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Marketing Management

Dawn Iacobucci

2010 South-Western, a part of Cengage Learning

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Advertising Media and Integrated

Marketing Communications

Chapter 10

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Marketing Framework

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Advertising Media

Ad budgets are usually fixed, so choicesmust be made on how to allocate

resources across media1. How much do we spend?

2. When do we spend?

3. Which media do we use?

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How Much Do We Spend?

Ad budget as a percentage of sales

Use past percentage or industry norm

Make adjustments based on marketinggoals

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How Much Do We Spend?

Ad budget approximately on par withcompetitors

Service providers track companies adexpenditures

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How Much Do We Spend?

When sales decline, previousapproaches imply budgets should be cut

Smaller ad budgets mean less presenceand a cycle of decreased sales

The strategic advertising goal approach

views advertising as an investment Determine advertisings goal and work

backward to calculate expenditure

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Discussion Question

Should advertising be seen as anexpense or an investment? Why?

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Reach, Frequency and GRPs

Reach: the share of your target that hasseen your ad at least once

Frequency: the average number of timestarget saw the ad (within set duration)

GRPs: Reach X Frequency

Ad reached 25% of target an average of 3times - the ad delivered 75 GRPs

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Reach & Frequency

For reach, the goal is to expose as manyof the target customers as possible

Find most cost efficient media for reachingtarget

For frequency, it depends on the goalAwareness and memory can probably be

attained with a few ads Persuasion may take more

If ad/product is readily understood, wear-outmay occur

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Media Planning

You pay more to get more--but therelationship is not perfect

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Return on Marketing Investments

Example Greys Anatomy: 9.3 million TVs

Greys Anatomy:$440,000 per 30 seconds McDonalds meal contribution: $0.50

$440,000/0.50 = 880,000 meals/breakeven

9.3 million viewers are exposed; thus,

McDonalds needs 9.5% to purchase 880,000 / 9.3 million = 9.5%

The question isIs this reasonable?

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Media Planning

Continuous: regularity in ad exposure Periodicity depends purchase cycles

Coca-Cola, McDonalds, Ford, etc.

Occasional: pop up from time to time Periodicity depends on purchase cycles

Seasonal: infrequent and focused on thepreterm season for the product School supplies in August, grills in April, etc.

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Discussion Questions

What type of schedule (continuous,occasional or seasonal) would you use if

you were marketing Coca-cola?

What about your school?

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Media Selection

The choice of media outlet is difficultbecause

There are more media outlets e.g., more television stations, more radio

stations via XM, the Internet, etc.

Audiences are fragmented across the many

media and use technology to zip past ads

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IMC

IMC: marketing messages must beseamlessly integrated across media

Positive relationship between IMC and goodbrand outcomes High awareness, brand loyalty, sales, etc.

Some elements should be consistent, someshould vary based on the strengths of thevarious media

Difficult to implement because adagencies are not full service providers

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Discussion Questions

How has Pepsi or Coca-Colaimplemented IMC? Give several

examples.

Can you give any examples of

companies who do not effectivelyimplement IMC?

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Media Strengths-Business

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Business Strengths of Media

TV ads are most expensive yet yield thelargest reach

Magazines have broad appeal or can betargeted

Radio and newspapers are often

purchased nationally, but can bepurchased for local markets

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Business Strengths of Media

Radio, newspapers, and magazines areless expensive than TV, but they also

deliver smaller audiences Billboards, bus ads, yellow page ads,

etc. are relatively inexpensive andeffective in covering local numbers

Magazines require long lead times forproduction but have nice reproductionquality

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Business Strengths of Media

Newspapers and magazines arenonintrusive but viewers can ignore ads

Online advertising and direct mail havethe best customization options

Online ads are inexpensive and can be

targeted, yet, penetration isnt 100% Direct mail is relatively inexpensive and

targeted, but it is not efficient (junk mail)

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Media Strengths-Ad Content

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Ad Content Strengths of Media

TV messages need to be simple andstraightforward; radio messages even

more so TV allows for vivid, dramatic portrayals

Print vehicles are good for detailed

product information

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Discussion Question

If you were a local restaurant, which typeof media would you use to advertise?

Why?

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Beyond Advertising

IMC goes beyond integrating acrosstraditional media. It includes personal

selling, sales promotions, publicrelations, etc.

