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INTRODUCTION TO ADVERTISING & ADVERTISING AND MEDIA PLANNING
INTRODUCTION TO
ADVERTISING
&
ADVERTISING AND
MEDIA PLANNING

Introduction to Advertising | Advertising and Media Planning

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STUDY GUIDE

INTRODUCTION TO ADVERTISING

Define Advertising Understand the role of advertising in the marketing mix Understand the characteristics of
Define Advertising
Understand the role of advertising in the marketing mix
Understand the characteristics of advertising compared to other promotion tools
Understand market segmentation, target market and target audience
Understand the different types of advertising campaign
Understand the cooperation of the marketing department and its advertising agency
Understand the advertising creative process
Understand the advertising production process
Understand the media process in advertising
Understand the ethics and law governing advertising
Understand advertising testing and evaluation

COURSE DESCRIPTION

The market place is crowded with many brands of product, all competing to be the leader. In their effort to gain market leadership, marketers use Advertising as one of their promotion tool.

This study guide will help you understand how Advertising as a Promotion Mix supports Marketing and Marketing Communications effort of brands. Therefore the learning process will begin at understanding the role of advertising in marketing and promotion, and continues on to describe how advertising works in creating image and differentiation of brands to achieve competitive advantage in the market place.

As the creator of advertising, Advertising Agencies plays a major role in creating winning brands. You will also learn how Advertising Agencies work in planning and creating winning advertising campaign.

SUBJECT OBJECTIVES

After studying this subject, students will be able to:

Understand the different types of advertising agencies and advertising agencies organization

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Scheme of Work

Semester I

Introduction to Advertising

The Role of Advertising in Marketing Advertising and the Promotional Mix Understanding the Customer and
The Role of Advertising in Marketing
Advertising and the Promotional Mix
Understanding the Customer and Consumer
Understanding the Customer and Consumer
Types of Advertising Campaign
Specialist Forms of Advertising
The Advertising Manager and Advertising Department

WEEK 1

Topic 1

WEEK 2

Topic 2

WEEK 3

Student Presentation on Advertising of Choice

Objective: To create awareness and basic knowledge about the elements of advertising which makes it an effective or ineffective advertising.

WEEK 4

Topic 3

WEEK 5

Topic 3

WEEK 6

Topic 4

WEEK 7

Topic 5

MIDTEST

WEEK 8

Topic 6

WEEK 9

Topic 6

The Advertising Manager and The Advertising Department

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WEEK 10

Topic 7

Determining and Setting Budget

WEEK 11

Types of Advertising Agencies Agency Recognition and Remuneration Functions of Departments in Advertising Agencies
Types of Advertising Agencies
Agency Recognition and Remuneration
Functions of Departments in Advertising Agencies
Creation of Advertisements and Commercials
Creation of Advertisements and Commercials

Topic 8

WEEK 12

Class Presentation and Discussion on Advertising Agencies in Indonesia

WEEK 13

Topic 9

WEEK 14

Topic 10

FINAL EXAM

Semester II Advertising and Media Planning

WEEK 1

Topic 11

WEEK 2

Topic 11

WEEK 3

Presentation of Advertising Creative: Storyboard / Storyline

WEEK 4

Topic 12

Production of Advertising Materials in Media

WEEK 5

Topic 13

Media in Advertising and Printed Media

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WEEK 6

Topic 14

Broadcast Media and Other Media

WEEK 7

Media Research Media Planning Ethics and Codes of Practice Advertising and The Law Advertising Testing
Media Research
Media Planning
Ethics and Codes of Practice
Advertising and The Law
Advertising Testing and Evaluation
Advertising Testing and Evaluation

Topic 15

MIDTEST

WEEK 8

Topic 15

WEEK 9

Group Exercise on Media Planning

WEEK 10

Topic 16

WEEK 11

Group Presentation on Codes of Practice

WEEK 12

Topic 17

WEEK 13

Topic 18

WEEK 14

Topic 18

FINAL EXAM

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6 6

Introduction

6 6 Introduction Marketing departments create products and brands that suit the demands of the customers

Marketing departments create products and brands that suit the demands of the customers and consumers. Advertising agencies help by encouraging the target consumers and customers to buy the brands through their persuasive messages. If the advertising is successful and if the customers like the products, they will buy again and again.

Advertising is also used to promote a corporate image, to persuade target audiences of a company’s performance and abilities, and it may also be used to inform by providing data such as specifications or details of financial services.

Whatever the form of advertising, advertisements and commercials have to be created with messages that are appealing, attractive, and convincing. The messages must also be communicated to customers at the right time and in the right place. Hence, the advertising industry needs media – newspapers, magazines, television, radio, posters and cinema. Each publication and each television or radio programme is seen by different types of people. Equally, a variety of people pass posters and visit cinemas.

The variety of products advertised and the media used mean that advertising is acomplicated process. It is an area that requires the expertise of specialist companies – advertising agencies. These agencies form the backbone of the advertising industry, together with sales promotion, public relations, direct response and other agencies, consultancies and suppliers.

Introduction to Advertising

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PART 1 BACKGROUND TO ADVERTISING

CHAPTER 1

7 PART 1 BACKGROUND TO ADVERTISING CHAPTER 1 THE ROLE OF ADVERTISING IN MARKETING 1. To

THE ROLE OF ADVERTISING IN MARKETING

1. To understand the role of business 2. To understand the role of advertising in
1. To understand the role of business
2. To understand the role of advertising in marketing
3. To understand the marketing mix
4. To understand push/pull concept
5. To understand advertising objectives

The Role of Advertising in Marketing

CHAPTER OUTLINE:

This chapter is about understanding the relationship between marketing and advertising and how advertising as part of the marketing mix helps marketers influence their target consumers into using their brands. It also discusses how advertising can provide a competitive edge by establishing image and brand differentiation.

OBJECTIVES:

Making a profit is the ultimate goal in a business venture and this is achieved by marketing products which are successful in fulfilling customers needs and wants, be it a physical need such as to overcome hunger and thirst, or emotional need such as to be accepted by family, friends and society.

The marketing effort is supported by promotion techniques such as sales promotion and advertising, so that the target consumers are informed of the availability of products and services that fulfill these needs and wants.

While marketing will establish the goods and services that will sell, advertising will inform the market that they are available. Advertising will promote the product and service in such a way to appear attractive to consumers and customers as well as different from competitors. Advertising will continue to highlight the different benefits and advantages long after the initial launch, therefore, helping to maintain demand in a competitive market where rivals are trying to sell their products as well.

Advertising does not only address customers and consumers, but also wholesalers, distributors and retailers who must be convinced to stock the products before advertising to the customers and consumers begins.

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THE ROLE OF ADVERTISING IN MARKETING

8 THE ROLE OF ADVERTISING IN MARKETING The Marketing Mix A company must find products and

The Marketing Mix

A company must find products and services that are needed and wanted if they want to

embark on a successful relationship with customers, so that they will come back for more of the same product. Therefore, there are factors which have to be considered when launching

a

new product and are referred to simply as the Four P’s : the right product
new product and are referred to simply as the Four P’s :
the right product
at the right price
in the right place
with the right promotion

The Right Product

It

so there is little point in attempting to advertise in the hope that it will be consumed. Hence the need to research the market-place to establish what product is wanted by customers; but the emphasis is on the right product to satisfy the needs and wants of the customer and user. The right product is more than the physical product –sometimes called the core product. It means the total product offering with all the variations and combinations.

has already been stated that if the product doesn’t suit the customer, it will not be bought,

The Right Price

Pricing is a crucial part of the marketing mix. If you sell a product cheaply enough, customers will be very eager to buy. But a low price may also indicate the product is lacking in quality and may not be attractive to the customers. Most often customers are prepared to pay for products and services that the company has developed that meet their demands.

The Right Place

The right place for products and services are where they must be readily available and convenient for the customers to have access to them. If they are not located where the customers want them, then other products and services, often from the competitors, will be bought.

The right place also means that it will project the image and reputation of the brand.

