Promotion : Defined

• As per Jauhari and Dutta 2012

“ The managerial process of IMC between the organization and its target audience,
to facilitate exchanges for mutual benefit and to generate attitudinal and behavioural
responses before, during and after the exchange has taken place”
The Role of Promotion in the Marketing Mix

Overall Marketing Promotional Mix

Objectives
• Advertising
• Public Relations
Marketing Mix • Sales Promotion
• Personal Selling
• Product
• Place
• Promotion
• Price

Target Market Promotion Plan

Goals and Tasks of Promotion

Informing Reminding

PLC Stages: PLC Stages:

Introduction Maturity
Early Growth Target
Audience

PLC Stages:
Growth
Maturity Persuading
Goals and Tasks of Promotion

Reminder Promotion

▪ Remind customers that product

may be needed

▪ Remind customers where

to buy product

▪ Maintain customer awareness

The Promotional Mix

Promotional
Mix Combination of
promotion
tools used to reach
the target market and
fulfill the
organization’s overall
goals.
◆ Advertising
◆ Public Relations
◆ Sales Promotion
◆ Personal Selling
◆ Direct Marketing
◆ Public Relation and Publicity
The Promotional Mix
The Promotional Mix

dve rtising
A
Impersonal, one-way
mass communication
about a product or
organization that is paid
for by a marketer.
Advertising
Advantages Disadvantages

◆ Reach large number ◆ Total cost is high

of people
◆ National reach is
◆ Low cost per expensive for small
contact companies

◆ Can be micro-
targeted
Public Relations

Public
ons The marketing function that
Relati
evaluates public attitudes,
identifies areas within the
organization that the public
may be interested in, and
executes a program of action
to earn public understanding
and acceptance.
The Function of Public Relations

◆ Main
tain a p
◆ Educ ositive
ate the image
compa public
ny’s ob about t
jective he
◆ Intro s
duce n
ew pro
◆ Supp ducts
ort the
◆ Gene sales e
ffort
rate fav
orable
publici
ty
Sales Promotion

S a le s
ro m o tion Marketing activities—
P
other than personal
selling, advertising,
and public relations—
that stimulate
consumer buying and
dealer effectiveness.
Sales Promotion
Free samples
End
Consumers
Contests

Premiums
Company
Trade Shows
Employees

Vacation Giveaways
Trade
Coupons Customers
Personal Selling

al
Person
Selling
Planned presentation
to one or more
prospective buyers for
the purpose of making
a sale.
Personal Selling

Traditional Relationship
Selling Selling
Marketing Communication

Categories of
Communication

Interperson
Mass
al
Communicat
Communicat
ion
ion
 Marketing Communication

As Senders As Receivers

▪ Inform ▪ Develop messages

▪ Persuade ▪ Adapt messages

▪ Remind ▪ Spot new

communication
opportunities
 The Communication Process

Noise

Encoding Message Decoding

Sender Receiver
Message Channel Message

Feedback
Channel
Characteristics of the Elements
in the Promotional Mix

Advertising
Communication Mode Indirect and impersonal
Communication Control Low
Feedback Amount Little
Feedback Speed Delayed
Message Flow Direction One-way
Message Content Control Yes
Sponsor Identification Yes
Reaching Large Audience Fast
Message Flexibility Same message to all audiences
Characteristics of the Elements
in the Promotional Mix

Public Relations
Communication Mode Usually indirect, impersonal
Communication Control Moderate to low
Feedback Amount Little
Feedback Speed Delayed
Message Flow Direction One-way
Message Content Control No
Sponsor Identification No
Reaching Large Audience Usually fast
Message Flexibility Usually no direct control
Characteristics of the Elements
in the Promotional Mix

Sales Promotion
Communication Mode Usually indirect and impersonal
Communication Control Moderate to low
Feedback Amount Little to moderate
Feedback Speed Varies
Message Flow Direction Mostly one-way
Message Content Control Yes
Sponsor Identification Yes
Reaching Large Audience Fast
Message Flexibility Same message to varied target
Characteristics of the Elements
in the Promotional Mix

Personal Selling
Communication Mode Direct and face-to-face
Communication Control High
Feedback Amount Much
Feedback Speed Immediate
Message Flow Direction Two-way
Message Content Control Yes
Sponsor Identification Yes
Reaching Large Audience Slow
Message Flexibility Tailored to prospect
MARKETING COMMUNICATION

IMPACT OF THE NEW MEDIA

INTERNET
BLOGGING
VIRAL MARKETING
 The Impact of Blogging

Sponsored by a company or one

Corporate of its brands and maintained by
Blogs one or more of the company’s
employees.

Independent and not associated

Noncorporate
with the marketing efforts of any
Blogs
particular company or brand.

LO3
Factors Affecting the
Choice of Promotional Mix

Nature of the product

Stage in PLC

Target market factors

Type of buying decision

Promotion funds

Push or pull strategy

 Stage in the Product Life Cycle

Maturity
Decline
Sales
($) Introduction Growth

Time
Light Heavy use of Advertising, Ads decrease; AD/PR
Advertising; Advertising; PR, brand sales promotion; decrease;
pre- PR for loyalty; personal selling; limited
introduction awareness; personal reminder & sales
publicity sales selling for persuasive promotion;
promotion distribution personal
for trial selling for
distribution
Integrated Marketing Communication…..
is a process for planning, executing & monitoring
the brand messages that create customer
relationships
Duncan, Principles of Advertising & IMC, 2005:17
Integrated Marketing Communication (IMC)

IMC “is the coordination and integration of all

marketing communication tools, avenues, and sources
within a company into a seamless program that
maximizes the impact on consumers and other end
users at a minimal cost” (Clow & Baack, 2007, p. 8).

