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What is Advertising?

It is any paid form of non personal


presentation and promotion of ideas,
goods, services by an identified sponsor.

The 5 Ms of Advertising

Mission objectives
Money budgets
Message communication
Media what vehicles?
Measurement - evaluation

Advertising objectives

Informative
Persuasive
Comparative
Reminder (reinforcement)

Advertising Goal
A specific communication task to be
achieved to a specific degree to be
communicated to a specific target
audience in a specific period of time.

How much to spend?


Half my advertising is wasted, but the trouble is I
do not know which half
- John Wanamaker

Depends on the product


What stage in the PLC
Market share and the consumer base
Competition and clutter
Ad frequency
Product substitutability

Media selection
The most cost effective media mix to
ensure achievement of the advertising
goal.
How should you select media?
Reach
Frequency
Impact

Reach
No. of persons exposed to a particular
media schedule at least once during a
specified time period

Frequency
No. of times within the specified period
that a person is exposed to that message

Impact
Qualitative value of an exposure through a
given medium
GRP (Gross rating points) = R * F
Wt. GRP = R * F * I

Sales Promotion
Whereas advertising gives a reason to
buy, SP gives an incentive to buy

Advantages of SP

Induces trials
To reward loyal customers
To induce stocking by the trade
Adjust to short term variations in trade
Liquidating inventories
Preempting competition

Disadvantages of SP
With too many promotion schemes promotion
clutter confuses consumers
Attracts brand switchers and deal prone
customers
Dilutes brand equity
Preponement of purchases
Lowers margins
Expensive and wasteful, when not handled
properly

Types of SP
Trade
Consumer

Developing a SP campaign

Planning the programme


Duration
Incentive to be given
Assessing viability
Pretesting
Implementing and controlling
Evaluation

Advertising Management
Opening Lecture

What is a brand?
Principles of Marketing definition
a name, term, sign, symbol, or design
intended to identify the goods or services
of a sellerand to differentiate them from
those of competitors.

But its more than that


A promise
Beliefs in your targets mind about your
product or service
Driven by what your company says and
does
A relationship

Duncan on Brands
A perception resulting from experiences
with, and information about, a company
or line of products

Why is branding so important?


For the Consumer
Simplifies their decision making and reduces
risk
Provides benefits above and beyond the
product or service itself

For the Producer


Provides a process to grow share, revenue,
and profit over the long-term
Provides a way to more easily make business
and creative decisions

Why is branding so important?


For the Distributor/Retailer
Drives inventory turns and the profit per
transaction
Can help them position their own business
to reach a certain target audience

Proof in the Pricing


Messaging and packaging so people are
willing to pay more for similar core products
or services
Toothpaste (Dove vs. Safeguard)
Coffee (Starbucks vs. Nescafe)

Characteristics of strong brands


Based on deep consumer and market
understanding
Have a distinct, relevant, and credible
position
Positioning is what we do to the mind (convince
the market of the differences)
Physical (product itself or channel, personnel)
Psychological (image)

More Characteristics of Strong Brands


Have a distinct brand personality
Have engaging and compelling
messaging consistently communicated
Provide excellent delivery of promised
benefits
Maintain their relevance

Levels of Relationship Intensity


High intensity
Brand advocates

(some are cult brands)

Belong to brand community


Feel connected with brand
Identify with brand
Aware of brand
0%

100%

Marketing Communication
Collective term for all the various types
of planned messages used to build a
brand-advertising, public relations,
sales promotion, direct marketing,
personal selling, packaging, events and
sponsorships, and customer service.

Functional Areas of IMC


Advertising
Advertising

Direct
Direct
Marketing
Marketing

Customer
Customer
Service
Service

Publicity
Publicity (Public
(Public
Relations)
Relations)

Functions
Functions
Events
Events &&
Sponsorships
Sponsorships
Packaging
Packaging

Sales
Sales
Promotion
Promotion
Personal
Personal
Selling
Selling

Functional Areas of MC
Advertising- non-personal, paid
announcements by an identified
sponsor.
Direct Marketing-an interactive,
database-driven marketing
communication process that uses a
range of media to motivate a response
from customers and prospects.

Functional AreasContd
Public Relations- communication
activities that help an organization and
its publics adapt mutually with each
other.
Sales Promotion- short-term, addedvalue offer designed to motivate an
immediate response.

Functional AreasContd
Personal Selling- interpersonal
communication in which a salesperson
uncovers and satisfies the needs of a
customer to the mutual benefit of both.
Packaging- container and conveyor of
information

Functional AreasContd
Events- highly targeted brandassociated activities designed to
actively engage customers and
prospects and generate publicity.
Sponsorships- financial support of an
organization, person or activity in
exchange for brand publicity and
association.

Functional AreasContd
Customer Service- a companys
attitude and behavior during
interactions with customers.

Using IMC to Build Brands


Planned (and unplanned) messages
Formed by all customer touch points
Internal
External
Experience with the product

Integrated Marketing Communication


(IMC)
Process for planning, executing and
monitoring the brand messages that
create customer relationships.
An ongoing process

Integration
Combining separate parts to a unified
whole

Synergy
Outcome of integration which is the
interaction of individual parts in a way
that makes the integrated whole greater
than the sum of its parts.
2+2=5

IMC
BRAND MESSAGES
Communicated by advertising,
sales promotion, direct
response, packaging, etc.

ONE AND TWO-WAY MEDIA


Radio, Print, TV, events,
sponsorships, mail, phone,
internet, packaging. Etc.

Evaluating
and Planning

CUSTOMERS BRAND
EXPERIENCE

STRONG BRAND
RELATIONSHIPS
Increased sales, customers
and brand equity

WEAK BRAND
RELATIONSHIPS
Lose customers, sales and
brand equity

IMC Media
The means by which the various types
of marketing communication messages
are sent and received

Traditional IMC Media


Television
Television

Radio
Radio

Telephone
Telephone

Newspapers
Newspapers
Media
Media

Mail
Mail

Magazines
Magazines
Internet
Internet

Outdoor
Outdoor

What is the role of IMC in the marketing


process?

Marketing & Promotions Process Model

By
Asst professor
Venkatesh.N

To gain an understanding of the role of


advertising within the Marketing
Communications Mix

To examine communication and advertising


theories and their relationship with consumer
behavior

To develop knowledge of advertising strategy


and planning

To examine the importance and uses of


creativity in advertising

To gain an understanding of various production


techniques

To appreciate the complexities of evaluation

Although advertising is an accepted part


of every day life, there is still great
debate as to how advertising works and
the role it can and should perform within
the marketing communication mix. This
module enables the applicants to review
this debate and apply the theories to the
advertising in our media today. They will
learn how to put together an advertising
plan and will examine the ingredients of
an effective advertisement and ways in
which this effectiveness can be measured

According to Philip Kotler & American


Marketing Association. The advertising is
any paid form of non personal
presentation of
Ideas
Goods
Services by an identified sponsor that is
called Advertising.

What is a Brand?
It is a product whose producer has made
every effert to make it uniquely desirable
to potential buyers, consistently using
every element in its presentation to do
so.

Why do companies do this?

If done well, it makes the brand difficult


to compete against. It develops an aura
making it appear better than its
competition.

A brand is created by all the elements of


the marketing mix working together.
Creates a positive prejudice in peoples
minds.