The Right Promotion

Promotion is the total activity to project the total reputation or image of a product, service, or company together with their associated names ( i.e. brand and corporate image).

Promotion covers packaging, advertising, public relations, sales literature, sponsorship and point-of-sale (POS) displays – in fact, all of the above-the-line and below-the line techniques to assist the sales process. Promotion, therefore, is the total way that a company presents its

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THE ROLE OF ADVERTISING IN MARKETING

9 THE ROLE OF ADVERTISING IN MARKETING products to the market. The result is that promotion

products to the market. The result is that promotion communicates the company’s reputation and the reputation of its products and services. A company’s reputation is a valuable commodity and many businesses profit from the goodwill that is generated as it results in more sales and easier sales.

to launch a new product or service to create brand awareness to generate interests to
to launch a new product or service
to create brand awareness
to generate interests
to generate sales inquiries
to promote new or improved version
to inform of another promotion such as sales promotions

Advertising Objectives

Selling in- Push /Pull

“Push” means “selling in” the products to the wholesalers and retailers to encourage stocking up once the consumers have seen the advertising or other promotion activities. This process involves informing the wholesalers and retailers about the products that will sell at the right price to allow profit for the wholesalers and retailers.

“Pull” is the encouragement for the customers to go to the stores to buy the products, after they have been exposed to the advertising and promotion activities.

It must not be assumed that once a product has been launched, then the manufacturer, or indeed the retailer, can sit back and relax. Customers must be reminded to keep buying the same brand, and failing to do so will lead to brand switching and buying a competing brand. New brands from competitors will also lure the customers to try them.

This means that manufactures need to innovate by promoting their brands differently, such as by adding new ingredients or reformulating the products

With regard to the above, aims of an advertising campaign or advertising objectives may be one of the following:

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THE ROLE OF ADVERTISING IN MARKETING

10 THE ROLE OF ADVERTISING IN MARKETING Points to remember • • • • • •

Points to remember

Advertising is a promotion technique which helps marketing of products and services by making them appear attractive and different from their competitors.

them appear attractive and different from their competitors. Advertising is only a part of the marketing

Advertising is only a part of the marketing mix, therefore, successful marketing effort is also contributed by other elements of the marketing mix.

Advertising is only one promotional tool and has to be used with other means such marketing, public relations, sales promotion, etc to ensure effective promotion efforts.

Advertising reflects the image and the position of the product within the market place.

Products and services have to be available in the stores, before they can be effectively promoted to the consumers.

Advertising can be used to support existing brands as well as to introduce a new brand.

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CHAPTER 2

ADVERTISING AND THE PROMOTIONAL MIX

11 CHAPTER 2 ADVERTISING AND THE PROMOTIONAL MIX ADVERTISING AND THE PROMOTIONAL MIX 1. 2. 3.

ADVERTISING AND THE PROMOTIONAL MIX

1. 2. 3. 4. 5. 1. Public Relations 2. Advertising 3. Sales Promotion
1.
2.
3.
4.
5.
1. Public Relations
2. Advertising
3. Sales Promotion

The elements of the promotional mix are:

CHAPTER OUTLINE

This chapter will provide an understanding of how advertising as one of the promotion technique can collaborate with other promotion techniques: marketing public relations, sales promotions, personal selling and direct marketing to effectively promote a brand in the competitive market place.

It will discuss the characteristics of each of the promotion technique and how it can be used as a promotion tool. Other supporting element such as packaging and sponsorship is also discussed to show its contribution in the promoting and establishing brand image.

OBJECTIVES:

To define promotional mix To define advertising To define other promotion tool: marketing public relations, sales promotion, personal selling, direct marketing To understand how promotion mix are used to achieve marketing objectives To understand how other elements of promotion such as media relations, sponsorship, packaging design contribute to the promotion efforts

Elements of the promotional mix

The promotional mix consists of the various ways companies use to promote and sell their products and services to their customers.

4.

Direct Marketing

5.

Personal Selling

Elements such as packaging are also considered as a major element in the promotion effort, along with other activities such as sponsorship, or a public relations tactic which is effective in getting across advertising messages as well enhancing brand and corporate image.

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ADVERTISING AND THE PROMOTIONAL MIX

12 ADVERTISING AND THE PROMOTIONAL MIX A company can use any of the above promotion tool

A company can use any of the above promotion tool together, or just one, depending on the marketing communication objectives.

Public Relations

.’). ● educating the customers about the benefits and advantages of new concepts ● ●
.’).
educating the customers about the benefits and advantages of new concepts
encouraging interest in the product
easing the sales process by establishing goodwill and reputation
promoting the corporate, brand and product image
creating awareness
launching the product (by news release and news conferences)

The Institute of Public Relations defines public relations as follows:

Public relations is about reputation – the result of what you do, what you say and what others say about you. Public relations practice is the discipline which looks after reputation with the aim of earning understanding and support, and influencing opinion and behavior.

Public Relations is assuming greater importance in the promotion efforts of brands and companies. Public Relations strategy and tactics are often used to communicate effectively with costumers, employees, and share holders. However, it is not the role of public relations practitioners solely to build an image in the market-place, but also to ensure that the company is delivering the products and services to the satisfaction of its publics. The public relations person does not merely mount a campaign to state this but makes sure that the company is doing it by advising the

organization on its actions (after all, ‘public relations is about reputation – a result of what

you do

Media Relations

Media relations is used as part of the public relations program to get the company’s message across to everyone who has an influence on the acceptance of the company, its products or services. Media relations does this by:

informing customers of the benefits and advantages of dealing with new companies in the market-place

providing detailed information (e.g. on specifications as well as on the use of products and services)

Techniques often used are:

● news releases to announce new products or developments which can be used and developed as news items in the media

● media statements (oral/written) to make announcements which the company does not want to expand upon

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ADVERTISING AND THE PROMOTIONAL MIX

13 ADVERTISING AND THE PROMOTIONAL MIX ● articles and features to expand on issues surrounding the

● articles and features to expand on issues surrounding the product (e.g. nutrition, when promoting a snack bar)

● interviews, receptions and briefings to give background to the product, service, company or key staff (e.g. an inventor)

● news conferences to announce products, services or a key development (e.g. a launch or
news conferences to announce products, services or a key development (e.g. a launch
or take-over bid)
photo-opportunities or press calls for newspaper photographers and TV cameramen
to obtain shots of a personality or product (e.g. a personality endorsing product or a
stunt)
case history featuring a product in use – especially in trade and technical public
relations
facility visit to factory where products are made
product loans (of computers, for example) for journalists to review.
leaflets and booklets to explain, educate and inform, especially of new concepts or
ones difficult to grasp and understand
news sheets and newsletters to carry more immediate information and items of interest
about the company
house magazines (external and internal) to inform and give greater background
(including perhaps, social aspects of the organization)
brochures and videos, particularly for promoting the corporate image.

Other Publicity Tools

As a company cannot always expect that the media will publish their news, it often used other publicity tools:

Advertising

Advertising may be defined as follows:

Advertising is a means of communication which uses printed, broadcast or other media, where space or air-time may be purchased for the purpose of persuading customers, consumers, users or other interested parties of the benefits and advantages of an organization and/or the products or services it delivers.

Advertising aims to create awareness and interests, and its persuasive message convincing the target audience that the advertised brand will fulfill their needs and wants.

While brand advertising establishes brand image, corporate advertising on the same level will create corporate image, and thus ensuring customers that brands manufactured by the company will benefit them.

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Sales Promotion

ADVERTISING AND THE PROMOTIONAL MIX

14 Sales Promotion ADVERTISING AND THE PROMOTIONAL MIX The Institute of Sales Promotion defines sales promotion

The Institute of Sales Promotion defines sales promotion as:

Sales promotion comprises that range of techniques used to attain sales and marketing objectives in a cost-effective manner by adding value to a product or service either to intermediaries or end-users, normally but not exclusively within a defined time period.