3
The Changing World of IMC
Old World New World

“Talking At” Consumers Two-way Dialogue With Consumers

Focus on Winning New Customers Focus on Building Long Term

Relationships With Consumers

Marketers Use and Coordinate

Marketers Relied Primarily on
Many Different Forms of
Advertising and Promotions Communication With Consumers

8
IMC & the need for integration

• Covers a number different media and strategies

• TV, radio, Direct, PR, social media etc
• Selective combination of appropriate types of
communication
• Meeting a common set of objectives for the brand
• Integration over time with regard to customers
• Integration provides synergy
 Integration and Synergy

Integration = Synergy

When brand
messages are …they reinforce each … and create a
integrated… other… synergy effect like:

14
Need and Importance : IMC
• Differentiate – (Organic India)
• Remind – (Zomato)
• Inform – (XUV-400)
• Persuade- (Snow World)
Reasons for the Growing Importance of IMC

From Toward
Media advertising
Media Multiple
Multiple forms forms of
of communication
advertising communication
Mass media
Mass media Specialized media Specialized media

Manufacturer dominance
Manufacturer Retailer
Retailer dominance
dominance dominance
General focus Data-based marketing
General Data-based
focus marketing
Low agency
Low agency accountability Greater
Greater agency
agency accountability
accountability accountability
Traditional
Traditional compensation
compensation Performance-based
Performance-based compensation
compensation

Limited Internet Availability Widespread Internet availability

IMC Challenges
• Selective Retention
• Availability of media option
• Consumer’s media consumption habit
• Consistency of message
• Integrated message across time
• Rural Urban mix
• Innovation Challenges
IMC Challenges
• Selective Attention –
IMC Challenges
• Selective Comprehension –
IMC Process
Step 1: Opportunity Analysis

❖Market Research
❖Identify Target Audience
❖Needs of Target Audience
Step 2: Market Analysis

❖ Internal Analysis – Products and Services

❖ External Analysis – Target Customers, STP
Analysis and Competitors
Step 3: Setting Objectives

❖ Sources, Messages and Channels

❖ Media Mix options
❖ Cost Implications

Message Three different types of Customers

(Current, Potential and
Competitor’s)
Defining
Advertising
Goals for
Measured
Advertising
Results
DAGMAR was an advertising model proposed by Russel H.
Colley in 1961.
According to DAGMAR, each purchase prospect goes through
4 steps:
1. Awareness
2. Comprehension
3. Conviction
4. Action

These steps are also known as ACCA advertising formula.

ACCA/DAGMAR is a descendant of AIDA advertising formula
and considered to be more popular and comprehensive than AIDA.
Developed for the measurement of advertising effectiveness it maps
the states of mind that a consumer passes through.
Important parts of the DAGMAR model are definitions of target
audience, (people whom the advertising message is addressed to)
and objectives (goals of advertising message).
Communication Process in DAGMAR Approach
Step 4:Budget Determination

❖ How much money available?

Methods :
1. Affordable Method
2. Arbitary Method
3. % to Sales
4. ROI
Step 5: Strategy Formulation

❖ Each Promotional Mix- Specific Objective and

Budget
❖Synergy between all elements of
communication
❖Single consistency strategy
Step 6: Monitoring, Evaluation and Control

❖ Nature of Message
❖ Nature of Media
Managing IMC
Importance of IMC
Consistent Delivery of Message

Client Agency Relationship

Strategic Development

Team Spirit and Motivation

Technology Based
Barriers to effective IMC
Top Management Support

Functional Specialization

Budget Allocation

Unwillingness to Change

Short Term Planning

Barriers to effective IMC
Top Management Support

Functional Specialization

Budget Allocation

Unwillingness to Change

Short Term Planning

CASE ANALYSIS
Assignments
• Discuss the role Integrated Marketing Communications
plays in the brand building process. Explain with the
help of a company using innovation in IMC.
• What is meant by customer contact point? Select a
company or a brand and discuss the various contact
points which marketers can use to reach consumer of
this product or service.
The Role of Promotion : 4 P’s

Promotion

Communication by
marketers that informs,
persuades, and reminds
potential buyers of a
product in order to
influence an opinion or
elicit a response.
Advertising Management :

•Marketing
communication
specialist
organization
•Direct Marketing
•Sales promotion
•Interactive
Agencies
•PR firms
Role of facilitating institution

Advertiser Agency Media

Research Suppliers
Advertiser

⮚ Planning and Budgeting

⮚ Administration and Execution
⮚ Coordination with other department
⮚ Coordination with Outside Agencies and
Services
 V.P –Packaged
soap and
detergent
division

Dishwashing Laundry
Product Category Product Category
G.M G.M

Advertising
Manager

Brand Manager

Category Management System

 Advertising Agency

“The work of a tailor is to collect the raw

material, find matching threads, cut the cloth
in desired shape, finally stitch the cloth and
deliver it to the customer.”