Defn Marketing Mix: a range of tools


and techniques that allows businesses to
provide customers with what they want.
It acts as a conduit for consumer demand
to reach businesses. Thusly, turning this
demand into profitable sales.

These tools include:


Product formulation and variation
Packaging
Sales literature
The sales force
Pricing
Sales promotion
Direct mail
Advertising
Market research
Branding

Components of the marketing mix

1)

Net sales value


Costs and contribution
The marketing mix

2)
3)

Gross margin
Cost of goods
Materials
Packaging
Manufacturing

Operating contribution
Selling costs (the marketing mix)
Sales
Distribution
Communications
Research

Sales and distribution costs


The communications mix
Advertising
Direct marketing
Promotions
Exhibitions
Etc.

Simply put: Advertising exists to help to


sell things.
It is mainly about brands
It is mainly designed to create and
strengthen consumer impressions of the
brand
Exception is public service advertising

An Advertising Plan Matches the Right


Audience to the Right Message and
Presents It in the Right Medium to Reach
That Audience & Has Three Elements.

Targeting the Audience: Whom are you trying


to reach?
Message Strategy: What do you say to them?
Media Strategy: When & where will you reach
them?

The 6M approach
Merchandise: important benefits to sell
Markets: who to reach
Motives: why people buy or fail to buy
Media: how to reach
Measurements: how to evaluate (time
and change)
Messages: key ideas to convey to move

Marketing
Communication
Economic
Societal

The process a
business uses to
satisfy consumer
needs by
providing goods
and services
Product category
Target market
Marketing mix
Brand

Marketing
Communicatio
n
Economic
Societal

Can reach a mass


audience
Introduces
products
Explains
important
changes
Reminds and
reinforces
Persuades

Marketing
Communicatio
n
Economic
Societal

Moves from
being
informational to
creating demand
Advertising is an
objective means
for providing
price-value
information,
thereby creating
a more rational
economy

Marketing
Communicatio
n
Economic
Societal

Informs consumers
about innovations
and issues
Mirrors fashion and
design trends
Teaches
consumers about
new products
Helps shape
consumer selfimage
Perpetuates selfexpression

Advertising is part of total continuum of


communications about the brand. It may
have a leading role and carry the
greatest budget: but it can be merely
cast in a supporting role for a campaign
of activity centered around an event.

Involves a huge amount of money


Work is done by relatively few people
Major expense is for media time/space
Companies spend only a small
percentage of sales on advertising

Product advertisingTries to sell a


specific product to final users or channel
members
Pioneering advertising builds primary demand
Competitive advertising builds selective
demand

Corporate/institutional advertisingTries
to promote an organisation's image,
reputation or ideasrather than a
specific product

Magazine
Word of mouth
Television
Newspaper
Yellow Pages
Radio
Outdoors
Cinema
Internet

Builds awareness of products and brands


Creates a brand image
Provides product and brand information
Persuades people
Provides incentives to take action
Provides brand reminders
Reinforces past purchases and brand
experiences

Advertiser
(client)
Agency
Media
Supplier
Audience

Uses advertising to
send out a message
about its products
Initiates the
advertising effort by
identifying a
marketing problem
Approves audience,
plan and budget
Hires the advertising
agency

Advertiser
(client)
Agency
Media
Supplier
Audience

Has strategic and


creative expertise,
media knowledge,
workforce talent,
and negotiating
abilities
Advertising
department
In-house agency

Advertiser
(client)
Agency
Media
Supplier
Audience

The channels of
communication that
carry the message to
the audience
Are also companies or
huge conglomerates
Mass media
advertising can be cost
effective because the
costs are spread over
the large number of
people the ad reaches

Advertiser
(client)
Agency
Media
Supplier
Audience

Assist advertisers,
agencies, and the
media in creating
and placing the ads
Vendor services are
often cheaper than
those in-house

Advertiser
(client)
Agency
Media
Supplier
Audience

The desired audience


for the advertising
message
Data-gathering
technology improves
accuracy of
information about
customers
Advertisers must
recognize the various
target audiences they
are talking to and
know as much about
them as possible

Strategy
Creative
idea
Execution
Media

The strategy is the logic and


planning behind the ad that
gives it direction.
Advertisers develop ads to
meet objectives.
Advertisers direct ads to
identified audiences.
Advertisers create a
message that speaks to the
audiences concerns.
Advertisers run ads in the
most effective media.
1-70

Strategy
Creative
idea
Execution
Media

The central idea grabs the


consumers attention and
sticks in memory.
Planning strategy require
creative problem solving.
Research involves creativity.
Buying and placing ads
requires creative thinking.

1-71

Strategy
Creative
idea
Execution
Media

Effective ads are well


executed reflecting the
highest production values in
the industry.
Clients demand the best
production the budget
allows.

1-72

Strategy
Creative
idea
Execution
Media

Television, Internet,
magazines, and other media
are used to reach a broad
audience.
Deciding how to deliver the
message requires creativity.
How you say something and
where you say it is just as
important as what you say.

1-73

Brand advertising
Retail or Local advertising
Direct-Response advertising
Business-to-Business advertising
Institutional advertising
Nonprofit advertising
Public Service advertising

1.

2.

3.

If it creates an impression for a product


or brand
If it influences people to respond in some
way
If it separates the product or brand from
the competition in the mind of the
consumer

BRAND MANAGEMENT

76

What is a Brand?
A brand is a name, term, sign,
symbol, or design which is intended
to identify the goods or services of
one seller or group of sellers and to
differentiate them from those of
competitors.

77

New Branding Challenges


Brands are important as ever
Consumer need for simplification
Consumer need for risk reduction

Brand management is as difficult as ever


Savvy consumers
Increased competition
Decreased effectiveness of traditional
marketing tools and emergence of new
marketing tools
Complex brand and product portfolios
78

The Customer/Brand
Challenge
In this difficult environment,
marketers must have a keen
understanding of:
customers
brands
the relationship between the two

79

The Concept of Brand Equity


The brand equity concept stresses the
importance of the brand in marketing
strategies.
Brand equity is defined in terms of the
marketing effects uniquely attributable to
the brand.
Brand equity relates to the fact that different
outcomes result in the marketing of a product or
service because of its brand name, as compared to if
the same product or service did not have that name.

80

The Concept of
Customer-Based Brand
Equity

Customer-based brand equity


Differential effect
Customer brand knowledge
Customer response to brand marketing

81

Determinants of
Customer-Based Brand
Equity
Customer is aware of and familiar with
the brand

Customer holds some strong, favorable,


and unique brand associations in
memory

82

Building
Customer-Based Brand
Equity
Brand knowledge structures depend on . . .
The initial choices for the brand elements
The supporting marketing program and
the manner by which the brand is
integrated into it
Other associations indirectly transferred to
the brand by linking it to some other
entities
83

Benefits of
Customer-Based Brand
Equity
Enjoy greater brand loyalty, usage, and
affinity
Command larger price premiums
Receive greater trade cooperation &
support
Increase marketing communication
effectiveness
Yield licensing opportunities
Support brand extensions.
84

Customer-Based Brand
Equity
as a Bridge

Customer-based brand equity


represents the added value
endowed to a product as a result of
past investments in the marketing of
a brand.
Customer-based brand equity
provides direction and focus to
future marketing activities
85

The Key to Branding


For branding strategies to be
successful, consumers must be
convinced that there are meaningful
differences among brands in the
product or service category.
Consumer must not think that all
brands in the category are the same.
PERCEPTION = VALUE
86

Strategic Brand
Management

Strategic brand management involves the


design and implementation of marketing
programs and activities to build, measure, and
manage brand equity.