• Discount coupons • Free sample to try the product • Discounted price • Added
• Discount coupons
• Free sample to try the product
• Discounted price
• Added volume
• Gifts
• Buy 1 get 1 free
• Discount price to increase profits
• Prizes
• Co-operative advertising or joint promotion
• Display material at point of sales to attract customers.
• In store demonstration

Customers still need that final incentive to actually buy, and so manufacturers, in conjunction with retailers and wholesalers, will use sales promotion techniques to ensure that they get the sale. It is no longer a panic measure used when sales are slow or the stockroom is too full – sales promotion is a strategic tool used in a planned way to achieve marketing objectives.

Consumers Incentives

Trade incentives

Direct-Response Marketing

Direct-response marketing may be defined as:

Direct-response marketing is selling goods or services without shops and usually without personal salespeople, direct to customers in response to orders generated by direct mail shots, leaflets, catalogues, telephone calls and printed or broadcast advertisements.

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ADVERTISING AND THE PROMOTIONAL MIX

15 ADVERTISING AND THE PROMOTIONAL MIX Differences between direct-response marketing and direct mail Direct Mail •

Differences between direct-response marketing and direct mail

Direct Mail

• Direct mail is dispatch of promotion materials by mail. • • In direct response
Direct mail is dispatch of promotion materials by mail.
• In direct response mail shot is an order form with information for purchase.
• There is also information for payment of purchase.
• Press advertisements
• Broadcast advertising (radio and TV shopping channels)
• General mail- order catalogues
• Leaflets inserted into magazines and newspapers
• Leaflets and catalogues sent to mailing list
• Leaflets and catalogues distributed door to door
• Door to door salespersons
• Salespersons working in retail outlets

Direct Response Marketing Techniques

Personal Selling

The recipient of the mail shot is asked to do certain action such as asked for brochures to be sent.

Direct Response

Direct-response marketing is a very attractive way for companies to get into the market- place as it does not involve retail outlets and so there is no need to ‘sell in’ to establish retailers or to open an individual shop or store. Some very successful companies have been started in this way (e.g. Body Shop). In addition, computer technology has eased the job of compiling mailing list of customers, addressing envelopes as well as analyzing customer preferences and buying habits. Improved telecommunication systems has led to the growth of telemarketing.

Salespersons are assigned and trained to promote product and services directly to customers. Salespersons can range from someone who merely takes sale orders to people who provide expertise in finding solution to customers’ problems.

Consumer Sales

• Specialist salesperson selling services (insurance)

• Salespersons in showrooms

• Sales/account officer/customer service in bank, etc.

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Trade Selling

ADVERTISING AND THE PROMOTIONAL MIX

16 Trade Selling ADVERTISING AND THE PROMOTIONAL MIX For selling in or push strategy, usually performed

For selling in or push strategy, usually performed by salesman and account managers responsible for corporate sales.

• Sales representatives to sell office equipments and commercial services • Sales engineers selling tools,
• Sales representatives to sell office equipments and commercial services
• Sales engineers selling tools, machines, raw materials, chemicals, etc
• Sport events

Commercial and industrial selling

Industry requires raw materials, equipment etc, therefore there is a need of business to business marketing which involves personal selling by:

Packaging

Packaging not only contains the product and protects it during transit from the manufacturers to the customers and consumers, but it will also preserve it by keeping it fresh. The pack is also a means of storing, stacking and dispensing the product.

In addition to the above, the pack has become the final means of communicating brand benefits. The pack can also be used to inform promotion activities.

The elements in the pack design such as shape, size, color, brand name and type face reflects brand identity and brand image as established by advertising

Sponsorship

Frank Jefkins gives his definition of sponsorship as :

The giving of monetary or other support to a beneficiary in order to make that beneficiary financially viable, sometimes for altruistic reasons, but generally to gain some advertising, marketing or public relations advantage.

Sponsorship may not have a direct effect on sales but it creates a climate of goodwill where the corporate or brand image is associated with benefiting sports, cultural and other worthwhile activities, players and performers.

Areas of Sponsorship

• Art/ music events

• Festivals

• Awards ceremonies

• Television and radio programs, etc

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Aims of Sponsorship

ADVERTISING AND THE PROMOTIONAL MIX

17 Aims of Sponsorship ADVERTISING AND THE PROMOTIONAL MIX ● to brand and position a product

● to brand and position a product or service by association

● to create brand awareness by exposure

● to support associated promotional activity ● to reinforce corporate identity ● to overcome an
● to support associated promotional activity
● to reinforce corporate identity
● to overcome an advertising ban
● to target a particular audience
● to generate goodwill in the community
● to support customer relations.

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ADVERTISING AND THE PROMOTIONAL MIX

18 ADVERTISING AND THE PROMOTIONAL MIX Points to remember • • • • • • •

Points to remember

Advertising is part of the promotional mix (consisting of public relations, sales promotion, media advertising, and direct response marketing) and is, therefore, not the sole means of promoting a product, service, brand or company.

Media advertising can be used to create interest and gain attention. Salespersons are used for
Media advertising can be used to create interest and gain attention.
Salespersons are used for selling to wholesalers and distributors.

Within each element of the promotional mix, there are a number of means and methods that can be used to achieve the sales and marketing objectives.

However, not all of the elements have to be used for a promotional campaign – only a combination of the most suitable to achieve the objectives.

Public relations consists of media relations and publicity tools such as printed matter and videos, together with presentations and special events to support marketing by communicating the company’s reputation.

Media relations can be used to create the climate for the acceptance of new concepts and new suppliers.

Advertising uses printed, broadcast and other media to communicate the advertiser’s message to the market.

Sales promotion uses a range of techniques to stimulate customers to stock or buy the product as promotions can be targeted at end customers as well as wholesalers and retailers.

Direct-response marketing is used to ‘sell off the page’ from catalogues and press advertisements amongst a range of other techniques.

Personal selling is used to sell goods and services through retail outlets as well as to the proprietors and owners of retail outlets.

Personal selling is also used to sell products and services to industrial and commercial companies.

Packaging is used to protect and contain products but also to convince customers to buy the brand or product.

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19 UNDERSTANDING THE CUSTOMER AND CONSUMER CHAPTER 3 UNDERSTANDING THE CUSTOMER AND CONSUMER 1. To define

UNDERSTANDING THE CUSTOMER AND CONSUMER

CHAPTER 3

UNDERSTANDING THE CUSTOMER AND CONSUMER

1. To define target market 2. To define target audience 3. To define segmentation 4.
1. To define target market
2. To define target audience
3. To define segmentation
4. To understand the process of segmentation
5. To understand the use of research in identifying target market
6. To understand the role of positioning and branding
1.
2.
3.
4.
5.

CHAPTER OUTLINE

Although many products and services are said to be “mass-market”, but in actuality, no company markets its products and services to the whole general public. Therefore the target market, (the people who are most likely to be interested in your products) must be identified. Through research and then by using the process of segmentation, the company will select its target market. This chapter will discuss the research process and the means of segmentation.

OBJECTIVES:

Establishing the Market-Place

As it is virtually impossible to get everyone to buy your products or services, a company must identify the sector of the market that is most likely to buy or use their offerings. The steps are:

establish a sector where there is a demand for which customers are prepared to pay develop the product arrange production cost-effectively distribute the product to the wholesalers and retailers use advertising to tell the market-place about the product.

The Target Market

The marketing department does extensive market research to discover how the market-place is segmented. It can then study the segments to find the needs and wants of the individuals within specific segments. The members of the selected segment is then determined as the target market. In other words the target market are the people who are most potential to buy/ consume the company’s product/ services.

