What major decisions should a marketing manager consider when developing an advertising program?

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Principles of Marketing ­ MGT301

VU

Lesson ­ 33

Lesson overview and learning objectives:

Advertising--the use of paid media by a seller to inform, persuade, and remind about its products

or organization--is a strong promotion tool.

Advertising decision-making is a five-step

process consisting of decisions about the

objectives, the budget, the message, the

ObjjectivesSettting

ObectivesSe ting

media, and, finally, the evaluation of results.

Advertisers should set clear objectives as to

BudgettDeciisions

Budge Decsions

whether the advertising is supposed to

inform, persuade, or remind buyers.  The

advertising budget can be based on what is

Message Deciisions

Message Decsions

Mediia Deciisions

Meda Decsions

affordable, on a percentage of sales, on

competitors' spending, or on the objectives

and tasks. The message decision calls for

CampaiignEvalluation

Campagn Evauation

designing messages, evaluating them, and

executing them effectively.

The media

decision calls for defining reach, frequency, and impact goals; choosing major media types;

selecting media vehicles; and scheduling the media. Message and media decisions must be closely

coordinated for maximum campaign effectiveness. Finally, evaluation calls for evaluating the

communication and sales effect of advertising before, during, and after the advertising is placed.

ADVERTISING

A. ADVERTISING

Any paid form of non-personal presentation and promotion of ideas, goods, or services by an

identified sponsor is termed as advertising.

B. The Five M's of Advertising

The five M's are basically the different important decisions that are to be taken while designing the

advertising campaign. The five M's of

advertising are (1) Mission (that is the

M essage

basic objective or goal that any

M oney

M essage generation

company wants to attain by its

M essage evaluation

F acto rs to

advertising campaign), (2) Money

an d selection

co nsid er:

(how much money should be spent  M ission

M essage execution

M easure-

Stage in PLC

So cial-respo nsib ility m en t

by the company to achieve the  Sales

M arket share

review

and con-

objective of advertising and the basic

goals

Communi

sum er base

catio n

M edia

factors that should be considered Ad ver-

im p act

R each, frequency,

C om petition

tising

while deciding about the budget of  objectives   and clutter

im pact

S ales

im p act

M ajor m edia types

the advertising) (3) Message (what

Ad vertising

S pecific m edia

frequency

specific information company wants

vehicles

Produ ct

M edia tim ing

to

communicate

through

its

substituta-

G eographical

bility

advertising, what should be the

m edia allocation

contents of the message etc) (4) Media (communication of the message to people requires some

media that can be print electronic its selection requires certain decisions like selection of type of

media, scheduling of media etc) the last M is (5) Measurement (it is something related to evaluation

169

Principles of Marketing ­ MGT301

VU

of the advertising campaign that can be done either by considering its impact on sales or profits of

the company).

C. Advertising decisions

Marketing management must take five important decisions when developing an

advertising

program:

a. Setting advertising objectives.

b. Setting advertising budgets.

c. Developing advertising strategy.

o a). Message decisions.

o b). Media decisions.

d. Evaluating advertising campaigns.

a. Setting Advertising Objectives

Setting advertising objectives is the first step in developing an advertising

program. These

objectives should be based on past decisions about the target

market, positioning, and

marketing mix, which define the job that advertising must do in the total marketing program. An

advertising objective is a specific

communication task to be accomplished with a specific

target audience during a

specific period of time. Advertising objectives can be classified by

primary purpose as:

1). Informative advertising, which is used to inform consumers about  a new product or

feature or to build primary demand.

2).  Persuasive advertising which is used to build selective demand for a brand by

persuading consumers that it offers the best quality for their money.

3). Comparison advertising which is advertising that compares one brand directly or

indirectly to one or more other brands.

4). Reminder advertising, which is used to keep consumers thinking about a product. This

form of advertising is more important for mature

products.

b. Setting the Advertising Budget

After determining its advertising objectives, the marketer must set the advertising

budget for

each  product  and  market.

Four

commonly used methods for setting

promotion budgets were discussed in last

Lesson. No matter what method is used,

A ffo r d a b le

P e rc e n ta g e -

M e th o d

setting the advertising budget is no easy

o f-S a le s

task. How does a company know if it is

M e th o d

spending the right amount? Some critics

charge that large consumer packaged-

goods firms tend to spend too much on

advertising  and  business-to-business

C o m p e titiv e -

O b je c tiv e -

marketers generally under spend on

P a rity

a n d -T a s k

advertising. They claim that, on the one

M e th o d

M e th o d

hand, the large consumer companies use

lots of image advertising without really knowing its effects. They overspend as a form of

"insurance" against not spending enough. On the other hand, business advertisers tend to rely too

heavily on their sales forces to bring in orders. They underestimate the power of company and

product image in pre-selling to industrial customers. Thus, they do not spend enough on

advertising to build customer awareness and knowledge.

