Chapter 12

occasional media scheduling

(sometimes called flighting or pulsing), you are not omnipresent, but you pop up from time to time. -Given that you're advertising less frequently, this approach will be less expensive and therefore possibly more cost-effective. -Obviously, one should advertise in synch with purchase cycles. -During times when ads aren't aired, competition can swoop in, but you're probably doing the same to them during their downtimes. -Furthermore, if you're building brand image, you'll be less vulnerable to competitors' poaching.

Describe method 3: Working backward from the company's strategic advertising goal (e.g., enhance awareness or positive attitudes) to calculate the necessary expenditures.

-A third approach is to be more strategic and treat advertising expenditures as an investment (in the brand and company), with the expectation that an investment should return sales and profits. -This approach can be somewhat challenging because advertising effects are difficult to measure, and often they are intended to produce long-term effects such as brand building. -To set an ad budget, we need to understand how advertising exposures are measured. -Then we set our exposure goal, and then we can estimate how much to spend to achieve that goal.

What are the 3 kinds of media schedules?

-Continuos -Occasional -Seasonal

Describe the rule of thumb for frequency:

-For frequency, the rule of thumb used to be that an ad needed to be seen and processed three times for it to be persuasive. This notion that three repetitions is a magic number is now recognized as simplistic. The good news is that sometimes seeing an ad once or twice can be sufficient, and the bad news is that sometimes a customer needs even more exposures than three. -The fundamental question comes down to the usual one: What's the goal? Awareness and memory can probably be attained with fewer ads. -Persuasion might take longer, particularly if the product is complicated or the viewer is unfamiliar with it. In addition, sometimes more is not better. If the product and ad are pretty readily understood, then subsequent exposures to the ad can lead to so-called wear-out and reduced effectiveness. -People start disassociating from the ad, thinking random thoughts, and attitudes toward the advertised brand start to drop.

Describe the goal for reach in GRP:

-For reach, the goal is to expose as many of the target customers as possible to the ad. -The challenge is to find the media that are most cost-efficient for finding as many of those customers and primarily only those customers.

What are the three questions in designing a salesforce?

-How many salespeople do I need? -Where do I deploy them? -How do I compensate them? -Sale forces are larger when a company wants an aggressive product launch and when a company wants to protect its territories from encroaching competition. Sales territories are determined by existing sales and competition but also from strategic assessments of the desired markets. Compensation is always some proportion of salary and commissions; the proportions tend to have more to do with tradition and competition than with any psychological assessment of the motivating factors.

Describe pull advertising:

-Pull (advertising to consumers) is important to a brand manager when the company's intermediaries stock a large number of competing products, and the partners don't care about supporting any of them in particular. -Then, advertising and sales promotions are necessary vehicles. -Direct-to-consumer (DTC) pharma ads are a very popular and effective example of pull.

Describe push advertising

-Push relies more on personal selling, and a brand manager needs to direct promotional efforts more to members of the channel than to the final user. -Channel members don't care about ads per se as much as money, and so trade allowances are frequently used. -These are price reductions that the manufacturer offers to the intermediary (wholesaler or retailer) in exchange for their doing something such as allocating space to a new product (so-called slotting allowances) or buying more product during special periods. -Sometimes these trade bonuses are passed along to the retailer's salespeople in the form of cash or training and product demonstrations, free merchandise, or conventions and trade shows.

Describe the synergies of media:

-Research suggests there are indeed synergies across media in IMC advertising campaigns. For example, websites haven't made catalogs obsolete; instead, their roles are changing. -Online shopping is: >>>>Easy for purchasing. >>>>Efficient for search. >>>>Suited toward goal-oriented purchasing. -Direct mail catalogs: >>>>Are colorful and vivid. >>>>Facilitate browsing. >>>>Drive consumers to the website!