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UNDERSTANDING THE CUSTOMER AND CONSUMER

20 UNDERSTANDING THE CUSTOMER AND CONSUMER The Target Audience The target audience are members of the

The Target Audience

The target audience are members of the target market to whom promotion and advertising messages will be addressed. Target audience can be broken down into smaller more manageable markets that have different wants and lifestyles. One of the biggest – and most important target audiences is housewives, because of the major decisions that they make on household purchases, but even this segment can be broken down into smaller categories such as urban housewives, working housewives and housewives with children.

segment must have the following qualities: 1. 2. 3. 1. 2. 3. 4. 5. 6.
segment must have the following qualities:
1.
2.
3.
1.
2.
3.
4.
5.
6.
7.
1.
cost are kept low as they targeted to profitable marketing
2.
production are more efficient since as can concentrate on specific items
3.
minimized wasted stocks

Further research will enable the marketing department to find what publications the members

of the target audience read, the radio stations they listen to and the television programs they watch. Similar research is often done by the advertising agency as

is vital to develop a message that appeals to the target audience and to ensure that the commercials and advertisements are seen and heard by the right audience.

it

Segmentation

A

it must have specific characteristics that can be defined and measured it should be accessible for distribution chain and for advertising and promotion messages. it must be sufficient in size or volume for the company to gain profit

Once isolated, the segment can be further studied, to establish

its precise needs, wants and aspirations the incomes and types of job of people within the segment its location its potential in terms of sales and profit effective means of communicating with it (so that the right media and messages can be used) economic budgets for advertising and promotion what to offer to suit the characteristics of the segment

The benefits for the company:

4. more profits

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Means of Segmentation

UNDERSTANDING THE CUSTOMER AND CONSUMER

of Segmentation UNDERSTANDING THE CUSTOMER AND CONSUMER ● demographics ● geo-demographics (a combination of

● demographics

● geo-demographics (a combination of demographics and location)

● social grades ● family lifecycles ● lifestyle ● behavioral types • sex • age
● social grades
● family lifecycles
● lifestyle
● behavioral types
• sex
• age
• social class
• family life cycle
• education
• employment
• occupation
• marital status
etc
• single
• newly married
• full nest ( have children)

Family life cycle

The family life cycle is used to segment th market based on life stages:

empty nest ( no more dependents) etc

Demographics

Classifying target market/target audience on measurable factors:

Geo-demographics

Geo-demographic is classifying the target market/audience into location of residences such as , urban, suburbs, rural, etc.

Social grades

This classification is based on social class which may use annual income or monthly expenditure as means of classification.

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Lifestyle

UNDERSTANDING THE CUSTOMER AND CONSUMER

22 Lifestyle UNDERSTANDING THE CUSTOMER AND CONSUMER Lifestyle or the way people live as affected by

Lifestyle or the way people live as affected by numbers of factors such as

• daily activities ( hobbies, work activities, social and family activities ) • interests (fashion,
• daily activities ( hobbies, work activities, social and family activities )
• interests (fashion, music, etc)
• opinions ( attitudes to political, social, economic, cultural issues, etc)
• market size
• market potentials
• market location
• target market attitudes concerning a particular product

Behavioral Types

Behavioral types are further variation of lifestyle. It is based on social expectation, goals and beliefs.

Market Research

To determine the different segments and target group, process called market research is conducted. Market research will identify:

Marketing Research

Marketing research is conducted to provide information that will assist the process of marketing, for example in identifying which media is effective in reaching the target audience, which advertising message is credible, etc.

Research Terminologies

Qualitative Research

Based on the work “ quality”, this type of research is looking for qualitative information in the market place. The qualitative information could refer to consumer needs and wants, their behavior in using a certain products. This information is helpful to advertisers and advertising agencies in establishing marketing communication strategies to influence the target audience to use the products. Another name for this research is Attitudinal Research, as it considers the attitudes of potential customers and consumers, such as beliefs and values, as these will influence behavior in the market place.

Attitudes, values and beliefs play an important part in people’s motives, therefore it is vital that they are examined and tested. The motives that can be investigated include not only physical needs (such as food, drink, shelter and warmth) but also psychological wants

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UNDERSTANDING THE CUSTOMER AND CONSUMER

23 UNDERSTANDING THE CUSTOMER AND CONSUMER (e.g. security, status and esteem). As Maslow’s Hierarchy of Needs

(e.g. security, status and esteem). As Maslow’s Hierarchy of Needs (Figure 3.1) suggests, customers move upwards from satisfying their physical needs until they reach their full potential.

1 2 3 4 5 1 S elf-actualization 2 E steem 3 Belonging 4 S
1
2
3
4
5
1
S elf-actualization 2 E steem 3 Belonging
4
S ecurity 5 P hysical needs
Figure 3.1 Maslow’s Hierarcy of Needs

Quantitative Research

Quantitative research looks for answers in terms of quantity or how many, for instance how many people believe in family planning. The method involves interviewers finding respondents and asking them appropriate questions. Questions are designed to get a “yes” or “no” answer, which are called closed question. Quantitative research is often used to find the number of people who share attitudes based on age, income bracket, sex or any other demographic factor recorded in the interview. This information is very useful in determining the target market and target audience.

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UNDERSTANDING THE CUSTOMER AND CONSUMER

24 UNDERSTANDING THE CUSTOMER AND CONSUMER Secondary Data The word secondary suggests that the data is

Secondary Data

The word secondary suggests that the data is collected after the primary data has been obtained. However that is not the case. Secondary data which is collected from published materials such as books and websites is usually collected first and then followed by collection of primary data.

first and then followed by collection of primary data. Desk Research Desk research referred to acquiring

Desk Research

Desk research referred to acquiring information behind a desk, such as from books in a library or by using a computer to search for websites. Secondary data is obtained in this way.

Field Research

Field research is carried out face-to-face by speaking to customers or other respondents either in their offices or homes or on the street, and it is the favored way of obtaining primary data.

Primary Data

The objective of obtaining primary data is to find information specifically related to certain issues important to the advertiser or advertising agencies, such information regarding motivation and attitudes in consuming certain products. Primary data are obtained through interviews, questionnaires or discussion with a sample group.

Sampling

Sampling involves questioning a pre-determined number of individuals who are as ‘sample’ of the overall market sector that is under investigation.

Random Sampling

Random sampling means that anyone has an equal chance to being asked questions, or participate in the survey. Once the research has been completed, the data can then be analyzed to establish opinions and attitudes related to various classifications (by age, sex or other demographics). Data gained from random sampling might subsequently be used to identify a group (or segment) that shows a demand for a certain type of product or service.

Quota Sampling

Quota sampling is used when the researchers are seeking to explore a particular group of people. They will want to establish the size, breakdown, attitudes and opinions of that particular group, for example students, 18-21 years old, female.

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UNDERSTANDING THE CUSTOMER AND CONSUMER

25 UNDERSTANDING THE CUSTOMER AND CONSUMER The quota sample represents a segment which have potentials to

The quota sample represents a segment which have potentials to be exploited, providing certain characteristics such as needs and motivation are discovered in the research.

Syndicated Research

• market trends • market size and potentials • target market characteristics such as buying
• market trends
• market size and potentials
• target market characteristics such as buying habits

Using the results of research

After analyzing the data, the result of the survey is used to determine:

Positioning

With syndicated research, either a number of advertisers join together to commission joint research or a research agency establishes research programs which it sells to a group of manufacturers or suppliers. Advertising agencies can also participate either to improve their own understanding in developing campaigns or on behalf of the client.

Omnibus Surveys

Omnibus surveys are continuous research which is carried out on a regular basis with regular samples so that an advertiser or an advertising agency can buy the right to have specific questions asked on particular subjects. The advertiser or agency pays only for the questions that it wants answers to, although the fee includes a contribution to the overheads of maintaining the survey. The costs are therefore shared by all those taking part in the surveys and not by a single company.

Brand positioning means placing the brand in the consumers mind so that it is perceived differently and more superior than competing brands. Successful brand positioning often relies in how the brand is viewed as meeting the needs and wants of its target audience and in how actually the brand fulfills its promise to the consumers.

The brand may have many benefits, but in establishing positioning, the marketer or the advertising agency should focus on one benefit of the brand that is related to the product, the competitors (what they say about their brands), and the characteristic of the consumers. If too many benefits are conveyed, then the message is not “single minded” or focus. For example Volvo has always stayed with the same positioning : the safety aspect of the brand.

