MKT Dis 7

Slide #

Scene #

Narration

Slide 1

Scene 1

[Ed, Samantha – Ed’s Office]

Ed and Samantha meet in the morning to discuss the next steps in the tablet PC launch.

MKT_7_1_Samantha-1: Good morning, Ed. How are you doing today?

MKT_7_1_Ed-1: Good morning, I’m doing quite well. Actually, I just left Carl’s office. He and I were discussing the next steps in our tablet launch.

MKT_7_1_Samantha-2: Oh, really? What should we focus on next?

MKT_7_1_Ed-2: Now that we have our strategy for managing our tablet’s pricing and distribution channels, we need to examine the media we are going to use to advertise the new tablets and the type of budget we are going to establish for advertising.

MKT_7_1_Samantha-3: Yes, these are all important issues that need to be addressed prior to launch. To make prudent decisions concerning media selection, an understanding of the strengths and weaknesses of each media type is needed, and we have to keep in mind our integrated marketing communications, or IMC, as well as other mix variables, so that we send a consistent message about our product. This does not mean that the advertising will be identical across all media. Different media should offer supplemental and complementary information.

MKT_7_1_Ed-3: You’re absolutely right, Samantha. We can use social media as our main media for advertising the new tablets. This would be consistent with our target market objectives. First, though, we should address the criteria for examining strengths and weaknesses of various media.

The criteria used for examining strengths and weaknesses of the various media are cost, reach, frequency, how targeted it is, and ad content.

The media we should consider are TV, Radio, Newspapers, Magazines, Billboard, Web, and Direct mail. Here is a summary of each type of media.

Slide 2

Interaction

Hover your mouse over the images of traditional and non-traditional media to learn more about the strengths and weaknesses of each.

TV

Strengths: reach, ability to demonstrate the product, and its vividness & ability to convey emotion are the greatest of any medium. It is also fairly strong at providing information.

Weaknesses: not very targeted, low on frequency, weakest in terms of cost (by far the most expensive medium).

Radio

Strengths: able to convey vividness and emotion, relatively inexpensive (much less so than TV), adequate reach, frequency, and somewhat targeted.

Weaknesses: less able to convey information, limited ability to provide product demonstrations.

Newspapers

Strengths: relatively inexpensive (much less so than TV), able to provide adequate amounts of information.

Weaknesses: lack of reach, frequency, less targeted, relatively unable to demonstrate the product, lack of vividness & emotion.

Magazines

Strengths: among the best in reach, fairly targeted (not the best, not the worst), among the best at conveying information.

Weaknesses: relatively expensive, lacks frequency (weekly, monthly, quarterly), lacks ability to demonstrate the product.

Billboard

Strengths: among the least expensive, near the highest in terms of frequency.

Weaknesses: not targeted, mediocre reach, provides minimal information, unable to demonstrate product, lacks vividness and emotion.

Social media and the Web

Strengths: least expensive (along with direct mail), high levels of reach, frequency, information, able to demonstrate the product, and targeted.

Weaknesses: can lack vividness & emotion.

Direct mail

Strengths: least expensive (along with Web), most highly targeted, able to provide the most information, high levels of reach and frequency.

Weaknesses: not able to demonstrate the product, lacks vividness and emotion.

MKT_7_1_Ed-4: Hover your mouse over the images of traditional and non-traditional media to learn more about the strengths and weaknesses of each.

TV (heading not narrated)

MKT_7_1_Ed-4_A: Strengths: Television’s ability to reach consumers, ability to demonstrate the product, , vividness, and ability to convey emotion are the greatest of any medium. It is also fairly strong at providing information.

MKT_7_1_Ed-4_B: Weaknesses: TV is not very targeted, is low on frequency, and is weakest in terms of cost. It is by far the most expensive medium.

Radio (heading not narrated)

MKT_7_1_Ed-4_C: Strengths: Radio is able to convey vividness and emotion, is relatively inexpensive as compared to TV, has adequate reach and frequency, and is somewhat targeted.

MKT_7_1_Ed-4_D: Weaknesses: Radio is less able to convey information and has a limited ability to provide product demonstrations.