Advertising Agency is just like a tailor. It creates the ads, plans how, when and where it should be
delivered and hands it over to the client. Advertising agencies are mostly not dependent on any
organizations.
STP Strategies For Advertising
• Marketing Strategies to satisfy different consumer segment needs.
(Target Marketing)
Basis for Segmentation
• Geographic Segmentation
• Demographic Segmentation
• Psychographic Segmentation
(attitude, value, motivation and lifestyle)
• Behavioural Segmentation
(occasion, benefits, user status, buyer readiness, loyalty status, attitude)
Selecting a Target Market
1. Analyse the potential of each target segment
2. Decide how many and which segment to target
a. Undifferentiated or Mass Marketing
b. Differentiated Marketing
c. Concentrated Marketing
Positioning
• Benefit Positioning
• Attribute Positioning
• Use or Application
• User Positioning
• Quality or Price
• Product Class
• Competitor
• Image or Personality
Promotion : Defined

• As per Engel et al.1987

“Controlled integrated programme of communication methods and materials

designed to present an organization and its products to prospective customers; to
communicate need satisfying attributes of products to facilitates sales and thus
contribute to long run profit performance”
Understanding The Consumer
Changing Consumption Trends:

1. Increasing Literacy Rate

2. Consumerism
3. Growing Income
4. Increase in reliance on credit
5. Influence of children on consumption
6. Consumer going online to make purchase
7. Rising Penetration of Smart Phones
8. Value Offers
9. Trading Up
10.Health Consciousness
Consumer Buying Behaviour
and

Role of Advertising
Consumer Buying Behaviour and Role of
Advertising
 The Consumer Buying Decision
Process and factors influencing it.

@ How many of you bought something today?

@
How many have seen or heard an ad today?
@
How many of you consumed something today?
@
How many of you engaged in word of mouth about a
product/service today?
@ How many of you used digital platform for buying a
product/service?
 Consumer Behaviour

Study of individuals, groups, organizations.

Processes they use to select, secure, and dispose of

products, services, experiences, or ideas

Satisfy needs and the impacts that these

processes have on consumer and society.
 Consumer Buying Behaviour

Consumer buying behaviour refers to the buying behaviour of

final consumers.

• Individuals and households who buy goods and services for

personal consumption.
BUT

The Central Question for the Marketer is .....

HOW DO CONSUMERS RESPONDS TO VARIUOS

MARKETING EFFORTS THE COMPANY MIGHT
USE?
Mar Com: Consumer Decision Making
Process
Need Recognition
• Regularly Used Products
Need Recognition
• New Products/Need
Need Recognition
• Dissatisfaction
Need Recognition
• Related Product Purchase
Need Recognition
• New Products
Information Search
Evaluation of Alternatives
Out Put Stage
• Purchase Decision
• Post Purchase Decision
• Divestment
Factors effecting Consumer Behaviour

• Culture – Cadbury’s Subh AARAMBH

• Subculture – Rudali (Camlin)
• Social Class – Lifebuoy “Help a Child Reach 5”
• Perception -
• Motivation
• Beliefs – Ghar Ka Khana
• Attitude -
• Personality
• Age and Family Life Cycle
• Lifestyle
Factors influencing consumer
behavior
Marketing mixes All other stimuli

Person making decision

Psychological Social Purchase
Eco no mic
Variables Influence Situation
Needs

Consumer decision
process

Ref: Carolyn Brown http://www.writingcapital.com Global Research Papers and Term Papers Writing
 Factors influencing consumer
behavior
Marketing mixes All other
stimuli
Person making decision
Ps yc ho log ic
Ec onomic needs Social influence Purchase
• Economy of al variab les
•Family situation
• Motivation
purchase •Social class • Purchase reason
• Perception
• Convenience •Reference • Time
• Learning
• Efficiency in use groups • Surroundings
• Attitude
• Dependability •Culture
• Trust
• Income •Ethnic groups
• Lifestyle

Consumer decision
process
(Person does or does not purchase (response)
Consumer Behavior is difficult to predic

However, in reality many decisions are not made in awareness of

a determined problem by the consumer.

Ref: Sandhusen, Richard L.: Marketing (2000). Cf. S. 218

Consumer Processing Model

• Learning Process
• Decision Making Process
Learning Process

• Learner’s Own Experience

• Other’s Experience
• Unconscious Learning
Perception
Process

Perception
 Possible Needs motivating a
person to some action

Ref: Final Consumers and their buying behavior © 2012 by The McGraw-Hill Companies, Inc
Psychological Influences within an
Individual
Needs

Wants

Drives

Consumers seek benefits to match

needs and wants
Other Social Influences

Reference Groups

Opinion Leaders

Culture
Family is big social
Influence on

Children dominant Mutually

 Consumer Decision Making Process

Need I nformatio Alternative Pos t

Recogniti n Searc h Evaluation P urchase purc has e
on Dec is io n Be havio r
Seekin Assessin
g g Value in
Perceiving
a need value value Buying value Usage and
consumptio
n
 Consumer Decision Making Process

Need I nformatio Alternative Pos t purc

P urchase has e Be
Recogniti n Searc h Evaluation Dec is io havio r
on n
Seekin Assessin Value in
g g Buying Usage and
Perceiving value
a need value value
consumptio
n
 The model of buyer
behavior
The Environment
It’s very difficult to “see” inside
Marketing Stimuli
Other the consumer’s head & figure out
Product Economic the whys of buying behavior
Price Technological (that’s why it’s called the black box).
Place Social
Promotion Cultural

Buyer’s Black Buyer Response

Box Buying attitudes and preferences
Buyer’s characteristics Purchase behavior: what the buyer
Buyer’s decision buys,
process when, where and how
much Brand & company relationship
Rethinking the Consumer
Buying Process
How the web has
Process
changed everything
 Social Media
40% of consumers used Facebook to learn about new
Influence products.
In 2010 it was 17%

Source: Facebook -
 Social Media Influence

The
most
influenti
al new
product
?source

Source: Facebook -
 Google calls this the ZERO
MOMENT OF TRUTH Consumer
make buying decision ONLINE
BEFORE calling or entering the store.

