SOLUTIONS MANUAL for Advertising & Promotion 7th Canadian Editin by Michael Guolla.(All 19 Chapters)

CHAPTER 1 INTEGRATED MARKETING COMMUNICATIONS Chapter Overview This opening chapter provides the student with an overview of advertising and promotion. The first section summarizes the content of promotional messages as it reviews how marketing communication is used to convey the marketing mix. The elements of the promotional mix are introduced and a brief overview of the kinds of firms involved in promotion is highlighted. This chapter introduces the concept of integrated marketing communications (IMC) and discusses its evolution, a renewed perspective, and importance. Most marketers understand the value of strategically integrating the communication functions rather than having them operate autonomously and so the depth of these topics provide a foundation of the emerging IMC trend. A model of the IMC planning process is examined that gives direction for the content of a promotional plan. Finally, we describe the perspective and organization of the text that is consistent with the planning process.

Learning Objectives 1. Describe the importance of marketing communication within the marketing mix.

2. Identify the tools of the promotional mix - advertising, sales promotion, public relations, direct marketing, Internet marketing, and personal selling – and summarize their purpose.

3. Illustrate the concept of integrated marketing communications (IMC) by considering its evolution, renewed perspective, and content.

4. Explain the IMC planning process and express the steps in developing a marketing communications program.

5. Identify how the IMC planning process is continued throughout all chapters.

Chapter and Lecture Outline I.

MARKETING COMMUNICATION

Most students may already have had a marketing course; however, it is still helpful to define marketing and stress that it involves more than just selling or other promotion functions. Previously, the American Marketing Association defined marketing as: the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

The description of marketing should include a discussion of the activities involved in the marketing process and its role and importance in different types of companies including both profit and nonprofit organizations. It is important to stress that each element of the marketing mix is multidimensional in nature and includes a number of decision areas. This reminder leads the way to defining the text’s scope.

In discussing the marketing mix, it should be highlighted that marketing communication is responsible for drawing attention to product, price and distribution elements in the message received by the audience.

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A

Communicating Product—an organization exists because it has a product, service, idea or cause to offer. Discussion can focus on the value offered by the product and the fact that goods and services offer attributes and benefits that satisfy needs. Benefits are communicated as functional based on their features or attributes. They are also subjectively claimed in ads based on performance. And they are communicated emotionally through product consumption. These emotions are positive or negative, and are psychologically or socially based. Instructors can show ads that demonstrate these differences since they are the heart of message development and delivery since promotional planners have complete control in deciding which approach to influence consumers.

Communication for brand identification is important with respect to brand name, brand logo, band tag-line and packaging. As the text exhibits illustrate, ads often identify the brand characteristics clearly to encourage recognition at the point of purchase where decision are made.

Communicating all facets of the product is expected to contribute to brand equity; an intangible asset of added value or goodwill that results from the favorable image, impressions of differentiation, and/or the strength of consumer attachment to a company name, brand name, or trademark. A discussion of the overall assessment of brand can ensue with reference to the data in the brand exhibits. Other brand outcomes are identified and instructors can draw on new ideas to see if advertisers are attempting to foster different brand related impressions upon consumers.

B

Communicating Price—the price variable of the marketing mix refers to what the consumer must give up in exchange for a product or service. Marketing managers must be concerned with establishing a price level, developing pricing policies and monitoring consumers’ and competitors’ reactions to price in the marketplace. From a marketing communication standpoint, price is often a key piece of information in an ad or is the main selling message.

C

Communicating Distribution—marketing channels or the place element of the marketing mix refers to the set of interdependent organizations involved in the process of making a product or service available to customers. In discussing the latter, the importance of resellers in marketing and promotional strategy should be introduced. Attention should be given to the need to develop promotional programs for the trade or resellers to encourage them to stock and promote a product.

D

Communicating Value—all marketing activities and marketing communication are designed to enhance and or communicate customer value as conveyed in the new AMA definition. This chapter draws on both definitions for historical significance and to highlight that marketing communication plays a role in persuading consumers that a brand offers value through the compilation of all aspect of the offering.

II.

THE PROMOTIONAL MIX

Promotion is defined as the coordination of all seller-initiated efforts to set up channels of information and persuasion to sell goods and services or promote an idea. It should be noted that promotion is best viewed as the communication function of marketing as most of an organization’s communication with the marketplace takes place through a carefully planned and controlled promotional program that utilizes elements of the promotional mix.

The promotional mix should be defined as the tools or elements that are used to accomplish an organization’s objectives. The role and function of each promotional mix element in the marketing program can be discussed along with its advantages and disadvantages.

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A.

Advertising—any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor.

Advantages of advertising: •

cost-efficient way for communicating, particularly with large audiences

•

cost-effective communication of a controlled message (what, when, how, where) if audiences process the message and the message is appropriate for that audience

•

valuable tool for creating and maintaining brand equity by creating images and symbolic appeals and for differentiating similar products

•

encourage online interaction with the brand

•

flexible tool for all sorts of products, market situations, channel members, and target audiences that works with other IMC programs

•

advertising occurs in all domains; consumer markets including national, retail/local and direct-response advertising, and, business and professional market including industrial, professional and trade advertising.

Disadvantages of advertising: (not in the text)

B.

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the cost of producing and placing ads can be very high, particularly television commercials but inexpensive Internet media examples occur

•

it can be difficult to determine the effectiveness of advertising

•

there are credibility and image problems associated with advertising

•

the vast number of ads has created clutter problems and consumers are not paying attention to much of the advertising they see and/or hear

Sales Promotion—marketing activities that provide extra value or incentive to the sales force, distributors, or the ultimate consumer and can stimulate immediate sales. Sales promotion is generally broken into two major categories: consumer and trade activities.

Advantages of sales promotion: •

provides extra incentive to consumers or trade members to purchase or stock/promote a brand

•

way of appealing to price sensitive consumer

•

way of generating extra interest in product or ads

•

effects can often be more directly measured than those of advertising

•

can be used as a way of building or reinforcing brand equity

Disadvantages of sales promotion: •

companies may become too reliant on sales promotion and focus too much on short-run marketing planning and performance

•

some forms of sales promotion do not help establish or reinforce brand image and short-term sales gains are often achieved at the expense of long-term brand equity

•

problems with sales promotion clutter as consumers receive many promotional offers

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•

consumers may become over-reliant on sales promotion incentives which can undermine the development of favorable attitudes and brand loyalty.

•

in some industries promotion wars may develop whereby marketers sales promotion incentives extensively which results in lower profit margins and makes it difficult to sell products at full price

It is important to address the potential terminology problem concerning the use of the terms promotion and sales promotion. In this text the term promotion represents an element of the marketing mix by which firms communicate with their customers and includes the promotional mix elements. However, marketing and advertising practitioners use the term promotion in reference to sales promotion activities. We use the term promotion in the broader sense. When discussing sales promotion activities, we are referring to this one specific element of the promotional mix.

C.

Public Relations—a corporate communication program designed to enhance the company’s reputation and/or earn public understanding and acceptance of a particular issue. It usually involves a process where management evaluates public attitudes, and executes a program of action to earn public understanding and acceptance.

Publicity—nonpersonal communications about an organization, product, service, or idea that is not directly paid for nor run under identified sponsorship.

The distinction should be made between publicity and public relations noting that public relations generally has a broader objective than publicity, as its purpose is to establish and maintain a positive image of the company among its various publics. Publicity is an important communication technique used in public relations however other tools may also be used.

Advantages of publicity: •

credibility of publicity is usually higher than other forms of marketing communication

•

low cost way of communicating

•

often has news value and generates word-of-mouth discussion among consumers

Disadvantages of publicity:

D.

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lack of control over what is said, when, where and how it is said

•

can be negative as well as positive

Direct Marketing—a system of marketing by which organizations communicate directly with target customers to generate a response and/or a transaction. Direct marketing has become such an integral part of the integrated marketing communications program of many organizations and this text views it as a component of the promotional mix.

Advantages of direct marketing: •

consumers are receptive to the convenience of direct-marketed products

•

allows a company to be very selective and target its marketing communications to specific customer segments

•

messages can be customized to fit the needs of specific market segments

•

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Disadvantages of direct marketing:

E.

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unsolicited communication makes consumers less receptive to direct-marketing

•

direct marketing has image problems

•

problems with clutter as direct-marketing messages compete for consumers’ attention

Internet Marketing—interactive media allow for a back-and-forth flow of information whereby users can participate in and modify the content of the information they receive. While the most prevalent perspective on the Internet is that it is an advertising medium, it is actually a medium that can be used to communicate other elements of the promotional mix including sales promotion, direct marketing, and public relations. Instructors should demonstrate the differences between paid, owned, and earned media within social media and across different content publishers.

Advantages of internet marketing: •

used for a variety of integrated marketing communication functions including advertising, direct marketing, sales promotion, public relations and selling

•

used to target very specific groups of customers with a minimum of waste

•

messages tailored to appeal to the specific interests and needs of the target audience

•

a higher degree of customer involvement when customers are visiting a web site or social media due to its interactive nature

•

possible to provide customers with a great deal of information regarding product and service descriptions and specifications, purchase information and more

•

tremendous creative potential as a well-designed web site can attract a great deal of attention and interest among customers and be an effective way to generate interest in a company as well as its products and services.

Disadvantages of internet marketing:

F.

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concern that the Internet as an advertising medium as users do not pay attention to display ads and the click-through rate on most is extremely low.

•

clutter on the Internet which makes it difficult for advertising messages to be noticed and/or given attention.

•

audience measurement for the Internet is still a problem as is measuring the effectiveness of banner ads and other promotional messages on the Internet.

Personal Selling—direct person-to-person communication whereby a seller attempts to assist and/or persuade prospective buyers to purchase a company’s product or service or act on an idea.

Advantages of personal selling: •

direct contact between buyer and seller allows for more communication flexibility

•

can tailor and adapt message to specific needs or situation of the customer

•

allows for more immediate and direct feedback

•

promotional efforts can be targeted to specific markets and customers who are best prospects

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•

high cost per contact

•

expensive way to reach large audiences

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difficult to have consistent and uniform message delivered to all customers

G.

Participants—the organizations that participate in the integrated marketing communications process are shown to give an introduction to various industry members and their responsibilities.

However, marketers are also looking for agencies that can offer a range of integrated marketing communication capabilities to their clients and help them compete in the rapidly changing world of advertising and promotion. The student should become familiar with the players including clients, advertising agencies, media organizations, marketing communications specialist organizations and those who provide collateral services. It is particularly important to note that with the movement toward IMC, marketing communication specialist organizations such as direct response agencies, sales promotion agencies, public relations firms and interactive agencies are playing an increasingly important role in the promotional process.

III.

INTEGRATED MARKETING COMMUNICATIONS

The transition from traditional promotional management to IMC planning has evolved over time with different interpretations regarding the change. These three sections provide background information to illustrate the new perspective, however the debate highlighted in the second section can potentially fuel a student debate.

A.

IMC: Evolution—marketers previously built strong barriers around marketing and promotional functions, planning and managing them separately with different budgets, different views of the market and different goals and objectives. In the 1990s, companies moved toward integrated marketing communications (IMC), which involves coordinating the promotional elements along with other marketing activities that communicate with a firm’s customers. Subsequently, marketers asked their ad agencies to coordinate the use of promotional tools rather than relying primarily upon media advertising. Agencies responded by acquiring public relations, sales promotion, direct marketing firms, and interactive agencies and touting their capability to meet all of their clients’ IMC needs. Companies also looked beyond advertising agencies and used other types of promotional specialists to develop and implement components of their promotional plans.

A task force from the American Association of Advertising Agencies (4As) developed one of the first definitions of integrated marketing communications. A concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines-for example, general advertising, direct response, sales promotion, and public relations- and combines these disciplines to provide clarity, consistency, and maximum communications impact.

B.

IMC: Renewed Perspective—One leading IMC scholar suggests that IMC has reached the stage of being a strategic business process due to multiple audiences for communication and demands placed upon marketing communication to measure its outcomes clearly for accountability. This point raises the issue as to whether IMC is legitimately a new concept and business activity or new terms to describe previous promotional practices. Instructors can allow for debate on this point, although students may not appreciate the subtly of the issue early in the course.

C.

IMC: Audience Contacts—An IMC perspective encourages planners to consider a variety of target audiences for the organization in which certain tools may be more appropriate than others for Chapter 1 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 1-6

delivering the most relevant message. Thus, companies can no longer be tied to a specific communication tool; rather they should use whatever contact methods offer the best way of delivering the message to their target audiences. A successful IMC program requires that a firm find the right combination of promotional tools and techniques and coordinate their use.

The focus of market-driven companies is on developing and sustaining relationships with their customers. This has led to an emphasis on relationship marketing, which involves creating, maintaining, and enhancing long-term relationships with individual customers as well as other stakeholders for mutual benefit. Marketers are giving more attention to the lifetime value of a customer because studies have shown that reducing customer defections can increase future profit.

D.

IMC: Paid, Owned, Earned—IMC tools rely on the paid, owned, earned idea of media exposure found in advertising. Figure 1-6 provides ideas to consider how each tool works within an IMC program effectively and efficiently. In particular, instructors may wish to contrast the paid, owned, earned characteristics of social media to illustrate the point that a social media promotional program should be articulated clearly as to what will occur for all three parts.

IV

INTEGRATED MARKETING COMMUNICATIONS PLANNING

Promotional management involves coordinating the promotional mix elements to develop a controlled and integrated program of effective marketing communication. It involves decision areas such as: •

which promotional tools to use and how to combine them effectively

•

determining the size of and distributing the advertising and promotional budget across the promotional mix elements

•

determining the influence of factors on the promotional mix including the product type, target market, buyer decision process, stage of the product life cycle, and channels of distribution

It is useful to explain the Integrated Marketing Communications Planning Model presented in Figure 1-8.

The steps are as follows:

V

•

Review the Marketing Plan

•

Assess the Marketing Communications Situation

•

Determine IMC Plan Objectives

•

Develop IMC Programs

•

Implement and Control the IMC Plan

IMC PLANNING: ORGANIZATION OF TEXT

This begins a continuing reprise throughout the book as a concluding section for all a chapters to illustrate how some of the content can be applied to IMC planning. To illustrate the approach, Chapter 1 describes how the book is organized around the planning framework presented in Figure 1-7.

Teaching Suggestions This initial chapter provides students with an overview of advertising and promotion, and a brief look at the role of promotion in the marketing mix. It is important to define the six elements of the promotional mix, discuss their role as marketing communication tools, and discuss their advantages and limitations. You should introduce the concept of integrated marketing communications and discuss its evolution. It is Chapter 1 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 1-7

important to review the factors that underlie the adoption of an IMC approach to advertising and promotion by many companies. You might also spend some time discussing the pros and cons of IMC. During an initial lecture there is latitude to discuss issues concerning each promotional mix variable. For example, perspectives regarding advertising such as its social effect might be noted along with common complaints and criticisms of advertising. We do not suggest going into a detailed discussion of these charges at this early stage of the course. We feel that students are best able to evaluate and appraise arguments for and against advertising and other promotional mix elements toward the end of the course. Thus, the final chapter evaluates the regulatory, ethical, social and economic aspects of advertising.

We feel that it is important in either the first or second lecture to cover the integrated marketing communications planning model in some detail. This text is built around this model and it provides the student with the “big picture” as to the decision sequence and considerations involved in the development of an advertising and promotional program. It is also important to communicate to students that advertising and promotion management is a process. A great deal of analyses, as well as the coordination of the promotional mix elements, is required to develop an effective program of marketing communications that can be integrated into an organization’s overall marketing strategy.

Vignette 1. What suggestions do you have for RBC to attract younger consumers?

The question invites students to suggest application of any of the IMC tools that could be added to RBC’s IMC plan. Students could recommend extensions beyond the video messages presented that could sustain the information needs of younger consumers. The importance of this vignette is to see the link between the marketing strategy of increasing the number of customers and the marketing communication activities selected to achieve the marketing direction.

Instructors could provide other example of long lasting campaigns to encourage students to consider brand messages that will sustain over time. McDonald’s approach with digital media is an example where a major brand exerted greater control of message delivery after experiencing difficulties with its initial social media experiences. By addressing consumers’ questions, McDonald’s directed the content of its message in a way that attempted to clearly focus on the quality of the food, something it had done significantly for a considerably time period. It also attempted to reinforce its brand by showing that it practiced marketing honestly and ethically with its truthful behind-the-scenes stories.

IMC Perspective 1-1 1. What additional IMC tools could Iögo use in its plan and what type of agency would best serve its needs?

This question introduces the idea that students should be considering the effectiveness of any IMC tool implemented. Chapter 1 shows that there are many types of marketing communication requiring promotional planners to consider all of them and ensure that they are the right ones to achieve important objectives. An important criterion to reinforce is that students should try to make a link of the decisions to how they might have been most effective. This chapter begins the idea permeating the book that it is important to understand how all marketing communication decisions are evaluated for effectiveness.

Instructors should make sure students understand how the tools contribute to marketing, behavioural and communication objectives. Depending on the IMC tool selected, students should be able to see the link of different IMC agencies as offering particular services.

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IMC Perspective 1-2 1. What marketing communication suggestions can be made to grow the “Canadian Dream” campaign?

Students might suggest events or other sponsorship activities that fit the community orientation of Chevrolet’s current activities. Alternatively, the travel orientation of the messages might suggest some kind of service/promotion that Chevrolet could provide to consumers who visit parts of Canada. These suggestions indicate the opportunity to augment the current messages in a related but more distinct direction that could reach niche target audiences.

Answers to Review Questions 1. Why is marketing communication important for communicating value to consumer?

Communicating value is a central tenet in the definition of marketing, so it is imperative for marketers to use marketing communication tools effectively to influence consumers’ value perceptions via product, price and distribution messages. Message about product include how the produce fulfills needs via its characteristics, brand identity, and brand equity. Marketing communication plays a prime role it showing consumers the key delivery of value (e.g., Keg example of offereing superior dining and food quality).

Brand identity is a combination of the name, logo, symbols, and packaging design that is experienced at any point of contact that consumer has with a brand via marketing communication. This assists consumers in understanding how it fulfills their needs and contributes greater value. The combined effect of these two points contributes to brand equity where consumers see a brand as superior.

Marketers go beyond traditional media advertising to communicate value. Consumers have contact with or receive information about a brand through in-store media such as point-of-purchase displays; articles they read, see and/or hear in the media. Companies build brands that via interactive media like web sites to communicate with customers or text messaging to mobile phones. Companies are also turning to branded entertainment as a way of connecting with consumers and making their products and services part of entertainment content.

2. How do smartphone brands use each marketing communication tool for communicating messages?

Advertising on TV allows smartphones to set an overall image for the brand, and these video messages are linked anywhere virtually to allow greater exposure to digitally-based target audiences. Additional product or service messages communicate salient attributes or benefits at the most relevant point in time (e.g., new featured with updated phone launch). Price promotions are featured on older models when updated smartphones are released. Often smartphone brands are involved with public relations activities for noteworthy causes to enhance their profile. As expected, smartphone brands have an extensive digital presence with websites for comparison purposes and customer service explanations.

Social media communication for a variety of purposes have occurred in which student can readily identify and explain their potential effectiveness. This question permits the opportunity to explore a complete IMC plan for an individual brand to see all the decisions in action for a product that it seems virtually all students have experience with.

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3. What are the reasons why marketers are taking an IMC perspective to their advertising and promotional programs?

IMC differs from traditional advertising and promotion in that it recognizes the value of using a variety of communication tools rather than just relying primarily on media advertising which might be supplemented with tactical promotions. IMC involves coordinating all a company’s promotional elements, as well as marketing activities, in a synergistic manner to send a consistent message to the target audience. While traditional advertising relies primarily upon the use of ads through the mass media to communicate with the target audience, IMC recognizes that consumers’ perceptions of a company and/or its brands are a synthesis of the bundle of messages or contacts they have with the firm. These contacts include media advertisements, packaging, sales promotion, messages received through interactive media such as web sites and other digital media, point-of-purchase displays, and other forms of communication. The IMC approach seeks to have all of a company’s marketing and promotional activities project a consistent, unified message and/or image to the market and consider which particular element of the promotional mix is the most effective way to communicate with customers in the target audience.

4. What parts of the IMC planning model are similar to and different from a marketing planning model?

Similarities include the need for a situational analysis, setting of objectives, the development of programs that have both strategic and tactical elements, and finally the implementation and control phases. The differences include the domain (communication vs. marketing mix), the specificity of the situation analysis is related to the communication problem or opportunity.

5. How is the structure of the book consistent with the content of an IMC plan?

An IMC plan should begin with an understanding of advertiser’s agency partners, and a decision of the target audience (Chapter 3) and an understanding of how the audience would receive the message (Chapter 4) so that the brand manager can set IMC objectives (Chapter 5) to direct the brand positioning strategy (Chapter 6). This strategic orientations give direction for the creative strategy (Chapter 7) and creative tactics (Chapter 8) of the message, which can be evaluated (Chapter 9), and planned (Chapter 10) and delivered via media (Chapters 11, 12, 13), or strengthened via sales promotion (Chapter 14), public relations (Chapter 15), directed marketing (Chapter 16) and the internet (Chapter 17). Ethical guidance of all decisions of the plan is summarized (Chapter 18).

Answers to Application Questions 1. Consider how a university or college communicates value in its marketing communication to its prospective students and current students. In what ways are the two approaches similar or different?

Communication to current students is done extensively via online portals. Information regarding courses, educational resources etc. are at students’ fingertips on a second-by-second basis. Any activities of culture, sport or education origin are easily obtained via numerous digital avenues (website, social media). Essentially, marketing communication via students is a strong representation of what occurs with long-term, repeat purchasing consumers in a relationship marketing setting.

In contrast, communication to prospective students occurs via personal communication via high-school visits and campus visists, direct mail of brochures etc., and online communication to the public portions of the institutions website as students shop around for the best fit for their needs.

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The idea of this question is for students to see that there are unique messages and media directed to customer and non-customers, although there still remains considerable overlap since an institution would want to project a consistent overall image to both groups.

2. Identify all the possible marketing communication tools that a favourite brand or performance artist is using. Try to explain why these tools were selected. In what ways did the tools support one another? How dis thy not support one another? Was each tool effective or ineffective?

This application question encourages students to put into context all the marketing communication that they would have been most exposed to, and therefore, more likely to be able to apply the concepts of this chapter. Instructors are encouraged to ensure that students find as IMC tools and push them to fully explain how the tools work or do not fit together. The question also begins the task for students to try and figure out what effectiveness is and how to estimate it prior to seeing the actual concepts in chapters 4 and 5.

3. Find one example where all promotional tools of a brand have the same look and feel, and find another example of a brand where the promotional tools have a different look and feel. Why did these decisions occur, based on relevant situation analysis variables?

Instructors can find good examples to show such at Telus and Koodo where there is consistent imagery for the phone service. Telus is especially good to reference since it had a consistent nature creative for its phone, but has now decided to us different creative for its TV service and other aspects of its marketing communication in terms of public relations and customer service. Thus, this shows how some parts of the plan are consistent while others are different. The explanation is largely due to different competitive spaces, the nature of consumer adoption of technology, and the company’s maturity as it develops into a full-fledged telecommunications organization.

4. Why is it important for those who work in the field of advertising and promotion to understand and appreciate all IMC tools, not just the area in which they specialize?

Marketers use many promotional tools to communicate with their customers. The promotional mix elements have to be viewed as component parts of an integrated marketing communications program.

An individual promotional activity such as advertising or sales promotion cannot be managed without considering its relationship to other promotional mix elements. Individuals working in various areas of advertising and promotion are expected to understand and use a variety of marketing communication tools, not just the one in which they specialize. For example, advertising agencies no longer confine their services to creating and placing ads. Many agencies are involved in sales promotion, public relations, direct marketing, event sponsorship and other communication areas. Thus, it is important for those who work in advertising and promotion, either on the agency or client side, to understand and appreciate the value and limitations of all the promotional mix elements and how they can be combined to develop an effective program of integrated marketing communications.

5. How does one of your favourite brands link or integrate its different IMC communication tools? Is it done effectively?

Students can address the digital connections here with advertising. For example, what messages and media are used to persuade consumers to investigate online brand communication via social media or websites? Students also might want to observe the connections of the brand’s commitment to a social cause with its social media activities. Similarly, investigations to a contest or another sales promotion might be useful with its connection to Facebook or Instagram. The important point is for students to actively see how brands are connecting their communication for exposure to consumers.

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Additional Questions (not shown in text) A. Consider all the marketing communication tools (i.e., advertising, sales promotions, public relations, direct marketing, Internet marketing, and personal selling) that are used to market a new car that a graduating student might be expected to buy. Explain why each tool would be effective to create awareness.

Integrated marketing communications play a very important role in the marketing of automobiles. Many consumers, particularly young people, base their purchase decisions on product related attributes such as price, quality, reliability, durability and performance, as well as on factors such as style and brand image. A variety of IMC tools are used to provide consumers with information about new cars as well as to create an image that will appeal to the target market for the car. Advertising on television as well as in magazines can play an important role in providing, creating and reinforcing an image of a car that is cool, fun, and hip to drive. Direct marketing can be used to build a database of customers who enter a contest on the car maker’s web site and/or request more information about the car. These customers can be sent information about the car and occasionally receive direct mail pieces. The customer can be taken on a virtual journey online to learn more about the car. The car maker can also e-mail a video link to consumers who request more information about the car. The car maker can also generate a considerable amount of publicity through press releases and public relations activities. Finally, promotional efforts can be extended to the dealerships to support the personal selling effort.

B. Why would brands combine their advertising message and sales promotion offer in the same print ad?

Free-standing inserts in newspapers contain ads with coupons. Consumers may perceive them as “ads”, despite the fact that it contains a discount on their next purchase. These types of ads have a communication effect on consumers because they provide information and/or imagery. They also provide an incentive to buy which is a basic objective of sales promotion. Brands combine advertising and sales promotion to achieve multiple objectives for both communication and for behavioural change/reinforcement.

C. What is meant by the concept of integrated marketing communications? How might a firm that is using integrated marketing communications differ from one that looks at advertising and promotion in a more traditional way?

Integrated marketing communications is a concept of communications planning that involves coordinating the promotional elements and other marketing activities that communicate with a firm’s customers. Companies who use integrated marketing communications recognize the added value of a comprehensive plan that evaluates the strategic roles of communication disciplines including advertising, direct response, sales promotion, and public relations and combining them to provide clarity, consistency, and maximum communications impact.

Companies that view advertising and promotion in a more traditional way often build barriers around marketing and promotional functions and plan and manage them separately with different budgets, different views of the market, and different goals and objectives. These companies may be sending different messages to the market through their marketing and promotional activities or relying primarily on one promotional mix element such as media advertising. Companies who take the IMC approach identify the most appropriate and effective methods to contact and communicate with their customers.

D. What are audience contact points? Select a company or brand and discuss the various contact points which marketers can use to reach consumers of this product.

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Audience contact points are each and every opportunity the consumer has to see or hear about the company’s product/brand or have an experience or encounter with it. These contact points can be created by the company and include planned messages delivered through media advertising, packages, collateral materials, in-store displays, and public relations activities. They also can come from interactions with the brand that occur during the process of buying or using the brand as well as from information that consumers receive from word-of-mouth messages. Marketers must determine how important the various contact tools are for communicating with their target audience and how they can be combined to form an effective IMC program.

Students should be encouraged to select a company or brand and discuss the ways consumers come into contact with it. They might use IMC Contact tools shown in Figure 1-5 of the chapter as a framework for conducting the contact point analysis. You might also ask them to discuss which contacts points are most effective or influential in shaping consumers’ impressions of the company or brand.

For example, media advertising may be the most important influence for an image-laden product such as clothing or cosmetics while information from a web site may be the most important influence for a high tech brand such as a consumer electronics product.

E. Sports sponsorship, a public relations tool, continues to grow at an increasing degree in the IMC plans or major brands. Explain how this is a good investment of marketing resources.

Publicity refers to nonpersonal communication regarding an organization, product, service or idea that is not directly paid for nor run under identified sponsorship. Public relations is a management function that among other things attempts to control and manage the nature of the publicity an organization receives. Publicity and public relations differ from other elements of the promotional mix in that their role is often more supportive in nature rather than being the lead elements of a promotional program, although there are exceptions to this.

Sports sponsorship is advantageous since it generally has the benefits of both public relations and publicity. The imagery with all the communication of the sponsorship acts positively for public relations purposes while the extensive media coverage provides additional exposure from a publicity perspective.

Investing in one tool, and having the effects of another makes for a good investment as it increases frequency and possibly reach depending upon the extensiveness of the publicity. In general, it should provide a more positive ROI. F. Describe how can the Internet be used to execute the IMC tools described in this chapter?

The Internet is having a tremendous impact on the way companies design and implement their entire business and marketing strategies as well as their integrated marketing communications programs.

Companies ranging from large multinational corporations to small local firms have developed websites to promote their products and services by providing current and potential customers with information, building images for their companies and brands and even selling their products or services directly over the Internet. While many view the Internet as an advertising or promotional medium, it really is a marketing communications tool that can be used to execute all elements of the promotional mix.

Companies can advertise on the Internet by running banner ads or sponsorships on the websites of other companies or organizations. Marketers can offer sales promotion incentives such as coupons over the internet and they can offer contests and sweepstakes online and encourage consumers to visit their web sites to enter them. Companies are using the Internet for direct marketing have made the Internet a major part of their direct-marketing efforts and encourage consumers to visit their websites to view their merchandise and to place orders online. Companies are also using the Internet for publicity and public relations as these activities such as the sending of press releases can now be done online.

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Companies also maintain press releases on their web sites which can be accessed by the media and other relevant publics to learn more about these companies and their products and services.

IMC Exercise This exercise is designed to give the student the opportunity to think more about the concept of integrated marketing communications and how it might be used by a company.

Choose a specific company and discuss how this firm can use the concept of integrated marketing communications in developing a promotional program for one of its products or services. You should analyze all of the company’s promotional mix elements including advertising, direct marketing, interactive media, sales promotion, publicity/public relations and personal selling and discuss how each one is used in the marketing communications program. You should also consider how other marketing mix elements such as the brand name, package, price and other factors communicate with the company’s target audience. Is this company using all of the promotion mix tools in its marketing communications program? Are they integrated and sending a consistent image and message?

IMC Comprehensive Project The purpose of the IMC comprehensive project is to have each student (or student teams) develop an integrated marketing communications plan for a product or service as they proceed through the course. The text is built around a detailed model of the IMC planning process that is presented in Figure 1-7 that can be used as a framework for this plan. Students can update their plan as each chapter and topic area is covered.

This will encourage the students to apply the course material and develop an appreciation for the process a product manager, account executive or marketing communications manager goes though in developing a promotional plan. The project will also help students gain an appreciation for the various sources of information available that can be used as part of the promotional planning process. By the end of the course each student (or team) should have a detailed notebook containing the plan for his/her product or service that can be turned in for evaluation.

Specific assignments for the IMC project will be presented with each chapter. These IMC project assignments can be given as a general guideline of what they should be covering in this section of the plan.

IMC Project Assignment for Chapter 1 The assignment for Chapter 1 is to familiarize you with the IMC planning process presented in Figure 1-7.

Students should study the IMC planning model so they can gain some insight as to what will be involved in developing the IMC project. Each student or team should choose a national, regional or local brand a product or service for which they will be developing their IMC plan. You should submit your choice to the instructor with a brief statement as to why you have chosen this particular brand. Your instructor should approve your choice before you begin working on the project.

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CHAPTER 2 ORGANIZING FOR INTEGRATED MARKETING COMMUNICATIONS Chapter Overview The purpose of this chapter is to familiarize the student with the ways that organizations organize for purposes of developing and executing integrated marketing communications programs. A description of the role and functions of advertising agencies is provided, as is an explanation of how agencies are compensated and evaluated. The chapter also discusses organizations that provide specialized integrated marketing communication services including direct-response, sales promotion and interactive agencies as well as public relations firms. It is important for students to understand that a variety of different organizations may play a role in the development of a company’s IMC program.

Learning Objectives 1. Identify the role of the advertising agency and the services it provides.

2. Describe methods for compensating, and evaluating advertising agencies.

3. Review the functions of specialized marketing communications organizations.

4. Evaluate the perspectives on the use of integrated services across agencies or within one agency, and agency-client responsibilities and partnerships.

Chapter and Lecture Outline I.

ADVERTISING AGENCIES

A.

Advertising Agency Decision

Companies can employ the services of an external advertising agency or use an in-house agency.

B.

1.

In-House Agency —companies set up their own internal ad agencies. The design varies from as small as an advertising department to as large as an external agency. In the latter case, the in-house agency will operate as a separate entity and control advertising and promotional expenditures in millions of dollars. This option is usually chosen so that costs are minimized and control over the agency’s activities is maximized.

2.

Advertising Agency —Though organizations have the capability of performing advertising services themselves, they elect to use outside agencies for the following reasons: (1) the skills offered, (2) objectivity and (3) experience.

Advertising Agency Industry Figure 2-1 captures the state of the major players in the Canadian advertising agency industry. Most agencies are an amalgamation of other agencies like sales promotion, digital, PR etc. and are part of large international consortiums. Not captured in the table are smaller regional or local agencies that remain independent. However, these firms presumably represent a substantial portion of the money spent on agencies. Instructors can review the background and clients of ad agencies for student interest. Their websites show their work and are generally very creative. New trends highlighted in the chapter can be examined also.

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C.

Full Service Advertising Agencies These agencies offer their clients a full range of services including account/client services, planning and research services, creative services, digital creative services, production services, media services, , specialized services (e.g., sales promotion, direct, PR, interactive).

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Account/Client services—the link between the advertising agency and its clients. Account executives serve as the liaison between the agency and client and are responsible for coordinating the agency's efforts in planning, creating and producing ads.

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Planning/Research services—full-service agencies provide a variety of marketing services to their clients and maintain departments such as research, strategy and planning. These departments assist the other services by ensuring that the marketing communication strategy addresses the communication issue accurately.

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Creative services—agency personnel in this department include artists and copywriters who are responsible for the creation and execution of the client’s advertising messages. Creative services may also include print and broadcast production departments, which are responsible for actually producing the advertising messages and putting them into final form.

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Digital creative services—these kinds of specialists are part of marketing communication plans as customized messages for Internet media are required.

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Production services—dedicated staff may be responsible for the physical development of ads in all or select formats. The traffic department coordinates all phases of production and sees that all ads are completed on time and deadlines for submitting the ads to the media are met.

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Media services—the media department is very important since clients are consolidating their media buying to save money and improve media efficiency. This department analyzes, selects and contracts for media space and time on behalf of clients.

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Specialized services—as implied in the term, full-service agencies, provide a variety of additional services to their clients so that a complete IMC plan can be delivered that includes all tools (e.g., sales promotion, PR, direct, digital).

Attention should be given to the two types or agency organization structures used by agencies.

Under the departmental system each of the agency functions is set up as a separate department and is called upon to perform its specialty for all of the agency’s clients. Agencies can use the group system in which individuals from each department work together as teams to service a particular account. Clients prefer the group system because agency employees become very familiar with their business and it ensures continuity in servicing the account.

II.

AGENCY COMPENSATION

The services that advertising agencies provide may be compensated in a variety of ways including: A.

Commissions from media—the agency is compensated based on the time or space it purchases for its client, historically 15%. The commission system is criticized since it ties agency compensation to media costs and encourages agencies to rely on commissionable media (i.e., TV) that is more expensive than non-commissionable media. However, some prefer this system because it is easy to administer and forces agencies to compete on bases other than price. Advertisers have moved to a negotiated commission system that takes the form of reduced percentage rates, variable commission rates and minimum and maximum compensation rates.

B.

Fee arrangements are of two types: a fixed-fee method where the agency charges a basic monthly fee for all of its services and credits to the client any media commissions earned. Under a feeChapter 2 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 2-2

commission combination the media commissions received by the agency are credited against the fee. If commissions are less than the agreed-on fee, client must make up the difference.

C.

Cost-plus agreement—under this compensation method the client agrees to pay the agency a fee based on costs of its work plus some agreed-on profit margin. This system requires the agency to keep detailed records of costs incurred in working on a client’s account.

D.

Incentive-based compensation—while there are variations on this system, the basic idea is that the agency’s compensation level will depend upon how well it meets predetermined performance goals for its clients such as sales or market share. Incentive-based compensation

E.

Evaluation of agencies—given the substantial amounts of money being spent on advertising, demands for accountability are increasing. The agency evaluation process generally involves two types of assessments—financial audits and qualitative audits. An increasing trend among larger firms is to formalize this process. Agencies are like their clients in the sense that they must solicit business, and often gain and lose business. The text offers a variety of reasons as to why agencies lose clients. Current issues of Strategy Magazine will be useful in providing the instructor with examples of account changes and the reasons the clients decided to change agencies.

III.

SPECIALIZED SERVICES

In addition to advertising agencies, other outside organizations may provide marketers with specialized services that are important in developing and executing integrated marketing communication programs.

Instructors can also review websites of specialized service agencies or review a few new developments shown in the chapter.

A.

Creative boutiques—specialize in and provide only advertising creative services. Because of their specialty of creative ideas, clients look to these agencies for new inspiration to portray their brands or for specific messages to more focused target audiences.

B.

Media buying services—work with media companies and package offering to clients to meet their media strategy and tactic decisions.

C.

Sales Promotions Agencies—provide promotional services that include promotional planning, creative, research, tie-in coordination, fulfillment, premium design, and contest/sweepstakes management.

D.

Public Relations Firms—develop and implement programs to manage an organization’s publicity, image, and affairs with consumers and other relevant publics including employers, suppliers, stockholders, government, labor and the general public.

E.

Direct Response Agencies—provide their clients a variety of services including data base development and management, direct mail, research, media services, and creative and production capabilities.

F.

Digital/Interactive Agencies—develop web sites, kiosks, Internet ads, and other forms of interactive advertising.

IV.

IMC PLANNING: AGENCY RELATIONSHIPS

A trend in the advertising industry is to combine all of the above services under one roof. These one-stop service agencies bring together service providers so that the client needs only to use their firm to receive all of the marketing support s/he requires. Advantages and disadvantages of these arrangements include: A.

Integrated IMC Services—The advantages and disadvantages of the one-stop shop include: 1. Advantages of integrated services:

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•

Greater control of the promotional process allows for more synergy among each of the communication program elements • More convenient for clients to coordinate all promotional efforts with one agency • Agencies with IMC capabilities can create a single image for the client 2. Disadvantages of integrated services: • Synergy and economies of scale are often not achieved by a single agency handling all communication areas • Internal conflicts often arise within various departments within a large agency over areas such as advertising, public relations or sales promotion • Limits client’s ability to take advantage of specialists in IMC areas B.

Agency-Client Responsibility—Another topic covered in this section is whether the client or advertising agency should have the primary responsibility for planning and coordinating the IMC process. Most marketers believe it is their responsibility to set strategy for and coordinated integrated campaigns while agency executives see this as their domain. The major barrier is a lack of people in agencies with the broad perspective and skills needed to make IMC work effectively.

Internal turf battles, agency egos, and fear of budget reductions are also cited as major barriers to successful integrated marketing campaigns.

C.

Agency-Client Relationships—A summary of recent research on the nature of agency-client relationships is presented with a number of survey findings. This material can be selectively used to give an idea as to the present situation.

Teaching Suggestions Students are often interested in working for an advertising agency. This chapter familiarizes them with other major participants in the IMC process and the important role they play. While most students are familiar with advertising agencies, they are less likely to know anything about direct response and sales promotion agencies, public relations firms and interactive agencies. You might note that there are some excellent career opportunities available in these areas.

It is important for the instructor to keep up to date with current events. Good sources of information on advertising are publications such as Strategy, Advertising Age, AdWeek, and BrandWeek. For excellent articles and sources of information on sales promotion students should be referred to Promo magazine. We have also found strong student interest in identifying which current advertisements have been created by various agencies. Most major agencies have websites that show examples of their advertising, information about their advertising philosophy, approaches to branding and other IMC content.

Vignette 1. What is significant about these campaigns that allowed Cossette to win awards?

This question gets to the heart of the matter regarding why advertising is creative. Clearly, there is no right answer, but an opportunity to develop arguments as to why judges saw the campaigns worthy of praise.

Astute students will recognized that the stories consistently focus on the consumption or life experience of consumers rather than the pre-purchase are purchase process. Inherently, the consumption side is more interesting or illuminating and is often a great inspiration for creativity and effective ads.

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IMC Perspective 2-1 1. In what new direction would you anticipate this agency moving in the future?

The story of Zulu is remarkable given the amalgamation of major industry players world-wide as presented earlier in the chapter. Each snippet gives an idea of Zulu’s work and allows students to see how it is unique or how it could help solve a communication problem or take advantage of a communication opportunity. Instructors could look for examples of each of these to initiate the discussion. The question leads students to consider the different types of agencies and how Zulu straddles the lines of many different types. It is unclear how Zulu can grow and remain as an independent as shown in their revised industry diagram, however students can have fun comparing them to others that started up the past couple of decades like Sid Lee, Taxi and Rethink.

An additional key point for students to realize that some of the most creative communication observed in Canada is the work of marketing suppliers (i.e., agencies) and not the actual managers of the products advertisers. While this is relatively elementary of instructors, it is quite illustrative for unfamiliar students. The question encourages an open-ended debate to generate discussion that hopefully would lead to some consensus on the criteria for selecting creative campaigns. It acts as an entry point for much of the material over the next few chapters and can generate some excitement for the early material in the text and the course.

IMC Perspective 2-2 1. Which indie is the most appealing for a student’s first advertising job?

These indie examples show the diversity of the agency industry. The examples also allow students to project their career aspirations in many directions. From another point of view, the projection question lets student see how creative services are delivered from many different avenues. Instructors are encourage to visit the websites of indie agencies to show their work and illustrate how smaller organization perspectives could be quite fruitful when hiring an agency.

Answers to Review Questions 1. How are the characteristics of a full-service agency contrasted with the characteristics of specialized communication agencies?

Full service agencies provide their clients with services including planning, creating and producing the advertising, account planning, marketing research, developing media strategies and selecting and purchasing media. Some full service agencies also provide non-advertising related services including strategic market planning, direct marketing, promotional programs, interactive marketing and web site design, and public relations. The importance of the services provided by a full service agency will depend upon the client. Some companies want agencies that are very strong in the creative area and can develop ads that strike a responsive chord with consumers. Companies that are competing in markets where brand image and identity is very important may put a major emphasis on creative capabilities in selecting and agency. Some companies want agencies that are very strong in media strategy and buying and can maximize their media expenditures.

Specialized agencies offers particular services that clients may value over the same service provide by a full service agency due to stronger competency. For example, creative boutiques have developed in response to some companies’ desires to use only the creative talent of agency. These smaller agencies often turn out excellent creative work and do not have the bureaucracy and politics of larger agencies.

Companies also feel that by working with a smaller creative boutique they can get more attention and better access to creative talent than they would at a larger agency. Another reason why a company Chapter 2 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 2-5

might use a creative boutique is that there are companies available to handle other parts of the advertising and promotional program.

Similarly, media specialist companies provide an important service by specializing in the analysis and purchasing of media time and space. Also, because media specialist companies purchase large amounts of time and space, they often receive large discounts and can save a client money on media purchases or provide them with more exposure from a media budget. Agencies, as well as their clients, have recognized that it is very difficult to staff and operate a media department that can provide the same level of service as media specialist companies. Thus, agencies have been unbundling media buying from the services they offer clients.

2. Why is compensating with the performance by results approach optimal in comparison with other methods?

Agencies are historically compensated in three ways: through commissions from the media, fee arrangement or percentage charges. Compensating agencies through media commissions occurs when the agency receives a specified commission from the media on any advertising time or space it purchases for the client. Under the fixed-fee method the agency charges a basic fee for all of its services and credits to the client and credits any media commissions earned. Agencies are also compensated through a fee-commission combination, whereby the media commissions received by the agency are credited against the fee. The cost-plus system occurs when the client agrees to pay the agency a fee based on the cost of its work plus some agreed-on profit margin.

These methods have given way to an improved performance-based system where advertisers use incentive-based systems where agency compensation is tied to performance. The performance measures may include objective measures such as sales and/or market share as more subjective measures such as evaluations of the agency’s creative work. As more marketers adopt an integrated marketing communication perspective and move away from traditional mass media, changes in compensation systems are taking place. This may include a combination of compensation systems such as a negotiated set fee or media commission rate as well as incentives.

There are several reasons why companies are moving away from the traditional 15 percent commission system and using an incentive-based method of compensating their agencies. One of the major reasons for this change is that companies are demanding greater accountability from their agencies and feel that an incentive-based compensation system is one way of achieving this. Companies feel that if agencies really want to be true partners, they will be willing to share in the sales performance of the product or service with them. For many companies, advertising plays a major role in determining the sales success of their product or service. Incentive-based compensation systems also encourage agencies to look beyond traditional mass media advertising and to consider how other IMC tools that might be more effective in driving sales.

There are a number of reasons why an agency might be reluctant to accept an incentive-based compensation system. A system in which the agency is compensated based on the brand’s performance in the marketplace has the potential to be a fair system, but may be fraught with problems as well. If the basis for evaluation is tied to communications objectives (as will be discussed later in this text) the system has may be acceptable to the agency. On the one hand, tying the compensation to market performance measures such as brand share and/or sales could be unfair. As the student will learn later in this text, it is very difficult—if not impossible—to tie market share and sales figures directly to advertising. For example, while the advertising may be working very well, other marketing variables may hinder sales and/or market share performance. Excellent advertising will not compensate for poor product quality, over pricing or a poor distribution system. Thus, if one were to see poor performance of the brand in the marketplace, the advertising agency might be punished for problems beyond their control. On the other hand, agencies see incentive based compensation methods as a way of differentiating themselves and proving to clients that they are confident in their ability to develop Chapter 2 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 2-6

advertising that will have a favorable impact on sales. Since clients are expecting more accountability from their advertising and promotional programs, and agencies may feel that their willingness to work under an incentive based compensation system will increase their likelihood of getting a company’s advertising business.

3. What are the similar and dissimilar functions of each of the specialized marketing communication agencies?

All agencies share a similar function of providing marketing communication recommendations to resolve the communication issue faced by its client. Each is also tasked with offering a customized service with expertise that may not be readily found elsewhere. Furthermore, each has a responsibility of ensuring that their staff is well versed in the latest trends and tools to provide optimal service.

While the core service may be consistent to some degree, each agency offers a specialty that others cannot match and this specialization suggests different processes for delivering service and a unique skill-set to ensure client satisfaction.

4. What are the issues of using one full-service agency versus multiple specialized agencies?

Some marketers prefer to have all of their IMC activities performed by one agency rather than using multiple agencies that specialize in various areas such as direct marketing, sales promotion, interactive marketing, and public relations. These companies feel that by having all of the IMC functions performed by one agency makes it easier to develop and implement a consistent and uniform program where everyone is working with the same information and toward the same goals and objectives. They also feel that giving one agency control of entire IMC program achieves greater synergy among each of the communication elements. It also makes it easier for the client when all of the promotional elements such as advertising, direct mail, event marketing, sales promotion, interactive marketing and public relations are handled by one large agency.

Answers to Application Questions 1. The chapter distinguished between full service and specialized agencies. Using Figure 2-1 as a guide for different agency names based in Canada, examine the websites of different types of marketing communication agencies. Using the websites as the main source of information, identify which types of services each agency offers.

This Internet application questions encourages students to investigate and see what creative work is done by different agencies. In doing so, the services offered by each should be readily seen, thus demonstrating what is occurring in the field. The part of the questions suggests to students early on that they can and should be thinking critically of all marketing communication recommendations that they observe while studying this material.

2. Which type of compensation system that an agency faced most often from its clients is an environment where a young advertising graduate would most like to work?

This is a projective question where students could be describing where they would like to work in the industry. Some might like the pay by performance approach since they enjoy the added pressure and this system places on the creative supplier. Presumably, the environment might be a bit more entrepreneurial and offer great opportunity for career advancement. Others who have certain skills may appreciate the fixed fees, noting that they would like to be recognized for producing their work.

Whatever the answer, the key point is for student to look at all facets of how an agency operates to decide where they may like to consider working.

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3. Again, using Figure 2-1 as a guide for different agency names based in Canada, examine the websites of different specialized marketing communication agencies. Using the website as the main source of information, identify which type of services each type offers.

This exercise is an opportunity to achieve the goal of introducing students to all sources of marketing communication services. It is much like question 1 and can be a useful exercise for in-class discussion or mini-presentations where students showed each other the work of different agencies.

4. Given the evaluation of different agencies in the above questions, is the use of a full-service agency or the use of multiple specialized agencies the recommended approach for smartphone brands? For breakfast cereal brands? For energy drink brands?

Multiple agencies could be suitable for smartphone brands since there are numerous target audiences to direct marketing communication towards across a multitude of segmentation variables with a product still in a growth phase. This could suggest more focused campaigns requiring customized IMC tools to provide a convincing message. Breakfast cereal is a mature product category with less opportunity or need for multiple target audiences. Combined with the fact that many brands have existed for decades, a single agency with one point of contact for all marketing communication may be more suitable.

Energy drinks present and interesting option to consider both options, however, in the case of Red Bull and all of their varied marketing communication activities, it suggests a multiple agency approach.

While the Sid Lee vignette mentions the agency’s involvement with Red Bull the vast international operations of Red Bull would suggest it using additional agencies.

Additional Questions (not in text) A.

Discuss the reasons why traditional advertising agencies have been developing IMC capabilities. What changes might these agencies have to make to improve their service?

IMC capabilities are developed in agencies because their clients are shifting their promotional dollars away from mass media advertising to other areas of marketing communication. By expanding their capabilities, traditional agencies can offer a full range of IMC services and provide a total communications solution to their clients. By expanding their IMC capabilities and services, traditional agencies can also make money from other areas of their clients promotional spending.

The greatest change that traditional agencies have to make to improve their IMC capabilities is to develop or acquire expertise in these other areas. Traditionally agencies have been experts in areas related to advertising including creative and media. Agencies have been acquiring these capabilities by purchasing companies such as interactive agencies, public relations and direct marketing firms or promotional agencies. Others have been working to develop these IMC skills internally through their hiring and training processes.

The decision as to whether to expand service offerings may not be as easy to make as one might wish.

The changes in the advertising marketplace—that is monies shifting from advertising to direct marketing, promotions and other areas may necessitate this expansion just to survive. Certainly the trend, even among smaller agencies, to provide these services is evidence that they recognize that they need to bring these monies “in house.” Beyond the requirement of the agency side, the client is now becoming more sophisticated and demanding. These clients are now recognizing the need to provide an integrated communications mix, and if it is not provided by their agency they will seek such services elsewhere.

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B. Discuss the pros and cons of using an in-house agency. What are some of the reasons why companies might change from using an in-house agency and hire an outside agency?

Some of the reasons why firms use in-house agencies include: (1) cost savings; (2) control; and (3) increased ability to coordinate marketing and promotional activities. Negative aspects include: (1) internal employees may have less experience and inferior skills than their external counterparts; (2) they may be less objective about the product and its capabilities; and, (3) they may be less flexible with respect to what they are willing and able to do with the product and/or brands programs. Companies often use an in-house agency when they have sufficient and capable staff to conduct the advertising and promotional activities themselves; they have a very large advertising and promotional budget and wish to save the costs of fees and commissions; and/or when they believe that the ability to coordinate and control the promotional activities is more feasible with this design.

Companies change from using an in-house agency and hire an outside agency for various reasons.

Marketers feel that the use of an outside agency provides greater objectivity with respect to the advertising. When an in-house agency is used, management may get too close to the advertising process and product and lose its objectivity when evaluating the ads. Outside agencies can provide a more objective perspective on the market and business that is not subject to internal biases and politics.

Companies often move from in-house to outside agencies as they become larger and their advertising and other marketing communication needs become greater. Rather than continuing to expand the inhouse agency, companies will move to using an outside agency that has the multiple services and expertise needed by the company. It should be noted that perhaps the major reason why outside agencies are used is that they provide the client with the services of highly skilled individuals who are specialists in the advertising area. Outside agencies also offer more flexibility to an advertiser as they can always switch agencies and hire a new one if they are dissatisfied with the work being done. It is much more difficult to terminate an in-house agency and hire new personnel to replace them.

C.

Discuss the reasons why marketers switch advertising agencies. Find an example of a company that has recently changed advertising agencies and analyze the reasons given for the change.

The relationship between a client and an agency is influenced by a variety of factors. These include perspectives on compensation policies, the demands clients place on agencies, the level of service the agency provides, the personalities of agency and client personnel, the performance of the client’s product or service, the perceived quality of the agency work in various areas (including account planning and management, creative, media, use of non-traditional media), and changes in the competitive situation. Changes in top management of a client may also affect the agency client relationship. New management may prefer a particular agency or certain approach to advertising and promotion which can affect the client’s relationship with the agency.

An advertiser may decide to switch agencies for a number of reasons. These reasons can apply to longterm clients as well. When marketers are having problems such as stagnant or declining sales or losses in market share they will often look to advertising. Often the problems are blamed on advertising agencies. In the competitive world or advertising, agencies are always looking for new business and major advertisers know they can attract a great deal of interest and attention when they put their accounts up for review.

IMC Exercise Find several examples of companies who have switched advertising agencies recently. Conduct research using sources such as Strategy Magazine, The National Post, Advertising Age, AdWeek and The Globe and Mail to determine the reasons why the company decided to change agencies and their rationale for choosing their new agency. Discuss the implications of your findings with respect to client-agency relationships. Find examples of advertising and other promotional programs that were developed by the old agency and Chapter 2 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 2-9

examples of ads developed by the new agency. Do you think the advertising campaign and messages being developed by the new agency are better and/or more appropriate for the company than those of the old agency? Why or why not?

IMC Comprehensive Project The assignment for this chapter is for the students to determine how they will organize for advertising and promotion both internally and externally.

IMC Project Assignment for Chapter 2 Your assignment at this stage of the project is to determine how you will organize your company for advertising and promotion. You must develop an internal organization chart and specify whether you are going to use a centralized or decentralized system and whether you will use an in-house agency or hire an outside agency. If you decide to hire an outside agency you should specify what type of criteria you will use for selecting an agency. Do you plan on using a full service agency or a creative boutique? What type of agency compensation system do you plan to use and why? How will you evaluate the performance of the agency? Attention should also be given as to whether you will be using any specialized marketing communication services such as direct-response agencies, sales promotion agencies and public relations firms. Would you prefer to use a large agency that has all of these integrated services capabilities?

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CHAPTER 3 CONSUMER BEHAVIOUR AND TARGET AUDIENCE DECISIONS Chapter Overview The purpose of this chapter is to review consumer behaviour and to demonstrate how knowledge and understanding of the consumer can be used in developing promotional decisions. This chapter utilizes the consumer decision-making process model as a framework for examining consumer behaviour. Attention is given to the three major variations in the consumer decision-making process: routine response behaviour, limited problem solving and extended problem solving. Consideration is given to how advertising and promotional strategies differ depending on the type of decision making process consumers are using. The chapter includes a description on how to make the initial decision of a promotional plan, namely, the target audience. It reviews the use of segmentation to determine the most appropriate profile of the target audience and highlights the significance of using current purchase behaviour as the key segmentation variable to initiate this decision.

Learning Objectives 1. Describe the consumer decision-making process and how it relates to marketing communication.

2. Contrast how the consumer decision-making process varies for different types of purchases and the effects on marketing communication.

3. Compare the similarities and differences of target market and target audience.

4. Identify the options for making a target audience decision for marketing communication.

5. Express why a profile of the target audience is important for message, media, and IMC tool decisions.

Chapter and Lecture Outline I.

THE CONSUMER DECISION-MAKING PROCESS

A brief introduction to consumer behaviour and an indication of the increased importance that this domain of study has assumed in marketing would be a good starting point. The instructor should discuss the fact that to operationalize the marketing concept it is critical that the marketer have an understanding of the consumer decision making processes. Likewise, to effectively design effective advertising and promotions programs, these processes must be understood and considered. It is important to point out that the development of successful marketing communication programs begins with understanding why consumers behave as they do.

Consumer behaviour is defined as the process and activities that people experience when searching for, selecting, purchasing, using, evaluating and disposing of products and services so as to satisfy their needs and desires. You will be going through the stages of the model, discussing what occurs at each and how advertising and promotion can be used to influence consumer decision-making.

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The consumer purchase decision process is generally viewed as consisting of sequential steps or stages through which the buyer passes in purchasing a product or service. Figure 3-1 of the text shows the steps in this process such as need recognition, information search, alternative evaluation, purchase decision, postpurchase evaluation. While not shown, consumers may back-track to other stages, the post-purchase eventually returns to the need recognition stage, and the post-purchase evaluation can be continuous and complex, especially with considerable online behavior manifested in social media.

A.

Need recognition—the first step in the consumer decision-making process is that of need recognition, which is caused by a difference between the consumer’s ideal state and actual state.

The way a consumer perceives a need and becomes motivated to solve a consumption problem will influence the remainder of the decision making process. To better understand the reasons underlying consumer purchases, marketers develop considerable attention to examining motives or factors that compel or drive a consumer to take a particular action. One approach to understanding consumer motivation is the classic theory of human motivation popularized by Maslow. His hierarchy of needs postulates five basic levels of human needs: physiological needs, safety needs, social/love and belonging needs, esteem needs, and self-actualization needs.

