What is Advertising? • It is any paid form of non – personal presentation and promotion of ideas, goods, services by an identified sponsor.
The 5 Ms of Advertising • Mission – objectives • Money – budgets • Message – communication • Media – what vehicles? • Measurement - evaluation
Advertising Goal • A specific communication task to be achieved to a specific degree to be communicated to a specific target audience in a specific period of time.
Advertising objectives • Informative • Persuasive • Comparative • Reminder (reinforcement)
How much to spend? Depends on the product • What stage in the PLC • Market share and the consumer base • Competition and clutter • Ad frequency • Product substitutability
Message generation • The greater the no. of alternatives, the better is the likelihood to hit upon an excellent message • A good ad focuses on one core selling proposition • Messages may be rated on desirability, exclusiveness and credibility
Message execution Messages can take one of the following two routes • Rational • Emotional The Creative department has to decide on the tone, format, style and words that would go into the creation of the ad message. They must ensure that it is not ‘deceptive’ or indulging in ‘puffery’.
Media selection • The most cost effective media mix to ensure achievement of the advertising goal.
How should you select media? • Reach • Frequency • Impact
Reach • No. of persons exposed to a particular media schedule at least once during a specified time period
Frequency • No. of times within the specified period that a person is exposed to that message
Impact • Qualitative value of an exposure through a given medium • GRP (Gross rating points) = R * F • Wt. GRP = R * F * I
Advertising Effectiveness • It is a measure of the total advertising effort of a company in relation with the performance of the company in the market. • Ad Effectiveness = SOM/SOV * 100 • A figure less than 100 indicates an ineffective level of expenditure;a figure above 100 indicates a high level of effectiveness
Sales Promotion • Whereas advertising gives a reason to buy, SP gives an incentive to buy
Advertising vs. Sales Promotion • 80’s and 90’s – Ad : SP :: 60 : 40 • 00’s Ad : SP :: 40 : 60 • In some industries the skew in favour of SP is even much more like liquor and tobacco
Reasons for greater use of SP - Internal • Accepted by top management as an effective marketing tool • More product managers are qualified to use SP • Field sales are under greater pressure to achieve current sales
Reasons for greater use of SP - External • Proliferation of brands • Frequent use by competitors • Similarity of brands “me – toos” • Consumers are more price savvy • Trade demands to liquidate inventories, even to stock • Declining ad efficiencies
Advantages of SP • Induces trials • To reward loyal customers • To induce stocking by the trade • Adjust to short term variations in trade • Liquidating inventories • Preempting competition
Disadvantages of SP • With too many promotion schemes ‘promotion clutter’ confuses consumers • Attracts ‘brand switchers’ and ‘deal prone’ customers • Dilutes brand equity • Preponement of purchases • Lowers margins • Expensive and wasteful, when not handled properly
Types of SP • Trade • Consumer
Trade Promotion • Schemes • Signage • Shelf space buying • Display windows buying and display schemes • Lucky draws • ‘Mystery’ customer schemes • Sales contests
Loyalty programmes Multipacks Free samples Free trials Trade – ins Cash rebates Free gifts In – packs Price packs Coupons Lucky draws Price -offs Consumer Promotions
Developing a SP campaign • Planning the programme • Duration • Incentive to be given • Assessing viability • Pretesting • Implementing and controlling • Evaluation
Public Relations • Involves a variety of programmes to promote or protect a company’s image or products
Functions of PR • Media relations • Product publicity • Corporate communications • Lobbying • Counseling
Marketing PR • Assisting in new product launches • Assisting in repositioning of product • Building interest in product category • Influencing specific target groups • Defending products that have encountered public problems • Building corporate image that rubs off on the products
Advantages of MPR • Building awareness • Building credibility • Stimulate sales force and dealers • Holds down promotion costs
The bottom line • PR is difficult to measure, but if consistently pursued with, it can have tremendous synergy with advertising and sales promotion, thereby reducing overall promotion costs