The strategic brand management process is


defined as involving four main steps:
1) Identifying and establishing brand positioning and
values
2)Planning and implementing brand marketing programs
3)Measuring and interpreting brand performance
4)Growing and sustaining brand equity
87

Strategic Brand Management Process

STEPS

KEY CONCEPTS

Identify and Establish


Brand Positioning and Values

Mental maps
Competitive frame of reference
Points-of-parity and points-of-difference
Core brand values
Brand mantra

Plan and Implement


Brand Marketing Programs

Mixing and matching of brand elements


Integrating brand marketing activities
Leveraging of secondary associations

Measure and Interpret


Brand Performance

Grow and Sustain


Brand Equity

Brand Value Chain


Brand audits
Brand tracking
Brand equity management system
Brand-product matrix
Brand portfolios and hierarchies
Brand expansion strategies
Brand reinforcement and revitalization

88

Motivation for
Customer-Based Brand Equity
Model

Marketers know strong brands are


important but arent always sure how
to build one.
CBBE model was designed to be

comprehensive
cohesive
well-grounded
up-to-date
actionable
89

Rationale of
Customer-Based Brand Equity
Model

Basic premise: Power of a brand resides in


the minds of customers
Challenge is to ensure customers have the
right types of experiences with products &
services and their marketing programs to
create the right brand knowledge structures:

Thoughts
Feelings
Images
Perceptions
Attitudes
90

Building
Customer-Based Brand
Equity
Building a strong brand involves a series

of steps as part of a branding ladder


A strong brand is also characterized by a
logically constructed set of brand
building blocks.
Identifies areas of strength and weakness
Provides guidance to marketing activities

91

CUSTOMERBASEDBRANDEQUITYPYRAMID

RESONANCE

JUDGMENTS

PERFORMANCE

FEELINGS

IMAGERY

SALIENCE

4.RELATIONSHIPS=
4.RELATIONSHIPS=
Whataboutyou&me?
Whataboutyou&me?

3.RESPONSE=
3.RESPONSE=
Whataboutyou?
Whataboutyou?

2.MEANING=
2.MEANING=
Whatareyou?
Whatareyou?

1.IDENTITY=
1.IDENTITY=

Whoareyou?
Whoareyou?

92

Salience Dimensions
Depth of brand awareness
Ease of recognition & recall
Strength & clarity of category
membership

Breadth of brand awareness


Purchase consideration
Consumption consideration
93

Performance Dimensions
Primary characteristics &
supplementary features
Product reliability, durability, and
serviceability
Service effectiveness, efficiency, and
empathy
Style and design
Price
94

Imagery Dimensions

User profiles

Purchase & usage situations

Type of channel, specific stores, ease of purchase


Time (day, week, month, year, etc.), location, and context of
usage

Personality & values

Demographic & psychographic characteristics


Actual or aspirational
Group perceptions -- popularity

Sincerity, excitement, competence, sophistication, & ruggedness

History, heritage, & experiences

Nostalgia
Memories
95

Judgment Dimensions

Brand quality

Brand credibility

Expertise
Trustworthiness
Likability

Brand consideration

Value
Satisfaction

Relevance

Brand superiority

Differentiation
96

Feelings Dimensions

Warmth
Fun
Excitement
Security
Social approval
Self-respect

97

Resonance Dimensions

Behavioral loyalty

Attitudinal attachment

Love brand (favorite possessions; a little pleasure)


Proud of brand

Sense of community

Frequency and amount of repeat purchases

Kinship
Affiliation

Active engagement

Seek information
Join club
Visit web site, chat rooms
98

Customer-Based Brand Equity


Model
INTENSE,ACTIVE
INTENSE,ACTIVE
LOYALTY
LOYALTY

Consumer
Brand
Resonance

Consumer
Judgments

Brand
Performance

Consumer
Feelings

Brand
Imagery

BrandSalience

RATIONAL&
RATIONAL&
EMOTIONAL
EMOTIONAL
REACTIONS
REACTIONS
POINTSOF
POINTSOF
PARITY&
PARITY&
POINTSOF
POINTSOF
DIFFERENCE
DIFFERENCE
DEEP,BROAD
DEEP,BROAD
BRAND
BRAND
AWARENESS
AWARENESS 99

Brand Positioning
Define competitive frame of reference
Target market
Nature of competition

Define desired brand knowledge


structures
Points-of-parity
necessary
competitive

Points-of-difference
strong, favorable, and unique brand associations
100

Issues in Implementing
Brand Positioning
Establishing Category Membership
Identifying & Choosing POPs &
PODs
Communicating & Establishing POPs
& PODs
Sustaining & Evolving PODs & POPs

101

Establishing Category
Membership
Product descriptor
Exemplar comparisons

102

Identifying & Choosing


POPs & PODs
Desirability criteria (consumer
perspective)
Personally relevant
Distinctive & superior
Believable & credible

Deliverability criteria (firm


perspective)
Feasible
Profitable
Pre-emptive, defensible & difficult to attack
103

Major Challenges in
Positioning
Find compelling & impactful points-ofdifference (MacMillan & McGrath, HBR,
97)
How do people become aware of their need for your
product and service?
How do consumers find your offering?
How do consumers make their final selection?
How do consumers order and purchase your product or
service?
What happens when your product or service is
delivered?
How is your product installed?
How is your product or service paid for?
104

Major Challenges in
Positioning
Find compelling & impactful pointsof-difference (cont.)
How is your product stored?
How is your product moved around?
What is the consumer really using your product for?
What do consumers need help with when they use
your product?
What about returns or exchanges?
How is your product repaired or serviced?
What happens when your product is disposed of or
no longer used?

105

Communicating &
Establishing
POPs
&
PODs
Create POPs and PODs in the face
of attribute & benefit trade-offs

Price & quality


Convenience & quality
Taste & low calories
Efficacy & mildness
Power & safety
Ubiquity & prestige
Comprehensiveness (variety) & simplicity
Strength & refinement
106

Strategies to Reconcile
Attribute & Benefit TradeOffs

Establish separate marketing


programs
Leverage secondary association
(e.g., co-brand)
Re-define the relationship from
negative to positive

107

Sustaining & Evolving


POPs & PODs
Core Brand Values &
Core Brand Proposition

108

Core Brand Values


Set of abstract concepts or phrases
that characterize the 5-10 most
important dimensions of the mental
map of a brand.
Relate to points-of-parity and pointsof-difference
Mental Map Core Brand Values Brand
Mantra
109

Brand Mantras
A brand mantra is an articulation of the
heart and soul of the brand.
Brand mantras are short three to five word
phrases that capture the irrefutable essence
or spirit of the brand positioning and brand
values.

Nike
Authentic Athletic Performance

Disney
Fun Family Entertainment
110

Brand Mantras
A brand mantra is an articulation of the
heart and soul of the brand.
Brand mantras are short three to five word
phrases that capture the irrefutable essence
or spirit of the brand positioning and brand
values.