The implications of Maslow’s hierarchy for developing advertisements that appeal to different types of needs should be discussed.

B.

Information Search—the second step in the consumer decision making process is information search. Internal search involves a scan of information stored in memory to recall past experiences or knowledge regarding purchase alternatives. External search involves go to outside sources to acquire information such as personal sources, marketer controlled sources, public sources, or through personal experiences such as examining of handling a product.

C.

Alternative Evaluation—after acquiring information during the information search stage the consumer moves to alternative evaluation. At this stage the consumer compares the various brands and services he or she has identified as being capable of solving the consumption problem and satisfying the needs or motives that initiated the decision process. Two important factors that are important during the alternative evaluation stage are: 1. The evoked set is a subset of all the brands of which the consumer is aware. A goal of marketers is to ensure that their brands are included in the evoked set of consumers.

2. The evaluative criteria are the product attributes that are used to compare different alternatives. Consequences are the specific events or outcomes, known as benefits, that consumers experience when a product or service is purchased and/or consumed. Functional benefits are tangible and can be experienced directly by consumers. Performance benefits refer are more intangible and subjective usage outcomes. Experiential benefits are related to how a product makes consumers feel during consumption.

In general, all messages attempt to place a brand within a target audience’s evoked set (e.g., awareness) and contribute to a consumer’s evaluation of the brand (e.g., attitude).

D.

Purchase Decision—as an outcome of the alternative evaluation stage the consumer may develop a purchase intention or predisposition to buy a certain brand. Once a purchase intention has been made and an intention formed, the consumer must still implement it and make the actual purchase. Many purchase decisions are made on the basis of brand loyalty which is a preference for a particular brand that results in its repeated purchase. Purchase decisions for nondurable, low involvement items take place in the store and decision and purchase occur almost simultaneously.

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For these types of decisions top-of-mind awareness of a brand is important as is the influence of packing, shelf displays, point-of-purchase material, and sales promotion tools.

E.

Postpurchase Evaluation—the consumer decision process does not end once the product or service has been purchased. After using a product or service the consumer compares the level of performance with expectations. Satisfaction occurs when the consumer’s expectations are either met or exceeded, while dissatisfaction results when performance is below expectations. Another possible outcome of purchase is cognitive dissonance which refers to a feeling of psychological tension or postpurchase doubt a consumer may experience after making a purchase choice.

Consumers often look to advertising for supportive information regarding the choice they have made.

F.

Types of Decision Making—consumers do not always engage in all five steps of the purchase decision process nor proceed in the sequence presented. There are three major variations of the consumer decision making process: 1. Routine response behaviour—purchase decisions for low-priced, frequently purchased products are based on a habitual or routine choice process consisting of little more than recognizing the problem, engaging in brief internal search and making the purchase.

Marketers of products characterized by routine response behaviour must get and/or maintain their brands in the consumers’ evoked set and encourage brand loyalty. Those not in the evoked set must encourage trial and brand switching.

2. Limited problem solving—often a consumer has a limited amount of experience in purchasing a product or service but in somewhat aware or knowledgeable of the brands available and/or the criteria to use in making a purchase decision. When consumers purchase a product through limited problem solving, marketers should make information available to consumers that will help them make their decision.

3. Extended problem solving—the most complex and detailed form of decision making occurs when consumers have little, if any, knowledge regarding the criteria to use in making a purchase decision or the various brands available. As with limited problem solving, marketers of products characterized by extensive problem solving must provide consumers with detailed information that helps them in making their purchase decision.

G.

Group Decision Making Marketers must understand the various roles in the group decision making process such as initiator, information provider, influencer, decision maker, purchaser and user or consumer.

They must also determine who is responsible for the roles in the decision making process so messages can be targeted to them. Messages must also be designed so as to appeal to the appropriate member(s). Figure 3-3 shows an application of this with the example of family decision-making. Other applications could include households in which people are not related (e.g., college and university students).

II.

TARGET AUDIENCE DECISION

A.

The marketing planning process involves the steps shown in Figure 3-4. The marketing strategy is directed towards the target market. Selection of the target market is not only a very important part of a firm’s marketing strategy, but also has implications for advertising and promotional Chapter 3 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 3-3

strategy and tactics. It is used a guide to determine the target audience decision, a primary consideration at the start of the promotional planning process.

B.

Segmentation Variables—segmentation involves the identification of the needs and wants of specific groups of people for the purpose of selecting a target, for either marketing strategies or marketing communication strategies.

A number of ways of segmentation are available (Figure 3-5) to the planner including: •

Geographic—the market is divided into geographic units with alternative marketing strategies targeted to each

•

Demographic—division involves demographic variables such as age, sex, family size, income, education and social class among others

•

Socioeconomic—division involves variables such as income, education, and occupation.

•

Psychographic—markets are divided based on the values, lifestyle, personality, culture, and social class.

•

C.

•

Values- as demonstrated by VALS and PRIZM

•

Lifestyle—activities, interests, opinions (AIO).

•

Personality—enduring characteristics, e.g., introvert.

•

Culture—culture refers to the complexity of learned meanings, values norms, and customs shared by members of a society. Subcultures refer to smaller groups or segments in a society that possess similar characteristics that set them apart from the larger cultural mainstream. Subcultures may be based on age, geography, race, religion, racial, lifestyles, and ethnicity.

•

Social Class—social class refers to relatively homogenous divisions in a society into which people sharing similar lifestyles, values, norms, interests, and behaviours can be grouped. Social class structures in Canada are generally based on occupational status, educational attainment and source or income. Social class is important to marketers because consumers within social stratums often exhibit similar values, life styles and buying behaviour and provide a natural basis for market segmentation.

Behaviouristic—this form of segmentation divides consumers into groups according to their brand loyalty, user status, usage rate, situation or benefits sought. These characteristics are then usually combined with one of the previously mentioned bases to develop segment profiles. Behaviouristic segmentation also considers both the purchase and the usage situation.

Promotional Planning Process— Similar to the marketing planning process, the promotional planning process uses the segmentation variables to identify the target audience. Marketing communication is directed to particular groups of consumers within the decision-making process stages necessitating specific messages or IMC tools for persuasion purposes to influence attitudes and behaviours. Instructors should be careful to point out the similarities and difference of target Chapter 3 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 3-4

market and target audience and how they may be identical in some circumstances and completely different in others.

D.

Target Audience Options—R&P state that the primary and most logical factor for initially defining a target audience is the current behaviour of consumers. R&P identified two customer groups and three non-customer groups.

1. Customer groups: •

direct communication to brand loyal customers who regularly buy their firm’s product.

•

consumers habitually purchase from a few favourites or those brands within their evoked set for some product categories; thus, favourable brand switchers are a second customer group highlighted by R&P.

2. Non-customer groups: •

New category users are those customers that are not yet purchasing within a product category.

•

Other brand switchers purchase a few different brands within a category.

•

Other brand loyals purchase only one brand and are completely loyal.

Examples of ads and other IMC tools are useful to demonstrate how this approach works. It is fairly obvious to discern whether a message is directed to customers or non-customers, however some students have difficulty making the distinction. Discussion allows instructors to also note examples where it may be less obvious. The additional profiling variables of demographic and other segmentation variables can be highlighted. Multiple examples from one brand can show how a firm could have more than one target audience to reinforce the point in Chapter 1.

IV.

IMC PLANNING: TARGET AUDIENCE PROFILE

The implications of consumer behaviour and target audience decision are summarized with a conclusion on the importance of using the segmentation variables appropriately so as to give direction for decisions in the areas for message creation, media placement and IMC tool usage. This planning section allows students to see how the IMC plan will unfold with a complete profile of the target audience.

Teaching Suggestions Because of the consumer emphasis dictated by the marketing concept, consumer behaviour has increased in importance, and has found its way into virtually every aspect of marketing, including advertising and promotion. Thus, it is very important for the student to understand that advertising and promotion strategies are designed for the purpose of influencing customer behaviour. Promotional planners require understanding of consumer behaviour including the way consumers relate to products and services, the goals and motives they seek to achieve and satisfy, and the process by which they make purchase decisions.

You should emphasize that the success marketers have in influencing the purchase behaviour of their target customers depends in large part on how well they understand their purchase patterns and behaviour.

The chapter links consumer behaviour with the target audience decision. Segmentation approaches are reviewed as the concepts are relevant for both marketing and promotion decisions. Students will be familiar Chapter 3 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 3-5

with using segmentation for target market decisions of a marketing plan; however, promotion often requires more precise identification and profile for its intended recipient, or target audience. This important distinction is highlighted and the instructor should be careful to use examples where we can clearly see a specific target audience in the ad, that is obviously consistent with who the brand may be targeting with its overall marketing plan. Some students may have covered some of this material in a basic marketing or consumer behaviour class. However, this chapter will still be valuable to them since it discusses how this material is used in the development of advertising and promotional programs.

Vignette 1. Does it look like Ikea’s new approach for its advertising will encourage consumers to continue shopping at the store?

Ikea’s history of minimal use of resources in the production and delivery of furniture is a significant competitive advantage that its advertising often communicated as a key differential advantage (i.e., chapter 6 positioning). The ads identified show continued commitment in this direction, and given the current social environment, it appears to be a key message to communicate to encourage consumers to continue visiting. Of course there are other characteristics about the store to emphasize, but the environmental point or re-use point is certainly very salient for many segments.

IMC Perspective 3-1 1. Did Svedka cross the line regarding consumers’ privacy?

In some ways, Svedka is commended for innovative advertising based on usage data, and awards organizations recognized the brand for this reason. However, an alternative view is the “creep” factor where it may seem like the brand is following consumers too closely. As such, the story raises the point of the privacy found in the Internet media chapter. Instructors could set up a debate on the merits of this advertising based on those for and against it. Instructors should also communicate how the message relates to consumer decision making, one of the main topics of the chapter.

IMC Perspective 3-2 1. Why was this message so persuasive in encouraging customers of other brands to switch?

The Koodo campaign clearly shows the value of the target audience decision in action. It highlights a key motivator – dissatisfaction – and identifies those who are most likely to switch to their brand and on what evaluative criteria, as discussed in the previous section. Instructors can visit this story when teaching positioning material as well since the persuasion point is so significant.

Answers to Review Questions 1. What are the stages of the consumer decision-making model? Why are they important for planning marketing communication?

Marketing communication can be directed to each stage of the model. Ads can highlight need recognition initially (e.g., TV) while additional information can be found at the brand’s website (e.g., information search). Comparisons with other brands could be obtained at independent review website (e.g. JD Power) that influence the alternative evaluation stage. Finally, direct communication on mobile devices indicating a promotional offer from GPS alerts could influence purchase while direct mail pieces can maintain satisfaction levels after purchase. Furthermore, the nature of the message can Chapter 3 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 3-6

evolve at each stage as well. Thus, the model is useful for planning the basic marketing communication decisions of message and media, that can be extended to other IMC tools including events etc.

2. How do the stages of the consumer decision-making model differ with the three types of problem solving?

The three variations of the decision making process are (1) routine response, (2) limited problem solving and (3) extensive problem solving. Marketing communications will differ in each.

Routine response behaviours are close to habits. As a result, they require little external search (if any) and there is little or no reliance on communications. The role of advertising and promotions is more of one of reinforcement, and of reminding the consumer that it is time to purchase. The role of providing information for evaluation is minimal.

Limited problem solving involves both internal and external search behaviours. As a result, the role of marketing communications increases. Consumers are more likely to have recognized the problem, and are using advertising and other forms of communication to provide information for evaluation.

Consumers are also more likely to employ a variety of sources of information in the process, and the marketer wants to be sure that his/her product is considered in the evoked set.

The consumer’s most extensive use of communications is likely to occur in the extensive problem solving situation. Decisions are given much more thought, external search is more involved, and there is a much greater reliance on advertising, sales persons, friends, family, etc. as input into the decision.

As a result, the responsibility of communications is increased as the marketer wants to have the information readily available to consumers when and where they want it.

3. When defining a target audience for communications, why is it a good idea to use consumer behaviour with respect to your brand as the primary variable before using variables such as demographics or lifestyle?

The behavioural variable is considered first for two reasons. First, it links the communication plan to the marketing plan more specifically. Secondly, actual behaviour signals or leads to sales, something to which most advertising campaigns hope to achieve as an end result. Most good advertising reflects the underlying purchase motive of the target audience. The purchase motive is related to behaviour because consumers act upon their needs during a goal seeking decision process. Thus, the expected behaviour of the target audience is a prime consideration.

4. What are the five customer groups? Explain in terms of beverage products like soft drinks or beer.

From the point of view of Coca-Cola, advertising could be directed to those who only drink Coca-Cola when drinking a cola product (e.g., brand loyals). Alternatively, the brand could target those who regularly switch between Coca-Cola and Pepsi (e.g., favourable brand switchers). Looking at the other side of customer groups, Coca-Cola could target Pepsi drinkers (e.g., other brand loyals) or those who drink Pepsi and RC Cola, or perhaps a generic cola product like PC (e.g., other brand switchers).

Finally, those who do not drink cola may be targeted (e.g., new category users), or those who do not even drink soft drinks (e.g., new category user). Of course these two non-category user groups are derived from different market partitions. An important point to note is that specific brands should be identified so that there is an application of the model.

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5. Why is a complete profile of a target audience important for marketing communication?

A complete profile of a target audience is necessary for message, media and IMC tool decisions.

Knowing the background of the target audience in terms of specific segmentation variable (e.g., psychographic) allows the planner to know how to construct the persuasive message with accurate visuals and imagery that will resonate. Similarly, knowing the background on variables like geography or usage allows managers to know which media and media vehicles to use to reach the target audience for exposure purposes. Finally, knowing other variables like lifestyle allows the planner to estimate the correct IMC tool to use in terms of public relations or social media.

Answers to Applied Questions 1. Explain the difference between functional, performance, and experiential benefits. Why might the messages recommended in the IMC plan for smartphones focus on each separately or together?

Functional benefits are concrete outcomes of product usage that are tangible and objectively related to the purpose of the product. Performance benefits are less tangible and more subjective product usage outcomes based on how the product attributes abstractly affect a consumer. Experiential benefits are related to how consumers feel while consuming the product. These emotions can be psychologically or socially based. Managers deciding upon the messages can select any of the three to emphasize or show the connection among them. Auto commercials are a good way to explore this point. For example, instructors can highlight ads that communicate the existence of safety fetures, like the example of air bags in the subcompact car. Other ads could demonstrate how a safety feature works for example (performance). Finally, another ad might show the reassurance (feelings) of the safety feature. It is important for students to see that for virtually any message, there is an alternative that could have been considered which opens debate as to whether the most effective was selected.

2. Considering a group purchasing situation you have previously experienced, like going out for the evening. What role did each person play during pre-purchase, purchase, consumption, and postpurchase.

Initiator—different group members may initiate the purchase decision process. For example, a friend who is very much into music may request the group consider going to see a new band or music artist who is visiting their city for one night only.

Information provider—different levels of expertise in product categories may lead to members assuming the role of information provider. Another friend, may suggest that they consider full evening by looking for different restaurants for dinner before the concert, and look for a club to visit after the concert.

The influencer—each group member may have their own criteria in mind in the purchase decision process. Some may like the band in question and support the idea, while others may suggest doing something else entirely like going straight to the club.

The decision maker—who actually makes the purchase decision? In such a situation, one leader may emerge who ultimately has a final say, with everyone following their rationale or logic.

The purchasing agent—regardless of the various roles assumed, one person may take on the responsibility for buying the tickets or making reservations.

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The consumer—Presumably all the friends would enjoy the evening and like being with one another no matter what the final decision ended up being since they all wanted to go out and be together at various entertainment activities.

3. In what situations is the target audience and the target market the same? In what situations is the size of the target audience larger or smaller than the target market?

The target market is the focus of the entire marketing mix while the target audience is the focus of a particular communication tool or part of a communication program. In some instances, the target audience is smaller than the target market. For example, if a firm runs an ad and promotion to entice consumers to switch to their brand, they are not reaching the complete target market since this would include its own customers. For small firms or firms with a brand new product, both the target market and target audience may be exactly the same. In this case, the firm is not trying to advertise to a particular target audience to increase their usage or alter their purchasing behaviour. The target audience is often larger than the target market for a product in public relations activities. By their very nature, public relations often times attempt to influence a broad community, of which numerous people would not be actual purchasers of the product.

4. Examine the ads in this chapter and identify the target audience the ad is directed toward using the model of five customer groups. Suggest other relevant segmentation variables to further profile the target audience. Also identify the relevant segmentation variable to pinpoint the target market.

This question raises the point that marketers use a variety of segmentation variables to identify their target market, and that many can be considered for executing their marketing strategy. Likely, students will be able to observe that some variables tend to be more common. Furthermore, while a variable or two may be used for segmenting, additional variables are relevant to further describe the market to give more precision for the marketing decisions. For target audience, if students adhere to the R&P idea, they will begin to realize that the customer status (i.e., customer or non-customer) is a strong way to begin one’s promotional planning since the content of the message can be executed more exactly to influence the next purchase.

5. Which segmentation variables are more useful or appropriate for profiling a target market for an automobile like the Mini? Similarly, which are more useful or appropriate for profiling the target audience for an automobile like the Mini?

This question extends the points made in question 5 with an additional application with a particular brand. The exact target market variables selected is reasonably varied and the point to make is that the student should use some information to make a logical conclusion. One might suggest that personality or values may play a prominent role, as would geography as city a consumer maybe most likely. Mini has such low volume it must resort to always targeting new customers in its communication, so it will likely try to attract other brand switchers. Although a good case could be made that much of their advertising encourages those with a certain personality to purchase a brand new car for the first time.

Additional Discussion Questions (not in text) A. After buying a new car, a customer receives direct mail such as a driving magazine or information on automobile care from the manufacturer. Explain why this is effect or ineffective communication.

This is likely to be very effective communication as it contributes to building the relationship between the care company and its current customer. The customer is further informed about the features and benefits of their purchase and the customer receives important information for maintaining the value Chapter 3 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 3-9

of their asset in a very significant financial investment. Most customers would likely be interested in articles or pictures of newer car models despite owning their current car since the purchase is typically extensive problem-solving activity that one would like to be prepared for.

B. Use the model of consumer decision making to analyze the purchase process a consumer would go through in purchasing a laundry detergent versus a new computer. Discuss the role advertising and other forms of promotion would play at each stage of the decision process.

The purchase of laundry detergent would be characterized by routine response behaviour since this is a product the consumer has probably purchased many times before. The decision making process would consist of little more than recognizing that one is running low on detergent and replenishing the supply during a shopping trip. The consumer will spend little effort engaging in external search or alternative evaluation as the purchase process for such products is relatively automatic. Decision making will be minimal if the consumer is loyal to a particular brand of detergent. If the consumer is not loyal to any particular brand, s/he may be influenced at the actual point-of-purchase through shelf displays, price deals or other types of promotion. Advertising will be important in getting a brand of detergent into the consumers evoked set and keeping it there. For a new brand, advertising may be particularly important in generating awareness and interest. Sale promotion techniques such as samples and coupons will also be used to encourage consumers to try new brands or switch brands.

The purchase of a new computer will be characterized by limited or extended problems solving, depending on the consumers level of prior knowledge or familiarity with alternative brands. The consumer goes through each stage of the consumer decision making process and spend considerable time and effort on external information search and in identifying and evaluating alternatives.

Advertising will play a very important role in providing consumers with information about computers and what they should be looking for in evaluating alternatives. Direct marketing may also be used to send consumers information that will be helpful in evaluating a brand and making the purchase decision. Personal selling efforts by in-store sales personnel will also be very important since consumers may rely on knowledgeable sale people to learn about the alternatives and make a choice.

C. How is it possible for a brand to communicate to both customers and non-customers in an IMC plan?

Brands can select different media for advertising or different IMC tools entirely to reach customers and non-customers. For example, if a customer’s personal information is in a data-base, customized promotional offers or advertising messages can be delivered directly. Alternatively, television or other media that reaches a wider audience that would include many non-customers can be used to attract those not currently buying the brand. In each of these cases, the selling message can be tailored specifically. For example, references to past experiences can be part of the message to customers while messages to non-customers might make competitive references or mention sources of dissatisfaction for those considering switching from their current brand.

D. Discuss the three variations of the consumer decision-making process. What is the importance of communications in each type?

Three decision making process are (1) routine response, (2) limited problem solving and (3) extensive problem solving. Obviously, the role of marketing communications will differ in each.

Routine response behaviours are close to habits. As a result, they require little external search (if any) and there is little or no reliance on communications. The role of advertising and promotions is more of one of reinforcement, and of reminding the consumer that it is time to purchase. The role of providing information for evaluation is minimal.

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Limited problem solving involves both internal and external search behaviours. As a result, the role of marketing communications increases. Consumers are more likely to have recognized the problem, and are using advertising and other forms of communication to provide information for evaluation.

Consumers are also more likely to employ a variety of sources of information in the process, and the marketer wants to be sure that his/her product is considered in the evoked set.

The consumer’s most extensive use of communications is likely to occur in the extensive problem solving situation. Decisions are given much more thought, external search is more involved, and there is a much greater reliance on advertising, sales persons, friends, family, etc. as input into the decision.

As a result, the responsibility of communications is increased as the marketer wants to have the information readily available to consumers when and where they want it.

E. Explain the concept of an evoked set. Why is this concept important to marketers? Give examples of an evoked set, and how marketers might attempt to influence consumers to gain consideration.

The numerous options for purchase in any product category direct consumers to consider only a subset of the alternatives available, leading to an evoked set. Often referred to as a consideration set, this subset of brands are those that will be actively considered in the purchase decision process. This is important since if a brand does not get included in the evoked set, it is not likely to be purchased.

Consider the purchase of a new car. The choice of alternatives runs from low end entries like Hyundai, Kia, etc. to expensive luxury and sports cars—not to mention SUV’s and others. It is highly unlikely that a consumer would consider the entire range of possibilities. The list would be narrowed down given decision criteria to a much smaller grouping, based on purchase criteria. It may lead to consideration of only Japanese cars, American cars or German cars. It might be limited based on price or past experiences. Whatever the criteria used, the entire list of cars will not be considered.

IMC Exercise Have the class collect ads that reflect some of the aspects of consumer behaviour discussed in the text such as stages of the decision process, Have them bring the ads to class and explain which aspect it reflects and how marketers might be appealing to this particular aspect of consumer behaviour. Each of the so-called generations—Generation Y and X have their own unique values, lifestyles, etc. Have students discuss these, and then bring in examples of ads designed to appeal to each.

IMC Comprehensive Project At this stage of the project students should be analyzing the consumer decision making process for their product or service and considering different segmentation variables that will be useful.

IMC Project Assignment for Chapter 3 Analyze the marketing situation analysis for the product or service you have chosen. You can use the marketing and promotions process model shown in Figure 3-5 as well as some of the factors shown in Figure 1-5 from Chapter 1 as a guideline to conduct your situation analysis. For the consumer analysis, describe the consumer decision process for your product/service as shown in Figure 3-1. Explain what factors are relevant at each stage. What are the implications of your situation analysis for the development of your IMC plan? How will the market for your product/service be segmented? Which segments will be targeted and why? What will be your target audience for your IMC programs?

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CHAPTER 4 COMMUNICATION RESPONSE MODELS Chapter Overview The purpose of this chapter is to examine the communication process by introducing the student to the fundamentals of communication and examining models and perspectives of how consumers respond to advertising messages. A model of communication is presented which introduces the controllable elements of the communications process—source, message, channel and receiver. The chapter is devoted to examining the target audience or receiver and the process by which consumers respond to advertising and other promotional messages. The response process is analyzed in terms of traditional response hierarchy models as well as alternative response models. Attention is given to comparing alternative response models such as the standard learning versus low involvement models. The chapter also examines the cognitive response approach and Elaboration Likelihood Model to show how more detailed analyses can be made of receivers’ cognitive processing of marketing communications. The end of the chapter attempts to resolve the debate with a model more suitable for decision-making.

Learning Objectives 1. Explain the elements of the communication process and identify the role of marketing communication.

2. Contrast traditional communication response models and alternative response hierarchies.

3. Develop the response processes of receivers of marketing communication through two models of cognitive processing.

4. Illustrate a response model for managerial decision making.

5. Construct ideas on how the knowledge of response models can be used for IMC planning.

Chapter and Lecture Outline I.

A MODEL OF THE COMMUNICATION PROCESS

A commonality shared by all elements of the promotional mix is that their function is to communicate.

Thus, it is important that advertising and promotional planners understand the communication process.

Communication is defined as the “passing of information,” the “exchange of ideas,” or the “process of establishing a commonness or oneness of thought between a sender and a receiver.” For communication to occur there must be some common thinking or ground between the two parties and a passing of information.

The communications process is often very complex with success depending on factors such as the nature of the message, audience interpretation and the environment in which it is received along with the receiver’s perception of the source and medium. A model of communication that represents the elements of the communications process is shown as Figure 4-1 that include: A.

Source—the sender or source of a communication is the person or organization that has information to share with another person or group. It should be noted that the source can be an individual (e.g., salesperson or hired spokesperson) or a nonpersonal entity such as the Chapter 4 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 4-1

corporation or organization itself. The receivers’ perception of the source influences the manner in which the communication is received, interpreted and responded to.

B

Encoding—the process of putting together thoughts, ideas and information into a symbolic form to communicate a message. The sender’s goal is to encode the message in such a manner so as to ensure that it will be understood by the receiver.

C

Message—the encoding process leads to the development of message content that contains the information or meaning the source or sender hopes to convey. Messages can take a variety of forms and may include symbolic forms or signs. The message content decision is found mostly in the creative strategy decisions of Chapter 7. The message must be put into a transmittable form that is appropriate for the channel of communication being used. Advertising messages range from simply written words or copy that will be read or heard as a radio message to the expensive production of elaborate television commercials with a great deal of visual impact and imagery.

Two component, message structure and message design, are two additional decisions reviewed in Chapter 8.

D.

Non-Personal Channel—those which carry a message without involving interpersonal contact between sender and receiver. These channels are often referred to as the mass media as messages transmitted through them are sent to many individuals at one time. The two major categories of nonpersonal channels are print and broadcast media.

E.

Personal Channel—involve direct interpersonal contact with target individuals or groups. For example a salesperson serves as a personal channel of communication when delivering a sales presentation. The growth of social media heightened the influence of personal channels that are mediated by digital communication devices.

F.

Receiver—the receiver is the person(s) with whom the sender shares thoughts or information.

Receivers are generally viewed as the consumers in the target audience targeted by the firm’s marketing and promotional program. The target audience may consist of individuals, groups, niche markets, market segments, or a general public or mass audience.

G.

Decoding is the process of transforming and interpreting the sender’s message back into thought and is heavily influenced by the receiver’s frame of reference or field of experience. Effective communication is more likely when common ground or shared meaning or understanding exists or has been established between the sender and receiver.

H.

Noise—throughout the communications process the message is subject to noise which refers to factors that can distort or interfere with adequate reception or comprehension. Noise can occur during the encoding, transmission, or decoding of a message. Noise can also occur because of a lack of common ground or understanding between the sender and receiver.

I.

Response—refers to the reaction the receiver has after seeing, hearing and/or reading the message. These responses can range from non-observable actions such as storing information in memory to taking immediate actions such as ordering a product seen in a direct response ad.

J.

Feedback is the part of the receiver’s response that is communicated back to the sender and takes a variety of forms. Feedback provides the sender with a way of monitoring how the message is being decoded and received by the target audience.

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II.

THE RECIEVER’S RESPONSE

An important aspect of developing effective communication involves understanding the receiver’s response to marketing communication so that promotional planners can design message to persuade and influence a member of the target audience. This section covers three traditional response hierarchy models and then discusses alternative models of the receiver’s response.

A.

Traditional Response Hierarchy Models—Figure 4-2 in the text shows three response hierarchy models. These models are discussed giving attention to their origin and implications and include: •

The AIDA Model (attention→interest→desire→action)

•

The Hierarchy-of-Effects Model (awareness→knowledge→liking→preference→conviction→purchase

•

The Information-Processing Model (presentation→attention→comprehension→yielding→retention→behaviour)

B.

Implications of the Traditional Hierarchy Response Models—the hierarchy models are useful to promotional planners since they delineate the series of stages potential purchasers experience, moving from a state of no or little awareness to the point where they are ready to purchase. The hierarchy models can also be useful as “intermediate” measures of communication effectiveness.

Knowing where potential buyers are with respect to the stages of the hierarchy helps the marketers know the specific communication task that must be performed.

All of these models view the response process as consisting of movement through a sequence of stages and assume a similar ordering whereby cognitive development precedes affective reaction which in turn precedes behaviour. While this is a logical progression that may be accurate in many situations, the response sequence may not always operate this way which gives rise to alternative response hierarchy models.

C.

Alternative Response Hierarchy Models—research and theorizing led to a questioning of the cognitive → affective → conative sequence of the response process and resulted in the development of alternative orderings of these stages. Michael Ray’s “three-orders” model of information processing, which is shown in Figure 4-3 of the text, identifies three alternative orderings of these stages based on perceived product differentiation and product involvement.

The concept of involvement explains the way consumers process information and make purchase decisions. However, a problem that has plagued the study of involvement has been defining and measuring the construct.

1. Standard learning model—in many purchase situations consumers go through the response process in the manner depicted by the traditional communications models or a “learn → feel → do” sequence or hierarchy. Under this hierarchy the receiver is viewed as an active participant in the communications process who actively seeks or gathers information through “active learning.”

2. Dissonance/attribution model—in some situations consumers may behave first then develop attitudes or feelings as a result of that behaviour and learn or process information that supports their attitudes and behaviour. The dissonance or attributional hierarchy consists of a “do → feel → learn” sequence. This hierarchy may occur when consumers are trying to Chapter 4 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 4-3

reduce post-purchase dissonance or anxiety that results from doubt or concern over a purchase. This dissonance reduction process involves “selective learning” whereby the receiver seeks information that supports the choice made and avoids information that does not bolster the wisdom of the decision.

3. Low-involvement model—the low involvement hierarchy is thought to characterize situations of low consumer involvement in the purchase process. The response hierarchy under low involvement consists of a “learn → do → feel” sequence and the receiver is viewed as engaging in “passive learning” and “random information catching” rather than active information seeking.

D.

Implications of the Alternative Response Hierarchy Models —Promotional planners would consider which of the three models is most relevant for describing how their target audience would respond to marketing communication. Subsequently, they would set the most realistic objective and make the most logical promotional decisions in terms of message, media and IMC tool.

III.

THE RECEIVER’S PROCESSING OF COMMUNICATIONS

The hierarchical response models were the primary focus of approaches to studying receivers’ responses to marketing communications for decades. However, the inability of these approaches to explain what might be causing or determining these reactions to the message has led to an interest in understanding the nature of processing of advertising and other persuasive communication. This section reviews the perceptual system to understand how receivers process advertising messages and two models designed to explain what occurs during the processing of ad messages. By processing, we are referring to the time duration when a receiver is watching a video ad message on TV or virtually, reading a display ad in print or online, or listening to an audio message on the radio or digitally (e.g., podcast). Processing concerns how external information (such as an advertising message) is transformed into meanings or patterns of thought and how these meanings are combined to form judgments.

A.

B.

Processing of Ad Messages—perception is the process by which an individual receives selects, organizes, and interprets information to create meaning. There are a number of processes involved in perception which determine how marketing information will be received: •

Selective exposure—consumers choose whether or not to make themselves available to information. As part of this, sensation is the immediate and direct response of the senses to a stimulus such as an advertisement.

•

Selective attention—consumer chooses to focus attention on certain stimuli while excluding others.

•

Selective comprehension—interpreting information on the basis of the consumer’s own attitudes, beliefs, motives and experiences.

•

Selective retention—consumers do not remember all information they receive due to the clutter of advertising messages and store the most relevant and important information in their memory.

Cognitive Response Model—a commonly used method for examining consumers cognitive processing of advertising messages is through the assessment of their cognitive responses or thoughts that occur to them while reading, viewing, and/or hearing the communication. The focus Chapter 4 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 4-4

of this approach, which is commonly used by academic researchers as well as practitioners, is to determine the types of thought evoked by an advertising message and how these responses relate to traditional “outcome” measures such as attitude toward the ad, brand attitudes and purchase intention. The model shown in Figure 4-4 depicts the three types of cognitive responses and their relationship to attitude the brand, attitude to the ad and purchase intention: 1. Product/Message thoughts—counterarguments and support arguments 2. Source-oriented thoughts—source derogations and source bolsters 3. Ad execution thoughts—thoughts individuals have toward the ad itself. These thoughts can be either positive or negative and are important because they are related to attitude toward the ad which is an important determinant of advertising effectiveness.

C.

Elaboration Likelihood Model—the Elaboration Likelihood Model (ELM) developed by Cacioppo and Petty has become a very popular way of analyzing differences in the way consumers process and respond to persuasive messages. The ELM is presented in Figure 4-5 of the text. According to the ELM, there are two basic processes or routes to persuasion, which are based on motivation and ability to process the message.

Under the central route to persuasion the receiver is viewed as a very active and involved participant in the communications process whose ability and motivation to attend, comprehend and evaluate a message are very high. Under the peripheral route to persuasion the receiver is viewed as lacking motivation or ability to process information and is not likely to engage in detailed cognitive processing. The receiver may use “peripheral cues” such as focusing on the message source or executional elements of the ad rather than message content.

Classical conditioning, known as a behavioural learning theory, can help explain how the peripheral route works. Behavioural learning theory emphasizes the role of external or environmental stimuli in causing behaviour while minimizing the significance of internal psychological processes. Classical conditioning assumes that learning is essentially an associative process whereby the relationship between an unconditioned stimulus and conditioned stimulus develops through repetition and contiguity. Classical conditioning has applications in advertising as products and services are become associated with perceptions, images, and emotions that evoke favorable reactions from consumers.

D.

Conclusion of Processing Models— A review of how advertising works concluded that there is little support for the concept of a hierarchy of effects in the sense of a temporal sequence. A key conclusion is that individual responses to advertising should be evaluated based on product category experience and brand experience in addition to cognitive and affective responses as demonstrated in the processing models.

IV. RESPONSE MODEL FOR MANAGERIAL DECISION MAKING This chapter continues with Rossiter and Percy’s perspective presents a managerial framework to make promotional decisions that account for the academic and practitioner research on advertising over the past fifty years. Its similarity to the more theoretical conclusion is readily observed. The experience element is captured by R&P’s view that the target audience based on previous purchase behaviour of a brand be the foremost characteristic initially considered in establishing a communications plan.

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A.

Processing of Messages— The processing of marketing communication messages is illustrated in Figure 4-6. Moreover, the cognition and affect considerations are noted in the processing stage as are the high and low involvement processing consistent with the more recent approaches for understanding audience responses to marketing communication messages.

B.

Communication Effects of Messages—The communication effect of marketing communication messages are also shown in Figure 4-6 indicating once again the relevance of cognition and affect as the brand attitude effect is comprised of both elements in its measurement. It is also evident in category need, and need fulfillment is energized via consumer motivation; a psychological process with strong emotion. The brand components shows the managerial applicability with specific effects for an individual brand manager rather than communication in general.

Teaching Suggestions This chapter is designed to introduce the student to the fundamentals of communication. It is the most theoretical chapter in the text. However, we feel this material is very important as it presents the basic elements of communication and provides a detailed examination of the process by which consumers respond to marketing communications. The material also provides the student with a foundation that is important for subsequent chapters of the text. We feel it is very important to stress to the student that communication is the common goal of all promotional mix elements. They must have a solid foundation in this area if they are to evaluate other areas of advertising and promotion such as creative strategy, media strategy and alternatives and effectiveness measurement.

We have found that it is helpful to emphasize to students that decisions regarding the controllable elements of the communication program, such as selecting a source, developing a message strategy and appeal, and selecting advertising media, cannot be made unless the promotional planner has some insight into how members of the target audience will respond to these factors. Students need to have some understanding of the traditional hierarchical response models including their implications and limitations. It is also important to point out the limitations of the traditional cognitive →affective → conative sequence assumed by these models and to cover the alternative response hierarchies. After reviewing the alternative models of the response process, it should be apparent to the student that the traditional standard learning hierarchy may not be appropriate in many communication situations. The final sections show the current direction of advertising theory that accounts for processing and communication effects in which both exhibit cognitive and affective elements, and there is no prescribe hierarchy of the receiver’s response.

Vignette 1. How could brands of other product categories emulate the spirit of Harley-Davidson’s promotional and design activities?

This question allows instructors to review Harley-Davidson’s unique promotional efforts and lets students see how the brand involved its loyal customers to many experiential activities. This is an example that brands implemented the past decade of inviting consumers to participate is event like promotions that are heavily branded and represent significant consumption-related experiences.

Students will likely gravitate to transformational type products where sensory gratification motivations are paramount.

IMC Perspective 4-1 1. Why did the teaser aspect of the campaign work so well?

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This is an excellent example of teaser ads since the brand remained unknown and the style of the message kept consumers guessing of the product category. Presumably, the teaser messages worked well to draw more attention and stronger involved processing of the video messages once exposed.

Certainly, the captivating images of the video message are some that we have never seen in advertising very often, and especially in discount grocery store advertising.

IMC Perspective 4-2 1. What should General Mills add to the campaign in the fourth year?

This opinion-oriented question could potentially present a lively discussion. The activities described are similar to the opening vignette in that they encourage consumer involvement; however these are more related to corporate social responsibility compared to experiences that directly enhance experiences for consumption of the brand as in the case of Harley-Davidson. Students might find all sorts of innovative ideas that instructors should encourage defense of their ideas by relating it to the processing and communication effects that can arise from the messages.

Answers to Review Questions 1. Recall the elements of Figure 4-1 and identify them for all aspects on an IMC plan – advertising, sales promotion, direct marketing, public relations, and Internet marketing.

The elements of the communications process include the sender or source, the message, the channel, the receiver, noise and feedback. The sender or source of a communication is the person or organization that has information to share with another person or group. The source may be an individual such as a salesperson or spokesperson who appears in a company’s advertisements or a nonpersonal entity such as a company or organization itself. The message is the information or meaning the source hopes to convey and may be verbal or nonverbal, oral, written or symbolic.

The channel is the method by which the communication travels from the source or sender to the receiver. At the broadest level there are two types of channels, personal and nonpersonal. Personal channels generally involve direct interpersonal contact with the receiver while nonpersonal channels carry a message without interpersonal contact between the sender and receiver. Nonpersonal channels are generally referred to as the mass media. The receiver is the person(s) with whom the sender shares thoughts or information. Generally receivers are the customers in the target market or audience who read, hear, and/or see the marketer’s message.

Noise refers to extraneous factors in the communications process that can distort or interfere with the communication of a message. Errors or problems in that occur in the encoding of the message, distortions in the transmission of the message, and distractions at the point of reception are possible sources of noise. Feedback refers to the part of the receiver’s response that is communicated back to the sender and may take a variety of forms such as response hierarchy measures including awareness, knowledge, attitudes, purchase intentions, preferences and behaviour. The form of feedback of ultimate interest to marketers is, of course, sales.

Students should be encouraged to find an example of a current advertising campaign and to analyze it with respect to elements of the communications process. They might evaluate the source being used as a spokesperson in the campaign, the type of message being used, the channels or media where the ads appear, the target audience for the campaign, and the type of feedback that might be used to monitor the effectiveness of the campaign.

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2. Explain why the three response models of Figure 4-2 are limited in planning for an IMC campaign?

The three models assume a strict order of cognition, affect, and behaviour, something a major review article in Journal of Marketing cited in the chapter suggests is not supported in numerous studies. In addition, the models do not indicate when the stages are occurring, such as when the message is received (i.e., watching television) or when consumers are going about their day-to-day lives. Both of these criticisms are addressed in the subsequent models presented in the chapter.

Another way to see how the models are in effective is to consider the following. Each of the response processes could occur at each of the decision-making stages. For example, consumers could see some ads while at the need recognition stage and have a cognitive and affective response and then plan to look at the product in the store. This decision towards a store visit is the behaviour which is actually occurring at the information search stage, the one after the need recognition stage. Consumers could receive a brochure at the store, read it at home and continue along in their information search stage.

Again, responding to the communication occurred while in a particular stage of the decision-making process.

3.

Explain what is meant by a central versus peripheral route to persuasion and the factors that would determine when each might be used by consumers in response to an advertisement.

Under the central route to persuasion the message recipient is viewed as a very active and involved participant in the communications process whose ability and motivation to process a message are very high. The recipient will pay close attention to message content and will carefully scrutinize the communication for the cogency or quality of the message claims. Under the peripheral route to persuasion the message recipient is viewed as lacking the motivation or ability to process the message and is not likely to engage in any detailed level of cognitive processing. Rather than thinking about or evaluating the information content of the message, the receiver will rely on “peripheral cues” such as an attractive source or other executional factors. Factors that would determine when each might be used by consumer in response to an advertisement include the involvement level of the consumer which will be a function of the nature of the product being purchased, the importance of the product/service being purchased to the individual, the needs of the individual, and the motivation and ability of the consumer to process the message.

4. What are the key difference between the traditional response models and the response model shown in Figure 4-6?

The primary difference is that the former assumes a similar cognition-affect-behaviour response sequence while the latter presents a contingency model where by the sequence is influenced by the topical involvement and the perceived product differentiation. The key implication of the sequence change is that advertising and promotion play different roles and have different primary effects depending upon whether the consumer responded one way versus the other.

The R&P model build on the previous models by clearly articulating the difference between the immediate reactions of the receiver while experiencing the message and the longer-term results of the communication of the brand. Consequently, there is a need to conceptually represent both dimensions of attitude theory at both places in time.

5. Why is it important to use a response model that is more applicable to managerial decision making?

Planning for advertising is dependent on understanding how the target audience will respond to the marketing communication message, however a manager needs to translate or view these responses as Chapter 4 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 4-8

potential options to influence when making marketing communication decisions. Furthermore, marketers require a degree of parsimony in using an approach that is clear for focus decision-making.

Academic contingencies and fine embellishments of model may help explain some variation across major samples to generalize theory, but in the end a manager needs to make concrete decisions.

Answers to Applied Questions 1. Consider ads found in social media like Facebook, Twitter and YouTube and assess whether the model in Figure 4-1 is useful for explaining how marketing communication works in these digital contexts.

As argued in the text, Figure 4-1 still stands the test of time and is still very applicable for digital media since it has the clear feedback and response mechanism. Students should be able to apply all aspects of the model to any form of digital communication, it is only a matter of seeing how it work by thinking through problem like this to see that the key parts remains.

2. Assume that you are the marketing communications manager for a brand of paper towels. Discuss how the low involvement hierarchy could be of value in developing and advertising and promotion strategy for this brand.

For a company selling a low-involvement product such as a paper towel, the consumer is likely to go through a learn→do →feel response hierarchy whereby some minimal level of awareness or passive learning may precede purchase and attitudes are formed after using the product. An advertiser of a low involvement product must recognize that consumers are less likely to give attention to actual message content and may focus more on non-message elements such as music, characters, slogans or jingles.

Advertisers may want to use catchy slogans or jingles that will stick in consumers’ minds and become salient when they are in the actual purchase situation. The use of short messages and heavy repetition schedules will also be important. Advertisers may also use VIPs or visual image personalities that may lead to more involvement with and higher identification and retention of advertisements. Sales promotion techniques such as sampling and coupons may also be used to encourage first time trial.

Point-of-purchase displays and advertising might also be used to encourage trial of the brand. If the product performs well the consumer should form a favorable attitude the probability of repurchasing it will increase.

3. Select an ad you think would be processed by a central route to persuasion and one where you think the peripheral processing would occur. Show the ads to several people and ask them to write down the thoughts they have about each ad. Analyze their thoughts using the cognitive response categories discussed in the chapter.

Under the central route to persuasion the message recipient is viewed as a very active and involved participant in the communications process whose ability and motivation to process a message are very high. The recipient will pay close attention to message content and will carefully scrutinize the communication for the cogency or quality of the message claims.

Under the peripheral route to persuasion the message recipient is viewed as lacking the motivation or ability to process the message and is not likely to engage in any detailed level of cognitive processing.

Rather than thinking about or evaluating the information content of the message, the receiver will rely on “peripheral cues” such as an attractive source or other executional factors.

Students should be encouraged to select examples of advertisements that they feel are representative of each route to persuasion and to explain why the ads would be processed either centrally or peripherally.

They should also show the ads to some friends and have them write down what thoughts they were having as they looked at the ad. They might then try to analyze these cognitive responses by Chapter 4 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 4-9

categorizing them as product/message related thoughts (counterarguments or support arguments), ad execution related thoughts, or source-oriented thoughts (bolsters or derogations). You might have a few students show the examples they have chosen of ads that might be processed by a central or peripheral route and have the class analyze the cognitive responses they gathered for these ads.

4. Find an example of a print ad and evaluate it using the cognitive response model shown in Figure 4-6.

Identify the specific types of cognitive responses that the ad might elicit from consumers and discuss why these might occur.

Students should be encouraged to find a print ad and evaluate it using the cognitive response model shown in Figure 4-6. They might show the ad to their friends or fellow students and have them write down what thoughts they were having as they looked at the ad. They might then try to analyze these cognitive responses by categorizing them as product/message related thoughts (counterarguments or support arguments), ad execution related thoughts, or source-oriented thoughts (bolsters or derogations). You might have a few students show the examples of ads they have chosen and present their analysis of the cognitive responses given in reaction to these ads. They might also discuss why these responses were generated. Similarly, students might find their sample described the emotions experienced when viewing the ads. Students should try to accurately identify the emotions and to assess how strongly felt the emotions experience are.

5. Red Bull has numerous IMC activities including its TV advertising, events, and promotional activities.

Check the Red Bull website and any other online material for background, and apply them to the matrix in Figure 4-7 to validate whether each activity assists in planning for IMC. Red Bull presents an interesting example to apply Figure 4-7. Across its IMC tools there is a distinct source, message and channel to a multitude of target audiences. For example the imagery of its TV ads with cartoons is distinctly different that the imagery of Red Bull Crashed Ice. Furthermore, the exposure procedures and the type of processing and resulting communication effects are correspondingly appropriate for each tool as well. In short this planning matrix allows managers to see which are the controllable decisions to effect an influence on outcomes that the manager deems important.

Additional Discussion Questions (not in text) A. What is meant by encoding? Discuss how the encoding process differs for radio versus television commercials.

Encoding refers to the process by which the sender of a communication puts thoughts, ideas, or information into a symbolic form using words, symbols, pictures and the like. The encoding of a television commercial involves the use of visual images, sound, motion, color, and words, which provide advertisers with the opportunity to develop very creative messages. The encoding of a radio commercial is limited to the use of sound, which usually comes in the form of words read by an announcer and/or music. However, some astute advertisers may use a process called image transfer whereby the images from a TV commercial are planted in a radio spot by using similar, or even the same, audio portion. The idea is that when consumer hears the radio message, they will make the connection to the TV commercial thus reinforcing the video images.

B. Explain the processes of selective perception described in the chapter. Provide examples.

Selective exposure – Consumers may selectively decide what they will allow themselves to be exposed to. For example, if a consumer knows information will be provided that may lead to dissonance or the potential for inconsistency, they may consciously avoid the information. If one just Chapter 4 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 4-10

purchased a new Ford, having selected this model over Chevrolet, they may avoid advertisements for Chevy’s to not create further dissonance. Changing stations during commercial breaks on television or radio, or leaving the room, skipping over ads in magazines, or simply ignoring banner ads are all forms of selective exposure. On the other hand, consumers may actually seek out information as well.

Accessing the Internet to obtain more information, reading Consumer Reports, etc. are also forms of selective exposure.

Selective attention—some consumers may stay in the room during commercials, but not pay attention to them. Consumers will be more inclined to pay attention to ads when they are in a search and/or evaluation stage of the decision process and the ad is relevant to this decision. For example, if you were in the market for a new car stereo, you might be more inclined to pay attention to commercials, print ads and publicity regarding brands, sales, etc. Once the purchase has been made, the consumer may engage in selective attention to these messages.

Selective comprehension—there is no guarantee that the information provided by an advertiser will be comprehended in the manner intended. Consumers may distort information to meet their needs, or take away a different meaning than intended. For example, a consumer is torn between two attractive alternative automobiles. One gets 9.2 litres per 100 kilometres highway, the other 7.8. Depending on which car is purchased, the differences in gas mileage may be distorted. If the higher of the two was bought, the 9.2 may be made out to be significantly higher than 7.8. If the lower mpg car was purchased, the difference would seem to be much less.

Selective retention—using the example of the two cars just above, what is remembered may be a result of selective retention. “Oh, I don’t remember the difference in mpg, but I recall it was only slightly higher” or “I remember there was a significant difference. My car got 1.4 litres per 100 kilometres more, and over a year this would amount to $200 in savings”. Consumers have a tendency to forget that information that is inconsistent or contrary to what they want to believe, and may be more likely to recall that that reinforces their existing beliefs, values, and/or attitudes.

C. Find an example of a print ad and evaluate it using the cognitive response model shown in Figure 4-4.

Identify the specific types of cognitive responses that the ad might elicit from consumers and discuss why these might occur.

Students should be encouraged to find a print ad and evaluate it using the cognitive response model shown in Figure 4-4. They might show the ad to their friends or fellow students and have them write down what thoughts they were having as they looked at the ad. They might then try to analyze these cognitive responses by categorizing them as product/message related thoughts (counterarguments or support arguments), ad execution related thoughts, or source-oriented thoughts (bolsters or derogations). You might have a few students show the examples of ads they have chosen and present their analysis of the cognitive responses given in reaction to these ads. They might also discuss why these responses were generated. For example, source bolsters might be given to a trustworthy or likeable spokesperson while source derogations might occur if the source is not liked or is unattractive.

Message related thoughts might be generated if there is a lot of information presented in the ad or the position advocated is not agreed upon by the message recipient. Ads that use a great deal of imagery might generate more execution related thoughts.

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IMC Exercise Choose a print ad from the newspaper or a magazine and evaluate them using the elements of the basic communications model presented in this chapter. Your analysis should address the following areas: •

a discussion of the source used in advertisement and why s/he is or is not appropriate for the message

•

the way in which the message is encoded including the use of visual and verbal elements.

•

a discussion of the channel or medium in which the ad was placed, such as the particular newspaper or magazine, and why this publication was chosen by the advertiser.

•

the process by which the message might be received or decoded by the target audience. Choose one of the response hierarchy models discussed in the chapter and discuss how the source and message might influence different stages of the model. What type of feedback that the advertiser might use to evaluate the effectiveness of the message.

What is your overall opinion of this ad from a marketing communications perspective? What changes, if any, would you recommend to improve the communication effectiveness of the ad?

IMC Comprehensive Project Students should be encouraged to consider how an understanding of communications and the response process can be of value in developing the IMC plan for the product or service they have chosen. The specific assignment is as follows: IMC Project Assignment for Chapter 4 Use the information from this chapter to analyze how consumers in the target audience for your product or service will respond to elements of your IMC program such as advertising, sales promotion, direct marketing or your web site. Which of the response hierarchy models discussed in the chapter is most applicable for this product or service? Specify the stages in the response process through which consumers will have to pass before purchasing your product or service.

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CHAPTER 5 OBJECTIVES FOR THE IMC PLAN Chapter Overview This chapter describes the objectives set in the planning and evaluation of the IMC program; marketing objectives, behavioural objectives and communication objectives. Promotional planners believe that promotional mix elements communicate, so its effectiveness should be based on how well it communicates and ultimately influences behaviour. The chapter reviews three approaches to communication objectives: the DAGMAR model, an application of comprehensive response hierarchies, and new IMC approaches.

The chapter then discusses the Rossiter and Percy perspective of communication objectives.

Learning Objectives 1. Distinguish among marketing, behavioural and communication objectives and identify the value of setting each type of objectives.

2. Describe the historical approaches for setting communication objectives for advertising.

3. Evaluate the options setting behavioural objectives and apply them when constructing a promotional plan.

4. Choose among the options for setting communication objectives and apply them when designing IMC recommendations.

5. Assemble the best combination of behavioural and communication objectives for each stage of the consumer decision-making process.

Chapter and Lecture Outline Companies generally have difficulty setting realistic objectives that will guide the development of the IMC program. They either fail to use specific marketing communication objectives or set ones that are inadequate for guiding the development of the promotional plan or measuring its effectiveness. Part of the problem stems from the fact that marketers are uncertain as to what advertising and promotion can or should do and/or prefer to use sales as an objective.

I.

OBJECTIVE SETTING

A.

Value of Objectives

One of the reasons companies do not set specific objectives for their advertising and promotional programs is that they fail to recognize the value of doing so. There are important reasons for setting advertising and promotional objectives: Communication Function—Specific objectives serve as communication devices and facilitate the coordination of groups working on the campaign on both the agency and the client side. Problems can be avoided if all parties involved have written and approved objectives to guide their decisions and actions.

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Planning and Decision Making—Specific objectives are useful as a guide or criterion for decision making.

Advertising and promotion planners are faced with a number of strategic and tactical options in areas such as creative, media, budgeting and sales promotion. Choices among these options should be made on the basis of how well a strategy or tactic matches the promotional objective.

Measurement and Evaluation of Results—Setting specific objectives provide a benchmark or standard against which success or failure of the campaign can be measured. When specific objectives are set it becomes easier for management to measure what has been accomplished by the campaign.

B.

Marketing Objectives

Marketing objectives are generally stated in the firms marketing plan and are statements of what is to be accomplished by the overall marketing program within a given time period. Marketing objectives are usually defined in terms of specific, measurable outcomes such as sales volume, market share, profits, or return on investment. The achievement of marketing objectives will depend upon the proper coordination and execution of all the marketing mix elements, not just promotion.

C.

Sales Objectives Debate

Marketing managers view their advertising and promotional programs from a sales perspective and argue that sales or some related measure such as market share is the only meaningful goal for advertising and thus should be the basis for setting objectives. They take the position that the basic reason a firm spends money on advertising and promotion is to sell its products. Thus they argue that any monies spent on advertising should produce measurable sales results.

Problems with sales objectives: •

achieving sales could be a function of other marketing mix variables such as product design or quality, packaging, distribution, or price.

•

the carryover effect which suggests that the effects of advertising on sales are not always immediate and occur over an extended time period.

•

sales objectives offer little guidance or direction to those responsible for planning, developing and executing the promotional program.

Appropriate use of sales objectives: •

when the promotional efforts are direct action in nature and are designed to induce a more immediate response. For example sales promotion programs have sales objectives since their goal is often to generate trial or short-term sales increases.

•

direct response advertising which measures success of a campaign in terms of the sales response generated by an ad, however the carryover effect could be strong

D. Behavioural Objectives Behavioural objectives link the marketing objective to the communication objectives by specifying the specific action expected to be taken on the part of the target audience. The idea of gaining sales can occur through different means depending on whether the brand desires greater purchases from current customers (i.e., repeat) or new purchase from non-customers (i.e., trial). Given a different action is required, a different message is required for influence which implies more unique communication objectives.

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E.

Communication Objectives

Marketers take the perspective that the primary purpose of promotional mix elements such as advertising is to communicate and effects should be based on communication objectives. Advocates of communication objectives generally use some form of the hierarchical models discussed in Chapter 4 as a basis for setting advertising objectives. Communications objectives should be based on the particular communication tasks that are required to deliver the appropriate message to the target audience. This requires the translation of general marketing goals into communication goals and specific objectives.

II. FROM OBJECTIVES

COMMUNICAITON

RESPONSE

MODELS

TO

COMMUNICATION

A. DAGMAR (Defining Advertising Goals for Measured Advertising Results) is a model developed

by Russell Colley in 1961 for setting advertising objectives and measuring the results of a campaign against these objectives. Under DAGMAR an advertising goal involves a communications task that is specific and measurable. A communications task involves something that can be performed by and attributed to advertising. Communication tasks in DAGMAR are based on a hierarchical model similar to those discussed in Chapter 4. While hierarchical communication effects form the basis of DAGMAR, there are other specific communication tasks that advertising might be expected to perform or help accomplish. A major contribution of DAGMAR was the specification of what constitutes a good objective. Five characteristics of good objectives were noted:

B.

•

Target audience—a good objective should specify a well-defined target audience. The target audience is usually identified in the situation analysis.

•

Measurable task—the communications task or objective should be a precise statement of what appeal or message the advertiser wants to communicate to the target audience. The objective should be measurable in that the method and criteria used for determining if it has been properly communicated should be specified.

•

Benchmark—another important part of setting objectives is having benchmark measures to determine where the target audience stands at the beginning of the campaign with respect to communication response variables such as awareness, knowledge, attitudes, image, etc.

•

Degree of change sought—the objectives should also specify how much change or movement is being sought such as the amount of increase in awareness levels, creation of favourable attitudes or number of consumers intending to purchase the brand, etc.

•

Specified time period—a final characteristic of good objectives is the specification of the time period during which the objective is to be accomplished. The time period should be appropriate for the communication objective as simple tasks such as increasing awareness levels can be accomplished much faster than a complex goal such as repositioning a brand.

Comprehensive Response Model Applications—Lavidge and Steiner hierarchy of effects model shown in Figure 5-2 is more specific than the DAGMAR model and provides a better way to establish and measure results. This particular model has been used as a basis for analyzing the communication response processes of consumers and has been the foremost application for setting communication objectives. Setting communication objectives with a model like this is the same way that a pyramid is built; by first accomplishing lower-level objectives such as awareness and knowledge or comprehension (see Figure 5-3). Similarly, the information processing model offers an approach for setting objectives, of which specific measures can be applied to assess Chapter 5 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 5-3

effectiveness. Progress on the use of these models in practice by professionals is mixed, and the chapter argues for the importance of adopting a more applied model (e.g., R&P) for managerial decision-making.

