Advertising Managment PPT Part 1

transcript

ADVERTISING MANAGEMENT

Part 1

Eastern Institute of Management2nd Year 1st Semester

The raw material of Advertising, is life….

• It’s the business of inspiring people. Yet, we’re most uninspired.

• Its’ the business of knowing everything about everything.Yet, we know little about just a few things.

• We believe we’re in a borderless world. Yet, we barricade our curiosity.

• We’re in the sensorama business. Yet, we don’t use most of our senses.

• You don’t need wings to fly. Just an open mind. And don’t give me excuses like “Where’s the time?”

• Do you discover one new thing in your life each day?• Enrich By One: Live your life that way…

A step ahead

• We were in the information age. We are now in the knowledge domain.

• The only way you win with colleagues and clients is when you knowas much if not more about their business.

• If you work on real estate, do you know about what is happening inthe Ropponji Hills district in Japan or for that matter Canary Wharfin London or the 50 Gramercy Park project in New York?

• Knowledge is the next battlefront. The soldier on that is the generalof tomorrow.

• Ahead By One: Live your life that way...

Course Content

1. Advertising’s Role in the Marketing Process2. Legal/Ethical/Social Aspects of Advertising3. Process of Communication – Wilbur Schramm Model4. Theory of Cognitive Dissonance/Advertising Strategy5. DAGMAR approach 6. Stimulation of Primary/Selective Demand – Positioning7. Campaign Planning/Brand Management

Copy/Logo/Illustration/Appeal/Layout8. Media Planning, Budgeting and Evaluation Press/TVC

Course Content…Contd

9. Rationale of Testing Opinion and Aptitude Test

10. Recognition/Recall11. Advertising Agency :

Selection/Compensation/Appraisal12. Advertising vs Consumer Behaviour13. Sales Promotions/Tactical vs Thematic/Retail14.

National/Co-operative/Political/International/Public Service Advertising

Expectations from you…ReadSee

ExperienceApply

…as the raw material of advertising is life

Advertising’s Role in the Marketing Process

What is Marketing ?

The American Marketing Association, defines ‘Marketing’ as

• the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods (products ~brands) and services to create exchanges that satisfy individual and organizational objectives’

Marketing Communication Mix

Marketing Objectives & Strategy

Marketing Plans

ProductionDistribution (Place) Promotion

Pricing Planning

The Promotion Mix

Advertising

DirectMarketing

Interactive/InternetMarketing

Publicity/Public Relations

PersonalSelling

Target Audience

SalesPromotion

Advertising

• originates from the Latin Word ‘ad vertere’ which means ‘to turn the mind towards’

• Advertising is the use of media to inform consumers about something and/or to persuade them to do something in effect. It brings products/brands and consumers together and then modulates the relationship between them

Question ?

• If Advertising is a part of Marketing, then is it all about Communicating ?

Example..When I say…

• A Cola• A Photocopier• A Photographic Film

Material• A Microprocessor• An Expensive Swiss Watch• Cartridge Blades for

Shaving• Main Frame Computers• Operating Software

What comes to your mind ?

• Coca Cola• Xerox• Kodak• Intel• Rolex• Gillette• IBM• Microsoft

What do these communicate to you?

The Law of Advertising

• Advertising, today, is all about ‘Building’ brands and ‘Positioning’ brands in the mind of the consumer and not just communicating about it.

What is a Brand ?

• A Brand is not a product : it is the product’s

source and it defines its identity in time.

• The value of a brand lies in its capacity to

generate cash flows.

• A brand is a landmark…it is enduring.

In Effect….

• A Brand is an Identity(like all famous personalities has its distinctiveness)

From a long term point of view,We need to win ‘share of mind’ rather than ‘share of space’

Some quick examples & an exercise…

Brand Positioning Exercise : Category Soap

• Lifebuoy• Liril• Lux• Santoor• Dove• Ayush• Dettol• Hamam• Aramusk

• Hygiene• Freshness• Beauty• Goodness-Sandalwood• Moisturizer• Herbal• Antiseptic• Family• Masculinity

Corporate Advertising

Types of Corporate Advertising

Image AdvertisingEvent sponsorshipAdvocacy advertisingCause-related advertising

Advertising done to promote the interests of the firm by enhancing its

image, assuming a position on a particular issue or promoting a

certain cause

Objectives of Corporate Advertising

Create a positive image for the firmCommunicate the organization’s viewpoint on

various issuesBoost employee moraleSmooth labor relationsHelp newly deregulated industriesHelp diversified companies establish an

identity

Chevron Engages in Image Advertising

Event Sponsorship

Events used for sponsorship:• Sporting events• Music/entertainment• Festivals• Arts/cultural events• Causes

Event Sponsorship is a form of marketing communications whereby an organization

becomes involved with a particular event by developing sponsorship relations.