Nike
Authentic Athletic Performance

Disney
Fun Family Entertainment
111

Introdu
ction t
o
Adver
tising
Outline
The mandate for effectiveness

What makes an ad effective?


The world of advertising
The five players of advertising
The evolution of advertising

Today advertising
is in a bind
Advertisers expect
specific results
that lead to sales
Advertising must
be effective

The Mandate for


Effectiveness
113

What Makes an Ad
Effective
?
Effective ads work on two
levels: with consumers
and with advertisers
Characteristics of
effective ads:

Strategy
Execution
Advertising must be goal
directed
114

The World of Advertising


Defining advertising
A paid form of
communication
A sponsor is identified
Tries to persuade or
influence the consumer to
do something
Conveyed through mass
media
Reaches a large audience
Is nonpersonal
115

Types of Advertising
Brand advertising
Retail/local
advertising
Political advertising
Directory
advertising
Direct-response
advertising

Business-tobusiness advertising
Institutional
advertising
Public service
advertising (PSA)
Interactive
advertising
116

The Roles of Advertising


Marketing role
Communication
role
Economic role
Societal role

117

Functions of Advertising

118

The Five Players of Advertising


Advertiser
Advertising agency
The advertising
department
The in-house agency

Media
Vendors
Target audience
119

The Evolution of Advertising


Age of print
Industrial revolution
and emergence of
consumer society
Modern advertising:
Agencies, science
and creativity
Accountability era
120

Current Advertising Issues


Interactive
advertising
Globalization
Niche marketing
Integrated marketing
communications
(IMC)
Consumer Power
121

How Brands Work

Brand personalities
Branding
Trust
Brand image
Brand relationships
Brand equity
122

MARKETINGPLANNINGPROCESS

Complex,
Varied
Marketing
Activity

Detailed,
Rich
Marketing
Models

Comprehensive,
Robust
Marketing
Measures

123

Role of Integrated Marketing


Communications
Marketing communications
are the voice of the brand and are a
means by which it can establish a dialogue
and build relationships with consumers.
allow marketers to inform, persuade, incent,
and remind consumers directly or indirectly
can contribute to brand equity by
establishing the brand in memory and
linking strong, favorable, and unique
associations to it.
124

Role of Integrated Marketing


Communications (Cont.)
Consumers can be told or shown how and why a
product is used, by what kind of person, and where and
when;
Consumers can learn about who makes the product and
what the company and brand stand for
Consumers be given an incentive or reward for trial or
usage
Brands can be linked to other

People
Places
Events
Brands
Experiences
Feelings
Things
125

Simple Test for


Marketing Communications
1.
3.
Current
Brand
Knowledge

2.
Desired
Brand
Knowledge

126

Integrated Marketing
Communications and CustomerBased Brand Equity

One implications of the CBBE


framework is that the manner in
which brand associations are formed
does not matter -- only the resulting
strength, favorability, and
uniqueness

127

Designing Integrated
Marketing Communications
Programs
From the perspective of customer-based
brand equity, marketers should evaluate
all possible communication options
available to create knowledge structures
according to effectiveness criteria as well
as cost considerations.
Different communication options have
different strengths and can accomplish
different objectives.
128

Alternative Communication
Options
(Consumer)

Media Advertising (TV, radio, newspapers,


magazines)
Direct Response Advertising
Interactive (on-line) Advertising & Web Sites
Outdoor Advertising (billboards, posters, cinema)
Point-of-Purchase Advertising
Trade Promotions
Consumer Promotions
Sponsorship of Event Marketing
Publicity or Public Relations
129

Alternative Communication
Options
(Business-to-Business)

Media Advertising (TV, radio, newspaper, magazines)


Trade Journal Advertising
Interactive (on-line) Advertising & Web Sites
Directories
Direct Mail
Brochures & Sales Literature
Audio-Visual Presentation Tapes
Giveaways
Sponsorship or Event Marketing
Exhibitions, Trade Shows, Conventions
Publicity or Public Relations
130

Print Ad Evaluation Criteria


Is the message clear at a glance?
Is the benefit in the headline?
Does the illustration support the headline?
Does the first line of the copy support or
explain the headline and illustration?
Is the ad easy to read and follow?
Is the product easily identified?
Is the brand or sponsor clearly identified?

131

Ad Campaign
Considerations
Campaigns make brands -- not single ads
Be creative and develop creative themes
Avoid slavishly sticking to executional formulas

Brand communications should sing like a


choir
Multiple voices
Multiple notes

Find fresh consumer insights & compelling


brand truths
Productively conduct ad research
132

IMC Case Study


CMPB Success Factors
Smart strategy
Relative deprivation

Imaginative creative
Funny but relevant

Clever hook
Got milk? slogan

Timely secondary media


In store

Right partners
133

Common Mistakes in
Developing Advertising
Failure to distinguish ad positioning
(what you say) from ad creative (how
you say it)
Mistaken assumptions about consumer
knowledge
Improperly positioned
Failure to break through the clutter
Distracting, overpowering creative in
ads
134

Common Mistakes in
Developing Advertising
(cont.)

Under-branded ads
Failure to use supporting media
Changing campaigns too frequently
Substituting ad frequency for ad
quality

135

Audience Communication Option Overlap

Communication
Option A

Communication
Option B

ce
n
die
u
A

Communication Option C
136
Note: Circles represent the market segments reached by various communication options.
Shaded portions represent areas of overlap in communication options.

Evaluating IMC Programs


Coverage - what proportion of the
target audience is reached by each
communication option employed, as
well as how much overlap exists
among options
Cost - what is the per capita
expense
137

Evaluating IMC Programs


(cont.)
Contribution - the collective effect on
brand equity in terms of
enhancing depth & breadth of awareness
improving strength, favorability, &
uniqueness of brand associations

Commonality - the extent to which


information conveyed by different
communication options share meaning
138

Evaluating IMC Programs


(cont.)
Complementarity - the extent to which
different associations and linkages are
emphasized across communication
options
Versatility - the extent to which
information contained in a
communication option works with
different types of consumers
Different communications history
Different market segments
139

Keller Bes

Be analytical: Use frameworks of consumer


behavior and managerial decision-making to
develop well-reasoned communication programs
Be curious: Fully understand consumers by
using all forms of research and always be thinking
of how you can create added value for consumers
Be single-minded: Focus message on welldefined target markets (less can be more)
Be integrative: reinforce your message through
consistency and cuing across all communications

140

Keller Bes
Be creative: State your message in a unique
fashion; use alternative promotions and media
to create favorable, strong, and unique brand
associations
Be observant: Monitor competition,
customers, channel members, and employees
through tracking studies
Be realistic: Understand the complexities
involved in marketing communications
Be patient: Take a long-term view of
communication effectiveness to build and
manage brand equity
141

Branding &
Brand Positioning

What is a Brand?
A name, term, sign, symbol or
design, or a combination of them,
intended to identify the goods or
services of one seller or group of
sellers and to differentiate them
from those of competitors.

What is Branding?

Providing goods and services


with the power of the brand.