III.

SETTING BEHAVIOURAL OBJECTIVES FOR IMC

The R&P’s approach is to have a clear behavioural objective for each target audience in terms of trial, repeat purchase, shopping, and repeat consumption.

A.

Trial Purchase Objectives—Brand trial purchase is defined as a consumer’s first purchase of a brand. A manager may look to expand sales by setting various trial objectives. A brand trial objective is relevant in scenarios for virtually any business looking to expand its customer base. A brand re-trial objective occurs when consumers have not bought for some time. Category trial is an option where a manager attracts users to the brand from outside its immediate competitive space within a product category. Finally, switching from another brand is an additional situation where trial may be relevant for a manager.

B.

Repeat Purchase Objectives— Repeat purchase is defined as a consumer’s continued purchase of a focal brand within a specified time period. Marketing communication tools can influence frequency, amount or timing.

C.

Shopping Objectives—Action that consumers take that will lead to a higher probability of purchasing the brand are indicative of objectives with respect to shopping that a manager may include in a plan. For example, most people find it imperative to visit a car dealership prior to buying a car. Digital communication has opened the door for marketers to have all sorts of shopping-like experiences that bring their target audiences one step closer to actual purchases.

D.

Repeat Consumption Objectives—For fast moving goods there is ample inventory within a household, and some marketing communication is designed to encourage continued usage of a product that has been purchased. This is tricky idea that some students have difficulty with as they can mix up buying with consuming.

IV.

SETTING COMMUNICATION OBJECTIVES FOR IMC

R&P summarize four communication effects (Chapter 4) that an ad, advertising campaign, or IMC plan may have on consumers. These are stated as objectives, as follows: A.

Category need pertains to whether the target audience feels the need to purchase within the actual product category. Options include omit, remind, or sell.

B.

Brand awareness is a universal communication objective. This means that every single point of communication should contribute to a target audience’s understanding and knowledge of the brand name. Options include recall, recognition or both recall and recognition.

C.

Brand attitude is another universal communication objective. Like brand awareness, every aspect of a firm’s IMC program should contribute to some aspect of the overall evaluation of the brand from the perspective of the target audience. Stated as specific benefit, attributes to be communicated. Also, more general beliefs and emotions or affect can also be established.

D.

Brand purchase intention consists of two options: •

Brand purchase intention is assumed.

Chapter 5 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 5-4

•

Brand purchase intention is generated.

IV IMC PLANNING: OBJECTIVES FOR BUYER DECISION STAGES One important role of marketing communications is to help the target audience move through the steps of the consumer decision-making process. This process is assessed for each target audience and a conclusion is made as to which communication objectives are most relevant for each stage. Refer to Figure 5-5 as an illustration of how this works.

Teaching Suggestions We feel that from an IMC planning perspective, this is one of the most important chapters in the text.

Students need to understand the importance of setting good objectives to guide the planning and development of an advertising campaign as well as for providing a benchmark or standard against which performance can be measured and evaluated. This chapter stresses the difference between marketing and sales versus communication objectives and behavioural objectives. The DAGMAR model relies heavily on the response hierarchy models discussed in Chapter 3. Students should recognize that the specific communication objectives that are appropriate will vary depending on the buying situation.

The DAGMAR model is discussed as a viable approach to setting advertising objectives. A very valuable aspect of Colley’s work on DAGMAR is the specification of characteristics of good objectives which are discussed in the text. While most companies are not going to meet all of the criteria set forth in DAGMAR, it is important that students recognize the characteristics of good objectives. Another important issue to address in discussing this material is the difference between sales versus communication objectives. The instructor may want to find some examples of campaigns which have won awards and/or have been very effective from a communications perspective but not in terms of sales.

The chapter ends with a description of the behavioural and communication objectives from the Rossiter and Percy perspective that have a few noteworthy features. These place greater importance on the brand manager responsible for promotional communication. Managerial options for each are identified as a guide for making objective-setting recommendations. More specific behavioural objectives, connected to the target audience, are clearly delineated. There is greater importance placed on the central concept of brand attitude that accounts for both cognitive and affective characteristics. The perspective can be used to set objectives for all levels of communication decisions.

Vignette 1. Check out Juicy on social media and offer suggestions on how Juicy can maintain GOAT status.

A perusal of the Juicy’s twitter feed will show that that Juicy appeared in many different scenarios related to sports beyond basketball and in other domains. Students will notice that there are not that many followers which may raise questions as to the viability of the creative concept. Enterprising students might make all sort of interesting suggestions to rejuvenate the direction of Juicy. One suggestion might be to bringing back the idea of chewing gum which was the original intention, rather than making Juicy some sort of culture icon that some of the Twitter images suggest. Students might also compare what is happening with Juicy in different social media, and decide if there should be different activities for Juicy in Twitter vs. Instagram for example.

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IMC Perspective 5-1 1. Why would Mark’s focus on the work clothes in its ads when it sells both work clothes and casual clothes?

Marks focused on casual clothes in its ads for quite some time as it moved in this direction after its initial development of work wear. So this example shows how a brand will have communication objectives for its brand based on the particular product line it is emphasizing it in ads. One might suggest that there appeared greater sales growth in the work wear, and that work wear became popular and fashionable with a younger crowd (e.g., hipster).

IMC Perspective 5-2 1. How do these messages contribute to getting a trial or repeat visit to Montreal?

Consumers have different information needs at each stage of the decision-making process. Certain tools can provide information more easily than others. Consumers also seek different types of brand experiences at each stage and may be keen on emotional involving tools at certain stages compared to others. Thus, in this example, we see ads the presumably would influence consumers at the pre-purchase stage or need recognition stage when planning their vacation, or mini trips such as long weekends to Montreal. The unusual creative likely spurred curiosity and many website visits which is one more step closer to purchase as consumers are now in the information search stage.

Answers to Review Questions 1. Discuss the value of setting objectives for the integrated marketing communications program? What important functions do they serve?

Specific goals and objectives are the foundation upon which integrated marketing communications decisions involving advertising and other promotional tools should be made. They serve as communication devices and facilitate the coordination of activities of those working on the campaign.

They also serve as a guide to promotional planning and decision making and provide a benchmark or standard against which success or failure of the campaign can be measured and evaluated.

2. What are the strengths and weaknesses of using traditional hierarchy models for setting communication objectives?

The traditional hierarchy models have a couple of key strengths. They provide an understanding of consumer’s response to advertising. They also guide the steps for planning advertising objectives. Firms could focus on certain stages for making communication objectives (i.e. awareness). However, there are two important limitations. It is difficult to believe that consumers go through the steps in the prescribed cognitive-affective behaviour process for all purchases. Furthermore, it is difficult also to believe that consumers could not be having both affective and cognitive responses at the same time.

3. Some claim that promotion is all about communication, so we should only focus on communication objectives and not worry about behavioural objectives. Convince them otherwise.

Behavioural objectives are required if one accepts that the target audience’s current behaviour is prime factor in constructing the message. Behavioural objectives help define the target audience further and they provide a bridge between communication objectives of the promotion plan and the marketing and the marketing objectives of the marketing plan. For example, if trial is required, then the message might want to focus on imagery of consumers going through the decision-making of buying the product for the first time. Alternatively, if repeat purchasing is required, then the message might pertain to the Chapter 5 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 5-6

continued satisfaction of buying once again, or how the brand is better than others to prevent switching out of the brand.

4. If a firm cannot afford large market research studies to quantitatively assess whether communication objectives have been achieved, why should the firm bother setting communication objectives?

Communication objectives are still valuable because they guide the rest of the communication decisions. They provide the criteria for managers and agencies to make the appropriate strategic and tactical creative decisions. They can also provide guidance for media and sales promotion decisions.

There is also some literature on doing market research very inexpensively that goes beyond traditional sources that large firms use, so tracking of campaigns can be feasible even without resources.

5. A firm is running a campaign with advertising, sales promotion, and public relations. Why might it have communication objectives for each IMC tool?

This is an application of the model presented at the end of the chapter and picks up on the Rogers example where every part of IMC has some effect. Since consumers go through the decision-making process, at each stage they may be influenced by communications from various sources (i.e. ads, sales promotions, public relation). Ads could generate awareness and initial favourable attitude about a car.

Upon researching the vehicle, ratings and reviews from car publications may solidify the attitude and lead to sales. Sales promotions like financing or rebates could lead to a stronger purchase intention.

Answers to Applied Questions 1. In meeting with a client for an energy drink, you are informed that the only goal of advertising and promotion is to generate sales. As an account planner for a marketing communication agency, present reasons why communication objectives must also be considered.

The bottom line for for-profit organizations is to increase market share, sales or both. Thus, for many managers, the goal of advertising is to generate sales. Managers frequently ask the question, “If I increase my advertising budget by X%, what will the impact be on sales?”

While the ultimate goal of the promotional program may be to increase sales, there are a number of reasons communications objectives must be considered as well: •

Communications objectives are intermediary objectives often required to generate sales.

Creating brand awareness, and favorable attitudes may be required before the consumer purchases. The hierarchy models demonstrate that purchases are not always spontaneous, and that consumers must be moved through a hierarchy of goals.

•

Communications objectives are measurable, while the relationship between advertising and sales is often difficult to exactly determine. It’s not that we can’t measure sales, but rather that establishing a measurable impact is very difficult.

•

Other factors beyond advertising contribute to sales. There is an old saying that nothing will kill a poor product faster than good advertising. In other words, if a company has a good advertising program but the product is not good, then sales will not increase. Likewise, if the product is not available due to distribution problems, then the impact of advertising will not be known, or if the price is too high, sales will not be affected. Finally, an excellent marketing program may be negatively impacted by market conditions. Weather, recessions, and other Chapter 5 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 5-7

factors may result in a loss or no change in sales even though the advertising program is effective.

•

Not all advertising is designed to increase sales. Creating brand or corporate image, generating awareness, appeasing stockholders, etc. are just some of the reasons why companies advertise.

Cause-related marketing and advocacy advertising are additional reasons why companies may advertise other than directly influencing sales.

2. Assess what the behavioural objectives would be for each ad in this chapter.

Ads that imply trial include 2, 3, 4, 7, 8, 9, 10, 11, 12, 19, 21, 23. Ads that imply repeat purchasing include 5, 13, 17, 20, 22. Some might debate a couple, but the point is that most ads imply a behaviour to see the target audience from a current brand behaviour standpoint.

3. Assess what the communication objectives would be for each ad in this chapter.

All should be contributing to awareness and attitudinal communication effects. Students should study each ad to see if the brand is well identified and whether the message clearly influences the target audience’s attitude in any particular regard. Some ads appear to influence category need, 3, 4, 9, 11, 12, 16, 22, others appear to influence purchase intention, 2, 7, 10.

4. After assessing the objectives for some of the ads of this chapter, check out the brand’s Internet site or social media offerings and determine if the objectives are the same or different.

This is an application exercise. It is intended to show students that firms could have different target audiences across different IMC tools or it could show that the firm is using these two tools to reach the same target audience. In some cases, the advertising is directed to one target audience through selective media purchases, but since the web is universally accessed it could have sections directing various target audiences.

Additional Discussion Question (not in text) A. What are the differences between marketing objectives and communications objectives? Why do so managers confuse the two?

Marketing objectives are statements of what is to be accomplished by an organization’s overall marketing program within a given time period. They are usually stated in terms of specific, measurable outcomes such as sales volume, market share, profits or return on investment. Communication objectives are statements of specific communication tasks that are to be accomplished such as creating awareness, brand knowledge and interest, favourable attitudes and image, purchase intentions and the like.

Managers confuse the two types of objectives because they approach their advertising and promotional programs from a sales perspective and tend to view sales or some related measure as the only meaningful objective of advertising. They tend to think in terms of how the promotional program will influence sales and end up reducing communication objectives to sales-related measures.

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B. What is meant by an advertising carryover effect? Discuss the problems carryover creates for managers who are trying to determine the impact of their advertising on sales.

Experts agree that advertising may have a lagged or carryover effect. That is, the results of the advertising may not be immediately felt. For example, ads are stored to memory, and acted upon at a later time. This effect may cause problems for marketers who are trying to assess the impact of these ads in the short run. If the ad is run now, but effects are not felt until later, it may be difficult to show that the advertising had an impact. Management, impatient as they sometimes may be, may not wish to consider spending waiting for the effects to happen. When the carryover effect is added to the other problems associated with using sales objectives, it makes the job of proving the impact of advertising’s effect n sales even more difficult for the ad manager.

C. In what situations would brand awareness be the only communication objective for an advertising campaign?

This is a bit of a trick question and sets up a debate that you may like to pursue. The model presented argues that all communications should contribute to awareness and attitude. If it does not contribute in some manner, then it is by definition, not effective. If this is true, then there are no situations where a firm would spend money on ads only for awareness. Often we hear in news reports that a firm or organization is running an awareness campaign. This is, in fact probably a short way of saying that yes, we are trying to increase awareness and influence attitudes. If students propose situations where some attitudinal component is not addressed, it is fairly certain that they have not thought hard enough to see that the ad could be contributing to the overall liking of the brand by the target audience – the heart of brand attitude.

IMC Exercise Find an example of how a marketer has used a specific promotional mix tool other than advertising as the basis for the “big idea” for an IMC program. For example, you might find an example where a company has used innovative packaging, sales promotion or publicity as the lead element of their IMC program. Why do you think the company chose to lead with this specific promotional mix element? Discuss how other promotional mix tools were used in developing the overall IMC program.

IMC Comprehensive Project At this point, students should be prepared to develop specific advertising and promotional objectives that will guide the development of their IMC projects.

IMC Project Assignment for Chapter 5 Specify the objectives for your IMC program. Describe how your objectives have evolved from the marketing and promotional situation analysis you conducted for your product or service. Explain whether you are using sales or communication objectives and the rationale for your choice. Do your objectives satisfy the criteria specified by the DAGMAR model? Carefully state the behavioural and communication objectives of your target audience. Is it possible to state objectives for different stages of the decisionmaking process?

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CHAPTER 6 BRAND POSITIONING STRATEGY DECISIONS Chapter Overview This chapter bridges the strategic orientation of the marketing plan and the creative decisions of creative specialists. In doing so, it examines the decisions and process associated with the topic of brand positioning strategy. Promotional planners receive direction from the situation analysis and decisions of the strategic marketing plan and must translate that information into communication strategies for its target audiences.

In turn, promotional planners work with creative specialists to ensure that the communication strategies are executed with appropriate creative messages. Brand positioning strategy is a key decision involved that links marketing strategy to creative strategy and is the primary consideration of this chapter.

Learning Objectives 1. Identify the concepts of market positioning strategy and market position.

2. Apply the positioning concept in an advertising context by defining brand positioning strategy and brand position.

3. Illustrate how to formulate the brand positioning strategy decisions 4. Demonstrate brand positioning strategy opportunities.

5. Interpret brand positioning strategy decisions in other contexts.

Chapter and Lecture Outline I.

POSITIONING

The first part of the chapter is devoted to reviewing the market positioning concept as a means of understanding the brand positioning concept. The decision-making process for brand positioning is also examined.

A. Market Positioning Strategy—A strategic marketing plan evolves from an organization’s overall corporate strategy and serves as a guide for specific marketing programs and policies.

From a promotional standpoint, planning specialists use the information contained in the marketing plan to create the promotional plan. A key piece of information is the strategic direction of the marketing mix as suggested by the market positioning strategy. Firms will write a marketing positioning statement in their marketing plan to accurately communicate a market positioning strategy. As the firm develops its market positioning strategy, it may consider combinations of product attributes that research has shown to be acceptable to the target market.

Promotional planners consider their market and competitive information in this document to understand the context of the market positioning decisions and the subsequent brand positioning decisions.

Positioning has been defined as “the art and science of fitting the product or service to one more segments of the broad market in such a way as to set it meaningfully apart from competition”.

Positioning is a guiding idea in the strategic marketing plan that is a result of identifying Chapter 6 – Advertising & Promotion,7th Canadian Edition ©2020 McGraw-Hill Ltd. 6-1

alternative market opportunities (i.e., areas where the company feels there are favorable demand trends, where customer needs and/or wants are not being satisfied and where it could compete effectively). Implementation of the marketing plan yields varying outcomes. One critical one is the idea of market position, the resulting consumer understanding of where a firm’s product is located in the overall market relative to it main category competitors and related category substitutes. The shampoo example in the text attempts to draw these ideas out.

B.

Brand Positioning Strategy—A brand positioning strategy relates to the image of the product or brand relative to a competing brand. It is a key decision prior to determining the most effective message of the advertising or the IMC. The reactions that consumers have to promotions are referred to as the brand position. The brand position is understood along the lines of salient attribute and/of salient benefits and is often diagramed with a diagram illustrating where the brand is in relation to other brands within a given competitive space. The chocolate bar example in the text illustrates this application.

C.

Brand Positioning Strategy Decision Process— the development of a positioning strategy involves six distinct steps 1. Develop a Market Partition2. Determine competitors' positions 3. Assess brand position 4. Determine brand positioning strategy 5. Monitor brand positioning strategy 6. Monitoring the brand positioning strategy

II.

BRAND POSITIONING STRATEGY DECISIONS

A. Market Definition Positioning by end benefit—setting a product apart by stressing a specific characteristic (i.e., attribute) or benefit offered. The examples in the text demonstrate how important and how frequently we see positioning by end benefit.

Positioning by brand name—quality characteristics are emphasized by a brand that lead consumers to believe that it is premium or a luxury brand. Other brands associate with a quality message at a competitive price. Other positioning by brand name occurs when brands directly emphasize its core benefit to the brand name, or the history and origin of the brand name.

Positioning by usage situation—teaching consumers how to use a product in new or different situation is a way to grow sales for both new and established product as shown in the text.

Positioning by product category—the examples provided in the text in reflect this strategy in which the product is positioned against others that while not exactly the same, provide the same class of benefits.

B.

Differential Advantage Chapter 6 – Advertising & Promotion,7th Canadian Edition ©2020 McGraw-Hill Ltd. 6-2

Differential Positioning Advertisers construct messages to establish or reinforce an advantage that a target audience would respond towards favourably. An historic approach is based on quality in which a brand claims stronger delivery on key attributes or benefits that the target audience values the most. Emphasis of key attributes or benefits in other directions such as convenience or consumption experience are also possible as long as the ad claims support the beliefs of the target audience.

Central Positioning While a differential positioning is the classical or typical approach, a newer idea suggest that a brand may not make claims in relation to being superior to a competitor, but rather claim as if they are the best in the category with their claim defining the category. This is a less common approach but can be seen with useful examples from brand leaders. A couple of suggestions in the text attempt to support this idea.

Brand Benefit Positioning In this approach, the product is positioned at a particular group of users. The ads provide good examples to demonstrate this strategy in practice as do the examples for the other products identified. In the product focus, the differential advantage is communicated by the superiority of the brand’s ability to deliver benefits.

User Positioning In contrast to the product focus above, messages do not address the product but rather the user of the product to illustrate the differential advantage or central positioing.

C.

Target Audience Brand Attitude—Advertising and promotion create favorable attitudes toward new products, reinforce or maintain existing favorable attitudes, and/or change negative attitudes.

1. Brand Attitude Model have been used by marketers to study consumer attitudes. These models view an object such as a product as possessing a number of attributes that provide the basis on which consumers form their attitudes. According to this model consumers have beliefs about specific brand attributes and attach different levels of importance to these attributes.

2. Brand Attitude Persuasion—the multiattribute model focuses on the underlying structure or basis of an attitude and provides insight into ways marketers can influence or change consumers’ attitudes such as:

D.

•

increasing or changing the strength or belief rating of a brand on an important attribute

•

changing consumers’ perceptions of the importance or value of an attribute

•

adding new attributes to the attitude formation process

•

changing perceptions of belief ratings for a competing brand

Consumer Purchase Motive—this highlights the importance of accounting for consumer motives while positioning advertising messages. Eight managerially useful motives are suggested that are Chapter 6 – Advertising & Promotion,7th Canadian Edition ©2020 McGraw-Hill Ltd. 6-3

grouped into two types, informational and transformational. Examples of Canadian companies using each of the eight motives are provided along with an indication of how the more traditional aspects of positioning are also used. Instructors are encouraged to find other examples to illustrate these concepts.

III.

•

1. Informational motives are those in which a consumer perceives deficit in the current state and seek a product that will return them to a more “normal” state.

•

2. Transformational motives are those in which a consumer perceives themselves to be in a “normal” but desire to be improved or enhance positively through the purchase of a product.

BRAND REPOSITIONING STRATEGY

Declining sales or changes in market conditions or other factors may lead a firm to change its brand positioning strategy, sometimes identified as brand repositioning strategy. The first section identifies critical analysis that led to recent repositioning strategies for well-known brands. An intention of this section is to illustrate that one key insightful part of the situational analysis may be a key driver in the need for a change in the brand positioning strategy. It is important to draw attention to the link from the situation analysis that provides support for the promotional planner to alter the brand positioning strategy.

When using marketing communication to reposition, we can consider brand repositioning in the four decision areas, market definition, differential advantage, target audience, purchase motivation. Numerous examples are shown for each of these and the corresponding decisions within each topic. Often times, brands are not planning to change their price point differential or alter the product or move into alternative distribution avenues, yet would like to build sales or gain market share via advertising or some other IMC tool. The Cassies examples in the text highlight brands that have successfully repositioned the brand solely through marketing communication. Instructors can show examples of these campaigns in class using the Cassie website.

IV

IMC PLANNING: BRAND POSITIONING EXTENSIONS

The final section shows that unique brand positioning strategies can be developed for specific target audiences. For example, some messages designed to attract new category users would suggest one kind of brand positioning while messages intended to retain existing loyal customers might suggest an alternative brand positioning. The rest of the section extends this idea to suggest that the brand positioning idea can be extended to the different buyer decision making stages and to corporate brands.

Teaching Suggestions This chapter in the Canadian edition is substantially different that the US edition. In fact, there are only a handful of significantly edited paragraphs remaining. Moreover, the Canadian edition contains a whole chapter on positioning and the US edition devotes about four pages. This reorganized chapter provides students a very brief review of the marketing process and marketing strategy decisions to put the strategic communication brand positioning strategy decision into context. The transition from a broader market positioning of the marketing strategy to the narrower brand positioning strategy of the IMC plan is challenging to communicate to students. One method is to investigate the distinction between target market and target audience thoroughly. The difference in these concepts distinction is subtle. It is important for instructors to illustrate some of the examples in the text or refer to their own. Naturally, the distinction is difficult to observe practically in some instances, and there may not be any differences for some cases. So it is wise to find examples that are more obvious than ones where it may be less apparent. The chapter has Chapter 6 – Advertising & Promotion,7th Canadian Edition ©2020 McGraw-Hill Ltd. 6-4

also tried to provide a more structured and theory supported perspective of positioning. Considering the significance of using the positioning concept to set the direction of a communications strategy, instructors can use either of the developments to give stronger grounding for their students. The use of attitude change strategies and the importance of linking the consumer motives to positioning are the two avenues for further explanation.

Vignette 1. How can Huggies maintain this brand positioning in future?

Huggies’ direction appears to be good. Its advertising message is more transformational and therefore puts a strong overall positive life enhancing image for its brand. From an attitudinal standpoint, it is not influencing particular benefits, but rather an overall positive emotions associated with the brand. We suggest that it is certainly a user positioning and the question to address is how it helps in providing a differential advantage over Pampers. To carry on the positioning, students might consider other domains where hugs and babies mingle, perhaps day care facilities might be suggested. Alternatively, community organizations and wellness outlets may also prove useful, as would pediatric doctor offices.

IMC Perspective 6-1 1. Why were the monsters a good symbol to represent the threats of winter driving?

Monsters clearly demonstrated a visual of the potential problem drivers might experience on trips in the winter. With this logic, the monsters signal the consumer motive of problem avoidance; not having an accident during snowstorms etc. with better designed vehicles. The monsters also signal the deliver claims of the technological benefits since the driver successfully avoids the attack.

IMC Perspective 6-2 1. How can Classico maintain its stronger brand position?

Classico takes a central position in the prepared pasta sauce category by saying it is second only to homemade sauce. In short, this brand claims it defines the pasta sauce category as it did when first launched. The authenticity is nicely reinforced with the Italian nonnas competing against a store product. How can Classico carry this on, perhaps testimonials for nonnas who use it sometimes, perhaps a taste test of the nonna’s grandkids having difficulty telling the difference, or perhaps a series of competitions that focus on each attribute of the sauce.

Answers to Discussion Questions 1. Describe how the market positioning strategy adopted for a brand would need to be supported by all other elements of the marketing mix.

Positioning requires consistency among all marketing mix elements. For example, it is difficult for the consumer to perceive that the very best brand/product can also be the least expensive. A high priced perfume or cologne would certainly lose some of its image if distributed in a discount store. High quality, high priced products advertised in low cost media might find that their image suffers. For most consumers, high quality usually means a higher price (and vice versa), upscale (selective or exclusive) distribution, and quality representation in advertising. Trying to go away from these consistencies may lead to confusion and detraction from the positioning. The same holds true for products at other ends of the price/quality spectrum. To maintain margins, intensive distribution may be required, price Chapter 6 – Advertising & Promotion,7th Canadian Edition ©2020 McGraw-Hill Ltd. 6-5

discounts, coupons, and other deals may be used more frequently, and less expensive media may be employed.

2. Why is it useful to distinguish between brand positioning strategy and brand position?

As noted in question 3, a brand positioning strategy is the planned image while the brand position is the resulting image that the target audience believes about the brand. A manager would naturally like the brand position to be identical to the brand position at the end of the planning period to demonstrate success; however this may not be the case as the message might get misunderstood or not be the right message. Alternatively, a brand position might actually be stronger than anticipated with an audience for which the brand was not targeted, thus indicating an unexpected success.

A brand positioning strategy relates to the planned image of the product or brand relative to a competing brand for a given competitive space as defined by certain category characteristics. Marketing communication decisions largely impact this projected image that is decided upon by the brand manager in conjunction with agency personnel and is generally written in the IMC plan. In contrast a market positioning strategy is written within the marketing plan and is dependent upon the whole marketing mix and is derived from the corporate plan regarding a particular product-market.

3. What problems would a brand encounter if it communicated with an incorrect motive?

Communicating an incorrect motive can lead to weaker brand effects. For example, a fashionable retailer of men’s clothing (e.g., Harry Rosen) could suggest that men would save time by visiting their store since many men do not enjoy shopping (e.g., problem avoidance). However, this motive is not the correct one as social approval or some other positive motive would be more likely, or at least incomplete satisfaction with one’s current retailer could be plausible. In each case, a better ad would be created and understood by the target audience.

4. What factors would lead a marketer to the use of a repositioning strategy.

Probably the most common factors leading to repositioning would be a loss of sale, a growing market, and/or the entry of a new product into the marketplace. Other factors might include an erosion of the product image, a desire to enter new markets and/or even management desires. In any of these cases, advertiser would look to a new target audience or perhaps a new message that had a different motive.

The CASSIES identified in the chapter propose a key feature of the situation analysis that likely contributed to the repositioning strategy.

5. Why is it important to consider unique brand positioning decisions at each of the buyer decision stages?

Is it feasible to implement this approach for all product categories?

Since brand positioning strategy is the direction the brand would like a target audience see the brand, it is quite likely that users and non-users would have different purchase behaviours; thus necessitating unique messages with varying levels of information to convince them of either repeat buying or trial.

The feasibility of this approach is dependent on factors such as size of each audience and the costs to develop the messages and media costs. With lowers costs for both of these via social media, it is entirely possible that brands could consider such an approach.

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Answers to Applied Questions 1. Explain how McDonalds’ market positioning strategy has changed with the new developments in its menu and outlets.

McDonald’s altered its menu in a healthier and more tasteful (e.g., coffee) and interior to make it a more welcoming environment that is attracting adults instead of its traditional base of families. Ronald has taken much less prominence in its promotion and imagery with the change. In short, McDonalds’ strategy is less of a family fast food restaurant but more of a quick service casual restaurant. Its corporate imagery during Olympic sponsorship for examples reinforces this view as well. This has implications for its brand positioning strategy for its individual campaigns as many of them are designed to attract consumers to switch to the brand from other formats. For example, it tries to regain customers from Tim Horton’s with much of its messages of late.

2. Examine the social media presence of a brand and assess whether it clearly identifies a brand positioning strategy.

This exercise directs students to investigate a topic of interest. Students will likely select a brand they consume and use themselves as a representation of the target audience. With this in mind, the student will implicitly think about how the positioning is occurring with social media vs. what they may have been accustomed via TV or other mass media. Answers should clearly remark upon all four decisions for a brand positioning strategy and give an indication of effectiveness.

3. Explain why a central positioning strategy is feasible. Do any brands currently use this approach in their marketing communications?

A central positioning is a newer idea, and in a world with iPads, it seems that the idea is clearly an option for brands to consider and attempt. As expected, really only one brand in a product category would attempt such a strategy, but it would be an interesting debate if students could identify a product category where two brands attempted the strategy. The option is entirely feasible as the iPad example suggests where the brand attempts to “own” the category as its marketing communication messages indicates that the market is defined via brand name.

4. Develop market partition diagrams for beverages. What repositioning options are available for any brand?

This question asks students to apply Figures 6-8 to 6-11 to a different product category other than the automobile market such as soft drinks. A product type partition would include; cola and non-cola or diet and non-diet as an initial breakout. An end benefit partition might include refreshing or thirstquenching among others of a similar nature. A usage situation partition could see soft drinks as a mixer or a beverage for drinking with a meal etc. Finally, Coke and Pepsi view is clearly seen in the brand name partition. For either of these brands, all four options may be applicable for various target audiences, and in all likelihood, both brands have used all four type of partitions for different campaigns over time.

5. How can brand positioning decisions be applied to new category users and brand loyals users of smartphones?

The attitude towards the product category for new category user and brand loyal is fundamentally different since the former does not consume and is therefore less knowledgeable thereby requiring more extensive communication. This fact suggests a message of an educational nature in order for a brand Chapter 6 – Advertising & Promotion,7th Canadian Edition ©2020 McGraw-Hill Ltd. 6-7

attitude and category attitude to be established. Encouraging repeat purchasing for a brand loyal is important and brands would use their existing positive (presumed) attitude and use messages to ensure consistency or slight improvement. In both scenarios, an appropriate message is required that will be within the latitude of acceptability for the brand to thrive.

Additional Discussion Questions (not in text) A. Establishing brand image is often difficult for new companies. Explain what these companies must do to establish a strong brand image.

As noted in the chapter, developing an image requires positioning. The chapter notes that there are six questions that must be answered to develop a position. In reviewing these, it becomes obvious that to create an image, the organization must determine what it wants to be, how it is different from competitors, and whether or not it can claim and maintain that image. The image then must be supported by an integrated marketing communications program, with each element designed to reinforce the image.

Companies fail to achieve a distinct image in the marketplace for a variety of reasons. First, all communications efforts do not support this image, due to inconsistencies. Secondly, the brand or corporate identity does not contribute to the overall image. Most importantly, building an image takes time. Companies that have been successful in building and/or changing their images have invested much time and effort into this endeavor, and have stayed with one consistent strategy through thick and thin.

B. Discuss the various attitude change strategies recognized by the multiattribute model. Discuss how an airline could use some of these attitude change strategies in their advertising and marketing programs.

The multiattribute model provides insight into several ways marketers can influence consume attitudes.

Each of these strategies might be used by an airline to influence the attitudes of flyers toward their airline. Each will be discussed.

The first strategy is increasing or changing the strength or belief rating of the airline on an important attribute. The airline should identify which attributes are important to flyers and emphasize them in their ads. For example, most airline flights are priced similarly so they focus their marketing and advertising on the quality of their service. They run ads that stress the high quality of customer service they provide at all levels of the flying experience.

Another strategy is changing consumers’ perceptions of the importance or value of an attribute. An airline may want to emphasize a particular feature or benefit and why it is should be important to flyers.

For example, airlines talk about their frequent flyer programs and encourage consumers to accumulate miles by being loyal to them.

Adding a new attribute to the attitude formation process is another strategy recognized by the multiattribute model. An airline may find a new service or benefit it wants to provide to consumers that isn’t currently offered by competitors. For example, some airlines have increased the amount of leg room they offer in coach class while others offer wider seating.

A final strategy is changing perceptions of belief ratings for a competing brand. An airline may identify an area where a competitor is weak or vulnerable and note this in a comparative ad. For example, one Chapter 6 – Advertising & Promotion,7th Canadian Edition ©2020 McGraw-Hill Ltd. 6-8

airline may have a better offering of flights between two cities or may have a better on-time arrival record. These advantages could be pointed out in a comparative advertisement.

C. Why is the brand attitude model important for brand positioning strategy?

The model is important since it provides a way of understanding and computing a target audience’s attitude to a brand. It is comprised of general cognition and affect towards the brand and individual cognitive and emotional element as well. These are manifested with beliefs about brand attributes (or benefits) and their importance. Once the decision maker has laid out all the possible attributes, and possibly obtained marker research ratings on them, the focus turns to which one or ones that need to be improved through communication to improve the overall brand effect. A few strategies to do this are shown in the text to plan for individual components to change.

IMC Exercise Find examples where an advertiser is having multiple brand positioning strategies. Suggest to students to find communications for a brand that are directed current customers (e.g., switchers) and other communications for the same brand that are directed to non-customers (e.g., new category users). Ask the students what makes the positioning unique for each target audience to support the brand position and what make the positioning similar to help support the overall market position.

IMC Comprehensive Project Students should be considering different positioning options at this stage so that the creative strategy and tactics have an appropriate strategic direction.

IMC Project Assignment for Chapter 6 Develop market position and brand position diagrams for the brand you are marketing. Identify certain opportunities for developing an improved brand positioning strategy decision. What attributes or benefits should the brand claim in its new advertising campaign? What method of positioning is most relevant in terms of consumer or competition? Identify the most relevant motive to base your positioning. What sources of information should be use as for the creative to support the brand positioning strategy?

Chapter 6 – Advertising & Promotion,7th Canadian Edition ©2020 McGraw-Hill Ltd. 6-9

CHAPTER 7 CREATIVE STRATEGY DECISIONS Chapter Overview Promotional planners receive direction from the situation analysis and decisions of the strategic marketing plan and translate that information into communication strategies for its target audiences. Further, promotional planners work with creative specialists to ensure that the communication strategies are executed with appropriate creative messages. This chapter is devoted to the specific creative strategy decisions in advertising; creative theme, message appeal, and source characteristics. Approaches used for determining the creative theme that forms the basis of an advertising campaign are described. Different types of message appeals are presented and theoretical conclusions from academic research are provided.

Adaptation of a model of source characteristics and its implication for advertising is explored.

Learning Objectives 1. Summarize the idea and importance of creativity in an advertising context.

2. Describe the creative strategy planning process.

3. Identify the approaches used for determining the creative theme that forms the basis of an advertising campaign.

4. Summarize the different types of message appeals that advertisers use to persuade their target audience.

5. Identify the source or communicator options a marketer has for a promotional message.

6. Apply source and message appeal options for different ad executions.

Chapter and Lecture Outline One of the most important components of an integrated marketing communications program is the advertising message. There are a myriad of ways to convey an advertising message, however, underlying the messages is a creative strategy determining what the advertising message will communicate and creative tactics dealing with how the message strategy will be executed. The focus of this chapter is on the development of creative strategy while tactical issues are covered in Chapter 8.

I.

ADVERTISING CREATIVITY

It is relevant to define creativity and explain its importance to see how it is critical for the promotional program. We examine the concept of creativity in general and see how it works in advertising.

A.

Definition of Advertising Creativity—creativity is a commonly used terms in advertising as those who develop advertising messages are referred to as “creative specialists”. Advertising agencies develop reputations for their creativity. So much attention is focused on creativity because the major challenge given to those who develop advertising messages is to be creative. Creativity has been defined as “a quality possessed by persons that enables them to generate novel approaches in situations, generally reflected in new and improved solutions to problems.”

Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-1

We are concerned with advertising creativity, which refers to “the ability to generate fresh, unique and appropriate ideas that can be used as effective solutions to communications issues.” Creative advertising ideas that are appropriate and effective require relevance and divergence. Relevance pertains to ad to consumer relevance and brand to consumer relevance so that processing and communication effects can take hold. Ads that hold no relevance for consumers are typically avoided or ignored. Seemingly in contrast though, divergence is important to break through the clutter of competing ads by as it offers a novel or unexpected scenario via originality, flexibility, elaboration, synthesis, artistic expression.

B.

Importance of Advertising Creativity—Perspectives of what constitutes creativity in advertising vary. At one extreme are the “suits” or “rationalists” who argue that advertising is creative only if it sells the product or service. At the other end of the continuum are the “poets” who judge creativity in terms of its artistic or aesthetic value and argue that creative advertising must be novel, original and unique. The answer as to what constitutes creative in advertising is probably somewhere between these two extreme positions.

The creative side of advertising is one of its most interesting aspects. The creative strategy used to communicate an advertising message is an integral part of the promotional process and is often critical to the success or failure of the campaign. Numerous examples or cases can be cited of how a good creative strategy was an important factor in determining the success of a product or service or reversing the fortunes of a struggling brand. Attention must also be given to the issue of creative versus effective advertising as ads may be critically acclaimed from a creative perspective but fail to help the sales of the brand.

Differing views of advertising creativity are seen among creative specialists as art directors and copy-writers can disagree on this matter, in addition, advertisers, students and the general public often differ in their views on creativity. Research concludes that processing effects and communication effects are two key indicators of effective creativity.

II.

PLANNING CREATIVE STRATEGY

Those who work on the creative side of advertising often face a major challenge. They must take all the research, creative briefs, strategy statements, communication objectives and other inputs and transform them into an advertising message. Their job is to write copy, design layouts and illustrations and produce commercials that communicate effectively. Marketers often hire advertising agencies to develop and implement their advertising campaigns because they are specialists in the creative function of advertising and are prepared for the creative challenge. However, it is important to point out that the development of creative strategy also involves representatives from the client side and other people in the agency as well as the creative staff. Planning creative strategy follows a general process that guides the development of the advertising campaign. Various types of research and information provide input and insight into the creative process. We discuss the concept of copy platforms that summarize the creative strategy recommendations of the creative specialists that guide the development of advertising campaigns.

A.

Creative Challenge—individuals who work on the creative side of advertising are responsible for developing an effective way of communicating the marketer’s message to their customers. The creative person or team is often provided with a great deal of input and background information on the target audience, such as their demographics, needs and motives, and communication objectives.

However, every marketing situation is different and requires a unique approach.

Creative people in agencies may argue that they often follow proven approaches or formulas when creating ads because they are safe and less likely to fail. They note that their clients are very often Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-2

risk averse and feel uncomfortable with advertising that is too different. It is important to note that companies who have very creative advertising are more willing to assume some risk. However, managers are more comfortable with advertising that is straightforward in communicating with customers and gives them a reason to buy.

B.

Creative Process—advertising people have argued that creativity in advertising is best viewed as a process and that creative success is most likely when some organized approach is followed. While most advertising people reject and/or resist attempts to standardize creativity or develop rules or guidelines to follow, most creative people do follow some type of process when approaching the task of developing an advertisement. There are several models or approaches to the creative process including those of James Webb Young, a former creative vice president at the J. Walter Thompson agency, which suggests that creative thought evolves in five stages Immersion. Read background information Digestion. Work the information over in one’s mind.

Incubation. Get away and let ideas develop Illumination. See the light or solution Verification. Refine the idea and see if it is an appropriate solution.

Models of the creative process offer an organized way of approaching an advertising problem.

These models stress the need for preparation or gathering of background information that is relevant to the problem as the first step in the creative process. A key factor is also the involvement of all participants including client personnel, creative specialist and account planners.

C.

Account Planning—account planner drive the creative process from the perspective of the client and coordinate the research so that creative and media specialists have sufficient information to make decisions that are effective for the client’s needs.

D.

Research in the Creative Process—specific research occurs at each of the stages of the creative process. There are numerous ways the creative specialist can acquire background information that is relevant to the advertising problem. Some of those discussed in the text include •

General preplanning input—informal fact-finding techniques and general preplanning input. Various ways of gathering background information might be discussed.

•

Product/service specific preplanning input—this involves different types of studies, usually quantitative, such as attitude, market structure and positioning, perceptual mapping and psychographic studies.

•

Qualitative research—techniques such as in-depth interview or focus groups with customers or ethnographic studies. Focus groups are a research method whereby consumers (usually 10 to 12 people) from the target audience are led through a discussion regarding a particular topic.

•

Evaluative research—at the verification stage of the creative process specialists evaluate ideas that come from the first stage, reject any that may be inappropriate, and refine those that remain and help give them final expression. Some of the techniques used at this stage Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-3

include: directed focus groups, message communication studies, portfolio tests, pretesting of ads in storyboard or animatic form E.

Creative Brief—a creative brief provides a plan or checklist that is useful in guiding the development of an advertising message or campaign. This document is prepared by the agency team or group assigned to the account and may include creative personnel as well as the account coordinator and representatives from media and research. The advertising manager and/or the marketing and product manager from the client side will also be involved in the process and must approve the copy platform. An example of a copy platform outline is shown in Figure 7-2.

F.

Advertising Campaign—a main characteristic of a campaign is multiple executions to tell the story of the brand and to allow consumers an understanding of the brand message. Generally, a minimum of three executions are run for marketing communication to be considered a campaign in comparison to a singular ad placement. This notion of three is not proven, but generally understood and is more of a practical suggestion based on observation.

III.

CREATIVE THEME

Most advertisements are part of a series of messages that make up an advertising campaign, which consists of multiple messages, often in a variety of media that centre on a single theme. The creative theme is a critical decision as it sets the direction for the development of the individual ads that make up the campaign that should reflect the market positioning strategy and establish the brand positioning strategy for the intended target audience. A campaign theme should be a strong idea, as it is the central message that will be communicated in all the advertising and other promotional activities.

A.

Origin of Creative Theme—an important part of creative strategy development is determining the central theme that will become the big idea for the ad campaign. There are several different approaches that can be used for developing the big idea and as the basis of creative strategy. Some of the best known and most discussed approaches include: 1. The unique selling proposition—this concept is described in Rosser Reeve’s Reality in Advertising. It’s three characteristics include: •

each advertisement must make a proposition to the consumer

•

the proposition must be one that the competition either cannot or does not offer

•

the proposition must be strong enough to pull over new customers to your brand

2. Creating a brand image—some competing brands are so similar it is difficult to find or create a unique attribute or benefit so the creative strategy is based on the development of a strong, memorable identity for the brand through image advertising.

3. Finding the inherent drama—Leo Burnett believed advertising should be based on a foundation of consumer benefits with an emphasis on the dramatic element in expressing these benefits.

4. Positioning—the basic idea is that advertising is used to establish or “position” the product or service in a particular place in the consumer’s mind. Positioning is often the basis of a firm’s creative strategy when it has multiple brands competing in the same market.

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5. Storytelling—an emerging creative approach in which advertisers develop longer video messages that provide extensive imagery and characterization that is wrapped up in a story format. Internet media provided the opportunity for advertisers to present transformational motivations in more involving messages that consumers select to watch themselves, although some are shown on TV and in cinema as indicated by the PC and Cineplex stories in this chapter.

These approaches to determining the major creative theme are used as the basis of the creative strategy for advertising campaigns. These creative approaches represent specific “creative styles” that have become associated with successful advertising creative minds and their agencies.

Instructors are encouraged to identify other creative approaches and styles.

B.

Campaign Slogans—The campaign theme is usually expressed through a slogan or tagline which briefly summarizes the idea in a few “catchy” words. Guidance on the selection of the best type of slogan is connected to brand attitude, brand awareness, strategic direction or aesthetics.

C.

Creative Consistency—it is generally recognized that successful creative themes tend to have consistency so that the target audience instantly understands that it is connected to a specific brand and when a particular execution is part of its respective campaign. The issue of consistency is summarized with examples in terms of time, executions, media, promotional tools and products.

Of course there are also situations where companies struggle to find a creative formula that works effectively.

D.

Canadian Creative Themes—the essence of a Canadian edition is captured in this part of the chapter that attempts to illustrate the importance and the success of unique creative themes for brands marketed in Canada. Instructors can raise the issue as to whether students agree with the conclusions of the culture research and whether the results imply the need for unique Canadian creative themes. A description of the Canadian awards can be contrasted with international competitions or merely described and winners shown, so that students are familiar with success.

IV.

MESSAGE APPEALS The message appeal refers to the approach used in the ad to influence the target audience’s attitude toward the product, service, or cause. The approaches are rational appeals and emotional appeals.

A.

Rational appeal—this type of appeal focuses on the consumer's practical, functional or utilitarian need for the product or service and/or specific reason for owning a particular brand. Examples of a product- or service-related appeal that would fall under the category of a rational appeal are discussed including: •

Feature appeal

•

Comparative appeal

•

Price appeal

•

News appeal

•

Popularity appeal

•

Reminder appeal Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-5

B.

Emotional appeal—this type of appeal relates to consumers' social and/or psychological needs for purchasing a product or service. Emotional appeals are popular as marketers observe via research that many purchase decisions are made on the basis of feelings and emotions since rational, functional-based differentiation between brands may be difficult. Examples of negative and positive emotions that can serve as a basis for an emotional appeal are shown in Figure 7-3 of the text and can be reviewed.

C.

Fear appeal—is used to create anxiety in the audience and arouse individuals to take action. Fear can stress negative consequences that may occur if behaviour is not altered such as ads that warn people not to smoke or drink and drive. Fear can also be used through the threat of social disapproval or rejection that an individual might suffer if s/he does not use a particular product or service (such as deodorant, mouthwash or dandruff shampoo).

A fear appeal can have facilitating effects by attracting attention and interest to a message and motivating the receiver to act to resolve the problem presented in the ad. However, high levels of fear can have inhibiting effects whereby the receiver may emotionally block out the message by tuning it out, selectively perceiving it or counterarguing against it. The nonmonotonic relationship between fear and persuasion is shown in Figure 7-4 and should be discussed. Attention is also given to an alternative approach to the curvilinear explanation of fear—the protection motivation model.

D.

Humour appeal—are used for a number of reasons including attracting and holding consumers’ attention, putting them in a favorable mood, creating affect that may transfer to the product or service being advertised, and reduce counterarguing by serving as a distracter. Problems with a humourous appeal include the possibility of drawing attention to the ad but at the expense of message content. Effective humour is also difficult to create and execute. Top advertising executives’ opinions of the pros and cons of humour are summarized in Figure 7-5 and should be discussed.

E.

Combined Rational and Emotional Appeal—purchase decisions are often made on the basis of both rational and emotional considerations. Thus rational and emotional appeals may be combined in the advertisement to attempt to influence both types of purchase motives. Sometimes, teaser advertising combines both rational and emotional appeals by talking about a brand but not actually showing it to build curiosity, interest, and/or excitement about a brand.

V.

SOURCE CHARACTERISTICS The source of a marketing communication is a multifaceted concept since numerous sources can be included in a promotional situation. We will use the term source to mean the person who is involved in the communication of a promotional message in either a direct or indirect manner. A direct source is a spokesperson that delivers a promotional message, demonstrates a product or service, and/or endorses a product or service. Spokespeople used in advertisements is an example of a direct source. An indirect source does not actually deliver a message but rather is used to draw attention to or enhance the appearance of a promotional message. Decorative models are a good example of an indirect source. Most of the theory and research associated with the study of source factors deal with the characteristics of individuals as communicators of a persuasive message and how they influence communication effectiveness. This is the approach we use to examine source characteristics.

The characteristics of the source usually have an impact on the effect of the advertising message.

A useful framework for examining source characteristics is the classification scheme developed by Herbert Kelman. This scheme recognizes three categories of source attributes with each involving Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-6

a different process by which the source influences attitudinal or behavioural change in the message recipient.

A.

Source Credibility—refers to the extent to which the source is perceived as having knowledge, skill or experience relevant to the communication topic and can be trusted to give an unbiased opinion or present objective information on the issue. Information from a credible source can influence beliefs, opinions, attitudes, and/or behaviour through a process known as internalization whereby the receiver desires to have an objectively correct or “right” position on an issue.

1. Source expertise is an important dimension of credibility through spokespeople such as doctors or professionals who endorse a brand. Celebrities may be seen as experts in some instances (e.g., sport equipment). Authoritative spokespeople with certain a certain demeanor may also be perceived as experts.

2. Trustworthiness is another important dimension of credibility through spokespeople who demonstrate characteristics in which the message would be more believable. Using corporate leaders as spokespeople—companies believe the use of their president or CEO is the ultimate expression of the company’s commitment to quality and customer service.

3. Limitations of credible sources—In some situations a high-credibility source may be less effective than a moderate- or low-credibility source such as when the receiver has a favorable initial attitude or opinion. In this situation the use of a highly credible source may lead the receiver to attribute his or her opinion to the source rather than the message being communicated. However when a moderate- or low-credibility source is used, the receiver cannot really attribute his or her attitude or opinion to the source.

B.

Source Attractiveness—a commonly used source characteristic in advertising is that of attractiveness. Attractiveness also has sub-components including similarity, familiarity and likability. The process through which attractiveness leads to persuasion is identification whereby the receiver seeks some type of relationship with the source by adopting a similar position.

1. Similarity—marketers recognize that people are more likely to be influenced by a message coming from someone with whom they feel a sense of similarity. A common cognitive response to ads with a similar person as the target audience is something along the lines of “I can see myself in that situation”. Ads with a similarity source characteristic often feature a person who looks like an “everyday” person.

2. Likability—marketers use source characteristics that enhance the brand in every imaginable way such as looks, personality or behaviour. A common technique used by advertisers to draw attention to an ad and enhance its effectiveness is the use of a physically attractive model. Often these models are used in a passive or “decorative” manner rather than as active communicators.

A number of factors must be considered in using decorative models such as whether they are appropriate or relevant to the product or service being advertised and whether they will draw attention to the ad but not the product or advertising message.

3. Familiarity—advertisers have long recognized the value of using celebrities such as television and movie stars, athletes, musicians or other popular figures to endorse their products and services. Celebrities are used because they have “stopping power” due to their familiarity and draw attention to advertising messages. Another reason is the expectation that the respect, popularity, and/or admiration the celebrity enjoys will influence consumers’ feelings and, of course, their purchase behaviour toward the brand the celebrity is endorsing. Familiarity is also Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-7

observed with people or situations that are common, like the typical office worker or a normal family situation.

4. Celebrity Endorsers—Despite the prevalence of using a celebrity, a number of factors must be considered in using celebrities as a spokesperson such as: a. Overshadowing the product—while a celebrity may draw attention to an ad, consumers may focus on the celebrity rather than the product or service and the advertising message. b. Overexposure—consumers generally recognize that celebrities endorse a product or service because they are paid to do so. When a celebrity endorses a number of products s/he may become over exposed and lose credibility. c. Target audience’s Receptivity—attention must be given to the target audience and whether the celebrity is appropriate for the consumers in this market. For example, younger consumers may be more impressed by celebrities than older people. d. Risk for Advertiser—a risk to the brand occur if the celebrity’s behavior is inappropriate in some manner that is not agreeable to the target audience.

5. The meaning of celebrity endorsers—advertisers should use celebrities who are connected in some way to the product or services they are endorsing. This means that marketers must understand the image and meaning a celebrity projects to consumers.

An insightful perspective on celebrity endorsement based on meaning transfer has been developed by McCracken. His model, which is shown in Figure 7-6 of the text, suggests that a celebrity’s effectiveness as an endorser depends on the culturally acquired meaning he or she brings to the endorsement process. Celebrities draw these meanings from the roles they assume in their entertainment or athletic careers. The model suggests that celebrity endorsers bring their meanings into the advertisement and transfer them to the products they are endorsing.

These meanings are then in turn transferred to the consumer when they purchase a product or service. The implications of the meaning transfer model should be discussed. Current examples of celebrities whose image is capitalized on by marketers who use them in their ads should be noted.

VI.

IMC PLANNING: MESSAGE AND SOURCE COMBINATIONS

Examples are highlighted where advertisers use varying combinations of source and message appeals thus suggesting a planning template shown in Figure 7-7. The idea of the IMC planning section is to indicate the variety of choices promotional planners have within the basic creative strategy concepts.

Teaching Suggestions Most students find the creative side as the most interesting aspect of advertising and promotion, and they typically do not have an appreciation for what is involved in the development of an advertising campaign.

They may think that the development of a campaign and individual messages involves only the agency creative department. It is important to stress the fact that the development of a campaign involves numerous individuals from both the other departments of the agency as well as on the client side. Since the creative message is so critical to the goals of so many parties involved, and since the creative has a significant connection to positioning, this chapter has attempted to demonstrate the connection more obviously than other texts. Most students will not end up being directly involved in the design and creation of Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-8

advertisements. However, creative strategy is often critical to the success of the firm’s integrated marketing communications efforts. Thus, it is important that everyone involved with the marketing and promotional program have some understanding of the creative process that underlies the development of advertising messages, as well as the creative options available to the advertiser.

Some interesting discussion can be generated over the issues of what constitutes creative advertising.

Students might be asked to debate the different perspectives of advertising creativity. One side can take the “its only creative if it sells” position versus the “aesthetic, novelty/uniqueness” perspective. Some discussions can also be generated over the issue of creative risk taking and just how much latitude the client should give the agency when it comes to creating the advertising message.

This chapter is devoted to the three primary decisions that constitute the creative strategy. It is important to make sure the basis definitions are communicated, but it is especially important to investigate actual ads for two purposes. First, students generally need help identifying the decisions that an advertiser has used in a print ad for example. Thus, basic comprehension questions can be asked with relevant examples. Second, instructors should explain or generate discussion on the reasons why the advertiser might have made their decision and how the ads in question would be appropriate for achieving communication effects and for reinforcing the brand positioning strategy. Lecture and discussion should definitely use examples.

Vignette 1. Why does it make sense for PC to advertise with long, emotional messages to encourage people to #EatTogether?

It is fashionable for brands to use advertising like this as a “movement” for social change, however this example is quite clear in encouraging consumers to produce meals at home and celebrate meals with friends and family. From a competitive standpoint, grocery retailers face competition from restaurants, but more recently from the more convenient delivery of this food by Uber etc. Statistics are quite clear that Canadians are relying on prepared food rather that making food more than in the past. We many suggest that this ad support category need communication objective of grocery food vs. restaurant prepared food. As for the ad campaign, instructors can show how creative the message are and point out how well it uses storytelling and an emotional appeal with source similarity.

IMC Perspective 7-1 1. Why does Cineplex want to associate its brand with the idea of love among the family?

Considerable movie going consumption is with family members such as couples, and parents with children. The ads cleverly encourage greater movie going vs. streaming at home with the idea of enjoying movies with loved ones. Movies tell the stories about love and family in many instances so carrying on this idea as the essence of message makes the ads mini-movies themselves as they use the storytelling approach for creativity. This example and the vignette, show how creative messages contribute to solving a marketing communication issue driven by competition points of the situation analysis.

IMC Perspective 7-2 1. Why does a mix of rational and emotional appeal work for Interac?

A combined rational and emotional appeal seems to work well for Interac. There is considerable consumer education required as payment systems change supporting a rational appeal. The risks Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-9

associated with technology, money and payment suggest the importance of emotional appeals so consumers feel reassure that the process will work well.

Answers to Review Questions 1

Television commercials can use unusual creativity that has very little relevance to the product being advertised. Explain why creative specialists would recommend such ads and why the brand managers would approve the production and placement.

Creative personnel face a major challenge as they must develop ads that will break through the media clutter and grab the attention of the viewer, listener or reader. This can be particularly difficult in the broadcast media and online as consumers watching TV, listening to radio or browsing the Internet are often trying to avoid ads rather than pay attention to them. While consumers may be more receptive to advertising in magazines or newspapers, the vast numbers of ads that appear in most publications makes it very challenging for any one ad to get noticed. Thus, creative personnel argue that they must use novel tactics such as startling images, sexual or suggestive appeals or very irreverent ads that can break through the clutter and get noticed by the consumer. It often appears that the goal of these ads is to entertain the viewer or listener rather than to deliver a strong message to them. These types of ads often do not contain a message that is relevant to the product but do get noticed and register a brand name or attribute association. Creative personnel will also argue the main goal of advertising is to create and maintain top-of-mind awareness and novel or unusual ads are an effective way of doing this.

Those who are from the “it is not creative unless it sells” school of advertising argue that the goal of advertising should be to deliver relevant information that helps sell the brand. They do not accept the breaking through the clutter, capturing attention or creating controversy argument as viable excuses for developing ads that do not deliver a relevant message or communicate a selling point. They expect advertising to do more than maintain brand awareness and feel that creative personnel should be challenged to do more than develop irreverent or unusual messages.

2. Describe the types of general and product-specific preplanning input one might evaluate when assigned to work an advertising campaign for a new brand of bottled water.

General preplanning input includes overall information on trends, developments and conditions in the marketplace that would be relevant to the marketing of the product. In the case of a new brand of bottled water, the advertiser would want to know about a number of trends and developments affecting the beverage market such as the increasing popularity of new age drinks. Information on the changing lifestyles of consumers and how this might affect their beverage consumption would also be relevant as would product specific information on the bottled water segment of the beverage market.

