C

Communications
i ti St
Strategy
t

“I know that half of my advertising dollars are wasted

... I just don't know which half.”
--John
John Wanamaker

MGT 411A – Fall 2009

Promotion (Marketing
Communications)

z What level of persuasion do we need to reach our

customers?
– Hierarchy of effects and ELM models
z Who should we talk to? What are our objectives?
What should we say? How should we say it?
– Developing a communications plan
– Message and media choices
z How much do we need to spend?
z How do we evaluate whether or not we’ve been
successful?

1
 The Communications Mix

Advertising
Trade
Shows Direct Marketing

Electronic Public Relations

Interactions
Personal Sales Promotion
Selling Sales
Litera- Trade Promotion
ture
Sponsorships
Tele-
Product Place-
mktg
ments

Personal Communications vs. Impersonal Communications

Challenge
z Develop and implement an integrated
marketing
g communications p
program
g
– Not just advertising or traditional promotions
– Focus on complementary contacts with
consumers

z Focus on delivering a consistent and

cohesive message
– Inform
– Persuade Remember your
– Remind Positioning!!

2
 Think Different

Consumer Persuasion Models

z Consumer stages in the persuasion process
– “Hierarchy
“Hierarch of effects model”
– Advertising message should be aimed to
influence a particular stage

z Consumer level of involvement

– “Elaboration likelihood model” (ELM)
– Consumers
C can b
be persuaded
d d via
i ttwo diff
differentt
routes of information processing

3
 Hierarchy of Effects
Models
Awareness

Interest

Desire
(Preference)

Action

Satisfaction/dissatisfaction
Repeat buy/switch

ELM Model of Persuasion

z High-involvement (consumer has motivation
and ability)
– “Central” route to persuasion
– More extensive processing of relevant attributes
– Strength of arguments matters here
z Low-involvement (consumer has low
motivation or low ability)
– “Peripheral” route to persuasion
– Less extensive processing of relevant attributes
– Non-cognitive, pre-conscious attention processes
– “Peripheral cues” produce persuasion

4
Central vs. Peripheral ads

Developing a
Communications Plan

5
 Major Decisions
Who should we talk to?

What do we want to happen?

Where, when, and how

What should we say?
often should we say it?

How much do we need to spend?

Campaign Evaluation

1. Who Should We Talk To?

Communications Target
z Customers
z Influencers
z Channels
– T d P
Trade Partners
t
– Salesforce/Employees

6
 2. What do we want to happen?
Possible objectives for advertising
z Build awareness
z Create associations and beliefs
z Develop motivation to act

Notice their relationship to stages of persuasion process.

Obj ti
Objectives can have
h long
l term
t and
d short
h t term
t effects
ff t
z Build brand equity (long term)
z Increase purchase intentions and its precursors (short
term)

Advertising Objectives

z Functions of advertising:
– Informational Function
• Awareness, education, and creation
of brand image
– Persuasive Function
– Reminder Function
– Value Added Function

7
 Advertising Objectives

z Good advertising objectives state the intended

function / goal explicitly, specify the target audience,
and are quantitative and measurable
z Example:

Communicatio
n Objective
“Colgate
Colgate Precision’s
Precision s advertising objective is to increase overall
brand awareness among therapeutic brushers from 20% to 50%
by the end of the quarter, and to increase sales by 15% by the end
of the year.” Sales
Objective

3. What Should We Say?

z Message Strategy: What should we say?
– Created by brand manager
– Sets guidelines for advertising agency
– Develops position and personality
– Focus on customer benefits and relationship
–

z Message Execution: How should we say it?

– Created by advertising agency
– Should effectively translate brand strategy
– Advertising appeals should be meaningful,
believable, and distinctive

8
 Creating Effective Advertising
z Get into the customer’s shoes: identify why they do or
do not purchase your brand
z Specify your marketing problem:
image? product perception? competitive threats?
z Determine what specific effect you want the
advertising to have on your target market and write
your positioning statement.
– Who is your target market?
– Who is your primary competition?
– What problem solution or benefit do you provide
to your customer?
– List facts that back up your claim
z A creative brief can be used to guide
creatives/copywriters

Positioning Statement
z To customers who are (target summary),

z our product offers (state what the product

does from the consumers’ point of view)

z relative to (competitive alternatives)

z because (support).

9
 Translate into Creative Language

Positioning Theme Creative Execution

Mountain Dew provides more Do the Dew
“Do Dew“
energy than other sodas b/c
it has lots of caffeine
ebay has virtually “You can find it on eBay”
unlimited product selection

We don't
don t rent as many cars as "We
We try harder
harder"
Hertz, so we have to do more
for our customers
Using the Yellow Pages "Let your fingers do the
saves time and hassles walking"

Message Execution
Turning the big idea into an actual ad that captures
the target market’s attention and interest
What options do we have for message execution
styles?
z “Informational” (testimonials, scientific evidence,
technical expertise)
– Example: Accord’s “cog”
z “Transformational” (p
(personality,
y lifestyle,
y mood, image)
g )
– Brand image example: Ikea’s “unboring” campaign
– Emotional example: AT&T wireless
z Other creative strategy variables: celebrity
endorsements, fear/threat, humor, sex

10
 Endorsements

z Celebrities given large payouts (e.g., Tiger

Woods)
– Based on assumption that celebrity will
influence consumers’ attitudes/behavior
toward brand

z Effectiveness of Endorser depends upon:

– Credibility
• Trustworthiness & Expertise
– Attractiveness
• Attractive, Respect, Similarity
1948,
Campbell’s

