Print Ad Samples - PowerPoint

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• Advertising
  – Television, radio, print, internet, outdoors
• Sales Force
• Sales promotions
  – coupons, rebates, trade shows, free samples etc.
• Public relations
Top Ad Spenders (1992)
•   P&G              1174 million
•   Phillip Morris   1090
•   GM               948
•   Ford             602
•   Chrysler         567
•   Pepsi            556
        Top Categories
•   Automotive      3597
•   Retail          2879
•   Food            1780
•   Restaurants     1334
•   Entertainment   1065
•   Telephone       732
•   Newspapers      10862
•   Network TV      10733
•   Spot TV         9399
•   Magazines       7105
•   Cable TV        1590
•   Spot Radio      1092
•   Outdoor          655
       Top Brands
•   McDonalds
•   Sears
•   Ford
•   Kelloggs
•   AT&T
•   Toyota
•   General Mills
Product life cycle and promotion

Stage of PLC   Purpose of Promotion

Introduction   Inform, create awareness
Growth         Persuade, differentiate
Mature         Remind, differentiate
Decline        Target niche markets
Product characteristics & promotions:

 Complex Product:
   Personal selling > Print Ad > TV Ad

 Risky Product:
   Personal sales
Purchase stage and Promotions

Before buying     Ad; free samples
At time of buying Personal selling
After buying      Ad; personal services
Push versus pull strategy
Push Strategy: Promote to retailers and create demand
  e.g., Trade promotions, quantity discounts, stock-up

Pull Strategy: Promote to customers and create demand
  e.g., Advertising, coupons

When to use more push versus pull
     Mature markets,
     Demand less than supply,
     Brand not strong

1. Identify the target audience
2. Image Analysis: what the consumer thinks about
   the product. - desired image vs. current image
3. Determine the communication objectives:
      •   Awareness - simple message, repeat name
      •   Knowledge
      •   Liking
      •   Preference
      •   Purchase
4. Designing the message:
    AIDA Model
• Attention

• Interest

• Desire

• Action
        Message content
•   Rational appeal
•   Emotion appeal: Fear appeal
•   Moral appeal
•   Humor
           Types of Ads
•   Informative Ad - new products
•   Persuasive Ad - mature products
•   Comparative Ad - Nissan and Honda
•   Reminder Ad - Coke, Nike
•   Corrective Ad - Listerine
•   Advocacy Ad - MADD, AIDS, Drugs
             Message Structure
• Conclusion drawing: Explicitly stated or inferred
   – Educated audience: Better let them infer
   – Complex product: Explicitly state conclusion

• One sided message: Only positive info.
   – good for favorably disposed audience

• Two sided message: Both sides
   – good when audience is opposed, better educated
     Message Format
•   Headline
•   Copy
•   Illustration
•   Color
       Message Source

Characteristics of a good source:
  – Experience
  – Likeability
  – Trustworthiness
           Setting Ad Budget

(1) Affordable method:
    - Ignores the impact of advertising on sales
    - Long range planning difficult
(2) Percentage of sales: easy method
    - Is not clear whether ad causes sales or vice versa
     - Ignores the specific needs of a region
(3) Competitive parity: Assumes that what the
    market does is rational
     - Does not account for the company’s objectives
(4) Objective and task method:
     Example: Dog Biscuit “Puppy Luv”
     1. Set market share goal: 6% share
        If the population is 17m households, we plan to capture
        6%*17 = 1m HH
     2. REACH=Percentage of market to be reached to
        achieve goal = 80
     3. FREQUENCY= Number of ad impressions needed for
        trial = 4
     4. Number of Gross Rating Points (GRP) needed
        = Reach * Frequency = 80 * 4 = 320 GRPs
       Gross Rating Point = 1 exposure to 1% of population
    5. If cost/GRP = $2500, then budget
       = 320 x 2500 = $ 800,000
        Terms to remember
Reach - Measure of the percentage of people in the
  target market who are exposed to the ad campaign
  during a given period; e.g. 70% of the target
Frequency - Refers to how many times the average
  person in the target market is exposed in a given
  period; e.g. one may desire 3 exposures to serve
  their objective.
GRP= Gross rating points
              Types of Media
• Television
    – National, Spot
•   Radio
•   Print – magazines, newspapers
•   Outdoor – billboard
•   Internet
•   Direct mail
                Alternative media:
•   Billboards
•   Stalls in restrooms
•   Shopping carts
•   Heads and bodies
•   Parking meters
•   Back seat of taxi
How to select media

