Topic Two: Nuts and Bolts

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Topic Two Nuts and Bolts

• GBA 633
• Advertising Management

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Promotions Opportunity Analysis

• Process by which marketers identify target
  audiences for goods and services produced by the
  company.
• Objectives
• Determine which promotional opportunities exists
  for the company.
• Identify characteristics of the target market so
  a coherent advertising and marketing
  communications message can reach it.

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Promotions Opportunity Analysis
Communications Marketing Analysis
Evaluate
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Step One Conduct a Communications Market
Analysis
Competitive Analysis
Positioning Analysis
Target Market Analysis
Opportunity Analysis
Customer Analysis
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Contacts

• Communication comes from MANY sources.
• Customers do not USUALLY differentiate between
  the reliability and validity of a source

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Contacts

• Contact information bearing experience with
  brand, category, word of mouth, package,
  newspaper, retail, signage, shelf location, how
  people respond when you use the product, return
  treatment, inquiry treatment, etc., etc.

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Some definitions

• _____________________ groups of prospective
  customers who share similar needs and wants
• _____________________ Dividing a markets into
  subsets of prospective customers who behave is
  the same way, have similar wants or similar
  characteristics that relate to purchase behavior

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More definitions

• ___________________ Well-defined similar
  clusters of customers across national boundaries
• ___________________ Groups of customers with
  whom a firm wants to create marketing exchanges
• ___________________ Selecting which segments in
  a market are appropriate to focus on and
  designing a means to reach them

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Advantages to Segmenting Markets

• Helps identify strengths/weaknesses
• Identifies best set of customers
• Clarifies marketing objectives
• More precise budgeting
• Links strategies and tactics to a specific group

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What Is Needed For Segmentation?

• Measurability
• Accessibility
• Substantialness
• Durability
• Differential response
• Homogeneous

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Consumer Segmenting
Behavioral
Geographic
Variables for Segmenting Consumer Markets
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Business Segmenting
Type of Organization
Geographic Location
Variables for Segmenting Organizational Markets
Customer Size
Product Use
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Positioning

• Designing a marketing program including product
  mix that is consistent with how the firm wants
  its products or services to be perceived.
• Perceptual mapping

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Positioning Approaches

• Is relative to competition.
• Exists in the mind of the consumer.

Attributes Competitors Use or application
Price/quality Product user Product
class Cultural symbol
Consumer markets B-to-B markets International
markets
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Step 2 Establish Communication Objectives

• Develop brand awareness
• Increase product/service category demand
• Change customer beliefs or attitudes.
• Enhance purchase actions

• Encourage repeat purchases
• Build customer traffic
• Enhance firm image
• Increase market share
• Increase sales
• Reinforce purchase decisions

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Step 3 Create a Communications Budget

• Objective-and-task approach
• Percent-of-sales approach
• Competition-matching approach
• Arbitrary approach
• All you can afford

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Step 4 Prepare a Communication Strategy

• Broad, long-term guidelines
• Linked to opportunities and threats
• Fit the companys
• Overall message
• Image
• Themes.

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Thinking Through the Strategy
9 Whats next?
8 What contact points are key?
7 Communication/action objectives
6 Tone personality of product
5 Why should they believe you?
4 Differentiation
3 The competition
2 Product reality
1 The customer
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Step 5 Match Tactics with Strategies

• Examples of tactics
• Specific advertisements.
• Personal selling enticements for sales reps.
• Sales promotions such as coupons, premiums,
  sweepstakes, and contests.
• Special product packages and labels.
• Price changes.
• Trade discounts to retailers.

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Step 6 Evaluation

• Evaluation should match IMC Objectives
• Message evaluation
• Respondent behavior techniques
• Pre- and post-test analysis
• Levels of analysis
• Short term outcomes
• Long term results
• Affective response
• Brand
• Company
• Product

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Message Evaluation Techniques

• ______________
• Earliest state of design
• How
• Comprehension tests
• Reaction tests
• What?
• Copy/verbal
• Message meaning
• Translation
• Peripheral cues
• Value of offer/price

• _______________
• Finished or in final stages
• How?
• Portfolio test
• Theater test
• What?
• Same as before, but a more polished version

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Recall Testing

• Whats recalled?
• Product name or brand
• Firm name
• Company location
• Theme music
• Spokesperson
• Tagline
• Incentive being offered
• Product attributes
• Primary selling point of communication piece

• Brand awareness
• How?
• Day-after recall (DAR)
• Unaided recall
• Aided recall
• Caution
• Respondents age affects recall scores

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Recognition Tests

• Respondents shown ad
• Measures
• Reaction
• Comprehension
• Likability
• Often used with recall tests

• What impacts?
• Size of ad (print)
• Number of times seen (TV)
• Product use
• Interest

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More Message Response Tests

• Attitudes and opinions tests
• Cognitive affective responses to ad
• Emotional reaction test
• Emotions remembering
• Difficult to measure emotions with questions
• Warmth monitor
• Problem Self-reported

• Physiological arousal tests
• Psychogalvanometer
• Pupillometric test
• Voice-pitch analysis
• Persuasion analysis tests

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Behavioral Measures

• Difficulties
• Influence other factors
• Delayed impact
• Change mind
• Brand in evoked set?
• Goal of ad

• Methods
• Sales
• Redemption rates
• Test markets
• Purchase Simulation tests

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What Kinds of Behaviors?

• Behavior
• Commitment
• Brand relationships
• Attitude
• Network

• Transactions
• Partial transactions
• Affiliations
• Feelings

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What Is Measured?

• Expanded responses multiple ways to let us know
  the message has been received
• Network change changes over time
• Contact measures how many and what kind of
  information sought
• Commitment signing up for mailing list past
  purchases
• Purchasers did they buy?

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Contact Measures

• Inventory of contacts
• Contact paths
• Tracking study
• Media mapping

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Measuring Commitment
Commitment external measurement of interest in
either the marketers brand or in the generic or
related category

• Externally
• Syndicated studies
• Data overlap
• Affiliations

• Internally
• Solicit response
• Follow-up
• Create/maintain database
• Data mine

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Identifying Best Customers

• Estimating Lifetime Value
• Classifying Customers by recency, frequency, and
  monetary value of purchases (RFM Analysis)

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Customer Pyramid

• Platinum
• Gold
• Iron
• Lead

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Illustration of RFM Application

• A catalog retailer is deciding which group of
  customers to send a catalog. Based on experience
  and an RFM analysis of customer database
• Average order size for customers in cell - 40
• Contribution margin 50
• Response rate 5
• Cost of catalog and mailing -.75
• Will the retailer make a profit mailing to this
  RFM segment?

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Measuring Purchases

• Directly
• Scanner data frequent shopper cards, some
  credit/debit cards
• Codes on catalogs
• Append to database
• Indirectly
• Warranty cards
• Market research
• Promotions sweepstakes, premiums, scanner info,
  frequent purchaser programs.

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Test Markets Purchase Simulations

• Used to assess
• Advertisements
• Promotions
• Pricing tactics
• New products
• Test markets
• Cost effective
• Resembles actual situation
• Concerns

• Purchase simulations
• Simulated experience
• Watch ads and shop
• Pros cons

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Circular System
Marketer develops database of interested
customers or prospects