Chapter Eight
Overview of
Advertising
Management
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Advertising Functions
Informing
Persuading
Reminding
Adding Value
Assisting Other Company Efforts
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2
Advertising Functions
Informing
• 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:
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3
Advertising Functions
Persuading
• Persuades customers to try
advertised products and services
• Primary demand:
• Secondary demand:
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4
Persuading
Gillette MACH3
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Advertising Functions
Reminding
• Keeps a company’s brand fresh in the
consumer’s memory
• Influences brand switching by:
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6
Advertising Functions
Adding Value
• Three basic ways by which companies
can add value
» innovating
» improving quality
» altering consumer perceptions
• Advertising adds value to brands by:
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7
Advertising Functions
Assisting 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?
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8
The Advertising Management Process
Advertising Strategy
• Setting Objectives
•Formulating Budgets
•Creating Ad messages
•Selecting Ad Media and Vehicles
Strategy Implementation
Assessing Ad Effectiveness
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9
Setting Advertising Objectives
• Expression of management consensus
• Guides the budgeting, message, and
media aspects of advertising strategy
• Provide standards against which results
can be measured
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10
Budgeting Considerations
in Practice
• What is the Ad objective?
• How much are competitors spending?
• How much money is available?
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Budgeting Methods
• Percent-of-Sales Budgeting
• Objective-and-Task Method
• Competitive Parity Method
(match competitors method)
• Affordability Method
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Percentage-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 illogical
Why??
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Objective-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 accordingly
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The Competitive Parity Method
• Sets the ad budget by basically
following what competitors are
doing
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Affordability 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
companies
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Research Workshop
• Guiding Questions
• Specific Research Issues
• Lifeline Procedures
• Budget & Reimbursement Procedures
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Research 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?
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Research 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)
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Research 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, SSNs.
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