Advocacy Advertising

Advocacy advertising is the propagation of ideas and elucidation of controversial social issues of public importance in a manner that supports the interests of

the sponsor

The San Diego Zoological Society

Cause Related Marketing

Cause related marketing is a form of marketing whereby companies link with charities or nonprofit organizations as

contributing sponsors

KitchenAid uses cause-related marketing

Try Reading This

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cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdanieg. The

phaonmneal pweor of the hmuan mnid, aoccdrnig to a rscheearch at Cmabrigde Uinervtisy,

it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the frist and lsat ltteer be in the rghit pclae. The rset can be a taotl mses and you can sitll raed it wouthit a porbelm.

Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. Amzanig huh? yaeh and I awlyas tghuhot slpeling was ipmorantt!

Direct Marketing

• When organizations communicate directly with target consumers to generate a response and/or a transaction.

• It’s not just direct mail but a host of activities such as database management, direct selling, telemarketing, multi level marketing, and direct response ads, catalogue selling etc.,

• Eg : L L Bean, Dell, Tupperware, Amway

Interactive/Internet Marketing

• Using the internet and the world wide web as the medium for exchange of information and transactions

• Eg : Amazon.com, ebay.com• Eg : Nike ‘Whatever’ campaingn

Sales Promotion

• Are those activities that provide extra value or incentives to the sales force, the distributors/retailers or the ultimate end consumers and can stimulate immediate sales.

• Consumer Oriented Sales Promotions : Coupining, sampling, Premium, Rebates, Contests, and Point of Purchase Materials

• Trade Oriented Sales Promotions : Merchandising Allowance, Price Deals, Sales Incentives, Trade Shows, Dealer Meets,

Public Relations and Publicity

GeneralPublic

Employees

Suppliers Stockholders

Customers

CLIENT

Public RelationsTo manage relationships with the Public

Public Relations Management Process

Determination and evaluation of public attitudes

Identification of policies and procedures of an organization

Development and execution of the program

Marketing Public Relations (MPR) Functions

Building marketplace excitement before media advertising breaks

Creating advertising news where there is no product news

Introducing a product with little or no advertising

Providing a value-added customer service Building brand-to-customer bonds Influencing the influentials/opinion leaders Defending products at risk and giving

customers a reason to buy

Public Relations Audiences

Employees of the firmStockholders and investorsCommunity membersSuppliers and customersThe mediaEducatorsCivic and business organizationsGovernmentsFinancial groups

Public Relations Tools

Press releases

Press conferences

Exclusives

Interviews

Community involvement

The internet

Example of a Press Release

Reebok Used a Press Conference to Announce the

Sponsorship of Shakira

PR Publications

Inserts Enclosures Annual reports Posters Bulletin boards Exhibits Audiovisuals Position papers Speeches

News releases Media kits Booklets Leaflets Pamphlets Brochures Manuals Books Letters

Advantages of Public Relations

Credibility

Avoidance of clutter

Lead generation

Selectivity

Image building

Criteria for Measuring PR Effectiveness

Total number of impressions . . . Over time On the target audience On specific target audiences

Percentage of . . . Positive articles over time Negative articles over time

Ratio of positive to negative articlesPercentage of positive and negative

articles by . . Subject Publication Reporter Target audience

Publicity

Key points regarding publicity:

Publicity is generally short-term focused Publicity is not always under the control of

the firm Publicity can be negative as well as

positive

Publicity involves the generation of news about a company, product, service, brand or person in various media. It is a subset of the

public relations effort.

