Chapter 10: Communications and Advertising Strategy
Chapter Objectives
After reading this chapter, students should understand:
·The basic model of communication and how technology is changing that model
·The elements of an integrated marketing communications (IMC) program
·Setting advertising goals and selecting target audiences
·Developing message strategies
·Key elements of media planning
·How advertising budgets are set
·Alternative approaches for evaluating advertising spending.
Chapter Overview
The purpose of this chapter is to introduce the concept of integrated marketing
communications (IMC) and explain how to develop advertising strategy within an IMC
program.
Chapter Outline and Key Terms
Communications and Advertising Strategy
Key Terms:
·Integrated marketing communications (IMC)
·Personal channels of communications
·Non-personal channels of communications
·Direct marketing
·Telemarketing
·Direct-mail marketing
·Direct sales
·Do not call registry
·Sales promotion
·Consumer-oriented promotions
·Trade promotions
·Public relations
·Personal selling
·Informational appeals
·Emotional appeals
·Physiological methods
·Theater tests
·Inquiry tests
·On-the-air/recall tests
·Sales/mini-market
A. Definitions
1. Integrated marketing communications (IMC): the concept that all elements
of the marketing mix communicate messages that must be coordinated in
order to reinforce what each is saying and to avoid customer confusion
2. Personal channels of communication: communication channels that involve
direct sales as well as face-to-face or word-of-mouth interactions between
customers.
3. Non-personal channels of communication: mass media communication
channels, such as television, newspapers, radio, direct mail, and the Internet.
4. Direct marketing: any communication form that sends messages direct to a
target market with the anticipation of an immediate or very short term
response; also, any method of distribution that gives the customer access to
the firm’s products and services without any other intermediaries.
5. Telemarketing: a form of direct marketing that uses the telephone as the
mechanism for reaching potential customers.
6. Direct-mail marketing: a form of direct marketing that involves sending
letters or catalogues to potential customers.
7. Direct sales: in the context of direct marketing, an approach that involves
the use of friends and neighbors as the sales force in reaching potential
customers.
8. Do not call registry: gives consumers a choice abut whether or not they
wish to receive phone calls from particular telemarketers.
9. Sales promotion: communication activities that provide extra incentives to
customers or the sales force to achieve a short-term objective.
10. Consumer-oriented promotions: a marketing tool such as a coupon that
targets consumers and is intended to generate a short-term change in a
product’s sales or market share.
11. Trade promotions: sales promotions oriented toward the channels of
distribution to an effort to get the channels to carry and promote the product,
often including devices such as sales contests, quantity discounts, and
training programs.
12. Public relations: communications for which the sponsoring organization
does not pay, often in some form of news distributed in a non-personal form.
13. Personal selling: the use of face-to-face communications between buyer and
seller
14. Informational appeals: an approach to developing advertising copy that
focuses on the functional or practical aspects of the product.
15. Physiological methods: measured advertising response by taking physical
measures, such as pupil dilation or eye tracking.
16. Theater tests: tests of prospective advertising copy that take place in a
theater-like environment.
17. Emotional appeals: an approach to developing advertising copy that strives
to tap an underlying psychological aspect of the purchase decision.
18. Inquiry tests: track the number of inquiries received from a print
advertisement.
19. On-the-air/recall tests: measure advertising effectiveness through follow-up
surveys after a TV advertisement is shown.
20. Sales/mini-market: advertising tests in controlled geographic areas.
B. Communications
1. Figure 10.2 Page 282 Model of the Communication Process Outlines a
basic communication process.
2. Includes two channels of communications:
·Personal
·Non-personal
1. Integrated Marketing Communications—the objective is that all of the
communication is coordinated with marketing strategy
·Figure 10.6 Page 285 Elements of the Communication Mix Elements
of the marketing communications mix are outlined.
2. Advertising: any form of paid non-personal communication
·Advantages—degree of control over what is communicated to potential
customers. Ability to reach a large section of population effectively,
quick, low cost, flexible
·Disadvantages—difficult to measure effectiveness, some methods are
expensive (Television), difficult to target a certain population, difficult
for target population to receive the message due to the number of other
messages that are being received by customers
·Table 10.1 Page 286 Advertising Expenditures: Consumers versus
Business-to-Business Products Demonstrates the differences in budget
allocations between consumer and business-to-business advertising.