Source:
 Simple Buying Process

Source:
 Digitalized Buying Process

Source:
Types of Buying Behaviour Decision

High involvement:- the term means when the consumer is

highly involved while buying a product. Generally this
situation happens in case of expensive or luxuries goods. Like
while buying a diamond necklace a consumer is highly
involved.
Low involvement:- this term means when the consumer is
not highly involved while buying a product. It happens in case
of low price goods. Like while buying toothpaste a consumer is
not highly involved.
Significant differences between brands:- it means when
there are significant differences between brands.
Few differences between brands:- it means when there are
very little differences between brands.
Types of Buying Behaviour Decision

1. Complex buying behaviour:- when the consumer is

highly involved in the buying and there is significant
differences between brands then it is called complex buying
behavior.

So in this case the consumer must collect proper information

about the product features and the marketer must provide
detailed information regarding the product attributes.

GOLD
Types of Buying Behaviour Decision

2. Variety seeking behavior:

In this case consumer involvement is low while buying the
product but there are significant differences between brands.

Consumers generally buy different products not due to

dissatisfaction from the earlier product but due to seek variety.
Types of Buying Behaviour Decision

3. Dissonance buying behavior:

Here consumer is highly involved in the purchase but there
are few differences between brands.

Like consumer while buying a Life Insurance buy them

quickly as there are few differences between brands.
Types of Buying Behaviour Decision

4. Habitual buying behavior:-

In this case there is low involvement of the consumer and
there are few differences between brands. The consumer
buys the product quickly.
Organizing Advertising and Promotion

• The way a company (the client) organizes

depends on
Its size
The number of products it markets
The role of advertising and promotion in the
marketing mix
The budget
Its marketing organization structure
Advertising Dept. Under Centralized System

President
President

Research
Researchand
and Human
Human
Production
Production Finance
Finance Marketing
Marketing develop-ment
develop-ment resources
resources

Marketing
Marketing Product
Product
Advertising
Advertising Sales
Sales
research
research planning
planning
Pros & Cons of a Centralized System

+ Positive - Negative
Better
Better Less
Lessgoal
goal
communications
communications involvement
involvement

Fewer
Fewer The
The
personnel
personnel Centralized
Centralized Longer
Longer
System
System response
responsetime
time
Continuity
Continuity
Impractical
Impracticalfor
for
multiple
multiplebrands,
brands,
More
Moretop
top products,
products,divisions
divisions
management
management
involvement
involvement
Decentralized Advertising System

Corporate

Production Finance Marketing R&D Human

Resources

Sales Product Marketing

Management services

Brand Advertising Marketing

Manager Dept Research

Ad agency
Sales promotion
Brand
Manager Package design

Ad agency Merchandising
Pros & Cons of Decentralization

+ Positive - Negative

Ineffective
Ineffectivedecision
decision
Concentrated
Concentrated making
making
attention
attention

Rapid
Rapid problem
problem The
The Internal
Internalconflicts
conflicts
response
response Decentralized
Decentralized
System
System
Unequal
Unequaldistribution
distribution
Increased
Increased of
offunds
funds
flexibility
flexibility

Lack
Lackof
of
Authority
Authority
ADVERTISING Agency: Basic Concept
An advertising agency is a service business dedicated to
creating, planning and handling advertising and other
promotional activities for its clients.

An ad agency is independent from the client and provides

an outside point of view to the effort of selling the client's
products or services.

An agency can also handle overall marketing,

communication, sales promotions oriented and branding
strategies for its clients.
ADVERTISING Agency: Basic Concept

• Typical advertising agency clients include the following clientele:

1. Businesses and Corporations

2. Government Agencies
3. Non Profit Organizations

• Agencies may be hired to produce a complete overall advertising

campaign and promotional activities to build awareness and fulfill
advertising goals and objectives
TYPES OF ADVERTISING AGENCIES

• Advertising agencies come in all sizes as stated below:

1. one or two-person shops (which rely mostly on freelance talent to perform

most functions)

2. Small to medium sized agencies

3. large independents and multi-national, multi-agency conglomerates like O &M

and Satchi and Satchi
• Limited-Service Advertising Agencies
• Some agencies usually offer only one or two of the basic services. For example,
although some agencies that specialize in "creative" also offer strategic
advertising planning service.

• Similarly, some "media-buying services" offer media planning service but

concentrate on media buying, placement, and billing.

• Thus, the advertiser who uses limited-service agencies usually gives greater
strategic direction to specialist creative or media agencies, and exercises greater
control over the product of these agencies.
• Specialist Advertising Agencies

• There are agencies that specialize in particular kinds of advertising: recruitment,

classified, industrial, financial, direct-response, retail, yellow pages,
theatrical/entertainment, investment, etc

• Specialization occurs for a variety of reasons. Often, as in recruitment

advertising, specialized media are involved that require knowledge / expertise
not ordinarily found in general-line agency.

• In industrial advertising, the subject is technical and requires that writers and
artists have training in order to write meaningful advertising messages about it.
• Branded Content Agencies
•
Branded content agencies don’t produce advertising in the ‘traditional’
sense. Rather, they aim to incorporate their client’s brands into popular
culture — e.g. creating a TV commercial for the brand or developing a
rich message content of the brand or designing an event people want
to attend.

