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ADVT2509 Notes Sheet

Multiple Choice

TEXTBOOK

Long Answer Questions

Branding & Building Relationships with the Database

Digital Bonding
- People bond with brands online and on mobile devices.
- Best way to understand how consumers engage online:
- Plot level and timing of brand interactions across the day
EG. Beauty products pick the best time to talk to women (NOT ON A MONDAY MORNING)

Do I look like I want

makeup advertised to me
on a Monday morning?

NOPE!

Companies need to target these consumers at a specific time of the day or week, in order to
uncover when they will be most engaged in their ads.

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Online Brand Communities

Most people are members of a Brand Community.
A Brand community is created by the Brand or its Members.
These communities promote:
consumption
socialise new members
build brand liking and loyalty

What are the common characteristics of a brand community?

- Consciousness of a sense of belonging

- Shared Rituals and Traditions
- A sense of Moral Responsibility or duty to the community.

The Database
Data INFORMS
and
ENHANCES
business
decisions.

Businesses generate
TRANSACTIONAL
DATA in the normal
course of doing
business

The Database epitomises the drive for:

Greater CONTROL
Superior INFORMATION
Tighter TARGETING
Reliable MEASUREMENT

Add VALUE to
transactions
and turn them into
RELATIONSHIPS

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Types of data:
Transactional:
Quantitative
Sales value, Sales History
Captured via Scanner data, Credit Cards, Loyalty Cards.

Relational:
Qualitative
LifeStyles, Values, Beliefs
Captured via Relationships, Online Contacts.

How to develop a Database:

1.
2.
3.
4.
5.
6.

The Product
Into the Database
Digesting the Data (Organising etc.)
Ideal Consumer (System finds the right consumer)
Using the Knowledge (Used for coupons, new product, Tailoring the message)
Sharing Data with Retailers (Registers track shopper transactions and are connected to
database)
7. Refining the Database (Update with information collected)

Sources of Database Information:

Government Agencies
Australia Post
List Services
ADMA (Association for Data Driven Marketing)

Determining the Effectiveness of the Database:

Many companies maintain, but do not use their databases effectively.
Theory:
More information about a consumer = more effective database

RFM Scoring Method: (Used on a consumer)

Recency (Recent transactions)
Frequency (How often are the transactions)
Monetary Transactions (Monitored transactions)

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Planning for IMC

IMC Strategic Decisions:

Target Marketing
Most products do not satisfy ALL consumers.
Therefore companies develop different strategies to segment and satisfy different consumer
needs. This is known as Target Marketing.
Target Marketing Process:

1. Identify Markets with Unfulfilled Needs

2. Determine Market Segmentation

3. Select Market to Target

4. Position yourself through Marketing Strategies

1. IDENTIFY MARKET

Isolates consumers with specific lifestyles, interests, needs and values, increases knowledge of
their requirements.
Effective Marketing: More common ground that can be established between marketers and
consumers.
Addressing requirements in Communication Program.
Informing/Persuading potential consumers that the product will meet their needs.

2. DETERMINE MARKET SEGMENTATION

Consumer Characteristics:
Geographic
Psychographic
Demographic
Behavioural
METHODS FOR SEGMENTING A MARKET

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These can be broken down in to:

Customer Characteristic Segmentations:
Geographic: Nations, States, Areas

Demographic: Gender, Race, Lifestyle

Socioeconomic: Income, education and occupation

Psychographic: Personality values

Buying Situation Segmentations:

Behavioural: Consumers level of involvement, and purchase behaviour towards a product or
service.
Outlets: Type of store where product is sold.
Benefit: Specific benefits consumers want from a product.
Awareness: Consumer product knowledge.
Usage: Level of use of the product.

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ADVT2509 Notes Sheet

USAGE
Consumer use of product
BEHAVIOUR
Consumer level of
involvement, purchase
behaviour towards product

OUTLETS
Types of store where
product is sold

BUYING SITUATION
(Type of segmentation)

AWARENESS
Consumer Product
Knowledge

BENEFITS
Benefits or outcomes
consumers want from a
product

3. SELECT TARGET TO MARKET

Selecting a Target Market:

a) determine the amount of segments you wish to enter. AMOUNT OF SEGMENTS
b) determine which segments offer the greatest potential. SEGMENT POTENTIAL

Positioning Strategy
The image of the product/brand in the consumers mind.
Marketers need to understand:
Target Market, and its attitudes to the category.
Product/Brand.
Positioning theme needs to be relevant in order to achieve resonance with consumers.

