17616752-Advertising-Sales-Management

ADVERTISING & SALES MANAGEMENT: 

ADVERTISING & SALES MANAGEMENT

Importance of Advertising: 

Importance of Advertising “Advertising is telling and selling” Though it is one of the several functions of marketing, it has taken the form of an independent discipline.

The Meaning of Advertising: 

The Meaning of Advertising The term originates from the Latin “adverto”, which means to turn round. Advertising thus denotes the means employed to draw attention to any object or purpose. “It is a paid form of non personal presentation an promotion of ideas, goods or services by an identified sponsor.” Through advertisement, the advertiser intends to spread his ideas about his products among this customers and prospects. Popularization is the basic aim of the advertising activity

Key Components of the Advertising Job : 

Key Components of the Advertising Job Decide the advertising objectives to be accomplished Determine the target audience at whom the message is to be aimed Decide the advertising appropriations Select the media Construct the actual advertisement in the pretest its efficiency Coordinate the advertising effort with the rest of the promotional Programmes

Four Major Decision Areas: 

Four Major Decision Areas Deciding the Advertising Objectives Deciding the Budget Deciding the Copy Deciding the Media

Deciding the Advertising Objectives: 

Deciding the Advertising Objectives Objectives are essential because it helps the marketer know in advance what they want to achieve and it also helps ensure that they are proceeding in the right direction Goals are also made real through objectives leading to effective development of advertising Programmes for meeting the objectives. As Advertising became a business task it was imperative that it was expected to yield results proportionate to the effort and cost involved.

Two distinct schools of thought: 

Two distinct schools of thought What should be or what could be the objectives of advertising? One school has it that advertising must bring in more sales and therefore advertising objectives should certainly include sales growth. The other school feels that advertising is about communication and therefore goals should be intended to shape awareness and attitudes of consumers. “Advertising that does not sell is a waste” –David Ogilvy Conflict Remains: Communicating certain ideas Vs Direct Sales Task role

Four Sets of Constructs/Themes: 

Four Sets of Constructs/Themes The behavioral constructs e.g.. Trial purchases and store visits Attitude; Attitude change and attitude measurement Awareness; creating awareness of new products and ideas Image creation and positioning (or reinforcing)

Areas of Ad Objectives: 

Areas of Ad Objectives Introduction of new products in the market Expansion of the market for the existing products/brands Building a long term consumer franchise for the firm Countering Competition Reminding Customers Reassuring the customers by removing post purchase dissonance Building up brand image and company image Aiding the total selling function by taking the customer through all the steps from awareness to purchase involved in the selling process Closing an immediate sale (Clincher ads) Supporting other sales promotion activities Stimulating impulse buying Enthusing the channel to stock the product Supporting and supplementing the salesman’s effort Supporting and supplementing the dealer’s selling effort

PowerPoint Presentation: 

“AIDA” Advertising How Advertising Works Attention Interest Desire Action!

AIDA (Awareness, Interest, Desire, Action): 

AIDA (Awareness, Interest, Desire, Action) The AIDA sequence is conceptualized by Strong (1925) Here the consumer is moved along a linear continuum of internal states from unawareness to awareness Then interest is elicited and desire (for the brand) is aroused . Finally, the consumer is stirred into action .

Linear Communication and the Hierarchy of Effects: 

Linear Communication and the Hierarchy of Effects Theories reflect the methods and assumptions of cognitive psychology. Analogy is drawn between the information processing of computers and that of humans These research traditions have been drawn on by models of advertising persuasion The consumer’s resistance is broken by an accumulation of advertising effects hence the expression “hierarchy of effects” The consumer processes information like a computer sequentially according to rules

Hierarchy of Effects: 

Hierarchy of Effects The hierarchy of effect represents “compounding probabilities” (Percy et al. 2001) It is also criticized on the grounds that it conceives of advertising consumption as an essentially dyadic process transmitted through a media channel to an individual viewer and consumed in social isolation A further criticism is that it represents only high involvement purchases: many or most purchases are spontaneous and do not engage consumers in such rational processing

Social Process Vs Emotional Process: 

Social Process Vs Emotional Process Ineluctably social process (Ritson and Elliot, 1999) – we do not generally view ads in an experimental booth-our interpretation of them is normally framed by the social context in which we encounter them. Elliot, 1998; Holbrook and Hirschman, 1982 –Subsequent models have incorporated stronger elements of consumer emotionality into the persuasion process to reflect the often irrational and quirky motivations behind consumer behavior.

