Ch 17 - marketing 350

Percent-of-sales approach

- Budgeting for an advertising campaign by multiplying the firm's past and expected sales by a standard percentage

Comparative advertising

- Compares the sponsored brand with one or more identified brands on the basis of one or more product characteristics

Advertising

- Paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media. •Advertising permeates our daily lives. •Advertising can have a profound impact on how consumers view certain products. •Many nonbusiness organizations—including governments, churches, universities, and charitable organizations—employ advertising to communicate with stakeholders. •Advertising is used to promote goods, services, ideas, images, issues, people, and anything else advertisers want to publicize or foster.

Magazines

-Advantages: Demographic selectivity; good reproduction; long life; prestige; geographic selectivity when regional issues are available; read in leisurely manner. - High costs; 30- to 90-day average lead time; high level of competition; limited reach; communicates less frequently

Newspaper

-Advantages: Reach large audience; purchased to be read; geographic flexibility; short lead time; frequent publication; favorable for cooperative advertising; merchandising services. -Disadvantages: Not selective for socioeconomic groups or target market; short life; limited reproduction capabilities; large advertising volume limits exposure to any one advertisement

Developing advertising budget

-Objective-and-task approach. -Percent-of-sales approach. -Competition-matching approach. -arbitrary approach.

•Two types of product advertising:

-Pioneer advertising -Competitive advertising

Posttest

Evaluation of advertising effectiveness after the campaign

Consumer jury

A panel of a product's existing or potential buyers who pretest ads

Unaided recall test

A posttest in which respondents are asked to identify advertisements they have seen recently but are not given any recall clues

Recognition test

A posttest in which respondents are shown the actual ad and asked if they recognize it

Aided recall test

A posttest that asks respondents to identify recent ads and provides clues to jog their memories

Radio

Advantage: Reaches 93 percent of U.S. adults; highly mobile and flexible; very low relative costs; ad can be changed quickly; high level of geographic and demographic selectivity; encourages use of imagination. Disadvantages: Lacks visual imagery; short life of message; listeners' attention limited because of other activities; market fragmentation; difficult buying procedures; limited media and audience research >> you can't review

Outdoor

Advantages: Allows for frequent repetition; low cost; message can be placed close to point of sale; geographic selectivity; operable 24 hours a day; high creativity and effectiveness. Disadvantages: Message must be short and simple; no demographic selectivity; seldom attracts readers' full attention; criticized as traffic hazard and blight on countryside; much wasted coverage; limited capabilities

Digital media

Advantages: Immediate response (the analyst can see it real time); potential to reach a precisely targeted audience; ability to track customers and build databases; highly interactive medium; real-time analytics. Disadvantages: Costs of precise targeting are high; inappropriate ad placement; effects difficult to measure; concerns about security and privacy.

Direct mail

Advantages: Little wasted circulation; highly selective; circulation controlled by advertiser; few distractions; personal; stimulates actions; use of novelty; relatively easy to measure performance; hidden from competitors. Disadvantages: Very expensive; lacks editorial content to attract. Readers; often thrown away unread as junk mail; criticized as invasion of privacy; consumers must choose to read the ad

Television

Advantages: Reaches large audiences; high frequency available; dual impact of audio and video; highly visible; high prestige; geographic and demographic selectivity; difficult to ignore; on demand capabilities. Disadvantages: Very expensive; highly perishable message; size of audience not guaranteed; amount of prime time limited; lack of selectivity in target market

Institutional advertising

Advertising that promotes organizational images, ideas, and political issues. •May deal with broad image issues, such as organizational strengths or the friendliness of employees. •May aim to create a more favorable view of the organization in the eyes of noncustomer groups, such as shareholders, consumer advocacy groups, potential shareholders, or the general public.

Product advertising

Advertising that promotes the uses, features, and benefits of products

Objective-and-task approach

Budgeting for an advertising campaign by first determining its objectives and then calculating the cost of all the tasks needed to attain them (>> they think this is the best bc they have a goal to reach and how to make it happen)

•Three types of competitive advertising:

comparative, reminder, reinforcement

Three types of media schedules:

continuous, flighting, pulsing

CPM

cost per thousand impressions

Reinforcement advertising

•- Advertising that assures users they chose the right brand and tells them how to get the most satisfaction from it

Reminder advertising

•- Advertising used to remind consumers about an established brand's uses, characteristics, and benefits

Arbitrary (random) approach

•- Budgeting for an advertising campaign as specified by a high-level executive in the firm

Competition-matching approach

•- Determining an advertising budget by trying to match competitors' advertising outlays

Flighting

•Advertisements run for set periods of time, alternating with periods in which no ads run •(>> ex: seasonal demand, ex: Christmas tree, Halloween costume)

Evaluating advertising effectiveness

•Advertising can be evaluated before, during, and after the campaign

Continuous

•Advertising runs at a constant level with little variation throughout the campaign period •Ex: daily use

Pioneer advertising

•Advertising that tries to stimulate demand for a product category rather than a specific brand by informing potential buyers about the product. ▶Used most often for products before they hit the market and for products in the introductory stage of the product life cycle.

Pulsing

•Combines continuous and flighting schedules; during the entire campaign, a portion of advertising runs continuously, and during specific time periods of the campaign, additional advertising is used to intensify the level of communication with the target audience •>> year around but sometimes is higher than other •Ex: school supply, candy (year round but Halloween buy more), or flowers (mother day,...)

Pretest

•Evaluation of advertisements performed before a campaign begins

•Depending on what is being promoted, advertising can be classified as:

•Institutional advertising •Product advertising

Competitive advertising

•Tries to stimulate demand for a specific brand by promoting its features, uses, and advantages relative to competing brands