Session 10 Advertising Promotion Communications examples

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					 Session 10: Advertising (Promotion)                                                                Communications examples
                                                                                                       Brita – “own” taste
 1.      Communications decisions, relation to
                                                                                                       SWA – entry into new market
         “Lens” model                                                                                  Calyx and Corolla – catalog as advertising, but not
                                                                                                       television
                                                                                                       Pantene – “own” healthy → shiny → beautiful
 2. Dynamic theory of consumer behavior
                                                                                                       Snapple – positions the product, identity
    underlying communication decisions (also
                                                                                                       AIBO – demonstration
    memory schema revisited)                                                                                                              Product        Perceptions       Preferences
                                                                                                                                          Features



 3. Message, media, budgets
                                                                                                                                         Advertising,     Availability,
                                                                                                                                             etc.            Price           Choice




                                                               15.810 Marketing Management                                                              15.810 Marketing Management




 Communications methods are varied                                                                  Communications decisions
 Advertising       Sales           Public          Personal           Web &           Direct
                 Promotion        Relations         Selling           Other          Marketing
 Print adv.      Premiums        Press kits       Sales            Banner adv.      Catalogs
                                                                                                                                             Message
 Broadcast adv
 Packaging
                 Gifts           Speeches         presentations
                                                  Sales meetings
                                                                   Search engines   Mini-catalogs                                            Decisions
                 Sampling        Seminars                          Embedded         Mailings
 Inserts         Fairs           Annual Reports   Incentive        Pop-up           Telemarketing
 Movies          Trade shows     Charity          programs
                                                  Samples
                                                                   Pop-under        Internet          Commun-             Budget                                          Testing and
 Brochures       Exhibits        Sponsorships                      Spam
 Poster          Demonstration   Publications     Quantity         Trust-based                         ication           Decisions                                        Evaluation
                                                  discounts
 Directories
 Billboards
                 Coupons         Community
                                 relations        Fairs
                                                                   Advisors
                                                                                                        Goals                                 Media
                 Rebates
 Display signs   Trade-ins       Lobbying         Tradeshows
                                                  Telephone
                                                                                                                                             Decisions
 Point of        Tie-in          In-house
 purchase                        magazine         Test-drives
                 Loyalty
 Logos           Bundling        Events
 Symbols         Free-standing
 Trade dress     inserts
 Product
 placement




                                                               15.810 Marketing Management                                                              15.810 Marketing Management




Consumer behavior theories help manage                                                              Consideration sets – an important
advertising and other communications                                                                marketing phenomenon!
                                                                                                                              Consideration                               Total
                                                                                                    Yogurt                           4                                     40
    1. Consideration Set -- helps us understand the role                                            Deodorants                       4                                     32
       of communication (recall non-compensatory)                                                   Shampoos                         6                                     39
                                                                                                    Laundry detergents               5                                     24
    2. Hierarchy of Effects -- helps us understand what                                             Cookies                          5                                     26
       needs to be said
                                                                                                    Autos                            8                                    300+

    3. Memory Schema -- helps us understand how to
       say it
                                                                                                    If you can reduce your odds from 1 in 300 to 1 in 8,
                                                                                                                   how much is it worth?

                                                                                                            (Costs $1 billion+ to design a new automobile.)

                                                               15.810 Marketing Management                                                              15.810 Marketing Management
                                                                                                                                                                                  Product
                                                                                                                                                                                                  Perceptions         Preferences



                                                                                                           The role of advertising,
                                                                                                                                                                                  Features




Are consideration sets rational?                                                                           the Hierarchy of Effects (HOE)                                       Advertising,
                                                                                                                                                                                    etc.
                                                                                                                                                                                                  Availability,
                                                                                                                                                                                                     Price              Choice




                            Consumer             Managerial
                                                 Action
                                                                                                            HOE & “Lens” model help diagnose advertising effectiveness.
                          Benefit of choice      Perceived quality,
     Search if:
                          from n+1 brands        differentiation


                        - Benefit of choice      Competitors’
                          from n brands          communications
                                                                                                              100%       80%                                 100%         40%
                          exceeds                                                                             Market    Aware/                               Market
                                                                                                                                   60%                                   Aware/
                                                                                                                       Consider
                                                                                                                                    Try                               Consider 30% Try
                                                                                                                                              20%                                                                    80%
                                                                                                                                             Repeat                                                                 Repeat
                          Search cost            Communications




                                                15.810 Marketing Management                                                                                         15.810 Marketing Management