Branding

Branding in marketing terms today means creating an image for a product. It is a combination of character, identity and the reputation that is developed by the product and its associations (e.g. the product might be coffee but it is identified and branded as a particular make, such as Nescafe-Classic). A major task of advertising is creating and maintaining brand image as means of establishing competitive edge in the market place.

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UNDERSTANDING THE CUSTOMER AND CONSUMER

26 UNDERSTANDING THE CUSTOMER AND CONSUMER Brand Image Brand image is about perception. Perception is not

Brand Image

Brand image is about perception. Perception is not reality but what is believed. Brand image is the consumer’s total perception of the brand, what he believes the brand is about. Therefore, brand image indicates how the advertising message is understood and interpreted by the consumer.

– attention
– attention

Communicating with the consumers

Advertising must be visually attractive and their messages must be credible as to gain interest, desire to use and finally the act of purchase.

Advertisers and advertising agencies often used models of communication to measure consumer response to the advertising message. The most often used model is AIDA:

A

I – interest

D – desire

A – action

AIDA shows the steps in persuading the target audience to response to an advertising message. A variation includes creating awareness, stimulating interest and understanding, encouraging evaluation, generating a trial or test and ensuring conviction by the customer taking action (by buying the product).

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Points to remember

UNDERSTANDING THE CUSTOMER AND CONSUMER

27 Points to remember UNDERSTANDING THE CUSTOMER AND CONSUMER • people have different needs and wants,

• people have different needs and wants, therefore a company cannot sale its products and services to everyone

• a process called segmentation is used to identify the target market • the market
a process called segmentation is used to identify the target market
the market place can be segmented through
o
demography
o
geo demography
o
socio economic classifications
o
family life cycle
o
lifestyle
o
behavioral types
market research and marketing research are conducted to study the market place to
obtain information about the target market and target audience
qualitative research is to gain information about attitudes, motivation, etc, while
quantitative research to measure size of segment, target markets and audiences
primary data is collected directly from the source to provide information on a particular
marketing problem. It usually involves field research
secondary data is obtained from published sources, and likely to be desk research
communication models such as AIDA can be used to communicate with a brand’s
target market.

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TYPES OF ADVERTISING CAMPAIGN

CHAPTER 4

TYPES OF ADVERTISING CAMPAIGN

CAMPAIGN CHAPTER 4 TYPES OF ADVERTISING CAMPAIGN • • CHAPTER OUTLINE Advertising campaigns are directed
• •

CHAPTER OUTLINE

Advertising campaigns are directed at two main audiences: the consumers and (retailers, wholesalers).

traders

Consumer advertising campaign has specific objective and therefore specific messages to be delivered to the target audience. Hence the many different types of consumer advertising.

Many products are sold directly to the consumers without outlets or shops. In order to purchase the products, a customer must make a direct order by calling a phone number of filling up order forms. This type of marketing strategy is supported by Direct Response Advertising.

Trade advertising are implemented to ensure “selling in” process to retailers, distributors and wholesalers.

This chapter will examine the different types of consumers advertising as well as trade advertising and briefly discuss direct response advertising.

OBJECTIVES:

1. To understand the difference between trade advertising and consumer advertising 2. To understand the different types of advertising campaigns directed at the consumers

Trade Advertising

The objective of trade advertising is to support the “selling in” process to distributors, wholesalers and retailers. It often involved promotion scheme such as:

The trade are given special price for bulk purchase, so they can make a profit when they sell to customers at retail price.

Providing POS (point of sales) materials such as leaflets, special display materials, hanging mobiles, etc , to enhance customers interests leading to purchase

• Product launching campaign

• Sales promotion campaign

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TYPES OF ADVERTISING CAMPAIGN

29 TYPES OF ADVERTISING CAMPAIGN Consumer Advertising Consumer advertising is to support the “Pull” of the

Consumer Advertising

Consumer advertising is to support the “Pull” of the “push/pull” process, by motivating consumers to buy products and so take them out of the outlets. It uses the mass media intensively to communicate the advertising message and influence the target market.

product advertising brand advertising range advertising corporate advertising retail advertising
product advertising
brand advertising
range advertising
corporate advertising
retail advertising

Types of consumer advertising

(i) generic advertising

(ii)

(iii)

(iv)

(v)

(vi)

(vii) co-operative advertising.

Generic Advertising

Generic advertising means advertising a product type rather than a brand and is usually undertaken by a trade association or consortium of manufacturers and suppliers. A good example is a campaign to promote fresh products like milk, fruit, vegetables and meat. Generic advertising does not promote a particular supplier but promotes the overall benefits and advantages of the product type. One of the most well known campaigns is the “Get Milk.” It can also include the promotion of services like insurance, to enhance awareness of the benefits of insurance to the target market.

Product Advertising

Product advertising concentrates on promoting the benefits and advantages of the product, such as the price, value and performance. It is often confused with brand advertising, but product advertising is aimed to promote the product benefits, whereby brand advertising is directed to establish brand image and enhance positioning for brand differentiation.

In print advertising, product advertising can be identified because the pack shot is as the main and often the only visual. The copy will talk about the benefits of the product. As for TV commercial, it is off course a waste of advertiser’s budget to show 30” of pack shot, however the pack is still dominantly displayed, with the benefits of the product spelt out in the storyline.

Brand Advertising

The emphasis of brand advertising is on the brand name, with sometimes little or no reference to the product This is especially true when there are a number of products sold under a family brand such as ABC.

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TYPES OF ADVERTISING CAMPAIGN

30 TYPES OF ADVERTISING CAMPAIGN However, a huge number of products have a single brand name

However, a huge number of products have a single brand name which has developed a reputation over many years of advertising that goes beyond the mere contents and benefits of the product. Good examples are found in the highly competitive personal hygiene or toiletries market, with brand names such as Sunsilk, Pantene, etc

market, with brand names such as Sunsilk, Pantene, etc Nowadays, manufacturers are trying to build global

Nowadays, manufacturers are trying to build global brands. Coca-Cola has had the greatest success with this; its name, logo, bottle and can design are known throughout the world.

The essence of brand advertising is usually image-building for the total product offering – developing that feeling of goodwill between the branded product or brand name and the customer.

Range Advertising

Sometimes, a manufacturer has a complete range of products to suit the different needs of different customers. A common example is hair care products such as shampoos, conditioners, tints and permanent colors. Ranges are frequently promoted in a single commercial or advertisement either using the various media available for advertising. By promoting through range advertising, the advertiser is suggesting that this brand is “one stop shop” for hair care, so why use another brand. New products can be introduced easily as the range image is transferred to them.

Corporate Advertising

Corporate advertising promotes the company not the individual products. Corporate advertising differs from brand advertising because the company name is not always the brand name. An example is Unilever whose brands include Rinso and Pepsodent . Unilever relies on brand advertising to promote their products and may rarely see the needs to implement corporate advertising

Corporate advertising is often used to establish customer relations, so that the customers readily accept the company and thus smoothing the sales process. It may also be used for investor relations and community relations, or when research shows that people are unaware of what the company’s name and what it does.

Retail Advertising

Retail advertising is undertaken by retailers when they want customers to visit and shop at their shops. Most often the advertising message contains information of specific sales promotions for specific types of products. The media used are print media and television and the timing is usually close to the weekend or holidays, when people have more time for shopping.

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TYPES OF ADVERTISING CAMPAIGN

31 TYPES OF ADVERTISING CAMPAIGN Co-operative Advertising Often manufacturers and retailers will combine their efforts

Co-operative Advertising

Often manufacturers and retailers will combine their efforts (and their budgets) to undertake specialist promotions emphasizing that a particular brand or product is to be available only through a certain outlet. Or it may involve two service providers, for example buying an airline ticket using a credit card issued by a specific bank (purchase Garuda ticket using credit card issued by Bank Mandiri).

Garuda ticket using credit card issued by Bank Mandiri). Direct Response Advertising The message is relatively

Direct Response Advertising

The message is relatively simple – for a limited period, this brand of product is available only at this outlet at a special offer price or with a gift, or eating at a particular restaurant using a specific credit card to get a discount on the bill.