• The idea is to make brands synonymous with an enjoyable experience,

thereby making them better known and recognized in consumers’
minds.
• Interactive agencies
• Interactive agencies may differentiate themselves by offering a mix of web
development, search engine marketing, internet advertising/marketing, or
e-commerce consulting.

• Interactive agencies rose to prominence offering a wide range of services.

Today, the most successful interactive agencies are defined as companies that
provide specialized advertising and marketing services for the digital space.

• The recent boost in the interactive agencies can also be attributed to the
rising popularity of web-based social networking sites like MySpace,
Facebook and YouTube
• Digital Agencies
•
Most digital (or online) agencies are structured and work in much the same way as
offline agencies.

• There are some agencies that work mainly on media planning and buying, some
work solely on the creative side, and others will be full service incorporating all of
the above.

• However what binds them is that their specialty will lie across all mediums of digital
communication, including banners, viral emails, games, Interactive TV, mobile and
email marketing.
• Direct Marketing Agencies
•
A direct marketing agency typically provides strategic / creative solutions to a
client's business objectives by using ‘direct’ marketing channels that are
measurable in terms of the responses created

• Direct channels include the likes of direct response TV and radio, direct mail,
inserts, door-drops and online advertising.
• Outdoor (Out of Home) Agencies
•
Outdoor agencies are specialists in ‘out-of-home’ media, such as posters in all
their various forms.

• They provide objective planning, buying and related technical support for
advertisers and their agencies to promote better understanding and more
effective use of OOH media.
Agency Compensation Plans
🔾 Commissions
🔾Around 15% of airtime fees

Agency Bills Client For $1,000,000 For Television Air Time

Agency Pays Television $850,000 For Television Air Time
Agency Earns $150,000 Commission (15%)
🔾 Commissions
🔾Around 15% of airtime fees
🔾 Markup Charges
🔾Production cost + fixed percent
🔾Agencies add 17.65% to the cost of outside services

The Agency adds $1,500 (17.65%)

Client is charged $10,000 for photography services
🔾 Commissions
🔾Around 15% of airtime fees
🔾 Markup Charges
🔾Production cost + fixed percent
🔾 Fee Systems
🔾Hourly rates or by project
🔾 Incentive Systems
🔾Tightly-specified objectives
 Specialized Services and Collateral Services
Creative Strategy –

Advertising Creativity, Advertising Campaigns

What Makes Effective Advertising?

Consumer’s
Sound
View Persuasive
Strategy

Effective
Advertising

Break Deliver on Doesn’t

Clutter Promises Overwhelm
133
The Role of Creativity

Creative ads share two ❖American Family

characteristics: Life Assurance
Company (AFLAC)
• Originality ❖Nike
• Appropriateness ❖Honda U.K.
❖Apple iPod
Original Ads: Apple iPod
• Silhouetted figures
against the neon
backgrounds
holding iPods.
• Simplicity of the
design and a
different look than
most commercials,
which feature
identifiable figures
engaging in
dialogue.
Advertising Successes and Mistakes

• Value Proposition is the essence of a message and the reward to the

consumer for investing his or her time attending to an advertisement.

• The reward could be information about the product or just an

enjoyable experience.
Advertising Successes and Mistakes
 Advertising
Successes
and Mistakes

• Successful campaigns: both the brand management team

and the creative team have done their work well.
• Marketing Mistakes: result when the brand manager fails to
distinguish the brand from competitive offerings.
• Agency Mistakes: due to the ad agency’s inability to design
an effective execution, even though its brand management
client has a convincing message.
• Complete Disasters: caused by poor value propositions and
mediocre executions.
Advertising Plans and Strategy

Advertising strategy

An advertising message that

communicates the brand’s primary
benefits or how it can solve a
consumer’s problem
Advertising Strategy: A Five-Step Program
1. Specify the key fact from the customer’s viewpoint.
2. State the primary problem, or advertising issue, from brand
management’s perspective.
3. State the advertising objective.
4. Implement the creative message strategy.
5. Establish mandatory requirements.

140
Step 1: Specify the Key Fact
The key fact in an advertising strategy is a single-minded statement
from the consumer’s point of view that identifies why consumers are
or aren’t purchasing the brand.

141
Step 2: State the Primary Problem
• Extending from the key fact, this step states the problem from the
brand management’s point of view.

142
Step 3: State the Communications Objective
This is a straightforward statement about what effect the advertising is
intended to have on the target market.

143
Step 4: Implement the Creative Message Strategy
Sometimes called the creative platform, the positioning statement is
the key idea that a brand is supposed to stand for in its target
market’s minds.

• Define the target market

• Identify the primary competition
• Choose the positioning statement
• Offer reasons why

144
Step 5: Establish Mandatory Requirements
The final step involves including mandatory requirements due to
regulatory dictates, or non-regulatory requirements like the corporate
logo or tag-line.

145
 Constructing a Creative Brief
Background Their current
thoughts/feelings

Strategy What do we want them

to think/feel

Task What do we want them

to do

Positioning Proposition

Client’s Objectives Belief in proposition

Target How we speak to them

146
Styles of Creative Advertising

147
Unique Selling Proposition Creative Style (USP)

An advertiser makes a superiority claim based on a unique product

attribute that represents a meaningful, distinctive consumer benefit.

148
Brand Image Creative Style

• The brand image style involves psychosocial,

rather than physical differentiation.
• Transformational advertising

149
Resonance Creative Style
• Does not focus on product claims or brand images but rather seeks to
present circumstances or situations that find counterparts in the real
or imagined experience of the target audience.
• Examples: Dove’s “Real Beauty” campaign
• QuickStep laminate floors

150
 Emotional
Creative Style

An attempt to reach
the consumer at a
visceral level by
appealing to their
emotions.

