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Chapter 7

Advertising Planning and Strategy

1
Learning Objectives
Learn about major components of the
advertising plan.
Understand the importance of setting objectives.
Discuss the success factors of introductory
advertising and the relationship between
advertising and sales.
Discuss various budgeting methods used in
advertising.

2
The Advertising Planning Cycle

1. Where are we? 2.Why are we there?

3.Where could we be?

5. Are we getting there? 4. How could we get there?

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Advertising Planning and Decision Making

Situation Consumer/Market Analysis


Analysis Competitive Analysis

Role of Advertising, Sales


Marketing Force, Price, Promotion, Public
Program Relations

The Objectives/Segmentation/Positioning
Communication/ Advertising Message Strategy and Tactics
Persuasion Plan
Media Strategy and Tactics
Process

“Facilitating” Agencies
Implementation Social and Legal Constraints

Figure 2-1 Framework for advertising planning and decision making 4


The Advertising Plan

An Advertising Plan Matches the Right


Audience to the Right Message and Presents
It in the Right Medium to Reach That
Audience & Has Three Elements.
Targeting the Audience: Whom are you trying to
reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach them?

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Understanding of Comm.
Process
A typical communication process model
A model of persuasion process
 Ad exposure
 Different functions of advertising messages

 Brand attitude

 Purchase behavior

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Developing an Advertising
Plan
Advertising objectives and target market
selection
Creative plan: Message strategy and tactics
Media plan: media strategy and tactics
Evaluation (research)
==> IMC approach: identify roles of various
forms of IMC and repeat the process.

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Typical Advertising or Campaign
Plan Outline (Tab. 7.1)
I. Introduction
• Executive Summary or Overview is provided.
I. Situation Analysis
• Advertising Problems
• Advertising Opportunities
I. Key Strategy Decisions
• Advertising Objectives
• Target Audience
• Competitive Product Advantage
• Product Image and Personality
• Product Position 8
Typical Advertising or Campaign
Plan Outline (Tab. 7.1)
IV. The Creative Plan
V. The Media Plan
VI. The Communication Plan
• Sales promotion
• Public relations
• Direct marketing
• Personal selling
• Sponsorships, merchandising, packaging, etc.
IV. Implementation and Evaluation
V. Evaluation
VI. Budget

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Situation Analysis
Opportunity analysis: to spot and
capitalize on favorable demand trends
 examples of such trends
Competitive analysis: to achieve and
maintain a “competitive advantage”
 examples of competitive advantages
Target market selection
 examples of target marketing
==> Marketing plan (4Ps)
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Creative Platform & Message Strategy

Creative platform is a document that


outlines the message strategy decisions for
an individual ad.
Creative platforms combine the basic
advertising decisions – problems,
objectives, and target markets – with the
critical elements of the sales message
strategy – main idea and details about how
the idea will be executed.
11
Selling Premises
Advertisements
Advertisementsthat
thatfocus
focus ononthe
the product
product
Product
Product itself by looking at attributes.
itself by looking at attributes.

Product
Productis
ispromoted
promotedononthe
thebasis
basis of
ofwhat
whatitit
Benefit
Benefit can
cando
dofor
for customers.
customers.

Promises
Promisesthat
thatsomething
somethingwill
willhappen
happenififyou
you
Promises
Promises use the advertised product.
use the advertised product.

Based
Basedononlogic
logicand
andreasoning
reasoningand
andclearly
clearly
Reason
Reason Why
Why states
statesaareason
reasonfor
forthe
thebenefit
benefitgained.
gained.

Unique
Unique Selling
Selling AAbenefit
benefitstatement
statementthat
thatis
isboth
bothunique
uniquetotothe
the
Proposition
Proposition product and important to the user.
product and important to the user.

Support
Support Lends
Lendscredibility
credibilityto
tothe
theselling
sellingpremise.
premise.

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Defining Advertising Goals for Measured
Advertising Results (1962, 1995, S. Dutka)
The 6M approach
 Merchandise: important benefits to sell
 Markets: who to reach

 Motives: why people buy or fail to buy

 Media: how to reach

 Measurements: how to evaluate (time and


change)
 Messages: key ideas to convey to move

13
Setting Objectives
Why set objectives?:
-- Planning and decision making
-- Communication
-- Measurement and evaluation
Sales vs. Communication objectives
-- Problems with sales objectives
 When sales objectives are appropriate
-- Challenges with communication objectives
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What is Good Objectives?
Specify a well-
Concrete and
defined audience
Measurable

Attainable Good Objectives


Specify a time
period
Establish bench-
Mark measures Realistic
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Setting Objectives Using the
Communications Effects Pyramid
Product: Backstage Shampoo
Time period: Six months
Objective 1: Create awareness among 90 percent
of target audience. Using repetitive advertising in
newspapers, magazines, TV and radio programs. Simple
message.
Objective 2: Create interest in the brand among 70
percent of target audience. Communicate information
about the features and benefits of the brand-I.e., that it contains
no soap and improves the texture of the hair