Manufactures without intermediate wholesalers or retailers often use Direct-response advertising to reach their customers. The customers complete order forms inserted into magazines and catalogues or give their orders over the telephone. Direct-response advertising is an effective means for new companies and new products to get into the market-place. However, it has also emerged as a major selling force in its own right.

Direct-response advertising has to work very hard to sell the product because there is no- one to sell the product on a face-to-face basis. So press advertisements have to convey all the sales messages in one go and even television and radio advertisements have to cover all the selling points comprehensively. Often, the advertisements and commercials will incorporate sales promotion techniques (such as money-off discounts, which are quite believable as wholesalers and retailers do not take a cut of the profits).

Direct mail is often used in direct response advertising, whereby a tool such as catalogue is mailed to a prospect, and the prospect can place an order if he/she so desires.

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Points to remember

TYPES OF ADVERTISING CAMPAIGN

32 Points to remember TYPES OF ADVERTISING CAMPAIGN • Trade advertising is used to encourage stocking,

• Trade advertising is used to encourage stocking, so joint promotion between manufactures and retailers will result in profits for both parties.

• • • • • • •

Trade advertising uses specialist media targeted at the buying departments and proprietors of stores, shops, supermarkets and retail chains.

If trade advertising is the ‘push’ encouraging intermediaries to stock the product for onward selling, consumer advertising uses the ‘pull’ of the push/pull process to encourage customers to buy the products and so take them out of the retail outlets.

Consumer advertising uses several forms of promotion including generic advertising (to promote the product concept), product and brand advertising (for individual and named items) and range advertising (to cover a series of variants of the named product).

Corporate advertising promotes image and goodwill to re-assure the market-place, lubricate the sales process and create a selling environment in consumer advertising.

Retail and co-operative advertising promote the availability of products and services from specific retail outlets.

Direct-response advertising is a major selling force in its own right, and it is particularly useful for new companies and products because of the avoidance of intermediaries.

Direct-response advertising can be used to sell/promote products and services that customers may not be readily prepared to buy face-to-face in a shop.

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SPECIALIST FORMS OF ADVERTISING

CHAPTER 5

SPECIALIST FORMS OF ADVERTISING

OF ADVERTISING CHAPTER 5 SPECIALIST FORMS OF ADVERTISING 1. 2. 3. 4. 5. Promoting to Commerce
1. 2. 3. 4. 5.
1.
2.
3.
4.
5.

Promoting to Commerce and Industry

CHAPTER OUTLINE

Aside from the consumer market, there is also the industrial and commercial markets. Due to the specific characteristics of these markets, specific forms of advertising, must be planned and implemented to ensure effective communication. This chapter will provide information regarding the purpose and use of such forms of advertising.

OBJECTIVES:

To understand the objectives of promotion to industry and commerce via business to business, industrial and technical advertising To understand the objective and use of specialist advertising to promote high technology, pharmaceutical and healthcare products To understand the objectives and use of recruitment advertising To understand the objectives and use of financial advertising To understand the use of advertising in special circumstances such as crisis management

The business sector such as a manufacturing company or an airline have needs for products and services unique to their own type of business. Although business people read newspapers and watch television and therefore it is possible to use these mediums to promote the products used for commercial purpose, but alternative means of promotion are also available and often more effective.

Business-to-Business Advertising

A business office needs computers, desks, chairs, and stationery. It also needs services such as security service and cleaning service. Ultimately, there are businesses that supply these needs, like Hewlet Packard who would supply computers, and another manufacturer would supply desks and chairs, etc. Hence when one company promotes through advertising to another company, its called business-to-business advertising.

Unlike consumer promotion, when promoting to a business, there are many different needs and motivation to fulfill. For example, the department manager when purchasing a computer is motivated by the advanced features as he needs something reliable to do his job, but the

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SPECIALIST FORMS OF ADVERTISING

34 SPECIALIST FORMS OF ADVERTISING purchasing manager may have a budget, therefore he is considering price

purchasing manager may have a budget, therefore he is considering price over features. Moreover, the advertising must consider the fact that it is trying to influence an expert audience. Details of specific features, capacities, etc needs to be exposed as well as other specifics such as track record, prompt delivery, etc.

• •

Industrial and Technical Advertising

The industrial market is highly technical and complicated and relies not only on communicating complex specifications to meet critical manufacturing and processing needs, but also on the capability to deliver consistent quality, on time and within an agreed budget.

Advertising of this type may offer not only the physical product , but also designs a total system so that the company control the supply of all equipment including the installation.

Specialist Sector Advertising

High technology

Specialist sector advertising offers high technology products, sophisticated electronic components, telecommunication systems, to different types of business sectors.

Pharmaceuticals/ healthcare

Pharmaceuticals/ healthcare products operates at three levels: OTC (over the counter), pharmacist recommendation (P) and prescription only medicines.

OTC can be advertised to the general public, but the other two are strictly controlled. The promotion of prescribed medicines in Indonesia can only be promoted through personal selling to medical doctors.

Specialist Advertising

Recruitment advertising is used for finding candidates for a position in a company. The specific job title and the qualification of the candidate searched are fully explained in the advertisement. The identity of the company looking for candidates maybe identified in the advertisement if it is believed to lure qualified candidates. The primary media used for this type of advertisement is newspaper.

Financial advertising is used to inform the public about the company’s performance and potential. Financial advertising is strictly regulated in both content and format.

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SPECIALIST FORMS OF ADVERTISING

35 SPECIALIST FORMS OF ADVERTISING Points to Remember • . • • • • • Promoting

Points to Remember

.

Promoting to industry, business and commerce requires an emphasis on different techniques and media compared with consumer advertising.

techniques and media compared with consumer advertising. Although some advertising for this sector can use

Although some advertising for this sector can use television, most advertisements are placed in the trade, technical, professional and management press.

There are a number of specified purchasers and end-users involved in buying decisions for business, industrial and commercial equipment, services and supplies. All of them have to be influenced by advertising, most probably in different publications.

Pharmaceuticals and healthcare promotion are similar, but there are also strict mandatory and voluntary controls that involve advertising within the health sector. It too has its specialist media and techniques.

Recruitment advertising is used by virtually every type of enterprise to find the right candidate for a job opening. Primary used is newspaper.

Financial advertising involves investor relations, i.e. communicating with shareholders and consumers (for banks). It shows the company’s performance and potential.

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36 THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT CHAPTER 6 THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT 1.

THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

CHAPTER 6

THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

1. 2. 3.
1.
2.
3.

The Advertising Manager

CHAPTER OUTLINE

The term advertiser refers to manufacturing or service companies who have brands that need promotion in the market place to establish favorable market share. As promotion is one of the responsibilities of marketing, therefore, in the marketing department of the company there is a position called Advertising Manager. The Advertising Manager plays a crucial role in ensuring that the brands are well received in the market so that the company will achieve its sales target leading ultimately to profitable venture.

This chapter will describe the role and responsibilities of the Advertising Manager, how he coordinates with his department internally and how he works with the selected advertising agencies, to establish and maintain favorable market position for the company’s brand under his care.

OBJECTIVES:

To understand the strategic role of the advertising manager in planning and determining the policy and objectives for the company’s advertising To understand how the advertising manager coordinates work with his staff in the advertising department To understand how the advertising manager works together with the selected advertising agency.

The job of coordinating and managing advertising in an organization belongs to the Advertising Manager. The Advertising Manager is employed in-house as the manager of the company’s internal advertising department. For a company to get full value from the Advertising Manager, he or she has to be given full responsibility for the task of managing all aspects of the company’s advertising programs. However, there will be subordinates and colleagues who take responsibility according to the amount of promotional work undertaken by the organization.