151
Generic Creative Style
• An advertiser employs a generic style when making a claim that could
be made by any company that markets a brand in a particular
category.
• Most appropriate for a brand that dominates a product category.
• Example: Campbell’s Soup

152
Preemptive Creative Style
• An advertiser makes a generic-type claim but does it with an assertion
of superiority.
• Example: “Visine gets the red out.”

153
In Summary
• An advertiser might use two or more styles simultaneously.
• Some experts believe that advertising is most effective when it
addresses both functional product and symbolic benefits.
• Effective advertising must establish a clear meaning of what the brand
is and how it compares to competitive offerings.

154
Means-End Chaining

155
Attributes-Consequences-Values
• Attributes are features or aspects of advertised brands.
• Consequences are what consumers hope to receive (benefits) or
avoid (detriments) when consuming brands.
• Values represent those enduring beliefs people hold regarding what is
important in life.

156
The Nature of Values
1. Self-direction 6. Security
2. Stimulation 7. Conformity
3. Hedonism 8. Tradition
4. Achievement 9. Benevolence
5. Power 10.Universalism

157
A MECCAS Model Conceptualization of
Advertising Strategy

158
The MECCAS Model

MECCAS: Means End Conceptualization of

Components
for Advertising Strategy

159
MECCAS
Illustration
For Self-
Direction
Value

160
 MECCAS
Illustration for
Stimulation
Value

161
 MECCAS
Illustration for
Hedonism
Value

162
 MECCAS
Illustration for
Achievement
Value

163
 MECCAS
Illustration for
Power Value

164
 MECCAS
Illustration for
Security Value

165
Developing an
Advertising Campaign
• Advertising campaign – the creation and execution of a series of
advertisements to communicate to a particular target audience
Steps In Developing And
Implementing An Advertising Campaign
Creating the Advertising Platform

• Advertising platform – basic issues or selling points to

•
be included in an advertising campaign
• Important to customers

Who Develops the Advertising Campaign?

Individual
Department
Agency
Determining the Advertising Appropriation
• Advertising appropriation – budget for a specific time period
• Geographic size of market
• Distribution of buyers
• Type of product
• Firm’s sales volume vs. competitor’s sales volume
• Appropriation for business products vs. convenience items
Twenty Leading
National Advertisers
Techniques in Determining Advertising Appropriation

• Objective-and-task – determining campaign objectives and the tasks

needed to obtain objectives
• Percent-of-sales – multiplying the firm’s past and expected sales by a
standard percentage
• Competition-matching – matching competitors advertising outlays
• Arbitrary – budget specified by high-level executive in the firm
Developing the Media Plan
• Media plan – specifies the media vehicles to be used
•
and the schedule for running advertisements
– Reach and frequency
• Cost comparison indicator – compares the costs of ad
vehicles in a specific medium in relation to the
number of people reached
• Media schedules – continuous, flighting, and pulsing
Creating the
Advertising Message
• Product Features
• Characteristics of target audience
• Campaign objectives
• Choice of media
• Magazines: regional issues
Components of
Advertising Message
• Copy – verbal portion of ads
• Storyboard
• Artwork – illustrations and layout
• Illustrations
• Layout
Tactics of Campaigns
• Most organizations try to aim for a good reaction towards the
campaign so that they gain excellent sales.

• Some organizations create a campaign that is difficult to understand

or disliked by the mass market but can get people talking about it.
Purpose of Campaigns
• Inform about the launch of a new or existing product

• Raise awareness about new product of services

• Alert an audience to an event

• To remind customers a company is well established

Who benefits?
• Retail organizations that stock the product or services and the
manufacturers who make the items

• Retailer: profile of the business rises, profit rise because of increased

sales.

• Manufacturers: Raise awareness of portfolio of products and services

• Stakeholders: (people involved in the business) with association to

products and services
Advertising Planning, Decision Making
and Setting Goals and Objectives
Customers are Your Business

• Organizations should not view themselves as

producing products, services, or marketing brands,
they should view themselves as buying customers,
giving customers a reason to want to do business with
the company, at the expense of competition
(Paraphrased from Theodore Levitt)
 Key Questions
Customer Questions:
• Who are my customers and what are there needs/wants?
• What does their decision process look like?
• How valuable are they to me?
• How many are there; will there be in the future?
Company/Competition Questions:
• Why should customers buy from me?
• What are the impediments to their purchase?

Implementation Questions:
• How do I make them mine?
• Can we eliminate the impediments?
Who is the customer?
• Consider an adult who buys the following as a gift.
Who is the customer?

● Accounting/Finance: whoever pays

● Development: whoever uses

● Marketing: whoever derives value from it

-child who plays
-parent who gets babysitter,
-purchaser getting social capital
Customer Analysis
• Who
• Where
• When
• What
• How
Customer Analysis
• Consumers
• Business to Business
Customer Analysis
• Consumers
• End use customers
• Brand loyalty
• Repurchase
Customer Analysis
• Business to Business requires special considerations
• derived demand
• purchaser is often NOT the user
Customer Analysis
• Where are my customers?
• Invoice data
• Warranty cards
Customer Analysis
• When Do My Customers Buy?
• Demand variation
• Changing customer buying patterns
Customer Analysis
• What Do My Customers Want?
• Recording sales by price range, size and color
• Competitive information from independent research firms
Customer Analysis
• How Do My Customers Buy?
• Recognition of problem
• Search for alternatives and info
• Buyer’s mental evaluation of alternatives
• Purchase
• Postpurchase behavior
Customer Analysis
• Problem recognition
• Depleted inventory
• Advertising
• Promotions
• Store display
Customer Analysis
• Search for alternatives and information
• Past experience
• Brochures
• Catalogs
Customer Analysis
• Evaluation of alternatives
• Standard Learning Hierarchy
• Dissonance-Attribution Hierarchy
• Low - Involvement Hierarchy
Standard Learning Theory
• Cognitive (Perceptual)
• Affective (Like - Dislike)
• Conative (Purchase)