HOE isolates the root causes of advertising                                                                 HOE helps make rational media
(in)effectiveness – indicates tactics                                                                       decisions
        Exposure           Choose media, budget                                                               Exposure – for example ACNielsen ratings, Arbitron ratings, by
                                                                                                              demographics
                                                                                                                  why golf? Soccer moms? Nascar dads?
                           Effective copy to get through the                                                      Gross rating points per dollar (1% x 1 exposure)
       Awareness           clutter.
                                                                                                              Are customers active or passive?
                           Effective content, relevant to                                                         Coke vs. final phase of automobile purchase
       Knowledge                                                                                                                                                                                  Exposure
                           customer                                                                               burn into memory vs. help search
                                                                                                                                                                                                Awareness
                           Fulfill perceived needs better than                                                How much information needs to be conveyed?
       Preference
                           competition                                                                            Consideration
                                                                                                                                                                                                Knowledge



                                                                                                                  Knowledge, preference, trial                                                  Preference


            Trial                                                                                                                                                                                     Trial
                           Available, low trial costs
                                                                                                                                                                                                Repurchase



       Repurchase          Reinforce quality, reminders

                                                15.810 Marketing Management                                                                                         15.810 Marketing Management




                                                                Product                                                                                                                          Product
                                                                Features     Perceptions     Preferences                                                                                         Features         Perceptions       Preferences




Communications decisions                                      Advertising,
                                                                  etc.
                                                                             Availability,
                                                                                Price          Choice
                                                                                                           Message decisions - Schema Theory                                                   Advertising,
                                                                                                                                                                                                   etc.
                                                                                                                                                                                                                  Availability,
                                                                                                                                                                                                                     Price            Choice




                                                                                                                                    Spokesperson              Past                            Memorable
                                         Message                                                                                                           experiences                       Advertisement.
                                         Decisions
                                                                                                                  ease of use
    Commun-              Budget                                Testing                                                                                                “For those
  ication Goals         Decisions                                and                                                                                                  special
 (consideration sets,
                                           Media                                                                                                                      occasions”
  HOE, Lens model)
                                          Decisions
                                                              Evaluation                                                                         Product
                                          (exposure in
                                             HOE)                                                              effective for...                                                              Visual image of
                                                                                                                                                                                               entertaining
                                                                                                                                                                                                 guests

                                                                                                                                  Need an                        Guest
                                                                                                                                  effective...
                                                                                                                                                                 Visits

                                                15.810 Marketing Management                                                                                         15.810 Marketing Management
  Rumor: McDonald’s hamburgers are
  made from worm meat.
                                                                                                          Fries            Hamburgers


                                                Hamburgers                       Shakes                                                            French Food

                                                                                                                  McDonald’s

                                                                                                                                              Worms
                              McDonald’s                                             McNuggets

                                                                                                                     Friendly
                                                    Worms


                                           15.810 Marketing Management




                                                                                                                                                       Product
                                                                                                                                                       Features            Perceptions         Preferences




                                                                         Memorable copy reinforces memory
                                     Lions                               schema – easy to retrieve                                                   Advertising,
                                                                                                                                                         etc.
                                                                                                                                                                           Availability,
                                                                                                                                                                              Price                Choice



                                     • symbol of Chinese authority
                                     • sit before all national banks
                                     • Lugou Bridge – 100 stone lions            Positioning Issue                                   Creative Copy

                                                                                     7-up is not a cola                                  The Un-Cola
                                                                          Let us drive you rather than you drive.         Take the bus, leave the driving to us.
                                                                         Shop by searching the telephone directory              Let your fingers do the walking.
Dragging a truck from swamp                                                If you drink many beers, Schaefer is a         The beer to have when you’re having
• truck is a Dongfen                                                                  good one to drink                              more than one.
• symbolic of economic                                                   We don’t rent as many cars, so we have to                      We try harder.
  independence                                                                  do more for our customers

                                                                          Red Roof Inns offer inexpensive lodging               Sleep cheap at Red Roof Inns.



