Marketing homework
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Chapter5-AdvertisingManagementPart1AY2019-2020.pptx
Advertising Campaign Management Part 1
Jennifer Sundstrom-Fitzgerald
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Learning Objectives
Identify advertising theories important to the process of advertising campaign management
Analyze the relationship of advertising expenditures to advertising effectiveness
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Advertising Theory
Theoretical approaches serve as the foundation:
Hierarchy of Effects Model
Means-End Theory
The Hierarchy of Effects Model and Means-End Theory are the two main theories we will review today. Both will drive decisions in terms of the types of visuals and messaging used in the final creative.
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Hierarchy of Effects Model
Awareness
Knowledge
Liking
Preference
Conviction
Actual purchase
The Hierarchy of Effects model is used by marketers to clarify the objectives of an advertising campaign through six steps consumers and businesses move through when making a purchase.
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Hierarchy of Effects Model
Steps are sequential
Consumers spend time at each step
Brand loyalty involves all six steps
Similar to attitude formation
The steps are sequential, although some experts question if they are really sequential due to purchase decisions being prompted by impulse or incentives such as coupons, discounts and free trials.
But, the basic model says they are sequential and that consumers spend some time at each step.
For instance, before a consumer can like a brand, they first must be aware of it and develop some knowledge of it. To develop brand loyalty, consumers normally go through all six steps which is similar to attitude formation and the cognitive-affective-conative sequence.
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Hierarchy of Effects Model
Attitude Formation - 3 Components:
Cognitive: awareness, knowledge
Affective: liking, preference, conviction
Conative: actual purchase
Paragard Birth Control
Marketers must help consumers shape a positive attitude for a specific brand – they do this by using visual and messaging cues to influence attitude formation about a brand, product, service, etc.
Awareness and knowledge which comprise the cognitive component of attitude.
Liking, preference, and conviction (or the perception that one brand is superior to competitors) comprise the affective component.
The conative component of attitude is what ultimately drives the actual purchase.
Use Swiffer launch to demonstrate and show Paragard launch and ask them their opinion if the brand was effective in shaping attitude.
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Means-End Theory
The way the advertising message is delivered leads to an end-state, or personal value achievement – or a specific “means to an end”
Product attributes lead to consumer benefits, which in turn connect to personal values
The second theory is the means-end theory also known as the means-end chain
The model suggests that a specific type of message and product positioning will help consumers find a solution to a particular problem – which in turn connects to a personal achievement.
Here are some common themes used in the creative – or the visual and messaging you see in ads. (Next Slide)
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Means-End Theory
Common themes used in creative:
Comfortable life and security
Equality and self-respect
Excitement and happiness
I want you to begin to pay closer attention to the advertisements you see on a daily basis. You will recognize many of the themes you see here. Discuss Colonial Penn Life Insurance and leveraging comfort and security with older Baby Boomers. (Go to next slide for final three examples)…
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Means-End Theory
Common themes used in creative:
Inner peace and social acceptance
Mature love and sense of belonging
Personal accomplishment and wisdom
Strayer University – Never Stop Growing
Here are the remaining common themes under “Means-End Theory”; Show ad from Strayer University with Dana Elaine Owens AKA Queen Latifah.
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Means-End Theory
This specific message supports that milk has health benefits for mother and baby’s bone development.
We both need Calcium
DRINK MILK
The means-end chain should prompt the consumer to believe that using the product will help achieve a personal value. In this case, good health for both mom and baby.
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Means-End Theory
Courtesy of: http://graphicdesignjunction.com/2012/09/50-fresh-examples-of-advertising-posters/
This is a B2B/Trade Ad example
Means-End Theory message: “Don’t get frustrated with leaking valves. Trust Fluid Controls Inc to be there 24/7.”
Notice heavy emphasis on visuals versus words
Here are two B2B or “trade advertising” ad examples that utilize the Means-End Theory. The first is from a valve supplier targeting power supply companies and the second is from a transit/Outdoor advertising supplier – Many business schools, like Fox, advertise on bus shelters in zip codes that match up with their target demographic like Center City Philadelphia and Temple’s Main Campus.