Newspapers (heading not narrated)

MKT_7_1_Ed-4_E: Strengths: Newspapers are relatively inexpensive as compared to TV, and are able to provide adequate amounts of information.

MKT_7_1_Ed-4_F: Weaknesses: Newspapers may have a lack of reach and frequency, may be less targeted, are relatively unable to demonstrate the product, and lack vividness and emotion.

Magazines (heading not narrated)

MKT_7_1_Ed-4_G: Strengths: Magazines are among the best media in terms of reach, are fairly targeted (not the best, not the worst), and are among the best at conveying information.

MKT_7_1_Ed-4_H: Weaknesses: Magazines are relatively expensive, lack frequency because they are only published weekly, monthly, or quarterly, and lack the ability to demonstrate the product.

Billboard (heading not narrated)

MKT_7_1_Ed-4_I: Strengths: Billboards are inexpensive and are near the highest of media in terms of frequency.

MKT_7_1_Ed-4_J: Weaknesses: Billboards are not targeted, provide mediocre reach and minimal information, are unable to demonstrate a product, and lack vividness and emotion.

Social Media and the Web (heading not narrated)

MKT_7_1_Ed-4_K: Strengths: These types of media are very inexpensive, deliver high levels of reach, frequency, and information, are able to demonstrate the product, and are targeted.

MKT_7_1_Ed-4_L: Weaknesses: Social media and web-based advertising may lack vividness and emotion.

Direct mail (heading not narrated)

MKT_7_1_Ed-4_M: Strengths: Mail is inexpensive, the most highly targeted of all media, is able to provide the most information, and has high levels of reach and frequency.

MKT_7_1_Ed-4_N: Weaknesses: Mail is not able to demonstrate the product, and also lacks vividness and emotion.

Slide 3

Scene 1, cont.

[Ed, Samantha – Ed’s Office]

(Display formula)

GRP = Reach x Frequency

.10 x 112,000,000 = 11,200,000

.072 x 112,000,000 = 8,064,000

MKT_7_1_Samantha-4: Wow, that is a lot to consider. How can we choose a media that will create awareness at our launch and still stay within our budget? You mentioned the terms “reach” and “frequency“ - Tell me more how these metrics will be used to determine the ad budget.

MKT_7_1_Ed-5: In order to determine the advertising budget using the method based upon strategic goals, an exposure goal should be set. This requires an understanding of how advertising exposures are measured. An exposure goal is based in GRPs, or Gross Ratings Points. A good exposure goal for our launch would be one hundred GRP’s.

MKT_7_1_Samantha-5: How do we go about achieving that goal?

MKT_7_1_Ed-6: Let’s start with reach. Reach is the percentage of the target audience seeing an ad at least once. The goal is to expose as many members of the target audience as possible to the ad, using media that is most cost-efficient for finding the target audience.

Next, we should consider frequency. Frequency is the average number of times the target audience sees the ad within a specified time period. The number of exposures is based upon the marketing and advertising goals. For a goal of awareness, fewer exposures would likely be needed than if the goal is persuasion. Unfamiliar and complex products would probably need more exposures than well-known, simple products.

MKT_7_1_Samantha-6: Okay. I’m following you. Are those the only items we need to consider for achieving our exposure goal?

MKT_7_1_Ed-7: Not quite. Lastly, we can combine these to come up with GRPs. In terms of television, a ratings point is a measure of viewership of a particular television program. One single television ratings point is equal to one percent of households with TVs.

MKT_7_1_Samantha-7: Hmmm, could you maybe give me an example to clarify that point a little?

MKT_7_1_Ed-8: Sure. Let’s say that there are an estimated one hundred nine point six million television households in the United States. Thus, a single national household ratings point represents one percent or one million ninety-six thousand households for a TV season.

GRP is the total of all rating points for an advertising campaign.

MKT_7_1_Samantha-8: How do you calculate GRP?

MKT_7_1_Ed-9: Good question! GRP is equal to reach times frequency.

(Display formula)

Let’s say there are one hundred twelve million homes measured in the United States. A show with a rating of ten would mean that eleven point two TVs are tuned to that show. A seven point two rating for a show would mean that eight point zero six four million TVs were tuned to the show. You get the idea.

