Advertising:

It is a paid form of mass communication and can be traced to an

identified sponsor.
Advertising Functions:
• Informing
• Persuading
• Reminding
• Adding Value
• Assisting Other Company Efforts
1. Informing:
• Makes consumers aware, educates them about the features and
benefits, and facilitates the creation of positive brand images
• Facilitates the introduction of new brands and increases demand
for existing brands
• Performs another information role by:
2. Persuading:
● Persuades customers to try advertised products and services
3. Reminding:
• Keeps a company’s brand fresh in the consumer’s memory
• Influences brand switching by:
4. Adding Value:
• Three basic ways by which companies can add value
– innovating
– improving quality
– altering consumer perceptions
5. Reminding:
• Keeps a company’s brand fresh in the consumer’s memory
• Influences brand switching by:
6. Assisting Other Company Efforts:
• Advertising is just one member of the marketing
communications team
• Sometimes, an assister that facilitates other company efforts in
the
• marketing communications process

The Advertising Management Process

Advertising Strategy:
 • Setting Objectives
• Formulating Budgets
• Creating Ad messages
• Selecting Ad Media and Vehicles
Strategy Implementation
Assessing Ad Effectiveness:

Setting Advertising Objectives:

• Expression of management consensus
• Guides the budgeting, message, and media aspects of
advertising strategy
• Provide standards against which results can be measured

Advertising Objectives:
Several categories of advertising objectives guide
advertising strategy
WHO
WHAT
WHERE
WHEN
How Often
Specify target market
WHO
WHAT
WHERE
WHEN
How Often
• What emphasis?
• What goals?
Emphasis: the features and benefits to be emphasized and the
emotions to be evokedGoals: objectives that need to be
accomplished at the present stage in a brand’s life cycle
• Which geographic markets need to be emphasized?
• What months or seasons are best?
• How often should the brand be advertised?

Budgeting Considerations
in Practice:
• What is the Ad objective?
• How much are competitors spending?
• How much money is available?
Budgeting Methods:
• Percent-of-Sales Budgeting
• Objective-and-Task Method
• Competitive Parity Method
(match competitors method)
• Affordability Method

Integrated Marketing Communication Strategy

Elements in the Communication Process
Sender →Encoding→ Message Media →Decoding →Receiver

Noise

Feedback→ Response

• Sender - party sending the message

• Encoding - message in symbolic form
• Message - word, pictures and symbols that the sender transmits
• Media - the communication channel e.g radio
• Decoding - receiver assigns meaning to symbols encoded by the
sender
• Response - reaction of the receiver after being exposed to the to
the message
• Feedback - the part of the receiver’s response after being
communicated to the sender
• Noise - unplanned static or distortion during the communication
process e.g. competitor action

The Promotional Message:

Grab ATTENTION
Excite INTEREST
Create DESIRE
Prompt ACTION
AIDA

Definition:
Marketing Communications Mix
 The specific mix of advertising, personal selling, sales
promotion, and public relations a company uses to pursue its
advertising and marketing objectives

Developing Effective Communication:

Step 1: Identifying the Target Audience
Affects decisions related to what, how, when, and where
message will be said, as well as who will say it
Step 2: Determining Communication
Objectives
On the basis of awareness level, preference.
Step 3: Designing a Message
AIDA framework guides message design
Message content contains appeals or themes designed to
produce desired results:
• Rational appeals
• Emotional appeals
Love, pride, joy, humor, fear, guilt, shame
• Moral appeals
• Designing a Message
• Message Format: Design, layout, copy, color, shape,
movement, words, sounds, voice, body language,
dress, etc.

Step 4: Choosing Media

• Personal communication channels
• Includes face-to-face, phone, mail, and Internet chat
communication
• Word-of-mouth influence is often critical
• Buzz marketing cultivates opinion leaders
• Nonpersonal communication channels
• Includes television, radio
Step 5: Selecting the Message Source
• Highly credible sources are more persuasive
• A poor spokesperson can tarnish a brand
• Step 6: Collecting Feedback
• Recognition, recall tests
• May suggest changes in product/promotion
Setting the Promotional Budget and Mix:
Setting the Total Promotional Budget
 – Affordability Method
• Budget is set at a level that a company can afford
– Percentage-of-Sales Method
• Past or forecasted sales may be used
– Competitive-Parity Method
• Budget matches competitors’ outlays