170

Principles of Marketing ­ MGT301

VU

Some specific factors that should be considered when setting the advertising budget are:

1). Stage in the product life cycle. New products typically need large advertising budgets.

2). Market share. High-market share brands usually need more advertising.

3). Competition and clutter. More advertising is usually required in a market with many

more competitors and their advertising clutter.

4). Product differentiation. When a brand closely resembles other brands in its  product

class, more advertising (and therefore budget) is needed.

The primary questions to be answered during the budget process are how much

to spend

and what impact is expected or acceptable. This process is difficult

because measurement

techniques of effectiveness rarely give precise answers.

c. Developing Advertising Strategy

Advertising strategy consists of two major elements:

a) Creating advertising messages

b) Selecting advertising media.

In the past, companies often viewed media planning as secondary to the message-creation process.

The creative department first created good advertisements, and then the media department

selected the best media for carrying these advertisements to desired target audiences. This often

caused friction between creatives and media planners.

Today, however, media fragmentation, soaring media costs, and more focused target marketing

strategies have promoted the importance of the media-planning function. In some cases, an

advertising campaign might start with a great message idea, followed by the choice of appropriate

media. In other cases, however, a campaign might begin with a good media opportunity, followed

by advertisements designed to take advantage of that opportunity. Increasingly, companies are

realizing the benefits of planning these two important elements jointly.

Thus, more and more advertisers are orchestrating a closer harmony between their messages and

the media that deliver them. Media planning is no longer an after-the-fact complement to a new ad

campaign. Media planners are now working more closely than ever with creative to allow media

selection to help shape the creative process, often before a single ad is written. In some cases,

media people are even initiating ideas for new campaigns.

a) Creating the Advertising Message

No matter how big the budget, advertising can succeed only if commercials gain attention and

communicate well. Good advertising messages are especially important in today's costly and

cluttered advertising environment. If all this advertising clutter bothers some consumers, it also

causes big problems for advertisers. Until recently, television viewers were pretty much a captive

audience for advertisers. Viewers had only a few channels from which to choose. But with the

growth in cable and satellite TV, VCRs, and remote-control units, today's viewers have many more

options. They can avoid ads by watching commercial-free cable channels. They can "zap"

commercials by pushing the fast-forward button during taped programs. With remote control, they

can instantly turn off the sound during a commercial or "zip" around the channels to see what else

is on. In fact, a recent study found that half of all television viewers now switch channels when the

commercial break starts.

Thus, just to gain and hold attention, today's advertising messages must be better planned, more

imaginative, more entertaining, and more rewarding to consumers. Some advertisers even create

intentionally controversial ads to break through the clutter and gain attention for their products.

i.

Message Strategy

The first step in creating effective advertising messages is to decide what general message will be

communicated to consumers--to plan a message strategy. The purpose of advertising is to get

consumers to think about or react to the product or company in a certain way. People will react

171

Principles of Marketing ­ MGT301

VU

only if they believe that they will benefit from doing so. Thus, developing an effective message

strategy begins with identifying customer benefits that can be used as advertising appeals. Ideally,

advertising message strategy will follow directly from the company's broader positioning strategy.

Message strategy statements tend to be plain, straightforward outlines of benefits and positioning

points that the advertiser wants to stress. The advertiser must next develop a compelling creative

concept--or "big idea"--that will bring the message strategy to life in a distinctive and memorable

way. At this stage, simple message ideas become great ad campaigns. Usually, a copywriter and art

director will team up to generate many creative concepts, hoping that one of these concepts will

turn out to be the big idea. The creative concept may emerge as visualization, a phrase, or a

combination of the two.

The creative concept will guide the choice of specific appeals to be used in an advertising

campaign. Advertising appeals should have three characteristics: First, they should be meaningful,

pointing out benefits that make the product more desirable or interesting to consumers. Second,

appeals must be believable--consumers must believe that the product or service will deliver the

promised benefits. However, the most meaningful and believable benefits may not be the best

ones to feature. Appeals should also be distinctive--they should tell how the product is better than

the competing brands.

ii.