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

37 THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT Role and responsibilities Strategic planning To plan the advertising

Role and responsibilities

Strategic planning

To plan the advertising strategy, the advertising manager must work with colleagues from other departments such as marketing and sales, because the advertising strategy evolves out of the marketing strategy which in turn evolves out of the business strategy. However, the effective advertising manager is not merely taking orders from above, but also contributes his/her expertise upwards, especially in companies where it is realized that advertising has a powerful effect in the market-place. The process can be expressed as follows:

the market-place. The process can be expressed as follows: Business strategy—Marketing strategy—Advertising

Business strategy—Marketing strategy—Advertising strategy

The above process shows that advertising strategy derived from marketing strategy, which must reflect the business strategy.

Determining policy, aims and objectives

Based on the marketing strategy, theAdvertising Manager and his team develop the advertising objectives and what results in the market place are expected from the implementation of the advertising campaign. To ensure that all activities are carried out in accordance to the company’s value , the Advertising Manager also sets out the advertising policies such as advertising code of ethics that must be abide to when creating advertising communication.

Promotional planning

At this stage, the planning for the whole of the promotional activity for the company can take place. This is not restricted to advertising but includes all the activities of the promotional mix in order to develop an integrated marketing communications approach, an approach now adopted by many competitive brands.

Budgeting

Basically, budgeting is calculating costs for all promotional activities and is one of the important elements in ensuring that marketing communications objectives are met. Marketing communications objectives are set to answer to marketing problems, and objectives are translated into strategy and promotion programs. To be implemented effectively, promotion programs require a budget. Although it is mentioned at this stage, the budget may have been set earlier, depending on the company’s financial policy.

Planning – administration and staff (procedures)

First and foremost, the advertising manager is an administrator running the advertising department. He is responsible for controlling the department, not just coping with the workload. Consequently, it means planning the department so that it is prepared to deal with the activities it handles, and that it is adequately staffed and equipped to undertake its role.

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

38 THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT He or she will look at the needs of

He or she will look at the needs of the department in both areas and so determine what staff he or she needs to employ and at what level of ability. He or she might look at training needs to see who can be developed to take on responsibility for some roles and activities. All of this will involve deciding on salary levels and other benefits.

• Promotional activities : advertising, sales promotions, publicity, direct mail, direct marketing • POS (
Promotional activities : advertising, sales promotions, publicity, direct mail, direct
marketing
POS ( point of sales), and other merchandising materials
Sales literatures : brochures/ leaflets
Exhibitions
Event marketing/brand activation

Implementing the promotional campaign (tactics)

The Advertising Manager is the guardian of the company’s reputation. He must ensure that the company’s brands are always seen in a positive way, or good brand image. Although the advertising industry has often been accused of manipulating image, it is realized that image must be based on facts. If customers are buying a brand because of its quality (the advertising message/positioning is quality), then the Advertising Manager must liaises with the production department to ensure that the standard of quality meets the customer’s expectation.

Below are the activities managed by the Advertising Manager and he may or may not use outside help to perform some of these tasks:

It should be noted that not all of the above will be included in the promotion campaign, as the above tactics are only included if deemed effective in supporting the marketing objectives.

It should also be noted that corporate public relations activities such as financial public relations, employee communication are not the responsibilities of the Advertising Manager, but marketing public relations activities such as sponsorship, exhibition, is within his area of responsibilities.

Internal/external responsibilities

The Advertising Manager has internal responsibilities because some of the work is being done by his internal staff, and while other activities are carried out external suppliers and consultants.

External suppliers/consultants that may be used are:

• Integrated marketing communications consultancy

• Sales promotion consultancy

• Direct mail consultancy

• Exhibition contractors

• Printers

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

39 THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT • Design studios • Photographers Agency Selection • Studying

• Design studios

• Photographers

Agency Selection

• Studying the agency’s credentials • Considering the services provided ( full service/ part service)
• Studying the agency’s credentials
• Considering the services provided ( full service/ part service)
• The fee structure
• Selecting agency for pitching.

Short list approach may be as follows

Advertising agencies should not be viewed as suppliers for the main reason that advertising agencies are consulted by the marketing department for their strategic approach in supporting the marketing objectives. Nowadays, advertising agencies approach to solve marketing problems is to design a total marketing communication approach known by many specialists in this area as Integrated Marketing Communication. Integrated Marketing Communication (IMC) uses several promotion techniques as a unified force to influence consumer’s perception, attitude and behavior.

Finding agencies

There are a number of ways of finding advertising agencies. The first is by reputation. Some agencies have become household names, but agencies selected because they are well- known may not be suitable for the type of work that the company wants. A large and famous consumer advertising agency is not suitable for a small business-to business advertiser and, conversely, the large agency may not want the account because the work involved may not be rewarding enough financially.

The Indonesian Advertising Agency Association (Persatuan Perusahaan Periklanan Indonesia- P31), a trade associations for advertising agency, may be a good source for finding appropriate agencies.

Another source would be through referrals by colleagues of the Advertising Manager, who can vouch with regards to the agencies reputation through their own experience

Making a short list

The selection process includes studying the agencies credentials, such as personnel, clients list, and sample of successful campaign.

A pitching is a final agency selection process involving two or three short listed agencies presenting their strategy/concept in solving the potential client’s marketing problems. Briefing the Agencies

At the individual presentations (or new business pitches, as the agencies call them), the advertising manager will expect to see the ability of each agency to solve the company’s

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

40 THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT marketing problem. However, agencies cannot pluck solutions out of

marketing problem. However, agencies cannot pluck solutions out of the air and so will expect, and ask for, campaign and advertising briefs.

Advertising brief

• Background on the company’s market (market size, market share and competitors) • Marketing objectives
• Background on the company’s market (market size, market share and competitors)
• Marketing objectives
• Target market
• Product/service (including total product offering)
• Timing (for launches or season selling)
• Other planned promotional activity
• Past advertising campaigns
• Existing company, product and brand images
• Market research results
Advertising objectives
Proposition (or theme for positioning the product, brand or service)
Benefits, advantages or features that the product might have that differentiate it from
its competitors
Tone or style required (humorous or prestige, for example)
Mandatory client requirements (such as use of corporate identity or house style and
tag lines).
● Has the agency come up with a solution to our problem?
● Does it know/understand our market/product/company?
● How long do clients stay with it?
● How long do account handlers stay with it?

The advertising brief or sometime may be called by other terms such as campaign brief, agency brief, is a document prepared by the Advertising Manager to provide information and guidance for the agency in creating the advertising strategy.

It contains the following information

It may also contain additional information, if available to the company:

Based on the briefs, agency will prepare their concept and strategy and will perform their best to convince the potential client how their strategy and concept will help achieve the clients marketing objectives.

Before making the final selection, would-be clients should consider such questions as these:

● Have the staff got experience of our industry?

● Has the agency got experience of our industry?

● Have the staff got the creative and technical ability to handle the account?

● Is the right chemistry there – between us and them?

● Can we trust them?

● Can we afford them?

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

41 THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT ● Are they suitably equipped? ● Are they recognized?

● Are they suitably equipped? ● Are they recognized?

It is also recommended that the client visit the agency as this may help in providing answers to some of the above questions.

• Works are done on time as scheduled • Advertising appeared as per media plan
• Works are done on time as scheduled
• Advertising appeared as per media plan and schedule
• The quality of work are in line with expectation
• Costs control
• Invoices are processed and paid as in terms of agreement

Insert table 6.1 on page 110 Client –agency relationship and staff liaison

Monitoring- quality control and approval

Working with the agency

A major role of the advertising manager is to liaise with the agency on a regular basis. This involves a series of quarterly and monthly meetings which are often put into the diary at the start of the client–agency relationship although there will also be other meetings to look and approve the detail of the work being done.

The decisions reached at any client–agency meeting are recorded on a contact report. This is not the minutes of the meeting but a confirmation of decisions made and an action plan (it is sometimes called an action report). It will include actions that the advertising manager needs to take (like supplying a product for a photo-shoot) as well as actions required from agency personnel. Each person who needs to do something will be identified by his or her initials, and the report will be circulated to all those who could be involved, as well as to key executives in the company and the agency.