Setting the Total Promotional Budget

Objective-and-Task Method
• Specific objectives are defined
• Tasks required to achieve objectives are
determined
• Costs of performing tasks are estimated, then
summed to create the promotional budget
Setting the Overall Promotion Mix
Determined by the nature of each promotion tool and the
selected
promotion mix strategy

Promotion Tools:
• Advertising
• Personal Selling
• Sales Promotion
• Public Relations
• Direct Marketing

• Reaches large, geographically dispersed audiences, often with

high frequency
• Low cost per exposure, though overall costs are high
• Consumers perceive advertised goods as more legitimate
• Builds brand image; may stimulate short-term sales
• Impersonal; one-way communication
Personal Selling
• Most effective tool for building buyers’ preferences, convictions,
and actions
• Personal interaction allows for feedback and adjustments
• Relationship-oriented
• Buyers are more attentive
• Sales force represents a long-term commitment
• Most expensive of the promotional tools
Steps in Personal Selling Process:
• Opening a call
• Need Exploration
• Presentation
• Handling objections
• Closing the sale
• Follow-up
Sales Promotion
• May be targeted at the trade or ultimate consumer
• Makes use of a variety of formats: premiums, coupons, contests,
etc.
• Attracts attention, offers strong purchase incentives, dramatizes
offers, boosts sagging sales
• Stimulates quick response
• Short-lived
• Not effective at building long-term brand preferences

Objectives of Sales Promotion:

• Generate trial
• Enquiries
• Traffic Building
• Repurchase
• Increased rate of purchase
Tools for Consumer Sales Promotion:
• Coupons
• Premiums and Gifts
• Subsidized financing
• Sampling
• Price Packs
• Contests
Objectives of Trade Promotion:
• Inventory Building
• Promotional Support

Tools for Trade Sales Promotion:

• Trade allowances
• Off-Invoice
• Display allowances
• Free merchandise
• Store demonstrations
• Business meetings, conventions, trade shows
Public Relations
• Highly credible
• Many forms: news stories, news features, events and
sponsorships, etc.
• Reaches many prospects missed via other forms of promotion
• Often the most underused element in the promotional mix
Direct Marketing
• Many forms: Telephone marketing, direct mail, online marketing,
etc.
• Four distinctive characteristics:
– Nonpublic
– Immediate
– Customized
– Interactive

• Well-suited to highly targeted marketing efforts

Market Segmentation:
• It is a process of dividing a heterogeneous market into
homogeneous sub-units.
• It consist of a group of customers who share a similar set of
wants
Bases for market segmentation:
• Customer based segmentation
• Product related segmentation
• Competition related segmentation
Targeting Strategies:
• Standardization e.g. coke
• Differentiation e.g. airlines
• Focus e.g. customized car
Positioning:
It is a strategy that enables a firm to competitively and strongly
place its brand in the customer’s mind, such that it becomes the
most preferred brand.
The positioning could be along any of the following lines:
• Product
• Service
• Channel
• Price
• Image

Television copy Principles:

• Frequent visual representations of the brand name and key
product attributes.
 • Catchy slogan
• Right message is very important
Radio copy principles:
• Pull interest of listener through use of human voice, sound
effects, music
• Mention brand name and key selling benefit frequently
Outdoor copy Principles:
• Copy must be extremely short
• Simple with catchy message
• Strong visual appeal

Copy Testing:
Copy testing can be done at
• The beginning of creative process
• At the end of creative process
• At the end of production stage
• After the campaign has been launched
Informing:
• people have to know about it, in order to buy it
Advertising that seeks to develop demand through presenting
factual information on the attributes of a product or service.
Tends to be used in promoting NEW products.
Use in the Introductory Stage of PLC
Persuading
• when competition offers similar product, you have to “persuade”
them to try yours
Advertising that emphasizes using words and/or images to try to
create an image for a product and to influence attitudes about it.
Used by Coke and Pepsi re: lifestyle ads.
Used after the Introductory Stage of the PLC
Reminding
• When new competition comes along, you have to “remind”
customers of your greater experience, advantages etc.
Advertising whose goal is to reinforce previous promotional activity
by keeping the product’s or service’s name in front of the public.
Used in the Maturity Period and the Decline Stage of the PLC.