Cognition : 

Cognition Cognition (Thinking) refers to the rational appeal of advertising as for example, a motor car ad which includes data on engine performance or utility features. The affective stage refers to the emotional response of the consumer to an ad. Not only does the ad seek to engage with the consumer on a rational level by emphasizing product benefits; it also tries to elicit a positive emotional response with pleasing imagery and alluring symbolism. Motor car ads typically feature the engine and other product data plus a carefully shot picture of the car and its occupants in a pleasing setting. The emotional response is: desire , triggered by identification. Finally conation refers to action: the combination of rational and emotional appeal in the same ad might act persuasively and motivate a purchase response.

PowerPoint Presentation: 

Advertising How Advertising Works Some things we know about people. “People read what interests them, sometimes it’s an ad.” (Gossage) People are strategic - they look out for their own best interests. People are bombarded with messages A key concern is getting through clutter People (and advertising) work from both logic and emotion

The Linear Model of Communication : 

The Linear Model of Communication SENDER ENCODE MESSAGE DECODE RECEIVER NOISE NOISE

Limitations of Linear Model: 

Limitations of Linear Model It is easy to interpret in such a way that meaning and message are understood to be synonymous . This risks misconstruing the interpretative possibilities. Oversimplification of the customer’s cognitive engagement with advertising by emphasizing a singular message that has one unproblematic meaning. The advent of parallel processing : the assumption that computers and human brains can process one bit of data at a time as been challenged by more complex models The implication that explicit attention must be given to an ad is erroneous. The linear model of communication with its sequential processing translates conveniently into a model of persuasion if these stages are replaced with attitudinal or behavioral states (AIDA). A lot of research goes on in measuring these states as they are an indicator of the likelihood of purchase (and therefore an indicator of success of the advertisement campaign). Thus these are necessary conditions for advertising to achieve its marketing goals but not sufficient. Eg. A consumer may be aware of ad or may even like an ad but that does not mean he will buy the product.

PowerPoint Presentation: 

The Lavidge-Steiner Learning Model Advertising How Advertising Works Awareness Knowledge Liking Preference Conviction Purchase Begins with Awareness Moves to Conviction and Purchase NOTE: Process may be quite rapid and you may try before being totally convinced How people “learn” ads

The Single Biggest Thing:: 

Key Concepts The Single Biggest Thing: Advertising dollars have great “elasticity” Planning and implementing the Right Advertising is usually critical for success in the marketplace The Wrong Advertising is usually worthless Advertising can be The Single Biggest Thing It can probably impact sales more than any other element of the marketing mix . And … it is the most fun!

The Single Biggest Thing: 

Key Concepts The Single Biggest Thing Advertising is just a part of “The Five Ps” All of “IMC” is important However... Advertising dollars are... Often, the biggest item in the marketing budget The most visible part of marketing spending The most controllable marketing activity Advertising is often… “the tail that wags the marketing dog”

Campaigns:: 

Key Concepts Campaigns: Origin of term Military Campaigns Political Campaigns Advertising Campaigns

Campaigns:: 

Key Concepts Campaigns: Origin of term Fr. campagne , It. campagna - open country suited to military maneuvers Campaign - a series of military operations with a particular objective in a war Campaign - a series of organized planned actions with a particular purpose, as for electing a candidate.

Campaigns:: 

Key Concepts Campaigns: Military Campaigns “Victory is my objective . War is my strategy .” Winston Churchill

Campaigns:: 

Key Concepts Campaigns: Military Campaigns “a series of military operations with a particular objective in a war” Advertising and marketing use both the language and the military mindset Example: a very popular marketing book…

Campaigns:: 

Key Concepts Campaigns: Political Campaigns Each single geographic or statewide campaign may have its own objectives and strategies which contribute to the overall campaign. In politics, as in war, you have to pick your battles . National political campaigns focus on key states and voter groups . The objective is a majority in the Electoral College.