Brand Elements

Brand Element Choice


Criteria How to choose
good
elements?
Memorable
Meaningful
Likeable
Transferable
Adaptable
Protectable

Brand Naming
Individual

names
Blanket family names
Separate family names
Corporate name/individual name
combo

Slogans Examples

The Role of Brands

Advantages of Strong
Brands
margins
perceptions of
More inelastic
product
consumer response
performance
Greater trade
Greater loyalty
cooperation
Less vulnerability
Increased marketing
to competitive
communications
marketing actions
effectiveness
Less vulnerability
Possible licensing
to crises
opportunities
Improved

Larger

What is Brand Equity?


The added value given to goods
and services, through branding
which may be reflected in the way
consumers, think, feel, and act with
respect to the brand.

The 10 Most Valuable Brands


Brand

2006 Brand Value

Coca-Cola

$67.00

Microsoft

$56.93

IBM

$56.20

GE

$48.91

Intel

$38.32

Nokia

$30.13

Toyota

$27.94

Disney

$27.85

McDonalds

$27.50

Mercedes-Benz $22.13

(Billions)

Measuring Brand Equity


Brand

Audits

Comprehensive examination of a brand


to assess the health of the brand
Suggest ways to improve its equity.
Brand

Tracking

Collecting information about the brand


performance
Brand

valuation

Determining financial value of the


brand

Managing Brand Equity


Brand

reinforcement

Continuous product improvement


and innovation.
Brand

revitalization

Change in Positioning
Overhaul the brand image

Brand Portfolios
A

set of brands a company offers

Advantages

Increasing shelf presence and retailer


dependence in the store
Attracting consumers seeking variety
Increasing internal competition within
the firm
Yielding economies of scale in
advertising, sales, merchandising, and
distribution

Brand Roles in a Brand


Portfolio
Flankers
Cash

cows
Low-end, entry-level
High-end prestige

Strategic Brand
Management
Identifying

& establishing brand

positioning
Planning & implementing brand
marketing
Measuring & interpreting brand
performance
Growing & sustaining brand value

What is Positioning?
The act of designing the
companys offering and image to
occupy a distinctive place in the
mind of the target market.

Value Proposition
A good hot pizza, delivered
to your door within 30
minutes of ordering, at a
moderate price

Defining Associations

Both are important!

PODs Success Criteria


Consumer Desirability Criteria

Deliverability Criteria

Examples of Negatively
Correlated Attributes and
Benefits
Low-price vs. High quality
Taste

vs. Low calories


Nutritious vs. Good tasting
Powerful vs. Safe
Ubiquitous vs. Exclusive
Varied vs. Simple

Differentiation Strategies
Product
Distribution
Personnel
Image

Channel

Product Differentiation
Product

form
Features
Performance
Conformance
Durability
Reliability
Reparability

Style
Design
Ordering

ease

Delivery
Installation
Customer

training

Customer

consulting
Maintenance

Distribution Channel
Differentiation
Coverage
Expertise
Performance

Personnel Differentiation
Better-trained

staff
Competent (skill and knowledge)
Trustworthy
Friendly and respectful
Reliable (perform consistently &
accurately)
Responsive
Good communicators (understand
customer and communicate clearly)

Image Differentiation
Establish

character and value


proposition
Convey in a distinctive way
Deliver emotional power

Product Life
Cycles

Claims of Product Life


Cycles
Products

have a limited life


Product sales pass through
distinct stages each with
different challenges and
opportunities
Profits rise and fall at different
stages
Products require different
strategies in each life cycle stage

Product Life Cycles Stages

Stages in the Maturity


Stage
Stable
Growth

Decaying
Maturity

Strategies for Sustaining


Rapid Market Growth
Improve

product quality, add new


features, and improve styling
Add new models and flanker products
Enter new market segments
Increase distribution coverage
Shift from product-awareness
advertising to product-preference
advertising
Lower prices to attract the next layer
of price-sensitive buyers

Ways to Increase Sales


Volume
Convert

nonusers
Enter new market segments
Attract competitors customers
Have consumers use
The product on more occasions
More of the product on each
occasion
The product in new ways

Market Evolution

Market Evolution Stages

Latent

New firms
Single-niche
enter
market
Multipleniche
Massmarket

Competition Society
covers all
needs
major
decline or
market
new
segments
technolog
y replaces
old

Maturity Strategies

ESSENTIALS
OF BRAND
BUILDING
STRATEGIES, TIPS & TECHNIQUES

Nick Wreden
Nickwreden@gmail.com

NEXT GENERATION BRANDING

AGENDA: Outline
Branding principles
New rules for a new business era
Malaysia boleh!
A Malaysian brand success story
Action items for success
How to build your brand
Participate!

BRANDING PRINCIPLES

WHY BRAND?: Branding advantages


Shortens sales cycles
Maximizes marketing spend
Facilitates repeat sales
Enables premium pricing
Blocks competitors
Independence from OEM relationships
Attracts strategic alliances & partners
Best path toward profitability

BRANDING PRINCIPLES
BRANDING: Definition
What is a brand?
Logos?

TV?

Advertising?

Expensive?

Brochures?

International?

SuperBrand award?

Positioning?

BRANDING PRINCIPLES

A name, term, sign, symbol or design, or a combination of these that


identifies the goods or services or one seller or group of sellers and
differentiates them from those of competitors.
The sum of all the images and associations customers have
concerning a company.
Great brands are born from people who are having fun. Their
excitement is reflected in the meaning of the brand.

A brand is a long-term profitable bond between an


offering & a customer. This relationship is based on
economic, emotional and/or experiential value, backed
by everyday operational excellence & consistently
measured for accountability, usually by customer
profitability.

BRANDING PRINCIPLES
MYTH
You need a big budget to
brand

REALITY

Brands are based not on spending but


on continuing customer relationships
Only companies selling to Businesses selling to businesses
consumers can brand
can establish dominant brands
Branding effectiveness is Branding effectiveness is
determined by the awards measured by sales, profitability &
won
growth
Only marketing
Everyone in an organization is
experts can brand
responsible for branding
The more ads you see, the ????
bigger the brand

BRANDING PRINCIPLES
MARKETING v. BRANDING: Which is which?
What is the difference between marketing &
branding?
Answer is key, because it helps establish our
activities & measurements.

BRANDING PRINCIPLES
MARKETING v. BRANDING: Which is which?
Marketing
Encourages firsttime purchases
Advertising
Public relations
(PR)
Promotion
Merchandising
Etc.

Branding
Delivers customer economic,
experiential & emotional value
that encourages repeat
purchases
Price
Operations
Culture
Key differentiator
Experience (2)
Talent
Service

BRANDING PRINCIPLES
Customer
economy
(1996-2007)

Im
me
dia
cy

y/s
erv
ice
Qu
alit

on
ati
liz

Ad
ve
rt

a
on

Sales

rs
Pe

Metrics:

Databases

n
tio

Driver:
Marketing
Marketing
Dept.dept.

Sell what
customers
buy

ra
eg

Market research

nt
s/i

Sell what
we make

Demand
economy
(2008-??)

es
oc
Pr

g
nin
itio
os
P

is in
g,
etc
.

Mass
economy
(1920-95)

Provide
customer
solution

Real-time enterprises

Organization

Supply chain

Profitability

Relationship depth

BRANDING PRINCIPLES

Product
Strategy

Targeting, Positioning
Pricing
Strategy

Promotion
Strategy

Place
Strategy

Implementation, Monitoring & Control


What two critical branding factors are missing?