Provide media comparisons:

-TV ad spots are by far the most expensive (e.g., $5-100 k for 30 seconds during prime time). Yet even with today's TV channel fragmentation, this medium still yields the largest reach numbers (sheer audience size). While reach is strong, frequency can be challenging to achieve because of the expense. In addition, reach via the mass media is relatively broad, not targeted. -Traditional TV is considered a mass medium, but special TV and cable channels serve more focused audiences. Similarly, some magazines have broad appeal, but others can hit a target segment quite efficiently (i.e., with little excess expenditure). -Radio spots and newspapers are often planned and purchased nationally, but, alternatively, each can also certainly be planned and purchased for local markets. -These media can capture known segments, such as radio by genre or in-flight magazines for the flying audience. Billboards and other urban methods (e.g., subway ads, ads on buses, ads before previews in movie theaters) are relatively inexpensive but are effective in achieving good local numbers. -Radio, newspapers, and magazines are certainly less expensive than TV (e.g., $250 for one minute of radio, $5 k for one page and one day in a decent paper, $5-15 k for one page in one issue of a magazine), but, of course, they also deliver smaller audiences. Bigger magazines (where bigger implies greater reach) naturally cost more; for instance, a full-page color ad in BusinessWeek is roughly $100 k and $200 k in Newsweek. Back pages cost still more. Particular costs and GRP delivery depends on whether the radio station is local or the newspaper a national.

What are the three methods in which companies' entire communications package (i.e., advertising in all its various forms, including the purchase of the necessary media)?

-The advertising budget as a percentage of last year's sales -Approximately what the company believes is parity with competitors -Working backward from the company's strategic advertising goal (e.g., enhance awareness or positive attitudes) to calculate the necessary expenditures.

Describe method 1: The advertising budget as a percentage of last year's sales

-The only challenge is arriving at the actual percentage value: 7%, 10%, 15%? -Most companies would begin with their past numbers or an estimate of the industry norm and then adjust: If the marketing goal is merely to maintain brand share, then roughly the percentage that they (and competitors) spent last year should suffice. If the company has done something newsworthy with the brand, an increase in advertising monies is necessary to get the word out. -If the company is seeking to milk the brand and redirect funds to their other brands, the percentage would be adjusted slightly downward. -Although these methods are easy, they are a bit simplistic. When sales decline (for reasons of a soft economy or a decrease in the brand's popularity), each approach would suggest cutting the ad budget. Smaller ad budgets would mean less presence in the marketplace, thus perpetuating a cycle of decreased sales.

Describe method 2: Approximately what the company believes is parity with competitors

-There are service providers (e.g., Schonfeld, Saibooks) who keep tabs on how much companies in various industries tend to spend (e.g., beer companies spend 8-10%). -If every competitor spent approximately the same percentage on advertising, then their market shares would be proportional to their ad spending shares; indeed, the ratio for each company of the proportion of ad spending to their market share proportions would be approximately 1. -As you can see in Figure 12.1, the market leader usually spends the most on advertising and has the greatest sales; the other brands spend less and their sales are less. Somewhat surprisingly, in many industries, the companies fall along a line, indicating a fairly constant proportionality between their spending and their incomes. -A particular brand or company can break out of this pack if there is reason, e.g., spending disproportionately more ad dollars to try to move up the market share food chain, or spending less because they're a niche brand with a cult-like following, rendering traditional advertising less necessary, etc.2 -Although these methods are easy, they are a bit simplistic. When sales decline (for reasons of a soft economy or a decrease in the brand's popularity), each approach would suggest cutting the ad budget. Smaller ad budgets would mean less presence in the marketplace, thus perpetuating a cycle of decreased sales.

