MKTG 301 Final is 44 questions 4 extra credit Next Monday at 7 Semi cumulative 1 Situation analysis 2 Set objectives 3 Strategy 1 Message strategy 1 positioning 2 Format execution syle 3 Message strength Carefully evaluate How do we learn info How do we perceive info Is the message strong in terms of these 1 Attention strength good advertising gets your attention If it doesn t get your attention it is basically worthless Doesn t work alone though 2 Followthrough Most people only look at the headline and illustration Does the ad guide you through the message Entices you to read the whole ad Make the ad pay o 3 Cognitive Is the ad easily understood 4 A ective does the ad arouse favorable attitudes 5 Behavioral Does that ad stimulate followup action Give the audience a reason to visit your website store etc Would you be more likely to buy this product Good advertising moves people in this direction 2 Media Strategy 1 Lots of di erent advertising media TV radio etc There is no ideal media type to use Most companies use more than one You need to have a strategy behind your media choice Why choose certain media types and not others Why emphasize some and not others 2 Media selection factors 1 Total cost big companies have a huge advertising advantage in that they can a ord good TV ads Local companies often can not Radio and newspaper ads are more common for local businesses Total cost is a sobering a ect when it comes to making advertising decisions 2 CPM cost per thousand people is a standard price measurement Magazine ads have a high CPM TV and radio are lower CPM 3 Segment selectivity do not pay to reach a bunch of people outside your target market Every dollar you re spending beyond target is a waste of money Be segment selective Magazines allow for segment selectivity News papers are not very segment selective and TV shows tend to have wide audiences 4 Editorial quality borrowed prestige the media you select may give you credibility How does your advertising choice a ect your brand image Many marketers like being on news shows or Time magazine etc 5 Lead time You may need a lot of time to get your campaign together A medium may want days weeks months or a year a more notice to select your spots Best not to work on a short term basis 6 Lifespan How long does the consumer to have to absorb the message Print mediums can be read and reread and generally have long lifespans TV and radio have fleeting exposure and need to have a higher frequency of repetition for exposure 7 Sensory impact We learn more of what we see than what we hear We learn more of both together This is why TV is popular TV has a high sensory appeal Scent samples in magazines are a big example of sensory impact 8 Target market media habits Do your customers watch certain tv shows Listen to types of music Have specific tra c patterns Target market this way Ex morning and evening drive times on radio 3 Budget Strategy 1 of Sales approach forecasted sales volume industry norm percentage advertising budget Usually inline with industry wisdom 2 Market share method Total industry advertising expenditures category such as energy drinks suvs etc How much similar markets are spending all together on ads market share objective expressed as percentage advertising budget 1 SOV Share of Voice market share 3 Competitive parity method Budget according to your closest competitors Match or exceed their marketing budget Most used by big companies Di cult for small companies because it s hard to tell what small companies are spending 4 Marginal Analysis Run an analysis ex awareness vs amount of advertising At some point you reach a point of diminishing return diminishing marginal utility i e leveling o Cut the budget o at point of diminishing return 4 Evaluation and Control 1 Pretesting Before you send out a message test the message strength formats etc 2 Concurrent testing Short term pilot testing of your message ex run a add for a few weeks in a control area to see the response Ex split runs run two di erent ads and see which one has the best response 3 Post testing how does your advertising achieve your objectives within your budget Which media types worked best Pricing is about monetary evaluation How do we decide the monetary value for exchange 1 Cost oriented approach we can t do pricing unless we understand the cost structure Break even analysis BEU Break Even in Units how many units do you need to sell to break even TFC Total Fixed Cost CPU Contribution Per Unit CPU average selling price per unit average variable cost All businesses want profit TFC profit objective CPU how many units you should sell This figure tells you nothing about demand or competition but this is a good start CPU helps cover fixed cost and contributes to profit objective 2 Demand oriented approach What is the elasticity of demand How sensitive is the demand when there s a change in price changeQD changeP Greater than one means that it is elastic and therefore a ected by change in price 3 Competition oriented 1 Penetration pricing consistantly below the competitors Reasons easy competitive entry tactically lower prices to increase price competition limited product di erentiation price may be the only way to di erentiate your product many substitutes the more substitutes there are the better the argument for penetration pricing elastic demand fueled by other conditions late PLC product life cycle stages high EOS Economies of Scale potential costs go down because of high demand and production excess production capacity no need for product rationing Sales and market share objectives increases and boost sales in the short run 2 Parity pricing on par with competition 3 Price skimming higher than the competitor The reasons for price skimming are virtually opposite from penetration pricing Quality objectives price is an indicator of quality High quality high price Artisan products designer products luxuries etc 4 Pricing methods 1 Markup pricing taking a percentage over and above your costs and tacking it on to your selling price Extremely cost oriented It s not uncommon in some industries ex appliances cars to have a standard markup rate Low turnover products generally have a high markup 2 Target return pricing also very cost oriented TFC TVC total variable costs Profit Units available for sale selling price 3 Fixed then variable pricing think of how a taxi works There s a basic charge variable for continuation Covers overhead variable costs afterward