The Power of Publicity

Perceived as more credible

Often perceived as endorsed by the medium in which it appears

Often has high news value

Often generates high frequency of exposure

Responding to Negative Publicity

Using Positive Publicity

Advertising Publicity

Tentative

Unspecified/Low

Undetermined

Advertising Versus Publicity

Achievable

Schedulable

Specific/High

Specifiable

Undetermined

Higher

Little

Factor

Control

Credibility

Frequency

Flexibility

Timing

Personal Selling

• A form of person to person communication where a seller attempts to assist and/or persuade prospective buyers to purchase a company’s product or service or to act on an idea.

• Eg. Real Estate/Insurance, NGO cause, PUBLIC

Selection Criteria of the Promotion Mix

Awareness Curiosity Trial Purchase Post Purc.

Purchase Decision Sequence

Advertising PR DM Prsnl Slng Sales Promo

Advertising RegulationLegal, Moral and Ethical Aspects of Advertising

Federal Trade Commission (US)

• Promotional practices of the Tobacco and Alcohol Industry

• Health Claims in the food Industry• Children’s Advertising : Toy Industry – “Dial A

Santa”• Advertising to the Elderly : Health Safety,

Financial Security• Environment

50 cases in nearly 100 million in judgement

What is Deception ?

• Conceptually Deception exists when as Advertisement is introduced into the perceptual process of some audiences and the output of that perceptual process – Differs from reality of the situation– Affects buying behaviour to the detriment

of the customerThe ad may not be false but the perception

may be

More meaning to Deception

• There is a misinterpretation, omission or practice that is likely to mislead

• The consumer is acting responsibly (or reasonably) in the circumstances

• The practice is material and consumer injury is possible because consumers are likely to have chosen differently if there was no deception

Misrepresentation or Omission5 of the 13 causes

• When an Ad suggests a small difference is important : eg Tar level in cigarettes

• Artificial product demonstrations : • Using an ambiguous or easily confused phrase :

eg “government supported’ meaning ‘government approved’ attorneys claiming to be specialist/certified

• Implying that a benefit that does not fully or partially exist : eg Efficen no Aspirin effect

• Implying that a product benefit is unique to a brand : eg Wonder Bread built bodies

Puffery

• A subjective statement of opinion about a products quality : great/best/ can’t get any closer/better deal etc.,

Neither have been proved true neither false

• Poetic License or allowable exaggeration– BMW : The Ultimate Driving Machine, Bayer

Aspirin – The Wonder Drug• Is an exaggeration extended to the point of

outright spoof that is obviously not true : Snapple – Made from the best stuff on earth

Legal, Ethical, Social Aspects of Advertising

You Judge

The deeper meaning

• Legal: pertaining to, or according to law

• Ethical : moral principles and values that given the actions and decisions of an individual or a group - relating to morales, principles

• Social : pertaining to society, organized community

The Implications

• Conceptually, deception exists when an advertising’s input to the perceptual process of the TG and the output of that process a) differs from the reality of the situation b) affects buying behaviour to the detriment of the consumer

• According to the Ferderal Trade Commission Act (FTC) passed in the US in 1914, deception will be found if there is a misrepresentation or omission that is likely to mislead the consumer to acting responsibly

The Implications

• Misrepresentation or omission can occur when an ad contains the incorrect implication that : a) test conducted scientifically b) a benefit exists c) claim is substantiated

• Puffing, the subjective statement concerning a products quality using terms such as ‘best’ is permissible

• The AAI and the Consumer Forum• Trademark protection/Self Regulations• Social Implications/Ethical Issues• Health and Environment Issues• Politically being correct : Gender/Sexual

Preferences

Legal Issues in Advertising

• Trade Mark Signs (Word, Colour, Picture etc.,)

• Patents Inventions (Products or Processes)• Designs• Copyright• Trade Secrets• Patents

Ethical Issues in Advertising

Starbucks Case Study

Advertising • Definition : Advertising is a public notice

meant to convey information and invite patronage or some other response.

Advertising Controversy• Information represents a distorted image of

reality• Response is negative

Public relations strategies• Mitigating harm• Responding to stakeholders needs• Repairing image

Ethical principles that apply in handling Advertising controversies

The Starbucks Case

• To some this was clearly offensive after 9/11

• To others this image is innocuous

New York Post, June 18th 2002:

“Starbucks Yanks Ad Mocking 9/11”

"As a New Yorker who watched the whole [Sept. 11] incident outside my window…seeing the poster in Starbucks directly across from Ground Zero adds some resonance that perhaps the people in Seattle did not grasp," fumed customer Gregory Moore, who first complained to the Post.