• Buyers are highly involved

• Products are clearly differentiated
• Mass media/Early PLC
Dissonance-Attribution Theory
• Conative (Purchase)
• Affective (Like-Dislike)
• Cognitive (Perceptual)

• Buyers highly involved/products similar

• Salesperson important
• Early Maturity
Low-Involvement Theory
• Cognitive (Perceptual)
• Conative (Purchase)
• Affective (Like - Dislike)

• Low involvement/similar products

• Broadcast/Late maturity
Customer Analysis
• Buyer’s mental evaluation of alternatives
• Friends
• Social class
• Personality
• Lifestyle
Customer Analysis
• Purchase
• Store location
• Skill of the salesperson
• Availability of credit
Customer Analysis
• Postpurchase Behavior
• Speed of repairs
• Product durability
• Extended warranty
Customer Analysis
• How Does My Firm Become Customer Oriented?
• Customer Checklist
• Plant tours
• Customer visits
Customer Analysis
• Action and results driven
• Encourages initiative
• Increases role of staff to customers
• Builds trust
THE IMPORTANCE OF NEW PRODUCTS

• Sustain corporate growth and profits

• Replace obsolete items
• Improve quality of life
• Take advantage of new technology
• Better satisfy the needs of current and future
consumers
• Brand extensions
Customer Satisfaction Opportunities

Customer
expectations

Customer Opportunities
satisfaction
gap 1. New products
2. Improvements
Actual
product
performance
How Many
Ideas Are
Required for
One
Successful
New Product?
Lead User Analysis
Method for Creating Breakthrough Innovation

How do you develop

breakthrough
innovation to grow
organizational
performance?
What Affects the Rate of
Adoption?
Complexity

Compatibility
Characteri
Characteri
stics
stics
Affecting
Affecting Relative Advantage
New
New
Product
Product
Diffusion
Diffusion Observability

Trialability
 The Diffusion
Process
Relationship of the Diffusion Process to the
Product Life Cycle
Introduction Growth Maturity Decline

100
Product
90 life cycle
80
curve
Cumulative Percentage of

70
Early majority
60 Late majority
50
Early adopters
Adoption

40

30 Innovators
Laggards
20
Diffusion
10
curve
0
Time of Adoption of
Innovations
Companies that do succeed often share the
following characteristics

• A history of carefully listening to customers

• An obsession with producing the best product
possible
• A vision of what the market will like in the future
• Strong leadership
• A commitment to new-product development
• A team approach to new-product development
SWOT
Strengths Weaknesses
1. Strong market presence 1. High leverage

2. Good established 2. Declining operating

customer base ( Coke, margins
Campbell soup)
3. Declining market share
Opportunities Threats
1. Strategic Acquisitions 1. Slowdown in US
economy
2. Growing opportunities in
the packaging industry 2. Higher Competition

3. Niche markets 3. Environmental Costs

Macroeconomic Factors
• Prices of raw materials
Increase in demand for biodegradable plastic as well as
aluminum/ copper have driven up prices and pressured margins

• Derived Demand
Demand depends on demand for other products such as food
and beverages, medical supplies and chemicals. Demand for
these products are projected to increase in the near-term future

• Emerging Markets
As industrial activity in developing economies picks up, so does
demand for goods to store and transport raw materials and
finished goods.
Competitor Analysis
Company Name Market Total Revenue Total
Capitalization Debt/Capital %
Bemis Co. Inc.
(NYSE:BMS) 3,514.6 40.5
3,280.2
Greif, Inc.
(NYSE:GEF) 2,835.6 47.2
2,608.0
Sonoco Products Co.
(NYSE:SON) 3,597.3 29.6
3,185.2
Temple-Inland Inc.
(NYSE:TIN) 3,577.0 50.3
2,328.0
Silgan Holdings Inc.
(NASDAQ: SLGN) 3,066.8 54.3
2,421.6
Competitor Analysis
Greif, Inc:

• A global producer of industrial packaging products.

• The Company operates in three business segment: Industrial Packaging;

Paper Packing: and Land Management.

• In July 2009, the company completed the acquisition of Ennis Containers,

Inc.
Competitor Analysis
Sonoco Products Company, Inc:

Provides industrial and consumer packaging products, and

packaging services in North and South America, Europe,
Australia, and Asia.

The Company operates in four segments: Consumer

Packaging, Tubes and Cores/Paper, Packaging Services
Competitor Analysis
Bemis Company, Inc:

• Manufactures and sells flexible packaging products and pressure

sensitive materials in the United States, Canada, Mexico, South
America, Europe, and Asia.