Monitoring is crucial so that the advertising manager can establish how the promotional program has affected any change – hopefully positively – measured against research undertaken prior to any activity.

Other more routine monitoring:

All of the above needs the advertising manager’s approval to ensure that objectives of advertising and promotions are met as planned. These activities also provide ways to analyzing situation so that problems can be identified and advertising can be continuously improved.

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THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT

42 THE ADVERTISING MANAGER AND ADVERTISING DEPARTMENT Points to remember • • • • • •

Points to remember

The advertiser is any organization that promotes its products, services or policies through the promotional mix and includes profit-making companies as well as charities and public sector organizations.

as well as charities and public sector organizations. The advertising manager works in the marketing department

The advertising manager works in the marketing department of a company and is responsible for advertising and promotion activities.

The advertising manager is responsible for strategic planning; determining policy, aims and objectives; promotional planning; budgeting; departmental organization; and implementing the tactics of the program.

The major responsibility of the advertising manager is to ensure that the promotional program is implemented effectively.

The advertising manager is also responsible for building, managing and maintaining the image and reputation of the company, its products and services.

The advertising manager does not work in isolation but liaises with other departments such as marketing, sales and production.

The advertising agency is selected by the advertising manager and its appointment is approved by him or her together with the marketing manager and possibly the board.

The advertising manager liaises with the advertising agency by regular meetings and routine contact to ensure that it is fulfilling the requirements of the client company.

The advertising manager decides on which work will be done internally and which will be done by external suppliers.

Monitoring and evaluating the work of the external suppliers and the internal staff to ensure satisfactory standards is the responsibility of the advertising manager.

The advertising manager also monitors expenditure to ensure that all work is done within budget.

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CHAPTER 7

DETERMINING AND SETTING OUT BUDGETS

43 CHAPTER 7 DETERMINING AND SETTING OUT BUDGETS DETERMINING AND SETTING OUT BUDGETS 1. 2. 3.

DETERMINING AND SETTING OUT BUDGETS

1. 2. 3.
1.
2.
3.

CHAPTER OUTLINE

Every program and activities performed by the company requires budget allocation.Advertising and promotion are no exception. Before the fiscal year the marketing department and the advertising department sit down together to discuss budget allocation for all advertising and promotion activities.

The basis of budget calculation is based on many factors such as objectives, target sales, and market data such as expenditures of direct competitors.

This chapter will describe the many methods for setting advertising and promotion budget.

OBJECTIVES:

To understand that budgets are based on past performance and future forecasts. To understand how budget are based on promotional plans and that it must have senior management approval. To understand the various ways of setting up budget

Setting up budget and budget period

All program and activities to be carried out in a fiscal year must be carefully established and approved by senior management of the company. Budget is based on past performance and forecast of future sales and the number of tasks to be carried out within the budget period.

The budget period is usually a year, normally the financial year of the organization. Budgets are therefore prepared by the advertising department and other departments towards the end of each financial year and approved by the board of directors ready for the next year.

In setting up the advertising budget, the Advertising Manager relies on some information. One is information from the sales department indicating sales achievements and also problem areas. Other information is market research from the marketing department which provides information on market trends, consumer behavior, competitor’s activities, etc.

Methods of setting up budget

• Objective task method

• Historical method

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DETERMINING AND SETTING OUT BUDGETS

44 DETERMINING AND SETTING OUT BUDGETS • Percentage past sales method • Percentage of future sales

• Percentage past sales method

• Percentage of future sales method

• Competitor parity method

• The market share method

• Affordability method • Marginal method • The unit method • Set up advertising/promotion objectives
• Affordability method
• Marginal method
• The unit method
• Set up advertising/promotion objectives
• Decide what promotion activities to be carried out to achieve the objectives
• Set up the budget.

The above methods can be used in combination as the aim is to a structured table of expenditure so that the promotional plan can successfully managed.

The objective task method

This method requires the setting up of advertising and promotional objectives, and then putting sums of money against all that needs to be carried out to achieve the objectives. Therefore the steps in using this method are:

Historical method

The historical method is based on advertising and promotion spending of the previous years. A percentage may be added to cover inflation and will be added if there are extra activities, for example using more media to extend media coverage.

Percentage of past sales method

This method is based on the idea that if a product sold well in previous years then it should be supported for future years. Alternatively stated, it is a way of maintaining sales at the previous year’s level. The idea works well if the product is growing and reaching saturation, but not if it has reached maturity or is in decline and needs abandoning or bolstering. There is also a danger that, if the product is becoming successful, it may sell well in any case, but this is a difficult decision that needs the joint deliberations of the marketing manager, the sales manager and the advertising manager.

Percentage of future sales method

This method is based on predicting the volume of sales that is likely to be achieved. This is not simply guesswork but based on market research and scientific forecasting.

Deciding on percentage.

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DETERMINING AND SETTING OUT BUDGETS

45 DETERMINING AND SETTING OUT BUDGETS There is no magic formula to be used, but based

There is no magic formula to be used, but based on discussion and deliberation of the senior management. A fast moving consumer product with heavy competition may spend more than 15% of its sales on promotion. A leading brand may spend less, but because of high volume of sales, a small percentage will represent a large amount of money.

a small percentage will represent a large amount of money. The the finance director, without the

The

the finance director, without the need to consult with the marketing or sales department.

Competitor parity/market share method

One

of the most important responsibilities of the Advertising Manager is to monitor competitive

brands promotional activities. He can access this information by purchasing advertising expenditure data.

However, it is not always a good idea to let your rival dictate your advertising expenditure, especially if similar media strategy is followed. Directly competing brands do not have exactly the same market characteristics thus lending to different advertising objectives and strategy. Moreover, if the competing brand has bigger market share, it is definitely not wise to have the same expenditure.

Therefore, competitor’s expenditure is to be used as a guide in setting up the advertising budget.

The affordable method

affordable method is simply a decision made by a senior member of the board, such as

This method is rarely used anymore, especially if the company is marketing oriented. This method may be used for a new company or new product, where promotion costs will be calculated like any other activity in the company.

The marginal method

The marginal (or stratified) method is based on justifying levels of expenditure in relation to the amount of increased sales that will occur and is a favored method of sales-orientated companies. It can, therefore, be applied to the various layers of activity in the promotional

mix

or the integrated marketing communications approach. It can also be used to justify

increasing sophistication in each of the techniques employed (eg using full-color advertising rather than black-and-white advertisements, which have lower media and production

costs).

Sales promotion and product advertising may have an immediate effect by selling more, so these would be given priority under the marginal or stratified method. The advertising manager has to decide on the various techniques, methods and even media that would be appropriate, and cost them according to the importance that they will have in achieving the company’s sales targets before including them within the budget

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DETERMINING AND SETTING OUT BUDGETS

46 DETERMINING AND SETTING OUT BUDGETS Per unit method The per-unit method is a very scientific

Per unit method

The per-unit method is a very scientific method, but is unfortunately production-led rather than market-driven. It depends on every operation in the production and supply of a product being costed – from raw materials to the cost of distribution. Advertising is regarded as a distribution cost in some companies.

is regarded as a distribution cost in some companies. This method requires a detailed cost analysis,

This method requires a detailed cost analysis, where some money from total cost of supplying each unit is allocated to promotion, after accounting for profit margin. This method could cause overspending if greater volume of units is sold than was forecast and if conversely if sales decrease, it does not account for more money.

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DETERMINING AND SETTING OUT BUDGETS

47 DETERMINING AND SETTING OUT BUDGETS Points to remember • • • • • Budgets are

Points to remember

Budgets are set annually for the company fiscal year.

Certain methods of determining budget are based on past performance o Percentage of past sales
Certain methods of determining budget are based on past performance
o
Percentage of past sales
o
Historical method
o
Competitor parity/market share method.
Budget should be market oriented not production based ( per unit method).

One of the key methods for setting up budget is the objective and task method, where by what needs to be done is established and costs are calculated.

Other methods are based on future forecasts: task and objective method, affordable method, percentage of future sales.

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