3. Direct marketing: sends direct message to target market with expectation of
immediate or short-term response
·Various types of direct marketing vehicles. Include:
·Telemarketing
·Direct-mail marketing
·Direct sales
4. Sales promotion
·Communication activities that provide extra incentives to achieve short-
term objectives. May include:
·Consumer-oriented promotions
·Trade promotions
5. Publicity and public relations: Communications activities for which the
sponsoring organization does not pay
·Advantages—assumed information is from an unbiased objective point
of view, inexpensive
·Disadvantage—company has no control over the information and the
information could be negative
6. Personal selling
·Advantage—can target market and messages. Good for products that are
complicated to use
·Disadvantage—expensive, lack of company control about how the
interaction with the sales force and the customer will be carried out
Illustration: Absolut Vodka (www.absolut.com) Page 288
Illustration: LG Electronics (www.lg.com) Page 289
C. Advertising Management
1. Advertising is a major expense for marketing managers worldwide. As
examples:
·Table 10.2 Page 289 Top 10 US Total Advertising Spenders in 2006
(millions of dollars) Provides the spending levels for the top 10 total
advertisers in the US.
·Table 10.3 Page 290 Top B-to-B Total Advertising Spenders in
2006 (millions of dollars) Provides the spending levels for the top 10
business-to-business advertisers in the US.
·Table 10.4 Page 290 Top Global Advertisers in 2008 (millions of
dollars) Provides the spending levels for the top global advertisers.
2. Advertising decision-making
·Advertising decision-making has six stages (6M model for
communications planning):
·Market: Who is the target audience?
·Mission: What is the goal of advertising?
·Message: What are the specific points of communications?
·Money: How much is the budget?
·Measurement: How will impact of advertising be measured?
3. Selecting the target audience
·This decision follows directly from the marketing strategy. (See
Chapter 2)
·Selection of target markets is a critical step following marketing
objectives
·Requires extensive analysis of various segmentation options
4. Setting advertising goals
·Marketing manager recognize that many factors in the environment
affect sales not just advertising
·Marketing manager should remember that advertising can be mostly
effective in building sales, but only to the extent that the complete
marketing strategy is appropriate
·Choice of advertising goals and objectives will vary according to the
product life cycle
·Figure 10.8 Page 293 Advertising Goals over the Product
Life Cycle Shows how advertising goals might change over
time
5. Developing the message strategy
·Marketing manager should always be involved in determining
objectives of the advertising
·Different approaches to creating advertising or appeals can be
classified in the following way:
·Informational or rational appeals
·Feature/benefit appeals: Focus on the dominant attributes or
characteristics
·Competitive advantage appeals: Superiority over another
product
·Favorable price appeal: Price is the dominant factor
·News appeals: Some kind of announcement about the
product dominates
·Product or service popularity appeals: How popular the
product is among target audiences
·Emotional appeals
·Focuses on imagery and symbols and eschews reference to
product attributes
·Taps underlying psychological benefit of the purchase
decision
·With the informational and emotional categories of appeals, there are
a variety of different tactical or execution approaches. These include:
·Straight-sell or factual message
·Scientific/technical evidence
·Product demonstration
·Comparisons
·Testimonials
·Slice of life (customer’s problem is solved by the product)
·Animation
·Personality symbols
·Fantasy
·Dramatization
·Humor
6. Evaluating message copy
·There are ways to evaluate the effectiveness of the advertising
message. These methods include:
·Laboratory tests: Figure 10.10 Page 297 Classification of
Copy-Testing Methods Is a classification of different
methods used for pre-testing and post-testing advertising
·Consumer jury: Focus groups
·Portfolio tests: Respondents show both control and
test ads
·Readability tests: Readability of copy of a print ad
·Physiological methods: These methods may include
·Pupil dilation
·GSR/EDR (galvanic skin response/electro-
dermal response
·Eye tracking
·Theater tests: Widely used method for pre-testing TV
ads
·Laboratory stores: Simulation of shopping
environment
·Real-world measures
·Dummy advertising vehicles: Dummy magazines
with test ad inside
·Inquiry tests: Ad tested by number of inquiries
generated
·On-the-air/recall tests: Ads inserted into TV programs
in one or more test markets. Consumers tested on
recall.
·Recognition tests: Tests consumers on recognition on
whether they have seen the ad
·Sales/mini-market tests: Allows advertisers to market
test in TV cable markets with variations of ads against
a control ad
7. Selecting media
·Selecting media more difficult with the rapid development of
alternative media
·Three main aspects to media planning
·Selecting the appropriate media for advertising campaign
·Selecting specific vehicles within each medium
·Scheduling the advertising
·Media selection: Divided into two types
·Traditional media:
·TV
·Magazines and newspapers (print)
·Radio
·Cable TV
·Outdoor
·Table 10.5 Page 300 US Measured Media for All
Advertisers in 2008 (billions of dollars) Provides the
spending levels for all measured media in 2008
·New media
·The Web
·Table 10.6 Page 300 US Online Advertising
Spending, by Format, 2008 – 019 (in
millions)
·Branded entertainment: Paid product advertising as
TV show
·Table 10.7 Page 303 Most Placed Products in
TV Shows September 2004 – September