Company-driven

Old
Brandi
ng

Product Development

BRANDING PRINCIPLES

DEFINE VALUE

Understand
competitors

Segment
customers

Sense market
trends

Target
profitable
segments

Understand
customers
Identify
opportunities

Craft value
propositions
Validate value
propositions

REALIZE
VALUE

SUSTAIN
VALUE

Develop
offerings

Improve
retention

Meet
customer
demands for
economic,
experiential,
emotion value

Increase
customer,
product &
account
penetration

Measure
value

Personalize
relationships

Find. Grow. Measure. Profit.

Customer-driven

SENSE VALUE

BRANDING PRINCIPLES

Strategic

BRANDING:
Planning
priorities

Branding
Customer

Ads,
PR,
etc.

FAQ:
How long
does it
take to
establish
a brand?

BRANDING PRINCIPLES

BRANDING: 4 types
Acquisition branding
Targeting & segmentation

Retention branding

Keep customers longer &

purchasing more
Brand penetration
Customer, account, product
Advocacy
Get customers to sell to
others

Acquisition
(Ads, PR,
etc.)
Retention/
recovery
(Reduce
defection,
loyalty)
Brand
penetration
Advocacy
(word of
mouth)

P
R
O
F
I
T
S
!

BRANDING PRINCIPLES

BRANDING: Acquisition vs. retention


The purpose of business is not to make a
keep a customer
make and _______________.
sale, but to _____
-- Peter Drucker
Legendary management consultant

BRANDING PRINCIPLES
BRANDING: Acquisition vs. retention
Acquisition
Dedicated staff
Average acquisition cost:
$113
Cost-to-serve higher
Price sensitive
2/3s of new buyers fail to
make repeat purchase

YET: 80-90% of
marketing budgets

Retention

No dedicated staff

80/20 profitability rule

Cost-to-serve lower

Trust & loyalty fuel


purchases

Tell 8-10 others about


happy experiences
YET: 10-20% of budgets

BRANDING PRINCIPLES
BRANDING: Acquisition vs. retention
ACQUISITION VS. RETENTION
Investment

Revenue

$1 acquisition

$5

$1 quality, value,
communications
(help retention)

$60

Creative Good
* Michigan State
Business School

BRANDING PRINCIPLES
BRANDING: Acquisition vs. retention
Average customer loss rate = 20% a year
20% customer loss rate cuts profits 17%
Retention increase of 5% = lifetime profit
increase of 95%
Existing customers 3-8 times cheaper to serve
HOW TO INCREASE SALES
Odds of selling to new customer

5-15%

Odds of selling to existing customer

50%

Odds of selling to a former customer

10-15%

BRANDING PRINCIPLES
BRANDING: Acquisition vs. retention

MALAYSIA BOLEH!

HOE PHARMACEUTICALS: Background


Sdn Bhd. headquartered in KL
Manufactures skin cream & liquid
preparations for prescriptions & OTC
Also manufactures herbal & cosmetic
products
Meets standards of WHO, Ministry of
Health in Malaysia & other countries
Extensive international investment

MALAYSIA BOLEH!

BRANDING: Challenges & opportunities


Foot problems very common
Cracked heel
Ladies & sandals

Extensive local/international competition


Dissatisfaction with competitive products
Quality product able to effectively solve
customer problem
Key!

Branding not offering a capability, but solving


a customer problem

Certifications offer third-party credibility

MALAYSIA BOLEH!

BRANDING: Secrets of success


Long-term commitment
We have always looked at this as a longterm strategy; branding is not something that
is done overnight.

-- George Soh, General Manager

Followed a brand plan


Lack of planning shortcut to failure
Malaysias Best; Tak Nak campaigns

Planned growth in stages


First Malaysia, then Singapore, Thailand,
Hong Kong, Taiwan, more

MALAYSIA BOLEH!

BRANDING: Secrets of success


Extensive market research
Target market: high-income 30+ females
Pharmacies, physicians
How product is used
Follow-up surveys for benchmarking

Operational excellence
High-quality manufacturing

Excellent integrated marketing execution


PR
Advertising
Collateral

Web
Promotion
Training

MALAYSIA BOLEH!

SECRETS OF SUCCESS: PR
Variety of targets
Local & monthly
Well-targeted message
Open shoes
Overweight
Education
Reason to
No moisture, dry out
buy from
Consequences
customer
Infection
viewpoint
Doctor care

MALAYSIA BOLEH!

SECRETS OF SUCCESS: Advertising


Testimonial theme
Targeted message
Reflects target customer

Strong graphic image


Credibility
3-day proofpoint

Reference for purchase


Package

MALAYSIA BOLEH!

SECRETS OF SUCCESS:
Collateral
Visual identification of problem
Inside: Education
How it works
What makes it better
Credibility

Before/After photos
Shows benefit from customer
perspective

Note consistency of graphics

MALAYSIA BOLEH!

SECRETS OF SUCCESS: Web


Good design
Easy to navigate
Easy to read

Complete product info

Contact info
Responsiveness

Current

MALAYSIA BOLEH!

SECRETS OF SUCCESS:
Promotion
Promotion/contest

Linked to target market

1 ct. diamond

Prospect involvement
Match slogan

Leveraged with PR
I have been using

Elgy Plus cracked heel


for some time & I am so
excited to be one of the
winners.

MALAYSIA BOLEH!

SECRETS OF SUCCESS: Training


Retail detail
Pharmacies, physicians

Educate
Why use
Use product after cure

MALAYSIA BOLEH!

SECRETS OF SUCCESS: Results


#1 or #2 in each target market
70-80% market share

SECRETS OF BRANDING
FIRST RULE OF BRANDING
It is not about you; it is about the prospect &
customer

SECOND RULE OF BRANDING


All customers (and prospects) are not
created equal.

THIRD RULE OF BRANDING


Measurement is critical.

METRICS-DRIVEN BRANDS

MAIN LESSONS: Remember this!


The purpose of business is not to make a
sale, but to _____ and _______________.
-- Peter Drucker
Legendary management consultant

!!
!
T
N
A
T
R
O
P

BRAND PLANNING: PLAN


KEY ELEMENTS

T
S
O
M

IM

I. Executive overview
II. Market, product, business & competitive review
III. Situation analysis
IV. USP (Unique Selling Proposition)
V. Strategies, objectives, goals & tactics
VI. Execution
VII. Budgeting
VIII. Timetables & responsibilities
IX. Measurement, evaluation & feedback

METRICS-DRIVEN BRANDS
BRANDING: Profitability imperatives
All customers are not created equal
Customers define brands based on their experience,
emotion & functionality
Companies can no longer position brands

Brands are only tools to build customer equity


Magnet to attract new customers
Anchor to hold existing customers

Goal is profitability, not sales or market share


Measurement is critical
Establishes accountability

RETENTION BRANDING
Retention pays!
Satisfied customers tell 3-5 others about a pleasant
experience
It can cost up to 10 times more to generate revenue
from a new customer than from an existing one
A 5% retention rate increase can increase profits by 60100%
Loyal customers who refer others generate business at
a very low or no cost

RETENTION BRANDING
Unhappiness costs!