Image sources:
http://graphicdesignjunction.com/2012/09/50-fresh-examples-of-advertising-posters/ (Valve Supplier)
http://www.verticalresponse.com/blog/how-to-create-effective-small-business-advertising/ (Bus Shelter/Transit Ad Supplier)
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Verbal and Visual Images
Balance between visual and verbal
Visual processing
Easier to recall
Stored as pictures and words
Concrete vs. Abstract visuals
Most ads seek a balance between visual and verbal, but usually one will dominate as seen in the last two examples. In recent years, marketers have moved to more visuals and less emphasis on verbal content. One reason for the change is that visual processing is easier for consumers to recall. Visuals are stored in our brains both as pictures and as words therefore, concrete images tend to be remembered better than abstract visuals
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Verbal and Visual Images
Radio visual imagery
Visual Esperanto
International ads
B2B advertisements
Courtesy of: Pearson Education, Inc.
Radio ads that can make listeners use their imagination and picture the product work very well. Vacation destinations attempt this via radio.
Visual esperanto is the ability of a visual to transcend cultures and languages by conveying the same meaning. It is beneficial in international ads where advertisers want to convey the same message to every market in the world. McDonald’s Yellow Arches and Nike’s Swoosh logo are good examples of this.
The picture you see here could be effective for a tourism destination but its very generic. Unless the brand uses it consistently, a similar image may be used by competitors and then brand parity issues arise.
Understanding everything we have reviewed so far involves intense marketing research and financial consideration. We will now shift to the impact of advertising expenditures and its relationship to advertising effectiveness.
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Advertising Expenditures
Factors impacting relationship between advertising, promotions, and sales:
Goals involved “Choose MD Anderson Cooper Cancer Center”
Threshold effects – the point where advertising and consumer responses peak
Diminishing returns – the point where ad expenses should be decreased and reallocated
A number of factors influence the relationship between advertising, promotions and sales.
The goal of the promotion may be to increase brand awareness or build brand image. The campaign “Choose MD Anderson Cooper Cancer Center” is an example of building brand image and loyalty in the Philly Metro area with intense competition
Threshold effects are present at the point where the advertising or communication begins to affect consumer responses in a positive direction. Apple’s launch of the iPhone and subsequent versions are positive examples as they often run a pre-launch, launch and post-launch phase when introducing a new product and know when to decrease spending/advertising when interest wanes and consumers look out for a new product.
Diminishing returns will be reached when an advertising campaign has saturated the market and further expenditures produce diminishing returns or a minimal impact.
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Advertising Expenditures
Factors impacting relationship between advertising, promotions, and sales:
Carryover effects (Maytag Appliances)
Wear-out effects (Sears and JCPenney)
Decay effects (Blackberry, Toys R Us)
Random events (weather and economic conditions)
Here are other factors:
Carryover effects refer to an ad’s message being remembered or carried over to the time when the product is needed and the consumer is thinking about the purchase. Examples Maytag Appliances and Raymour and Flanigan Furniture – they run continuous advertising with bursts during key times of year to ensure we will think of their brands first when the need arises.
Wear-out effects occur when an ad or message becomes old and stale and the consumer no longer pays attention to it. Ex. JC Penney
Decay effects occur when a company quits advertising, and the brand name begins to fade in people’s memories. Ex. Sears, Blackberry and Toys R Us
Sales can also be impacted by random events, such as weather conditions or an economic recession.
The following chart illustrates some of these effects.
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Expenditures and Sales and Profit Margins
Sales
Advertising Expenditures
An unrealistic assumption about the relationship between promotional expenditures and sales.
Marketers should not assume that sales will continue to increase if more money is spent on advertising and promotional expenditures and need to forecast that point in time when diminishing returns will begin.
There is no crystal ball and this is why consistent SWOT and PEST analyses are conducted two or more times per year depending on the industry to ensure strong sales and market share placement.
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Expenditures and Sales and Profit Margins
A sales-response function curve combined with the downward response curve and marginal analysis.
Dollars
Advertising Expenditures
Threshold Effects
Diminishing Returns
Sales
Concave Downward Response Curve
This graph is much more logical in terms of the relationship b/w sales growth and the amount of advertising expenditures. We are able to be more proactive in terms of changing our advertising strategy after the threshold point and before diminishing returns. Apple’s iPhone XR and XS have have reached this this point. However the iPhone 11 is in the entry phase.
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Learning Objectives
Identify advertising theories important to the process of advertising campaign management
Analyze the relationship of advertising expenditures to advertising effectiveness
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