Study Guide for Exam 4 Chapters 16 17 18 19 20 Concepts from Lecture Planning and Executing an Ad Campaign 5 Steps o Step 1 Identify Target Audience o Step 2 Specifying Objectives o Step 3 Budgeting Media Outlet o Step 4 Designing the Ad Campaign o Step 5 Measuring Advertising Effectiveness Sales Promotion it s done periodically to increase sales whereas advertising improves brand image over time but becomes ineffective to a limit o Advertising Informing converting an existing need into a want or to stimulate interest in a new product o To build awareness o To induce trial Persuading stimulating a purchase or an action o Increase frequency of use o Help distinguish from competitor brands Reminding keeping the product and brand name in the public s mind Sales promotion Build awareness for promoted product Provide info about the product Present an economic incentive to buyer to purchase product Personal Selling improves sales force which produces incremental short term revenue gains of at least 10 and long term increases of 50 or more o New Trends in Personal Selling Dynamic market Two way info flow Abundant info Value in relationship o Customer Relationship Management Customer centric company customizes its product offering based on data generated thru interactions between the customer and the company Social Media published content that is generated and shared by all users It allows users to transmit info engage in discussions and form communities o Power of Social Media sometimes faster than news can predict stock market o New Role of Consumers have more sources of info can distribute info o Measuring Social Media Effectiveness compare before and after Pricing that which is given up in an exchange to acquire a good o What s Hot in Pricing JC Penny eliminated coupons and attempted the Walmart approach of saying that they always have the best price but failed then reverted back to having coupons o Pricing Strategies 75 00 seems more than just 75 Seventy five seems a lot more o Left digit effect 89cents to 69cents seems better than 89cents to 71cents o Right digit effect 23 to 22 seems better than 19 to 18 o Elasticity measures responsiveness of customer demand to changes in the product s price Elastic Inelastic Price increase will decrease sales and will decrease revenue Price decrease will increase sales and will increase revenue Price increase will decrease sales slightly and will increase revenue Price decrease will increase sales slightly and will decrease revenue Break Even Pricing method of determining what sales volume must be reached before total revenue equals total costs Markup Pricing cost of buying the product from producer plus amounts for profit and for expenses not otherwise accounted for Concepts from Textbook and CengageNOW Chapter 16 Institutional advertising to enhance a company s image rather than promote a particular product EX UNHATE Foundation an organization that strives to encourage acceptance of racial diversity around the world shows prominent leaders kissing each other Product advertising promotes the benefits of a specific good or service Advocacy advertising when an organization expresses its views on controversial issues or responds to media attacks Pioneering advertising to stimulate primary demand for a new product or product category Offers detailed info about the product s benefit and to create interest Used in intro stage of product life cycle EX Samsung recently released a line of TVs that not only have Internet access and connect to DIRECTV without a set top box but also include face recognition voice control and gesture control Competitive advertising to influence demand for a specific brand Used in growth phase of PLC EX Geico uses competitive advertising that discusses the attributes of the brand how little time it takes to get a quote how much customers can save and the ease of submitting a claim Comparative advertising compares two competing brands on specific attributes Used when products experience slow growth EX 21st Century explicitly comparing its insurance rates with Geico Advertising campaign series of related advertisements focusing on a common theme slogan and set of advertising appeals Unique selling proposition a desirable exclusive and believable advertising appeal selected as the theme for a campaign Infomercial a 30 minute advertisement that looks more like a TV talk show than a sales pitch Adver gaming placing advertising messages in Web based or video games to advertise or promote a product service organization or issue Cost per contact cost per thousand the cost of reaching one member of the target market It enables an advertiser to compare the relative costs of specific media vehicles Cost per click the cost associated with a consumer clicking on a display or banner ad It enables the marketer to pay only for consumers who opted to click on an ad Reach the number of target consumers exposed to a commercial at least once during a specific period usually four weeks EX An advertiser might try to reach 70 of the target audience during the first three months of the campaign Higher reach means that more people are tuning in to the show Frequency the number of times an individual is exposed to a given message during a specific period It is used to measure the intensity of a specific medium s coverage EX Coca Cola might want an average exposure frequency of five for its POWERade television ads meaning that each of the television viewers who saw the ad saw it an average of five times Continuous media schedule a media scheduling strategy in which advertising is run steadily throughout the advertising period used for products in the later stages of PLC EX Ivory soap posts ads in the newspaper every Sunday over a 3 month time period Flighted media schedule a media scheduling strategy in which ads are run heavily every other month or every two weeks to achieve a greater impact with an increased frequency and reach at those times EX Movie studios schedule TV advertising on Thursday nights when moviegoers are deciding which films to see that weekend Pulsing media schedule a media scheduling strategy that uses continuous scheduling throughout the year coupled with a flighted schedule during the best sales periods EX A retail department store may advertise on a year round basis but place more advertising during certain sale periods such as Thanksgiving Christmas and back to school Seasonal media schedule a media scheduling strategy that