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Personal Selling

Personal selling and a companyssales force are essential

communication vehicles for manyindustries

Accounts for 14 million jobs

Over 10% of work force

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Personal Selling

Get attention of potential customer e.g., prospecting, qualifying potential

customers, and approaching them

Get interest e.g., sales presentations

Get desire

e.g., product demonstrations, handlingcustomers objections

Get action e.g., closing deal, following up service

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Advertising & Selling

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Discussion Question

Do you think marketers of dry eraseboards should use personal selling? Why

or why not?

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Designing a Sales Force

How many salespeople do I need?

Larger with an aggressive launch

Where do I deploy them?

How do I compensate them? Proportion of salary and commission

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Designing a Sales Force

Pull relies on advertising and salespromotions Direct promotional efforts to consumers

Push relies more on personal selling Direct promotional efforts to channel members

Trade allowances: price reductions to

intermediaries for allocating space, etc. May be passed on to retailers salespeople as cash,

training and product demonstrations, freemerchandise, conventions, etc.

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Discussion Questions

How might Maytag implement a pushstrategy? What about a pull strategy?

Do you think they do both? Why or whynot?

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Public Relations

PR communications are the attempt ofan organization to reach

Customers, suppliers, stockholders,government officials, employees, generalcommunity

PRs intention is to convey a positiveimage and to educate a constituencyabout the companys objectives Generate goodwill on behalf of the company

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PR People

Issue press kits - news releases whenanything newsworthy is happening

Features news (e.g., product launch),company information, bios, history, etc.

Maintain information on web site

Arrange events Speaking engagements, sponsorships,

philanthropy, etc.

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Publicity

Communication tool that the companydoesn't pay for

It has the appearance of objectivity PR can prepare press releases, but there is

no guarantee that they will be picked up

Publicity can be negative or positivebecause companies cannot directlycontrol it

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Discussion Questions

Can you describe the effects of negativepublicity?

For example, describe the effects Ford andFirestone experienced following the SUVtire blow-out incidents.

Can negatively publicity be managed? Ifso, how?

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Product Placement

Product placement is when products areintegrated into shows More subtle than ads

e.g., Hannah Montana with Adidas

Becoming increasingly popular as

consumers increasingly zap ads Over $1 billion annually Is currently illegal in most of Europe

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Event Sponsorship

Event sponsorship can occur in sports,cultural or artistic endeavors Brands draw from their positive valence and

high positive energy Nascar racing

Not clear that sponsorship is cost-effective When Coca-Cola sponsors the Olympics, do

they really need the exposure?

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Sales Promotions

Sales promotions activate purchaseinterest, thus effecting short-term sales

Coupons Rebates

Promo prices

Trade-ins

Deals for loyalty programs

Free trial-sized products

Contests/sweepstakes

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Discussion Question

Why might Nationwide Insuranceallocate money to sponsor Nascar

instead of allocating money forsweepstakes?

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IMC Choices Depend on

1. The target audience

2. The companys goals

Awareness Information about features and benefits

Enhancement of brand attitudes

Strengthening of preferences

Stimulation of purchase trial Encouragement of repeat purchasing

Attraction of brand switchers

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Questions to Ask

Should we schedule continuously,occasionally or seasonally?

What is the consumers purchase cycle? What is the level of saturation desired?

What life cycle stage is the product in?

What can we afford?

What is best for our target?

What do we want the target to know?

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Example: IMC Schedule

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Media Effectiveness

If goal is awareness, reach matters Can be measured by viewership, readership,

circulation numbers, traffic indices, etc.

If goal is attitude adjustment, use surveys

It can be difficult to assess ROMIbecause customers cant always tell youwhere they saw the ad

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Media Effectiveness

If you spend more on advertising, do yousee more in sales?

Increasing ad budget relative to thecompetition doesnt increase sales in general

Qualitative differences, such as better adcopy, can increase the likelihood that TV

advertising will positively affect salesAds that evoke positive and not negative

feelings have been related to sales

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Media Effectiveness

Online advertising

Track click-thru rates, downloads, inquiries,

purchases, returns, etc. & compare with costper click, per download, per acquisition, etc.

Online ad cost effectiveness is not great, butcost is low

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Discussion Question

If increased advertising spending doesnot lead directly to increased sales, why

do it?