1

Overview of Overview of Advertising Advertising

ManagementManagement

Chapter Eight

2

Advertising FunctionsAdvertising Functions

Informing

Persuading

Reminding

Adding Value

Assisting Other Company Efforts2

3

Advertising FunctionsAdvertising Functions

Informing

• Makes consumers aware, educates them about the features and benefits, and facilitates the creation of positive brand images

• Facilitates the introduction of new brands and increases demand for existing brands

• Performs another information role by: 3

4

Advertising FunctionsAdvertising Functions

Persuading

• Persuades customers to try advertised products and services

• Primary demandPrimary demand: • Secondary demandSecondary demand:

4

5

PersuadingPersuading

Gillette MACH3

6

Advertising FunctionsAdvertising Functions

Reminding

• Keeps a company’s brand fresh in the consumer’s memory

• Influences brand switching by:

6

7

Advertising FunctionsAdvertising Functions

Adding Value

• Three basic ways by which companies can add value » innovating» improving quality» altering consumer perceptions

• Advertising adds value to brands by: 7

8

Advertising FunctionsAdvertising Functions

Assisting Other Company Efforts

• Advertising is just one member of the marketing communications team

• Sometimes, an assister that facilitates other company efforts in the marketing communications process

• Examples?8

9

The Advertising Management ProcessThe Advertising Management Process

Advertising Strategy

• Setting Objectives•Formulating Budgets

•Creating Ad messages•Selecting Ad Media and Vehicles

Strategy Implementation

Assessing Ad Effectiveness 9

10

Setting Advertising ObjectivesSetting Advertising Objectives

• Expression of management consensus• Guides the budgeting, message, and

media aspects of advertising strategy• Provide standards against which results

can be measured

10

19

Budgeting ConsiderationsBudgeting Considerations in Practice in Practice

• What is the Ad objective?• How much are competitors spending?• How much money is available?

20

Budgeting MethodsBudgeting Methods

• Percent-of-Sales Budgeting• Objective-and-Task Method• Competitive Parity Method

(match competitors method)• Affordability Method

21

Percentage-of-Sales BudgetingPercentage-of-Sales Budgeting

• A company sets a brand’s advertising budget by simply establishing the budget as a fixed percentage of past or anticipated sales volume

• Criticized as being illogicalWhy??

22

Objective-and-Task MethodObjective-and-Task Method

• The most sensible and defendable advertising budgeting method

• Specify what role they expect advertising to play for a brand and then set the budget accordingly

23

The Competitive Parity MethodThe Competitive Parity Method

• Sets the ad budget by basically following what competitors are doing

24

Affordability MethodAffordability Method

• Only the funds that remain after budgeting for everything else are spent on advertising

• Only the most unsophisticated and impoverished firms

• However, affordability and competitive considerations influence the budgeting decisions of all companies

25

Research WorkshopResearch Workshop

• Guiding Questions

• Specific Research Issues

• Lifeline Procedures

• Budget & Reimbursement Procedures

26

Research WorkshopResearch Workshop

• Guiding Questions

» Why did FIJI ask for our input? What is our “value added” to their efforts?

» What will distinguish my team’s efforts from all others’ work?

27

Research WorkshopResearch Workshop

• Specific Issues in Conducting Consumer Research» Focus groups, surveys, observations» Plan your questions ahead in detail» Select sample(s) carefully» Sensitivity, confidentiality, ethics (the

Tribune test)

28

Research WorkshopResearch Workshop

• Lifeline Procedures» How to communicate with FIJI» Prescreen your questions» Thank you’s

• Budget & Reimbursement Procedures» Submit itemized receipts, batched, once per team» If you aren’t sure, check ahead on what is reimbursable» Cash payments to individuals for participation in research

require documentation, SSNs.