• The company operates in two segments, Flexible Packaging and

Pressure Sensitive Materials.
Starbucks
• Core competencies
• Third Place
• Neighborhood coffee shop
• Failed Ventures
• Joe magazine
• Café Starbucks
• Circadia
• Losing focus
• Hear Music
• Akeelah and the Bee
• Closing down stores
Advertising Goals
Specific
Objectives Communications
Communications

Planning
Planning &
&
Decision
Decision Making
Making

Measurement
Measurement
&
& Evaluation
Evaluation
From Awareness to Action
Point of purchase
Conative Retail store ads, deals
Realm of motives. Purchase “Last-chance” offers
Ads stimulate or direct Price appeals
desires Testimonials
Conviction
Competitive ads
Affective Preference Argumentative copy
Realm of emotions.
Ads change attitudes and “Image” copy
feelings Liking Status, glamour appeals

Announcements
Knowledge Descriptive copy
Cognitive Classified ads, slogans, Jingles,
Realm of thoughts. skywriting
Ads provide information Awareness
Teaser campaigns
and facts
The DAGMAR Approach
Define Awareness
Awareness

Advertising
Goals for Comprehension
Comprehension

Measuring
Advertising
Conviction
Conviction

Results Action
Action
Pros and Cons of DAGMAR
Pros Cons

Focus
Focusonon communications
communications Relies
Reliesheavily
heavily on
on the
theresponse
response
objectives
objectives hierarchy
hierarchy

Measurement
Measurementof
ofstages
stages May
May not
notincrease
increasesales
sales

Better
Betterunderstanding
understandingof
ofgoals
goals Practicality
Practicality and
and cost
cost
and
and objectives
objectives

Less
Lesssubjective
subjective Inhibition
Inhibition of
ofcreativity
creativity
Concept of ad Budget
• An advertising budget is estimate of a company's promotional
expenditures over a certain period of time. ...

• When creating the advertising budget, a company must weigh the

trade-offs between spending one additional advertising dollar with
the amount of revenue that dollar will bring in as revenue.
Methods of Ad Budget
• Here are the top four methods for setting an advertising budget
used by the most successful independent businesses:

• Fixed percentage of sales. ...

• Comparable to the competition. ...
• Objective and task-based. ...
• The maximum amount.
How do you budget an advertisement?
• Start with last year's total gross sales or average sales for the past few
years, then allocate a specific percentage of that figure
for advertising.

• Most businesses set aside between 2% and 5% of annual revenues

for advertising. So if your annual sales are $300,000 then spend
$6,000 to $15,000 on advertising.
How do you calculate advertising budget?
• Calculating Your Ad Budget
• Step 1: Take 10 percent and 12 percent of your projected annual,
gross sales and multiply each by the markup made on your average
transaction.

• Step 2: Deduct your annual cost of occupancy (rent) from the

adjusted 10 percent of sales number and the adjusted 12 percent
number.
Factors affecting budget decisions
• A stage in the product life cycle-new products requires large advertising
budgets to build brand awareness in comparison to established brands.

• 2. Market share and consumer base- High market share brands need
less ad expenditure as a percentage of sales to maintain share

• 3. Competition and clutter- in a market with high competition, a brand

must advertise heavily to get heard. Cluttering of advertisements
confuse the customers and make them forget your brand easily.

• 4. Advertising frequency- the number of times the ad is displayed puts

an impact on the advertising budget

• 5. Product substitutability- Brands belonging to less- differentiated or

commodity-like product classes (like soft drinks, airlines, banks etc.)
need heavy advertising to establish a unique image.
Ad Appropriation
• Advertising appropriation is the portion of a total marketing budget
that is allocated for advertising over a specific time period.

• The advertising appropriation policy for a company may be based on

any one of a number of approaches.
Advertising Appropriation Methods
• Affordable method:
One of the methods is to find out what the company can afford in a given business
situation. However, according to this method, advertising opportunities are usually
overlooked because the advertising expenses are considered to be unaffordable.
For Eg.- for a start-up company, investing in advertising would cost a lot.

• Percentage of Sales method:

The advertising spend can be some percentage of the sales revenue of the
company.
For example: a 2% advertising spend decided on a Rs.50 Lakh p.a. revenue
company would come out to be Rs.1 Lakh.

• Percentage of Profit method:

The ad spent percentage is related to profits instead of sales, wherein profit
provides even more assurance than sales.
• Competitive parity method:
The method takes the total budget to be allocated for advertising to be at par with hat of
competitors to prevent any price wars. For Eg- HUL and ITC spending nearly equal on their
personal care category advertising.

• Returns on Investment method:

In this method,all the profits generated by advertising are compared with the cost of the funds
and a proportional ad budget is decided.

• Objectives and tasks method:

Advertising objectives are decided upon for the coming budget period and all the costs that
would be incurred for achieving these objectives are calculated in terms of the tasks to be
performed.
Factors Influencing Advertising Budgets

Hidden
Product product
life cycle qualities

Product Product
durability price

Differentiatio Purchase
n frequency
Top-Down vs. Bottom-Up Budgeting
Top-Down Budgeting Methods

Affordable
Affordable
Method
Method

Return
Return on
on Arbitrary
Arbitrary
Top
Top
Investment
Investment Allocation
Allocation
Management
Management

Competitive
Competitive Percentage
Percentage
Parity
Parity of
of Sales
Sales
Object and Task Method

Isolate
Isolateobjectives
objectives

Determine
Determinetasks
tasksrequired
required

Estimate
Estimaterequired
requiredexpenditures
expenditures

Monitor
Monitor

Reevaluate
Reevaluateobjectives
objectives
Payout Planning
Organizational Characteristics

• Factors that influence advertising and promotion

budgets
• The organization’s structure
• Power and politics
• The use of expert opinions
• Characteristics of the decision maker
• Approval and negotiation channels
• Pressure on senior managers to arrive
at the optimal budget