not based on looks, tastes, touch, smell, or sound (sensory effects)

Advantages

Helps to analyze the awareness in target audienceHelps to create, develop, refine or sustain the awareness in the target market.

All the best