Based on:
 Nature of the product
 Type of message
 Cost of production
 Cost - CPM (cost per thousand)

Newsweek      $84,000 3million   CPM = $28
Business Week $30,000 775,000    CPM = $39
          Scheduling: Pulsing
Budweiser experiment:
Pulsing: The idea of concentrating heavy advertising
  in some periods and then having some periods of
  low level of advertising follow.
• Dupont also conducts such experiments: In one
  experiment to advertise for Teflon coated
  cookware, they found that 5 exposures per week
  did not have any effect while 10 exposures per
  week doubled their market share.
Evaluation of the effectiveness of campaign

       Direct rating
       Laboratory tests
       Split cable testing

  Post testing
       Unaided/aided recall
       Intention to buy
  Advertising agency
Four departments:
  Creative, media, research, and business
  Average fees: 15% of the media cost

Problems with fee structure:
- Large advertisers pay more for the same services
   simply because they advertise more.
- No incentive to use cheaper media or shorter
- Agencies feel that they perform extra services for an
   account without getting more money.
             Other terms
Storyboard : Outline of advertising
Time compression: running an ad at a higher
  speed than the normal; e.g. levi jeans
  30 second commercial / 15 seconds
Zipping - when one changes the channel
  frequently and views many programs
Zapping - when one does fast forward on taped
  program when the commercials arrive.
Sales Promotions
    Types of sales promotions
• Trade promotions
  – Advertising allowances, joint promotions,
    training, slotting allowances
• Consumer promotions
  – Coupons, rebates 330b cpns, face value $194b
  – Deals / discounts
    Trade promotions growing. Why?

•   Growing retailer power
•   Lower brand loyalty
•   Competition
•   Retailers have demand data and are in a
    better bargaining position
Types of consumer promotions
–   Coupons – in pack / on pack / FSI coupons
–   Rebates – cash refund
–   Premiums - buy two, get a free toy / t-shirt for $5
–   Deals / discounts/ price bundles
–   Samples
–   Sweepstakes
–   Contests
–   Continuity programs – frequent flier miles
–   POP: Point of purchase displays
      Types of Trade promotions
•   Price-offs
•   Allowances
•   Buy-back guarantees
•   Free goods
•   Displays
•   Premiums
•   Sales contests
•   Trade shows
•   conventions
    Who is a coupon prone household ?
•   Income                Low medium high
•   Education             Low Medium high
•   Family size           Large/small
•   Small children        Y/N
•   Home owners / renters
•   Car owners
•   Are coupons profitable?
•   Redemption / Misredemption
    How Sales Promotions Work ?
Blattberg, Briesch, Fox - Marketing Science 1997
• Temporary price reductions substantially increase
• Higher market share brands are less deal elastic
• The frequency of deals changes the consumer’s
  reference price
• Greater the frequency of deals, the lower the
  height of the deal spike
    How Sales Promotions Work?
• Cross promotional effects are asymmetric -
  promoting higher quality brands impacts weaker
  brands more than vice-versa
• Retailers pass through less than 100% of the trade
• Display and feature advertising have strong effects
  on item sales
• Advertised promotions can result in increased
  store traffic
• Promotions affect sales in complementary and
  competitive categories
            Sales Promotions
• Majority of promotional volume comes
  – from switchers
  – category expansion
     • Store switching
     • purchase acceleration
     • Stockpiling
• Promotional elasticities are greater than
  price elasticities
              Public relations
•   News releases
•   News conferences
•   Public service announcements
•   Talk shows, football games, book signings,
    autograph sessions
          Joint promotions
• Advantages?

• Disadvantages?

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