Describe GRP (gross rating points)

-Whether we're talking about placing an ad on TV or in a magazine or on the side of a bus, a GRP is a simple function of reach and frequency: -Reach is defined as the share (percentage) of your target audience that has seen your ad at least once. -Frequency is the average number of times your target audience saw the ad (within some set duration, say the three month period during which the ads were in circulation, or a three-month testing period within a longer ad showing). -GRPs, then, are defined as the simple product: >>>>>>>>>>>>GRP = Reach × Frequency

Describe ads and product placement:

-While ads are more useful than product placements in providing information, both can result in the transfer of positive associations.7 -Both ads and product placement are also met with some viewer skepticism, since it's known that both are paid for. -A somewhat related phenomenon is the placement, or plant, of a brand advocate in chat rooms. -When a brand is talked up and the chat is thought to be authentic, it is very powerful and persuasive, but if the rest of the chat room attendees smell a plant, the tactic can backfire.

Describe GRP based on a goal of advertising:

-if the marketing goal is (at least minimal) awareness among a larger segment (i.e., greater reach than frequency, as in the second scenario), the ad would have to be run during a highly viewed TV show (for example), which would likely be quite expensive. -If the goal is deeper knowledge and more favorable attitudes in the smaller segment (i.e., greater frequency than reach), the ad could be run three times during a specialized TV show with a smaller viewer audience (which would also likely be less expensive).

What is the intent of PR?

-is to convey a positive image and to educate a constituency about the company's objectives, such as recent innovations. -In general, the job of a PR firm is to generate goodwill on behalf of the company.

Describe ways to measure the effectiveness of advertising:

-measures of memory (recall and recognition), attitudes, propensity to purchase, and so forth. -For example, if the marketing goal is to enhance awareness and memory, then reach is the more likely media goal than frequency, and this can be measured by viewership, readership and circulation numbers, traffic indices, and many measures of exposures. If brand awareness is already pervasive in the target segment, and if the goal of the ad campaign is an attitude adjustment, then surveys (even quick three-item smartphone surveys) will be necessary. -The ways to test advertising are many. The same scanner data that allow marketers to run experiments in stores on price points are also used to assess ads in the marketplace. For all households in a ZIP Code, advertising researchers can find out what national or local ads have been running on TV, radio, newspapers, etc. For the households in certain research companies' panels (e.g., such as those run by A.C. Nielsen or Information Resources, Inc.), finer measures of advertising exposure are possible, e.g., was the household TV on during the ad showing, etc.? -While varying ad weights (budget expenditures) may have limits in affecting sales and shares, research has found that qualitative differences, such as better ad copy or strategies to reach current non-category users, etc,. can increase the likelihood that TV advertising will positively affect sales. As another indicator that content matters, researchers have also found that an increase in media weight (i.e., advertising budgets) is related to sales for ads that both evoked positive feelings and failed to evoke negative feelings. Finally, some marketers would say, why bother spending ad dollars on retaining customers who already have a strong positive preference for the featured product. Instead, eliminate these wasted (or redundant) dollars, and spend on consumers who are more ambivalent to prevent their switching to the competition. -Click-thru rates (from banner ads) are a simple no-brainer, but they also track downloads, inquiries, purchases, returns, etc. Then costs can be assessed against these measures: cost per click, cost per download, cost per acquisition, etc. Costs of online advertising are low, but click-through conversion rates are also low, so online costs-per aren't terribly impressive. That is, cost effectiveness of online advertising may not be great, but cost per se is so extraordinarily low that the inefficiencies are ones that most advertising managers are willing to live with. -Finally, just as advertising media need to be integrated, by way of IMC, messages and media themselves may be optimally integrated. Consider the following example. A national electronics firm that produces hearing aids was interested in learning how to get its message to people who have various forms of hearing loss, as well as what they should say. Hearing aids are a tricky product because, while young people can have suboptimal hearing, for many people, hearing loss first occurs as they age. So wearing a hearing aid is an admission of aging and it's seen as somewhat embarrassing. So what to do?