Campaigns:: 

Key Concepts Campaigns: Advertising Campaigns “Advertising is a team sport!”

Campaigns:: 

Key Concepts Campaigns: Advertising Campaigns Structured and sequential activities An imaginative re-integration of new and existing factors Shared objectives and strategies A team effort

Advertising Campaign:: 

Key Concepts Next, we’ll show you four billboard ads for a telecom company in Kansas City - Birch Telecom Then, we’ll discuss some of the basic common elements needed in an advertising campaign Here’s the first ad... Advertising Campaign:

Advertising Campaign:: 

Key Concepts Advertising Campaign:

Advertising Campaign:: 

Key Concepts Advertising Campaign:

Advertising Campaign:: 

Key Concepts Advertising Campaign:

Advertising Campaign:: 

Key Concepts Advertising Campaign:

Advertising Campaign:: 

What were the common elements? 1. ____________________________ 2. ____________________________ 3. ____________________________ 4. ____________________________ 5. ____________________________ 6. ____________________________ Key Concepts Advertising Campaign: graphic look strategic message benefit statement brand personality executional elements - the dog anything else?

Advertising Campaign:: 

Campaigns are built with… Key Concepts Advertising Campaign: Plans & Strategies

Plans & Strategies:: 

Key Concepts Plans & Strategies: Organized Actions and… “Imaginative Reintegration” Plans & Strategies are a combination of: Tightly organized planned actions Unique strategic configurations Plans may contain strategies Strategies need plans to be implemented

Plans & Strategies:: 

Key Concepts Plans & Strategies: Kenichi Ohmae (head of McKinsey Japan) “ In business as on the battlefield, the object of strategy is to bring about the conditions most favorable to one’s own side. In strategic thinking , one first seeks a clear understanding of the particular character of each element of a situation, and then makes the fullest possible use of human brainpower to restructure the elements in the most advantageous way.”

Plans & Strategies:: 

Key Concepts Plans & Strategies: Kenichi Ohmae (head of McKinsey Japan) “ Phenomena and events in the real world do not always fit a linear model. Hence, the most reliable means of dissecting a situation into its constituent parts and then reassembling them in the desired pattern is not a step-by-step methodology such as systems analysis. Rather, it is that ultimate non-linear thinking tool , the human brain.”

Plans & Strategies:: 

Key Concepts Plans & Strategies: Kenichi Ohmae (head of McKinsey Japan) “ No matter how difficult or unprecedented the problem, a breakthrough to the best possible solution can come only from a combination of rational analysis based on the real nature of things, and imaginative reintegration of all the different items into a new pattern using nonlinear brain power .”

Plans & Strategies:: 

Key Concepts Plans & Strategies: Now let’s talk about Plans Marketing Plans are written: By the Advertisers By their Advertising Agencies Creative Plans may be called: Creative strategies Creative blueprints Creative platforms Creative briefs And sometimes the word “communication” replaces the word “creative”

Plans & Strategies:: 

Key Concepts Plans & Strategies: Plans contain Strategies and vice versa Marketing Plans may also have Strategies and Plans for Sales Promotion and PR The Campaign will also have A Media Strategy - and… A Media Plan Media Departments write Media Plans The Advertising Strategy determines the Creative Objective and the Media Objective

Plans & Strategies:: 

Key Concepts Plans & Strategies: Here’s a graphic representation… Media Strategy To be determined Creative Strategy To be determined Market Strategy/Media Target audience W 18-49 Market Strategy/Creative Establish brand as superior Media Objective Deliver Advertising to Target audience W 18-49 Creative Objective Establish brand as superior Marketing Objective Sell one million of product

Plans & Strategies:: 

Key Concepts Plans & Strategies: Who’s going to manage all of this? At the client, Director of Marketing Responsible for Marketing Usually sets Marketing Objective and Budget Agency is responsible for Advertising Good agencies seek to do this work for their clients At the agency, Account Managers: They are the link to the client They develop strategy - or lead development They manage the resources of the agency and, very often, they write the Plans

Plans & Strategies:: 

Key Concepts Plans & Strategies: Agencies turn strategies into ideas And they turn those ideas into ads Creative people actually make the ads Copywriters and art directors Agencies turn plans into campaigns Clients and account management determine needs and budgets Media departments turn budgets and strategies into Media Plans

Plans & Strategies:: 

Key Concepts Plans & Strategies: To make plans and strategies work, a lot of people have to work together. And that means they have to speak… The same language!