Examples due to Shourong Wang
                                                                                                                                      15.810 Marketing Management




                                                                                                                                                       Product



  But what should be retrieved from
                                                                                                                                                       Features            Perceptions         Preferences




  memory (Keller, Sternthal, & Tybout)                                    Ogilvy on Advertising                                                      Advertising,
                                                                                                                                                         etc.
                                                                                                                                                                           Availability,
                                                                                                                                                                              Price                Choice




                                                                            Do your homework – study the product (features →
     Brand positioning                                                      perceptions, adv → perceptions)                                                                           Exposure

        points of difference (Fedex, speed then tracking)                                                                                                                            Awareness

        points of parity (it had better clean)                              Positioning – what the product does, who is it for?                                                      Knowledge

                                                                                                                                                                                     Preference


     Brand associations                                                     Brand image – brand “DNA” (Brita’s taste), BMW is ??                                                           Trial


        Subway – taste, then low-fat (Jarred)                                                                                                                                        Repurchase

                                                                            What’s the big idea? – get through the clutter (HOE)

     Brand DNA                                                              Make the product the hero – tie to memory schema
        Subway, Brita, Pantene
                                                                            Pursuit of knowledge – listen to the research                                         Fries          Hamb
                                                                                                                                                                                 urger
                                                                                                                                                                                   s


     Laddering
                                                                                                                                                    Shakes                                     French
                                                                                                                                                                                                Food
                                                                                                                                                                      McDo


                                                                            Cult of creativity – can be a science
                                                                                                                                                                      nald’s


        reliable → not tied to office → freedom of movement                                                                                           McNu
                                                                                                                                                      ggets
                                                                                                                                                                          Friendly
                                                                                                                                                                                           Worms




                                                                            It’s not all sex.
                                           15.810 Marketing Management                                                                15.810 Marketing Management
                                                                         Example copy strategy
Some examples                                                            (British Airways)
                                                                          Strategy Objectives

                                                                             To project BA as the worldwide leader in air travel.
   British Airways – does copy success with
   respect to objective                                                      To establish BA as the world's most successful airline.

                                                                             To demonstrate the superiority of BA products.

                                                                             To add value in the eyes of passengers across the whole range of BA
                                                                             products.

   Citibank – original introduction in SE Asia,                              To develop a distinctive, contemporary, and fashionable style for the
                                                                             airline.
   what was the core message, the future
                                                                          Execution Objectives
   brand DNA?
                                                                             Simple and single-minded, dramatic and break new ground, instantly
                                                                             understood throughout the world, visual rather than verbal, long-
                                                                             lasting, likable, and confident.


                                           15.810 Marketing Management                                                   15.810 Marketing Management




                                                                         Citibank
                                                                          Another example of brand DNA

                                                                          Recall Pantene




                                                                                                                         15.810 Marketing Management




Communications decisions                                                 Communication testing can be scientific
                                                                            Advertising
                                                                              Audience membership by segment
                                      Message
                                      Decisions                               Syndicated testing
                                    (Schema Theory,                           Other testing
                                      Ogilvy, KST)
   Commun-               Budget                           Testing
 ication Goals                                                              Salesforce
                        Decisions                           and
 (consideration sets,
                                      Media                                    Internal measures
  HOE, Lens model)
                                     Decisions
                                                         Evaluation
                                                                               Optimization -- Z&S, Delphi Group, etc.
                                     (exposure in
                                        HOE)
                                                                            Other
                                                                               Experiment and monitor




                                           15.810 Marketing Management                                                   15.810 Marketing Management
                                                                                                      Example: measures within the
Ogilvy on Testing                                                                                     Hierarchy of Effects
 1.             Measure reputation                        10.   Line extensions (e.g., conjoint)

 2.             Pretest models (e.g., Assessor)           11.   Warn about decaying preferences          Exposure        Audience membership, segments, media reach

 3.             Concept tests (e.g., virtual concepts)    12.   “Read” competitive test markets

 4.             Comparative ratings (e.g., perceptual     13.   Best promise (e.g., measures of
                                                                                                        Awareness        Seen, noted, read, recall adv., recall message
                maps)                                           importances)

                Formulation, flavor, color (e.g.,               Premiums (e.g., simulated stores)
 5.
                conjoint)
                                                          14.
                                                                                                        Knowledge        Positioning, consideration
                                                          15.   What does it communicate?
 6.             Packages (e.g., concept tests)
                                                          16.   TV advertising testing (e.g.,           Preference       Preference, intent to purchase
 7.             Positioning (e.g., perceptual maps)             instrumented markets)

 8.             Target audience (e.g., segmentation       17.   Read and remember
                studies
                                                          18.   Settle arguments
                                                                                                           Trial         Trial, penetration
 9.             Feature importances (e.g., conjoint             a.   Which campaign?
                analysis)                                       b.   What price?