Actually, I have a short video that I think will be very helpful in explaining this concept.

Slide 4

MBTV: Rating Points, Reach & Frequency

http://www.youtube.com/watch?v=gxuokqMv2rg

Slide 5

Scene 1, cont.

[Ed, Samantha – Ed’s Office]

MKT_7_1_Samantha-9: Thanks for that video, Ed. Now I understand why reach and frequency are so important for our tablet’s advertising campaign. How can we use this information to help us determine our advertising budget?

MKT_7_1_Ed-10: We would use this information to determine the level of TV exposure for our tablet. A high GRP provide Golds Reling a very strong TV exposure level during our initial launch.

MKT_7_1_Samantha-10: Ed, this sounds complicated. Reach? Frequency? GRP’s? Is there an easier way to create our advertising budget?

MKT_7_1_Ed-11: Yes, but we can crunch the media numbers using the formulas for GRP’s and present them to Carl this afternoon. Moving on to the ad budget, here are the three choices we can present to Carl.

One - Calculate the advertising budget as a percentage of last year’s sales.

Two - Spend approximately what we believe is parity with competitors.

Three - Use our strategic advertising goal, and work backward to calculate necessary expenditures.

MKT_7_1_Samantha-11: Sounds good - what details can we present to Carl?

MKT_7_1_Ed-12: The first method is easy. The only challenge would be determining the value of the actual percentage. Most companies begin with their past numbers or an estimate of the industry norm, and then adjust. If a company’s marketing goal is merely to maintain brand share, then roughly the percentage that it and its competitors spent the previous year should suffice. If a company has done something newsworthy with the brand, an increase in advertising monies is in order to get the word out; and if a company is seeking to milk the brand and redirect funds to its other brands, the percentage would be adjusted slightly downward.

MKT_7_1_Samantha-12: I understand. What about the second method we could present to Carl?

MKT_7_1_Ed-13: Well, the second method is also relatively easy. There are media service providers, such as Schonfeld, Saibooks, or Nielsen, who keep tabs of how much companies in various industries tend to spend. If every competitor spent approximately the same percentage on advertising, then their market shares would be proportional to their ad spending shares. I don’t think this will be the case in our situation. Apple has been around longer than Golds Reling and most likely has a huge advertising budget.

MKT_7_1_Samantha-13: What about the third method?

MKT_7_1_Ed-14: The last approach is to be more strategic and treat advertising expenditures as an investment, with the expectations that an investment should return sales and profits. This approach is somewhat challenging because advertising effects are difficult to measure and are often intended to produce long-term effects. To set an ad budget, a company needs to understand how advertising exposures are measured, then set its exposure goal, and then estimate how much to spend to achieve that goal.

MKT_7_1_Samantha-14: Hmm, I believe we should go with a combination of methods two and three. This way we can get a better handle on what Apple, Google, HP, Kindle and others are spending on their advertising in the domestic and international markets for their tablets.

MKT_7_1_Ed-15: I agree. I’m thinking that TV and social media will be our best media choices.

MKT_7_1_Samantha-15: That sounds like a good idea. The high GRP’s accrued through TV advertising will provide great exposure for the new tablets. Integrating this with social media should provide great results.

MKT_7_1_Ed-16: This is all excellent information. Let’s put it together in a cohesive package that we can share with Carl.

Slide 6

Scene 2

[Ed, Samantha, Carl – Conference Room]

Ed, Samantha, and Carl meet in the conference room to discuss the advertising aspects of the product launch.

MKT_7_2_Carl-1: Good afternoon, Ed and Samantha. I saw you both looking very busy in Ed’s office earlier. I’m looking forward to hearing the information that you two have put together for advertising our tablet.

MKT500_7_2_Samantha-1: Yes, Ed and I have been very busy. What we discovered causes us to ask three questions.

MKT_7_2_Carl-2: And what would those be?

MKT500_7_2_Samantha-2: To run a successful ad campaign for Golds Reling, we need to consider these three key questions.

Slide 7

Interaction

Click the tabs to learn more about the three media questions that a company should answer when running advertising promotional campaigns.

What

A) How much do we spend?