Message Execution

The advertiser now has to turn the big idea into an actual ad execution that will capture the target

market's attention and interest. The creative people must find the best style, tone, words, and

format for executing the message. Any message can be presented in different execution styles, such

as the following:

�  Slice of life: This style shows one or more "typical" people using the product in a normal

setting.

�  Lifestyle: This style shows how a product fits in with a particular lifestyle.

�  Fantasy: This style creates a fantasy around the product or its use.

�  Mood or image: This style builds a mood or image around the product, such as beauty,

love, or serenity. No claim is made about the product except through suggestion.

�  Musical: This style shows one or more people or cartoon characters singing about the

product.

�  Technical expertise: This style shows the company's expertise in making the product.

�  Scientific evidence: This style presents survey or scientific evidence that the brand is better

or better liked than one or more other brands.

�  Testimonial evidence or endorsement: This style features a highly believable or likable

source endorsing the product.

172

Table of Contents:

1. PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done?
2. ROAD MAP:UNDERSTANDING MARKETING AND MARKETING PROCESS
3. MARKETING FUNCTIONS:CUSTOMER RELATIONSHIP MANAGEMENT
4. MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING:End of the Mass Market
5. MARKETING CHALLENGES IN THE 21st CENTURY:Connections with Customers
6. STRATEGIC PLANNING AND MARKETING PROCESS:Setting Company Objectives and Goals
7. PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process
8. MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
9. MARKETING ENVIRONMENT:The Company�s Microenvironment, Customers
10. MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment
11. ANALYZING MARKETING OPPORTUNITIES AND DEVELOPING STRATEGIES:MIS, Marketing Research
12. THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches
13. THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET
14. CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors
15. CONSUMER BUYING BEHAVIOR (CONTINUED):Personal Factors, Psychological Factors
16. BUSINESS MARKETS AND BUYING BEHAVIOR:Market structure and demand
17. MARKET SEGMENTATION:Steps in Target Marketing, Mass Marketing
18. MARKET SEGMENTATION (CONTINUED):Market Targeting, How Many Differences to Promote
19. Product:Marketing Mix, Levels of Product and Services, Consumer Products
20. PRODUCT:Individual product decisions, Product Attributes, Branding
21. PRODUCT:NEW PRODUCT DEVELOPMENT PROCESS, Idea generation, Test Marketing
22. NEW PRODUCT DEVELOPMENT:PRODUCT LIFE- CYCLE STAGES AND STRATEGIES
23. KEY TERMS:New-product development, Idea generation, Product development
24. Price the 2nd P of Marketing Mix:Marketing Objectives, Costs, The Market and Demand
25. PRICE THE 2ND P OF MARKETING MIX:General Pricing Approaches, Fixed Cost
26. PRICE THE 2ND P OF MARKETING MIX:Discount and Allowance Pricing, Segmented Pricing
27. PRICE THE 2ND P OF MARKETING MIX:Price Changes, Initiating Price Increases
28. PLACE- THE 3RD P OF MARKETING MIX:Marketing Channel, Channel Behavior
29. LOGISTIC MANAGEMENT:Push Versus Pull Strategy, Goals of the Logistics System
30. RETAILING AND WHOLESALING:Customer Service, Product Line, Discount Stores
31. KEY TERMS:Distribution channel, Franchise organization, Distribution center
32. PROMOTION THE 4TH P OF MARKETING MIX:Integrated Marketing Communications
33. ADVERTISING:The Five M�s of Advertising, Advertising decisions
34. ADVERTISING:SALES PROMOTION, Evaluating Advertising, Sales Promotion
35. PERSONAL SELLING:The Role of the Sales Force, Builds Relationships
36. SALES FORCE MANAGEMENT:Managing the Sales Force, Compensating Salespeople
37. SALES FORCE MANAGEMENT:DIRECT MARKETING, Forms of Direct Marketing
38. DIRECT MARKETING:PUBLIC RELATIONS, Major Public Relations Decisions
39. KEY TERMS:Public relations, Advertising, Catalog Marketing
40. CREATING COMPETITIVE ADVANTAGE:Competitor Analysis, Competitive Strategies
41. GLOBAL MARKETING:International Trade System, Economic Environment
42. E-MARKETING:Internet Marketing, Electronic Commerce, Basic-Forms
43. MARKETING AND SOCIETY:Social Criticisms of Marketing, Marketing Ethics
44. MARKETING:BCG MATRIX, CONSUMER BEHAVIOR, PRODUCT AND SERVICES
45. A NEW PRODUCT DEVELOPMENT:PRICING STRATEGIES, GLOBAL MARKET PLACE