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Benefits of the Advertisement Budget

1. It sets limits on the minimum and maximum of advertising expense during the course of a year. 2. It keeps the expenditure within the parameters set. 3. It encourages prudent use of advertising money by rational allocation among different media. 4. It facilitates the job of an advertising manager by making it easier for him to get the expenditure approved by the top management. 5. It facilitates the evaluation of the effectiveness of advertising.

Factors affecting the Advertisement Budget

Competition Campaign objectives Product Life Cycle (PLC) Market size Availability of funds Type of product Media plan

Methods of Determining Advertisement Budget

Percentage-of-sales method Advertising Objective and Task method Affordability Competitive Parity method

MEDIA - DEFINED
From the users of media i.e, advertisers and audiences: - the mix of mediums that carry the advertisers message and constitute as the vital link between the company that manufactures and serves the product and the customer who buy or might wish to buy it

MEDIA - DEFINED
From the suppliers of media i.e, institutions that offer media: - mix of service organizations which aim to fulfill the needs of listeners, viewers and readers for information and entertainment

Types of Media
Print Media Television Media Radio Advertising Direct Mail Media Directory Media Point of Purchase Media Outdoor Media Transit Media Specialty Media

MEDIA PLANNING
Media planning answers the following questions: - When? (the timing of the ad publication) -Which? (the selection of the media) -How? (the co-ordination in media planning) -How much? (the budgeting of the ad resources)

Scope of media planning activities

THE SITUATION ANALYSIS: To understand the marketing problem. An analysis is made of a company and its competitors. - Size and share of total market - Sales history, costs and profits. - Distribution practices - Use of advertising

Scope of media planning activities

THE MARKETING STRATEGY PLANS : To plan activities which will solve one or more of the marketing problems. - Marketing objectives - Product and spending strategy - Distribution strategy. - Which elements of the marketing mix are to be used - Identification of best market segments.

Scope of media planning activities

CREATIVE STRATEGY PLAN : To determine what to communicate through advertisements. Include the determination of. - How product can meet consumer needs. - How product will be positioned to advertisements. - Copy themes. - Specific objectives of each advertisement. - Number and size of advertisements.

Evaluating Advertising Effectiveness

Communication-Effect Research - Direct rating method
- Portfolio tests - Laboratory tests

Sales-Effect Research

Sales Promotion
Tools used to promote sales in a given territory and time. SIGNIFICANCE : - Growing consumerism
Heightened inter-firm rivalry Trades resistance Fragmentation of media viewers Mass media cost Short term results

Consumer Sales Promotion Objectives

Generate consumer interest Enquiry Generation Traffic building Repurchase Increased rate of purchase

Trade Promotion - Objectives

Inventory building Promotional support

CHANNEL DESIGN DECISIONS / PHYSICAL DISTRIBUTION DECISION

Analyzing Consumer Needs Setting Channel Objectives Identifying Major Alternatives Evaluating Major Alternatives

CHANNEL MANAGEMENT
Selecting Channel Members Managing & Motivating Channel Members Evaluating Channel Members

RETAILING
All activities involved in selling goods or services directly to final consumers for their personal, non business use. - Store & Nonstore retailing

Retailer : Business whose sales come primarily from retailing.

RETAIL FORMATS
SPECIALITY STORES : Carry a narrow product line with a

deep assortment.

DEPARTMENT STORES : Carry several product line, with

each line operated as a separate department.

SUPERMARKETS : A relatively large, low-cost, low-

margin, high-volume, self-service operation.

CONVENIENCE STORES : Relatively small stores located near residential areas, open long hours seven days a week. DISCOUNT STORES : Carry standard merchandise sold at lower prices with lower margins and higher volumes. OFF-PRICE RETAILERS : Sell merchandise bought at less-thanregular wholesale prices and sold at less than retail.

MARKET
The term market refers to the aggregate of all demand for a particular product or services. It also refers to the aggregate of all consumers-existing and potential for the product.

MARKET SEGMENTATION
The process of disaggregating the total market into a number of submarkets. The heterogeneous market is broken up in the process into number of relatively homogeneous units.

WHY SEGMENT ???

Distinguish one customer group from another within a given market. It would make the marketing efforts more efficient and economic.

METHODS
GEOGRAPHIC SEGMENTATION DEMOGRAPHIC SEGMENTATION PSYCHOGRAPHIC SEGMENTATION BUYER BEHAVIOUR SEGMENTATION VOLUME SEGMENTATION

GEOGRAPHIC SEGMENTATION
REGION CONTINENT COUNTRY,STATE,DISTRICT DENSITY OF POPULATION URBAN AND RURAL CLIMATE OF THE AREA

DEMOGRAPHIC SEGMENTATION
AGE OF THE CUSTOMER GROUP SEX FAMILY SIZE RACE,RELIGION,COMMUNITY LANGUAGE OCCUPATION,EDUCATIONAL LEVEL SOCIAL LEVEL AND INCOME LEVEL

PSYCHOGRAPHIC SEGMENTATION
PERSONALITY TYPES LIFESTYLES VALUE SYSTEMS

BUYER BEHAVIOUR SEGMENTATION

DIFFERENT CUSTOMER GROUPS EXPECT DIFFERENT BENEFITS FROM THE SAME PRODUCT AND AS SUCH THEIR MOTIVATIONS IN OWNING IT AND THEIR BEHAVIOUR IN BUYING IT WILL BE DIFFERENT

VOLUME SEGMENTATION
BULK BUYERS SMALL-SCALE BUYERS REGULAR BUYERS ONE-TIME BUYERS

STEPS
Assess the differences between one customer group and the other in terms of their needs and their likely responses to the product. Find out by what descriptive factors can consumers of a particular type or disposition be tagged on to a specified segment.

STEPS
Based on (1) and (2) above, disaggregate the consumers into suitable segments. Analyze and establish whether it is desirable and possible to formulate separate marketing programmes and marketing mixes for the different segments.

STEPS
Find out which segments would be happy with the offerings of the firm and could therefore be considered as the natural targets of the firm. Estimate the likely levels of purchase by each of the segments, especially the significant and relevant ones. Select those segments which offer higher potential and which would be amenable to the offerings of the firm.

POSITIONING
The act of designing the companys offering and image to occupy a distinctive place in the target markets mind.

POSITIONING
Positioning starts with a product. A piece of merchandise, a service, a company, an institution, or even a person But positioning is not what you do to a product. Positioning is what you do to the mind of the prospect. That is, you position the product in the mind of the prospect.

POSITIONING-THE CASE OF DOMINOS (PIZZA)

TARGET CUSTOMERS : CONVENIENCE-MINDED MIDDLE & UPPER INCOME PIZZA LOVERS BENEFITS : DELIVERY SPEED AND GOOD QUALITY : 15% PREMIUM

PRICE

VALUE PROPOSITION : A GOOD HOT PIZZA, DELIVERED TO YOUR DOOR WITHIN 30 MINUTES OF ORDERING AT A MODERATE PRICE

POSITIONING ERRORS
UNDERPOSITIONING OVERPOSITIONING CONFUSED POSITIONING DOUBTFUL POSITIONING

POSITIONING STRATEGIES
ATTRIBUTE POSITIONING BENEFIT POSITIONING APPLICATION POSITIONING USER POSITIONING COMPETITOR POSITIONING PRODUCT CATEGORY POSITIONING QUALITY OR PRICE POSITIONING