There are three main ways to determine this.

1. Base the budget as a percentage of last year’s sales

1. Spend about the same as competitors

1. Spend what is necessary to meet the advertising goal

B) When do we spend?

When to advertise is an important consideration. There are three different types of schedules a company can choose.

1. A continuous schedule has a fairly regular ad exposure.

1. With an occasional schedule, the ad comes on from time to time.

1. With a seasonal ad, the strategy focuses on advertising before an event, such as Christmas, Memorial Day, etcetera.

C) Which media do we use as channels of our communications?

There are many media available to advertise on: TV, radio, magazine, newspaper, billboard.

The strategy of Integrated Marketing Communications (IMC) should be used to decide what media to use. IMC is a company communicating a consistent message across all media outlets.

This includes the traditional media mentioned above (TV, radio, etc.), product placements, personal selling, direct selling, product design, and packaging.

MKT500_7_2_Samantha-3: Click the tabs to learn more about the three media questions that a company should answer when running advertising promotional campaigns.

What

MKT500_7_2_Samantha-4_A: How much do we spend?

There are three main ways to determine this:

One - Base the budget as a percentage of last year’s sales

Two - Spend about the same as competitors

Three - Spend what is necessary to meet the advertising goal

MKT500_7_2_Samantha-4_B: When do we spend?

When to advertise is an important consideration. There are three different types of schedules a company can choose.

One - A continuous schedule has a fairly regular ad exposure.

Two - With an occasional schedule, the ad comes on from time to time.

Three - With a seasonal ad, the strategy focuses on advertising before an event, such as Christmas or Memorial Day.

MKT500_7_2_Samantha-4_C: Which media do we use as channels of communications?

There are many media available to advertise on: TV, radio, magazine, newspaper, and billboard are among the most popular.

The strategy of Integrated Marketing Communications, or IMC, will help us decide what media to use. IMC refers to the practice of a company communicating a consistent message across all media outlets.

This includes the traditional media mentioned previously, such as TV or radio, product placements, personal selling, direct selling, product design, and packaging.

Slide 8

Scene 2, cont.

[Ed, Samantha, Carl – Conference Room]

MKT500_7_2_Samantha-5: Ed and I feel that we have the media question answered, and we will work diligently to complete the reach, frequency, and GRP’s, which will help in budgeting. This will provide a more systematic method for answering the other two questions and setting our advertising budget.

MKT_7_2_Carl-3: And what ideas have you come up with regarding advertising media for our tablet?

MKT500_7_2_Samantha-6: We need to investigate a variety of advertising media in addition to TV and social media, which we have already discussed. These should include radio, magazine, newspaper, outdoor, web, and direct mail. Eventually, we want our integrated marketing communications to extend beyond traditional advertising to include personal selling, public relations, publicity, product placement, sponsorships, promotion, and social media.

MKT500_7_2_Ed-1: To ensure that we are spending our money wisely, the key is to coordinate the different IMC elements selected and to have consistency in message among them. Measuring effectiveness becomes difficult across the many different elements, but measuring recall, attitudes, click rates, and response rates from communications such as direct mail, coupons, and rebates will be useful.

MKT_7_2_Carl-4: This is very impressive. I am in agreement with the advertising media strategy you have recommended. Golds Reling is in good hands with both of you in charge of this launch. Before you leave, let’s recap a few of the key takeaways that we covered today.

Slide 9

Check Your Understanding

Match the term with the correct description.

Reach - the percentage of the target audience seeing an ad at least once

Frequency - the average number of times the target audience sees the ad within a specified time period

GRP - the total of all rating points for an advertising campaign

IMC – A consistent message the company communicates about its product or service across all media outlets

Slide 10

Scene 3

[Ed, Samantha – Hallway]

MKT500_7_3_Samantha-1: Wow, we really covered a lot of ground today with our advertising plans. We have many media options available to us for advertising, so we really need to be sure our integrated marketing communications are consistent across all media we choose.

MKT500_7_3_Ed-1: You’re absolutely right, Samantha. We also have an e-Activity and the weekly threaded discussion on advertising and setting advertising budgets, where we can discuss this further. See you next week!