DAGMAR Approach:
It stands for “designing advertising goals for measured
advertising results.”
It carries the potential customer through 4 stages:
• Awareness
• Comprehension
• Conviction
 • Action

The International Environment:

Economic Environment

Political/Legal Demographic
Environment Environment
International
Marketing And
Promotional
Decisions

Cultural Environment
Economic Environment:
 Stage of economic development
 Economic infrastructure
 Standard of living
 Per capita income
 Distribution of wealth
 Currency stability
 Exchange rates
Demographic Environment:
 Size of population
 Number of households
 Household size
 Age distribution
 Occupation distribution
 Education levels
 Employment rates
 Income levels

Cultural Environment:
 Language
 Lifestyles
 Values
 Norms and customs
  Ethics and moral standards

Political/Legal Environment:
 Government policies
 Laws and regulations
 Political stability
 Nationalism
 Attitudes toward multinationals
Global Brands:
A Global Brand is one that has the same name, design, and
creative strategy everywhere in the world and is marketed in most of
the major regional market blocs. i.e. McDonald’s, Rolex, Gillette
 Should the global marketer offer the same product, marketing,
and advertising throughout the world?
OR…

 Should the global marketer adapt the product, marketing, and

advertising to individual markets throughout the world?

Global Marketing & Advertising:

• Arguments for globalization
– Economies of scale
– Consistent image
• Arguments for localization
– Different consumers
• Decision making process
• Involvement with product category
• Product usage pattern and perception
• Attitude toward advertising
• Preferences, tastes and life styles
• Arguments for localization (cont’d)
– Different economies and marketing environments: 4Ps
– Different media landscapes: availability & cost
– Different government regulations
– Different cultures
– Different perception of advertising
– --> More general and standardized the advertising strategy
and execution, more bland and less compelling its impact
on target audience ---> A balancing act

Perceptions of Advertising, Europe and United States:

 United Kingdom France Germany United States
Advertising is
perceived as
mostly entertaining, informative entertaining, easy to
humorous informative understand
secondarily informative humorous, humorous, informative
entertaining easy to
understand
not believable, believable, believable believable,
easy to easy to entertaining
understand understand

The Global Debate and Advertising:

 Globalization(Standardization)
 Localization (Adaptation)
 Contingency (Moderate) May be Best Strategy
Advantages of Global Marketing and Advertising:
• Economies of scale in production and distribution
• Lower marketing and advertising costs
• Ability to exploit good ideas on a worldwide basis
• Consistent brand and/or company image in all markets
• Simplification of coordination and control of marketing and
promotional programs
Problems with Global Advertising:
• Differences in market and economic development, consumer
needs, media availability and legal restrictions
• Cultural differences make advertising standardization difficult
• Usage patterns and perceptions of a product may vary from one
country to another
When is Globalization Appropriate?
• Brands that can be adapted for a visual appeal
• Brands that are promoted with image campaigns that play to
universal appeals
• High-tech products and new products coming to the world for the
first time
• Products with nationalistic flavor

• Products that appeal to a market segment with universally

similar tastes, interests, needs and values
Criteria for Selecting an Agency for International Advertising:
 Ability of agency to cover relevant markets
 Quality of agency work
  Market research, PR, and other services offered
 Roles of company advertising department and agency
 Level of communication and control desired
 Ability of agency to coordinate internationally
 Size of company’s international business
 Company’s desire for local vs. international image
 Company organizational structure
 Centralized vs. decentralized
 Company level of involvement with international operations
Advertising and market research areas
 Information on demographic characteristics of markets
 Information on cultural differences such as norms, lifestyles and
values
 Information on consumers’ product usage, brand attitudes, and
media preferences
 Information on media usage and audience size
 Copy testing to determine reactions to different types of
advertising appeals and executions
 Research on the effectiveness of advertising and promotional
programs in foreign markets
Creative Decisions:
Creative decisions involve determining the appropriate advertising
message for each market and are similar in process and procedure to
those for domestic advertising as:
 Creative decisions should be based on advertising and
communication objectives
 Copy platforms must be developed that include major selling
ideas
 Specific appeals and execution styles must be selected
 Appeals may have to be adapted for local market conditions

Media Selection Decisions:

 Media differ in various countries with respect to factors such as:
– availability
– cost
– usage
– quality
– restrictions
  Media options include use of local, national or international
media

Factor to Consider in Developing Promotion Programs for

Foreign Markets:
 Economic development
 Market maturity
 Consumer perceptions
 Trade structure
 Regulations