Describe the choices between advertising and personal selling:

Advertising: -Customers can be anywhere -Product is simple to understand -Product is fairly standard -Relatively inexpensive, less risky -Advertising can be expensive -Results can be difficult to establish Personal selling -Need geographic concentration -Product is often technical, complicated -Product can be customized

Describe the philosophy behind integrated marketing communication:

Keep in mind the company's overarching strategy, and ensure that all marketing activities send a consistent message, beginning with the communications (i.e., consumer and trade advertising and promotions, product placements, personal selling, direct and database marketing, etc.) and including other marketing mix elements (e.g., product design and packaging, pricing, channel availability).

Describe the decision making between advertising and sales force

The costs of sales forces include more than compensation. Salespeople are partners, members of your distribution channel, and, just like your end users, they want deals. So while consumers might think they're bombarded with advertising, as Figure 12.6 indicates, companies' expenditures on advertising and sales promotions directed to consumers is only a small piece of the pie. The largest portion of their marketing communications budgets is directed to trade: their channel partners.5

seasonal ads

are infrequent and focused on the preterm season for the product (e.g., school supplies advertised in August, candy advertised before Valentine's Day and Halloween, outdoor grills advertised in April and May). -Advertising outside the season is not done because it will not induce additional purchases.

public relations (PR)

is another means of providing information and building brand attributes. -PR lines of communications are the attempt of an organization to reach its customers, suppliers, stockholders, government officials, employees, or the general community. -PR can be conducted from within the company, run by its advertising agency, or (most often) outsourced to PR specialists. -Release Press kits (aka new releases) -is another means of providing information and building brand attributes. PR lines of communications are the attempt of an organization to reach its customers, suppliers, stockholders, government officials, employees, or the general community. PR can be conducted from within the company, run by its advertising agency, or (most often) outsourced to PR specialists.

publicity

is another tool of communication; it's not paid for by the brand's company. -So it can carry the appearance of objectivity, e.g., some new brand feature praised by a third party, such as a newspaper or Website that provides news coverage. -Press releases are, of course, constantly prepared by a company, but there is no guarantee that any influential media will bother to pick up on what a company deems newsworthy. -Sometimes the publicity indeed comes from a third party, such as when a popular press business magazine like Fortune publishes its annual "100 Best Companies to Work For" issue. Companies included in these listings are celebrated, and you just can't buy that kind of attention. On the other hand, the company has no control over the spin on the story, and publicity can be negative, requiring some recovery on the part of the company's own PR group.

product placement

is more subtle than most advertising. -It's been around awhile but has become increasingly popular (over $1 b annually) as brand managers struggle to find creative means of getting in front of viewers who are increasingly zapping ads. -In movies (e.g., James Bond's cars), on TV (Survivor), and in video games, products and brands are being integrated into the show. -The product is integral to the scene, so the viewer can't zap past it, and the inclusion of the product carries an implicit endorsement by the actors onscreen.

sales promotion

is still another tool in the IMC mix. -The best known form of sales promo is the coupon: a newspaper or magazine cutout to take shopping for a small discount on a future purchase. -Coupons are very popular, so there are many forms: FSIs (freestanding inserts in newspapers, magazines, and direct mail), printouts at the checkout, point-of-purchase coupon pop-outs (on the shelves where the products are featured), Internet printout coupons to take to retail shops, etc. In addition to coupons, sales promos include rebates, promo prices, trade-ins, deals for loyalty programs, free trial-sized (i.e., small) products, contests and sweepstakes, etc.

Continuous media schedule

the ad exposure is regular; it doesn't have to be a perfectly predictable schedule (e.g., every Friday, a half-page in The New York Times) or even all that frequent, but the idea is that you're fairly constantly reminding the consumer that you exist. -The periodicity depends on the length of the buying cycle (advertise frequently for soft drinks, less frequently for tires). -You want to advertise a little more frequently than the object is purchased, to keep it in consumers' minds, but not so much as to risk overexposure and boring your customers (not to mention overspending on advertising).

integrated marketing communications

the idea that marketing planning should ensure that a company's various advertising efforts send a coherent story across the different customer touch points. -To make informed choices and select the appropriate media outlets, the marketing manager needs to understand the strengths of the various individual media available. It is ultra important that the marketing messages are seamlessly integrated across the media selections. -More recently, marketers recognize that while some elements should be consistent (e.g., the brand name, logo, general flavor, and positioning), the varied media have varied strengths, and the message should play to the medium's strengths. For example, a TV ad is vivid and dramatic, but the message needs to be kept simple, whereas complicated products can be explained better in print (magazines, online, direct marketing). The goal is consistency in the general positioning, but the different media offer supplemental information.