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Market Coverage Strategy

3 Basic Approaches to Market Coverage
1. Undifferentiated Marketing
1. Single Product/Service offered to whole Market. (WHOLE MARKET)
2. Differentiated Marketing
1. Different products for Different Segments.
(SEGMENTS)
3. Concentrated Marketing
1. Focus on Single Market or Few Markets.
(NICHE, SMALL SEGMENT)

4. POSITION THROUGH MARKETING STRATEGIES

Positioning:
is the art and science of fitting the product or service to one or more segments of the broad
market in such a way as to set it meaningfully apart from competition.
What are the questions must Marketers ask themselves?
1.
2.
3.
4.
5.
6.

What position do we have now?

(CURRENT POSITION)
What position do we want to be in?
(FUTURE POSITION)
From whom must we win this position?
(WHO OWNS THAT POSITION?)
Do we have the money to do the job?
(DO WE HAVE THE MONEY?)
Do we have the tenacity to stay with it? (DO WE HAVE THE WILL?)
Does our creative strategy match our positioning strategy? (DO OUR STRATEGIES MATCH?)

Positioning Strategies

Attributes and Benefits?

Price and Quality?
Use or Application?

How do we
position?

By:

Product Class?
Product User?
Competitor?
Cultural Symbols?

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1. Attributes and Benefits

1. Setting the brand apart from the competition using characteristics and benefits. Salient
Benefits.
2. Price and Quality
1. Brand Price association. High quality image pricing, value pricing.
3. Use or Application
1. Brand use association. How that brands use is perceived.
4. Product Class
1. Competition can come from outside a product class, whereby a product is positioned
against another product category.
5. Product User
1. Type of user association.
6. Competitor
1. Position brand against competitors.
7. Cultural Symbols
1. Position brand using symbols that have acquired cultural meaning.

DEVELOPING A POSITIONING PLATFORM

1. Identify the competitors

Consider all competitors. Look at other product classes and
substitute products.
2. Assess consumers perception of Competitors
How are our competitors perceived by consumers?
Market research is used to determine this

3. Determine competitors current position

What are our competitors positions , as well as ours, with
relation to important product /service attributes.
4. Analyse consumer preference
What are consumer purchase motives?
What attributes are important to them?
Determine a consumers IDEAL brand is the best way to
uncover this.

5. Make the positioning decision

The first 4 steps will lead to a decision on positioning

6. Monitor the position

Assessing how well the position is being maintained in the
marketplace

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Establishing Objectives and Budgeting for IMC

MARGINAL ANALYSIS:

Eg. Graph format.

The Graph shows:

Advertising/promotional expenditures increase = Sales and Gross Margin Increase.
Benefits of graph:
- Can be used to determine how much to spend on advertising.
- Shows where optimal expenditure Level is (Point A)
Weaknesses of graph:
- Sales are a direct result of advertising and promotional expenditures and this effect can be
measured.
- Advertising and promotion are solely responsible for sales.

PRINCIPALS OF MARGINAL ANALYSIS

Increase
Spending

If Increased cost LESS THAN Incremental (marginal) return

<

Hold
Spending

If Increased cost EQUALS Incremental (marginal) return

Decrease
Spending

If Increased cost MORE THAN Incremental (marginal) return

>

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ADVT2509 Notes Sheet

ADVERTISING SALES RESPONSE MODELS

A: The Concave - Downward Response Function

- The effects of advertising spending, follows the law of diminishing returns.
- As advertising increases, its incremental value decreases.
- Those with the greatest potential to buy, will likely act on it first based on advertising.
- Those less likely, are not likely to change as a result of advertising
B: The S-Shaped Response Function
- Assumes initial outlay of Advertising Budget has little impact (Range A)
- After a certain budget level has been reached, advertising and promotional efforts begin to have
an effect (Range B)
- Advertising Expenditures hit (Range C), spending will have less additional impact on sales

Top-Down Approach

Budget set by management

Money allocated to different departments
Ensure that promotional budget stays within a limit
Spending levels determined without any theoretical backing.