Product-specific preplanning input includes information that is directly relevant to the product or service. Usage and attitude studies regarding bottled water users and nonusers in particular, could be performed as well as psychographic studies. Problem detection studies could be performed to determine what changes or improvements consumers would like to see in bottled water (e.g., taste, flavors, nutritional supplements). The outcome of a problem detection study may provide input for product improvements, reformulations, or new brands. It would also be important to have information on the type of advertising being used by competitors.

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3. What is your opinion of advertising awards, such as the Cannes Lions, that are based solely on creativity? If you were a marketer looking for an agency, would you take these creative awards into consideration in your agency evaluation process? Why or why not?

There are numerous arguments that can be made both for and against advertising awards that are based primarily on creativity. In defense of awards based on creativity, it should be noted that a major challenge given to the artists, copywriters, and creative directors is basically to be creative. They are given the charge of turning advertising and communication objectives, product/services attributes and benefits, and selling premises into a creative concept that will bring the message to life and capture the attention of consumers. Another argument in favour of the value of creative based awards is that they function as “report cards” from the other creatives who judge them and help the advertising industry set high standards for itself. It has also been argued that creative awards are very motivating to creative people, who often are driven by more than financial compensation, and are a catalyst for creative excellence.

There are also problems with creative awards such as the classic argument that an award-winning ad is of little value unless it results in sales of the product. Critics of awards have also noted that agency personnel have become too obsessed with winning creative awards and too much time, energy and money are devoted to entering advertising award competitions. There is also concern that the creative personnel may be more concerned with the award winning potential of an ad than its ability to sell the client’s product.

It is reasonable for agencies as well as individuals to pride themselves on their creative awards. First of all awards recognize that the creative specialists are doing their job very well. Moreover, creative awards can be very important to an agency (and individuals) in terms of recognition, visibility and ultimately more business and income.

4.

Assume that a government agency wants to use a fear appeal message to encourage college and university students not to drink and drive. Explain how fear appeals might affect persuasion and what factors should be taken into consideration in developing the ads.

Fear can affect persuasion in both a positive and negative manner. An anti-drinking and driving message with a low level of fear can have facilitating effects if it attracts the attention and interest of students and motivates them to consider how they might try to resolve the threat. This suggests that a mild fear appeal may be effective in changing attitudes and behaviour of college students as it may get them to think about the negative consequences involved and think about how they might avoid them. Fear appeals can also have a negative or inhibiting effect and a message that uses too much fear may cause students to tune it out, perceive it selectively, counter-argue against it or discount the likelihood of the negative consequences happening to them. One potential problem with anti-drinking and driving messages targeted at students is that young people tend to perceive themselves as invulnerable and thus they may discount any negative outcomes shown in the message as unlikely to occur to them.

A number of factors should be taken into consideration in developing a fear appeal message for this audience. As noted above, students are a market segment that may require special consideration when using a fear appeal message. This audience may be likely to discount fear appeal messages that are too strong or seen as too unrealistic. The credibility of the source used in the message may be very important and consideration might be given to using a source with whom this group identifies and might not easily derogate. Research on fear appeals has shown that they are more effective among non-users of a product than users. Thus it may be more effective to target fear appeals at those students who are not heavy drinkers and encourage them to take responsibility for those students who do drink and drive. The Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-11

designated driver program and responsible drinking campaigns of liquor and beer companies often do this.

5.

What are source characteristics? What types are there? How do they affect processing of a message and the communication effects of the message?

Source characteristics are source credibility comprised of source expertise and source trustworthiness, and source attractiveness comprised of source similarity, source likability, and source familiarity. Each of these five characteristics can influence the processing in varying ways via low or high involvement or their emotional content (e.g., processing) or communication effects (e.g., awareness). For example, a high profile celebrity endorser will likely attract attention and facilitate emotional associations to the brand via the spokesperson. Similarly, the celebrity may allow stronger recall from the brand connection made in the ad with the fame of the person. This illustration shows the kind of logic student should use when making creative strategy decisions. The decision must be justified in terms of how it would link to the effects of the communication.

6.

How is it possible that an IMC program could have multiple sources for the message using both rational and emotional appeals?

An IMC program will likely be using multiple media and multiple IMC tools to influence rationally and emotionally. Since the points raised in question five are realistic, the IMC program may use different sources across the media and tools resulting in differing effects. For example, the telecommunication brands often will use a more rational appeal on radio and have an entirely different source than those used in the TV ads where the message may be a combined rational and emotional appeal. Alternatively, aspects of digital messaging may be solely emotional leading to an entirely unique source. These points can carry over to IMC tools where the brand may use different sources for public relations activities. For example, Clara Hughes is the focus of Bell’s Let’s Talk campaign in support of mental health, however she is not a spokesperson for Bell’s regular advertising.

Answers to Applied Questions 1. Find an example of a print ad that you think is very creative and ad you feel is dull and boring. Select each element of the ad and figure out how it is contributing to the creativity or the lack of creativity.

Students should be asked to find examples of print ads that they find particularly creative as well as dull and explain why they judge them so. Their analysis should focus on specific aspects of these ads that make them exciting or interesting versus dull and boring. It is likely that they will find more creative and exciting ads in publications that are targeted to their age group such as Rolling Stone or fashion magazines. Less exciting ads may be found in general interest publications such as Reader’s Digest, and Time and or business publications.

2. The chapter outlined a few campaigns; look on the Internet to research and figure out the most successful Canadian campaign in recent years.

Students should likely find CASSIES in their investigations since this is referenced in the section for LO2. They may also find creative awards presented by each media or by the trade publications. The idea of the question is for students to seek out Canadian examples of very good advertising to understand that very good creative is originating from Canada. An additional point to raise is that students should be in tune with the fact that they are seeing Canadian, American and International campaigns on a daily basis and that understanding the source will give a new found appreciation of the styles and messages.

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3. Find an example of an ad or campaign that you think reflects one of the approaches used to develop a creative theme such as unique selling proposition, brand image, inherent drama, or positioning.

Discuss how the creative theme is used in this ad or campaign.

There are four approaches discussed in the text for developing creative theme/ideas that can serve as the basis of the creative strategy. These include the unique selling proposition, creation of a brand image, the use of inherent drama and positioning. Students should bring in examples of ads that they feel are examples of each approach to developing a creative theme and describe the logic of their selection. Instructors should challenge students on why the selection is effective and also investigate whether an alternative approach might have worked as well or better.

4. Describe how a few of the negative emotions conveyed in Figure 7-3 could be used in a campaign for car insurance. Describe how a few of the positive emotions convey in Figure 7-3 could be used in a campaign for smartphones.

Anger can be shown in a scenario where the policyholder does not have the proper coverage during a claim and is therefore dissatisfied and the ad can show the frustrated consumer moving to a new brand of insurer. An unexpected negative emotion could be envy where a policyholder sees a friend or relative get certain coverage not part of his or her policy. Contentment is often shown in smartphone ads where consumers enjoy and savor the features of the new version.

5. Find a celebrity who is currently appearing in ads for a particular company or brand and use McCracken’s meaning transfer model (shown in Figure 7-7) to analyze the use of the celebrity as a spokesperson.

McCracken’s meaning transfer model provides a very interesting perspective on celebrity endorsements. According to this model, a celebrity’s effectiveness as an endorser depends on the culturally acquired meaning s/he brings to the endorsement process. Celebrities acquire these meanings from the roles they assume in their careers as entertainers, athletes, politicians and other areas. They then bring these meanings into the advertisements in which they appear and transfer them to the product or service they are endorsing. Students should be asked to find a celebrity who is currently endorsing a product, service or company and analyze his or her endorsement effectiveness in terms of McCracken’s model. They should discuss how the celebrity acquired his or her meaning and whether it transfers well to the company or brand they are endorsing.

6. Actors portraying doctors in ads are often used for rational appeals. In what situation might it make sense to have a doctor for an emotional appeal? What type of emotional appeal would be most logical from Figure 7-3.

The purpose of this question is for students to apply the ideas of Figure 7-7. It would be generally unexpected to use a doctor for emotional appeals and that is the idea of Figure 7-7, to allow promotional planners to think beyond traditional means when putting together a creative strategy. In all likelihood, it will be challenging for students to arrive at a scenario where a doctor spokesperson may work for some of the emotions, but the exercise does prove to be a challenge to figure out.

Additional Discussion Questions (not in text) A. Discuss the pros and cons of using a comparative advertising appeal.

There are several advantages to using a comparative advertising message. A comparative ad may be a way of gaining attention, particularly when a new or lesser-known brand compares itself to a wellChapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-13

known brand or market leader. Comparative ads also allow a company to directly communicate the features, attributes, benefits, and advantages of its product or service relative to those of its competitor(s). For a new brand, comparative advertising provides a way of positioning the product in the evoked set of brands the consumer might consider. Potential problems with comparative advertising are that consumers may see these ads as less believable and more offensive than non-comparative messages. Users of the attacked brand may be particularly skeptical about the credibility of comparative claims. There is also the possibility that the use of a comparative message may focus more attention on the competitor’s brand and benefit them more than the sponsoring brand.

B.

What are the differences between creative strategy and creative tactics? Why is it important to make a distinction between these two concepts?

Creative strategy determines what an advertising campaign and messages will say or communicate. It is best viewed as a process that is designed for determining what the advertising should communicate about the product or service and the big idea that will be used as the central theme of the advertising campaign. Creative tactics focus on how the advertising campaign and messages will be communicated with regard to areas such as execution styles as well as the tactical issues involved in the design and production of advertising. It is important to make a distinction between the two concepts because the creative strategy must be established before the customer tactics are developed.

C.

What is meant by a unique selling proposition (USP)? Find an example of an ad your feel uses a unique selling proposition as its major selling idea. Evaluate this ad against the three characteristics of USP’s discussed in this chapter.

The concept of the unique selling proposition (USP) was developed by the famous advertising copywriter Rosser Reeves. The concept of a USP is that it offers the consumer a specific feature or benefit that is important to them and unique to this particular brand. The three characteristics of a USP are that each ad must make a proposition to the consumer that tells them the benefit they will get by buying the brand; the proposition must be one that the competition either cannot or does not offer; and the proposition must have motivating power and thus be able to convince consumers to buy the brand.

Students should be encouraged to find an example of an advertisement that they feel uses a USP as its major selling proposition. The ad should be evaluated against the three characteristics of USPs discussed here and in the chapter.

D. What are the stages of the creative process? Do you agree with the notion that advertising creativity can or should follow a definitive process?

The stages of the creative process of advertising include: preparation → incubation → illumination → verification/revision. The notion that there is some definitive process to advertising creativity is logical although it should not be expected that every creative specialist will follow this procedure in developing an advertisement. Models of stages of the creative process are valuable as they offer an organized way of approaching an advertising problem. Virtually all creative specialists will want to prepare themselves by gathering background information that is relevant to the advertising problem or by examining research or engaging in fact finding that will help them generate creative ideas or solutions. It is also important to subject creative ideas to verification so as to reject any inappropriate ones and refine and polish those that remain in order to give them optimal final expression.

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E.

Marketers choose message sources with high credibility. Discuss some reasons why it may be unnecessary or even detrimental to use a source that is high in credibility.

There are some situations where high source credibility may not be necessary and may even be a liability. A high credibility source is likely to be most effective when message recipients are opposed to the position advocated in the message as the credible communicator will inhibit counterarguing and source derogation. However, a high-credibility source may not be needed when the audience has a neutral position and may even be less effective than a moderately credible source when the receiver’s initial attitude is favourable. The reason for this is that when a low credibility source is used the message recipients are encouraged to review personal thoughts that are supportive of their favourable position rather than attributing their feelings to the highly credible communicator. Studies have also shown that high and low-credibility sources are equally effective when they are arguing for a position opposing their own best interest.

Another reason why a low-credibility source may be as effective as a high-credibility source is because of the sleeper-effect phenomenon. While the immediate impact of a persuasive message may be inhibited because of its association with a low-credibility source, the association of the message with the source diminishes over time and the receiver’s attention focuses on the information in the message.

Thus the positive effects of using a high-credibility source will diminish over time as will the initial negative impact of using a low-credibility source.

IMC Exercise Find an example of three current advertising campaigns that are using at least one of the following source or message factors: •

a celebrity spokesperson

•

a corporate leader such as the president, founder or CEO as an advertising spokesperson

•

a fear appeal message

•

a humourous appeal message

Analyze the advertisers’ use of this particular source or message factor. Why do you think they chose to use this particular source or type of message? Are the spokespersons and/or messages appropriate or inappropriate for this particular brand of product or service? How might the use of this type of source or message impact the way consumers in the target audience respond to the advertising campaign?

IMC Comprehensive Project Students should be prepared to begin focusing attention on the advertising component of their IMC plan.

They should be able to use the information in this chapter to begin developing the creative approach and campaign theme for their plan. The specific assignment is as follows: IMC Project Assignment for Chapter 7 You should be ready to begin developing the advertising component of the IMC plan for your product or service. Develop a copy platform that contains the basic creative strategy for your advertising campaign.

You can use the copy platform outline shown in Figure 7-2 as a guideline. What is the advertising campaign theme you have chosen for your product or service? Are you using any of the approaches discussed in the chapter such as unique selling proposition, brand image, inherent drama or positioning as the basis for your major selling idea? Identify the message appeal that would most suitable and provide justification based on Chapter 7 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 7-15

conclusions from your situation analysis. Determine if you will use any key source characteristics to influence the target audience you have previously selected.

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CHAPTER 8 CREATIVE TACTICS DECISIONS Chapter Overview This chapter summarizes three decisions pertaining to creative tactics: execution style, message structure and design elements. The chapter then presents a framework for creative specialists and marketers to help them make the appropriate decisions for the creative tactics to achieve brand awareness and brand attitude communication effects. The framework uses the target audience’s current brand attitude as the starting point for deciding the correct execution style, message structure and design.

Learning Objectives 1. Analyze the creative execution styles that advertisers can use and the situations where they are most appropriate.

2. Explain different types of message structures that can be used to develop a promotional message.

3. Express design elements involved in the creation of print advertising, video, and audio messages.

4. Apply a planning model for making creative tactics decisions.

5. Illustrate how clients evaluate the creative work of their agencies and discuss guidelines for the evaluation and approval process.

Chapter and Lecture Outline I.

EXECUTION STYLE

Creative execution style refers to the manner in which an advertising appeal is presented. A particular advertising appeal can be executed in a variety of ways and a particular means of execution can be applied to a variety of advertising appeals. Usually, execution techniques are combined in presenting an advertising message. For example, slice-of-life ads are often used to demonstrate a product or make brand comparisons.

Some of the more commonly used execution techniques include: A.

Straight-sell—relies on a straightforward presentation of information about the product or service such as specific attributes or benefits.

B.

Scientific/technical evidence—a variation of the straight sell where scientific or technical evidence or information is presented in the ad to support a claim.

C.

Demonstration—is designed to illustrate the key advantages or benefits of a product or service by showing it in actual use or in some contrived or staged situation.

D.

Comparison—involves a direct or indirect comparison of a brand against the competition.

E.

Testimonial—whereby a person speak on behalf of the product or service based on his or her personal use of and/or experiences with it.

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F.

Slice of life—shows a real-life situation involving a problem, conflict or situation consumers may face in their daily lives. The ad then focuses on showing how the advertiser's product or service can resolve the problem.

G.

Animation—uses characters or scenes drawn by artists or on computer. Animation is often used as an execution technique for advertising targeted at children.

H.

Personality symbol—involves the use of a central character or personality symbol to deliver the advertising message and with which the product or service can be identified. The personality symbol can be a person who is used as a spokesperson, animated characters or animals.

I.

Imagery—shows an imaginary situation or illusion involving a consumer and the product or service. Cosmetic companies often use imagery executions although the technique has also been used in advertising for other products such as automobiles and beer.

J.

Dramatization—creates a suspenseful situation or scenario in the form of a short story.

Dramatizations often use the problem/solution approach as they show how the advertised brand can help resolve a problem.

K.

Humour—can be used as the basis for an advertising appeal, however, it can also be used as a way of executing the message and presenting other types of advertising appeals.

II.

MESSAGE STRUCTURE

The manner in which marketing communication message points are presented is very important for the receiver to understand its meaning and to retain the message in memory. Consideration must be given to message content and how the information will be structured for presentation. Four message structure considerations are discussed.

A.

Order of presentation—should important message points or arguments be placed at the beginning of the message, in the middle or at the end? A primacy effect suggests that the information placed at the beginning of the message is most effective while a recency effect suggests that the arguments at the end are most effective.

B.

Conclusion drawing—should a message draw an explicit conclusion for the audience or allow them to form their own conclusions? Research has shown that, in general, messages with explicit conclusions are more easily understood and effective. However, some studies show that the effectiveness of conclusion drawing may depend on the target audience, the type of issue and nature of the situation.

C.

Message sidedness—should a marketing communication use a one-sided message whereby only positive attributes or benefits of a product or service are mentioned or a two-sided message where both strong and weak points or attributes are presented.

D.

Verbal/Visual Balance—both the verbal and nonverbal or visual portions of an advertisement influence the way an advertising message is processed. Verbal or copy aspects of the message are important in conveying rational or factual messages while nonverbal or visual elements of an ad are important for developing emotional and image based associations.

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III.

DESIGN ELEMENTS FOR IMC TOOLS

Once the creative strategy and initial creative tactics decisions have been determined, attention turns to creating the actual advertisement. The design and production of an advertising message involves a number of activities such as writing copy, developing illustrations and other visual elements of the ad and bringing all of the pieces together in a finished product.

A.

Design for Print Message—three components of a print ad include the headline, subhead, body copy, and the visual elements or illustrations. These elements are brought together through a layout.

1. Headlines—the headline refers to the words in the leading position of the advertisement— those that are likely to be read first or are positioned to draw the most attention. The most important function of a headline is to attract the readers’ attention and make them interested in the remainder of the advertising message.

•

Direct headlines – straightforward and informative in terms of the message presented

•

Indirect headlines—provoke curiosity and intrigue by using questions, challenges, provocations, and other methods

2. Subheads—ads also contain a main headline and one or more secondary headlines or subheads.

These subheads usually appear in a smaller type size than the main headline and are generally larger the type size used for the body copy. They are used to break-up or section off large amount of body copy and highlight key sales points in the ad.

3. Body copy—the main text portion of a print ad is referred to as the body copy. Body copy content depends on the type of advertising appeal and/or execution style being used.

4. Visual elements—another major component of a print ad is the visual elements or illustrations.

Visual components often dominate print advertising and play a very important role in determining effectiveness.

5. Layout—a layout refers to the physical arrangement of the parts of the ad including the headline, subheads, illustrations, body copy and any identifying marks.

B.

Design for Video Message—video messages have several components which must work together to create the right impact and communicate the advertiser's message.

1. Video—video or visual elements are what are seen on the screen. Decisions have to be made regarding the main focus of the visual such as the product, the presenter, action sequences, lighting graphics, color and other factors.

2. Audio—the audio portion includes several elements such as voice, music and sound effects.

Voices may be heard through the direct presentation of a spokesperson or as a dialogue or conversation among people in the commercial. A common method for presenting the audio portion of a commercial is through a voice-over whereby the message is delivered or action on the screen is narrated by the voice of an announcer who is not visible. A trend among major advertisers is to hire celebrities with distinctive voices to do the voiceovers for their commercials.

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Music—a very important part is music which plays provides a pleasant background or helping create the appropriate mood or setting. Another important musical element is jingles, which are catchy songs about a product or service that usually carry the advertising theme and a simple message.

3

C.

Production of Video Messages—elements are brought together in a document known as a script which is a written version of a video message that provides a detail description of its video and audio content. The script indicates the audio components such as the copy to be spoken by voices, music and sound effects. The video portion of the script provides the visual plan. Once the basic script has been conceived, the writer and art director get together to produce a storyboard or a series of drawings used to present the visual plan or layout of a proposed commercial. Once the client approves the storyboard, the message is ready to move to the production process involving three phases; preproduction, production, postproduction.

Design for Audio Message—audio messages have components which must work together to create the right impact and communicate the advertiser's message. Audio messages are traditionally heard with radio, but technological advancements are making them more prevalent in other domains like podcasts etc.

1. Verbal—the message is organized and structured much like the body copy in a print ad or the dialogue in a video message, however a number of styles are used to fit the verbal only format of audio ads.

2. Sound—the sound portion includes several elements such as voice, music and sound effects, with the latter two becoming very critical for branding purposes.

IV.

PLANNING MODEL FOR CREATIVE TACTICS

The R&P perspective discussed in previous chapters also includes recommendations for creative tactics for two main communication objectives.

A.

Tactics for Brand Awareness—Creative tactics are recommended for general awareness, for brand recognition, and for brand recall. Instructors can review ads to illustrate each of the tactics applied.

B.

Tactics for Brand Attitude—Creative tactics are recommended for all four approaches for influencing brand attitude as shown on the grid embedded within the section.

1. Brand Attitude Grid—the grid indicates attitude persuasion is a function of motivation and involvement, consistent with earlier points identified in previous chapters.

2. Brand Attitude Grid Tactics—using the dimensions of involvement and motivation, the creative tactics recommendations for the four brand attitude cells are outlined.

3. Low Involvement—Informational Creative Tactics—ads should have a very obvious benefit claim with an unusual execution style.

4. Low Involvement—Transformational Creative Tactics—three emotional portrayal guidelines are critical for this type of attitude.

5. High Involvement—Informational Creative Tactics—illustrates the importance of information as high involvement implies the requirement of considerable and accurate benefit claims.

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6. High Involvement—Transformational Creative Tactics—persuasion through this type of attitude formation requires strong emphasis of the emotion.

V.

IMC PLANNING: GUIDELINES FOR CREATIVE EVALUATION

While the creative specialists determine the advertising appeal and execution style that will be used in the campaign, the client must evaluate and approve the creative approach before any ads are actually produced.

A number of different people on the client side may be involved in evaluating and approving the creative work of the agency. The amount and influence of these individuals will depend on the company's organization and policies, the importance of the product to the company, the role of advertising in the marketing program, and the nature of the advertising approach being recommended.

There are two stages in the development of advertising—creation and production. Once the creative approach has been determined and approved, the attention turns to the production process, which involves a variety of functions needed to produce the ad or commercial and put it into a finished form suitable for use by the media. The client will have the opportunity to review the final version of the advertisement after the production stage. However, it is important that a careful evaluation be made before the ad actually enters production as this stage requires a substantial investment of time and money.

There are a number of guidelines that personnel on the client side might use to evaluate the creative approaches suggested by the agency. Some of the most important and basic criteria or guidelines that might be used in evaluating creative approaches are discussed in the text and include the following: •

Is the creative approach consistent with the brand's marketing and advertising objectives?

•

Is the creative approach consistent with the communication objectives?

•

Is the creative approach appropriate for the target audience?

•

Does the creative approach communicate a clear and convincing message to the customer?

•

Does the creative approach keep from overwhelming the message?

•

Is the creative approach appropriate for the media environment in which it is likely to be seen?

•

Is the ad truthful and tasteful?

Teaching Suggestions Nearly every student has an opinion about the quality and effectiveness of ads and those that they feel are particularly good or bad. Students should enjoy reading this chapter and learning about the execution styles that can be used by advertisers. An interesting way of beginning the lecture on creative tactics is to ask the students to name the TV commercial or print ad they would rate as the "most outstanding" one they have seen lately. You might then ask them how they think their list of top commercials would compare against that of ad critics. Publications such as Marketing Magazine pick the best ads each year and feature them in special editions.

This chapter does not go into a great amount of detail regarding the process of creating and producing the advertisement. If more detail is desired on areas such as art and layout, copywriting or print and broadcast production students might be referred to a more traditional advertising principles book such as Contemporary Advertising by William F. Arens. There are also numerous books available on the creative process such as Creative Strategy in Advertising by A. Jerome Jeweler and Bonnie L. Drewniany and Creative Advertising: Theory and Practice by Sandra E. Moriarty. Students interested in specific areas of the creative process such as copywriting or layout can be referred to some of the books in these areas such Chapter 8 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 8-5

as The Design of Advertising by Roy Paul Nelson, Advertising Copywriting by Philip Ward Burton and Fundamentals of Copy & Layout by Albert C. Book and C. Dennis Schick.

Vignette 1. Why does such an unusual ad execution work for this brand? And why does it work for this product category?

This example illustrates a trend of brands associating with a social issue. Instructors can use this example to discuss whether this approach is effective for brand positioning. Since the execution is longer, instructors can examine all of the creative tactic decsions that are used. And, it is possible to examine the execution along the R&P creative tactics for the most logical brand attitude communication effect. Presumably, consumers are interested in longer video version of ad messages for the story the unfolds over the few minutes they receive the exposure. We might surmise that many viewers are attitudinally in-line with message, and when discovering the link to the video message online, they are certainly interested in confirming their existing beliefs. If true, instructors can examine the tactics regarding how this message influences significantly.

IMC Perspective 8-1 1. What do you suggest for a new execution for Doritos ketchup chips in the future?

As the perspective notes, personality symbols significantly contribute to brand awareness. As a unique manifestation of the brand, its quirky or distinctive behvaviour that illustrates its personality contributes to either brand recall or brand recognition depending on how the imagery is portrayed. The number of examples highlighted, and the instructor can find more, demonstrates how carefully planned the selection is and how advertisers adjust or select characteristics that fit the brand positioning strategy.

IMC Perspective 8-2 1. How would you introduce Stuart in the next ads for Buckley’s cough syrup? Would he make mention of getting out of the pill suit?

The prank ads are essentially using a humour execution style, so instructors can review the research that identifies different communication effects that typically accrue. Moreover, the humour is expected to generate sufficient attention to ensure complete processing of the message. Some of the examples identified indicate that the prank style is used for brands in which we might not expect such creativity. This is a good point to raise to show how a prank ad can work, when it it least expected.

Instructors can investigate with the students as to whether the prank ads contribute to awareness and attitudinal communication effects. This will likely spur some amount of debate since some may be skeptical.

Answers to Review Questions 1. Identify the difference between an message appeal and a creative execution style. Why is it important to make this distinction?

An advertising appeal refers to the basis or approach used in the advertisement to elicit some consumer response or influence feelings toward the product, service, or cause. The creative execution style refers to the way in which a particular appeal is turned into an advertising message and presented to the consumer. A particular appeal can be executed in a variety of ways and a particular means of execution can be applied to a variety of advertising appeals. For example a rational appeal that focuses on a Chapter 8 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 8-6

product's features or advantages can be executed through a straight-sell or factual message, a demonstration or a comparison. A particular execution technique such as animation could be used for a rational appeal or for an emotional appeal. Students should be encouraged to analyze the particular appeals and execution styles used in selected ads.

2. What is meant by a one-sided versus two-sided message? Discuss some of the reasons marketers may or may not want to use a two-sided message.

A one-sided message mentions only positive attributes or benefits associated with a product or service or a particular issues whereas a two-sided message presents both favourable and unfavourable information or arguments. The advantage of using a two-sided versus one-sided advertising message is that it may enhance perceptions of an advertiser’s credibility. Consumers often know that there are opposing arguments or viewpoints on an issue and an advertiser may be perceived as less biased and more objective if a two-sided message is used. One-sided messages are most often used since a company may only want to mention positive attributes, benefits or features or present only favorable arguments about its product or service. Marketers feel it is too risky to say anything negative about their own company or brands. One-sided messages are most effective when the target audience already holds a favorable position toward the topic and will not hear opposing arguments. They may also work better with less educated audiences. For those individuals with an opposing viewpoint or a bettereducated audience, a two-sided message may be seen as less biased and more credible and thus more effective.

3. Are headlines are more important for gaining attention or reinforcing awareness?

The most important function or role of the headline is to attract the readers' attention and make them interested in the remainder of the message. Research has shown that the headline is generally the first thing people look at in a print ad, followed by the illustration. Once the headline gets the consumer’s attention and is read, the communication effect kicks in. Headlines can also perform a segmentation function by engaging the attention and interest of consumers who may be most likely to buy a particular product or service. Some ads use little or no body copy so the headline must work with the illustration or visual portion of the ad to communicate the entire advertising message. Subheads are secondary headlines that are usually smaller than the main headline but larger than the body copy. Subheads are often used to enhance the readability of the message by breaking up large amounts of body copy and highlighting key sales points. Their content often reinforces the headline and advertising slogan or theme.

4. What are the similarities and differences of creative tactics across the four cells of the planning model?

The similarities of the creative tactics across the four cells of the R&P framework concern three factors.

The first is that all four routes to persuasion have a common structure regarding the emotional portrayal of the motive and the benefit of the brand message. Secondly, within the low involvement quadrants, we see that a couple of the recommendations are quite similar (i.e. number of benefit claims, extra benefit claims). This is also true for the two high involvement cells with respect to the intensity of the benefit claim and the emotional authenticity. Within the informational quadrants, we see that it is not necessary for consumers to like the ad for it to be effective and that unusual creative executions are feasible. Finally, we see the importance of the emotional authenticity as being important within the transformational quadrants.

Once the similarities are noted, some of the differences become apparent. While a given cell shares some similarities with another, each has its own specific recommendations for persuading the brand attitude of the target audience. For example, moving from LI/IN to LI/TR we see how the emotional Chapter 8 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 8-7

portrayal of the motive becomes more critical. Moving from LI/IN to HI/IN we see how important greater amounts of information are required to persuade the target audience. The best way to illustrate these similarities and differences is to have four ads that each represents one of the four cells.

5. Explain how the guidelines for creative evaluation can be applied to ads seen on the Internet.

The most important function or role of the headline is to attract the readers' attention and make them interested in the remainder of the message. Research has shown that the headline is generally the first thing people look at in a print ad, followed by the illustration. Once the headline gets the consumer’s attention and is read, the communication effect kicks in.Headlines can also perform a segmentation function by engaging the attention and interest of consumers who may be most likely to buy a particular product or service. Some ads use little or no body copy so the headline must work with the illustration or visual portion of the ad to communicate the entire advertising message. Subheads are secondary headlines that are usually smaller than the main headline but larger than the body copy. Subheads are often used to enhance the readability of the message by breaking up large amounts of body copy and highlighting key sales points. Their content often reinforces the headline and advertising slogan or theme.

Answers to Applied Questions 1. Look through ads in other chapters and figure out what execution style is used. Do the same for video ads found online.

There are so many ads in the earlier chapters that draw on alternative points so this question allows students to take a peek at them once again with a new perspective. Hopefully this provides a good integrative exercise to see how all the decisions operate. Once the execution style is identified, then the student can see the link between the style and the objective for example while examining ads from Chapter 5, or the link of the style and creative strategy decisions while examining ads from Chapter 7, or the link of the style and the positioning decision while examining ads from Chapter 6. Extending this logic, students can look at ads online and perform the same task.

2. What are the limitations of constructing standard print-format ads for Facebook and billboards?

These two ads are put together to show similarities of processing despite the divergent locations. In both cases, the receiver is concentrating on another task and may not divert their attention; the message is very short limiting the processing time; the degree of creativity is restricted with the production characteristics such that the cognitive and emotional associations will be minimized. Subsequent communication effects are therefore restricted in essential processing does not occur.

3. Brands are experimenting with long-form video messages online. Using the design elements discussed in the chapter, contrast this approach with a standard 30-second TV ad. When would a brand use both with in its IMC plan?

Brands are using long-form video ads online when they want to re-launch their brand positioning strategy or when they want to creative a distinctive image for those who are seeking unique video messages online since they require a degree of effort to locate compared to seeing an ad on TV. Longform video messages provide greater opportunity for a story to be told thus putting the brand in a more involving context. These kinds of messages are attracting known directors and producers of TV and movies thus creating a newer form of PR compared to the hype surrounding TV campaigns. Brands have the opportunity to run a shorter version of the long-form in cinemas or on TV so that the message Chapter 8 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 8-8

is consistent in the public, however, in the end the brand will likely use both formats if they see there is the opportunity to resonate with unique target audiences.

4. Find an ad for each of the four cells of the R&P framework for creative tactics. Identify the design elements that match the guidelines for each cell.

This is a fun application exercise where students can compare the list of characteristics found in the latter part of the chapter to the ad that they have selected. It could be a very fun activity in class where students can make mini-presentations. Alternatively, the exercise could be adjusted and instructors could focus on any of the ads in this or any of the other chapters.

5. Apply the guidelines for creative evaluation to a campaign for Telus or Bell or Rogers, and conclude whether it passes all the criteria sufficiently.

Similar to question 4, student can have practice arguing how and why the ads are effective based on structured criteria rather than saying trite commentary on whether they liked the ad or not. An important challenge for students when applying the material is to consider the point-of-view of the target audience rather than their own. Of course, students are consumers of the products of these brands, but instructors should bring in the ide of whether the messages are directed to customers or non-customers, and students can then adjust their thoughts accordingly.

Additional Discussion Questions (not shown in text) A. Discuss the use of slice-of-life execution techniques in advertising. For what types of products and services might this execution technique work best?

The slice-of-life format relies on a problem-solution approach that is often presented with a little drama.

These spots usually begin by showing consumers facing or talking about a problem such as bad breath, dingy laundry, dandruff, headaches, or dry skin. The short drama always ends with the problem being resolved by the advertiser’s product. Advertisers feel that the slice-of-life format is a more interesting and effective way to present their message than just making performance or efficacy claims. Consumers purchase products to solve problems and marketers feel the slice-of-life execution format is an effective way of registering a product feature or benefits and showing how it can resolve common problems we encounter in our daily lives. The slice-of-life execution format is very popular among packaged-goods companies such as Procter & Gamble because it is an effective way of connecting with consumers by showing common situations or problems they encounter in their everyday lives.

B. Explain how a humour execution style differs from a humour message appeal.

A humour execution style is typically used to attract the target audience’s attention for a rational message or adds a demonstration of the more rational message to enhance some emotional responses thus allowing the processing to not be completely cognitive. In contrast a humour message appeal presents the attributes or benefits or emotional consequences of consumption consistently through all design elements and reinforces the positioning of the brand.

C. Discuss the role music plays in advertising. Why might companies such as Microsoft, Cadillac, and Nike pay large sums of money for the rights to use popular songs in their commercials?

Music can play a variety of roles and functions in commercials. Music is often provides a pleasant background or to help create the appropriate mood or setting for the commercial. In some ads the role of music is much more central to the delivery of the advertising message. It can be used to break through Chapter 8 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 8-9

clutter, help establish an image or position, or add emotion or feeling. Music can work through a classical conditioning process whereby it creates positive feelings or affect that become associated with the product or service being advertised. Music can also create a positive mood state that can make the consumer more receptive toward the advertising message. Companies pay large sums of money for the rights to use these songs such as because they feel the music is central to the feeling or image they want to create in the commercial.

IMC Exercise The last section of the chapter discusses criteria or guidelines that can be used for evaluating the output from the creative process of advertising. Some of these concern factors that are not directly accessible and thus more difficult to evaluate, such as consistency with marketing and advertising objectives.

However, answers to these questions are judgmental in nature and can be evaluated such as appropriateness for the target audience, communication of a clear and convincing message, whether the creative overwhelms the message, appropriateness for the media environment, and whether the ads are truthful and tasteful. Choose a particular campaign, conduct some research on it in the business press or trade publications, and then evaluate the creative approach as well as some of the individual ads against these guidelines. Excellent sources of information that can be helpful to students in this assignment are the ad reviews that appear in publications such as Marketing Magazine.

IMC Comprehensive Project Students should continue to develop the advertising part of their IMC project using the information in this chapter to help them. The specific assignment is as follows: IMC Project Assignment for Chapter 8 In the previous assignment you were asked to develop a copy platform that specified your campaign’s theme, appeal and source. Your assignment for this chapter is to specify the execution style that will be used to implement your ad campaign. What specific type of advertising execution technique will be used to present your appeal? Provide some rationale for the execution approach you plan to use. Address any relevant issues of the message structure. What specific tactical design elements will be important in developing your print and broadcast messages? Will your creative approach satisfy the guidelines discussed at the end of Chapter 8?

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CHAPTER 9 MEASURING THE EFFECTIVENESS OF THE PROMOTIONAL MESSAGE Chapter Overview This chapter discusses a critical issue; while it seems perfectly logical that managers on both the agency and client side would like to know whether the programs implemented are effective, in reality the majority of IMC programs go untested. Compounding this is the fact that the evaluations use inadequate or inappropriate measures. The purpose of this chapter is to discuss why organizations need to measure the effectiveness of their programs, and when, where and how such measures should be used. The chapter discusses the reasons why advertising effectiveness measures should be taken and why they commonly are not. How, when, what, and where such measures should be used follows, with a description of the techniques commonly used. The chapter concludes with a discussion of the problems involved in measuring the effectiveness of IMC programs and establishes some of the essentials for proper testing.

Learning Objectives 1. Identify the decisions for measuring promotional program effectiveness.

2. Describe what is measured to assess promotional program effectiveness.

3. Evaluate pretest approaches for measuring promotional program effectiveness.

4. Evaluate posttest approaches for measuring promotional program effectiveness.

5. Appraise requirements of proper effectiveness research.

Chapter and Lecture Outline I.

DECISIONS FOR MEASURING EFFECTIVENESS

A.

Why Measure Effectiveness 1. avoiding costly mistakes 2. evaluating alternative strategies 3. increasing advertising efficiency 4. determining if objectives are achieved

B.

What to Measure 1. Creative Strategy decisions—all aspects of the creative strategy can be investigated to determine their communication effectiveness. Advertisers can test different themes for initial approval. The decision to use rational versus emotional appeals or different kinds of emotional appeals can be studied. Moreover, advertisers could assess consumer reaction to options for spokespersons.

2. Creative Tactics Decisions—all elements of creative tactics are basis for evaluation. Advertiser can test consumer acceptance of a unique or unusual execution style. Various design elements (e.g., music, visuals, headline) can also be looked at.

3. Other Promotional Tools—this chapter addresses the effectiveness of the message. Subsequent chapters examine the effectiveness for sales promotion etc., and the media chapters identify research issues as well. However, these tools generally feature ad-like communication or include ads, which can also be tested as above.

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C.

Where to Measure—there are certain advantages and disadvantages associated with where effectiveness tests take place. Again, two different testing environments are discussed.

1. Laboratory tests—those tests conducted in a specific location to which consumers are brought—for example, testing labs, theaters, etc. The major advantage is control. The major disadvantage is a lack of realism and the potential for testing bias.

2. Field tests—those tests taken under more natural viewing situations, such as phone surveys, inquiry tests, etc. The major advantage is that they offer a more realistic viewing situation. At the same time, a lack of control and a number of other distracting conditions are disadvantages associated with these methods.

D.

How to Measure 1. Quantitative Methods—Statistics measuring brand awareness, brand attitude, and purchase intention are usually gathered with scaled questions so calculate summary statistics.

2. Qualitative Methods—Interviews and focus groups usually provide researchers with data to understand consumer motives, processing responses to ads, and potentially communication effects.

E.

When to Measure 1. Pretesting—Pretesting occurs prior to the implementation of the campaign.

2. Post-testing—Post-testing takes place once the program has been implemented.

II.

MEASURING EFFECTIVENESS

This section identifies the type of questions asked to measure and assess processing of ad measures and communication effects of ads, and ad campaigns. This shows an application of the R&P model, but similar measures can be used for the less useful hierarchical response models shown earlier.

A.

Processing Measures 1. Attention—Questions pertaining to what the receiver noted.

2. Learning—Questions addressing message understanding for those who do not perceive much risk of purchasing brand on next occasion.

3. Acceptance—Questions gauging comprehensive evaluation of all ad elements.

4. Emotional Responses—Questions examining affective response to all ad elements.

5. Ad Recognition—Questions assessing ad elements the receiver remembers with a ad prompt.

6. Ad Recall— Questions assessing ad elements the receiver remembers without an ad prompt.

B.

Communication Effects Measures 1. Category Need—Example of category purchase intention question is shown.

2. Brand Awareness—Recall and recognition questions are suggested, in this order.

3. Brand Attitude—Multi-attribute approach to attitude measurement is shown along with questions for overall cognitive and affective evaluations. All measure potentially could be use to obtain a comprehensive measure of brand attitude.

4. Brand Purchase Intention— Example of brand purchase intention question is shown.

III. PRETEST MEASURING The actual testing of ads may take place throughout the campaign. Four types of tests are discussed.

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A.

Concept Test—concept test occurs very early in the development of the campaign, and is designed to explore consumers' responses to ads and/or campaigns being considered. Focus groups and mall intercepts are commonly employed methods at this stage.

B.

Rough Test—Because of the high costs associated with testing, completed advertisements and commercials, advertisers (or their agencies) conduct such tests prior to the completion of the final product. Results of these tests have been shown to correlate highly with those taken after the ads have been completed.

C.

Pretest of Finished Print Ad—advertisers prefer to test the ad in its finished form. A variety of both print and broadcast measures may be used.

1. Pretesting finished print messages—a number of methods for pretesting print messages are provided. Some of the more common of these are: a. portfolio tests b. readability tests c. diagnostic measures 2. Pretesting finished broadcast ad—common methods for pretesting broadcast ads are: a. theatre tests—a lab method for pretesting finished commercials. b. on-air tests—a field method that usually includes single-source ad research. c. physiological measures include: • • • •

pupil dilation galvanic skin response eye tracking brain waves

IV. POST-TEST MEASURING • A.

The actual testing of ads may take place throughout the campaign. Four types of tests are discussed.

Post-test of print ad—three common forms of post-testing print ads include: a. inquiry tests—designed to measure advertising effectiveness on the basis of inquiries generated from ads appearing in print media. b. recognition tests – allows the advertiser to measure the impact of the ad c. recall tests—attempt to measure recall of specific ads.

B.

Post-test of broadcast ad—five common forms of post-testing TV ads include: a. Day-After-Recall—an historically popular method, that has since declined in use, which provided a recall scores, persuasion measures and diagnostics. b. Comprehensive measure—Figure 9-12 illustrates the Ipsos-ASI Next *TV test, a commonly employed posttest measures of broadcast commercials. c. Test marketing—companies conduct tests designed to measure their advertising effects in specific test markets before releasing them nationally. d. Single source tracking studies—track the behaviors of consumers from the television set to the supermarket checkout counter.

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e. Tracking print/broadcast ads—tracking studies measure the effect of advertising on awareness, recall, interest, and attitudes toward the ad and/or brand as well as purchase intentions.

V.

IMC PLANNING: PROGRAM FOR MEASURING EFFECTS

To this point in the chapter, a number of methods of testing the effectiveness of print and broadcast ads have been presented. In each case, these measures were discussed in respect to their contributions as well as their limitations. In this final section, the chapter discusses how the marketer might establish a sound program for conducting effectiveness research.

A.

Criteria for Effective Research—a number of problems with existing research methods are discussed with the PACT program (Figure 9-13) used as a standard against which to measure these methods. In this section, each of the PACT principles is discussed with suggestions as to how each principle might be met.

B.

Guidelines for Effective Testing—again referring to the PACT program, four suggestions are offered that we believe will improve the effectiveness of the evaluation program. These include: •

use of a consumer response model

•

establish communications objectives

•

use both pretests and posttests

•

use multiple measures

•

understand and implement proper research

Teaching Suggestions Due to the importance and amount of information presented in this chapter, we suggest that the lecture cover at least two time periods. The first time module might be used to discuss the importance of conducting effectiveness studies, some of the reasons why such studies are not conducted, and some of the pretest measures. The second session could cover posttests, and the PACT guidelines. In addition, the second session should discuss ways of measuring outcomes versus communications objectives.

As in some of the previous chapters, this subject matter can be presented in a very interesting fashion. The media frequently provide information that can be used to keep the student current, and to provide “real world” applications. Sources such as Marketing Magazine, the National Post, Ad Age, AdWeek, and the Wall Street Journal often have articles relating to this subject matter.

We have found through our experiences that academics seem to place more emphasis on the importance of measuring effectiveness than do practitioners. We believe that this may be one of the more important elements of the entire decision sequence model of promotional planning and suggest that this importance be stressed to students as they will soon be the practitioners.

Vignette 1. What part of advertising effectiveness do the research approaches measure?

For the most part, students should see that much of the advertising effectiveness research summarized pertains to processing of the message and communication effects. The application of the research for these is seen with respect to motivation and processing time, media mix, and creative development respectively. This opening vignette is different than the others since it cites research summarized in Harvard Business Review. Instructors can delve into one of the three articles more precisely if there is interest to develop a specific topic.

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IMC Perspective 9-1 1. Why are advertisers so concerned with measuring emotions?

As the response models and planning tools for communication objectives of chapters 4 and 5 indicate, emotion is critical for persuasive and effective promotional messages. Emotional responses are a key processing phase so the measurement is quite important for advertisers to know whether the intended emotional associations are in fact connected to the brand. Furthermore, the importance of brand benefits is the emotional component of attitude formation from a theoretical standpoint (beliefs x evaluations), so this provides an additional incentive for managers to measure.

2. Should promotional planners measure emotional responses for other IMC tools, such as sales promotions or direct response?

The idea of IMC is that all promotional messages, no matter what the contact point, should use a communication response model for planning purposes to determine communication objectives.

Furthermore, all contact points are now opportunities for brand building so promotional planners would certainly interested in developing sales promotions that are more involving and connect emotionally with consumers. A glance to the sales promotion chapter will highlight the idea of consumer-franchise building promotions and some of the perspectives illustrate key examples.

IMC Perspective 9-2 1. Express your feelings on whether you would volunteer as a respondent to this kind of research.

The question places the student in a new role to get an idea of the situations we ask respondents to experience in order to obtain needed information for decision-making. A divergence of opinion would be expected, and instructors can compare the effort and involvement for respondents of this method versus other methods.

Answers to Review Questions 1. Discuss the differences between pretesting and posttesting. Give examples of each.

Pretests are those tests that take place before the advertisement or commercial is made available for viewing by the public. These tests may take place at a number of points from as early on as idea generation to testing the final version before showing it. Examples of pretests include focus groups, consumer juries, physiological measures, in-home tests, theater tests, etc.

Posttests are those that occur once the ad has been placed in the medium and exposed to the public.

Posttesting is designed to (1) determine if the campaign is accomplishing the objectives sought, and (2) serve as input into the next period’s situation analysis.

Examples of posttests include recall tests, comprehensive tests, diagnostics, inquiry tests, single-source measures and tracking studies.

2. What measure should a marketer use to assess effectiveness for message processing and for communication effects?

The question focuses students to understand the link between the content of chapter 4 and chapter 5 as a way of estimating the effectiveness of advertising. The communication response model is use to understand the receiver. Its application provides objectives for the ad. Finally, assessing the ad effectiveness is based on measures that correspond to the objectives set and the ad design to attain optimal processing of the ad message.

3. Why might a firm use theatre test, on-air test and physiological measure to pretest its finish broadcast ads?

All of these methods are used as a screening to determine whether the ad should be aired in a campaign.

Presumably the results would indicate a sufficient number of “duds” if a marketer regularly used one Chapter 9 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 9-5

or all of these methods. Over time, it is argued that the total cost of the research would be less than the enormous amounts of money wasted in media expenditures for a “bad” commercial, not to mention the possible lost contribution from annoying current or potential customers. Each research method offers its own unique strengths, since they are lab, field and physiologically based, and a manager would devise a research strategy based on their interpretation and conclusions.

4. Why is it useful for an advertiser to do tracking research?

The PACT criteria ensure that research to measure the effectiveness of ads prior to media release is performed to the highest standards of research as possible. It provides a common understanding in the industry so that are major participants agree to what, when and where to test when assessing ad effectiveness. The criteria are the research requirements related to the performance measures highlighted in the PBR system described in Chapter 2.

5. Why are the PACT criteria important for testing effectiveness?

The PACT criteria ensure that research to measure the effectiveness of ads prior to media release is performed to the highest standards of research as possible. It provides a common understanding in the industry so that are major participants agree to what, when and where to test when assessing ad effectiveness. The criteria are the research requirements related to the performance measures highlighted in the PBR system described in Chapter 2.

Answers to Applied Questions 1. Select a popular ad campaign and explain whether it should have tested different creative strategy options or different creative tactic options?

This question acts as an example to allow students to estimate what could have been tested prior to the launch of the campaign. For virtually any campaign, hindsight evaluation could suggest that different theme or appeal be used, and this could be the source of investigation. Alternatively, from a tactical standpoint, different music or dialogue or scenes could be suggested as key tactics that could be tested.

An astute student will point out different testing if the ad would have had a different move (e.g., move from information to transformational) which would have likely necessitated a change for both creative strategy and tactic decisions.

2. Select an ad from the book and describe questions that should be asked for a post-test for processing and communication effects.

This application allows students to adapt the questions in the book to the brand and product category of the ad selected. The process of answering this question should reinforce the communication model understanding and provide additional support for seeing the link of ad content to the measurement of effectiveness.

3. Explain why you would or would not want to personally participate in each of the studies described?

Perhaps the most enjoyable comments will be students’ opinions on the eye-tracking and the other physiological methods. These are much more invasive than completing a survey or participating in a focus group or personal interview. Some interesting views may emerge with those who go to a specialized theatre to watch ads and view “dummy” magazines as these will feel artificial. Essentially this question provides a fun opportunity for students to understand the methods from a personal point of view that might make the learning more enjoyable compared to memorizing.

4. Explain why you would or would not want to personally complete a tracking study questionnaire about a major ad campaign (e.g., Telus).

Completing a questionnaire about a brand’s advertising is less invasive; and potentially less interesting for consumers as they have to recall message points and respond to many attribute and benefit measures Chapter 9 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 9-6

in addition to other questions of interest for cross-classification purposes. Alternatively, students may find the questions interesting be intrigued to discover what a brand is interested in measuring to see if advertising is effective. The question allows instructors to present the content of such a questionnaire to gauge student interest and reaction.

5. For any of the print ads located in the previous chapters, design a testing approach based on the final section of this chapter?

Either the PACT section or the order in which the text is organized should be the basis for structuring this answer. The important point here is that students should have a clear idea of what to prescribe for each step. Using the latter view, students could apply the R&P model to structure what objectives that might have been set for the print ad. Similarly, with a print ad selected, each of the pre and post tests could be investigated that are reviewed in this chapter. The measure is a tricky aspect to the task as students will have to think about key question to track category need, awareness, and attitude. Finally, the student should be able to offer an intelligent suggestion on how the research will assist in making the recommendations on whether the ad will be run or not.

Additional Discussion Questions (not in text) A.

Discuss how tracking studies might be tied into the hierarchy-of-effects models.

Tracking studies are generally used as posttest measures of the ads effectiveness. In these tests, the impact of the ad is tracked over time or in a particular location. The text notes that one of the major advantages of tracking studies is that they can be tailored to each specific campaign or advertising situation. By combining the tracking study methodology with the hierarchy of effects models, the advertiser can specifically measure the impact of a program on communications objectives.

Once the campaign has been run (or while it is being run), measures of the number of persons aware of the ad and its message can be taken. In addition, knowledge of the message, the product benefits being stressed and/or the purpose of the ad can also be assessed. In respect to affective reactions, liking, preference, and conviction toward both the ad and the product or service advertised can be measured. While actual purchases may be difficult to attribute to the ad, it is very possible (and common) to measure behavioral intentions. Each of the hierarchy models could be used in this manner, with each step constituting a dependent variable.

B.

Describe some physiological measures of advertising effectiveness. Give examples of companies that might find these measures useful.

The text describes a number of physiological measures used to measure effectiveness. A summary is provided here: •

pupil dilation—measures dilation and constriction of the pupils to stimuli

•

galvanic skin response—measures the skin’s resistance or conductance to current based on reactions to ads and/or commercials.

•

eye tracking—following the viewer’s eyes as they read an ad or watch a commercial to determine where attention focuses, and what may be attracting attention.

•

brain waves—alpha waves and hemispheric lateralization measures are taken to determine electrical frequencies occurring in the brain in response to advertising stimuli.

Obviously, a number of companies could make use of these methodologies. While some of these may have more application that others—as well as more validity—it would be up to the individual organization t determine which is most useful to them. For example, Coke has use eye tracking to determine where the respondents’ eyes focus (as has Wrigley’s gum). Insurance companies might Chapter 9 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 9-7

use GSR/EDR to determine anxiety created by an ad, and advertisers employing sex in their appeals might use any one of the above.

C.

Discuss the concept of single-source research. What advantages does it offer the marketer?

An increasingly popular method of measuring the effects of advertising is through the use of singlesource methods. Two of these methods, BehaviourScan, and ScanTrack have been available for a number of years and are very popular.

Single-source methods attempt to track the behaviours of consumers from the television set to the check-out counter, measuring the impact of commercials on product purchases. These measures may be used as pretest or posttest measures, as is discussed in the chapter.

Marketers feel that single-source measures will change the way that ad effectiveness studies will be conducted if they are successful. Part of the reason for this is that they offer advantages of other commonly employed measures, but provide more insights into the possible behavioral effects that advertising might evoke. More specifically, the single-source methods hope to be able to determine advertising effects on sales.

At the same time, single-source methods have their critics. Some researchers feel that these methods only measure short-term effects of advertising. Others feel that the data provided is just too complex to be of significant use. The cost of acquiring single-source data is also very high at this time.

In sum, there is little doubt that single-source methods hold a great deal of promise for measuring the effects of advertising. These measures offer advantages of both lab and field measures, and provide the capability to measure actions that come closer to showing the effects of advertising on sales. As these systems move out of test markets, and can be used to explain more of the mass market, their value will increase, while costs may go down.

D.

Discuss the elements necessary to conduct good advertising testing research.

Perhaps the best answer to this question is that the marketer practices a sound market research methodology. This would mean the employment of the proper sample, pretesting of questionnaires, adequate controls, and assessments of reliability and validity. More specifically, the PACT principles might also be used to insure that a proper research design is implemented.

PACT principles state that the research must: (1) be relevant to the objectives of the advertising; (2) achieve agreement as to how the results will be used prior to testing; (3) provide multiple measures; (4) be based on a model of human response; (5) allow for multiple exposures; (6) recognize limitations associated with unfinished copy; (7) provide controls to avoid biases; (8) have a proper sample; and (9) demonstrate reliability and validity.

E.

Discuss some of the aspects of the communication program that advertisers may wish to test.

Advertisers may wish to test all creative strategy decisions. Once a particular advertising theme has been exposed for a period of time, advertisers would want to know whether it positions the brand successfully. Alternatively, they may desire to test multiple advertising themes to determine which is most appropriate. Related to the creative theme is the message appeal and advertisers would be concerned as to whether the particular appeal is effective at persuading. Advertisers would like to know whether the source being used is effective and how the target audience will respond to it. A product spokesperson may be an excellent source initially but for a variety of reasons may lose impact over time. Changes in the source’s attractiveness or likeability or other external factors may also lead to changes in source effectiveness.

Creative tactics decisions are also critical aspects of measurement. The executional style can be assessed to determine its effectiveness. Message structure issues can be looked at to determine if Chapter 9 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 9-8

they are persuading appropriately. Design factors that have an impact on its effectiveness include headlines, text, layout, and illustrations. Advertisers can produce different options prior to launching a campaign to asses which might be more liked.

Astute students will recognize that the chapter mostly addresses advertising message effectiveness, and that aspects of media effectiveness are relevant. Research pertaining to media is presented in the media chapters and instructors can make reference to it at this stage and use the material in this chapter as a foundation to explore the issues in more detail. Some topics that can be highlighted now include the following. The location within a particular medium and size or length also merits examination. For example, research shows that readers pay more attention to larger ads. Another factor is the vehicle option source effect, i.e., the differential impact that the advertising exposure will have on the same audience member if the exposure occurs in one media option rather than another. The final factor in media decisions involves scheduling. The evaluation of flighting versus pulsing or continuous schedules is important. There is evidence to support the fact that continuity may lead to a more effective media schedule than does flighting.

IMC Exercise Assign students the responsibility of interviewing at least one business or non-profit organization’s person responsible for the marketing /promotional program. Have them ask whether effectiveness measures are taken. Have them report to the class what measures these are. If none are taken, have them suggest which might be used.

IMC Comprehensive Project In your plan you identified a variety of messages that might be employed. Explain which measures of effectiveness would be employed. Report whether they would be used at the pre-test or post-test phase, and whether they would employ lab or field methodologies.

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CHAPTER 10 MEDIA PLANNING AND BUDGETING FOR IMC Chapter Overview This chapter introduces the concepts involved in media planning. The chapter begins with an overview of media planning by introducing the content of the plan and media planning challenges. The chapter then focuses on media strategy decisions and media tactics decisions. The chapter concludes with a description budgeting process, theories underlying budgeting decisions, and the managerial approaches to budgeting.

Learning Objectives 1. Illustrate how a media plan is developed.

2. Explain the process and identify the decisions for implementing media strategies.

3. Explain the process and identify the decisions for implementing media tactics.

4. Distinguish among the theoretical and managerial approaches for media budget setting.

5. Apply the methods for allocating the media budget to relevant IMC tools and market situations.

Chapter and Lecture Outline I.

MEDIA PLANNING

This first section presents a brief discussion of the factors involved in the media planning process and illustrates the fact that media planning is an involved process influenced by a variety of factors including the nature of the media, the marketing strategy, and the product being advertised.

A.

Overview—a media plan defines a combination of media that will enable the marketer to communicate the message effectively and efficiently. The activities involved in this plan are detailed in Figure 10-2. A media plan is the actual document detailing these decisions.

B.

Media Plan—media planning involves the series of decisions in delivering the message to the target audience.