Dissatisfied customers tell 7-13 others


Unhappy customers complain for up to 23 years!
Negative word-of-mouth: 2X as much impact on
purchase intentions as positive word-of-mouth
Make-goods/expediting are expensive
Find replacement customers

RETENTION BRANDING
80/20 rule

20% of your customers account for 80% of your profits


Knowing this is not as important as knowing WHICH
20% (as well as the bottom 15%)
Conventional accounting only tells us profit from 100%
of the customers

Branding imperatives

Identify & increase profitability of customers

Make intelligent customer acquisition/retention

PROFILES IN BRANDING

INDUSTRY EXCELLENCE AWARDS 2004


Awarded by MITI in March 2005
Categories: Product excellence, export
excellence, quality management

Special award -- Malaysian brand names


Hoe Pharmaceutical
Noor Arfa Batek
Carotino

Special award -- Innovative product


CCM Pharma
Others

METRICS-DRIVEN BRANDS
TRADITIONAL BRANDING

How profitable is this product?

How should I price this


product?

Are we doing enough newproduct development?

How can we extend the


product life cycle?

What is our share of market?

PROFITABLE BRANDING
How profitable is this
customer?
How should I price this
customer?
Are we doing enough
new-customer
development?
How can we extend the
customer life cycle?
What is our share of
customer wallet?

advertising
Advertising is a form of communication for marketing and
used to encourage, persuade or manipulate an audience
(viewers, readers or listeners; sometimes a specific group) to
continue or take some new action.
The word advertising comes form the Latin word "advertere
. That means "to turn the mind toward"
Definition According to American Marketing Association
advertising
is anyto
paid
form of non-personal
and
Definition
According
American
Marketingpresentation
Association
promotion is
of any
ideas,
goods
and
by an identified
sponsor.
advertising
paid
form
ofservices
non-personal
presentation
and

promotion of ideas, goods and services by an identified


sponsor.

Developing the ADVERTISEMENT

MISSION
-sales goods
-advertising
objectives

MESSAGE
-Message
generation
-Message
evaluation
-Message
execution
MONEY
-stage of
PLC
-market
share
competition
-Advertising
frequency

MEDIA
-Reach,
frequency
-Major media
types
-Specific
media vehicles
-Media timing
-Geographical
media
allocation

Measurem
ent
Communic
ation
-Sales
impact

Market Segmentation, Targeting, and


Positioning
Segmentation is the process of classifying customers into groups which share
Segmentation is the process of classifying customers into groups which share some
some common characteristic
common characteristic

Targeting involves the process of evaluating each segments attractiveness and selecting
one or more segments to enter

Positioning is arranging for a product to occupy a clear, distinctive and desirable place
relative to competing products in the mind of the consumer

AIDA (Attention, Interest, Desire, Action)

Attitude Based Decision Process:


Stages
Hierarchal steps

Comparison between traditional


and IMC marketing approach
Traditional Approach to Marketing Communications :

Contemporary IMC Approach

Defining IMC
used
s
s
e
c
s s pr o a l ua t e
e
n
i
s
u
egic b cute and ev ve
t
a
r
t
s
e
si
sa
IMC i develop, ex able, persua ith
,
r
to plan ated, measu programs w
n
n
coordi mmunicatio rs, prospects l
co
me
erna
o
t
t
x
s
e
u
t
c
brand
n
ers,
leva
m
e
r
u
s
r
n
e
i s to
o
h
t
c
C
.
o
s
M
e
d
I
c
n
f
n
goal o rt-term
y e e s a e r na l a udi e
o
e
l
h
p
T
m
e
t
te sho
a
and in
r
e
n
and
e
s
g
n
r
u
t
a l re
financi -term brand
ong
build l alue.
v

Reasons for the Growing


Importance of IMC

Branding

Brand Identity is a
combination of factors:
Name, logo, symbols,
design, packaging, product
or service performance, and
image or associations in the
consumers mind.

IMC plays a
major role in the
process of
developing and
sustaining brand
identity and
equity.

ADVERTISING MANAGEMENT

Defining
advertising
Target

Advertising
OBJECTIVES

ADVERTISIN
G
MANAGEMEN
T

Advertising
Effectiveness

Selecting
Media

Developing
STRATEGY

Setting the
Advertising
BUDGET

ADVERTISING TARGET
The advertising target is the audiences, towards whom the
ad targeted.
Sometimes this target encompasses the entire target
market.
In other cases it includes only a subset of target market.

ADVERTISING OBJECTIVES
The basic objective of advertisement is effective
communication b/w producers and consumers. Some
following objectives are:
Preparing ground for new product
Creation of demand
Facing the competition
Creating and enhancing goodwill
Informing the changes to the customers
Neutralizing the competitors advertisement

ADVERTISING BUDGET

Its a component of the total promotion budget, must be allocated


among markets, brands & media.
Under this system, brands in the introductory stage would receive
more funds than those in the maturity stage.

There is 5 factors are consider for setting the


budget
-Product life cycle stage
-Market share & consumer base
-Competition & clutter
-Product substitutability
-Advertising frequency

ADVERTISING STRATEGY
1. Selects an appeals
the ad concepts

4. Provides technical direction


the ad elements
& production

2 Formulates

3 Develops

Head
lin

ion
t
a
r
t
s
Illu
Copy

re
u
t
a
n
g
i
s

ADVERTISING MEDIA
In advertising, mass communication channels are called
advertising media, like- newspaper, magazine, radio, TV
.etc.

The major type of advertising media are- print, broadcast, direct,


location.

Print media
More information can be communicated more accurately through print media
than others.
The major type of print media are Newspaper, Magazines, Brochures,
Fliers etc.

Newspaper can be classified as daily or weekly with local or national


distribution. Local newspaper are geographically selective & national
newspaper that offer regional edition.

The number of general-interest magazines are declined now days while the
special type of magazines has increased. so, its the one of important vehicle
for advertising.

MAGAZINES can also be classified by the target group for which the
content is tailored: consumers, business, farmers
consumers magazines range from large circulation , general-interest
magazines & special interest magazines are Readers digest, Times
magazines, India today, Film-fare magazine, Fishing Chimes
etc. Business publications include magazines of broad scope like Fortune &
those targeted specific industries. Farm magazine is a broad interest
national magazine.
most magazines are national & are published monthly.

magazine

news paper

Broadcast media
Radio & TV are broadcast media. Whereas advertiser buy space in
print media, they buy time on broadcast media.
Television, the fastest growing medium, also reaches practically all
homes. TV ads generally have the greatest impact because they
stimulate both sight and hearing & advertiser can show their product in
use.

Direct advertising media


Marketers try to communicate directly with potential
customers when they use direct advertising media like Direct
mail, mail order, and un-mailed direct media.
Direct mail & mail order, can have a format of any size or
shape that is unbound.
Un-mailed direct , includes Leaflets & Booklets that are
distributed door-to-door or in parking lots.

Conclusion
Advertising and promotion has a crucial and key role specially
in building new customers , penetration and embedment of
new product/service easily into market.
Thus study of them is very much essential for successful
marketing

Sales Promotion
The wonders and the wounds

Promotion Mix /
Communication Mix (PR)

Sales Promotion
PR
Selling
Advertising

Below the line


Above the line

Two Types of Sales Promotion

Consumer Promotion
Trade Promotion

What do we want the


consumers and trade to do?

Buy More
Buy Now

A sales promotion should


be

Temporary if not the consumers


would not believe it the next time
Great Value Added they should
find reason to buy now and more

Trends on Sales Promotion

of the marketing budget is allocated to


sales promotion
In 1995, 51% of total adspend represents
trade promotions. 24% on media
spending 22% on consumer promotion
Growth in the coupon segment is
tremendous in aspirational markets

Americans redeem more than 7 billion


coupons annually.