Top Management sets the spending limit

Bosses set
spending limit

Promotion budget set to stay within

spending limit

Promo budget
set within limit

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ADVT2509 Notes Sheet

Build-Up Approach
Consider a companies communication objects first
Then budget to attain these goals

Promotion objectives are set

Promo objectives

Activities needed to achieve objectives

are planned

Activities needed
to achieve

Cost of promotion activities are budgeted

Cost of promo
activities

Total promotion budget is approved by

Top Management

Promo budget
set by Bosses

TWO TYPES OF BUILD-UP BUDGETING METHODS

Objectives

1.
Objectives & Task :
Budget is set by
management based on
what they feel is
necessary. No theory to
back.

2.
Payout Planning :
Setting budget based on
what competitors spend.
Done by matching % of
sales expenditures as
competitors.

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ADVT2509 Notes Sheet

OBJECTIVE AND TASK METHOD

Another type of build up approach:

Establish
Objectives

Determine
Specific Tasks

Estimate Costs

Monitor

Re-Evaluate
Objectives

establishing objectivesestablish the specific communication objectives to be achieved

determine specific tasksdetermine the specific tasks needed to accomplish the
communication objectives. May include advertising in various media, developing programs
involving sales promotions and/or other elements of the promotional mix.
estimate costs associated with tasksdetermine what it will cost to perform the specific
tasks that must be performed to achieve the objectives
monitormonitor and evaluate performance in light of the budget appropriated
re-evaluate objectivesonce specific objectives have been attained, monies may be better
spent on new goals.

Media Strategy and Choices

WHERE TO PROMOTE?

Media planning begins by understanding the market.

Major Purpose of Media Strategy:
Channel Choice
Geographic

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ADVT2509 Notes Sheet

MARKET ANALYSIS
WHO DO WE PROMOTE TO?

A major issue in media planning is understanding the sources of information and media used
during the purchase decision.

Sources of Information

Internal Sources
Situation Analysis
Prior Research
Database

External Sources
Syndicated Research
Commissioned Research
Secondary Sources

MEDIA OBJECTIVES

Examples:
1. We want to reach 60% of the market, 3 times over the next 6 months
2. Use broadcast media to provide 80% of the target market over 6 months
3. Concentrate heaviest advertising in Winter and Spring.
REACH VS FREQUENCY

Advertisers have a number of objectives they have to face, therefore they must make trade offs
between reach and frequency.

Reach

Message seen/heard by more people

Frequency

Message seen/heard by less people more often

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EXAMPLES:
EG.1

Reach

EG.2

Frequency

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ADVT2509 Notes Sheet

INDICATORS

The media planner typically uses some type of benchmark for setting objectivessuch as GRPS,
which combines both reach and frequency.
Total audience ratings points (TARPs) are also a widely used measure of reach; they refer to the
number of people in the primary target audience the media buy will reachand the number of
times.
Unlike GRPs, TARPs do not
include waste coverage.

EFFECTIVE VS AVERAGE FREQUENCY

Average Frequency
Effective Frequency

Desired level of frequency

Observed frequency for an

actual or planned
campaign

By comparing Effective and Average

frequencies, planners are able to fine tune
advertising campaigns.

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SCHEDULING

The prime objective of media scheduling is to time advertisements, so that they will coincide with
the highest potential buying periods.

What are the 3 major scheduling methods?

continuity - continuous pattern of advertising (Every day, week, month)

flighting - Intermittent periods of advertising and no advertising
pulsing - Combination of 2 above (continuity maintained, sometimes increased)
Continuity
Advantages:
Constant reminder to consumers
Covers entire buying cycle
Media Priorities (discounts, locations)
Disadvantages:
High costs
Potential of overexposure
Limited media allocation possible

Flighting
Advantages:
Cost effective only during purchase cycles
May allow inclusion of more than one medium with limited budgets
Weighting may offer more exposure and advantage over competitors
Disadvantages:
Likelihood of wearout
Lack of awareness, interest, retention of promotional message during non-scheduled
times
Vulnerable to competitive efforts during non-scheduled periods

Pulsing
Advantages:
All of the same from the above
Disadvantages:
Not required for seasonal or cyclical products