Vocabulary:: 

Key Concepts Vocabulary: The Language of Marketing & Advertising Original concepts came from military Now the business of marketing has its own intellectual infrastructure - a way of thinking and a way of talking Understanding the specific meanings of key words and concepts is critical Yes, it will be on the test!

Vocabulary:: 

Key Concepts Vocabulary: Mission: Overall goals & values your “reason for being” Objective: What you want to accomplish . Strategy: How you are going to do it. Tactic: Specific action. (Should be specific action that helps meet strategic goals - tactics should be on strategy. ) Remember, objectives first, then strategy. (If you don’t know where you’re going, any road will take you there.)

Vocabulary:: 

Remember the acronym M.O.S.T. Mission, Objective, Strategy, Tactics Key Concepts Vocabulary: Mission: Overall goals & values your “reason for being” Objective: What you want to accomplish . Strategy: How you are going to do it. Tactic: Specific action. (Should be specific action that helps meet strategic goals - tactics should be on strategy. )

Vocabulary:: 

Key Concepts Vocabulary: The Value Ladder Consumer Benefit Product Benefit Feature Attribute Benefit Value The Value Ladder Kids like it Easy to serve E-Z Open glass jar Good food for my family “I’m a good mom” Apple sauce is made from apples “Laddering”

Vocabulary:: 

Key Concepts Vocabulary: Some More Important Words… Target audience - person or group to whom advertising is directed Primary target - the target audience Secondary target - usually, the trade Demographics - statistical description of target audience Psychographics - psychological traits of target audience

Vocabulary:: 

Key Concepts Vocabulary: Some More Important Words… Sales Promotion - use of incentives (a small bribe) to develop or stimulate sales Public Relations (PR) - publicity through non-paid media Publics - a PR version of target audience Situation Analysis - beginning section of plan where current situation is evaluated “SWOT” Analysis - Strengths, Weaknesses, Opportunities, and Threats

Vocabulary:: 

Key Concepts Vocabulary: Some Important Media Words… Reach - percentage of the audience exposed to an advertising message Frequency - average number of times audience has had the opportunity to see the message GRPs (Gross Rating Points) - the sum of the ratings points (a point is one percent of the audience) TRPs (Target Rating Points) - this is a subset, measuring rating points for the target group

Vocabulary:: 

Key Concepts Vocabulary: Some More Important Media Words… CPM (Cost per thousand) - how much it costs to reach a thousand people (the “M” is the Roman numeral for a thousand) CPP (Cost per point) - how much it costs to buy a “point” of the broadcast audience Share - percentage of an audience tuned to a specific station OK, now that we know how to talk about advertising, let’s talk about how it works …

How Advertising Works: 

Advertising How Advertising Works Let’s talk about how advertising works. Next, we’ll cover... Some things we know about people Some things we know about advertising messages The Lavidge-Steiner Learning Model “AIDA”

PowerPoint Presentation: 

Advertising How Advertising Works Some things we know about people. “People read what interests them, sometimes it’s an ad.” (Gossage) People are strategic - they look out for their own best interests. People are bombarded with messages A key concern is getting through clutter People (and advertising) work from both logic and emotion

PowerPoint Presentation: 

Advertising How Advertising Works Some things we know about Advertising Branding and Advertising Branding = overall brand equity building Advertising = specific messages and goals Advertising contributes to Branding Advertising is concerned with: The Advertising Message Media Planning and Placement

PowerPoint Presentation: 

An Advertising Communication Model Advertising How Advertising Works Feedback MESSAGE Advertising Communication Model Advertiser Sender (Encoder) Audience Receiver (Decoder) Note it is more difficult for the audience to communicate back to the advertiser. Feedback is one purpose of Market Research Some things we know about Advertising

Deciding the Advertising Budget (how much should a company spend?): 