Starbucks response

"We deeply regret if this ad was in any way misinterpreted to be insensitive or offensive, as this was never our intent. The poster, promoting Tazo Citrus and Tazoberry beverages, was designed to create a magical place using bright colors and whimsical elements such as palm trees and dragonflies."

Starbucks Press Release 6/16/2002

Why Recognizing the Ethical Dilemma Matters

• These are immediate decisions which will forever affect the public's opinion of the company and the value of the world wide brand.

• If the company does not identify or recognize ethical aspects of crisis, it’s too late.

Schemas and Scripts: When Are You in An Ethical

Dilemma?• Starbucks Collapse into Cool:

– Action: Recognize post-9/11 environment & immediately pull the ads

– Result: stakeholders protected

Social Aspects of Advertising

The advertising philosophy of United Colors of Benetton is based on Luciano Benetton's belief that 'communication should not be commissioned from outside the company, but conceived from within its heart.'

“All the colors of the world” was one of the first slogans to appear in Benetton ads, and was later altered to “United Colors of Benetton.” The concept of united colors was such a strong one that for the first time in its history, the company adopted the slogan as its actual logo. Creative Head : Oliviero Toscani

Benetton’s long journey toward its destiny as a subverter of stereotypes began with its cooperation with Oliviero Toscani and the images of the 1986 campaign. Happy groups of multiracial kids were replaced by “couples” representing an all-new interpretation of difference. In this cycle, the word “different” became a close cousin of “controversial.” Benetton learned that dealing with the issue of difference within the process of advertising is not an easy task. Often, an attempt to bring different individuals together can lead to conflict instead of happiness and euphoria.

After equality and the exaltation of differences, Benetton turned to the reality of what is common to all and shared by humankind. The dialogue that Benetton had begun with its “consumers” (whom it had always viewed, above all, as men and women) gained depth.In 1991, during the Gulf War, this image was created, a photo of a war cemetery: To opposition against the irruption of “death” as an advertising subject, Benetton answered with a birth, the famous image of a newborn baby still attached to the umbilical cord.

At this point, the language of Benetton communication changed radically. With the February ’92 campaign came the scandal of planetary proportions. These ads showed news photos of real, high-drama situations: a man dying of AIDS, a soldier gripping a human thigh bone, a man assassinated by the Mafia, a car on fire, a ship being

stormed by emigrants.

The reaction to these real-life photos was sometimes violent. Many publications in several countries refused to print the campaign. By eliminating the product from its ads, violating the taboo of disagreeable themes, associating its name with the representation of conflict and pain and, above all, abandoning the false, comfortable world of advertising stereotypes, Benetton cracked the foundation that held up the culture, language and specificity of the classic advertising message.

King James I counterblaste

• ...a custom lothesome to the eye, hateful to the nose, harmful to the brain, dangerous to the lungs, and in the black and stinking fume thereof, nearest resembling the horrible stygian smoke of the pit that is bottomless (1604)

Tobacco in Society

• Unique consumer product– Kills 1 in 2 – Addictive– Almost unregulated

• Pervasive drug use – Nicotine self-administration– Dirtiest possible delivery system– 10 million dependent on nicotine

Who smokes?• 13m smokers

– 28% men– 26% women– 15% professional– 39% manual unskilled

• 82% start as teenagers• 70% want to quit

– 4m try in any year– c. 300,000 succeed – 10m ex-smokers

Health impacts• Harm to smokers

– 120,000 UK premature deaths per year– over 50 health impacts– addiction c.10m dependent in the UK

• Harm to others– lung cancer, heart disease, asthma– pregnancy complications and cot death – 17,000 hospital cases per year in under-5s– welfare

Some Impacts

• Cancer• Heart & Circulation• Respiratory• 20 fatal illnesses• 50 non-fatal illnesses • Widespread addiction• Cost burden• Productivity

• Deforestation• Indoor air pollution• Waste & Litter• Ozone depletes

Pesticides• Labour exploitation• Fires• Criminal activity

Teenage Smoking

Politics: Two Views

• A legal adult consumer product that people are free to choose if they want to enjoy the pleasure of smoking, knowing and accepting the widely publicised and usually overstated risks.