True or false? Advertising is about shaping a message and getting the message to the target audience via some optimal combination of media

true

True or false? Direct mail is relatively inexpensive, but it is not terribly efficient. That is, recipients will receive some of the direct mail appeals as "junk" mail. With better database programs, the reach of the particular target audience can be quite focused.

true

True or false? IMC is about integrating a brand message across any media, not just traditional advertising outlets.

true

True or false? If you sell something that is seasonal, you'll advertise just prior to that season. Otherwise you have a choice of advertising continuously or occasionally. Big companies with big ad budgets can advertise continuously, but little brands can advertise continuously if the less expensive media are used. So the choice between continuous and occasional is not just budget.

true

True or false? In addition to advertising, whatever personal selling staff a company has at its disposal, the firm's sales promotions, public relations, and all related departments should be expressing a consistent, complementary message. All of these media (broadly defined) are supposed to work as a team on behalf of the brand.

true

True or false? Personal selling and a company's sales force are essential communication vehicles for many companies and industries. Personal selling is huge; the Department of Labor estimates some 14 million jobs (over 10% of the workforce) are in selling. These sales-related positions include the guy doing road trips to sell machine parts or insurance, as well as the counterperson at Nordstrom's, as well as the order takers at 1-800-cataloger.

true

True or false? Research suggests a positive relationship between IMC practices and good brand outcomes: high levels of awareness, brand loyalty, and sales.

true

True or false? The cost to produce a finished (and fairly simple) 30-second television commercial is at least $500,000. Companies spend this money because they believe in advertising and know its value as a communications tool. Research has shown a positive relationship of the levels of advertising and promotional spending to the market value of the firm.

true

True or false? The effect of the ad campaign on that target segment with respect to the select goal can be and should be measured. Other effects might also result, but one should not expect that all the goals could be met with a single blip of advertising and IMC.

true

True or false? The media with the best customization options are online advertising and direct mail. The varieties of ads on the Internet are still very inexpensive, and data-based profiling enhances the technology's ability to target. Still, online penetration isn't yet 100%, and users have to actively find the brand and company; hence reach is not yet a strength of this medium.

true

True or false? if the marketing goal is brand awareness, occasional ads won't cut it. The advertising needs to be fairly frequent until the basic knowledge has nearly saturated the target market.

true

True or false? newspapers have the advantage of extreme timeliness. Magazines require longer lead times for production, but they have nice reproduction quality. So-called "beauty shots" of products in magazine photos are as high-quality as those on TV. Newspapers and magazines also have the advantage of being nonintrusive because readers choose to pick up the magazine at a time of their convenience and can flip past a print ad quickly if they wish to do so. Each medium has drawbacks as well, like the flipping past the ad.

true

event sponsorship

usually of sports but sometimes of other cultural or artistic endeavors, has a long tradition. -The event is exciting, and the brand draws from its positive valence and energy. -Ex. NASCAR racing is a popular vehicle for sponsorship (17 of the 20 biggest spectator sports are NASCAR races). Big crowds attend (the average attendance per race is 100,000; the average ticket price is $90), TV audience sizes and ratings are soaring (Fox, NBC, and TNT have a multibillion-dollar deal for coverage), merchandise exceeds another $2 b, and corporate money is pouring in through sponsorship (already over $1.5 b according to Fortune).

Does the AIDA process (attention, interest, desire, action) works in selling too?

yes!