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Principles of Marketing

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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
Obectives Se 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
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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.
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Principles of Marketing ­ MGT301
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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
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Principles of Marketing ­ MGT301
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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.
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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 Companyís 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 Mís 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