•

media objectives—the objectives sought by the media plan

•

media strategy—action designed to attain the media objectives. It includes the medium, the general category of media channels like broadcast, print, or out-of-home, the media type, the specific media category like television or radio for broadcast, and finally the media class such like specialty TV channels for that context. Application of these concepts are show for digital media. Decisions include: •

reach—the number of potential audience members exposed once to a media vehicle in a given period of time

•

coverage—the potential audience that might receive a message through a vehicle Chapter 10 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 10-1

• •

frequency—the number of times the receiver is exposed to the media vehicle in a given time period

media tactics—the more specific media decisions involving media vehicle (e.g., type of television show to advertise on), fine-tuning the budget and timing of all media purchases.

C.

Media Planning Challenges—a number of problems are identified, each of which directly impacts the planning process such as: insufficient information, inconsistent terminology, need for flexibility, role of media planners and problems in measuring effectiveness of a media plan. An understanding of these problems is critical to the proper design of the media plan.

II.

MEDIA STRATEGY DECISIONS

A.

Media Mix—media strategies require a combination of media to be used. The media mix determines the channels used. The objectives of the plan, the budget, and other factors, will directly impact this decision. Figure 10-3 summarizes the strengths and limitations of the key media characteristics. An attempt to include the same sixteen criteria for all six traditional media makes comparison more systematic as shown in Figure 10-4. Descriptive words to indicate the relative intensity of the strength or limitation have be omitted as this is more of a judgment and is heavily dependent upon other media decisions and creative decisions. Items for each media are investigated more fully in each chapter.

B.

Target Audience Coverage—Figure 10-5 provides a graphic illustration of marketing coverage possibilities. Of course, the marketer would like to achieve full coverage through a combination of media. As noted, this is not a likely outcome, and decisions have to be made that involve trade-offs between less than full market coverage and over coverage or waste coverage.

C.

Geographic Coverage—the decision as to where to promote at this point involves geographical considerations. Once again, the discussion turns to the use of secondary information and indices as aids in making this decision. A number of critical terms are introduced including: the Brand Development Index, and the Category Development Index. The calculation of both BDI and CDI is provided, based on actual examples. Figure 10-8 is a very useful way of presenting strategies evolving around BDI and CDI.

D.

Scheduling—marketers will typically employ one of three scheduling alternatives since it may not be feasible (or necessary) to maintain a constant advertising schedule.

1. Continuity refers to a continuous pattern of advertising—that is every day, week, or month depending on the planner’s time horizon for planning (food products, laundry detergents, etc.)

2. Flighting is a scheduling method in which there are intermittent periods of advertising and nonadvertising (snow skis, etc.)

3. Pulsing is actually a combination of the two previous methods, in which a continuous schedule is used, though the amount of monies spent will vary throughout the time period (automobiles).

E.

Reach and Frequency—given that advertisers have differing objectives, and are constrained by budgets, the media decision usually involves a trade-off between reach and frequency. This decision is essentially one of exposing more persons to the ad, or exposing fewer persons more often. In making this decision, the media planner must take into consideration a number of factors including: Chapter 10 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 10-2

1. How much reach is necessary?

2. What frequency level is needed?

3. Determining effective reach and frequency.

4. Using gross ratings points (GRP's) III.

MEDIA TACTICS DECISIONS

A.

Media Vehicle—Creative aspects of the ad may require the use of specific media. For example, television may be required to implement certain types of creative campaigns. Likewise, the mood that a medium creates may carry over to the ad itself. For example, certain magazines may create various moods as they are being read Research may be designed to determine which media class (broadcast vs. print) generate the most effective results, the location within a particular medium (front page or back page) and size or length of time the ad or commercial runs. Another factor is the vehicle source effect—the differential impact that the advertising exposure will have on the same audience member if the exposure occurs in one media option rather than another.

B.

Relative Cost Estimates—costs must be considered in the determination as to which media will be employed. Two types of costs must be addressed—absolute cost—which is the actual cost to place the ad in the medium—and relative cost—or the relationship between the price paid for advertising time or space and the size of the audience delivered. A comparison of media vehicles is usually necessary, using criteria such as cost per thousand (CPM), and cost per ratings point (CPRP)

C.

Blocking Chart—the blocking chart summarizes the media strategy and media tactics decisions made thus far, and includes extensive implementation details that guide the media buyers as they attempt to achieve the media objectives.

IV

BUDGET SETTING

A.

Theoretical approaches in budget setting—most of the models used to establish advertising budgets can be categorized as taking an advertising or sales response perspective. In this section we discuss some of these.

1. Marginal analysis—Figure 10-21 in the text illustrates the concept of marginal analysis. As the figure indicates, as advertising/promotional efforts increase, sales and gross margins will also increase to a point and then level off. In using marginal analysis, the firm would continue to spend promotional dollars so long as the marginal revenues created by these expenditures exceeded the incremental costs. When the dollar expenditures exceed the returns, the budget should be scaled back. In other words, the optimal budget would be at that point where marginal revenues are equal to marginal costs, or where mr = mc. While this economic model seems logical intuitively, in fact, there are two major weaknesses that limit its applicability: (1) The assumption that sales are a direct measure of advertising and promotions efforts, and (2) the assumption that sales are determined solely by advertising and promotions.

2. Sales response models—two budgeting models based on sales response are discussed in the text. The first of these—the concave-downward function—is based on the microeconomic theory of the law of diminishing returns. Essentially, the model states that as the amount of advertising expenditures increases, its incremental value decreases. The basic argument is that those most likely to buy the product are likely to do so as a result of the earliest exposures.

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Additional exposures are not likely to increase the probability of their purchasing, nor is it likely to have an effect on those who are undecided or unlikely to buy. Thus, the effects of advertising would rapidly diminish.

The second model—the S-shaped response function—takes a very different approach. In this model, it is argued that initial outlays of promotional dollars will have very little impact on sales. As indicated in Figure 10-22, in Range B an impact will begin to be noticed, carrying through to Range C, where additional expenditures have again very little impact. This S-shaped curve suggests that there are incremental values to be accrued from additional dollar outlays, but only to a point. For example, it would be argued that a certain level of expenditures is necessary to make an impact. However, after a certain point (beginning of Range C) these dollars are unlikely to be of value.

In addition to considering the theoretical aspects of budget setting, a number of other factors must be taken into consideration including: situational factors; customer factors; the competitive environment; etc. Figure 10-23 can be used to demonstrate this point quite effectively.

B.

Managerial Approaches in Budget Setting—the more traditional methods of setting budgets and the relative advantages and disadvantages of each are summarized. Both top-down and bottom up approaches are summarized. Top down approaches occur when the budget is established at the “top” by management and is passed down to the managers (e.g., affordable, arbitrary, percentage, competitive, ROI). Bottom-up approaches focus on establishing specific objectives and determining the budget based on the costs required to attain these goals (e.g., objective and task, payout). a. the affordable method—In this approach, the firm determines what level of advertising and promotions expenditures they feel that they can afford, and set this amount as the ad budget. b. arbitrary allocation—when budgets are set through arbitrary allocation, there is no real rhyme or reason for the amount established. c. percentage of sales—there are variations on this method, as some firms use a flat percentage of sales figure, while others may assign a percentage of the product cost to advertising with the budget based on the number of units sold (see Figure 10-26). In addition, another variation stems from which year is considered the base year for sales.

One approach uses past sales histories, while the second—a percentage of projected future sales—uses projected sales figures. Firms employ both methods, with a projection used for planning, and the final budget adjusted according to actual sales. d. competitive parity—in this method, budgets are set by matching the percentage advertising/sales ratios of competitors. e. return on Investment (ROI)—while good in theory, the ROI method is rarely used. The basis of this approach is that advertising expenditures should be considered as an investment, returning sales as a result. Unfortunately, the ability to demonstrate this relationship is very difficult. f.

objective and task method—Figure 10-29 demonstrates the steps required in using the objective and task approach. As can be seen, the process involves establishing objectives, Chapter 10 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 10-4

determining the specific tasks associated with attaining these objectives, and determining the costs associated with these tasks. Monitoring and re-evaluation of these steps is critical to the success of this method. g. payout planning—By projecting the revenues that a product is expected to return over a period of two to three years, the marketer can develop a payout plan. Based on this expected rate of return, the marketer can assist in the determination of the advertising expenditures necessary. An example of a payout plan is presented in Figure 10-31.

V.

IMC PLANNING: BUDGET ALLOCATION

Examples are shown in two figure where the budget allocated across different IMC tools. Managers are concerned with determining the relative emphasis across media and IMC tools to maximize media and communication objectives and to the need to stay within the budget. Instructors can find other examples such as these to indicate the complexity of IMC programs and to reinforce the audience contact point in Chapter 1.

Teaching Suggestions Both the length and complexity of this chapter make it a difficult one for students to comprehend. The chapter contains a large number of terms, definitions, and formulas. Unfortunately, there is no way to ignore all of these, as they are critical to the students' learning of media planning and strategy, and are the vocabulary with which they will need to become familiar to participate in the advertising world, regardless of which side of the buying-selling process they may be on.

One suggestion is to break the chapter into two lectures. In the first, the terms, formulas, etc., as well as an overview of the planning process can be discussed. The second lecture can be more specific, focusing on some of the objectives to be accomplished, discussing reach and frequency trade-offs, effective reach and issues of budgeting.

Vignette 1. How do you as a consumer of media or as a citizen feel about the issues raised?

This is an opinion question to get a discussion going to essentially assess in what way media consumption is evolving. In presenting this issue to my students the past few semesters, some are actually quite alarmed. Instructors could potentially develop debate on whether this is a serious issue or not, on whether more action should be taken politically, or whether consumers should take action.

IMC Perspective 10-1 1. Explain why a media agency is critical for IMC planning.

Media agencies are integral to IMC planning since they provide the resources and expertise for promotional planners to make informed media decisions for all IMC tools. Media agencies negotiate with media for favourable rates, understand research to optimize reach, frequency and coverage decisions, and as the examples show, they innovate with unique media placements.

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IMC Perspective 10-2 1. Which of these media executions appears to be the most innovative?

The awards winners manage to find a good fit with their message, creativity and media selected. Media decisions in isolation cannot be considered effective as it is predicated on the target and what the brand is attempting to say to the target audience. Combined, the overall effect appears quite innovative in an area where it is difficult to innovate. Certainly the Grand Prix winner demonstrated significant innovation. Instructors can show examples of the winner and discuss the merits of each.

Answers to Review Questions 1. Explain why media planning involves a tradeoff between reach and frequency.

In an ideal world, advertisers would like to maximize reach and frequency. Unfortunately, in the real world, they are faced with budgetary constraints. Given budget limitations, the media planner is forced to choose between reach and frequency. Given specific objectives of the plan, one or the other may be emphasized.

Maximizing reach at the expense of frequency is more logical when the message is simple and easily understood, the receiver is in the early stages of the response hierarchy (for example, awareness and/or interest) and the target audience is broad. For example, campaigns targeting cola users use very simple messages and are targeted to a broad audience. Thus reach is important.

When the consumer is at a higher level in the response hierarchy, for example, comprehension, retention, etc., or the message is more complex, and/or the target audience is narrowly defined, frequency may be a more important objective. For example, messages that have a lot of copy, and may be more difficult to comprehend must consider the importance of effective frequency. One or two exposures may not be enough to achieve the media objectives. Likewise, a narrowly defined target audience may allow for an emphasis on frequency, and the minimization of waste coverage, thus placing less emphasis on reach.

2. Describe what is meant by waste coverage. The decision must often be made between waste coverage and under-coverage. Give examples of when the marketer might have to choose between the two, and when it may be acceptable to live with waste coverage.

Of course, the optimal situation would be one in which there is a perfect match between the target audience sought and the media coverage, with everyone getting potential exposure to the message, and those not in the market not being exposed. In reality, this is not going to happen, so the marketer must choose between the options of under-exposure or paying for coverage for recipients not in the target audience. In some instances, the budget may not allow for full market coverage under any situation. In other situations, the communications objectives, the cost of the media buy and other factors must be taken into consideration. Most marketers would likely argue that they would rather live with waste coverage, insuring that most if not all in their audience were exposed, rather than under-coverage, as those not exposed are much less likely to purchase the product or service.

A recent trend in business to business advertising is to buy time and/or space in consumer oriented media rather than the more targeted trade publications. While perhaps only a small percent of the audience or readers is in the target audience, media buyers have found that it is still more cost efficient to purchase the less-targeted medium than it would be to buy trade magazines, etc., even though there is a high degree of waste coverage. A final consideration is the potential to convert non-prospects into Chapter 10 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 10-6

buyers. While the market may be defined as a specific group (let’s say 18-24), those on the fringe (17, 25) may end up seeing the ad and ultimately purchasing—even though not in the primary target audience. In such cases, what was thought to be waste coverage really was not.

3. What is meant by readers per copy? How is this different from CPM? Explain the advantages and disadvantages associated with the use of both.

Magazine advertisers argue that the circulation figure is an underestimate of media reach. They contend that because magazines may be read by more than one person, that the CPM is an underestimate of cost efficiency. They believe a more accurate figure is readers per copy.

Readers per copy is determined by including a pass-along rate—a figure that includes readers who may not subscribe or have paid for the copy. An advantage of using this number is that it may more accurately reflect potential exposures to the medium. For example, it is well accepted that there is not always a one to one circulation to readership ratio. Smart buyers may be able to actually be able to gain more exposure to their ads than they are paying for if they can find a medium with high pass along readership. Consider a magazine like Time or Sports Illustrated. More than one person may read each issue, whether the readership is taking place in the household, fraternity, etc. In this case, the media buy based on circulation underestimates the reach, and the buy becomes more efficient.

The disadvantage associated with using readers per copy is that pass-along rate is very difficult—if not impossible—to determine. While one may easily estimate the number of persons exposed to Time magazine in a household, for example, the ability to estimate the number of persons exposed to Business Week in a doctor's office, or fraternity house is much more complicated and lacks validity. In many cases, the actual number of readers per copy is little more than a guess.

More and more media are presenting relative cost comparisons in terms of CPM rather than CPP (cost per point). Part of the reason for doing so is the fact that it is often difficult to make cross media comparisons. By providing the media buyer with a “standard” figure, it makes the media buying process much simpler.

A disadvantage of this consistent use of CPM’s is also evident, however. A message appearing in print is not the same as a message appearing on broadcast. One appearing in a magazine will not have the same impact as one in newspaper. By providing a standard number the media buyer may be somewhat mislead in terms of the impression that the ad carries. (Some have suggested using a comparison called cost per minimum impression unit, but no one seems to know what that means.)

So long as the media buyer remembers that CPM refers to the cost to potentially expose one’s message to a thousand people, there should be no problems associated with this common term. At the same time, as the text warns, media buying is both an art and a science, and other factors must be taken into consideration 4. Identify the information resources required to calculate the budget using the objective and task method.

A number of information requirements are needed to perform the objective and task method; the size and location of the target audience, precise definition of the communication tasks required, cost information for all media considered, reach and possible frequency estimates for each media vehicle.

This extensive lists illustrates why this method is not commonly done as the work involved is quite extensive.

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5. .What factors influence the budget allocation to different media or different IMC tools?

The marketing objective in terms of sales or share is a major factor as these contribute to the target audience selection and the subsequent behavioural and communication objectives. Beyond this, planners would need to consider how media and IMC tools will contribute to these objectives and fit with the decision-making process of the target audience. Internal organizational factors and relationship with the different marketing communication agencies can also influence the decision since these participants will put forth their own suggestions and recommendations.

Answers to Applied Questions 1. One long-time advertising agency executive noted that buying media is both an art and a science, with a leaning toward art. Explain what this means and provide examples.

There is a wealth of secondary information available to advertisers and media planners. As noted throughout this chapter, audience profiles, media usage, media costs, and competitive information is readily available. However, even given these large volumes of data, media buying may be less scientific a process than one might think.

A number of reasons can be offered for this position. First, the validity of the data is often questioned due to methodological difficulties. Secondly, there are factors that just don’t show up in the numbers.

The content of the material, the audience’s impression of or attitude toward a specific DJ, or newscaster, etc. may not be reflected in the numbers, and must be evaluated more qualitatively. Monthlies may offer greater potential for frequency of exposure than weeklies, etc.

Even when the numbers are valid, one must look purely beyond just the data per se. For example, local news ratings for CBC stations may often be highest on a certain night because of the network’s prime time programming. While the numbers may be there, this doesn’t indicate the fact that the stations are more popular, only that people haven’t switched away from the station they were on. While one might say, “so what, the numbers are there”, the quality of the viewer may not be the same as on other nights when they specifically tuned into the news broadcast. The discussion on CPM’s vs. Readers per Copy is another example when the media must be looked at and evaluated on criteria other than just the numbers.

Most good media buyers know that numbers are important. Most also know, however, that they must look beyond just the numbers in making their decisions. Qualitative aspect or the “art” of media buying may be as important at the hard data.

2. Visit the website for a two magazines of the same genre and locate their media kit that tries to attract advertisers to their particular media vehicle. Investigate how each magazine tries to persuade advertisers and decide which magazine would be most suitable to advertise.

This should prove to be an illuminating activity so that students can appreciate the wealth of data available for each media vehicle and to see the extensive promotion of media vehicles to entice advertisers. For example, the media kit for Canadian Living 2014 is a pdf comprised of 22 pages with colourful imagery, multiple tables showing the audience profile, the placement costs, production requirements and schedule in addition to a few other items. In contrast, Chatelaine shows a few tabs of the basic information and nothing more. Student could certainly compare others, but these are the foremost magazines with a female readership skew and offer a good example if students do not come to class with a good example.

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3. Calculate the CPM for five or six different media vehicles that are interesting or topical.

This exercise can be done in conjunction with question 2 since students will be looking at the media kits. Alternatively, students can try to locate multiple print vehicles in CARD and calculate the CPMs. Whatever the selection, the students should be questioned on explaining why the numbers differ. For example, a vehicle could have a very selective audience with a low readership, thus driving up the CPM. Guidelines on comparing similar media vehicles could be offered as an extension to the question.

4. Assume that a new entry level car brand wants to achieve thirty percent awareness among graduated students aged 21 to 24; calculate how much would have to be spent in the budget to achieve this objective.

This is a very challenging question for students as it is an application of the objective and task method of budget setting. They have to estimate the number of students first from a secondary data source.

From this, reach and frequency decisions need to be made taking into account any geographical skews in the data in order to show how the 30% awareness could be achieved. Media selection is next which would likely require multiple avenues. This part would open up debate on whether TV would still provide sufficient coverage. Alternatively, consideration of Internet ads for young people watching a “TV” show online would likely be evaluated by most students. Once the media selections have be done, the costs for each need to be worked into the calculations along with the earlier estimates for reach and frequency. In the end, an estimated budget based on the task of awareness should arise. An extension question could investigate how the budget would need adjusting to achieve other objectives.

5. For an up-and-coming brand of fashionable jeans, a re-branded local night club for dancing, and an established energy drink, identify the most appropriate media budget allocation (in percentages) to create awareness. Do the same for all three brands with respect to IMC tools.

Instructors could tabulate alternatives in a class discussion and get students to express the reason for their decisions. Each of the product selected fit within the life of a young student and all three are at different stages of the PLC, new product, rebranded, and mature which should prove to be a challenge to wrestle with and offer divergent opinions across the three options. The first question looks to see how the students will allocate the budget across different media in a pure advertising recommendation, while the second looks at the budget for multiple IMC tools. Of course there will be some overlap where an IMC tool might require advertising. For example, if a brand is sponsoring an event, it might advertise the sponsoring in media, so from a budget and communication effects standpoint, it is both advertising and both an IMC tool. So in the end, this exercise draws upon the key part of IMC planning which is the link between the IMC tools to achieve objectives.

Additional discussion questions (not in the text) A.

Using the BDI and CDI indices, explain the least desirable market situation for marketers. Provide an example. Then do the same for the most desirable situation.

BDI compares the percentage of the brand's total Canadian sales in a given market area with the percentage of the total population in the market. The resulting BDI indicates the sales potential for that brand in that market area. CDI provides information on the potential for development of the total product category rather than specific brands.

Figure 10-8 provides an excellent summary of how BDI and CDI can be used to develop marketing strategies. The use of these indices provides marketers with insights into the market potential for Chapter 10 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 10-9

the product or brand. This, in turn, provides information regarding the amount of media emphasis, weighting, etc. to be allocated.

The least desirable situation is one in which the BDI and the CDI are both low. In this situation, there appears to be little potential for either the category or the brand. For example, consider typewriters. If they are still marketed at all, the category is in the decline stage, and any brands would be as well. No amount of advertising is likely to bring back the category or the brand.

The most desirable situation is one in which BDI and CDI are both high. In this case, the category is growing, and the potential for the brand to grow is high as well. An example might be PC’s. The use of computers is growing, and new brands may have the potential to grow as well. The advertiser would be more likely to be successful by investing in this situation.

B.

Discuss the factors that are important in determining frequency levels. Give examples of each factor.

Figure 10-14 identifies factors important in determining frequency levels. The three factors and specific examples of each are:

C.

a.

Marketing factors—these include factors such as brand history, brand share, degree of brand loyalty, purchase and usage cycles, competitive share of voice, and target markets.

b.

Message factors—complexity and uniqueness of the message, length of time the campaign has run, image versus product sell, message variation, wearout and advertising units.

c.

Media factors—clutter, editorial environment, attentiveness, scheduling number of media used, and repeat exposures.

Describe the three methods of promotional scheduling. Give examples of products and/or services that might employ each method.

The text discusses the three scheduling options available to the marketer. Given the fact that there are always budgetary constraints, and that some products/services do not need to be marketed year round, scheduling allows for more efficient allocation of advertising and promotional dollars. The scheduling options available are: Continuity—A continuous schedule refers to constant advertising throughout the year, either daily, weekly or monthly. Products most likely to employ this scheduling method include those that would be used consistently throughout the year with no seasonal variations (e.g.,, toothpaste, mouthwash, laundry detergent).

Flighting—This schedule has intermittent periods of advertising, with times when there is advertising and others when there is none. The “on” advertising time is referred to as flights.

Seasonal products (e.g., snow skis, swim wear) would employ this method. One advantage of flighting is its ability to extend the limited ad budget.

Pulsing—A combination of the previous two methods, pulsing employs a continuous schedule with periods of increased advertising to take advantage of intermittent opportunities.

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D.

Critics of the percentage of sales method of budget setting contend that this method “reverses the advertising and sales relationship” and that it “treats advertising as an expense rather than an investment” Explain what these arguments mean, and discuss their merits.

The percentage of sales method, while a commonly employed method of budget setting, has its disadvantages. Perhaps the major disadvantage is the fact that the advertising budget is based on the amount of sales generated, not as a basis for achieving sales; and thus reverses the advertising and sales relationship.

By establishing the advertising budget based on the level of sales, sales is dictating what the ad budget will be. Advertising is not considered a tool for generating sales, but is considered more of a cost of doing business. If sales fall, the ad budget is cut. So what happens is that in periods of declining sales, rather than considering advertising as a tool for reversing the trend, it is seen as a way to cut costs to improve profits. In periods of increasing sales, the advertising budget may be raised accordingly (remember it’s a % of sales), in many cases not because it has been shown to have an effect so much as just a rule of thumb.

The argument that % of sales reverses the advertising→ sales relationship is a valid one. If one treats advertising as an investment, then the ad budget should actually increase during down turns in the market, in an attempt to turn around the declining sales. By slashing the ad budget based on a % of sales, management is saying that they do not believe that investing in advertising is a viable strategy for improving sales.

E. Discuss the two sales response models described in the text. Explain the differences between the two models. Provide examples of type of products that might follow each of these response curves.

The s-shaped response curve makes the assumption that certain levels of advertising expenditures must be reached before any noticeable impact on sales will occur. According to this model, initial outlays will have little or no noticeable impact on sales, then additional outlays will have a very noticeable effect to a point at which sales will level off and additional expenditures will again have little or no impact.

The concave-downward model follows the economic model of the law of diminishing returns. That is, as the amount of advertising increases, its incremental value decreases. Thus, the effects of advertising would be felt almost immediately then begin to decrease.

As can be seen, the models differ substantially in respect to the impact of advertising expenditures In the former model, the impact of advertising will not even begin to be felt until a certain level of expenditures has been reached. Those who believe that advertising spending has a cumulative effect would adhere to this model. In the concave downward model, the impact takes place almost immediately, with incremental expenditures having less and less value.

The models would also differ in respect to the types of products being advertised. For example, the S-shaped response curve would seem to indicate an ability of the advertising to stimulate sales, both through the provision of information and throughout persuasive capabilities. As noted, it would support the fact that ads have a cumulative effect, and the additional ad spending may lead to additional sales. The concave-downward model, on the other hand, would argue that consumers are already in a mind set to buy or not buy, and the value of the advertising is primarily to inform not to persuade. Additional levels of ad spending will not be effective in changing one’s mind, or motivating them to purchase. If these assumptions are true, it would seem that for high-involvement products, the concave downward model would be more likely to be operating, while the S-shaped Chapter 10 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 10-11

response might better explain products for which the consumers’ mind has not already been made up. In other words, the concave model assumes there will be little or no search, or that this search has been concluded. the ads primary impact is on the decision to buy. (Otherwise, additional expenditures would be likely to be effective at the search stage). The S-shaped model would seem to be more effective when the decision hasn’t yet been made, and the consumer can still be impacted by the ads.

IMC Comprehensive Project At this stage, present the specific media objectives. Without specifically naming media (this will be done in following chapters) develop a broad media schedule. Also explain what creative aspects and mood must be taken into consideration. In addition, determination and allocation of the budget is now required.

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CHAPTER 11 BROADCAST MEDIA Chapter Overview The purpose of this chapter is to examine the broadcast media of television and radio. We examine the general characteristics of television and radio as well as their strengths and limitations as advertising media.

Attention is given to how advertisers use TV and radio as part of their media strategy, how they buy television and radio time, how audiences are measured and evaluated for each medium, and how rates are determined. Recent developments in the area of audience measurement for television are examined.

Learning Objectives 1. Describe the different types of television advertising, specialty television advertising, alternate time periods, program format, and measurement of television audiences.

2. Summarize the strengths and limitations of television TV as an advertising medium.

3. Describe different types of radio advertising, specialty television advertising, alternate time periods, program format, and measurement of radio audiences.

4. Summarize the strengths and limitations of radio as an advertising medium.

5. Apply the media knowledge of TV and radio for strategic IMC decisions.

Chapter and Lecture Outline I.

TELEVISION

There are a number of options available to advertisers purchasing television time which is a very specialized part of the advertising business, particularly for large companies spending huge sums of money and advertising on a national or regional basis.

A.

Delivery of TV Services—this section reviews the five different ways consumers receive TV services given the technology changes over the past decade or so. How this occurs influences whether the audience receives advertising while enjoying video content.

B.

Types of Television Advertising— a consideration that faces advertisers is the allocation of their TV media budget among network, specialty network, online network, sponsorship, and product placement options.

1. National Networks—advertisers disseminate their messages by the purchase of airtime from a television network which assembles a series of affiliated stations or affiliates to which its supplies programming. Network advertising simplifies the purchasing process for advertisers who want to reach broad target audiences. Most prime-time commercial spots, particularly on the popular shows, are sold during the up-front market while time can also be bought during the scatter market that runs throughout the TV season. Spot advertising refers to commercials shown on local television stations, with the negotiation and purchase of time being made directly from the individual stations. All non-network advertising done by a national advertiser is known as national spot, whereas airtime sold to local firms is known as local advertising.

2. Specialty Networks—specialty networks offer a lower cost, more flexible alternative to regular network advertising and this makes them particularly attractive to smaller advertisers.

However, wide-spread acceptance of the nearly numerous channels is limited due to their niche characteristic. About 20 channels own a prominent image and strong following.

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3. Network Advertising Online—national and specialty networks sell advertising time for shows that a consumer accesses anywhere, anytime, on any device, featuring apps for mobile delivery.

The growth of this is slow, but appears poised for substantial increase and instructors can update this as things change quickly.

4. Sponsorship—under a sponsorship arrangement, an advertiser assumes responsibility for the production and content of the program as well as the advertising that appears within it.

5. Product Placement—advertisers pay to have their products used or featured in television shows.

This often works in conjunction with sponsorship deals as well. The source in which the product is placed is critical since the plot, actors or other characteristics of the entertainment vehicle can be associated effectively with the brand. Issues of the amount of time and the number of different vehicles are also highlighted as important.

C.

Time Periods and Programs—another consideration in buying television time is the selection of the particular time period and program during which the commercial will be shown. Considerations here include the selection of a specific time period or daypart segment and audience size and demographic composition. Dayparts are important to advertisers because they attract different demographic groups.

D.

Measuring the TV Audience An important consideration in using television advertising concerns the size and composition of the TV viewing audience. Audience measurement is critical to advertisers, networks and stations since they want to know the size and characteristics of the audience they are reaching when they buy time on a particular program. Audience size and composition are important to the network or station as these figures determine the amount they can charge for commercial viewing time.

Programming decisions are made on the basis of audience size.

Audience Measurement—the source of network TV and local audience information is Numeris.

The company uses a diary research method for gathering audience information using standard marketing research practices to ensure valid and reliable information. Numeris implemented people meters to measure national local audiences in major cities. This improved technology over the original people meter offers individual level data and timely measurement.

Audience Measures 1. Program rating—the percentage of TV households in an area that are tuned to a specific program during a specific time period. A ratings point is a figure that represents 1 percent of the TV households in a particular market tuned to a specific program.

2. Share of audience—the percentage of households watching TV in a specified time period that is tuned to a specific program. Share figure are important because they reveal how well as program does with the available viewing audience. Total audience is the total number of homes viewing any five-minute part of a program.

Audience Measurement Reporting Numeris’ subsidiary offers numerous software applications for analyzing the data collected to understand audience composition for TV shows. The breakouts of the data include a wide variety of segmentation variables identified in Chapter 3. Other companies offer similar services.

E.

OTT TV Viewing TV viewing changed significantly with technology and this final section illustrates the trend of accessing TV programming online through new distribution systems. While there is minimal Chapter 11 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 11-2

advertising through this system currently, it offers sponsorship and product placement opportunities, and may indeed be a sizable paid option in the future.

II.

EVALUATON OF TELEVISION

Television has virtually saturated households throughout the Canada and has become a mainstay in the lives of most people. They rely on TV for news and information and it is their primary form of entertainment.

The penetration and popularity of television make it the predominant form of mass media. It has often been noted that television represents the ideal advertising medium with its ability to combine visual images, sound, motion, and color. While television has numerous strengths, it also has limitations as an advertising medium.

A.

Strengths of Television 1. Creativity for cognitive and emotional responses—the interaction of sight and sound offers tremendous creative flexibility and makes possible dramatic, lifelike representations of products and services.

2. Target audience coverage—marketers selling products and services that appeal to broad target audiences find that TV lets them reach mass markets.

3. Cost efficiency—extensive coverage across markets permits markets to reach thousands of consumers with very little cost per person or cost per thousand.

4. Attention—television commercials are intrusive in that they impose themselves on consumers.

Unless we make a special effort to avoid commercials, most of us are exposed to thousands of them each year. While some of the viewing audience may be lost during commercial breaks, viewers are likely to pay some attention to commercials.

5. Scheduling flexibility—TV has often been criticized for being a nonselective medium, since it is difficult to reach a precisely defined market segment. However, some selectivity is possible due to variations in the composition of audiences as a result of scheduling flexibility through different programs and broadcast times.

6. Geographic coverage—scheduling flexibility gives rise for advertiser to cover more desirable geographic markets or more strongly emphasize some regions over others.

7. Reach—with nearly 100% penetration of televisions and virtually all Canadian reporting television consumption, advertisers have the opportunity to reach virtually everyone.

8. Frequency—advertisers can control the number of times consumers receive the message through proper scheduling and can optimize their frequency based on their market needs.

9. Media Image—advertising on television places a certain degree of legitimacy upon an advertiser due to the extensive absolute costs involved.

B.

Limitations of Television 1. Absolute cost—the absolute costs for commercial time can be very high, particularly on the major networks. Production costs for quality commercials can also be prohibitive. The production costs for a national brand commercial average more than $300,000 and can be much higher for more elaborate spots.

2. Target audience selectivity—advertisers who are seeking a very specific, often small, target audience find the coverage of TV extends beyond their market, reducing its cost efficiency particularly within a local market area.

3. Amount of processing time—most TV commercials are only 15 or 30 second spots and leave nothing tangible for the viewer to examine or consider.

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4. Clutter—the problems of fleeting messages and shorter commercials are compounded by the fact that the advertiser’s message is only one of numerous spots and other non-programming material seen during a commercial break.

5. Viewer attention—the increased penetration of VCRs and prevalence of remote control channel changing or zapping is creating a major problem for advertisers. Studies have shown that nearly a third of a TV program’s viewing audience is lost during commercial breaks as they stop watching television or switch to another channel.

6. Involvement—the overall effect of the characteristics of television implies that low involvement persuasion despite its significant invasiveness.

7

III.

Media image—TV commercials are probably the most criticized form of advertising because of the intrusiveness of the medium. Studies have shown a noticeable distrust level for TV commercials.

RADIO

The role of radio as an entertainment and advertising medium changed dramatically with the rapid growth in the popularity of television. Radio has evolved primarily into a local advertising medium characterized by highly specialized programming which appeals to very narrow segments of the population. Radio has survived and actually grown as an advertising media vehicle because it offers advertisers certain advantages. However, radio does have certain limitations that affect its role as an advertising medium.

A.

Types of Radio Advertising—purchase of radio time is similar to that of television in terms of purchasing options as advertisers can make either network, spot or local buys during multiple time periods or dayparts.

1. Network radio—a new option for Canadian advertisers who can now purchase advertising time on the CHUM and The Team radio networks.

2. Spot radio—national and local advertisers can use spot radio to purchase airtime on individual stations.

3. Stations Formats—radio is offered in both official languages, along with other languages spoken in Canada, across both AM and FM modes. Distribution of a radio station program is easily done digitally as consumers listen to a “local” radio stations anywhere via the Internet.

B.

Time classifications—the broadcast day for radio is divided into time periods or dayparts. The size of the radio listening audience varies widely across the dayparts, and advertising rates follow accordingly. The largest audiences (and thus the highest rates) occur during the early morning and late afternoon weekday drive times.

C.

Measuring the Radio Audience—Numeris provides information on radio listenership and this includes person estimates, rating and share including average quarter hour (AQH) figures and cumulative audience data (Cume).

IV.

EVALUATON OF RADIO

A.

Strengths of Radio 1. Cost efficiency and absolute cost—radio commercials are inexpensive to produce and the absolute and relative costs for radio advertising time is generally lower than for television.

2. Reach and frequency—cost implications suggest tremendous opportunity to build strong reach through placement across radio formats and enhanced frequency.

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3. Target audience selectivity—allows marketers to focus their advertising on specialized audiences such as certain demographic and lifestyle groups. For example, talk radio reaches the adult market effectively while top 40 music reaches teens and young adults.

4. Geographic coverage—advertisers often use radio stations and personalities to enhance their involvement with a local market and to gain influence with local retailers. Radio provides marketers with a variety of integrated marketing opportunities such as event marketing and point-of purchase promotions.

5. Scheduling flexibility—radio is probably the most flexible of all the advertising media because it has a very short closing period, which means advertisers can change their message almost up to the time it goes on the air.

6. Creativity for cognitive responses—verbal characteristics permit extensive rational messages or ads designed to communicate more factual information about a product.

7. Media image—consumers rely on radio for basis day-to-day media and good impressions about it are generally reported by market research.

B.

Limitations of Radio 1. Creativity for emotional responses—radio is an advertising medium without a visual image.

The radio advertiser cannot show the product, demonstrate it, or use any type of visual appeal or information. However, there is potential for mental imagery. Creative radio ads encourage listeners to use their imagination when processing a commercial message. It can also reinforce TV messages through a process called image transfer where the visual elements of TV commercials are implanted in a radio spot.

2. Amount of processing time—similar to television, radio features very short messages.

3. Target audience coverage—the percentage of the market tuned to any particular station is usually very small.

4. Attention—radio programming, particularly music, is often the background to some other activity and may not receive the listeners’ full attention. People who listen in their cars preprogram their radios and change stations during commercial breaks. Another factor that is detracting from radio listening in motor vehicles is the rapid growth of cellular telephones.

Commuters who own a cell phone are talking on the phone more and listening to less radio.

5. Selective exposure—pre-programmed radios provide instant availability of other stations during ad breaks. Consumers have significant control to avoid ads.

6. Clutter—most radio stations carry an average of nearly 10 minutes of commercials every hour.

During the popular morning and evening rush hours, the amount of commercial time may exceed 12 minutes. A new technology called Cash is making it possible for radio broadcasters to reduce the pauses between words of radio announcers and add more time for commercials.

7. Low involvement—like television, radio is often construed as a low involvement media.

V.

IMC PLANNING: STRATEGIC USE OF BROADCAST MEDIA

A.

Television—The points raised build on Figure 5-5 where each media plays a role in the consumer decision-making process and has particular communication objectives. While TV has specific strengths and limitations, how a promotional planner constructs the message in the media can help achieve varying degrees of the communication objectives options described in Chapter 5.

B.

Radio—The same argument if put forth for radio as seen above for TV. The key strengths of radio allow different advertisers take advantage of this media for consumers at the purchase stage of their decision-making.

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Teaching Suggestions This chapter is designed to provide the student with a general understanding of the broadcast media of television and radio. The instructor may want to direct the students’ attention to the statistics cited in the text regarding penetration of radio and television and the amount of time spent with these media. It is important for students to understand the general characteristics of television and radio including their specific strengths and limitations, the role they play as advertising media vehicles, how television and radio time is purchased and how audiences are measured and evaluated for each medium.

An interesting and informative website that you may want to visit is ThinkTV, formerly the Television Advertising Bureau. The nature of television as an advertising medium continues to change, especially with the evolution of the Internet. The instructor should encourage the student to explore these changes and consider their impact on advertising in terms of not only media planning, but also creative strategy and sales promotional programs.

Radio is a viable media option for national as well as local advertisers. Examples of the creative and effective use of radio are readily available just by spending some time listening to the medium. There are several interesting developments in radio that should be discussed including the growing popularity of talk radio and webcasts of radio stations. Internet distribution of radio is another avenue to persue.

Vignette 1. Is Canadian content of video entertainment important enough for you to pay for it?

This deal would be welcomed by advertisers especially the broadened media vehicle selection so that advertisers can increase their exposure levels with one supplier. Advertisers look for efficiency across its media partners and this should now be an opportunity with Rogers Sportsnet and the NHL. Furthermore, with stronger buys, an advertiser might have greater say in its placement rotation. The branding aspect would help to attract stronger audience numbers so that the advertiser would get great efficiency in that regard as well. Advertisers would be able to build a degree of frequency with their messages across games for fans following their team, and a degree of reach since there are seven Canadian teams that fans would be following.

IMC Perspective 11-1 1. Does this story suggest any other conclusions about Canadian TV broadcasting or Canadian TV advertising?

This perspective brings together the idea of social TV, making TV viewing a potentially more enjoyable experience thereby providing interesting opportunities for advertising messages. A few examples are highlighted, and the point instructors can delve into is how specific TV shows could use particular social media, and how that might enhance the quality of the message exposure for advertisers.

Instructors could bring it back to live sports, as shown in the opening vignette, or other special shows like the Oscars. Alternatively, different entertainment shows, like Canada’s Amazing Race, could feature unique applications. Instructors should point out how the unique features of different social media vehicles may be more appropriate for certain messages or IMC tools.

IMC Perspective 11-2 1. Which issue appears to be the most contentious between TV advertising buyers and sellers?

Most students are unaware of simultaneous substitution, and NFL fans will likely support the decisions and not really care about Bell’s challenge and criticism. For now, one will likely conclude that this is a test-case to see what will occur. The end of simultaneous substation is probably a long way off, but under the current chairman, the CRTC became more consumer friendly and may look into other tests to see the impact on the advertising industry.

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Answers to Review Questions 1. “Television is a mass medium that offers little selectivity to advertisers.” Do you agree with this statement? What are some of the ways selectivity can be achieved through TV advertising?

For a few decades television acted as a mass medium. However, some selectivity has always been available due to variations in program content, broadcast time and geographic areas. For example, Saturday morning cartoon shows appeal primarily to children while weekend sports programs are watched primarily by males. Geographic selectivity is possible through local of spot ads in specific markets. With the growth of cable TV television has become less of a mass medium. The major networks now account for less of the prime-time viewing audience and the market has become very fragmented. The selectivity of TV has increased significantly as advertisers can reach groups with specific interests such as sports, news, music, the arts or business on cable channels. There is even greater segmentation within these television programming categories. For example, the Golf Channel is a new cable network devoted entirely to the sport. There are cable networks devoted to a variety of music genres, such as MuchMusic and MusiquePlus, as well as to business and financial news (Report on Business Television).

2. Discuss the strengths of television as an advertising medium and the importance of these factors to major national advertisers and to smaller local companies.

Television has often been described as the ideal advertising medium because of its advantages. These include the opportunity TV offers for developing creative and imaginative messages with high impact; its wide coverage and ability to reach large audiences in a cost-effective manner; the captive nature of the TV viewing audience which usually results in attention to commercials; and the selectivity and flexibility television offers for reaching various types of target audiences, particularly with the growth of cable television. These factors are very important to major advertisers such as automobile companies or packaged goods marketers. These companies are generally trying to reach mass audiences with their advertising messages and television is an excellent media vehicle for doing this. However, they can also take advantage of the selectivity TV offers through programs or cable channels to reach more targeted audiences. Automobile companies and packaged goods marketers also rely heavily on the creativity and impact that is possible through TV commercials. These companies use the sight, sound and visuals offered through television to create high impact ads, develop images for their brands, and develop emotional or entertaining appeals. Television advertising can be particularly valuable for creating emotional or entertaining appeals that help make a low involvement product more exciting or interesting.

Of course there are limitations to television as an advertising medium, even for major advertisers with large budgets. Television can be a very expensive medium for national advertisers and production costs for high quality commercials are also very high. The viewing audience for television programs is becoming increasingly fragmented with the increase in the number of channels available to viewers.

Clutter also is be a problem numerous minutes per hour of commercials. The increase in the number of homes with digital video recorders is not yet a major problem but is likely to be so in the near future.

For smaller local companies, television has become a more viable medium in recent years. Local companies such as retailers, car dealers, restaurants and other merchants are spending a greater portion of their media budget on TV, particularly on local cable where the rates are low and they can target a specific market segment. Being able to use TV allows them to take advantage of the creative power of television. However, local companies also face some of the same problems as national advertisers such as audience fragmentation and competition from other media. Local companies also often lack the budget to produce high quality TV commercials which can limit the effectiveness of the commercials they run on television.

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3. Discuss the methods used to radio audiences. Do you think that the measurement methods being used for each are producing reliable and valid estimates of the viewing audiences?

National network viewing audiences are measured by BBM Canada. BBM uses a diary method that requires respondents to record their viewing at 15 minute intervals. Demographic information is collected for each respondent so that viewership by age, income, occupation, education and geographic location can be estimated. While BBM receives back 40% of completed diaries, some are not filled out correctly and this may affect reliability. BBM is implementing a people meter program to overcome some of the measurement deficiencies associated with diaries.

There is, of course, a considerable amount of debate over the reliability of audience measures. The measurement of television viewing audiences is very difficult and some variability must be accepted.

However, since these measures are used to determine advertising rates, marketers want them to be as accurate as possible. The use of the diary method is likely to provide less accurate measures since there are problems with diary households not filling them out regularly and/or accurately. There also are problems stemming from the fact that consumers are zapping commercials and then coming back to the program after the commercial break. This means that the actual viewing audience for the commercial is not as large as that for the program.

One way of improving measurement of local viewing audiences is greater use of the portable people meters rather than relying on the diary system. Another way is by increasing the sample size. Larger sample sizes will decrease sampling error and also provide better representation of specific demographic segments.

4. What are the strengths and limitations of advertising on radio? What types of advertisers are most likely to use radio?

Advantages of advertising on radio include its low cost and efficiency. Radio commercials are inexpensive to produce and the cost of advertising time on most stations is relatively low. This allows advertisers the opportunity to build more reach and frequency into their media schedules. Another major advantage of radio is the high degree of audience selectivity available through program formats and geographic coverage of the numerous stations. Radio is also a very flexible medium with very short closing periods for running a spot and also offers the potential for mental imagery in the creation of a commercial. Radio stations also offer valuable merchandising assistance and support to advertisers.

Disadvantages of radio include creative limitations due to the absence of a visual image, a high level of audience fragmentation because of the large number of stations, chaotic buying procedures for purchasing radio time, limited amount of research data on radio audiences and limited listener attention (particularly in cars where station changing occurs frequently or where commuter are talking on cellular telephones). Radio is most likely to be used by local advertisers such as retailers. However, radio has also become a popular medium for national advertisers, particularly those with products and/or services which appeal to hard-to-reach audiences such as teenagers.

5. How can TV best be used to work with social media?

TV ads can direct viewers to the social media vehicle naturally with their brand at the conclusion of the ad for an extended message. Any other IMC tool that may be advertised on TV can be featured (e.g., contest, cause-related activity) and the viewer directed to the social media vehicle for the execution of the sales promotion or request for involvement with the cause. An interactive scenario could be possible where one TV ad invites Twitter comments, and then a subsequent TV ad 30 minutes later could be incorporated with the Twitter messages. Of course, any content seen from any social media vehicle can be the essence of a TV message. Students should be encouraged to think creatively, brainstorming for new ideas or recalling examples they have experienced.

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Answers to Review Questions 1. Watch a show on TV and make notes on what ads are shown. Find the equivalent show on the network’s website and makes notes on what ads are shown. What similarities and differences do you notice?

This should be a very interesting short assignment that can be the basis for some interesting class discussion. Students should pick TV shows during non-prime time day-parts (e.g., early morning, afternoon, late fringe) and list the products and services advertised, and analyze the type of consumers these advertisers are targeting. Similar time periods and questions can be done for online shows and ads to see if there is any difference.

2. Watch TV or listen to the radio and make note on whether the ad directs the receiver to any aspect of digital media (e.g., social network).

This task represents another perspective of question 5 from both sections of questions. The contribution of each media assisting one another for overall communication effects is one of the most exciting aspects of new media. Students should try to classify whether the usage is straight advertising messages of the brand or whether the media is used in the execution of other IMC tools.

3. Listen to the radio and make notes on what ads are aired. What similarities and differences do you notice in comparison to TV advertising?

This is another comparison task to allow students to observe that ads on the radio will be for products that do not require a visual as much to achieve communication effects. Alternatively, the ads will support the visual media of the brand in order to gain additional frequency at a lower cost and to encourage purchase intention with reminder messages. Another feature is to encourage students to experience radio messages as they are gravitating away from such media.

4. Listen to a radio station and pay attention to the ads to assess whether any overcome the limitation of a lack of creativity for emotional responses?

Imagery transfer refers to a technique whereby the images of a TV commercial are implanted into a radio spot. This can be done by establishing the video image of a TV commercial and then using the audio portion as the basis for the radio message so that consumers hearing the radio spot will make the connection to the television ad. Coordination of radio and television commercials is often done by national advertisers in particular. Students should be encouraged to find and evaluate current examples of campaigns using image transfer techniques.

5. How can radio best be used to work with social media?

Similar ideas found in question 5 of the other set of questions are quite logical here. Again, students should be encouraged to think of new ideas. Instructors could augment the question to focus on a specific brand if they like to make the exercise more applicable to an identifiable context.

Additional Discussion Questions (not in text) A.

Discuss the strengths and limitations of advertising on specialty channels. Discuss how both large national advertisers and small local companies might use this TV option effectively.

There are several advantages including the opportunity for advertising to very specialized markets that tune to a particular channel, its lower costs, and the greater flexibility in the type of commercials that can be used. In that regard, a big advantage is the ability to use longer commercials that can communicate more detailed and complex messages. Limitations include that it is still overshadowed by the major networks as most households still watch considerably more network programming. A final problem is its lack of penetration. Cable penetration is currently at about 73% of Canadian households, which means nearly a quarter of the market cannot be reached on cable.

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While the growth in the number of specialty channels has resulted in much greater audience fragmentation, it has also provided advertisers with much greater selectivity. Specialty channels make it possible for advertisers to reach very specialized market segments since they carry a specific type of programming that appeal to certain audiences. A number of developments are likely to affect the advertising industry. The number of channels available will continue to increase which will result in more audience fragmentation but allow for even greater selectivity. It will also continue to be a popular source of sports programming, particularly at a local and regional level. Television service providers are promoting the high-speed access to the Internet that is available through cable modems and digital cable boxes. Another important impact of cable will be at the local level as advertisers such as more retailers and service companies are advertising on their local cable systems.

B. Analyze reasons for the boom in televised sports programming. How can marketers capitalize on the growth of sports programming in developing IMC programs?

The growth in sports programming is due to a number of factors. People have a tremendous interest in sports and are watching sporting events, sports news shows and other types of sports-related programming more than ever. The major broadcast and cable networks have also increased their sports programming because televised sporting events attract free-spending young men, who constitute an important market segment for advertisers. Media companies are improving the quality of sports programming which is helping attract more viewers.

Marketers are capitalizing on the growth in sports programming primarily by building integrated marketing communication programs that center around event sponsorships. Nearly two-thirds of the monies spent on event sponsorship go to sporting events. Sports such as auto racing, golf, tennis, skiing, beach volleyball and others are attracting corporate sponsorships. Marketers are recognizing they can build integrated marketing programs around sporting events that include television advertising, sales promotion, publicity/ public relations and even interactive media.

C.

Discuss the methods used to measure network television viewing audiences and local audiences. Do you think that the measurement methods being used for each are producing reliable and valid estimates of the viewing audiences? How might they be improved?

National network viewing audiences are measured by Numeris with the portable people meter that receives a signal from media once the wearer is in proximity. Numeris uses a diary method that requires respondents to record their viewing at 15 minute intervals in smaller markets. Demographic information is collected for each respondent so that viewership by age, income, occupation, education and geographic location can be estimated. While Numeris receives back 40% of completed diaries, some are not filled out correctly and this may affect reliability. Numeris is implementing a people meter program to overcome some of the measurement deficiencies associated with diaries.

There is, of course, a considerable amount of debate over the reliability of audience measures. The measurement of television viewing audiences is very difficult and some variability must be accepted.

However, since these measures are used to determine advertising rates, marketers want them to be as accurate as possible. The use of the diary method is likely to provide less accurate measures since there are problems with diary households not filling them out regularly and/or accurately. There also are problems stemming from the fact that consumers are zapping commercials and then coming back to the program after the commercial break. This means that the actual viewing audience for the commercial is not as large as that for the program.

One way of improving measurement of local viewing audiences is greater use of the portable people meters rather than relying on the diary system. Another way is by increasing the sample size. Larger sample sizes will decrease sampling error and also provide better representation of specific demographic segments.

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D. Discuss the factors that media buyers should take into consideration when buying advertising time on radio.

First they must decide whether they want to make a network or spot buy. National advertisers such as automobile companies or major business-to-business marketers are likely to purchase time on one of the radio networks since they are generally trying to reach a national audience. However, because of the limited geographic coverage of Canadian radio networks and their relatively low ratings, they do not generate very high reach. Companies who are interested in buying time in certain geographic markets and local companies such as retailers will be the major purchasers of radio time on local stations. A second major factor to consider is the audience that can be reached through different radio stations. Radio allows companies to focus their advertising on certain demographic and lifestyle groups.

Radio formats vary in popularity among different age groups. Radio stations also can appeal to listeners with specialized interests through programming that focuses on specific topics such as news, sports, finance and investments, computers, and cars. Cost factors are also taken into consideration when buying radio time. As with any other type of media, media planners consider both the absolute and relative cost of advertising time on radio. Radio stations generally promote their ability to reach specific target audiences which increases the efficiency of an advertiser’s budget.

E. Explain what is meant by zipping and zapping and how they affect television viewing behaviour. Discuss some of the ways advertisers can deal with the zapping problem.

Zipping refers to the practice of fast forwarding through commercials during the playback of a program recorded on a PVR. Zapping refers to the use of a remote control to change channels and switch away from commercials during a break. The networks use a variety of tactics to hold viewers’ attention during commercial breaks such as showing previews of upcoming programs or short closing scenes at the end of a program. The ultimate answer to zap-proofing commercials, however, is to produce creative and meaningful spots that will attract and hold the attention of TV viewers. Techniques might help do this include the use of celebrities, humorous appeals or unique executions. Students should be asked to take note of any commercials that catch their attention and that they like and discuss why they might watch the ad rather than switching channels.

IMC Exercise There are advantages to advertising on cable TV including the opportunity for narrowcasting or reaching a very specialized market and greater flexibility in the type of commercials that can be used. Select a popular cable network. Analyze several of the different programs on this network and the types of companies who advertise on these shows. Discuss the types of commercials used by the advertisers on these programs with respect to factors such as creative style, objectives, length and format. Do the commercials appear to differ from those found on the major networks?

IMC Comprehensive Project Students should analyze how the broadcast media of television and radio might be used as part of the media plan for their project. The specific assignment is as follows: IMC Project Assignment for Chapter 11 Analyze the role of television and radio in the media plan for your product or service. Your analysis should focus on how TV and/or radio can be used to reach the target audience and help achieve your media objectives. What are the advantages of using TV and/or radio? What percentage of your media budget will be devoted to broadcast media? Do you plan on using both network and cable programs as part of your TV media schedule? What specific network and cable programs will be use in your media schedule and why?

Discuss how radio might be used as part of your media plan.

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CHAPTER 12 PRINT MEDIA Chapter Overview This chapter continues the analysis of the major mediums for advertising by examining the two primary types of print—magazines and newspapers. Magazines and newspapers are high-involvement media which allow the presentation of detailed information that can be processed at the reader’s own pace. The characteristics of each media are examined including the different types of magazines and newspapers and their strengths and limitations as advertising media. Attention is given to audience measurement for magazines and newspapers, their rate structures and the purchase of advertising space in each. The discussion of each media concludes with an application of magazines and newspapers for strategic IMC decision.

Magazines have become a highly specialized medium that reaches specific target audiences in both the consumer and business markets. Newspapers are particularly important to local advertisers and retailers to encourage shoppers to visit their store locations and still represent a large portion of the total Canadian advertising expenditures. Advertising revenue is extremely important to magazines and newspapers as few could survive without it, however newspapers face a difficult situation of having lost significant advertising revenue to digital alternatives.

Learning Objectives 1. Identify the different types of magazines available for advertising, how circulation and readership levels are determined, how audience size and its characteristics are measured, and the factors that influence advertising rates.

2. Evaluate the strengths and limitations of magazines as an advertising medium.

3. To identify the types of newspapers offered for advertising, how circulation and readership levels are determined, how audience size and its characteristics are measured, and how advertising rates are determined.

4. Evaluate the strengths and limitation of newspapers as an advertising medium.

5. Apply the media knowledge of magazines and newspapers for strategic IMC decisions.

Chapter and Lecture Outline I.

MAGAZINES

Magazines serve the educational, informational, and entertainment needs and interests of a wide range of readers in both the consumer and business markets and are targeted to very specific types of audiences.

A.

Classifications of Magazines—a useful way of classifying magazines is provided by Canadian Advertising Rates and Data (CARD) which divides the publications into three broad categories based on the audience to which they are directed.

1. Consumer magazines—those that are bought by the general public for information and/or entertainment. CARD divides domestic consumer magazines into numerous classifications, among them general interest, sports, travel, and women’s. Consumer magazines represent the major portion of the magazine industry in terms of advertising revenue.

2. Ethnic Publications—growth of cultures in Canada has spurred publications in numerous languages. Some are large and earn reasonable advertising revenue; however, most are early in their development and offer limited options to communicate with less overall quality.

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3

Farm publications—the second major CARD category consists of magazines direct to farmers. There are approximately 80 publications targeted to nearly every possible type of farming or agricultural interest.

4. Business publications—these are magazines or trade journals that are published for specific businesses, industries, or occupations. CARD’s major categories of business publications include those directed to specific professional groups, industrial magazines directed to manufacturing and production industries, trade magazines, and general-business publications.

5. Foreign publications—magazines from other countries, notably the USA, provide competition for domestic publications but allow advertisers an alternative vehicle to reach Canadians through specialized editions. Moreover, brands with North American mandates reach Canadians through the same ads in the original publication.

B.

Magazine Circulation and Readership—two of the most important considerations in deciding whether to utilize a magazine in the media plan are the size and characteristics of the audience reached by the publication. Important considerations include the circulation of the publication as well as its total readership.

1. Circulation—circulation figures represent the number of individuals who receive a publication, either through subscription, store purchase or controlled circulation. The number of copies distributed to original subscribers or purchasers is known as primary circulation and is used as the basis for the magazine’s rate structure. Publications base their rates on guaranteed circulation and provide rebates if the number of delivered magazines fall below the guarantee.

Circulation verification services are provided by several companies to ensure circulation figures for magazines are accurate. Most major publications are audited by the Alliance for Audited Media (AAM).

2. Readership—in addition to primary circulation figures, advertisers may be interested in the number of people that a publication reaches as a result of secondary or pass-along readership.

Total audience or readership of a magazine can be determined by taking the readers per copy and multiplying this figure by the circulation of an average issue. Magazines Canada along with Vividata provide information about readership levels and audience characteristics.

C.

Magazine Advertising Rates—while magazine rates are primarily a function of the circulation of the publication, rates will vary in response to other variables including size of the ad, position, number of colours, particular editions chosen (geographic, demographic), any special mechanical or production requirements, the number and frequency of insertions and whether the circulation is controlled (free) or paid. Advertising space is generally sold on the basis of space units such as full page, half page and quarter page. The chapter identifies that rates are available for both print and digital editions. Some digital publicans charge the same as the print version with a cost per page.