Fear / Threat

z Focused on social disapproval

or physical
h i l danger
d
z Fear / Threat
– Rational danger control
– Emotional fear control
z Effective Execution:
– Avoid highly threatening or fear-inducing content
– People who are highly involved in a topic need less fear
arousal
– Give specific instructions & demonstrate how instructions
will solve the problem
– Use credible source to reduce counter-arguing

11
 Humor
z Typically used to:
– Gain attention,
attention create brand awareness, attitudes,
awareness influence attitudes
enhance recall of claims

PROS
z Captures attention
z Can humanize advertiser,
leading to liking
z Rewards consumer for
attending
z May distract from
counterarguing
z Can help ad break through the
clutter
CONS
z Risky if not funny to everyone
z Can distract from message
z Highly susceptible to wear-out
– shortens ad’s
ad s lifespan
z Can reduce recall of message
information

Humor

12
 Does Sex Sell?

z Goals of Sexual Appeals

– Draw attention to an ad
– Enhance recall of message
– Evoke emotional response & thus persuasive impact

z Risks include interference with comprehension

and offending the audience
– Examples: Benetton, American Apparel, Calvin Klein

z Factors increasing effectiveness

– sexual content is appropriate to product category (e.g.,
lingerie)
– content is relevant to primary selling point

4. Where, when and how often?

Step 1. Decide on Reach, Frequency

Step 2. Choosing Among Major Media Types

Media Habits of Target Consumers,
Nature of the Product, Type of Message

Step 3. Selecting Specific Media Vehicles

Balance Media Cost Against Other Media Factors

Step 4. Deciding on Media Timing

Scheduling of Advertising Over the Course of a Year

13
 Select & Allocate Resources to
Various Media
z Significant differences in productivity exist among media
z Qualitative
Q lit ti Criteria:
C it i
– hierarchy of effects model
– reach & frequency to match target audience
– cost per thousand
z Econometric Analyses (or Experimentation) to Provide
Media Elasticities
Example:
Sales or Share = α + .01(direct mail)
+ .08(samples & literature)
+ .28(journal advertising)

Rise of “Addressable” and

Alternative Media
z Addressable media -
g , direct mail,, e-mail (p
– e.g., (permission-based and
other), interactive internet

z “Non-traditional” non-addressable media -

– Event Sponsorships
– Product Placements and co-promotions
– Guerilla
G erilla marketing
– “Viral” or “Buzz” marketing

Levi’s backflips

14
 Guerilla Marketing Example

z g ATHF in Boston: g
Marketing good PR or
bad PR?
– Turner Broadcasting paid $2M to Boston PD

Thailand Campaign

The ultimate washing detergent test:

the postal system

15
 5. How Much Do We Need to Spend?

z Percent of (Expected) Sales

z Competitive Parity
Rules of Thumb
– i.e., “share of voice” or Benchmarks

z Affordability

z Objective
j & Task
Return on
z Experimentation Investment

z Quantitative Modeling
– regression and other econometric approaches

Advertising Costs: Snapshot

z 30-second spot on Network TV, Fall 2008 (AdAge):

– Grey s Anat.:
Grey’s Anat : $326,685,
$326 685 CSI: $262,600,
$262 600 Cops: $50,367
$50 367
z Standard open page rate for ad in Lucky (NY): $55,160
z Top categories: retail, automotive, telecomm, food,
media/entertainment, and pharmaceuticals
z Top 100 U.S. advertisers cut spending by 2.7% in 2008, but
Walmart increased spending by 16% (to $1.7B)
– TV and print ads account for
f 56%
6% off this group’s
’ overall
spending
z Examples of ad spending levels in 2008:
– Top 3: P&G $4.8B, Verizon $3.7B, AT&T $3.1B
– In 2004, GM spent $4B; by 2008, GM down to approx $2.9B

16
 6. Campaign Evaluation

Advertising Program Evaluation

Communication Effects Sales Effects

Is the Ad Communicating Well? Is the Ad Increasing Sales?

Measure impact on Estimate advertising

cognitions response function

Advertising evaluation
Need clear measurements (defined in advance) for ad
performance:
z Exposures
E pos res
– estimate of media audience (Nielsen, Target Group Index, GRP)
z Reception
– attention and understanding (on-the-air telephone interviews, brand
awareness surveys)
z Acceptance
– attitudes
ttit d toward
t d product
d t (consumer
( surveys))
z Retention
– persistence of the message (day-after recall, theme recall)
z Actual behavior
– sales effect (factory shipments, retail audits, consumer purchase
diaries)

17
 Advertising Response
z How to estimate the advertising response
function
– Judgment (decision calculus)

– Experimentation

– Econometric Analyses

z E ii lb
Empirical benchmarks
h k iin advertising
d ti i response
– Average advertising elasticity is 0.2

– Higher for new products than existing products

Budget Setting: Do you always get more bang

for the buck?
The Advertising Saturation
Response Function Effect

Advertising Effectiveness Curve

Sales

Threshold effect

Advertising Expenditures

18
 Evaluating Creative

Summary

z Importance of clearly articulating the role

communications is to play in the marketing mix

z Importance of clearly specifying communications

objectives

z Importance of empirical testing of communications

productivity

19
 Next Session: Biopure
z Biopure is an integration case, which covers
the entire 3C-STP-4P framework. Treat it as
a practice final exam.

z Focus on the following questions:

– What is the potential market size for the human
and veterinary markets, respectively?
– Should Biopure launch the veterinary product?
Wh or why
Why h not?t?
– If they were to launch it, what should their
strategy be?

20