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Setting objectives using the
communications effects pyramid
Objective 3: Create positive feelings about the brand
among 40 percent and preference among 25
percent of the target audience. Create favorable attitudes
by conveying information, promotions, sampling, etc.
Objective 4: Obtain trial among 20 percent of the
target audience. Use sampling and cents-off coupons along
with advertising and promotions
Objective 5: Develop and maintain regular use of
Backstage Shampoo among 5 percent of the target
audience. Use continued reinforcement advertising, fewer
coupons and promotions

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Factors Related to Success of
Advertising for New Products
1.Communicating that something is different
about the product. Successful introductory
commercials communicated some point of difference
for the new product
2.Positioning the brand difference in relation
to the product category. Successful
commercials positioned their brand’s difference within
a specific product category. For example, a new
breakfast product was positioned as the “Crispiest
cereal”or a new beverage as the “smoothest soft
drink.”

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Factors Related to Success of
Advertising for New Products
3.Communicating that the product difference
is beneficial to consumers. Nearly all of the
successful commercials linked a benefit directly to the
new product’s difference.
4.Supporting the idea that something about
the product is different and/or beneficial to
consumers. All the successful commercials
communicated support for the product’s difference
claim or its relevance to consumers. Support took the
form of demonstrations of performance, information
supporting a uniqueness claim, endorsements, or
testimonials.
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Several Ways to Increase Sales
(what mktg.comm. can do to help?)
New customers from other brands
New customers from other categories
Increasing share of requirements (SOR)
Increasing brand loyalty and reducing
attrition and price elasticity
Increasing usage

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McDonald’s Advertising Response Function
s el a S

Advertising

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Relationship of Adv. to Sales & Profits
In consumer goods marketing, increases in market share are
closely related to increases in the marketing budget.
There are minimum levels below which advertising
expenditures have no effect on sales.
Sales normally increase with additional advertising. At some
point, however, the rate of return declines.
There will be some sales even with no advertising.
Sales response to advertising may build over time, but the
durability of advertising is brief, so a consistent investment is
important.
Culture and competition impose saturation limits above which
no amount or advertising can increase sales.

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Advertising Budgeting
Methods
Objectives-and-tasks method
Percentage-of-sales method
Competitive parity method
All-you-can-afford
Arbitrary allocation
Quantitative or experimental model

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The Advertising Budgeting
Methods
•Common
•Commonbudgeting
budgetingmethod.
method.
•May
•May be based on lastyear’s
be based on last year’swith
with
Historical aapercentage increase.
HistoricalMethod
Method percentage increase.
•Nothing
•Nothingto
todo
dowith
withadvertising
advertising
objectives.
objectives.

•Most
•Mostcommon
commonmethod.
method.
Task-Objective
Task-ObjectiveMethod:
Method: •Looks
•Looks at objectivesset
at objectives setfor
foreach
each
Bottom-Up activity, and determines the cost
activity, and determines the cost
Bottom-Up of
ofaccomplishing
accomplishingeacheachobjective.
objective.

•Compares
•Comparestotal
totalsales
saleswith
withthe
thetotal
total
Percentage-of-Sales
Percentage-of-Sales advertising (or marketing
advertising (or marketing
Method
Method communication)
communication)budget
budgetduring
duringaa
previous
previoustime
timeperiod
periodtotocompute
computeaa
percentage.
percentage.
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The Advertising Budgeting
Methods
•Relates
•Relatesthe
theamount
amountinvested
investedin
in
Competitive
CompetitiveMethods
Methods advertising to the product’s share
advertising to the product’s share
of
ofmarket.
market.
•Must
•Mustunderstand
understandshare-of-mind.
share-of-mind.

•Allocates
•Allocateswhatever
whateverisisleft
leftover
overto
to
All
AllYou
YouCan
CanAfford
Afford advertising.
advertising.
•Companies
•Companieswhowhouse
usethis
thisdon’t
don’t
Method
Method value advertising very much.
value advertising very much.

25
Top-10 Beer Brands’ SOMs and SOVs (1997)

Media
Total Sales Expenditure
Brand ($ Billions) SOM ($ Millions) SOV
1. Budweiser $ 35.6 29.2% $ 98.4 20.4%
2. Bud Light 22.8 18.7 55.7 11.5
3. Miller Lite 16.2 13.3 149.0 30.8
4. Coors Light 13.7 11.2 91.9 19.0
5. Busch 7.9 6.5 2.4 0.5
6. Natural Light 7.1 5.8 0.1 0.0
7. Miller Genuine Draft 5.5 4.5 21.5 4.4
8. Miller High Life 4.7 3.9 61.1 12.6
9. Busch Light 4.5 3.7 0.0 0.0
10. Milwaukee’s Best 3.9 3.2 3.1 0.6
TOTAL $ 121.9 100% $483.2 100%

26
Review
Learn about major components of the
advertising plan.
Understand the importance of setting objectives.
Discuss the success factors of introductory
advertising and the relationship between
advertising and sales.
Discuss various budgeting methods used in
advertising.

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