Other digital publications are more like websites and charge based on a CPM basis much like other digital media.

II.

EVALUATION OF MAGAZINES

A.

Strengths of Magazines 1. Target audience selectivity—magazines are the most selective of all media except direct mail.

Most magazines are published for special interest groups, activities, or obvious segments that marketers use such as demographics.

2. Geographic coverage—national, regional and city coverage is possible with appropriate use of some magazine titles.

3. Control for selective exposure and attention—magazines are generally purchased because the information they contain interests the reader, and ads provide additional information that may Chapter 12 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 12-2

be of value in making a purchase decision. Consumers consider magazines to be the primary source of information for a variety of products and services.

4. Creativity for emotional and cognitive responses—magazines are generally printed on highquality paper stock and use printing processes that provide excellent reproduction in black and white or colour. These production qualities offer tremendous opportunity for advertisers to effectively portray their product. Some magazines offer a variety of special options that can enhance the creative appeal of the ad and increase attention and readership. Examples include gatefolds, bleed pages, inserts, pop-ups, and creative space buys.

5. Amount of processing time and reader involvement —magazines are often kept for reference and/or read over several days. One benefit of the longer life of magazines is that reading occurs at a less hurried pace and there is more opportunity to examine ads in considerable detail thereby increasing the amount of processing time compared to broadcast media.

6. Media image—companies whose products rely heavily on perceived quality, reputation, and/or image often buy space in prestigious publications with high-quality editorial content whose consumers have a high level of interest in the advertising pages.

B.

Limitations of Magazines 1. Target audience coverage—magazines typically do not very high circulation rates so even the best of magazines can only reach a smaller portion of its target audience relative to other media, and especially the main other print media, newspaper.

2. Scheduling Flexibility—most major publications have a 30- to a 90-day lead time, which means space must be purchased and the ad must be prepared well in advance of the actual publication date.

3. Reach and frequency—the percentage of adults reading any individual publication tends to be much smaller, so magazines have a thin penetration of households. Thus, companies who want to reach mass markets have to buy space in a number of magazines.

4. Absolute cost and cost efficiency—the absolute cost of advertising in large mass-circulation magazines like MacLean's can be very expensive, particularly for popular positions such as back covers. The selectivity strength of magazines with smaller readerships provides more expensive CPM compared to other media.

5. Clutter—this is something of a paradox for magazines. The more successful a magazine becomes, the more advertising pages it attracts, which leads to greater clutter.

III

NEWSPAPERS

Newspapers are the second major form of print media and represent the largest of all advertising media in terms of total advertising volume. Newspapers are an especially important advertising medium to local advertisers such as retailers. However newspapers can also be a valuable medium to national advertisers as well.

A.

Types of Newspapers—the vast majority of newspapers are daily publications serving a local community. However, there are other types of newspapers that have special characteristics that make them valuable to advertisers. Classifications of newspapers include: 1. Daily newspapers—published each weekday and found in larger cities and towns across the country. In 201, there were about 100 daily newspapers in Canada and these were read by approximately 50% of adults each weekday and 80% each week.

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2. Community newspapers—most community newspapers originate in small towns or suburbs where the volume of news and advertising is not adequate to support a daily paper. They appeal primarily to local advertisers in the community because of their limited geographic focus.

3. National newspapers—national newspapers in Canada include The National Post and The Globe and Mail. They appeal primarily to national advertisers and to regional advertisers that use specific geographic editions of these papers.

4. Internet newspapers—the above newspapers offer on-line versions of their newspapers and are experimenting with varying advertising approaches.

5. Special-audience newspapers—there are a variety of papers that offer specialized editorial content and are published for specific groups. Marketing Magazine is an example of a special audience newspaper as are college newspapers.

6. Newspaper supplements—although not a category of newspapers per se, papers also include magazine type supplements. An example is The Globe and Mail’s Report on Business which is published monthly.

B.

Types of Newspaper Advertising—advertising in newspapers has categories including: 1. Display Advertising—display ads are found throughout the paper and generally use illustrations, headlines, white space and other visuals in addition to copy text. Display ads account for approximately 70 percent of the advertising revenue of the average newspaper.

Display ads can be further classified as local or national/general advertising.

Local advertising refers to ads placed by local advertisers targeted to the market area served by the newspaper. National or general advertising refers to newspaper display advertising done by marketers of branded products sold which are sold on a national or regional level.

2. Classified Advertising—classified ads are those arranged under subheads according to the product, service, or offering being advertised and run in the classified section of the newspaper.

Major categories include employment, real estate, and automotive.

3. Special ads—special ads in newspapers include government and financial reports and notices and public notices. Preprinted inserts do not appear in the paper itself but are printed by the advertiser and then distributed with the newspaper. These include circulars, catalogs, brochures and free standing inserts (FSIs) which are popular for distributing coupons.

4. Sponsorship Ads—these types of ad look exactly as newspaper content which encourages readership, but somewhere on the page there is a message indicating sponsorship or similar word, so that the reader understands that it is a paid message. Newspapers offer production services to advertisers and their agencies to facilitate this placement.

5. Preprinted Inserts—represent decent advertising revenue for newspapers and a good option for advertisers to deliver a colourful message on good quality stock paper. The Hudson’s Bay continues to make good use of this option as an example.

6. Digital Ads—digital versions of newspapers attract advertisers who want to reach those reading this form of news. Interestingly, newspapers offer video ads, something they never did in the past owing to their print history. Combined with display ads, this type of news publication offers advertisers a multi-media exposure in one journalistic outlet.

C.

Newspaper Circulation and Readership—media planners must understand the size and characteristics of the audience reached by a newspaper

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1. Circulation – the basic source of audience information comes from the circulation figures in CARD. The Alliance for Audited Media (AAM) verifies circulation figures for newspapers as shown in the magazine section. The Canadian Community Newspapers Association (CCNA).

2. Readership –Data on newspaper readership characteristics is available from Newspapers Canada and Vividata.

D.

Newspaper Advertising Rates—advertising space in newspapers is sold by the agate line and column width. Most newspapers offer volume discounts (e.g., open-rate structure). There are additional charges for the use of colour and for preferred page and section positions.

IV.

EVALUATION OF NEWSPAPERS

A.

Strengths of Newspapers 1. Target audience coverage—the general nature of newspapers permits extensive coverage of its target audience, especially with such a high readership. The resulting weaker selectivity can be offset with placement in appropriate sections.

2. Geographic coverage—advertisers can vary their coverage by choosing a paper or combination of papers that reaches the areas with the greatest sales potential. Most major newspapers offer advertisers geographic or zone editions within their market.

3. Scheduling flexibility—newspapers are flexible in terms of requirement for producing and running the ads and from the creative options they make available to advertisers.

4. Reach and frequency—in most areas, 60 percent or more of households read a daily newspaper, and the reach figure may exceed 70 percent among household with higher incomes and education levels.

5. Absolute cost and cost efficiency—newspapers allow large and small advertisers to find the most appropriate sized ad to fit their overall advertising budget.

6. Amount of processing time and reader involvement —an important feature of newspapers is consumers’ level of acceptance and involvement with the paper, including the ads it contains.

Consumers are generally very familiar with the sections of the newspaper and knowledgeable about the types of ads they contain.

7. Creativity for cognitive responses—extensive long-copy appeals are possible for make for more thoughtful and elaborate processing of informational messages.

8. Media Image—consumers rely on newspapers as a trusted source of information and therefore carry a significant source effect as a legitimate media.

B.

Limitations of Newspapers 1. Target audience selectivity—while newspapers can offer advertisers geographic selectivity, they are not a selective medium in terms of demographics or lifestyle characteristics. The only exception to this is the sections that are available in most newspapers.

2. Control for selective exposure and attention—because a newspaper is generally kept for less than a day, an ad is unlikely to have any impact beyond the day of publication and repeat exposure is unlikely.

3. Creativity for emotional responses—the course paper used for newspapers, the absence of extensive colour, and the lack of time papers have available to achieve high-quality reproduction limits the quality of most newspaper ads.

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4. Clutter—because a high percentage of the average Canadian daily newspaper is devoted to advertising, the advertiser’s message must compete with numerous other ads for consumers’ attention and interest.

V

IMC PLANNING: STRATEGIC USE OF PRINT MEDIA

A.

Magazines—The points raised build on Figure 5-5 where each media plays a role in the consumer decision-making process and has particular communication objectives. While magazines have specific strengths and limitations, how a promotional planner constructs the message in the media can help achieve varying degrees of the communication objectives options described in Chapter 5.

B.

Newspaper—The same argument if put forth for newspaper as seen above for magazines. The key strengths of newspaper allow different advertisers take advantage of this media for consumers at the purchase stage of their decision-making.

Teaching Suggestions This chapter is designed to provide the student with a general understanding of the two major types of print media, magazines and newspapers. As with television and radio, it is important for students to understand the general characteristics of magazines and newspapers including the different types or classifications of each medium, their specific strengths and limitations as advertising media, how readership is measured, and how rates are determined and advertising space is purchased. The instructor should call students’ attention to the wide variety of magazines available and their ability to reach nearly every consumer interest, lifestyle, and activity as well as most businesses. You might ask your students if there is any segment of the consumer or business market that does not have one or more magazines targeted towards it. One interesting point of discussion is whether there are too many magazines on the market and whether it is possible for the highly specialized publications to survive. Students might also be asked to find and discuss examples of magazines that are using selective binding and inkjet imaging to target and personalize ads. A very interesting web site that you may want to visit for some interesting information on Canadian magazines is Magazines Canada at www.magazinescanada.ca.

With regard to newspapers, it is important to stress their importance as an advertising medium for local advertisers and also to discuss how national advertisers might be encouraged to allocate more of their budgets to newspapers. You might ask students who read a newspaper on a daily basis and what particular sections they read. It is likely to find low readership, however people are gravitating to reading newspapers online and potentially young adults are doing adopting readership there. The implications of this for advertisers can be discussed.

Vignette 1. What creative strategy and creative tactics are effectively used in these print media award winners?

This question highlights the inter-play between creative and media. While text material has to be presented in some kind of order, it is challenging for students to see the links between creative material in chapters 7 and 8 with the media placement in chapters 11, 12 and 13. The Walmart example uses body copy effectively and works well with different print and out of home options. The milk example takes advantage of the imagery capability of print media to communicate humour. The complexity of the message for Carex necessitated print to convey its brand and category need.

IMC Perspective 12-1 1. How is the experience of reading a print magazine similar to or different from a digital version of the same title?

This question continues a line of similar questions in other perspectives to generate discussion about how the processing and communication effects may be similar or dis-similar with new media. It also raises the idea of whether an online version of a magazine is really a magazine. In fact, it is a website Chapter 12 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 12-6

with a magazine brand name! The interaction is much different even though the content maybe identical. Moreover, the placement and type of ads are somewhat the same, but considerably different as well. All of this suggests that the discussion of media experience is one that students should be exposed towards.

IMC Perspective 12-2 1. Why are digital newspapers a stronger or weaker alternative as an advertising medium compared to other digital alternatives?

The perspective outlines the key advantage of newspapers over blogs in that there is reliable and credible authenticity of the information content due to the existence of its history of journalism and of an editorial board that questions and reviews the journalists work. In fact, the article highlights the importance of newspapers as a resource for bloggers. While there are no doubt some credible bloggers, the view that all bloggers are superior or overtaking newspapers is not a view shared by all. In essence, this perspectives calls into question the editorial content in which an advertiser would want to be associated with and suggests that newspapers retain their credibility still.

Answers to Review Questions 1. Discuss how circulation figures are used in evaluating magazines as part of a media plan and setting advertising rates.

Circulation figures represent the number of individuals that receive a publication, either through subscription or store/newsstand purchase. Total audience or readership refers to the total number of individuals who read a magazine or newspaper and is determined by taking the readers per copy and multiplying this figure by the circulation of the average issue. Magazines use circulation figures and readership estimates to set their advertising rates. The greater the number of readers the publication can deliver, the more than can charge for advertising space. Media buyers often prefer to use circulation figures of a publication in making their purchases since they are more verifiable. Total audience or readership figures rely on estimates of pass-along readership which occurs when the publication is read by individuals other than the primary subscriber or in places out of the home such as waiting rooms, airplanes, etc. Media buyers generally attach greater value to the primary in-home reader versus the out-of-home or pass-on reader as the former generally spends more time with the publication, picks it up more often and is thus more likely to be attentive and responsive to advertising.

2. Discuss the strengths and limitations of magazines as an advertising medium. How do magazines differ from television and radio as advertising media?

There are numerous advantages of magazines as an advertising medium. These include their selectivity or ability to reach specific target audiences, their reproduction quality, creative flexibility in terms of the type, size and placement of advertising material, their permanence or long life span, the prestige associated with advertising in some publications, consumer receptivity to and involvement with magazine advertising, and the special services offered by some publications. Disadvantages or limitations of magazine advertising include the high absolute costs of advertising, the limited reach and frequency (particularly for individual publications) the long lead time often required for placing an ad, and the problem of advertising clutter and competition among the numerous ads for the readers’ attention.

Magazines and newspapers play an important role as advertising media in an integrated marketing communications program. They allow the presentation of detailed information that can be processed at the receiver’s own pace whereas TV and radio are externally paced media which means the receiver cannot control the rate at which the information is processed. Magazines are more suitable than the broadcast media for delivering detailed ads with a great deal of information or visuals that the reader needs time to study or examine. However, magazines are not as effective as television for reaching Chapter 12 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 12-7

mass audiences and they offer advertisers the same creative options that are available through TV commercials.

3. Discuss how circulation figures are used in evaluating newspapers as part of a media plan and setting advertising rates.

Circulation figures represent the number of individuals that receive a publication, either through subscription or store/newsstand purchase. Total audience or readership refers to the total number of individuals who read a magazine or newspaper and is determined by taking the readers per copy and multiplying this figure by the circulation of the average issue. Newspapers use circulation figures and readership estimates to set their advertising rates. The greater the number of readers the publication can deliver, the more than can charge for advertising space. Media buyers often prefer to use circulation figures of a publication in making their purchases since they are more verifiable. Total audience or readership figures rely on estimates of pass-along readership which occurs when the publication is read by individuals other than the primary subscriber or in places out of the home such as waiting rooms, airplanes, etc.

4. Discuss the strengths and limitations of newspapers as an advertising medium. How might the decision to use newspapers in a media plan differ for national versus local advertisers?

Newspapers have a number of advantages that make them popular among both local and national advertisers. These include their extensive penetration or market coverage, their flexibility in terms of production requirements and short closing times, the geographic or territorial selectivity of newspapers, the high level of involvement and acceptance consumers have with newspapers and the advertisements therein, and the valuable services offered. Limitations of newspapers include their poor reproduction quality, the short life span of daily papers, their lack of selectivity with respect to demographics and lifestyle and the clutter problem that results from the vast number of ads in most papers.

The decision to use newspapers in a media plan may differ for national versus local advertisers because of the rate differential that papers charge the two types of advertisers. The rates paid by national advertisers are considerably higher than those paid by local advertisers. Thus national advertisers may be less willing to use newspaper advertising or may try to avoid the higher rates by channeling their newspaper ads through special category plans, cooperative advertising deals with retailers, and local dealers and distributors that pay the lower local rates.

5. How do magazines and newspapers help achieve brand behavioural and communication effects?

Both media are high-involvement which contribute substantially to category need, brand attitude and brand purchase intention objectives. Consumers are in a reading situation, and when attended to, the message can be especially convincing with rational arguments augmented with appropriate emotional message content. The desire of readers to experience a magazine on multiple occasions increases frequency potential which can contribute to awareness. The message content can also designed maximize brand exposure assisting in brand awareness as well. In short, all communication objectives can be obtained with magazines; however, the coverage is not excellent with many magazines having very low readership levels. Newspapers suffer on this latter point as they are discarded on a daily basis; however frequency can be built in with additional exposures during daily placements. Of course the drawback of this is the additional cost versus magazines.

Answers to Applied Questions 1. Explain why advertisers of products such as cosmetics or women’s clothing would choose to advertise in a publication such as Flare, Elle Canada or Chatelaine.

Women are very likely to be receptive to ads for cosmetics or clothes in these publications. In fact, one might argue that one of the reasons women buy fashion magazines such as Flare, Elle Canada or Chatelaine is to see the ads. For example, clothing ads provide some insight into new styles and fashions Chapter 12 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 12-8

and will be of great interest to magazines’ readers. Advertisers will tolerate the high number of ads in these publications because they create a very favourable environment that includes high quality photography and artwork as well as articles that are of interest to women.

2. Select an enjoyable print ad from a magazine and apply the earlier text material. Identify the target audience, behavioural objectives, communication objectives, brand positioning strategy and the creative strategy and tactics decisions; and associate these points with the key strengths of magazines as an advertising media.

This represents an assignment that the Canadian author uses. It is a good application of the material and requires the student to make a decision on a number of points where there is likely some debate or interpretation as to what is really going on. Of course, the brand could have had an entirely different idea on the direction and purpose of the ad, however this exercise gives the student a good opportunity to develop confidence making a decision on the key concepts of this and other chapters.

3. Explain why advertisers of products such as smartphones or men’s clothing would choose to advertise in newspapers such as The Globe and Mail, Vancouver Sun, or Metro.

Each of these three media vehicles offer the breadth of selection for newspaper advertising; national newspaper and city newspaper that require payment, and a city newspaper that is free. To some degree Metro is not a city newspaper since much content is not local and fits with all of the cities in which it has distribution, so it may be seen as a mid-point between the other two. Each would suit men’s clothing, but likely different brands and different retailers that have corresponding fit between the readership and the target audience. Alternatively, the wide spread usage of smartphones, we could expect to see all major brands advertising in all three publications. In this case though, brands might adjust the message and image to be more fitting of the readership of each newspaper. Of course brands in each product category may make other adjustments if there is a stronger concentration of its customers with a particular publication.

4. What differences might one conclude between national newspapers and community newspapers regarding the strengths and limitations of newspapers?

Community newspapers provide excellent target audience coverage for the local market at a reasonable relative and absolute cost while national newspapers are wasted coverage for local advertisers even with regional editions that they offer. National newspapers offer stronger reproduction quality with their superior printing technology and offer a better emotional experience to influence attitudinally. Much of the other evaluation criteria are quite similar. One might suggest that the media image is substantially different with neither the winner as they each serve a readership niche. This might imply an advantage for certain types of advertisers however. Students are encouraged to consider one or two other significant differences.

5. Identify how newspapers and magazines can be used for each stage of the decision-making process for automobile purchases.

Ads in both media can highlight need recognition very easily with an appropriate headline to attract attention with relevant copy in the message. Newspapers might be more useful for information search and evaluation of alternatives, although one could not claim that magazines are weak in this regard since the format offers good opportunity to do comparative ads. From a purchase decision standpoint, neither might be considerably strong, but the frequency potential with repetitive viewings in a magazine might sway this one. Post-purchase evaluations may be more influential with magazines due to the ability to capture emotionally with better visuals and stronger reproduction.

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Additional Discussion Question (Not In Text) A. Describe what is meant by selectivity with regard to the purchase of advertising media and discuss some of the ways magazines provide selectivity to advertisers.

Selectivity refers to the ability of an advertising media vehicle to reach a specific target audience.

Magazines provide selectivity to advertisers in a number of ways. Most magazines are published for readers with specific interests and lifestyles or who are involved with or work in a specific profession, business or area. Magazines also offer demographic and geographic selectivity. The editorial content of magazines generally appeals to specific demographic groups based on factors such as gender, income, occupation, and education. Magazines also offer demographic selectivity through special editions that are targeted at different demographic segments. Geographic selectivity is possible as magazines can make it possible for advertisers to focus on certain cities or regions. This can be done by advertising in a magazine that is targeted to a particular geographical area such as a regional or city magazine. Geographic selectivity is can also be achieved in magazines by purchasing ad space in specific geographic editions of national or regional magazines.

B. Choose a specific target audience that an advertiser might want to reach. Discuss how magazines and/or newspapers could be used to reach this particular market in a cost effective manner.

First of all it should be noted that selectivity is an inherent advantage of advertising in many magazines.

Most magazines are published for special-interest groups and allow advertisers to target segments of the population that are of interest to them. In addition to selectivity based on interests or topic, magazines can also provide demographic and geographic selectivity. This can be done through editorial content as well as through special demographic and geographic editions. Magazines are also offering greater selectivity through processes such as selective binding and ink jet imaging. Readers can be targeted by postal code, metropolitan area, region or demographics. Students should be asked to choose a product or service targeted at a specific market and discuss how magazines are an effective way to reach this group. They might even contact a magazine and ask for a media kit which usually provides very detailed information on how the magazine can reach specific target audiences and users of various products and services.

Newspapers have the advantage of offering advertisers geographic selectivity since they can reach areas or cities of specific interest to them. However, newspapers are not a selective medium in terms of demographics or lifestyle characteristics. One way advertisers can increase selectivity of newspapers is by advertising in certain sections of the paper such as the sports, food, entertainment or business section. Within a local market area advertising in specific geographic or zone editions of a paper can enhance selectivity. Newspapers in large metropolitan areas offer zone editions so local retailers can reach readers in their trading area. Again, students might be encouraged to contact a local newspaper (even the college paper) and request a media kit or information on advertising rates.

C. If you were purchasing magazine advertising space for a manufacturer of snowboarding equipment, what factors would you consider? Would your selection of magazines be limited to snowboarding publications? Why or why not?

In purchasing magazine space to advertise snowboarding equipment the media planner would obviously want to know what publications are best suited for reaching snowboarders and their advertising space rates. Consideration should also be given to the amount of advertising for snowboarding equipment that appears in these publications and the problem of getting the company’s ad noticed among all the competing ads. North American marketers of snowboarding equipment limit their advertising to publications that focus specifically on this market such as Snowboard since virtually all of the readers of these publications are snowboarders and there would be very little, if any, wasted circulation.

Companies might also consider running ads in skiing magazines such as Ski, Skiing or Powder as readers of these publications may also be snowboarders. However, one problem of advertising in Chapter 12 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 12-10

snowboarding or skiing publications is the high amount of competition from ads for other companies’ equipment which may make it difficult for the company’s ad to get noticed. Consideration also has to be given to the number of snowboarders who may be viable prospects for the equipment but do not read any of the snowboarding skiing publications. To broaden its reach, the company might want to look at other magazines that reach snowboarders such as general sports publications (e.g., Sports Illustrated), outdoor magazines, or other publications that reach this age and lifestyle group. A problem the company faces in advertising in these general publications is that of wasted circulation as many of the readers may not be snowboarders. Thus, advertising in general sports or outdoor magazines may not be as cost-effective as the more narrowly targeted snowboarding or skiing publications.

IMC Exercise Choose a specific consumer or business magazine and analyze it from an advertising perspective. If time permits you might write or call the publication to request a media kit from the publisher. Your report should include an analysis of the following: •

The target audience for the magazine in terms of both demographics and life style of its readers.

•

The percentage of the magazine’s pages devoted to advertising versus editorial content. Is there a clutter problem in the magazine?

•

A breakdown of the types of products and services advertised in the magazine. Why do you think these advertisers are attracted to this particular publication?

•

An analysis of the editorial climate and mood created by the publication and how it affects who chooses to advertise in it. How might the editorial climate of the magazine affect readers processing of the advertisements?

IMC Comprehensive Project Students should analyze how magazines and newspapers might be used as part of the media plan for their project. The specific assignment is as follows: IMC Project Assignment for Chapter 12 Analyze the role of magazines and newspapers in the media plan for your product or service. Your analysis should focus on how magazines and newspapers can be used to reach the target audience and help achieve your media objectives. What percentage of your media budget will be devoted to magazines and newspapers? What class of magazines and specific publications do you plan to use and why? If you plan to use newspaper advertising what are some of the factors you need to consider in making effective use of this medium? You should consult a source such as Canadian Advertising Rates and Data to get rate information on the magazines or newspaper you plan to use. You might also consider contacting some of the publishers to request media kits on their magazines.

Chapter 12 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 12-11

CHAPTER 13 OUT-OF-HOME MEDIA Chapter Overview In addition to the broadcast and print mediums discussed in the two previous chapters, marketers have a variety of alternatives from which to choose. In addition to the familiar outdoor ads and transit ads, a number of new out-of-home media appear in a many places and point-of-purchase locations. Out-of-home media are assuming an increasing role in the media mix as a primary media and as a support media. Moreover, other forms of support media are gaining prominence. The purpose of this chapter is to explore out-of-home and support media, and to discuss their strengths and limitations.

Learning Objectives 1.

Identify the options within outdoor media developing an IMC program and for audience measurement, and their strengths and limitations.

2.

Identify the options within transit media developing an IMC program and for audience measurement, and their strengths and limitations.

3.

Identify the options within place-based media developing an IMC program and for audience measurement, and their strengths and limitations.

4.

Show how out-of-home media are important elements of IMC planning.

Chapter and Lecture Outline I

OUTDOOR MEDIA

A.

Outdoor Media Options—outdoor media are available in a wide variety of formats including posters, backlit posters, bulletins, superboards, spectaculars, street-level posters and transit shelter posters, mobile signage. All of these options feature creative opportunities as advertisers look to make a unique public impression to large audience passing by these media on a regular basis. Most options are sold by a few media companies as there is concentration in this industry much like others.

B.

Audience Measurement for Outdoor Media—Reach and frequency are measured by the Canadian Outdoor Marketing and Measurement Bureau (COMMB). Their methodology involves using traffic circulation data from municipalities and analyzing this data with respect to the average number of people in the vehicle and the origin of the vehicle within the CMA. COMMB measurement results can be used to estimate reach and frequency levels for individual outdoor advertising campaigns.

Instructors should provide commentary on the sophistication of the research methodology and indicate the strength of the reliability and validity of the audience data. It is easy to be skeptical regarding the quality of this data, but these organizations represent world-class standing on the confidence advertisers can have when purchasing media from these sources.

C.

Strengths of outdoor media • • • •

geographic coverage scheduling flexibility reach frequency Chapter 13 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 13-1

• • • • D.

cost efficiency control for selective exposure attention creativity for emotional responses

Limitations of outdoor media • • • • • • • •

target audience selectivity target audience coverage absolute cost creativity for cognitive responses amount of processing time low involvement clutter media image

II.

TRANSIT ADVERTISING

A.

Transit Media Options—another form of out-of-home advertising is transit advertising. While similar to outdoor in the sense that signs and electronic billboards are often employed, transit differs in that these ads are oriented around transportation. Buses, taxis, commuter trains, airplanes, and subways are some of the transit forms employed. Five types of transit advertising are most commonly employed: •

interior transit cards are placed in backlit units above the seating area in buses, streetcars and subway cars.

•

interior door cards are placed on both sides of the doors of subway and commuter train cars.

•

exterior posters are placed on the on the sides and backs of buses.

•

station posters are found in places where people wait for public transportation and include bus shelters.

•

Digital video network is a system of video display screens located throughout the transit system in a few cities providing advertisers with an alternative message delivery beyond display/poster messages.

Travel between cities offers additional exposure avenues for advertising messages. Video and audio ads can be placed in airplanes along with additional collateral material.

B.

Strengths of transit media • • • • • • •

geographic coverage scheduling flexibility reach frequency absolute cost and cost efficiency control for selective exposure amount of processing time Chapter 13 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 13-2

C.

Limitations of transit media • • • • • • •

target audience selectivity target audience coverage attention creativity for emotional and cognitive responses involvement clutter media image

III.

PLACE-BASED MEDIA

A.

Place-Based Media Options—place-based media bring the message to the audience in locations among four domains; recreation, entertainment, professional, and public. This includes examples such as malls, convention centres, movie theatres, hotels, sports venues and school campuses. Both video and print-like messages are possible in most of these locations presently.

B.

C.

VI.

Strengths of Place-Based Media •

target audience selectivity

•

absolute cost and cost efficiency

•

control for selective exposure

•

attention and involvement

•

creativity for processing responses

Limitations of Place-Based Media •

target audience and geographic coverage

•

scheduling flexibility

•

reach and frequency

•

amount of processing time

•

clutter

•

media image

IMC PLANNING: STRATEGIC USE OF OUT_OF_HOME & SUPPORT MEDIA

Figure 5-5 summarized a planning approach that indicated a way to consider where each media plays a role in the consumer decision-making process and has particular communication objectives. Out-of-home’s strengths suggest its ability to enhance awareness. Out-of-home media is often used for purchase intention objectives due to the time and location characteristics.

Teaching Suggestions Coverage of the characteristics of the media presented in this chapter can lead to interesting exchanges. As indicated, discussions of product placements, advertising in the movies, and new places where ads are appearing generally get students involved, and may lead to heated discussions. Students may be encouraged to engage in a debate over the merits and/or ethics of some of these advertising forms.

Our lectures generally follow the outline set forth in the text. We discuss the characteristics of the various media, the strengths and limitations, and some of the sources of information that are available. We then tie Chapter 13 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 13-3

these materials back to the media strategy chapter and the communications models chapter to demonstrate how and when such media might be employed.

Vignette 1. Why are advertisers turning toward mobile messages delivered by digital billboards?

As noted in the vignette, digital billboards are much more attractive than standard billboards in terms of showing a fresh message with significantly lower production costs. Recall that one of the main reasons of advertising wear-out is a lack of change in the creative. The simple change of a message digitally allows advertisers to keep the message new and different as shown in the McDonalds example.

Mobile communication from the digital billboard provides an additional message opportunity, so the CPM for the media placement is further enhanced. If interested, the consumer is prompted to explore the brand further online via many avenues (e.g., website, social media). With the penetration of phones, advertisers are looking for as many ways to entice consumers to seek information or experiences with brands electronically. This continues the opportunity of varied creative and cheaper production.

IMC Perspective 13-1 1. Why are advertisers turning toward messages delivered by digital transit shelters?

This perspective continues the point of out-of-home advertising moving to digital communication. The technology addition helped spur the significant growth in advertising revenue for out-of-home in 2015.

While print is lagging, this and radio continue to hold their own as key components in an IMC plan for major brands. The transit example shows that the application is somewhat different; however there is still the opportunity to use near-field communication, along with the video screens. Presumably advertisers may see stronger use of mobile devices since people are waiting for transit and have time on their hands to follow up with Internet media.

IMC Perspective 13-2 1. In what way is advertising through Cineplex effective?

Cineplex offers advertisers numerous advertising formats within a few media vehicles. This provides advertisers with extensive reach and frequency potential. The mood of movie-goers is positive, since it is in the entertainment field, and advertisers generally prefer to communicate with audiences in a positive frame. The multi-media available can help for both low and high involvement processing.

Instructors can review Cineplex media kit to show students how a media company attracts and convinces advertisers to spend their money. Colourful imagery and a clear application of advertising shows how this is a very option for some product categories and brands.

Answers to Review Questions 1. Explain how our-of-home ads can be creative and foster emotional responses. Why would brands use outdoor ads for this purpose?

Outdoor ads use humour with clever phrases in a message that is primarily text based. In this case, the humour of the ad is consistent with the brand and reinforces the attitude of the target audience. It would be very difficult to expect short text messages to have a central route to persuasion and actively contribute to significant attitude change. Alternatively, pictures with limited copy can provide reminders of consumption experiences, or reminders of television commercials. In this case, the transformational experience of television commercials is played once again the target audience’s mind allowing the processing of a television commercial when it is in fact not occurring. For an advertiser to deliver a similar kind of message experience at a lower cost, allows potentially greater ad frequency in the overall media plan.

Chapter 13 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 13-4

2. Who is most influenced by exterior bus/train ads?

This question encourages students to consider that transit media audiences may have distinctive segmentation variables reflected in its ridership. Students might be encouraged to do research to investigate this question. Alternatively, students may relate their own experiences to identify certain segmentation variables. Naturally, certain lifestyle or attitudinal segmentation variables would be difficult to know, so instructors can guide the discussion along the lines of which are possible.

3. Why do advertisers consider place-based media to be a good part of their media mix?

Place-based media are excellent for advertisers who want to influence consumers when they actively shopping or when they are very close to the action of shopping. Advertiser are trying to simulate awareness and purchase intention with message that are in proximity of shopping locations to maximize the response and investment of advertising dollars.

4. How do out-of-home media help achieve awareness objectives?

Out-of-home media can be used to achieve a number of communications objectives. Creating awareness is foremost among these objectives since the message is not processed for very long but may be seen very often. In this sense, out-of-home and support media offer a tremendous amount of frequency so that brand name and key images may be recalled or recognized. The volume of auto and pedestrian traffic helps with reach again improving awareness levels. In short, the awareness objective is foremost for these media as they act as a constant reminder.

Answers to Applied Questions 1. Find a creative outdoor ad and discuss with one of your friends what makes it creative.

Students could consult COMMB where there are many examples in they do not readily think of any examples or when there is a dry spell in creativity. Instructors could entertain mini-presentations from students as they find their examples and ask the students to explain the creative/media link. For example, some very creative outdoor ads fit only this media and do not really work well in other media.

3. Travel on a bus/train to school (or elsewhere) and record all the ads that you discover on your trip. Is there a pattern or commonality among the message?

Hopefully students appreciate an adventure to look for unusual ads in all sorts of places. Instructors might like to explore whether students have seen ads in unique places when they might have visited other cities for enjoyment or on exchange programs for their studies. The text and Figure 13-1 can give a list for handy reference to prompt recall of different examples. If none emerge in a discussion, instructors might look to Strategy and COMMB for interesting examples to stimulate interest.

3. While traveling throughout the town or city, look for the most unusual place-based ad and decide if this was effective advertising.

Hopefully students appreciate an adventure to look for unusual ads in all sorts of places. Instructors might like to explore whether students have seen ads in unique places when they might have visited other cities for enjoyment or on exchange programs for their studies. The text and Figure 13-1 can give a list for handy reference to prompt recall of different examples. If none emerge in a discussion, instructors might look to Strategy and COMMB for interesting examples to stimulate interest.

4. Explain how out-of-home and support media might be used as part of an IMC program. Take any of the media discussed in the chapter and explain how they might be used in an IMC program for automobiles, cellular phones and Internet services.

Out-of-home and support media can be used to achieve a number of communications objectives, awareness, attitude, purchase intention/shopping. Consider the following examples: Chapter 13 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 13-5

Automobiles-product placements are often effectively done in movies for image purposes. Outdoor billboards have been used by all major brands for awareness. Promotional products are another hallmark of auto advertiser for reminder and image reasons. When in the market for a new car, auto brands often place themselves in key places for demonstrations (e.g., malls). In short, auto brands typically us all forms of out-of-home and support media.

Cellular telephones- Promotional products have been used by a number of cell phone companies. Key chains shaped like cell phones have been used to create awareness and retention. Note pads for desktops have also been commonly employed. Outdoor is a favorite of cell phone companies, primarily to create awareness. Cell phone ads have also appeared on transit ads and bus shelters.

Internet services-These companies are also frequent users of outdoor and transit advertising for all communication purposes. Most of these messages focused on creating awareness of the service As you can see in each of these examples, support media can be used by a variety of companies to achieve a number of communications goals. Due to their flexibility these media can be creatively used to effectively promote companies and their service offerings.

Additional Discussion Questions (Not in Text) A. Discuss advantages and disadvantages associated with advertising in movie theatres. For what types of products and/or services might these media be most effective?

B.

•

There are a number of advantages associated with these forms of advertising. First, there is the potential for a high number of exposures and for high frequency. The cost in local theatres can be relatively low, though this is typically accompanied by a lack of creative potential. There is little or no clutter, and the audience is more likely to be attentive (essentially a captured audience). Recall of movie ads can be quite high (though not necessarily positive) and if the experience is an enjoyable one, positive effects of mood are experienced

•

One of the primary disadvantages is that such ads may lead to dissatisfaction among consumers in that they feel the ads are intrusive. Unlike television, radio and other media, the consumer often feels that they have paid a significant price to enjoy their movies and are not happy when they must watch an advertisement. As a result they tend to react negatively when the ads appear. Studies have shown that ads in movie theaters are rated as intrusive, irritable and less well liked. Consumers often express the idea that they are paying to watch a movie, and if they wanted to watch television with all of the commercials, they could have done so for free at home.

•

A second disadvantage is that of cost—particularly with movie ads. Both absolute and relative costs are high, with the CPM’s for movie advertising particularly high relative to other media.

•

Perhaps the most viable product or service to advertise in these media are entertainment related products and/or services. Movies are advertised in the format of previews, and some companies have been successful in promoting travel and related services.

Discuss some of the advantages and disadvantages of outdoor advertising.

Outdoor ads are creative, more attractive, more attention getting, and in general more appealing to both advertisers and viewers.

More specifically, outdoor advertising has the following advantages: •

wide coverage of local markets—if the budget allows, outdoor advertising can be used to cover a very broad local customer base. Ads can be placed in strategic locations such as freeways, bus terminals, city streets and buildings, etc., allowing for the potential of a large number of exposures.

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•

high levels of frequency—because purchase cycles are usually for a minimum of one month, passers-by will have the opportunity to be exposed to the message a number of times.

•

geographic flexibility—as noted, outdoor ads can be placed in a variety of locations, potentially reaching drivers, walkers, mass transit users, etc., throughout a number of geographic locations.

•

creativity—due to recent technological advances, outdoor has now become a very creative medium. Boards are no longer unidimensional and boring. (Note some of the examples provided in the text.)

Outdoor also has its disadvantages:

C.

•

target audience selectivity—outdoor is not a very effective medium for targeting specific markets. Given that locations are chosen on the basis of the number of potential exposures, the medium is most effective when a mass market is sought.

•

limited message capabilities—exposure times for most of the ads are very short. As a result the message must be simple and limited. (Of course this is less true for terminal ads or transit ads on the inside of commuter vehicles. It is also possible to increase message comprehension with well-thought-out illustrations or pictures.)

•

media image—one of the advantages of outdoor (high frequency) may also result in a disadvantage—wear out. If the viewer sees the ad repeatedly for a lengthy period of time, the likelihood increases.

•

Absolute cost—outdoor is expensive in both an absolute and relative sense.

One of the disadvantages associated with transit advertising involves image. Discuss why this might be a problem and why advertisers might stay away from this medium as a result.

Ads that appear on buses, subway cars, benches, etc. may suffer from image problems. A variety of reasons may contribute to this: •

the image of transit itself—some people feel they would never ride a bus, are afraid of the subway and/or have a negative image of taxi drivers—this image may carry over to the advertisers themselves.

•

advertisers—while ads on buses, taxi’s, etc. may involve a number of companies with well known names and reputations, ads on benches (for example) may be sponsored by less well known companies. The receiver may impute a lack of credibility or form a negative impression as a result (Would you use a lawyer whose ad you saw on a bus bench?)

•

The low cost of the ads can also attract advertisers who could not afford to advertise elsewhere.

•

appearance—weather conditions can contribute to the negative image. For example, slush and dirt on motor vehicles, dirt and fading on benches, graffiti on posters, etc.

Problems: •

If the ad does not create a favourable impression this may carry over to the image of the product/service.

•

Attributions may be made to the advertiser—as noted above “would you eat in a restaurant you saw on a subway ad?”

•

The ad could be defaced beyond recognition.

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•

Ads on transit vehicles may go to places outside the targeted area. For example, a restaurant ad targeting urban dwellers may reach those on a cab or bus that are not likely to go into the city to eat.

IMC Exercise Stage a contest in which students bring their best example of a support ad to class (or a description of the same). The contest should be judged on the novelty as well as the potential effectiveness (as explained by the student) of the ad.

IMC Comprehensive Project Include a variety of support media in your media plan. The absolute and relative costs of these should be shown and a rationale for their inclusion should be provided.

Chapter 13 - Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 13-8

CHAPTER 14 SALES PROMOTION Chapter Overview Sales promotion and its role in a firm’s integrated marketing communications program is the focus of this chapter. We examine how marketers use both consumer and trade promotions to influence the purchase behaviour of consumers as well as wholesalers and retailers. The chapter discusses the scope of sales promotion and the reasons for its increasing importance. The content of a promotion plan is reviewed such as specific promotion objectives, strategic use of promotion regarding consumer franchise-building versus non-franchise-building promotions and key promotion tactics. The chapter thoroughly examines consumer and trade sales promotion techniques used by marketers. The chapter concludes with a discussion IMC issues as they relate to sales promotion.

Learning Objectives 1. Explain the role of sales promotion in a company’s integrated marketing communications program and to examine why it is increasingly important.

2. Identify the objectives, strategy, and tactical components of a sales promotion plan.

3. To examine the consumer promotion strategy options and evaluate the factors to consider in using them.

4. Describe trade sales promotion strategy options and evaluate the factors to consider in using them.

5. Apply key IMC issues related to sales promotion decisions.

Chapter and Lecture Outline I. SALES PROMOTION PLANNING Fully integrated marketing programs include consumer and trade promotions that are coordinated with advertising, public relations, and Internet marketing programs as well as sales force efforts.

A.

Characteristics—sales promotion is a direct inducement that offers an extra value or incentive for the product to the sales force, distributors or the ultimate consumer with the primary objective of creating an immediate sale. There are two important aspects to sales promotion: •

sales promotion involves an inducement that provides an extra incentive (e.g., financial, emotionally based, value oriented, or experiential) to purchase a product

•

sales promotion is essentially an acceleration tool that is designed to speed up the selling process and maximize sales volume

Chapter 14 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 14-1

B.

Types of Sales Promotion—sales promotion can be broken down into two major categories: •

Consumer sales promotion which are promotions directed at the consumers who are final purchasers of goods and services

•

Trade sales promotion which includes promotional programs and activities designed to motivate distributors and retailers to stock and promote a manufacturer’s products

The activities included under each sales promotional category are shown in Figure 14-1. When a promotional push strategy is used, the goal is to persuade the trade to stock, merchandise and promote a company’s products by aggressively selling and promoting to resellers. A company’s sales representatives can offer resellers special programs such as promotional allowances and cooperative advertising. Trade advertising in publications that serve the industry may also be used as part of a push strategy. When a promotional pull strategy is used, the goal is to create demand among end users that will in turn encourage retailers to carry a brand. Heavy spending on consumer advertising and sales promotion is an important part of a pull strategy.

C.

Growth of Sales Promotion The role and importance of sales promotion in companies’ integrated marketing communications programs have increased dramatically due to a number of factors such as: 1. Strategic Importance—sales promotion experts or agencies are part of the brand building team at the start of the planning process as all promotional professionals realize the dual importance of the communication and behavioural effects of sales promotion.

2. Reaching a Specific Target Audience—sales promotion tools are effective in reaching specific geographic, demographic, psychographic and ethnic markets.

3. Promotional sensitivity—the percentage of purchases made in conjunction with a promotional offer has increased.

4. Declining brand loyalty—consumers are less brand loyal and purchase on the basis of price, value, and convenience, and look for deals and will buy whatever brand is on sale.

5. Brand proliferation—consumer product companies are launching more new products each year. Sales promotion tools such as samples and coupons are often used as part of the process that leads consumers from trial to repeat purchase at full price. Promotions play an important role in securing and maintaining shelf spaces for new and existing products.

6. Short-term focus—the increase in sales promotion in motivated by marketing plans and reward systems geared to short-term performance and the immediate generation of sales volume.

Managers use sales promotions routinely, not only to introduce new products or defend against the competition, but also to meet quarterly/yearly sales/market share goals.

7. Accountability—companies demand to know what they are getting for their promotional expenditures. They feel that sales promotion programs are more economically accountable than advertising since they often generate a quick and easily measured jump in sales.

8. Power of retailers—recent developments have helped to transfer power from the manufacturers to the retailers. With the advent of optical checkout scanners and sophisticated in-store Chapter 14 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 14-2

computer systems, retailers gained access to data concerning how quickly products turn over, which sales promotions are working and which products make money. Retailers use this information to analyze sales of manufacturers’ products and then demand discounts and other promotional support from manufacturers of lagging brands.

9. Competition—companies are turning to sales promotion to gain or maintain a competitive advantage. A major development in recent years is the use of account-specific marketing (also referred to as co-marketing) whereby a marketer collaborates with customizes promotions for individual retailers.

II.

SALES PROMOTION PLAN

A.

Objectives of Consumer Sales Promotion—companies must give consideration to what they hope to accomplish through their promotions and set clearly defined objectives and measurable goals for their sales promotional programs. While the basic goal of most sales promotion activities is to induce purchase of a brand, there are different objectives the marketer might have for both new and established brands. These include; obtaining trial purchase, obtaining repeat purchase, increasing consumption, building brand equity.

B.

Consumer Sales Promotion Strategy Decisions 1. Sales Promotion Strategy Options—the options identified in Figure 14-1 are important strategic choices. In making these choices it is important to make the distinction between consumerfranchise building sales promotions and non-franchise building efforts. Consumer-franchisebuilding promotions are designed to communicate distinctive brand attributes and contribute to the development and reinforcement of brand image and identity. Non-franchise-building promotions are designed to accelerate the purchase decision process and generate immediate increases in sales.

An additional decision criterion relates to the incentive characteristic. As illustrated in Figure 14-2, the choice is based on the target audience and the intended behavioural response. Operant conditioning, a form of behavioural learning this approach, can help explain the different types of behavioural responses. Learning occurs as a result of the outcomes or consequences associated with a particular response. Reinforcement refers to a reward or favorable consequences associated with a behaviour and is an important element of instrumental conditioning. Sales promotion rewards a consumer through the incentive. Operant conditioning concepts that are particularly relevant to sales promotion are schedules of reinforcement and shaping as shown in Figure 14-3.

2. Application across Product Lines—another strategic decision is the degree to which each sales promotion tool is applied to the range of sizes, varieties, models, or products.

3. Application across Geographic Markets—sales promotions can be run nationally, regionally or in select markets.

C.

Consumer Sales Promotion Tactics Decisions—the value, timing and distribution of the sales promotion offer are key tactical decisions.

1. Value of Incentive—marketers decide on the value of the promotion in terms of discounts offered, the value of premium offers and whether non-economic incentives will be used.

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2. Timing—marketers decide during which months, weeks, days and/or seasons the promotion will be run.

3. Distribution—marketers establish the logistics with respect to how the promotion will get to the consumer and how the consumer will get to the promotion.

III. CONSUMER SALES PROMOTION STRATEGY OPTIONS The consumer sales promotion techniques used by marketers should be discussed along with their strengths and limitations and the role they play in meeting promotional objectives.

A.

Sampling—sampling involves procedures whereby consumers are given a quantity of a product for no charge to induce trial. Sampling is used as a way of introducing a new brand to the market although it is also used for established products.

1. Strengths of sampling • •

Samples are an excellent way of inducing trial Sampling allows consumers to experience a product directly and gain an appreciation for its benefits and characteristics

2. Limitations of sampling • •

Costs of sampling programs can be very high The benefits of a brand may be difficult to gauge from a sample

3. Sampling Methods—decisions must be made concerning the method by which the sample will be distributed. The sampling method is important not only in terms of costs, but also in terms of influencing the type of consumer who receives the sample. Some of the more widely used sampling methods include: • • • • • • • B.

Door-to-door sampling Sampling through the media Sampling through the mail In-store sampling On-package sampling Event sampling Location sampling

Coupons—are the oldest, yet most widely used and effective sales promotions tool. The number of coupons distributed to consumers has increased dramatically over the past decade.

1. Strengths of coupons • • • •

Coupons reduce the price for price sensitive consumers who are attracted to it.

Coupons allow the offering of a price reduction without having to rely on retailers.

Couponing can be an effective promotional device for generating trial of a new brand.

Coupons can be used to encourage trial and increase consumption of established brands.

2. Limitations of coupons • • • •

It can be difficult to estimate the coupon redemption level.

Loyal users often redeem coupons targeted to attract new users of established brands.

Couponing programs can be expensive.

Problems of coupon misredemption and fraud exist.

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3. Coupon Distribution—Coupons can be distributed in a variety of ways including: • • • • • C.

media delivery in newspapers and magazines and as free-standing inserts (FSIs) through direct mail in or on packages in stores and at points-of-purchase over the Internet through online promotion sites

Premiums—a premium is an offer of an extra item of merchandise or service either free or at a low price that is used as an incentive for purchase.

1. Strength of premiums—usually inexpensive gifts or items that are included in the product package, distributed with a purchase or sent to consumers who make mail-in-requests along with a proof of purchase. A key feature is that the gift is viewed as a valuable incentive.

Secondly, reinforce the brand image and work with co-branding. Third, premiums can encourage an impulse purchase to do the nature of the first two points. Fourth, premiums work with other IMC tools very well as there is a story or meaning to associate with. Finally, premiums generally obtain trades support as a push since they can see the pull efforts.

2. Limitations of premiums—while the gifts are inexpensive, they are costly on a per unit basis versus other forms of exposure. One solution is to use self-liquidating premiums that require the consumer to pay some or all of the cost of the premium plus handling and mailing costs.

Premiums require a degree of effort in some cases where they need to send away for it. Finally, there is a risk of poor acceptance and being stuck with a worthless inventory.

D.

Promotional products are useful and/or symbolic items that are implemented in a marketing communication programs as a sales promotion or message vehicle, or a combination of both.

Promotional products are similar to premiums but are not tied to a purchase and are viewed as a thank you or reward gift to a brand’s stakeholders. In this sense, promotional products are also seen as item given out as part of a company’s public relations activities.

1.

Strengths of promotional products • • • • • •

2.

Limitations of promotional products • • • • • •

E.

target audience selectivity and coverage creativity for cognitive responses frequency absolute cost and cost efficiency creativity for emotional responses attention, involvement, and amount of processing time

media image clutter scheduling flexibility reach geographic coverage selective exposure

Contests and Sweepstakes—a contest is a promotion whereby consumers compete for prizes or money on the basis of skills or ability and winners are determined by judging entries against some predetermined criteria. Contests often provide a purchase incentive by requiring a proof of purchase to enter or to obtain an entry form from a dealer or advertisement. A sweepstakes is a promotion Chapter 14 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 14-5

whereby winners are determined purely by chance and cannot require a proof of purchase as a condition for entry. Another form of a sweepstakes is a game which also has a chance element associated with winning.

1. Strengths of contests and sweepstakes •

Contests and sweepstakes can be an effective way of getting the consumer to become involved with the brand by making the promotion product relevant.

•

Contest and sweepstakes can be executed to build brand equity through the consumer franchising building characteristic.

2. Limitations of contests and sweepstakes

F.

•

A contest or sweepstakes promotion may overwhelm the ad or brand and may do little to contribute to the brand franchise or image.

•

There are numerous legal problems and considerations that impact the design and administration of contests and sweepstakes.

•

The presence of professionals or hobbyists who submit large numbers of entries but have no interest in the product can detract from the effectiveness of contests and sweepstakes.

Refunds and Rebates—Refunds or rebates are offers to return some portion of the product purchase price after supplying some sort of proof or purchase. Consumers are generally responsive to refund or rebate offers, particularly as the size of the savings offer increases.

1. Strengths of Refunds and Rebates •

Refunds and rebates can be effective sales promotional tools for creating new users and for encouraging brand switching

•

Refunds and rebates are often perceived as immediate savings or value even though the money is not received until the offer is redeemed and many consumers never follow through on the offer.

•

Refunds and rebates can allow a marketer to achieve a price reduction for much less than if a direct price deal were utilized.

2. Limitations of Refunds and Rebates •

Consumers do not like the delay and effort required to redeem refund and rebate offers.

•

The terms of some rebate offers are inconvenient or even unrealistic.

•

Consumers may have a negative perception of brands that use rebates.

•

Retailers do not want to become involved with the administration of rebate programs.

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G.

Bonus Packs—Bonus packs offer the consumer an extra amount of a product at the regular price by providing larger containers or extra units. Here are some of the strengths and limitations of bonus packs: 1. Strengths of Bonus Packs •

They provide extra value to consumers without having to get involved with things such as coupons or rebate offers.

•

They can be an effective maneuver against a competitor’s promotion or introduction of a new brand by loading consumers with the product and making them less susceptible to competitors’ promotional efforts.

•

Bonus packs often receive favourable response from retailers.

2. Limitations of Bonus Packs

H.

•

They may require additional shelf space and do not provide extra profit margins to the retailer.

•

They may appeal primarily to current users who may have purchased the brand anyway.

Price-off Deals—price-off deals provide a reduction in the regular price of the brand, typically right on the package through specially marked price packs.

1. Strengths of Price-off Deals •

They are controlled by the manufacturer, which enables them to ensure that the promotional discount reaches the consumer rather than being kept by the trade.

•

Price-off deals usually present a readily apparent value to consumers, particularly when they have a reference price point for the brand and recognize the value of the discount.

•

Price-offs can provide a strong influence when point-of-purchase comparisons are made.

•

They can encourage consumers to buy larger sizes.

2. Limitations of Price-off Deals

I.

•

They can create pricing and inventory problems for consumers

•

They may appeal primarily to regular users rather than attracting nonusers

Event Marketing—Event marketing is a form of promotion where a company or brand is linked to a specific event or a themed activity. It usually is developed for the purpose of creating experiences for consumers and promoting a product or service. Marketers often do event marketing by associating their product with a popular activity such as a sporting event, concert, fair, or festival. It is important to make a distinction between event marketing and event sponsorships, as the two are often used interchangeably yet refer to different activities. Event sponsorships are promotions whereby a company develops sponsorship relations with a particular event and provides financial support in return for the right to display a brand name, Chapter 14 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 14-7

logo, or advertising message and be identified as a sponsor of the event. Event marketing has become very popular in recent years for at least two reasons: •

Events can be used as to create experiences for consumers and associate a company’s brand with certain lifestyles and activities

•

Events can be used to distribute samples as well as information about a marketer’s product or service or to actually let consumers experience the product

III. A.

TRADE SALES PROMOTION Objectives of Trade Sales Promotion—sale promotion programs targeted to the trade should be based on well-defined objectives and a consideration of what the marketer wants to accomplish by using trade promotions. Objectives for trade promotions include: 1.

2.

3.

4.

B.

Obtain distribution for new products Maintain trade support for established brands Encourage retailers to display and promote established brands Build retail inventories

Trade Sales Promotion Strategy Options—tools that manufacturers use as inducements for wholesalers and retailers include: 1. Trade allowances—probably the most commonly used trade promotion is some form of trade allowance which is a discount or deal offered to the retailer or wholesaler to encourage them to stock, promote, or display a manufacturer’s products. There are several types of trade allowances including: •

buying allowances—a deal or discount offered to resellers in the form of a price reduction on product ordered during a fixed time period

•

promotional allowances—discounts provided to retailers for performing certain promotional or merchandising activities in support of a manufacturer’s brand

•

slotting allowances—rather than a discount, these are special fees that retailers charge manufacturers for agreeing to handle a new product and providing a slot or position in their store to accommodate the new product.

There are several problems with trade allowances. Companies are concerned over the abuse of trade allowances by wholesalers, retailers and distributors. Marketers give retailers trade allowances with the expectation that the savings will be passed on to the consumer in the form of lower prices. However, the trade members often pocket these discounts. Two practices that are particularly bothersome are forward buying and diverting.

2. Point-of-Purchase Displays —marketers use a variety of point-of-purchase materials including end-of-aisle displays, posters, banners, shelf cards, motion pieces, stand-up racks and other material. Point-of-purchase displays are an important promotional tool because they can help a manufacturer obtain more effective in-store merchandising of their products. Products often sell better when they are on display as they are more likely to be noticed by consumers and displays also are often accompanied by price deals.

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3

Cooperative advertising—cooperative advertising, whereby more than one party shares the cost of advertising, is another important form of trade promotion. Actually there are three types of cooperative advertising including: •

Vertical cooperative advertising—Vertical cooperative advertising is the most common type of co-op ad program used as part of a trade promotional program. Under a vertical coop program, the manufacturer pays for a portion of the advertising a retailer runts to promote its product and its availability in the retailer’s place of business. The limit or amount of coop funds the manufacturer provides to the retailer is usually based on a percentage of dollar purchases made from the manufacturer. This percentage is usually around 3 to 5 percent.

•

Horizontal cooperative advertising – refers to advertising sponsored in common by a group of retailers, companies or other organizations providing products or services to a market.

•

Ingredient sponsored cooperative advertising – refer to advertising supported by a raw materials or component manufacturer to help establish end products using the company’s materials or ingredients.

4. Contests and incentives—manufacturers use contests and special incentive programs to stimulate greater selling effort from resellers management or sales personnel. An important target of contests or special incentives is the sales personnel of the middlemen. In addition to using contests, programs targeted to sales personnel may include push money or spiffs.

5. Sales training programs—another form of manufactured sponsored promotional assistance is sales training programs for reseller sales personnel. Manufacturers provide sales training assistance to retail salespeople by having formal classes, having their sale reps work with resellers and providing sales manuals, brochures, videos and other selling aids.

6. Trade shows—a trade show is a type of exhibition or forum where manufacturers display their products to current as well as prospective buyers. Trade shows provide a major opportunity to display and demonstrate products, interact with customers, identify new prospects, gather customer and competitive information and even write new orders. The social aspects of trade show are also important as customers use them to entertain key customers and to develop and maintain relationships.

IV.

IMC PLANNING: STRATEGIC USE OF SALES PROMOTION

Sales promotion techniques usually work best when used with advertising. Conversely, a consumer sales promotion program can enhance the effectiveness of an ad campaign. When properly planned and executed to work together, sales promotion can provide a synergistic effect that is much greater than the response that would be generated from either promotional mix element used alone. Proper integration of advertising and sales promotion requires the coordination of several decision areas including: A.