• A lethal product with over 50 known health impacts - including harm to non-smokers - sold by a predatory industry which nurtures teenage smoking until nicotine addiction takes over.

How it works - part 1

Younger adult smokers are the only source of replacement smokers... If younger adults turn away from smoking, the industry must decline, just as a population which does not give birth will eventually dwindle.

(RJ Reynolds, 1984)

How it works - part 2

A cigarette for the beginner is a symbolic act. I am no longer my mother's child, I'm tough, I am an adventurer, I'm not square …

As the force from the psychological symbolism subsides, the pharmacological effect takes over to sustain the habit.

(Philip Morris,1969)

Responses

• Informed choice v. disinformation• Tobacco promotion• Taxation• Smoking in public and workplaces• Smoking cessation support• Reduce harmfulness of the product

Warning...

“The tobacco industry has succeeded where many health education programs have failed because they capitalize on the deep social needs that most compel adolescents: to fit in, to exert independence from parental control, and to demonstrate physical agility and sexual allure.”

Smoking in public places

Process of Communication Wilbur Schramm Model

Linear Model of Communication

Realms ofUnderstanding

Source Encoding Decoding Receiver

MESSAGE

Noise NoiseFEEDBACK

SENDER RECEIVER

CHANNEL

Linear Model

Wilbur Schramm (1955) – Basic Model of Communication

1. Source : Individual/Organization sending the message

2. Encoding : transferring intended message to symbolic style that can be transmitted

3. Signal : transmission through particular media4. Decoding : understanding and interpreting the

symbolic style5. Receiver : Individual/org receiving the message6. Feedback : Receivers Communication Back to source7. Noise : distortion of the communication message

Realms of Understanding

The concept ‘realms of understanding’ is an important element in the concept of communication process because it recognizes that successful communications are more likely to be achieved if the source and the receiver understand each other. This understanding concerns attitudes, perceptions, behaviour, and experience.

The Other Forms/Role Players

• One Step• Two Step• Multi Step• Word of Mouth• Opinion Leaders• Opinion Formers• Opinion Followers

Process of Adoption

New Product Adoption Theory

• ADOPTION PROCESS - The consumer decision stages that lead to

innovation acceptance/rejection - A micro process process that focuses on

internal forces of the consumer* Intra Personal (Psych) Influences* Inter Personal (Social) Influences* Product Selection Criteria

Process of Adoption

Knowledge ConfirmationImplementationDecisionPersuasion

Communication Channels

Prior ConditionsNeeds/Problems

SocioeconomicPersonalityCommunication

Relative AdvantageCompatibilityTriability

Adoption

Rejection

Contd. AdoptionLater Adoption

Discontinuance

Continued Rejection

Rogers 1983

Example

• Knowledge – Rahul cleans his teeth, begins to notice sensitivity

• Persuasion – Notices that ‘Special Paste’ claim they reduce sensitivity. Friend also confirms

• Decision – Prepared to believe. Given free sample ( or special price deal)

• Implementation – Buys and tests it• Confirmation – Improves. Reads article that

whets it. Continues to buy it

An Example

Reliance India Mobile

Category Need : Knowledge/Persuasion

Awareness

Brand Awareness : Decision

Implementation

Brand Facilitation/Purchase Intention

Web Worlds501 SchemeFree Talk

Process of Diffusion

New Product Diffusion Theory

- the spread of an innovation from its source to the ultimate consumer.

- a macro process that focuses on external forces on the consumer (change agents, channels of information, types of information)

- occurs in a social system (a target audience, community, etc.)

Some Examples for Discussion

2.5% 13.5% 34% 34% 16% 2.5% 13.5% 34% 34% 16%

Innovators

Laggards

Late Majority

Early Majority

Early Adopters

• Innovators : Like new ideas have large disposable incomes

• Early Adopters : Large opinion leaders, important in speeding diffusion, younger and educated. Consult people. Imp to Mktg Comms. As they speed process.

• Early Majority : Usually opinion followers, average age, education, social status and income.

• Late Majority : Skeptical of new ideas, adopt because of social and economic factors

• Laggards : Suspicious of all new ideas. Lowest on rung.

is influenced by…

* Competitive Intensity * Good Supplier Reputation * Standardization of Technology * Vertical Channel Coordination * Resource Commitments

Speed of Diffusion

Advertising Managment PPT Part 1

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