                                                                                                        Repurchase       Repeat, frequency

                                                                        15.810 Marketing Management                                                       15.810 Marketing Management




Communication experiments                                                                             “Heavy-up” advertising experiment

                                                                                                                          Sales Rate (100% = normal)
Consideration




                                                                                                        140%

                                                                                                                       Normal        Heavy             Normal
                                                                                                        120%



                                                                                                        100%



                                                                                                         80%
                                                                               Communication
                                                                               spending
                                                                                                         60%
                             Clight               Cbase         Cheavy
                                                                                                                         10


                                                                                                                                14


                                                                                                                                     20


                                                                                                                                             24


                                                                                                                                                  28


                                                                                                                                                         34


                                                                                                                                                                38


                                                                                                                                                                      42


                                                                                                                                                                             46
                                                                                                           2


                                                                                                                   6




                                                                                                                                     Time (4 week periods)
                                                                        15.810 Marketing Management                                                       15.810 Marketing Management
You get what you pay for in advertising testing.                                                                                A simple formula
                           1
                          0.9
                                                                                                           Split-                Value = en * (variation) * (reliability) * validity
Predictive Ability (pR)




                          0.8
                                                                                                           cable
                          0.7
                          0.6                                Trailer Coupon Redemption
                                                                                                                                            en = maximum of n “normal” random variables
                          0.5
                                                                                                                                            variation = standard deviation in value across alternative copy
                          0.4
                                                                                                                                            reliability = (signal)/(signal + noise) for test score
                                              Theater Testing
                          0.3
                                                                                                                                            validity = correlation of test score and true outcome
                          0.2           On-Air Recall
                          0.1
                           0
                                0   5    10   15      20      25   30   35   40    45    50    55   60

                                                   Research Cost ($000s)
                                                                             15.810 Marketing Management                                                                            15.810 Marketing Management




Advertising dynamics                                                                                                   Communications decisions
                          Should you pulse?
                                                                                                                                                                                Message
                                                                                                                                                                                Decisions
                                                                                                                                                                           (Schema Theory,
                                                                                                                                                                             Ogilvy, KST)
                          If so, how often?                                                                                       Commun-                Budget                                      Testing and
                                                                                                                                ication Goals                                                        Evaluation
                                                                                                                                (consideration sets,
                                                                                                                                                        Decisions                                   (Ogilvy on testing,
                                                                                                                                 HOE, Lens model)
                                                                                                                                                                                 Media
                                                                                                                                                                                                     various scientific
                                                                                                                                                                                Decisions                methods,
                                                                                                                                                                             (exposure in
                          Why is there “goodwill?”                                                                                                                              HOE)
                                                                                                                                                                                                      experiments)




                                                                             15.810 Marketing Management                                                                            15.810 Marketing Management




                                                                                                                                  Representative response curve
Budgeting decisions: recall the fall core.                                                                                        (Leo Burnett, USA)
                                                                                                                                100%
                                                                                                                                                                                                             85%
                                                                                                                                                                                               80%
                                                                                                                                                                          74%
                                           Sales Revenue                                                                          80%

                                                                                                                                                       60%
                                                                                                                    Awareness




                                                                                                                                  60%

                                                   Profit before communications cost
                                                                                                                                  40%
                                                                                                                                         21%

                                                    Profit                                                                        20%



                                                                                                                                   0%
                                                                                                                                        0               1,000           2,000               3,000                 4,000
                                               C   optimal              Communication
                                                                        Spending                                                                                        GRPs
                                                                             15.810 Marketing Management                                                                            15.810 Marketing Management
Communications decisions                                                                 Summary
                                                                                          Advertising can be understood as one of the 4Ps
                                              Message
                                              Decisions                                   Advertising needs to be coordinated with the
                                             (Schema Theory,
                                                 Ogilvy)                                  product (promotion, price) through the “lens”
  Commun-                 Budget                                     Testing and
                                                                                          model. A key component of “positioning.”
ication Goals            Decisions                                   Evaluation
(consideration sets,   (response analysis,
                                              Media                (Ogilvy on testing,
 HOE, Lens model)          data based)
                                             Decisions
                                                                    various scientific
                                                                        methods,          Various scientific theories useful
                                              (exposure in           experiments)           economics of consideration sets
                                                 HOE)
                                                                                            schema theory
                                                                                            hierarchy of effects
                                                                                            scientific testing
                                                                                            budgeting (from Fall core)


                                                    15.810 Marketing Management                                               15.810 Marketing Management

				
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