Budget Allocation—this allocation depends on a number of factors: • • •

B.

the promotional objectives of the campaign the market and competitive situation the brand’s stage in its life cycle

Creative Themes—to integrate the advertising and sales promotion programs successfully, the theme of consumer promotions should be tied in with the advertising and positioning themes Chapter 14 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 14-9

wherever possible. The WD-40 ad shown in Exhibit 13-3 provides a good example of how a sweepstakes theme is coordinated with the positioning used for the brand.

C.

Media Support—using a promotion without prior or concurrent advertising can limit its effectiveness and risk damaging the brand’s image. Conversely, a coupon, a premium offer, or an opportunity to enter a sweepstakes or contest can enhance the effectiveness of an ad.

D.

Brand Equity—The increasing use of sales promotion in the marketing program represents a fundamental change in strategic decisions regarding how companies market their products and services. However, the value of this increased emphasis on sales promotion has been questioned by experts. Concerns include the following: •

Marketers becoming too dependent on using sales promotion to produce short-term or immediate increases in sales

•

Investing in sales promotion at the expense of advertising and thus not building the long-term value of the brand franchise

•

Brands losing their perceived value from the perspective of consumers when they are purchased because of a promotional offer.

This has led to concern that the increased use of sales promotion is having a negative effect on brand equity. As was noted in the Chapter 1, brand equity refers to a type of intangible asset of added value or “goodwill” resulting from the favourable image or differentiation that a brand has achieved. There are examples of situations where a company’s have hurt the brand equity of their products by placing more emphasis on consumer and trade promotions than advertising. In these situations, there is the potential for companies to fall into a sales promotion trap or spiral whereby all competitors are making extensive use of promotions. Figure 14-10 shows this dilemma which is analogous to the “prisoner’s game” as the only way out of it is for both parties to cooperate by cutting back on promotions.

E.

Measuring Sales Promotion Effectiveness—one framework that can be used here is based on four communications goals: attention, comprehension, persuasion and purchase. Behavioural measures include brand switching and loyalty, number of inquiries, coupon redemption and contest entries.

A number of organizations measure sales promotions. MarketSource provides marketers with a basis for measuring the effectiveness of their sampling program.

Teaching Suggestions In this chapter we examine sales promotion including the promotional activities directed at consumers as well as the trade. We suggest that this material be covered over a two-class period. The first lecture can provide an overview of the sales promotion area, reasons for the shift in marketing dollars to sales promotion and consumer sales promotion. The second lecture can cover trade promotion, the coordination of sales promotion with advertising and other promotional mix elements, and the problems of sales promotion. In covering sales promotion you may want to refer students to the discussion of behavioural learning theory that describes shaping procedures.

The instructor should review the consumer and trade sales promotion techniques along with their advantages and limitations. Students should be encouraged to evaluate these techniques as strategic and tactical promotional tools and to consider the reasons why marketers use them. We also feel that it is very important to discuss how sales promotion can and should be coordinated with the advertising program. To Chapter 14 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 14-10

keep abreast of development in the sales promotion area and to find some very interesting articles on, and examples of, successful promotions, the instructor can refer to sources such as Promo magazine. Another organization that has a lot of valuable information on sales promotion is the Promotional Marketing Association, Inc. Their website can be found at www.pmalink.org.

Vignette 1. What next step can Budweiser take with the Red Light promotion?

Students might suggest enhanced digital applications, user-generation content development, and social media additions of some sort to enhance the experiential side of Bud Red Light. Others might suggest running a contest that links hockey and goal scoring. The list is endless, but instructors are encouraged to focus the discussion on the main strategic and tactical elements and allow the students to figure out which aspect they are in fact changing and for what reasons.

IMC Perspective 14-1 1. Why do brand managers see contests as an effective promotional tool?

Contests offer significant brand enhancing capabilities. The examples cited show situations where the activity or prize is significantly related to the brand. Thus, the sales promotion and brand message are simultaneously communicated provide both communication and behavioural effects. Moreover, the excitement of message reception of both the brand and the promotion provides extensive positive processing. Instructors are encouraged to apply the communication model to the sales promotions so students can understand why brands see tremendous success with contests.

IMC Perspective 14-2 1. What are the strengths of these promotions in terms of achieving behavioural and communication objectives?

One strength of the Coke promotion is its association with Spotify which provides perfect target audience coverage and a high profile image to work with the Coke brand. Another strength is the uniqueness and innovation of the sales promotion which is significantly different that typical promotions for soft drinks. A limitation is that it is likely costly, but the 9% growth in market share likely covered the costs. Pepsi’s promotion shared a strength with the target audience coverage by using Snapchat. The novelty of the lenses vs. the music provides an interesting comparison to decide which promotion provided the greatest incentive. Another strength for Pepsi included the product placement and teaser ads that provided additional exposure. They may have increased brand awareness more strongly than Coke leading to stronger sales in future given the sales figure mentioned.

Answers to Review Questions 1. What are the differences between consumer and trade sales promotions? Discuss the role of each firm’s IMC program.

Consumer sale promotions are directed at the consumers who purchase goods and services and are designed to provide them with an extra incentive or inducement to buy the marketer’s brand. They are part of a promotional “pull strategy” and designed to help create demand for a brand at the endconsumer level. Trade promotions are targeted to the wholesalers, distributors and retailers in the Chapter 14 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 14-11

channel of distribution and are designed to encourage channel members to stock and promote the marketer’s products. Trade promotions are part of a promotional “push” strategy.

Both consumer and trade promotions are a key part of a firm’s integrated marketing communications program. In a very competitive market, consumers must often be provided with an extra incentive such as a coupon, bonus pack, premium, or price reduction to encourage them to choose one brand over another. Consumer promotions, along with advertising, are a very important part of marketers’ “pull strategy” which creates demand for their brands. With the increasing amount of advertising clutter and purchase decisions being made in the store, marketers must do more than just advertise to gain and hold market share. Trade promotions are also very important, as marketers must give attention to getting the channel members to stock, display and promote their brands. Much of the power in channels of distribution has shifted to the retailer and competition as limited amounts of shelf space have intensified. Thus marketers must focus attention and effort on “pushing” their products through the channels of distribution. Trade promotions are an important part of this strategy.

2. Discuss how sales promotion can be used as an acceleration tool to speed up the sales process and maximize sales volume.

There are several ways sales promotion can be used as an acceleration tool to speed up the sales process and maximize sales volume. Consumer promotion tools such as premiums, bonus packs, and price-off deals provide an extra incentive that may motivate consumers to take more immediate action. Coupons usually have expiration dates that require consumers to use them during a specific time period, which is another way of accelerating the purchase process. Marketers often use techniques such as in-store sampling programs that may be accompanied by a discount coupon and thus encourage immediate purchase. Trade promotions can also accelerate the selling process with retailers. For example, retailers who take advantage of an off-invoice allowance often pass the savings on to consumers in the form of a price reduction, which encourages them to purchase the brand. Promotional allowances are given to retailers for performing certain promotional or merchandising activities such as providing special displays, running in-store promotional programs or including the marketer’s brand in an ad. These activities will help generate sales volume and encourage immediate purchases by consumers.

3. Post-secondary educational institutions do not usually use sales promotions. Consider which ones could be use and identify the target audience in which they could be effectives.

The Canadian author offers a bonus pack to students during night classes, students can receive a free hour of education after the 7:00 to 10:00 class. Surprisingly, no student, including very loyal ones, has accepted this promotional offer despite economic theory saying more is better! Another sales promotion could be discounts on tuition for low enrollment courses or for summer courses when there is less demand which would even out demand over the twelve month period. Of course the implementation of discounts could be quite problematic for universities to justify, but an interesting consideration nonetheless for price sensitive students. Universities could offer more promotional products perhaps to reinforce the brand image, why not give every student a binder and pen with the university logo upon graduation to remind them to donate Instructors could have some fun with this exercise brainstorming what the effects would be how promotional incentives could work.

4. Explain why a brand might devote more of its budget to trade sales promotions than to consumer sales promotions.

Trade promotions are very similar in that they attempt to influence behaviour (trial, repeat buying, or action) via an incentive. The incentives are very similar with an emphasis on financials, assistance or experiences. Since in both cases the audience makes a final decision by evaluating the pros and cons of the offer, it is not too surprising to see that there is a strong degree of similarity. The Chapter 14 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 14-12

communication effect from the presentation are also relevant in terms of awareness and attitude, so all in all the over strategy and tactics of the decisions have more in common that something dissimilar.

5. Explain why it is important for sales promotion to contribute to brand equity. In what circumstances will brand equity enhancement not be a priority?

Brand awareness and brand attitude play a key role in brand equity, and the opportunity for communication beyond the promotion offer is recent trend in the development and implementation of sales promotions. For example, the Bring Home the Cup promotion is enhanced with extensive television commercials contributing to the equity of for Pepsi, Lays’s and Gatorade. Coupons offers regularly include a regular print ad. In fact, so most promotional offers are combined with advertising or some other IMC tool, it is difficult to find a promotional offer that does not provide enhanced communication that builds brand equity. In another direction, as the Bring Home the Cup promotion illustrates, the activity or type of behaviour associated with the promotion is often now designed to contribute to the brand experience. Given these points, it is hard to imagine very many circumstances where brand equity enhancement would not be a priority, especially given the importance of word-ofmouth communication. So even transactional situations where there is little expectation of a continued relationship with the brand and the customer, promotional offers should still attempt to build brand equity

Answers to Appied Questions 1. Explain how the consumer sales promotions identified in Figure 14-1 can be executed with Internet media.

Electronic samples and premiums can easily and obviously delivered; and physical samples and premiums can be ordered on company websites or social media locations. Coupons can be virtually disseminated essentially anywhere on the internet for printing at home. It seems like almost all contests/sweepstakes entry occur online these days as entry software is commonplace. Submitting rebate information can be possible as consumers can enter the data and email physical evidence of proof of purchase, however companies may have concerns of fraudulent claims in this regard and continue to expect mailed in evidence. Bonus packs seem to be an unlikely avenue for Internet delivery unless of course the product is actually order online and delivered via mail or courier. Price-offs are the simplest to administer online since it is information based in fact occurs with dynamic pricing systems as people search for hotels, flights etc. Event marketing is a curiosity as to whether that could be executed online, but entertainment activities that are streamed appear as a possibility. Students would likely add to this list based on their consumption experiences, especially with this final one.

2. What are the differences between consumer-franchise-building and non-franchise-building promotions? Find an example of a promotional offer you believe contributes to the equity of a brand and explain why.

Consumer-franchise-building promotions are those that are designed to communicate distinctive brand attributes and contribute to the development and reinforcement of brand identity and image. They are designed to help build long-term brand loyalty or preference and help the marketer achieve the ultimate goal of full-price purchase. Non-franchise-building promotions are those that are designed to accelerate the purchase decision process and generate an immediate increase in sales. These promotions do little or nothing to communicate information about a brand’s unique features or benefits and contribute very little, if any, to the building of brand identity and image.

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Students should find promotional offers that they feel are examples of each type and explain why.

Examples of non-franchise building promotions are not difficult to find as price-off deals, coupons and refund offers usually fall into this category. Examples of franchise-building efforts might include a contest or sweepstakes that helps develop and strengthen a brand’s image or position or promotional programs that encourage repeat purchase.

3. Phone service providers do not offer premiums all that often. Identify good ones for different brands.

Bell could likely send out…. Bells! – a good symbol that has been a logo for decades previously. This could manifest in a number of ways and be a fitting imagery if the brand decided to go this route. Fido could obviously send out different dogs and be a whole set of valuable collectibles. Koodo of course could send out miniature El Tubadors and Telus has in fact handed out beany baby like plush items of the famous animals. Of course all of these premiums are the imagery of the brand in the ads and would reinforce the characters shown.

4. Consider all the trade sales promotions that a major brand like Tassimo would use and explain how they would be effective or ineffective for increasing sales of the machine and the coffee discs.

All three types of trade allowances would be very useful; off-invoice allowances to ensure extra inventory during key selling times, promotional allowances for display information which would critical for consumers to understand the new technology, and perhaps slotting allowances to ensure product acceptance in the stores since Kraft did not normally sell in household good locations.

Additional dollars for point-of-sales displays would be useful for enhanced consumer communication in-store, especially during Christmas sales or other times. Cooperative advertising might be used with stores that have good flyers like Hudson’s Bay. Certainly sales training would useful during launch so that floor staff understood how the product worked and could offer in-store assistance to consumers.

5. Why does the Red Bull Crashed Ice event not use imagery from the advertising with the slogan “Red Bull Gives You Wings”?

The RBCI event is a good example where the same look and feel is not used across all IMC tools since there is likely a much different target audience for the event versus the general advertising. The Same imagery is useful when a brand is directing it messages to a common target audience. However, the lifestyle, or perhaps a different segmentation variable, may be much more relevant for RBCI compared to the general advertising. In this case the use of the drink is more for social drinking at the event in comparison to the advertising to highlight the stimulating effects of the energy drink. This suggests a different brand positioning strategy for an alternate target audience, a key concept of the planning model of the text.

Additional Discussion Questions (not discussed in text) A. Discuss how advertising and sales promotion can have a synergistic effect and what is required to create this effect.

Advertising and sales promotion can have a synergistic effect whereby the impact of the combination of the two promotional tools is greater than the response that would be generated if they were used independently. Proper coordination of advertising and sales promotion requires coordinating decisions regarding the allocation of the budget to each area as well as advertising and sales promotion themes, the target audience reached and the timing of various sales promotion activities. For example, by using advertising in conjunction with sales promotion for a new product, marketers can make consumers aware of the brand and its benefits and increase their responsiveness to the promotional offer.

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Consumers are more likely to redeem a coupon or respond to a price-off deal for a brand they are familiar with or have favorable feelings toward versus a brand they know little about. Moreover, product trial created through the use of sale promotion techniques such as sampling or coupons is more likely to result in long-term usage of the brand when accompanied by advertising.

B. What is a slotting allowance? Do you think retailers are justified in charging manufacturers slotting fees? Why or why not?

A slotting allowance is a fee that must be paid to retailers to provide a “slot” or position to accommodate a new product in their stores. Retailers argue slotting fees are justified because there are costs associated with taking on a new product such as redesigning store shelves, entering the product into their computers, finding warehouse space, and informing store employees of the new item. They also argue that they are assuming some risk in taking on a new product since a high percentage of new product introductions fail.

Manufacturers argue that slotting fees are not justified, as it really does not cost manufacturers that much money to take on a new product. They argue that these fees are excessive and end up going to the bottom line of the retailers. They argue that these fees are another way retailers are extracting money from manufacturers and really are a form of bribery or blackmail that has to be paid to get a new brand on the retailer’s shelves. An excellent discussion on the debate over slotting allowances can be found in a recent article by Paul N. Bloom, Gregory T. Gundlach and Joseph P. Cannon in the Journal of Marketing, Vol. 64 (April 2000) pp. 92-108.

C. Discuss the advantages of cooperative advertising from the perspective of the manufacturer and the retailer.

Cooperative advertising has advantages for manufacturers. It gives them the capability of extending their advertising resources through the purchase of newspaper advertising at local rates. It also allows them to tailor their advertising to local market conditions and to indicate to consumers where their products can be purchased. Cooperative advertising can also enhance the manufacturer’s position with retailers and help get their product promoted at the local level (and often on sale or special). Cooperative advertising can also stretch a company’s promotional budget since the retailer also contributes to the advertising of the product.

From the perspective of the retailer cooperative advertising also has advantages. Co-op ads provide a source of funding for retailers to advertise in local markets and bring consumers to their stores.

Moreover, when a co-op ad is promoting a well-known brand, it can generate store traffic that results in sales for this brand as well as other merchandise. Astute retailers take advantage of cooperative advertising as it can pay for a large amount of the advertising they do.

D.

Explain the process of shaping. Give an example of a marketing communications strategy that employs this technique.

Shaping involves the reinforcement of successive acts that lead to a desired behaviour pattern or response. Marketers often use shaping procedures in the introduction of a new product.

Using a new cookie product as an example, a company might employ shaping procedures through the following process. First, free samples of the product would be distributed. This might take place through the mail, door to door, or by sampling in grocery stores. Coupons might be given out with the samples to provide an incentive for the customer to make the initial purchase. Next, an additional coupon might be placed on or in the cookie package, encouraging the consumer to rebuy. Follow up coupon Chapter 14 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 14-15

distribution through newspaper inserts, direct mailings, and/or magazines might follow—with the coupon amount being reduced. By this time, assuming the product is of good quality and is liked, the coupons might be eliminated. Occasional coupons in the future might be used to maintain loyalty.

E. Discuss the differences between a promotional push and a promotional pull strategy. What factors influence a firm’s decision to use either a push or a pull strategy?

A promotional push strategy is one whereby a company has a program to encourage channel members to stock and promote its products. The goal of this strategy is to push the product through the channels of distribution by aggressively selling and promoting to resellers. A promotional pull strategy creates demand on the consumer end by spending monies on advertising and promotion directed at the ultimate consumer. The goal of this strategy is to pull the product through the channels as favorable demand from consumers will motivate the trade to stock and promote it.

Decisions as to whether to emphasize a push or pull strategy depend on the company’s relation with the trade, the promotional budget and demand for the product. Companies with favorable channel relationships often use a promotional push strategy and work closely with channel members to encourage them to stock and promote their products. Firms with limited promotional budgets may not have the funds for advertising and promotion that are required for an effective pull strategy and may find it more feasible to target their efforts to the trade. Products with favorable demand resulting from unique benefits, superior advantages and/or popularity among consumers may use a pull strategy.

IMC Exercise The chapter discusses how sales promotion can be used to contribute to brand equity by developing a promotional offer that is consistent with the brand positioning. Find an example of a contest, sweepstakes or premium offer that a marketer is currently running and analyze the promotion with respect to how it contributes to brand equity. You can find examples of contests, sweepstakes or premium offers in magazine ads, freestanding inserts (FSIs) in the newspaper, or on the Internet. Your analysis should include a discussion of the image or positioning the marketer is using for the brand and how the promotional offer supports the advertising campaign being used for the brand.

IMC Comprehensive Project After reading and discussing this chapter, students should be prepared to develop the sales promotion portion of their IMC project. The specific assignment is as follows: IMC Project Assignment for Chapter 14 Discuss how you will use sales promotion as part of the integrated marketing communications plan for your product or service. You should specify the consumer and trade sales promotion objectives for your product or service and discuss how specific sales promotion tools discussed in the chapter may be used as part of your integrated marketing communications program. You should also discuss how you will coordinate sales promotion with your advertising campaign giving attention to areas such budgeting, ad and promotional theme coordination, and media support and timing.

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CHAPTER 15 PUBLIC RELATIONS Chapter Overview Public relations (PR) are how information about the organization and its products is communicated. Like the program elements discussed thus far, marketers attempt to use this tool to benefit the firm and its offerings. At the same time, this promotional mix element is generally used in a different way that is not always designed to promote a specific product. Rather, it may be used to promote the organization as a whole, a cause or position advocated by the organization, or to create goodwill in the marketplace. In addition, it is not always within the control of the marketer. Thus, while it may be possible to affect public relations in some situations, in others the marketer may have to assume a reactive posture. This chapter discusses and expands on the changing role of public relations and summarizes the content of a public relations plan that is consistent with other IMC tools.

Learning Objectives 1. Recognize the role of public relations in the promotional mix.

2. Explain how to compile a public relations plan.

3. Examine how public relations is generated through media publicity, and argue the strengths and limitations of media publicity.

4. Illustrate how public relations is managed through corporate advertising.

5. Apply the ideas of public relations within the development of an IMC plan.

Chapter and Lecture Outline I.

PUBLIC RELATIONS

A.

Traditional View of PR—the chapter begins by differentiating between the traditional role of public relations and the new role. The traditional role reflects a management function that has as its primary responsibility the goal of communicating and the gaining acceptance of the organization’s policies and programs within its various communities.

B.

New Role of PR—the new role assumes a much broader, and more marketing-oriented, perspective.

In the new orientation, the public relations function operates in close communication with the marketing department (rather than as separate entities) to develop programs and policies.

C.

Publicity—publicity refers to the generation of news about a person, product or organization that appears in news media. It often is the result of a public relations effort. It typically lasts for a short period of time, and it is not always positive and under the control of the marketer. Some powerful incidents of publicity are unplanned by the marketer.

II.

PUBLIC RELATIONS PLAN

A structured public relations plan can help ensure that PR is an ongoing process as opposed to series of disconnected one-time events. As well, a plan will facilitate the integration of PR with other IMC tools.

The key elements of a PR plan are similar to other IMC tools.

A.

Situation Analysis—in addition to a review of the situation analysis from the marketing or IMC plan, people’s attitudes towards the firm, its products and/or specific issues should be assessed.

Conducting attitude research provides input into the planning process, serves as an early warning system, secures support internally, increases the effectiveness of the communication.

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B.

Determine Relevant Target Audiences—target audiences can be internal or external. Internal audiences include: employees, stockholders and investors, community members, suppliers and customers. External audiences may include: media, educators, civic and business organizations, governments, financial groups.

C.

Behavioural Objectives—the framework for these as discussed in Chapter 5 is readily applicable for PR. Organizations would want to consider whether the consumer interaction following the communication would be “trial” or “repeat” oriented.

D.

Communication Objectives—The communication objectives set out in Chapter 5 also apply to PR. Firms certainly have awareness objectives and the above point concerning attitude research indicates that communication objectives in this direction are imperative.

E.

Strategy—there are three elements for the PR strategy: message content, message creativity and message delivery. As in the case of regular advertising, the public relations communications have similar basic decisions. The focus of the message can have a marketing level orientation or a corporate level orientation. Public relations activities designed to support marketing are referred to as marketing public relations (MPR). Message creativity and message delivery of the PR are key variables as the purpose of the communication is similar to advertising which is to ultimately influence a target audience.

F.

Tactics—depend on the type of dissemination tool used including the media, direct marketing, press conferences, seminars, events and personal letters.

G.

Relations Effectiveness—the evaluation of PR can tell management how to assess what has been achieved by PR, how to measure PR achievements quantitatively and how to judge the quality of PR achievements and activities. Typical measurement tools for corporate advertising are focus groups and attitude surveys. The effects of sponsorship programs can be measured through exposure and tracking methods.

III.

NEWS MEDIA PUBLICITY

A.

Media Options—choices for communicating with target audiences include: • • • •

B.

Strengths of Media Publicity • • • • • • •

C.

press releases press conferences exclusives interviews

credibility endorsement cost avoidance of clutter reach specific audiences image building frequency potential

Limitations of Media Publicity • • • •

weaker brand or corporate identification effect inconsistent message timing accuracy Chapter 15 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 15-2

IV.

CORPORATE ADVERTISING

A firm’s advertising is not always designed to promote a specific product or service. Corporate advertising is designed to promote the firm overall—by enhancing its image, assuming a position on a social issue or cause, or seeking direct involvement from the market. This form of advertising is often considered controversial and/or of dubious benefit to the firm.

A.

Corporate Reputation—we highlight the decision-making process (similar to advertising) and the importance of understanding the attitudinal implications through the concept of corporate reputation.

B.

Corporate Image Advertising—advertising designed to promote the organization’s overall image may include positioning, television sponsorship, recruitment, financial support, and advocacy.

C.

Cause-Related advertising—a company links with a charity or non-profit organization as a contributing sponsor. Recent findings are summarized for discussion.

D.

Sponsorship—the marketer ties-in with a cause and/or event. Sports and entertainment events are among the most frequently used. Extensive planning issue associated with sports is presented such as positioning, target audience fit, target audience exposure, and brand activities.

V.

IMC PLANNING: STRATEGIC USE OF PR

The concluding section suggests some interpretation on the use of PR with other IMC tools. For most organizations and brands, PR plays a critical support or leading role depending upon the circumstances of the decision. The key point is that target audience and objectives of the role of PR needs to be clearly established for its most advantageous use.

Teaching Suggestions This chapter can be supplemented and developed in more detail according to the needs of the instructor. A number of good public relations texts are available. In addition to lecturing on the topic, it is possible to generate a great deal of class discussion. A multitude of public relations and corporate advertising examples can be found, and the discussion of the impact (and examples) of PR can also stimulate a great deal of student interest. We have found that the issue of corporate advertising, particularly advocacy advertising, provides a great topic for debate. Students might be encouraged to take one position or another and discuss the issues, providing examples to support their arguments.

Vignette 1. Why is the Bell Let’s Talk initiative so effective?

The issue of mental health certainly resonates with the majority of the population who have experienced troubles themselves or vicariously through friends and family. In that regard, many attend to the messages and process them empathy and concern. This response likely leads to those seeing the messages as believing that Bell is contributing positively to a worthy cause which ultimately improves Bell’s reputation. The fundraising component and ease of financially contributing by doing everyday behaviours makes the logistics of the PR activity simple and convenient. Given the high penetration rate of smartphones, the coverage of the PR is extensive.

IMC Perspective 15-1 1. Did Tim Hortons handle this publicity with the right public relations activities?

Students may not be aware of the publicity as the stories were featured in the business sections of news media, and hard to know if links to these stories got extensive exposure in Facebook feeds or other digital exposure options. Instructors may need to review the story to a degree so it is understood prior to considering whether Tim Hortons handled the publicity optimally. It is quite a debate to consider Chapter 15 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 15-3

whether the franchises are being unreasonable and are causing a problem or if they have a legitimate point worthy of the exposure that is generated. This would certainly be part of the discussion to assess whether the PR response is on the mark or not. On the surface, many students may side with Tim Hortons with the idea that the company appears to be responding in a positive and forthright direction.

IMC Perspective 15-2 1. Why are major Canadian brands investing significantly in sport sponsorship?

Sports sponsorship provides extensive brand exposure during live broadcasts. Brands that want to reach consumers who mostly watch OTT services discussed in Chapter 11, would like to obtain exposure when these viewers watch a live game periodically. The association of a brand with a high profile professional sport adds substantial luster to the brand. The cpm is likely very good for most sponsorship deals; while the absolute cost is high, the length of the deals and the size of the audiences drive the relative cost downward.

Answers to Review Questions 1. Identify the key differences between public relations and publicity. In what ways are the two interdependent?

The distinction between public relations and publicity is often not clear to students. Much of this can be attributed to the fact that the public relations department typically handles problems and opportunities involving publicity. Thus the tools used in the creation of public relations programs are the same as those employed to generate or control publicity. The procedures used to measure the effectiveness of these programs are also similar.

At the same time, there are distinct differences between public relations and publicity, with control being foremost. While public relations programs are designed and implemented by the organization, publicity may originate from within or outside of the organization. In the latter case, the information is not always favorable to the firm, and the scope of the actions designed to deal with these communications will differ significantly.

A second difference lies in the cost of public relations and publicity. While some textbooks argue that there is no cost involved in public relations, we take a different view. Public relations programs may be very costly in and of themselves, not to mention the cost of staff, materials, etc. Likewise, public relations agencies charge firms for their work. (If public relations are free, how did these large public relations firms get in business in the first place?) Publicity is expensive for the firm since writing and issuing press releases and managing “leaks,” obviously cost money. But these costs may be much less than those involved in large PR efforts, and—when released by other sources (for example, Consumer Reports)—may be free.

Finally, both PR and publicity may too often be reactive rather than proactive in design. That is, they may be employed in response to an event or communication that poses a potential threat. Formalized programs designed to be proactive are now becoming more common, though more so in the public relations area than in publicity.

2. Describe the reasons why firms use public relations in an IMC program. Provide an example of an appropriate use of public relations in this mix.

Advantages include: •

Credibility—due to its perceived news intent (versus selling), PR may have higher credibility than marketing messages

•

Cost—PR costs less than marketing messages, due to the lack of media costs

•

Avoidance of clutter—longer articles, separation from ads and new content help avoid clutter Chapter 15 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 15-4

•

Ability to reach specific groups—through effective targeting, and due to its news value, PR messages may get through to groups advertising cannot

•

Image building—corporate advertising, cause and advocacy advertising, and PR activities in general may help establish a positive image in the mind of receivers

The major disadvantages of PR are the lack of control over the message and guarantee that it will appear in the media at all. Thus, the intended communication may never take place or an unintended message is delivered. Marketers can effectively employ PR activities and eliminate the disadvantages.

Corporate, advocacy and cause advertising are paid for, and will get the message and media sought delivered. At the same time, they maintain the advantages, as there is no perceived intent to sell.

Likewise, sponsorships can be effectively used to get the message delivered. Companies now formally design-in PR programs as part of their IMC program to increase effectiveness.

3. Companies are now trying to generate as much free publicity as they can. Cite examples, and discuss the advantages and disadvantages associated with this strategy.

There is an old saying that “any publicity is better than none”. We are not sure that we subscribe to this expression. Companies have a designed strategy to generate as much publicity as they can, assuming that most exposures are likely to help them. Students should be encouraged to look for publicity in domains beyond the entertainment industry. Instructors can certainly look at the digital manifestation of publicity and investigate whether social media exposure constitutes true publicity if the reach of the exposure is minimal. For example, a few hundred views of a YouTube video may be quite inconsequential versus newspaper headlines. Alternatively, the quick dissemination of a link to a video on YouTube can be quite damaging.

4. Companies are now taking the position that their charitable contributions should lead to something in return—for example, sales or increased visibility. Discuss the pros and cons of this position.

Traditionally, public relations activities have been separate from the marketing department, primarily designed to create goodwill in the community, portraying the organization in a favorable light, etc. In some cases, the organization would attempt to insure that no profit- motive aspects were realized, (from a sales standpoint) in fear that the goodwill would be negated.

The more modern role basically takes the position that “if we are doing it, why not get credit for it”? In other words, these PR activities may not need to be designed to aid the marketing process, but if they do, what is the harm? Still another perspective is to use PR activities to directly aid the organization’s marketing efforts.

From a marketing standpoint, one might take the position that if the PR activity is done in good taste, and it does benefit the recipient; why not get credit for it? There is no less value to the receiver, and so long as there is no exploitation involved, everyone benefits. One can take this position too far however, in that the receiver of the benefits now are selected based on potential benefits to the organization not on need.

It is this last point that upsets the PR people—especially the traditionalists. They believe that PR was never designed to be a marketing activity and that it should remain independent. In addition to their altruistic convictions, they note the fact that the whole plan could backfire, causing the firm more problems than benefits.

Companies still engage in both forms of PR. Olympic sponsors are one example. Some do so quietly, with little or no recognition. Others essentially buy the sponsorship, using the same in their advertising and promotions to benefit their products or services.

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5. Explain how public relations activities and media publicity can be executed with Internet media.

Even though public relations practitioners have been some of the slower adopters of this innovation, the Internet offers this field a number of advantages. Traditional PR activities involve the dissemination of press releases, articles, etc. regarding the organization. The process of delivering these is cumbersome, and can mount up when paper and mailing costs are considered—particularly when the list of contacts is large. In addition, this distribution takes time.

The Internet offers the advantage of speed. Articles and/or newsworthy events can be posted on the site almost immediately after they happen. There are no limits on length, which allows the organization to provide as much detail as they wish. News organizations or others wishing to use this information can access it as needed and remain up to the minute in terms of developments.

Knowing that the organization has a website providing this information also allows the user to know where to go to access the same. Rather than having to wait for the pr news, the medium can access the site, and get it themselves. They can go back for updates, additional information, etc., which makes their job much easier, and increases the likelihood of the information getting published or on the broadcast medium.

Finally, the cost savings are enormous. There are no paper and printing costs. There are no distribution costs other than putting it on the site, and of course there are no mail costs.

Answers to Applied Questions 1. Some marketers and PR people believe that public relations should replace advertising as the primary means of introducing new products. Explain why this would or would not be a good plan.

Ries & Ries in their book The Fall of Advertising and the Rise of PR, contend that PR will replace advertising in terms of importance in the marketing communications mix. Advertising—they say—will be used primarily to support existing brands, with PR assuming the primary responsibility for introducing new products. Following are reasons both supporting and opposing this position: •

Supporting--because of the declining effectiveness of advertising, it is no longer effective for introducing and building new brands. The reason for this is because consumers have changed in regard to how they learn about new brands, and the communications program must change as well.

Consumers now learn about products and brands through means other than advertising. Further, they contend, advertising has lost credibility. Public relations and publicity are considered more objective information. Advertising’s role in the future will be primarily to maintain the brand image.

•

Opposed--Advertisers feel that it is hard to control the message disseminated through PR channels.

Often the complete message does not get told, the message may not appear at all, or may appear at the wrong time. Further, publicity can be a tool for mature brands beyond the introductory stage, and there is no reason to focus on this aspect only. Finally, more money is currently being spent on advertising as PR. It is highly unlikely that this will reverse, as PR—while important—is still perceived as support for advertising.

The most effective situation is when advertising and PR work together in an integrated program. To get the most from their individual contributions, they must work together to provide the consumer with a unified message.

2. Select an organization that you admire and compile notes on the content of its public relations plan based on Internet research.

Students may require guidance on where to look and the instructor may direct them to https://www.newswire.ca/. This website disseminates company news releases that are ultimately repurposed in stories found in newspapers or equivalent online sources. Students would likely go to a Chapter 15 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 15-6

company’s website in which they should look for pages covering the brand’s corporate news, social responsibility activities, or community initiatives. Students may also visit a brand’s social media to read about a brand’s owned media postings. Instructors should encourage students to identify the target audience, intended communication and behavioural objectives in addition to the strategic and tactical elements of the execution. Additionally, students may go in the direction of seeing a brand use sponsorship for public relations and look at other resources such as sports news for example.

3. How do music artists take advantage of media publicity? Which strengths do they predominantly use?

How do they minimize the limitation so of media publicity?

This question hopefully resonates with students who are exposed via publicity regarding the artists they follow. It may also bridge the age gap of students and instructors who may not know what is going on with student consumption. A key aspect of the bridge is for the instructor to put structure around the student responses in a class discussion so that they can see the underlying principles. Students will likely focus on social media exposure of music artists (e.g., seeing video of the artist on YouTube, following artist’s Twitter feed). Instructors can also question the use of artists using other forms such as TV and radio and observe whether students are cognizant of publicity occurring in these media.

Instructors can also delve into differences with “indie” artists versus mainstream artists. Logically artists are taking advantage of the lower cost, credibility of the source, and image building. The identification limitation is taken care of with the distinctiveness of the imagery artists typically portray that can be captured with the photos and video exposure. Timing is controlled with the performance schedule and the release of new material.

4. Identify sponsors of different concerts or entertainment activities you have attended and make a conclusion as to why this type of sponsorship may be successful?

This is an experiential exercise that could prove interesting and distressing if there is poor recall, however an easy search can assist in this matter. The process of not recalling and then finding out could prove quite illuminating and this addition to the assignment may be fruitful for instructors to consider.

In most cities these days there are a series of music events (e.g., Rock, Blues, Jazz etc.) that the class could focus on. Of course other cultural activities might spur interesting debate. One useful part to consider is the degree of brand exposure that occurs for a sponsor. In some examples, there are dozens of sponsors and the logos are so small, the overall clutter of the exposure is so bad, one might wonder why the brand decided to participate. It is important to drive home the point of how the sponsorship contributed to the overall image and positioning of the brand when evaluating the examples.

5. Explain why a company like RBC would use the tools described in the chapter, including media publicity, corporate image advertising, cause-related advertising, and sponsorship.

RBC is an example of a very large company that uses all aspects of public relations, and most instructors would likely conclude very effectively across it vast operations domestically and internationally. It published a social responsibility report documenting all of its accomplishments. Its most recent effort with respect to water is a very good example of cause-related advertising. This program is so comprehensive; the term advertising does not give it full justice, however, the average Canadian would only understand the program from the advertising of it, an important distinction to be made. RBC also has a number of other activities that it sponsors such as the Olympics. In fact the Blue Water effort is referred to as a sponsorship since it gives money to hundreds of groups who manage the waterways, which shows how the lines between these activities are blurred. However, RBC’s communication of its effort falls into the domain of cause-related advertising. No doubt these activities get covered by media which contributes to the positive media publicity RBC often receives.

Additional Discussion Questions (not in text) A. Discuss some of the advantages associated with the use of marketing public relations (MPR’s). What are some of the disadvantages?

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Advantages include: •

It is a cost effective way to reach the market—public relations activities are often less expensive than traditional marketing programs

•

It is highly targeted—MPR’s can be targeted to a specific audience, thus increasing the effectiveness of the program

•

Endorsements of third parties—MPR’s may be perceived as more credible because they receive endorsement of those who may not be connected directly with the organization. This perceived lack of a relationship is a benefit to the sponsoring organization.

•

Support of the IMC program—the MPR program lends support to the more profit-oriented IMC program strategies due to its credibility.

•

Breaking through the clutter—due to the length of the articles, and the separation from advertisements, MPR’s may break through the clutter of ads

•

Circumvents consumer resistance—consumers may be hesitant to respond to marketing efforts they know are designed to sell, MPR’s help circumvent this problem

Disadvantages include: •

Lack of control—as with other PR pieces, the marketer loses control over the material

•

Difficulty tying in marketing efforts—it is often difficult to get one’s logo, positioning statement, etc. tied into the message

•

Media time and space are not guaranteed—because there is no media being paid for, there is no guarantee that the media time or space will be granted

•

Measuring effectiveness—the measures used to determine the effectiveness by marketing standards may be more difficult to employ. Traditional pr measures may not be as useful.

B. Describe some of the criteria used by companies to measure effectiveness of the public relations program.

The text discusses a number of criteria for measuring effectiveness that include: • • • • • • • • •

Total number of impressions over time Total number of impressions on the target audience Total number of impressions on specific target audiences Percentage of positive articles over time Percentage of negative articles over time Ratio of positive to negative articles Percentage of positive/negative articles by subject Percentage of positive/negative articles by publication or reporter Percentage of positive/negative articles by target audience

Also discussed are the means for accomplishing the evaluation process: •

Personal observation and reaction-- personal observation and evaluation by one’s superiors should occur at all levels of the organization

•

Matching objectives and results--specific objectives designed to attain the overall communications objective should be related to actions, activities, or media coverage. For example, placing a feature story in a specific number of media is an objective, quantitative, and measurable goal.

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•

The team approach--whereby evaluators are actually involved in the campaign. By working together the team develops and accomplishes their goals.

•

Management by objectives--executives and their managers act together to identify goals to be attained and the responsibilities of the managers. These goals are then used as a standard to measure accomplishments.

•

Public opinion and surveys--research in the form of public opinion surveys may be used to gather data to evaluate program goal attainment.

•

Audits--internal audits involve evaluation by superiors or peers. External audits include those that are conducted by consultants, the client, or other parties outside the organization.

C. Explain what is meant by the term cause-related advertising and advocacy advertising. Cite examples of organizations that have used this strategy. Does it work?

Cause-related advertising is the term used to describe the linking of companies with charities or nonprofit organizations as contributing sponsors. Cause related marketing is a “hot” trend in the business community.

Most major companies have participated in cause related marketing for a variety of reasons. First, the goodwill and positive publicity associated with these activities are beneficial to the firm. Secondly, there is the feeling of doing something good for the community. Third, marketing activities such as coupon redemptions and sales have been shown to be positively affected.

Participating in a cause-related relationship is not a guarantee of success, however. American express has suffered negative publicity, as have others when the public feels that all of the motives are not altruistic. In addition, some causes (such as AIDS) are considered to be too controversial to engage in, creating possible problems in the marketplace as well as within the organization.

Advocacy advertising involves the propagating of ideas and elucidating controversial social issues of public importance in a manner that supports the interests of the sponsor. A quick perusal of any major daily newspaper will reveal that this form of advertising is on the increase. Such ads can also be found in magazines such as Time and Newsweek among others.

The reasons for advocacy are included. One is to generate public support on an issue. Another is to elicit funds, while a third is to make people aware of an issue. Such ads may range from taking a safe stance (Mobil’s back the police campaign) to extreme depending on the goals of the sponsor.

Effectiveness will also vary depending on the goals sought.

D. Why is publicity so powerful? Give examples of how publicity has worked for and against companies.

The power of publicity emanates directly from its high credibility. Because the source of the communication is generally perceived as being objective, or at least as not having a vested interest, the information is often treated differently than that of advertising and/or promotions. As a result this information is passed on more readily, and in general is considered more believable.

A contributing factor is the way that the media handle publicity. Unfortunately, negative publicity often receives more attention than positive news. As a result, more coverage is provided, more consumers are exposed, and the information seems to convey more “news value.”

E. What are some of the reasons for conducting public relations research activities?

As with any other part of the communications program, there are reasons for conducting public relations research activities. These include, but are not limited to the following: •

to determine target audiences—some members of society may provide more effective markets than will others.

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•

to determine attitudes and perceptions—it is important to know the audiences perceptions of the organizations as well as the programs it may or may not implement

•

to “tune” the program—testing source, message, and media factors is important to insure the success of the PR program

•

to evaluate the effectiveness of the program—follow-up research designed to determine the effectiveness of the program is important.

Just as we would want to conduct research as input into the design of the program, we would also need to do the same to determine how the program worked once implemented. Research activities are required throughout the program F. A great deal of money is being spent on sponsorships. Discuss why organizations are increasing their expenditures in this area, and how they can measure the effectiveness of these investments.

Sponsoring events has, in the past, been thought of as something an organization does because of the wishes or interests of the President or CEO. This is no longer the case. While some sponsorships may still take place for this reason (the CEO loves golf, for example), the vast majority have more strategic objectives in mind. Chapter 15 discusses some of these reasons, but one of the major ones is to keep the name of the company and/or brand in front of the target market. Air Canada and Bell have paid to have their names on NHL arenas to raise awareness of their brand names.

A number of companies now offer methods for measuring the effectiveness of sponsorships. These companies use sales audits, exit interviews, and economic impact studies to measure impact. One company provides a measure of event sponsorships and their impact on sales. Still another clocks the amount of time a sponsors name is shown, and equates this to buying advertising space costs.

While all of these measures would be useful to the sponsor, one must take a hard look at these methodologies before subscribing to them. In many cases, the measures are questionable (equating exposure to advertising), in others the impact may be overstated (economic impact). As noted in the text, a number of factors contribute to sales and/or other behaviours, and to attempt to isolate only the impact of sponsorships may not be as easy as suggested.

Assuming the measures are valid, they could be used by a variety of companies. For example: •

golf equipment companies—measuring exposure to their name as a result of players wearing visors, using their balls, carrying their bags, etc.

•

event sponsors—companies who sponsor tennis events—is their name and association being noted?

•

underwriters—sponsors of events like concerts, plays, etc., who pay for the cost of the programs.

IMC Exercise Instruct students to gather information of various types of public relations activities engaged in by organizations. These include both traditional and nontraditional methods. Have them collect examples of sponsorships, and describe the target audiences sought, and the pros and cons of the sponsorship.

IMC Comprehensive Project Develop a public relations plan as part of the overall program. Describe what the objectives of this program are, how the program will be implemented and how it will be evaluated for effectiveness.

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CHAPTER 16 DIRECT MARKETING Chapter Overview In this chapter we examine direct marketing in the promotional mix. We discuss the objectives sought in direct marketing programs, noting that these may often differ from the communications objectives discussed earlier. We also discuss direct marketing strategies, the direct response media used to convey the communications message, and the evaluation of the direct marketing program. We also investigate loyalty programs that are typically executed via direct marketing. We conclude the direct marketing discussion with a discussion of its strengths and limitations.

Learning Objectives 1. Define direct marketing and summarize the importance of a database for making marketing communication decisions.

2. Express the decisions of a direct marketing plan.

3. Describe the content of a loyalty program.

4. Evaluate the strengths and limitations of direct marketing.

5. Apply the ideas of direct marketing within the development of an IMC plan.

Chapter and Lecture Outline I.

DIRECT MARKETING

A.

Defining Direct Marketing—direct marketing is the interactive use of advertising media to stimulate an immediate behavior modification in such a way that this behavior can be tracked, recorded, analyzed and stored on a database for future retrieval and use. The execution of direct marketing uses one or more direct-response media (direct mail, telephone, interactive TV, print, Internet, mobile devices, etc.) to solicit a response from a prospect or customer. The use of direct media differs on whether the receiver’s identity is known or unknown.

B.

Developing a Database—an important part of the direct marketing program is the development of a database. The database is the foundation from which direct marketing decisions evolve. Figure 16-1 shows a typical database content. Key points on where to obtain a database and the need to update the files are highlighted.

1. Database Content—databases are compiled from company records and from various public and private sources. Some will be rich with past purchase history along with extensive profile variables. Others will be less comprehensive with basic demographic and contact information to send marketing communication. Databases include information allowing marketers to send messages to those with no past purchase history and those with past purchase history. This allows marketers to improve the selection of market segments, stimulate repeat purchases, and cross-sell. Databases containing customer information need updating and monitoring to assess the success in terms of frequency and amount of purchasing.

2. Database Use for Targeting—information from the database allows direct marketers to target customers or non-customers depending on the source and content of the database. In either case, a good database allows a direct marketers to use multiple segmentation variables to effectively target as precisely as possible.

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3. Database Use for CRM—loyalty programs run on databases to implement customer relationship management (CRM). Such programs are discussed later in the chapter, and a true loyalty program cannot work without extensive use of databases.

II.

DIRECT MARKETING PROGRAM PLAN

A.

Target Audiences for Direct-Marketing—the content of the database permits direct communication to those who are both known and unknown so that messages can be customized and or personalized.

B.

Direct-Marketing Objectives—direct marketers seek a direct response, in terms of trial or repeat purchases. This response need not necessarily be a behavioural response, as direct marketing is now used for other purposes: to build an image, maintain customer satisfaction, and inform and/or educate customers in an attempt to lead to future actions

C.

Direct Response Media—direct marketers generally pursue either a (1) one-step approach or a (2) two-step approach in developing media strategies. In the one-step approach, the medium is used to directly obtain an order (for example, direct response television ads). In the two-step approach, more than one medium may be used, with the first effort designed to screen or qualify buyers and the second designed to generate the response. A number of direct response media are available to the marketer including: a. Direct mail—direct mail is used extensively for communicating with current customers for upselling. Keys to the success of direct mail are the mailing list and the ability to segment markets.

Purchased mailing lists allow advertisers to reach non-customers according to pre-defined criteria found in the database. b. Catalogues—Examples of successful catalogue retailers are described. c. E-mail—Electronic distribution of direct mail is E-mail where consumers agree to receive messages from a brand. Sign-up occurs via online or store based transactions or through visits to home pages or social media vehicles. Legitimate communication via e-mail is distinguished from unwanted “SPAM” from ruthless illegitimate “marketers”. d. Broadcast media—The majority of direct marketing broadcast advertising now occurs on TV through the use of TV Spots, Infomercials, and Teleshopping. e. Telemarketing—consumer and business-to-business telemarketing facilitates personal communication in the selling process.

D.

Direct Marketing Effectiveness—the typical measure is cost per order.

II.

LOYALTY PROGRAMS Loyalty programs reward customers for continuing to purchase the same brand of a product or service over time. Loyalty programs have become commonplace in a number of product and service categories, particularly travel and hospitality, as well as among retailers. Consumer packaged goods companies are also developing loyalty programs that offer consumers to accumulate points for continuing to purchase their brands. The points can be redeemed for gifts such as merchandise or for discounts.

Reasons for the popularity of loyalty programs include. Marketers view these programs as ways of encouraging consumers to use their products or services on a continual basis and as a way of developing customer loyalty. Companies are realizing the importance customer retention and loyalty programs help them build relationships with customers. Loyalty programs provide marketers with the opportunity to develop databases containing valuable information on their customers and which can be used for direct marketing purposes.

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Loyaty programs have multiple purposes and characteristics as summarized in the chapter.

Depending on the interest in the topic, instructors could show examples of different programs to highlight both of these points. Communication between the brand and its loyal customers is part of CRM and consumer attitude and usage to loyalty programs are a key input to their design.

Furthermore, loyalty programs are a key means of communicating directly with consumer with digital apps and other means to keep in constant contact.

III.

EVALUATION OF DIRECT MARKETING

A.

Strengths of Direct Marketing • • • • • •

B.

Target audience selectivity Target audience coverage frequency scheduling flexibility personalization costs

Limitations of Direct Marketing • • • •

media image target audience coverage control for selective exposure reach

IV.

IMC PLANNING: STRATEGIC USE OF DIRECT MARKETING

A.

Decision-Making Process Direct marketing influences trial and repeat purchase primarily at the purchase decision stage. It can also contribute to purchase-related action at any stage such as the information search stage.

B.

Direct Marketing and IMC Tools Direct marketing is in itself a form of advertising. Whether through mail, print, or TV, the directresponse offer is an ad. Sometimes the ad supports the direct selling effort as a brand might run image ads to support its store and catalog sales. Direct marketing media are also employed to support all facets of the IMC program including PR, sale promotion.

Teaching Suggestions As noted, direct marketing is a rapidly growing field. It is a helpful and interesting exercise to start the class with a discussion as to what direct responses students are familiar with, and to point out the fact that some very large, reputable firms are engaging in this form of marketing.

It is also useful to spend some time discussing the increased use of databases. Seemingly every organization either now has, or is in the process of establishing a database from which to market. Students will probably be able to identify which databases their names might appear on by the fact that the lists are often sold. It is easy to track who is buying lists from each other, as noted in the text.

Vignette 1. What would you as a consumer look for in a loyalty program?

Loyalty programs with enhanced digital interaction allow retailers to systematically collect data on regular basis as consumers manage their loyalty account with their phone. The degree of knowledge and concern about the collection and use of this data is likely quite varied among the members. This vignette summarize examples for students to see the extensiveness of a loyalty program and to see that Chapter 16 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 16-3

it is a significant activity beyond a simple continuity card at the local coffees shop that acts more like a sales promotion. As such, issues of whether student consumers are concerned about their purchase behavior being tracked, among other things, is worthy of discussion so that they are more enlightened about the growth of data collection and use of major Canadian companies.

IMC Perspective 16-1 1. Who would be most attracted to the features of the PC Optimum loyalty program?

Consumers who shop at both store locations regularly will benefit significantly with the new program.

Interesting to consider is whether consumer might switch to the program and stores based on the expansion of the program. For example, would loyal Esso consumers now gravitate to the two retailers to obtain more points? The concentration of three product categories; groceries, drug stores, and gas suggests geographic location of where people live may be a factor in greater acceptance.

2. How competitive is PC Optimum’s loyalty program compared to other loyalty programs?

Instructors would likely want to review the content of the program, and students will likely conclude that the program is very good and rewards continued shopping very well. Instructors could highlight the convenience aspects and the flexibility of use so that students could understand the program more.

Answers to Review Questions 1. Explain how companies use database marketing. How is the information derived from the database used to target audiences?

An important factor in the success of direct marketing is that of developing and maintaining a database.

Sources for names to include in a database come from a variety of sources, including customers themselves. When you fill out a warranty card, provide information to receive promotions, or even provide information at the cash register, there is a good chance your name will be entered into a database. Once in the database, companies will use your name for a variety of marketing purposes.

Sending out notices of sales, phoning members of the database, and sharing your name with other companies or organizations are just some of the activities for which the names will be used.

In addition, sophisticated companies spend much time and effort in analyzing their databases. Through their databases they can track sales, determine the impact of sales and promotions, and profile their customers. By selling the names to others, another revenue stream is developed for the company.

2. What is the difference between the one and two-step approaches to direct marketing? Give examples of companies that pursue both methods.

In the one-step approach, the direct marketer is trying to get a sale immediately upon exposure to the direct communication. For example, the commercials that ask you to call an 800 number “right now” and place an order would be an example of the one-step approach. Companies selling magazines, gimmicky items, psychic networks, etc. typically use this method.

In the two-step approach, two communications are used. Sometimes, as in the case of magazine subscription sales, companies like Publishers Clearing House and others will send a notice of an upcoming sweepstakes, telling the receiver to watch the mailbox to enter, and then send the second piece.

Others may use a TV commercial to have the viewer call in for further information, a brochure, etc. then follow-up with another communication to attempt to make the sale.

It is interesting to note that some companies that originally used the one-step approach—for example, Publishers Clearing House and Bowflex, now employ the two step model. Bowflex—an extremely successful direct marketer employs a variety of media including TV, coupon inserts in the mail, and the Internet in their direct marketing efforts.

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3. Why are loyalty programs considered to be a direct-marketing program rather than a sales promotion?

Loyalty programs are established activities within an organization that facilitate the ongoing relationship with its customers. Sales promotions are short-term events that are started and stopped with a prescribed time period. This distinction is a primary characteristic that is very important to point out.

As part of this, it should be noted that a simple card keeping track of purchase like coffee where a consumer would get free one after buying ten is not a loyalty program since it does not fulfill the characteristics outlined in the chapter. In all likelihood, this kind of card is akin to a sales promotion since it can be discontinued so very simply by no longer distributing them. A loyalty program operates with customer registration and executes communication and loyalty transactions via the use of a data base. This is substantially more involved and institutionalized compared to a coupon event or running a price discount for a few weeks.

4. One of the disadvantages associated with direct marketing media is the high cost per exposure. Some marketers feel that this cost is not really as much as a disadvantage as is claimed. Argue for or against this position.

While the higher cost per exposure is often considered a disadvantage associated with direct marketing media, but this cost may be warranted. While most other media have lower costs, their value lies primarily in creating exposure, interest and/or providing information. Direct marketing media actually seek a response. Thus, the higher cost is warranted if there is a higher, more direct behaviour associated with the communication.

The ability to target market, and eliminate waste coverage is another factor in support of the higher cost of direct marketing media. When one factors in the minimal waste coverage, the cost per exposure may be more in line with competitive media.

Finally, the ability to tailor the message may result in a more effective message. If this is true, and it improves the likelihood of a behaviour, again the higher cost is warranted.

5. How does direct marketing influence each stage of the consumer decision-making process as it works with other IMC tools?

Direct marketing messages and media can influence every stage of the decision-making stage. No doubt some attempts work at the need recognition stage. For example, direct mailings to households for household services encourage consumers to use a service rather than doing it oneself (e.g., snow removal, lawn maintenance). Consumers may be on an email list for a retailer and receive notification of a sales event or new merchandise and begin the process of information search by visiting the store.

A follow-up phone call from a car dealership, along with brochures sent or picked up, assist consumers in the alternative evaluation stage. Essentially, virtually any direct response media could be used as each of the stages assuming the right message is associated with the deliever and there are no logistical difficulties to turn off the consumer as they progress through the stages.

Answers to Applied Questions 1. Construct a list of variables that a fashion brand might desire in its database to mark to students in college or university.

The starting point for this question would be Figure 16-2. Students would add or delete from the list of variables. Given it is a fashion product, the database might be include lifestyle variables that would be related to design etc. If possible the database would include the styles liked or other preferences that its clientele might desire.

2. Collect any direct mail delivered to your household and evaluate whether it is effective.

This is another experiential exercise designed so that students can understand the marketing stimuli they encounter on a regular basis. Students can examine the material and assess the degree to which Chapter 16 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 16-5

there may be category need, awareness, attitude, and purchase intention effects. As part of this evaluation instructors can link the creative decisions covered earlier to illustrate that they are operational in this media much like other print, TV, and online messaging.

3. Read up online about an interesting loyalty program and apply Figure 16-4 to identify the characteristics and give an assessment of the program’s value.

Students may investigate one of the loyalty programs featured in the chapter, so instructors might want to put constraints on the question. For example, Air Miles is referenced quite a bit so perhaps this one might be skipped. Alternatively, Air Miles could be used as a basis, an in class summary first, and then each student could compare another one to Air Miles. Figure 16-4 represents new material in evaluating loyalty programs as the topic has grown with the maturity of the programs the past couple of decades.

Instructors may want to refer to the article as it in very comprehensive shedding new light on a topic that is much more complex than one might expect. In the end, an overall assessment on whether the program fosters loyalty or merely sets up switching cost should be considered and investigated with respect to consumer behavior theory.

4. How might a smartphone service improve its marketing communication with the use of direct marketing?

Customers of smartphone service providers can receive regular information flow from email.

Conversations via chat can occur when the customer has some kind of difficulty, perhaps simple instructions from a service attendant could alleviate extensive dissatisfaction. Alerts can be given when new product and services are available with both of these options. Glossy communication via a magazine could work as well since the mailing address is in the data base. Also, the personal touch might be helpful with phone calls periodically to answer and questions or concerns.

5. Provide examples for both consumer goods and services of how companies might use direct marketing as part of an IMC program.

This is an open question for students to present their findings. They should be encouraged to look for examples that would interest themselves and their fellow students in order to understand how direct marketing works. Instructors need to be prepared to react to the material presented and offer structure on the type of objectives, strategy and tactic that are used, and to draw connections on how the direct marketing effort may be connected to other IMC tools. This assignment could prove to be very interesting to students if the right examples are sought and investigated accordingly.

Additional Discussion Questions (not in text) A. Explain how a consumer goods company might employ database marketing. A business-to-business company? A service company?

All industries can use of database marketing in a variety of ways. Following are a few examples: •

Consumer goods companies—consider the example of bicycle helmet companies. A helmet is purchased, and the warranty card is filled out. The information is entered into a database. The database can then be used to cross sell the customer on additional bike products, offer an insurance policy in case of helmet failure, and sending a thank you for the purchase. Bike helmets are replaced, on the average every three years. Around this time, the database identifies potential new buyers, and direct mail pieces, coupons, reminders, etc. are sent to the prospective buyers.