Deciding the Advertising Budget (how much should a company spend?) No Standard Formula or Norm Varies from industry to industry Varies from company to company Varies from company to company within same industry Varies within same company over time

General Practices in Budgeting: 

General Practices in Budgeting Competitive Parity (Competitor Standards) Affordability (Small Firms) Fixed Percentage of Turnover (1-2% of turnover; ignores varying requirements of advertising effort at various stages of PLC)

Based on Functions to be performed: 

Based on Functions to be performed Advertising Objectives are Pinpointed Their role in achieving the overall marketing objectives is decided Advertising appropriations are decided on a market to market, product to product and brand to brand basis

Regression equation: 

Regression equation The regression equation deals with the following variables: The unknown parameters denoted as β. This may be a scalar or a vector of length k . The independent variables, X. The dependent variable, Y . Regression equation is a function of variables X and β. Y = f (X, β) The user of regression analysis must make an intelligent guess about this function. Sometimes the form of this function is known, sometimes he or she must apply a trial and error process. Assume now that the vector of unknown parameters, β is of length k . In order to perform a regression analysis the user must provide information about the dependent variable Y : If the user performs the measurement N times, where N < k , regression analysis cannot be performed: there is not provided enough information to do so. If the user performs N independent measurements, where N = k , then the problem reduces to solving a set of N equations with N unknowns β. If, on the other hand, the user provides results of N independent measurements, where N > k , regression analysis can be performed. Such a system is also called an overdetermined system ; Regression coefficient - when the regression line is linear (y = ax + b) the regression coefficient is the constant (a) that represents the rate of change of one variable (y) as a function of changes in the other (x); it is the slope of the regression line

Regression Analysis : 

Regression Analysis Based on historical data Time Series Data : Records of past advertising expenditures and sales over time Cross Sectional Data : Records of advertising expenditure and sales for a specific period over different markets Most firms using Regression Analysis go for Time Series Data The aim is to predict dependent variable-sale or market share The advertising expenditure level would be one of independent variables. The regression coefficient corresponding to the advertising variable serves as a measure of the short term response to advertising. it is the slope of the regression line

The Adaptive Control Model : 

The Adaptive Control Model The model recognizes that the budget decisions need updating because the relationship between the advertising and sales changes over time with changes in market conditions. This model starts with a sales response curve and locates an optimal level of ad expenditure. The firm will now experiment with non optimal levels in select test markets. This is done to get more knowledge about the sales response curve set originally. The new information therefore coming out of experimental marketing is added to the sales response function for arriving at current optimal advertising expenditure rate.

The Compromise : 

The Compromise A “compromise budget” is arrived at after considering the basic questions: What is the audience to be reached by advertising? What is its size, location etc? What are the media available for delivering the advertising message? Of the available media which media or media combination are likely to most cost effective? What are the features of the proposed campaign? Does the campaign involve single release of an advertisement or repeat releases? What is the releases proposed? Therefore, the Advertising Budget is a function of: Advertising Objectives, Media Decisions and Copy Decisions

Deciding the Copy/Layout: 

Deciding the Copy/Layout “Copy”: Written Matter Pictures Labels Logo Design Copy is synonymous with layout Copy development has become the task of professional advertising agencies; however copy development becomes successful only when there is close interaction between the advertiser and the agency

Main Steps in Copy Development: 

Main Steps in Copy Development Facts Finding Stage What is the central issue to be tackled? What is the issue to which the total campaign has to address itself? What are the overall communication objectives? What is the specific communication objective of the proposed campaign? Advertiser and the agency have to work out literally together The agency becomes an insider as far as the advertiser is concerned. The agency gathers and analyses all pertinent data to come to grip with the problem and to decide the course to be taken

Idea Finding Stage: 

Idea Finding Stage Tentative ideas are developed under different “idea heads.” They are further processed, developed and screened. The less promising ones are eliminated. To develop ideas different routes are adopted. Interviewing a selected sample of target audience is a route normally taken for eliciting ideas. Sometimes the agencies also attempt to focus on group interviewing and brainstorming. All processes are aids to get access to some creative ideas on which the ad man can work further. He has to further develop the theme and total advertisement story. He has to decide: kind of source for conveying message, frame message, its style and structure. He normally the ad man/agency comes up with a number of copy alternatives and places them before the advertiser. The copies are normally tested in selected segments of market before final decision on choice of copy is made.

