Overview of Advertising ManagementAdvertising FunctionsSlide 3Slide 4PersuadingSlide 6Slide 7Slide 8The Advertising Management ProcessSetting Advertising ObjectivesBudgeting Considerations in PracticeBudgeting MethodsPercentage-of-Sales BudgetingObjective-and-Task MethodThe Competitive Parity MethodAffordability MethodResearch WorkshopSlide 26Slide 27Slide 281Overview of Overview of Advertising Advertising ManagementManagementChapter Eight2Advertising FunctionsAdvertising FunctionsInformingPersuadingRemindingAdding ValueAssisting Other Company Efforts23Advertising FunctionsAdvertising FunctionsInforming•Makes consumers aware, educates them about the features and benefits, and facilitates the creation of positive brand images•Facilitates the introduction of new brands and increases demand for existing brands•Performs another information role by: 34Advertising FunctionsAdvertising FunctionsPersuading•Persuades customers to try advertised products and services•Primary demandPrimary demand: •Secondary demandSecondary demand:45PersuadingPersuadingGillette MACH36Advertising FunctionsAdvertising FunctionsReminding•Keeps a company’s brand fresh in the consumer’s memory•Influences brand switching by: 67Advertising FunctionsAdvertising FunctionsAdding Value•Three basic ways by which companies can add value »innovating»improving quality»altering consumer perceptions•Advertising adds value to brands by: 78Advertising FunctionsAdvertising FunctionsAssisting Other Company Efforts•Advertising is just one member of the marketing communications team•Sometimes, an assister that facilitates other company efforts in the marketing communications process•Examples?89The Advertising Management ProcessThe Advertising Management ProcessAdvertising Strategy• Setting Objectives•Formulating Budgets•Creating Ad messages•Selecting Ad Media and VehiclesStrategy ImplementationAssessing Ad Effectiveness910 Setting Advertising ObjectivesSetting Advertising Objectives•Expression of management consensus•Guides the budgeting, message, and media aspects of advertising strategy•Provide standards against which results can be measured1019Budgeting ConsiderationsBudgeting Considerations in Practice in Practice•What is the Ad objective?•How much are competitors spending?•How much money is available?20Budgeting MethodsBudgeting Methods•Percent-of-Sales Budgeting•Objective-and-Task Method•Competitive Parity Method (match competitors method)•Affordability Method21Percentage-of-Sales BudgetingPercentage-of-Sales Budgeting•A company sets a brand’s advertising budget by simply establishing the budget as a fixed percentage of past or anticipated sales volume•Criticized as being illogicalWhy??22Objective-and-Task MethodObjective-and-Task Method•The most sensible and defendable advertising budgeting method•Specify what role they expect advertising to play for a brand and then set the budget accordingly23The Competitive Parity MethodThe Competitive Parity Method•Sets the ad budget by basically following what competitors are doing24Affordability MethodAffordability Method•Only the funds that remain after budgeting for everything else are spent on advertising•Only the most unsophisticated and impoverished firms•However, affordability and competitive considerations influence the budgeting decisions of all companies25Research WorkshopResearch Workshop•Guiding Questions •Specific Research Issues•Lifeline Procedures•Budget & Reimbursement Procedures26Research WorkshopResearch Workshop•Guiding Questions »Why did FIJI ask for our input? What is our “value added” to their efforts?»What will distinguish my team’s efforts from all others’ work?27Research WorkshopResearch Workshop•Specific Issues in Conducting Consumer Research»Focus groups, surveys, observations»Plan your questions ahead in detail»Select sample(s) carefully»Sensitivity, confidentiality, ethics (the Tribune test)28Research WorkshopResearch Workshop•Lifeline Procedures»How to communicate with FIJI»Prescreen your questions»Thank you’s•Budget & Reimbursement Procedures»Submit itemized receipts, batched, once per team»If you aren’t sure, check ahead on what is reimbursable»Cash payments to individuals for participation in research require documentation,
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