Why the Growth???

Instant results
Faster implementation
Measurable
Relatively easy and inexpensive

The Downside of Sales


Promotion

Brand Erosion
Profitability increase is relatively
low
Implementation cost and problems
Orients marketing managers
towards short term results

What a sales promotion


should be.

Lets go back to the basics


Should hit the consumer at a particular
behavioral stage
Are marketing communication activities
that change the price/value relationship
of a product / service perceived by the
target

Generating immediate sales


Altering long term brand value

Planning Sales Promotion

Who is our target set of


consumers?
What is the reason for that
behavior
What is the goal of the program
Is there a meaningful economics
attached to sales promotion

Types of Buyers

Loyals

Competitive loyals

People who are loyal to the competing brand

Switchers

Buy a particular brand on a more or less


consistent basis

Purchase of various brands in one category

Price buyers
Non Users

Results that are needed


.

Loyals

Competitive loyals

Persuade to buy the right brand more often

Price

Break loyalty
Encourage brand switching

Switchers

Reinforce behavior
Increase consumption
Change buying timing

Value added to make price less important

Non users

Create awareness, create category worth

Types of Sales Promotions

Coupon
Bonus Packs
In pack, On pack, and Near Pack
Specialty container
Continuity program
Refund
Sweepstakes
Contest
Through the mail Premium
Sampling
Price off
Trade deal
Cause related promotion

Coupons

Clip and bring to


the store to
exchange
Now it is phone
based
Induce loyalty
Repeat purchase
Keeps the
consumers
locked

Bonus Packs

Like bundle
pricing but this is
temporary
Adds value

In Pack, On Pack Promotion

It is used to
introduce
new products
/ service
Dispose of
excess
inventory
Use excess
overhead

Specialty Container

Increases
products
perceived value
Uy tignan mo ito
meron libreng
pitchel

Continuity Program /Loyalty


Cards

Refund / Rebate
Promotion

If the product does


not perform, then
its money back
Or consume X
number of
products and get Y
FREE
Increases
consumer
confidence
Loyalty program

Sweepstakes

Chance game
where the
consumer has
the chance to
win something
big through
purchases
The more
purchases, the
more tickets
Creates loyalty

Sampling

Used when the


consumer is
unaware of the
brand or product
Product buying is
prone to retail
channel based trial
Use when the
product can be
broken down into
smaller
dimensions

Price off promotion

Use for slow


moving items
Excess
inventory
Off season
Dislodge
competitors

Choose the right


promotion for the right
situation

Example
Problem

Solution

New product

Sampling, on pack promo

Consumers not loyal

Rebates, sweepstakes,
loyalty cards

Competitors are attacking


the market with ads

Price off, free goods,


premiums, rebates, etc

Excess inventory
Shelf life is critical

Consumer Promotion

To induce immediate off take from


the shelf
To induce trial
To buy more of your products
To buy immediately

Trade Promotion

Encourages your trade channel to


load up
Move inventory from the company
to the warehouse of the trade

Distributor or Key Accounts

Deals with promotional tools for


staff and sales people who are
involved with the trade.

Sell in (PUSH STRATEGY)

Trade Promotion based on

Volume buy a certain volume to


attain a high discount
Prompt Payment pay on time and
get a discount
Free goods using new products or
slow moving products as
promotional items

Volume Promotion

It motivates the dealer to buy


more
Example

10+1 promotion buy 10 boxes get


one free
Volume discounts
Bundle promotion feature a new
product as freebie

Advertising Promotion

Cooperative advertising

Coke and Julies Bakeshop


Lock in to the outlet to exclusively
sell your brand

Cooperative Promotion

Co-branding
Using another
brand to
penetrate the
market
Good if the
equity of the
other brand is
high or parallel

Co-branding

Can be a strategy
or a promotion
It increases margin
Synergizes strength
of two brands
Increases
profitability due to
the higher value
perception

Free Goods

Better
profitability
Moves higher
volume
Economies of
scale

Trade Advertising

Advertisements used as a basis


for booking sales
Rationale is consumers will look
for a brand that has ad support

Massive advertising always


leads to higher trade acceptance
Trade will only stock items that
will sell

Personal Selling
Direct Selling
Distribution Selling
Outlet Selling

Direct Sales

One of the recent


trends in consumer
marketing
Direct hit to
consumers
Smaller ad spending

Direct sales

Uses human capital as resource


Offering high earnings to those
who do not have businesses
Home based
People get people strategy
Very sound business model

How do they profit?

Gross Margin 40%


1st level Commission 10%
2nd level commission 8%
3rd Level commission 5%
AT this point, the company still
earns and yet the number of
networks grow.

Direct Sales

Meaningful to sales people


The consumer saves money
Answer to the crisis of power of
retail channels

Distribution Selling

Sales efforts to cover geographic


region
Cover relevant distribution
channels
Example:

Bonheur Marketing

Bonheur Marketing

Former exclusive distributor of


Marlboro and Philip Morris
Covers outlets such as

Supermarkets
Sari sari stores
Sub distriutors
Dealers
Luzon wide

BiC became better when

Distribution was assigned to


FilStar an affiliate of National
Bookstore
Thats why BiC enjoys great retail
presence in NBS

Key things to remember

Creative brief
Copy strategy
Execution methods
Media
Media Planning
Success tracking

Creative Brief

Brand elements
Target segment
Reason to buy
Current behavior
Current perception
Desired impression

Copy Strategy

Tagline
Plot
Mood and Tone
Reason to believe
Execution
Media
Media Plan

Media Plan

Medium

Above the line


Below the line

Loading

Front
Back
Seasonal
Flat

Media

TVC
Print
Radio
Internet

CPM (clicks per million)


Ad click
Ad impressions
Banner or button advertisement
Click through
Cost per click
Spam
URL

Media

Billboard of course they will stay


Mall panels
Comfort ads
Transit ads
Non traditional

Corporate gifts

Leaflets

Media Plan

Using each medium optimally to


achieve brand objectives
It is all about making the right mix
or right allocation of budgets
Hitting consumers where it
matters most

Executions

Humor
MTV
Slice of life
Celebrity endorser
Testimonial
Image model can be a competent
looking person
Performance test

Just make sure they do not

Laugh and forget which brand is


being advertised
Remember the story in the ad and
then forget about the brand
Remember the song and then
ano nga palang brand yun?!

Things you should remember

Matrix or charts or altering SWOT with


TOWS analysis (which by the way is not
a marketing tool but a central
management tool) DONT BUY THE
IDEA
The basics still work and it will sans a
few alterations
IMC is integrating all communication
materials under one big idea

Remember

Life is a journey of learning


The moment you get cocky is the time
you die
Mistakes are best teachers
Do not believe all teachers too some
of them have issues as well pick good
mentors
Dont label anything good or bad
Know thy Dharma know what you are
here for

Remember

Detachment is a great tool


Make yourself competent goal is
not to be employed but employable
Dont make yourself stagnant
even if your family or husband is
rich
Have FAITH

Remember

PR competence is as important as
knowledge
Be the best you can ever be (not
Alipin Sagigigilid all your life)