The Main elements of a copy: 

The Main elements of a copy Message Message Structure Message Sidedness (One side argument or two side argument) Order of Presentation Climax Order (Strong points are placed at the end-applies to high interest material); Anti-Climax (Strong points placed at the beginning-applies to low interest material); Pyramidal Order (important points presented at the middle-effect is least persuasive) Stating Conclusion in a Message (Should there be an explicit conclusion? It is preferable to leave something out of the message for the audience to guess) Message Appeal Product oriented appeals Physical Features oriented appeal Function oriented appeal Brand to Brand comparison appeal Consumer oriented appeals Consumer Oriented appeal (Attitude, Class, Lifestyle) Appeals evoking pleasant sensations and moods Appeals evoking sense of luxury and distinctiveness Humor appeals Fear appeal

The Main elements of a copy: 

Source The Credibility of the Source Likeability/Attractiveness of the Source The Source’s approach to the views and Disposition of the audience The Main elements of a copy

Snapshots: 

Snapshots Source tone: soothing, authoritative, upbeat; familiarity or lack of it. Color: Blue-Cold, used to create distance, blue skies. Red-Intense. Orange (Warm). Black (Mysterious, Sinister), Purple (Luxury). Colors can be treated as metaphors for nature: green grass, brown earth, red blood and passion Serif Old Roman Style: Tradition and Authority Times, Century Schoolbook (Transitional),

Media Selection: 

Media Selection Deciding on : Reach (% of people in the target market exposed to an ad campaign during a given period) Frequency (the no. of times the average person is exposed to an advertising message in a given period) Media Impact (qualitative value of a message exposure through a given medium) Eg. Radio Vs TV More the reach, frequency and media impact advertiser seeks the higher the advertising budget will have to be. Choosing Among Major Media Types

Profiles of Major Media Types: 

Profiles of Major Media Types MEDIUM ADVANTAGES LIMITATIONS Newspapers Flexibility, Timeliness, Good Local Market; Broad Acceptance; High Believability Short Life; Poor Reproduction Quality Television Combines sight, sound, and motion; appealing to senses; high attention; high reach High absolute cost; less audience selectivity Direct Mail Audience Selectivity, Flexibility; No Competition; Personalization Relatively High Cost; “Junk Mail” Image Radio Mass Use; high geographic and demographic selectivity; low cost Audio Presentation only; lower attention than television; non standardized rate structures; fleeting exposure

PowerPoint Presentation: 

Magazines High geographic and demographic selectivity; credibility and prestige; high quality production; long life Long ad purchase lead time; some waster circulation; no guarantee of position Outdoor Flexibility; high repeat exposure; low cost; low competition No audience selectivity; creative limitations

PowerPoint Presentation: 

Selecting Specific Media Vehicles (Specific Magazines, Television Shows, Radio Programmes) Deciding on Media Timing (Scheduling the advertising over the course of a year)

Advertising Evaluation: 

Advertising Evaluation Measuring the communication effect of an ad-copy testing-tells whether the ad is communicating well. Methods of Advertising Pretesting : Direct Rating (Exposes to consumer panel to alternative ads and asks them to rate the ads) Portfolio Tests (Consumers view or listen to a portfolio of an advertisements taking as much as time as they need. They are then asked to recall all the ads and their content, aided or unaided by the interviewer. ) Laboratory Tests (Physiological Reactions are measured: heartbeat, B P, pupil dilation, perspiration. These help measure ad’s attention getting power but reveal little on belief, attitude or intentions) Post Testing Methods: Recall Tests (Recall everything they can about the advertisers and products they saw) Recognition Tests (Eg. Readers of a given issue of a magazine are asked to point out what they recognize as having seen before)

Measuring the Sales Effect: 

Measuring the Sales Effect What sales are caused by an ad that increases brand awareness by 20% brand preference by 10%? Sales effect is harder to measure than communication effect Sales are effected by multiple factors apart from advertising: product features, price, availability etc. Methods: Past Sales comparison with past advertising expenditures Varying Advertising Spends (keeping market areas and marketing efforts constant)