•

Business to business companies—automatic filling and shipping of orders, cross selling and other database tools can be applied. In addition, announcements of new products, sales and/or promotions can be sent from the database. In respect to customer service, the information contained in the database may speed up the entire problem solving process.

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•

Service companies—banks are extensive users of database marketing tools. New banking services designed to specific demographic and/or socioeconomic groups rely on databases to increase the ability to specifically target these groups with new program offerings, important changes, news, events, etc.

B. Explain why a company like KitchenAid successfully adopted direct marketing techniques.

Almost as soon as it started through TV, direct marketing has been proven to be a success for smaller companies and start-ups. Now, large corporations have found these techniques—particularly the infomercial—to their liking. A number of factors have led to success for these marketers. The low cost of the medium—that is, both production costs and media costs are low. Advertisers can produce an infomercial for a relatively low cost compared to commercials, and the media costs—because of the time periods purchased - are also inexpensive. Beyond the costs, infomercials and other direct marketing tools also offer attractive features. One is the ability to reach the desired target audience.

Content of the direct response messages is also a positive attribute. For example, a one-hour infomercial can provide the potential car buyer with a lot of information, right in the comfort of their home, and with little effort. The same is true for other products, some of which the buyer may not be familiar with and may become interested once they have acquired more information.

Overall, the infomercial, and direct marketing overall, has evolved from its original platform. Once strictly a sales tool, these media have discovered that they can offer the consumer much more, maintaining their interest and satisfaction, generating goodwill, etc., and still generate sales. To some of these companies, the primary goal is not to sell, but to support other marketing efforts.

C. Describe what is meant by a database. What functions do databases perform?

A database is a listing of customers and potential customers. These lists may be organized on a variety of factors, including demographic, geographic, and even psychographic.

The database has become a powerful marketing tool. Marketers use databases to: •

Improve segmentation strategies—lists can demonstrate past purchasers, potential purchasers, and (as noted above) be segmented on a variety of criteria.

•

Stimulate repeat purchases—companies arrange databases in a way that allows them to contact customers when a service is due. For example, car dealers letting customers know when their service is due; carpet cleaners notifying customers that it has been a year since their last cleaning etc.

•

Cross-selling—once a customer is included in the database as a result of a purchase, the opportunity exists for cross-selling. For example, camera companies may sell film or developing to recent camera purchasers; tape and disc companies can cross-sell videotapes, etc.

The opportunities for using databases seem endless. A good discussion can ensue on this topic.

IMC Exercise Catalogues have become an important direct marketing tool, and many catalog companies have opened retail stores. Have students provide examples of these occurrences, bring in example catalogues, and explain why this is occurring.

IMC Comprehensive Project Explain whether the product could be marketed through direct response media. If not explain why not. If so, include in the plan the direct media to be used, the cost, budget allocation for their inclusion should be provided.

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CHAPTER 17 INTERNET MEDIA Chapter Overview We see Internet media as a valuable tool for marketers and an important part of the IMC program. In our opinion, there are advantages and disadvantages of Internet media just as there are for other media and an astute marketer will know how and when to employ this medium. The chapter begins with an overview of Internet media communication by looking at usage, web-site communication along with its objectives, and website strategy. Digital advertising planning is examined next by covering the content of a digital advertising plan. Next different advertising formats; display ads, paid search ads, video ads, audio ads, and classified and directory ads, which are related to the idea of Internet media vehicles. Subsequently, the next section describes mobile advertising and mobile usage including apps and sms. Methods of measuring effectiveness are then summarized and strengths and limitations of the Internet follow. We conclude with a brief summary of the strategic use of Internet media.

Learning Objectives 1. Describe the Internet media usage and explain website communication.

2. Review Internet media advertising.

3. Identify the advertising formats of Internet media.

4. Explore mobile advertising.

5. Define measures of Internet media effectiveness.

6. Apply the ideas of Internet media within the development of an IMC program.

Chapter and Lecture Outline I.

INTERNET COMMUNICATION

The initial section provides a general overview of Internet with respect to marketing communication. The Internet is both a communications and direct response medium. We make the point that we initially want to consider the communication role of the Internet as opposed to its selling role as this former perspective is in keeping with the scope of the book.

A.

Internet Users—Canadian usage statistics are summarized in the figures and are a handy reference to compare to other media.

B.

Website Communication—This section highlights the point that websites are a primary Internet tool that contributes to marketing communication objectives such as; develop awareness, disseminate information, build a brand image, and facilitate interaction.

C.

Website Strategy—A website is the home of the information the company provides via Internet media. It is also an experiential medium with much transformational properties as seen in TV advertising. Developing and maintaining a successful site is costly and time consuming. However, to attract new visitors and retain current visitors, it is essential that sites be continually updated.

The development of interactivity and the idea of website advertising are emphasized. Research of attitude ad and attitude to brand is as applicable to attitude to website and attitude to brand. In this regard, all branded company websites can be viewed as one big ad, and that the content of these websites are constructed to carefully influence the audiences’ brand attitude.

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II.

DIGITAL ADVERTISING PLANNING

A.

Overview—the figures show the extent and type of advertising revenue in Canada. Instructors are encouraged to review this for student to understand the big picture.

B.

Digital Advertising Plan—this section indicates that a digital advertising plan shares similarities to advertising plans of other media.

C.

Target Audience & Objectives—the use of segmentation variables described in chapter 3 are applied with digital advertising. Targeting consumers based on their Internet viewing (behavioural targeting) is prominent. Issues of privacy and self-regulation of behavioural targeting is highlighted.

D.

Digital Media Strategy—media strategy decisions identified in chapter 10 (mix, target audience coverage, schedule, geographic coverage, reach & frequency) are applied to digital marketing to illustrate consistency.

E.

Digital Media Tactics—all aspects of Internet media are available for dissemination of a marketing message necessitating the need to consider how to organize the options. The figure applies existing media terminology to illustrate how planner can evaluate different media vehicles for ad placement.

III.

DIGITAL AD FORMATS Promotional planners use Internet media as an advertising tool to reach their audiences. In most cases, the delivery is similar to other media in terms of a print messages, video message or audio message. In some instances, each offers specific opportunities to reach an audience with particular characteristics and act as a media vehicle.

A.

Display Ads—display ad formats follow technical requirements of industry standards provided by IAB.com and IABCanada.com that were revised in 2017. Many old formats are not recommended and the new guidelines enhance the user experience with the LEAN principles. Instructors can highlight these characteristics with examples. The buying and selling of digital ads is quite different compared to other media with ad networks and ad exchanges. This process is somewhat complex and is challenging to teach.

B.

Paid Search Ads—search engine prompts of key words provides links to related web-sites. These links are essentially an extremely primitive form of a display ad that encourages additional action of the user desiring to process the message further at website or any social media vehicle potentially. Paid search ads are the first step in the two-step direct marketing process described in Chapter 16.

C.

Video Ads—streaming of video messages via internet media increased with broadband growth and penetration giving rise to greater advertising opportunities.

Digital Video Ads: Owned—brands place different lengths and formats of video ads in a variety of digital media vehicles in which there is paid fee to a media company.

TV Video Ads: Paid—commercials are placed within programming on major TV networks like CTV. In this respect, consumers view the ads as the “cost” of seeing content not paid for on the CTV website.

Digital Video Ads: Paid—television-like commercials are available for viewing in many locations such as webs-sites and web-portals. Video available for viewing can include television-like ads that users can view prior to receiving the content. These ads are seen without TV show like content.

D.

Audio Ads—streaming of audio messages via internet media increased recently as well. Podcasting includes audio communication that is sponsored by advertisers with the effect simulating radio ad.

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Audio ads are now delivered through streaming services. This seems like radio advertising on the surface, but is distinctly different with the strength of more selective targeting.

E.

Classified and Directory Ads—a substitution of ads from newspapers (e.g., classifieds) and directory books (e.g., Yellow Pages) occurred over the past decade. General (e.g., Kijiji) and specialty websites (e.g., Autotrader) offer advertisers similar targeting options like other media.

F.

Promotional Ads—digital delivery of a promotionally oriented item acts as a advertising format since there are brand messages associated with its presentation.

IV.

MOBILE

A.

Mobile Ads—expenditures for mobile ads continued to grow with the same ad formats found for desktop ads. Note, IAB separates ad expenditures along these two delivery methods.

B.

Mobile Device Usage—many figures summarize mobile usage which provides instructors opportunity to communicate how significantly consumes use mobile technology.

C.

Mobile Apps—apps act as a permanent owned media once installed on a user’s phone. Consumers are using apps on a regular basis for many shopping activities in which IMC plans need to account for achieving objectives.

D.

SMS—direct communication from a brand to a consumer is facilitated by SMS. Logically, a considerable amount of this communication is with customers who are loyal or favourable switchers. The messages encourage repeat purchases and provide an opportunity for advertisers to offer promotions or communication of other IMC tools like events.

V.

MEASURING INTERNET EFFECTIVENESS Most of this can be done electronically and specific measures include: 1. Audience Measures—determination of audience sizes remains challenging with a lack of consistent standards and established procedures.

2. Communication Model Measures — Exposure and processing measures—hits, viewers, unique visitors, clicks, click-through rate and impression/page views online measuring of recall and message retention; use of surveys and panels to assess attitudinal effects.

VI.

IMC PLANNING: STRATEGIC USE OF INTERNET MEDIA The section identifies the tremendous communication opportunity of Internet media. It works with any of the other IMC tools and various manifestations of the Internet media act as if they are unique IMC tools within it. With its print, video, audio characteristics, Internet media can have virtually all sixteen media characteristics summarized in Chapter 10 as strengths with the right combination of applications. Its pervasiveness allows it to achieve any communication objective for any target audience at any point in the consumer decision-making process. Thus, when one decides to use the Internet, the manager needs to be very specific with respect to the strategic intent or else valuable resources can certainly be wasted.

Teaching Suggestions This chapter may be one of the most interesting chapters in the text for students. At the same time, it may be one of the more difficult for instructors to teach. Much of the difficulty arises from the rapid change of Internet media. Another factor that makes the chapter difficult to teach is the high level of knowledge and interest of the students. Most of them will know more about the working of the Internet than we do.

We recommend getting the students involved in the discussion from the beginning. Showing examples of effective websites—as defined by the communication objectives—is a good starting point. A review of all the advertising avenues is warranted to see the similarity and differences with advertising on TV or print Chapter 17 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 17-3

mediums. It is also instructive to make a link to the media concepts from Chapter 10. For example, the idea of media class and media vehicles can be applied to internet media, as social media may be viewed as a media class and Facebook viewed as a particular vehicle.

Vignette 1. What communications objectives are achieved with a display ad in these examples?

Display ads contribute to brand awareness to some degree depending on the creative elements and size, much like what occurs in other static presentations such as magazines or outdoor. With a shorter message and less ability to be creative in many aspects, the brand attitude effects are elusive. However, the display ads provide receivers of the message to carry on with the brand to its website or social media presence for further communication which can contribute attitudinally. The link within the ad may assist in purchase intention. Displays are unlikely to contribute category need substantially, but a creative message may make it work.

Digital and Social Media Perspective 17-1 1. Why was the “Snack Time” campaign so successful?

This example shows that a clear positioning and clever creative elevates a message no matter the media.

Additionally, this example demonstrates the opportunity of Internet media to provide a comprehensive digital ad plan. These two points reinforce importance of advertisers getting the right combination of message and media to achieve communication effect. The measurement points reinforce the importance of moving beyond exposure measures that are commonly over used in Internet media to the detriment of communication measures.

Digital and Social Media Perspective 17-2 1.

In what way do these apps achieve communication objectives for the brands?

Collectively, the examples show that all communication objectives can be obtained (e.g., Cirque), in addition to behavioural objectives (7-11). As well, the apps contribute to influencing consumers as they progress from one stage to another in their decision making as shown in the retail examples.

Answers to Review Questions 1. How has Internet media threatened other media? How has Internet media assisted other media?

The Internet may be one of the best things to ever happen to traditional media. Internet marketers very quickly learned that they needed traditional media to promote their sites, and that promoting on the Internet alone would not be sufficient. The result is that traditional media have received the rewards of the Internet companies’ expenditures, and are bringing in revenues at a very high rate. Recent events have demonstrated that for Internet companies to survive, they will need to adopt more traditional marketing methods, and employ even more traditional media.

Traditional media brands are finding ways to deliver content on the internet which has expanded their revenue base. In fact, news readership is stronger with two avenues for consumption. Its only serious decline is the loss of its lucrative classified to online versions. TV encourages interaction with its programming via social media and its revenue has steadily grown, as does radio to some degree. Outof-home has resurged with the GPS technology connecting to consumers’ smartphones.

2. What are the similarities and difference in planning for digital advertising vs. TV advertising?

Similarities include the overall structure of media strategy and media tactic decisions overlapping considerably in terms of scheduling, reach, frequency, target audience coverage, geographic coverage, and relative costs. Differences include the interactive characteristics of many messages and the fact Chapter 17 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 17-4

placement in different vehicles in terms of a content provider website vs. social media website.

Instructors are encouraged 3. Explain the advertising formats that advertisers use with Internet media. Discuss the advantages and disadvantages associated with each.

Instructors can refer to the above notes regarding the description of the ad formats. A framework for evaluating the ad formats should apply the exposure, processing, communication effect, and action model of the text. A good discussion could arise from such a point of view. Alternatively, instructors can apply the 8 media characteristics and 8 media usage characteristics 3. Explain the three ways in which a promotional planner can achieve positive marketing communication effects in social media.

Popular terminology is “owned” media, “paid” media, and “earned” media. All three of these existed historically, but their saliency heightens with a change in the environment. Owned media exists with a brand’s own Facebook page (or website from a non-social media view). Companies have always distributed its own media in different ways; notably collateral material like brochures which represented “owned” media. A brand can have its own presence in social media with its own Facebook page, Twitter feed, or YouTube channel. Presently, a reasonable use of these social media can avoid paying the “paid” media features. Of course, if a brand chose to do so, it could make it marketing communication message go through each of these social media vehicles and pay for the delivery of ads just like what is done broadcast and print. Finally, media publicity represented “earned” media originally, and now it is seen with social media activity like tweeting or retweeting, sending links of YouTube messages to others or communicating via many Facebook options. In essence we witness an electronic manifestation of wordof-mouth communication, a key feature of “earned” media for a century or more.

4. What are the unique characteristics of ads on mobile devices vs. desktop computer?

Mobile ads are much smaller and the display of them is quite different compared to dissemination of static and motion ads found in other media. The placement within content is strikingly unique. To see this in action, consider a simple 10 second video message shown on a big outdoor screen vs. a small phone screen. Compared to a desktop, the effects are less dramatic, however the sheer size of a desk top screen affects processing significantly. The communication effects of this smaller message delivery must be considered along the lines of awareness and brand attitude. Students may find that mobile ads are more aligned with purchase intention as consumers use their phone while shopping.

5. Describe the ways that marketers measure the effectiveness of their use of Internet media. How do these measures relate to more traditional measures?

Internet marketers have a number of exposure measures that include: •

Page impression—number of users exposed to a webpage

•

Visits—number of user sessions

•

Unique visitors—number of different visitors to a site in a specific time period

•

Ad Impressions—number users exposed to an ad

•

Clicks—number of users interactions with an ad

•

Click-through rate—percentage of ads exposed that users click

•

Average time per visit—length of times spent on webpage

Marketers also adapt other media measures for communication effects to assess awareness and attitudinal results. Behaviour is tracked with respect to repeat visits, frequency and recency.

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6. Discuss the advantages of Internet media. For which types of advertisers is Internet media best suited?

Why? The Internet offers some distinct advantages to the marketer. These include: •

Target audience selectivity

•

Involvement and processing time

•

Control for selective exposure

•

Creativity

•

Costs

Most companies may be able to find a way to use the Internet to operate to their advantage. They just need to know how to define what the objectives they are seeking will be in determining its role.

Answers to Applied Questions 1. Select a favourite Internet site for a brand and investigate how it achieves the objectives outlined in this chapter.

Students should have an enjoyable time applying the objectives outlined in the first section to their website selection. Of course, they may be looking at sites that are directed for transactions versus communication; however, instructors could still quiz them on how the website communicates the brand as part of completing the transactions. Instructors should make note of how well the student draws on all the characteristics of the web design that are consistent with the design elements looked at in Chapter 8. It may be tempting to delve into the technological elements, but instructors should keep the discussion on point with respect to communication.

2. Suggest a digital ad plan for a leading brand for any product category.

This also could potentially be a fun exercise for students to imagine what a digital ad plan would look like for a fashion product or smartphone perhaps. The plan should contain all the elements highlighted in the section including target, objectives, strategy and tactics so that students see the similarities and differences compared to a non-digital ad plan.

3. Visit a number of internet media vehicles and evaluate the effectiveness of the display ads in terms of the creativity, message, and ability to reach the intended target audience.

Of course students already looked at many different sites in the past; however in all likelihood they have not critically evaluated the ads. This exercise will allow students to apply the creative decisions of Chapter 7 and 8, as well as the segmentation variables in Chapter 3. In order to fully address these points, relevant ideas from Chapter 4 and 5 will have to be applied as well.

4. Critically evaluate mobile apps on your smart phone in terms of the brand achieving brand communication objectives.

Apps on a phone act as a constant visual reminder of a brand and supports brand awareness. Its existence offers significant control for exposure which may lead to greater frequency of message delivery. As these two points suggest, all the media evaluation criteria of Chapter 10 can be applied to this delivery of brands messages. Instructors can review an application of this idea to see if all criteria are relevant and to see whether it is a strength or a limitation.

5. What measures of marketing communication effectiveness are relevant for each of the four types of social media investigated in this chapter?

Students should be able to show that all aspects of measurement are relevant. Brands would want to know the numbers participating with the social media, the exposure and processing levels, and also try Chapter 17 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 17-6

to figure out if there is any attitudinal influence. Behaviour could be especially interesting to talk about what to measure with so many different activities that are possible with each of the different social media.

6. Select a product of interest and explain how each of the four types of social media described in this chapter can be integrated effectively with broadcast, print and out-of-home media.

TV and radio ads clearly suggest receivers to visit their Facebook page for varying reasons (e.g., information, promotion) and to find the brand’s YouTube channel for example. This covers off two of the four social media classes. It is unclear whether brands direct receivers to the other two, but the option certainly exists if there is a compelling communication objective. Print media commonly show the social media icons and given the reading format of this media, it may be more likely that brands could direct its target audience to a blog or a cause that is using a wiki for example for increased brand communication. Directing receivers to social media from out-of-home media does not appear as likely, perhaps due to its transient nature. However, this appears to be moving in the right direction with the use of mobile technology (e.g., QR codes) and we can expect more signage to be directing receivers to appropriate social media vehicles while consumers are in the process of shopping.

Additional Discussion Question (Not In Text) A. Discuss the objectives marketers may be seeking in their use of the Internet.

There are many communication objectives for using Internet media: •

Develop awareness—establishment of a website immediately provides the potential of worldwide exposure. However, it does not guarantee it. By establishing a web presence, companies with limited budgets may now be discovered by potential customers, and may establish a website for just this purpose.

•

Disseminate information—perhaps one of the most effective uses of the Internet is that of providing information. No other medium can provide more information, at a faster pace and for less cost than the Internet

•

Build a brand image—websites can also assist a company in providing the market an image or to communicate their positioning

•

Facilitate interaction—all aspects of Internet media facilitate interaction (e.g., reciprocal, responsive, speedy, non-verbal information, page 493 of text).

Depending on the nature of the company, each may be more useful. For example, for a small company with a limited budget, the ability to gain awareness may be the most valuable objective. For a large company, with an extensive advertising budget, the ability to provide information may be most important. At any given time, these objectives may also change.

B. Review the limitations of Internet media and assess whether these are as weak as the limitations of other media.

Target audience coverage is problematic with Internet media. The placement of one ad on one vehicle is quite limited compared to what may occur with TV for example where a placement of an ad may reach 2% to 4% or upwards of 8% to 10%. A placement of a print ad may be exposed to a few hundred thousand in the case of Canadian Living, but only a few tens of thousands with an online banner ad.

Carrying this line of reasoning beyond one placement, reach attained by using multiple vehicles is potentially very strong with TV and other media, but a banner ad with Internet media would require even more ad placements to achieve high levels of reach (e.g., 30% or 40%).

Banner ads on websites produce significant clutter with while competing for attention, and this may be similar to newspaper ads, however TV ad placements do not have any other ad playing at one time and Chapter 17 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 17-7

many magazine ads are full page without any competing messages. Refer to Figure 11-24 to illustrate the level for receivers’ attention occurs with each media.

Much data shows that consumers do not view Internet media ads favourably, so from a media image standpoint, ads in Internet media have a long way to go. All of this is quite curious with the growth of Facebook ads and the placement in other Internet media vehicles.

IMC Exercise Have students visit websites in both the consumer and business-to-business sectors. Have them evaluate the sites based on the communication objectives discussed in the text, critiquing the site and offering suggestions for improvement.

IMC Comprehensive Project Develop the Internet strategy. Describe what the website will look like (or design one), and which advertising and promotions forms will be employed. Will the site include public relations sections? How will it contribute to social media usage with respect to the brand?

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CHAPTER 18 SOCIAL MEDIA Chapter Overview The chapter starts off with an overview of Internet communication by looking at the users, web-site communication along with its objectives, and website strategy. Advertising via Internet media is examined next by covering the different advertising formats; display ads, paid search ads, classified and directory ads, video & audio ads, and mobile ads, which are related to the idea of Internet media vehicles. Subsequently, the next section investigates social media along the lines of social networking, content communities, blogs, and collaborative projects, which related to the notion of social media incentives. Methods of measuring effectiveness are then summarized and strengths and limitations of the Internet follow. We conclude with a brief summary of the strategic use of Internet media.

Learning Objectives 1. Identify social media communication.

2. Review social networking.

3. Illustrate content communities.

4. Describe blogs and collaborative projects.

5. Investigate social media influencer.

6. Apply the use of social media within an IMC program.

Chapter and Lecture Outline I.

SOCIAL MEDIA

A.

Social Media Classes—Social media is an Internet-based application that allows the creation and exchange of user-generated content resulting in social media classes; collaborative projects (e.g., wiki, social bookmarking), blogs, content communities (e.g., YouTube), social networking sites (e.g., Facebook), virtual worlds. This chapter summarizes the first four for advertising and marketing communication purposes. It groups two into information-based social media (news, blogs, projects) and identifies the emerging idea of lifestyle social media (e.g., Trip Advisor). As a part of the interest in social media for advertisers, researchers identified the concept of social media attachment that instructors may wish to review in detail to see why advertisers may gravitate to certain social media classes and vehicles. While there is no doubt that certain social media vehicles dominate (also true with established media), much of social media is fragmented and that target audience coverage is minimal when placing ads, thus necessitating careful planning and application of existing media knowledge.

B.

Social Media Engagement—Advertisers are interested in consumers’ online brand-related activities (COBRAs) along the lines of consuming, contributing and creating since they indicate varying degrees of social media engagement. Instructors should highlight the distinction that it is not some abstract idea of engagement, but specific brand related activities that occur in social media only. For example, using the term engagement for consumers attend a marketing event is not the same since the experience does not involve social media. However, we would say there is social media engagement if consumers took selfies showing brand imagery why at the event.

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C.

eWOM—social media engagement also manifests as electronic word-of-mouth (eWOM). A number of interesting findings from the literature are shown and instructors may wish to inllustrate the success of positive eWOM, a preferred term over online WOM.

D.

Social Media Usage—A few figures show the pervasiveness of social media use. These data are important when planning as the numbers indicate the degree of potential reach across vehicles and across ages, and potential frequency by the amount of usage.

II.

SOCIAL NETWORKING

A.

Facebook—owned, paid and earned media exposure is summarized for Facebook. Depending upon the objectives, a promotional planner can (i) own a brand page/account to deliver message, (ii) pay to have a message placed within the media, or (iii) foster digital word-of-mouth communication of the brand. Statistics summarize the degree of social media engagement.

B.

Twitter— owned, paid and earned media exposure is summarized for Twitter. Depending upon the objectives, a promotional planner can (i) own a brand page/account to deliver message, (ii) pay to have a message placed within the media, or (iii) foster digital word-of-mouth communication of the brand. Statistics summarize the degree of social media engagement.

III.

CONTENT COMMUNITIES

B.

YouTube—represents the main example of a media vehicle placing ads online alongside video content. The section presents Canadian data and shows the paid, owned and earned characteristics of YouTube for advertisers.

B.

Instagram— represents the main example of a media vehicle placing ads online alongside photo content. The section presents Canadian data and shows the paid, owned and earned characteristics of Instagram for advertisers.

IV.

BLOGS & COLLABORATIVE PROJECTS

A.

Blogs—are usually the personal writings of an individual, although company and brand versions exist and represent the “owned” media in this media class. Blogs often reflect the “earned” media of brands as individuals will post their experiences while using goods and services. Blogs are also an avenue for “paid” media as bloggers will accept ads to support their costs. Blogger owned by Google is one option for bloggers to accept ads and for brands to place ads.

B.

Collaborative Projects—illustrates the ultimate in social media since consumers are contributing and perhaps to some degree creating as a COBRA. This characteristic makes the distinction (e.g., paid, earned, owned) murky as it is difficult to know who is posting what material, and whether they were paid or not. Moreover, the blurring of content and advertising is become enriched with the movement of content from one domain to another like Pinterest. Instructors can raise an interesting discussion on this point with material from Chapter 19 where AS shows that the identity of an advertiser should be known.

V.

SOCIAL MEDIA INFLUENCE The section identifies decisions and issue surrounding the use of influencers in social media. Of note are the guidelines they are expected to adhere based on recommendations from Ad Standards in Canada, which are aligned with similar points from the FTC in the US. Instructors are advised to put this into historical context as the notion of paid influence in marketing is something that existed in marketing long before Internet media and social media.

VI.

IMC PLANNING: STRATEGIC USE OF SOCIAL MEDIA The section concludes with the point that social media engagement is a manifestation of the feedback stage of the communication model shown in Figure 4-1, and that social media planning Chapter 17 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 17-2

is so important such that is requires a detailed plan like any other media. The section identifies six planning issues pertaining to the development of a social media plan. Instructors many want to relate some or all of these points as they review the material of each social media.

Teaching Suggestions Social media usage statistics and social media engagement are two important points to review initially to see how social media is involved with consumers’ lives and to see how much feedback occurs to advertisers through social media. Depending on class interest and the instructors understanding, all or some of the social media domains can be investigated. We suggest that students will likely want to spend considerable time discussing influencers, and a comparison of influence in other aspect of marketing is a good comparison.

Vignette 1. Do these trends suggest a future decline in Facebook paid advertising?

This story and question open the door for a discussion on the merits of Facebook paid advertising.

Information in the story suggests that Facebook advertising may have hit its peak and will face a period of flat growth. At some point, equilibrium across media expenditures may emerge due to many factors including the privacy issues, switching to other social media, and switching to other media after advertisers experimented with social media for decade or so.

Digital and Social Media Perspective 17-1 1. Why are people motivated to help brands with additional exposure by placing their photos within Instagram?

Social media engagement may go down in marketing history as a significant curiosity. Why would consumers willingly spend time and resources to assist a brand in its marketing? Instructors can open the door for such a discussion with students and remind them of academic research suggesting that social media engagement such as this reflects some aspect of negative personality traits. Alternatively, the fact that advertisers encourage social media engagement suggests that it may only be a low involvement entertainment response suggesting something not necessarily positive for a brand as these have non-brand associations.

Digital and Social Media Perspective 17-2 1.

What other goods or services could creatively use AR in social media?

Students might find the examples entertaining and instructors can focus on these in class to start a conversation on other applications of AR in different social media for many brands. This could potentially be a fun group exercise for 20 minutes and then have the students verbally present their ideas to the class.

Answers to Review Questions 1. What is social media engagement? How does social media engagement vary within different social media classes?

Social media engagement reflects consumer brand-related activities along the lines of consuming, contributing and creating. Consuming is a very weak form of social media engagement, and some may discount this as significant compared to contributing and creating which signal actual production of content on the part of the consumer. None the less, this book uses the word engagement with social media only due to the interactive characteristics. Social media engagement is similar to a degree across social media classes, however some are more video oriented while others are more picture oriented, and some in fact are more text content oriented. Given this divergence it suggests that different Chapter 17 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 17-3

objectives can be attained depending on the nature of social media engagement a brand tries to encourage with its brand communication.

2. Identify how Facebook offers paid, owned, and earned media for advertisers.

This review questions gets students to realize that a Facebook ad campaign could have seven combinations: each independent, three pairs, and all three. This suggests that a social media plan within Facebook requires a clear direction for target, objectives and message delivery. Paid is similar to other media where Facebook acts as a media company. Owned acts somewhat like a website with a brand page. Earned occurs with various social media engagement that occurs from consumers.

3. Identify how YouTube offers paid, owned, and earned media for advertisers.

The answer for this question is similar as question 2. Instructors can show the similarities and differences between the two in terms of the presentation to make a connection on the ability for brands to achieve communication objectives.

4. In what way is Snapchat a good social media vehicle for earned ad messages?

Instructors would likely prefer to get students to verbally discuss this in class since there is a significant skew towards young people using Snapchat, and the likelihood of instructors knowing examples etc. is probably pretty low.

5. Explain why social media influencers are effective.

Social media influencers act as a message source for brands, and in many cases, the key characteristic is source attractiveness. But instructors can discuss those situations where it may be source credibility.

Instructors should bring into the discussion as to whether the disclosure or non-disclosure of material connection affects their opinion of the spokesperson. Also, a discussion can ensue on whether the message are perceived as ads or something completely new.

6. How does social media fit within an IMC plan?

Social media is used for brand building with significant imagery for transformational motives such as fashion, travel, and home décor. It is also used for situations of direct marketing to encourage purchase intentions. As these two points indicate, social media fits within an IMC plan to achieve objectives, much like any other tool used. This is an important point for instructors to raise which shows how new media still have the fundamental of existing media.

Answers to Applied Questions 1. Select a favourite social media site for a brand and investigate how it achieves the communication objectives.

Students should have fun with this exercise and instructors need to be ready to comment on whether the students apply the objective correctly and thoroughly. As part of this application, instructors can expand the points by looking at processing and ensuing action.

2. Visit a number of Facebook brand pages and evaluate the effectiveness of the brand posts in terms of creativity, message, and ability to reach the intended target audience.

The point of this question is to see that the message and media interaction is significant in social media as we have seen in other media. One point that should emerge is the creative limitations of this, and most social media, due to the standardized format of presentation. In this sense, the ability to attract attention and facilitate processing may be argued to be less effective with so much similarity of presentation.

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3. Visit a number of Instagram brand pages and evaluate the effectiveness of the brand posts in terms of creativity. How do they compare to the equivalent in Facebook?

Questions two and three follow a similar idea of the message and media interaction, and this question involves a comparison of this point across two social media. Again, the degree of similarity of presentation of Instagram messages may influence processing, so instructors should delve into this point by comparing the two.

4. Read up about a favourite music artist on Wikipedia. Is it possible to view the content as earned media?

While the concept of Wikipedia conjures encyclopedia, the nature of people contributing raises the question as to who they are and what motivates them to write. In addition, this raises the point as to how their information is presented etc. to influence the attitude of a receiver of the message. Some aspects of Wikipedia appear quite factual, while other aspects might be construed as evaluative. Thus the message will influence in a certain direction much like any other message due to it content. Applying this user generated content along these lines suggests that the point of view taken on the Wikipedia page is consistent with posts people make in other social media, with a vetting mechanism, but it remains earned media exposure.

5. See the postings of many social media influencers and evaluate whether they are adhering to the guidelines set by Ad Standards.

Students can check out the hastags and message from influencers to see if there are any violations of Ad Standards guidelines. It would be instructive if instructors asked students to show examples of good and bad messaging along these lines. This question can be discussed with the other influence question.

6. Select a product of interest and explain how a particular social media vehicle could be effectively used for paid, owned, and earned exposure.

This question is designed to apply a specific context to an exact social media. For example, Honda for paid, owned and earned in Facebook, Gucci for paid, owned, earned in Instagram, Cineplex for paid, owned, and earned in Snapchat. The point is for students to see what the plan would look like for a media in a social media vehicle.

Additional Discussion Question (Not In Text) A. One of the most difficult objectives is creating a strong brand image. Discuss the factors that make brand building both difficult and possible in social media.

A strong brand image goes beyond just creating awareness. Strong brands convey a very distinct impression of the brand; when their names are mentioned, something immediately comes to mind.

Development of a strong brand requires that one have well developed, sustaining and differentiating attributes that distinguishes it from competitors. Brand image does not take place over night, and can change over time. Brand images can also be enduring which require appropriate messaging. The marketer must be committed to the brand, always being consistent in all marketing efforts on its behalf.

Social media is allowing marketers to build brand images in new ways with its combination of video and images along with social media engagement and brand’s responding to social media engagement from consumers. At this point, it is unclear whether this will be successful in for all brands across many product categories.

B. Explain the three ways in which a promotional planner can achieve positive marketing communication effects in social media.

Popular terminology is “owned” media, “paid” media, and “earned” media. All three of these existed historically, but their saliency heightens with a change in the environment. Owned media exists with a brand’s own Facebook page (or website from a non-social media view). Companies have always distributed its own media in different ways; notably collateral material like brochures which represented Chapter 17 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 17-5

“owned” media. A brand can have its own presence in social media with its own Facebook page, Twitter feed, or YouTube channel. Presently, a reasonable use of these social media can avoid paying the “paid” media features. Of course, if a brand chose to do so, it could make it marketing communication message go through each of these social media vehicles and pay for the delivery of ads just like what is done broadcast and print. Finally, media publicity represented “earned” media originally, and now it is seen with social media activity like tweeting or retweeting, sending links of YouTube messages to others or communicating via many Facebook options. In essence we witness an electronic manifestation of wordof-mouth communication, a key feature of “earned” media for a century or more.

IMC Exercise Have students visit social media websites and have them evaluate the sites based on the communication objectives discussed in the text, critiquing the site and offering suggestions for improvement.

IMC Comprehensive Project Develop the social media strategy by identifying the target audience and objectives which should be aligned with

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CHAPTER 19 REGULATORY, ETHICAL, SOCIAL, AND ECONOMIC ISSUES FOR IMC Chapter Overview This final chapter evaluates the regulatory, social, ethical and economic issues of advertising. Advertising is a powerful and influential force in our society, and this text would not be complete without considering the perspectives and criticisms regarding its effects. The first section of the chapter focuses on the regulation of advertising in Canada. This is followed by summarizing the criticisms of advertising from ethical and societal perspectives. Attention is then given to appraising the effects of advertising on the economy including its effect on consumer choice, competition, and product costs and prices. Perspectives regarding the economic effects of advertising are summarized by considering two schools of thought: the Advertising = Market Power and Advertising = Information perspectives.

Learning Objectives 1. Describe the advertising regulation system in Canada.

2. Evaluate the ethical perspectives of advertising.

3. Explain the social effects of advertising.

4. Examine the economic role of advertising and its effects on consumer choice, competition, and product costs and prices.

Chapter and Lecture Outline I.

INTRODUCTION

Because of its high visibility, pervasiveness, and persuasiveness, advertising has been the subject of controversy and criticism. Various groups and scholars have attacked advertising for reasons including its excessiveness, the way it influences society, advertising methods, its exploitation of consumers, and its effect on our economic system. The role of advertising in society is a controversial one and a discussion of the topic would not be complete without considering the regulations affecting advertising and the criticisms regarding its ethical, social and economic effects as well as the responses to these charges.

Advertising is subject to considerable criticism because it is judged by groups with different norms, values, and ethical standards. Arguments on both sides of controversial ethical, social, and economic issues will be presented in this chapter to allow students to draw their own conclusions on the issues.

II.

ADVERTISING REGULATION IN CANADA

Regulation occurs through government and self-regulation.

A.

Canadian Radio—Television and Telecommunications Commission (CRTC) – It regulates broadcast media organizations and is guided by the Broadcasting Act.

B.

Competition Act—contains guidelines for misleading advertising and is monitored by Industry Canada.

C.

Regulations on Advertising to Children—In this province it is illegal to direct commercial messages to persons younger than 13 years of age.

D.

Ad Standards (AS)—the mandate of this industry body is to create and maintain community confidence in advertising. The AS’s activities encompass: Chapter 19 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 19-1

1. Canadian Code of Advertising Standards—the Code is used as the criteria to assess whether a complaint is legitimate 2. AS Interpretation Guidelines—these periodic bulletins provide advertisers with information on how AS sees trends or issues in advertising in terms of their decisions.

3. Gender Portrayal Guidelines—these attempt to ensure that women and men are portrayed appropriately in advertising 4. Complaint process—the AS’s Standards Division handles consumer complaints, special interest group complaints and trade disputes 5. Complaints report—each year the AS publishes a comprehensive complaint report 6. Complaints for debate—the most significant decisions of the AS are summarized for class debate.

7. Clearance process—the AS provides clearance services for advertisements for alcohol, cosmetics, non-prescription drugs and food. It also provides these services for ads directed to children outside Quebec.

III.

ETHICAL EFFECTS OF ADVERTISING

While laws and regulations determine what advertisers can and cannot do, not every issue is covered by a rule or guideline. In many situations, advertisers must make decisions regarding appropriate and responsible actions based on ethical considerations rather than what is legal or within industry guidelines. Ethics are moral principles or values that govern the actions and decisions or an individual or group. While a particular action or practice may be within the law, this does not necessarily mean it is ethical. Ethical issues must be considered in making integrated marketing communication decisions as a lapse in ethical standards or judgment can result in actions that are highly visible and can be damaging to a company’s reputation and image.

Much of the controversy over advertising stems from the ways it is used by companies as a selling tool and because of the impact advertising has on society’s tastes, values, and lifestyles. There are a number of criticisms of specific techniques used by advertisers as well as charges against its impact on society in general.

A.

Advertising as Untruthful or Deceptive—one of the major attacks against advertising is that ads are misleading or untruthful and end up deceiving consumers. The issue of what constitutes deception is a very difficult one. However, a concern of critics is the extent to which advertisers are deliberately untruthful or misleading in their advertising. Most large companies are unlikely to risk their reputation and image or subject themselves to prosecution by regulatory groups by making overtly false or misleading advertising claims. Companies involved in outright fraud or deception are often smaller companies using high-pressured direct marketing tactics to push their products.

However, national advertisers will test the limits of industry and governmental rules and regulations and make claims that may give their brands an advantage in highly competitive markets.

Critics of advertising question whether consumers are receiving proper information to make an informed choice since advertisers usually only present information that is favourable to their brands. They feel that advertising should be primarily informative in nature and not be permitted to use puffery or embellished messages. Others argue that advertisers should have the right to present the most favorable case for their products and services. They note that most consumers can protect themselves from being persuaded against their will and that regulatory bodies and mechanisms are sufficient to keep advertisers from deceiving or misleading consumers.

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B.

Advertising as Offensive or in Bad Taste—another common criticism of advertising, particularly by consumers, is that ads of certain products and particular types of appeal are offensive, tasteless, irritating, boring obnoxious, and so on.

1. Product Type —consumers can be offended or irritated by advertising in a number of ways.

Some are offended that a product or service is even advertised at all (such as contraceptives or personal hygiene products). A research study of prime time commercials found a strong product class effect with respect to the type of ads consumers perceived as distasteful or irritating..

2. Fear appeals—often the inappropriate use of fear appeals receives criticism. This arises from the exploitation of human anxieties of our shortcomings physically or intellectually. Social marketing campaigns have used extreme scenes depicting the consequences of undesired behaviour such as drinking and driving.

3. Sexual appeals—the type of advertising appeals that have received the most criticism for being offensive or in poor taste are those using sexual appeals and/or nudity. These techniques are often used, as ways of gaining consumers’ attention and in some cases may not even be appropriate to the product being advertised. Even if the sexual appeal is appropriate for the product, people may still be offended. Advertisers who use nudity and sexual suggestiveness argue that their ads are not offensive and are consistent with contemporary values and lifestyles that are more accepting of this type of advertising. Another common criticism of sexual appeals is that they can be demeaning to women and men by depicting them as sex objects.

4. Shock appeals—while not used extensively, certain advertisers use shock to draw attention to their ads. Moreover, the surrounding publicity with such a strategy often ensures even greater exposure. Despite the criticism surrounding this type of advertising, its reoccurrence suggest that in the face of criticism, some advertisers perceive stronger benefits. This could be a source for energetic debate among students who usually are interested in the more unusual aspects of advertising.

C.

Advertising and Children—one of the most controversial topics advertisers must deal with is the issue of advertising to children. Concern has also been expressed over marketers’ use of other promotional vehicles and techniques such as radio ads, point-of-purchase displays, premium offers, and the use of commercial characters as the basis for television shows. Arguments can be presented on both sides of this controversial issue. The Broadcast Code for Advertising to Children recognizes the debate to find a balance between these two points of view. First, arguments against advertising to children include: •

Children, especially young ones, are vulnerable to advertising because they lack the necessary experience and knowledge to understand and evaluate the purpose of persuasive advertising appeals.

•

Children cannot differentiate between commercials and television programs, do not perceive the selling intent of commercials, and cannot distinguish between fantasy and reality.

Arguments in favor of advertising to children include: •

Advertising is a part of life and children must learn to deal with it as part of the consumer socialization process of acquiring the skills needed to function in the marketplace.

•

Greater market knowledge of the marketplace gives teens a basis on which to evaluate ads and makes them more likely to recognize the persuasion techniques used by advertisers.

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IV.

SOCIAL EFFECT OF ADVERTSISING

Concern is often expressed over the impact of advertising on society, particularly with respect to its influence on values and lifestyles. Opinions regarding the value of advertising as an important social influence agent are often very negative and it is criticized for a number of reasons.

A.

Advertising Encourages Materialism—critics claim that advertising has an adverse effect on consumer values by encouraging materialism, which refers to a preoccupation with material things rather than intellectual or spiritual concerns. Advertising can create materialism such as: •

creating needs rather than showing how a product or service fulfills them

•

surrounding consumers with the images of the good life and suggesting that acquisition of material possessions leads to contentment and happiness and adds to the joy of living

•

suggesting that material possessions are symbols of status, success, and accomplishment and/or will lead to greater social acceptance, popularity, sexual appeal, and so on.

The criticism of advertising on the basis of creating materialism assumes that materialism is undesirable and done at the expense of non-materialistic goals. Even if one assumes that materialism is undesirable, there is still the issue of whether advertising is responsible for creating and encouraging these values. This brings up the classic argument as to whether advertising is a major force contributing to society’s values, such as materialism, or whether advertising merely reflects or mirrors the values of society and does not mold or shape them.

B.

Advertising and Persuasion—another common criticism of advertising is that it has the power to manipulate consumers and make them buy things they do not need. Persuasive advertising, which plays on consumers’ emotions, anxieties, and social and psychological needs and desires, is viewed as undesirable. This type of advertising is seen as going beyond basic needs or necessities in appeals to sell products and services. Only informational advertising, which reports factual, functional information such as price performance, and other objective criteria, is viewed as acceptable and desirable.

Defenders of advertising offer a number of rebuttals to these criticisms. They argue that a substantial amount of advertising is essentially informational in nature and that it is difficult to separate desirable, informational advertising from undesirable, persuasive advertising. They also note that most lower-level needs in our society are satisfied and it is natural for consumers to be concerned with higher order needs, and for advertising to appeal to these wants and desires. They also note that advertising cannot make consumers do things against their will and they can defend themselves against advertising. Consumers do have a choice and can ignore ads for products and services that they do not really need.

C.

Advertising and stereotyping—advertising is often accused of creating and perpetuating stereotypes thorough its portrayal of certain groups including women and visible minorities.

1. Women—advertising has received a great deal of criticism for its stereotyping of women.

Critics charge that advertising generally depicts women as being preoccupied with beauty, household duties, and/or motherhood or shows them as decorative objects or sexually provocative figures. Critics also argue that advertisers have failed to acknowledge the changing role of women in society. While sexism and stereotyping of women still exist, advertising’s portrayal of women is improving as ads recognize the changing role of women in our society and the importance of portraying them realistically.

2. Visible minorities—recent Canadian trends and commentaries by practitioners suggest that the portrayal of minorities – particularly Chinese, South Asians and Blacks can be improved in Canadian advertising even though there has been an improvement in the recent past.

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D.

Advertising and the media—since advertising plays such an important role in financing the media has led to concern on the part of many that advertisers can influence or even control the media.

1. Arguments supporting advertiser control of the media: •

The media’s dependence on advertising revenue makes them susceptible to influence such as exertion of control over editorial content, biasing editorial opinions, limiting coverage of controversial topics or stories, and influencing the program content of television.

•

Newspapers and magazines receive a substantial percent of their total revenue from advertising, whereas commercial television and radio derive nearly all of their income from advertising.

Thus, the media may be reluctant to carry stories detrimental to companies who purchase large amounts of advertising time or space.

•

There have been situations where advertisers have brought pressure to the media and influenced content or programming decisions. Some of these situations have been in response to pressure or the threat of boycotts from consumer groups opposed to program content.

2. Arguments against advertiser control: •

It is in the best self-interest of the media that advertisers not influence them too much. To retain public confidence, they must report the news fairly and accurately and not be perceived as biased or attempting to avoid controversial issues. Media executives point to the vast amount of topics they cover and the investigative reporting they do as evidence of their objectivity.

•

It can be argued that advertisers need the media more than the media need any individual advertiser, particularly when the medium reaches a large audience or does a good job of reaching a specific market segment.

The Canadian media are basically supported by advertising and allow consumers to enjoy them for a fraction of what it would cost without advertising. Although not perfect, a system of advertisingsupported media provides us with the best option for receiving information and entertainment and is probably more desirable than the alternatives of paying higher subscription costs, pay-per-view, or having government-supported media.

E.

Advertising and social benefit—negative opinions regarding advertising have been around just as long as the field itself, and it is very unlikely that they will ever disappear. It is important that the advertising industry remains cognizant of, and continually addresses the issues and concerns over, the effects of advertising on society. Advertising is a very powerful institution, but it will only remain so as long as consumers have faith and trust in the ads they see and hear every day.

It is important to note that advertising and other integrated marketing communication tools, such as direct marketing and public relations, are also used to promote worthy causes and to deal with problems facing society such as drinking and driving, drug abuse, and are used to raise funds for a variety of humanitarian efforts.

V.

ECONOMIC EFFECTS OF ADVERTISING

Considerable attention has been given to examining the economic impact of advertising. Advertising plays an important role in a free-market system such as that found in Canada and other countries by making consumers aware of products and services and providing them with information that can be used to make purchase decisions. However, advertising’s economic role goes beyond this basic function of information provision, as it is a very powerful force that can affect the functioning of an entire economic system. It is viewed as a positive force that encourages consumption and fosters economic growth. On the other hand, critics of advertising view it as having detrimental economic effects by not only failing to perform its basic function of information provision adequately, but also adding to the costs of products and services and Chapter 19 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 19-5

discouraging competition. A number of major issues regarding the economic effects of advertising are considered.

A.

Effects on Consumer Choice—some critics argue that advertising has a negative effect on consumer choice as large advertisers use their power to limit our options to a few well-advertised brands.

Economists argue that advertising is used by large national advertisers to achieve differentiation and brand loyalty, usually at the expense of smaller brands. These large companies often end up charging a higher price and are able to achieve a more dominant position in the market than smaller companies that cannot compete against their large advertising budgets. When this occurs, advertising restricts choices and becomes a substitute for competition based on price or product quality.

Defenders of advertising argue that it does not create brand monopolies and reduce the opportunities for new brand or product introduction. The opportunity to advertise gives companies the incentive to develop new brands and improve existing ones. Advertising is instrumental in helping companies inform consumers about their new products.

B.

Effects on Competition—one of the most common criticisms economists have with advertising concerns its effect on competition. They argue that large firms with huge advertising budgets create a barrier to entry, which makes it difficult for other firms to enter the market. This in turn leads to less competition and higher prices. Large advertisers enjoy certain competitive advantages such as economies of scale in advertising, particularly with respect to factors such as media costs.

While advertising may have an anticompetitive effect on a market, there is no clear evidence that advertising alone reduces competition, creates barriers to entry and thus increases market concentration. Defenders of advertising note that it is unrealistic to attribute a firm’s market dominance solely to advertising, as there are a number of other factors to consider such as price, product quality, distribution effectiveness, production efficiencies, and competitive strategies.

While market entry against large established competitors is difficult, companies with a quality product offered at a reasonable price find that advertising actually facilitates their market entry by make it possible to communicate with consumers.

C.

Effects on Product Costs and Prices—A major area of debate among economists, advertisers, consumer advocates and policymakers concerns the effects of advertising on product costs and prices. Critics offer several reasons why advertising results in higher prices: •

The large sums of money spent on advertising and promotion are an expense that is passed on to consumers in the form of higher prices

•

Advertising increases product differentiation and adds to the perceived value of the product in the mind of the consumer, which allows advertised brands to command premium prices

•

There are often large differences in prices between national brands and private label brands that are physically and functionally similar, which is evidence of the added value created by advertising. Consumers pay higher prices for this added value.

Proponents of advertising offer several counter-arguments to the claim that advertising increases prices: •

Price insensitivity and brand loyalty can be created by a number of non-advertising factors such as product quality, packaging, favorable usage experience and market position

•

Advertising can actually result in lower costs by helping firms achieve economies of scale in product and distribution and helping stimulate demand among mass markets

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•

D.

Advertising can make a market more competitive, which often leads to greater price competition. Several studies have found lower consumer prices in markets permitting advertising for a product versus those that did not.

Summarizing Economic Effects—Economists’ perspectives regarding the effects of advertising can be divided into two principal models or schools of thought, each of which makes different assumptions regarding the influence of advertising on the economy: 1. Advertising Equals Market Power—this model reflects traditional economic thinking and views advertising as a way of changing consumers’ tastes, lowering their sensitivity to price, and building brand loyalty among buyers of advertised brands. This results in higher profits and market power for the large advertiser, reduces competition, and leads to higher prices and fewer choices for consumers. Proponents of this viewpoint are generally negative in their assumptions regarding the economic impact of advertising.

2. Advertising Equals Information—this model takes a more positive viewpoint of advertising’s economic effects, as it views advertising as providing consumers with useful information, increasing their price sensitivity, which moves them toward lower-priced products, and increasing competition in the market. Advertising is viewed as a means of communicating with consumers and telling them about a product and its major features and attributes. More informed consumers put pressures on firms to lower prices and improve quality. Proponents of this model assume that the economic effects of advertising are favorable and view it as contributing to efficient and competitive markets.

These two perspectives take very divergent views regarding the economic impact of advertising as shown in Figure 18-6. It is unlikely that the debate over the economic effects of advertising will be resolved soon. Economists will continue to take a negative view of advertising and its effects on the functioning of the economy, while advertisers will continue to view it as an efficient way for companies to communicate with their customers and an essential component of our economic system.

Teaching Suggestion In this final chapter we evaluate advertising from a societal, ethical and economic perspective. Advertising is a powerful institution in Canada and has been the target of considerable criticism regarding its social and economic impact. Much of the criticism of advertising concerns the specific techniques and methods used by advertisers, as well as advertising’s effect on societal values, tastes, lifestyles and behaviour. We examine these criticisms of advertising along with the responses of advertisers to these attacks. It is important to recognize that there are usually two sides to each of these issues and we try to recognize the arguments of the critics as well as of the advertising industry. For example, one of the classic debates over the social impact of advertising concerns the issue of whether advertising is responsible for creating undesirable consumer values, such as materialism, or whether advertising merely reflects or mirrors the values of society rather than molding or shaping them. Arguments can be made on both sides and it makes an interesting topic for student discussion.

A very good exchange of arguments regarding this issue can be found in articles by Richard W. Pollay, “The Distorted Mirror: Reflections on the Unintended Consequences of Advertising,” Journal of Marketing, April 1986 and Morris B. Holbrook, “Mirror, Mirror on the Wall, What’s Unfair in the Reflections on Advertising,” Journal of Marketing, July 1987 and a rejoinder by Pollay, “On the Value of Reflections in ‘The Distorted Mirror,” which also appeared in the July 1987 issue of JM. Stephen Fox’s book, The Mirror Makers: A History of American Advertising and Its Creators (New York: Morrow 1984) also provides an excellent discussion of arguments concerning the impact of advertising on society.

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Vignette 1. What are the strengths and potential limitations of these messages?

These examples open the door for a discussion regarding how each of these approaches of marketing communication provided benefit to those in need. As students put for a case for each example, it should be clear that there is no real winner or loser, but merely an opportunity to understand the situation and see how the solution proved to be an effective means of communicating. Instructors can follow up with questions on how to make the marketing communication more effective, or ask what further marketing communication should occur in a second wave of the messages. Essentially, all aspects of marketing communication planning can be evaluated within these examples to reinforce the point that all the model is applicable in all situations.

Ethical Perspective 19-1 1. What position do you take on American Apparel’s new marketing communication in light of its history?

Students will likely unanimously vote for a yes regarding the telecommunications firms receiving a fine. As for the other cases, there is less use and therefore less chance that feelings will be so strong.

Presumably, even without much experience, most students can see the logic of the decisions of the other businesses. Instructors can look for more recent cases in the news or on the Competition Bureau’s website. The main teaching point of this vignette is to illustrate that there is strong government action for significant violation of laws that go beyond the AS’s scope. AS takes care of the relatively simple cases, and a handful of controversial ones, however, as seen by these examples, the Competition Bureau steps in when there is significant dollars involved, and where there is potential for future dollars lost by consumers.

Ethical Perspective 19-2 1. Can you recall other examples of advertising providing social benefit?

Young students are likely to still recall social marketing ads directed to them as teens regarding the ill effects of consuming alcohol, among other items, and should be able to offer an opinion. The research cited does raise the issue of causality direction. For example, are heavier drinkers more like to pay attention to ads. Instructors with a stronger research methods orientation can pursue this line of questioning. The vignette raises the question as to whether alcohol advertising encourages drinking or nor and where anti-drinking message curbs it use. Perhaps the slopes of the data analysis will show difference on this matter. In any case, instructors can bring about an application of all course material to consider whether alcohol advertising can turn non-user into users, or light users into heavy users.

Answers to Review Questions 1. Explain why you agree or disagree with the rulings of the rulings of the AS presented in this chapter regarding the Ford Focus and Kia automobile ads.

The answers to this question are subjective. Arguments for or against should be based on students’ interpretation of Clause 14 of the Code and principles of the Guideline. Instructors might want to contrast these cases with the others listed, or possibly focus on contrasting these two cases with a few others that have had many complaints. The search function on the AS website allows for instructors to call up different examples from the past ten years or so. The intention of this question is to open the door for students to understand the content of the code.

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2. Evaluate the arguments for and against advertising to children. Do you feel restrictions are needed for advertising and other forms of promotion targeted to children?

There are numerous arguments that are offered by those individuals or groups opposed to advertising to children. They argue that children, especially young ones, are vulnerable to advertising because they lack the necessary experience and knowledge to understand and evaluate critically the purpose of persuasive advertising appeals. They also argue that preschool children cannot differentiate between commercials and television programs and do not perceive the persuasive, selling intent of commercials, and cannot distinguish between reality and fantasy. It has also been argued that advertising directed toward children creates materialism, stifles creativity, creates conflict between the parent and child, and hinders the development of moral and ethical values. In addition to advertising, marketers use other forms of promotion to target children such as premium offers and entertaining web sites on the Internet.

Self-regulatory groups as well as government agencies have passed guidelines and legislation to ensure that control the use of these promotional tools in marketing toward children.

Numerous arguments can be offered in favor of advertising to children. It can be argued that advertising is a part of life and children must learn to deal with it as part of the consumer socialization process.

Advertising serves as an information source and teaches children the consumption skills necessary to function in the marketplace. It is also argued that it is the responsibility of the parents to help children interpret advertising, to monitor the shows their children watch and ultimately to decide whether or not to purchase a particular product for their children.

3. Discuss how attitudes toward the use of sex in advertising differ between men and women. Discuss the implications of these attitudinal differences for marketers who are developing ads for each gender.

The results of an online survey of 200 men and 200 women concerning general opinions about sex in advertising revealed that it is a polarizing issue. While almost half of men indicated that they like sexual ads, very few women felt this way. Nearly two-thirds of the men indicated that sexual ads have high stopping power and get their attention while only a quarter of the women thought the same. Women were also more likely to feel that there is too much sex in advertising, that sexual ads promote a deterioration of moral and social values, and that ads with sexual themes are demeaning of the female models that appear in them. Only a small percentage of both men and women indicated that ads with sexual themes make them purchase a product. However, a higher percentage of men than women indicated that ads with sexual themes make them look at them and remember a brand.

The results of this survey indicate that men are much more receptive to the use of sexual appeals than are women. Men are much more likely than women to notice an ad that has a sexual theme and remember the brand. They also like sexual ads more and are less likely to view them as demeaning to women. These finding suggest that ads with sexual appeals may be an effective way to get the attention of males and to register a brand name. However, the findings do not suggest that a sexual themed ad will be effective in getting either sex to purchase a product. For women, the results suggest that sexual appeals may not be as effective as they are less likely to notice the ad, even less likely to remember the brand and purchase interventions are extremely low. Moreover, the results show that women do not like ads with sexual themes and find them demeaning to women. Of course it would be interesting to analyze these findings by age to determine if younger women were more open to sexual themed ads than older women.

4.

Describe the differences between the two major perspectives of the economic impact of advertising: “advertising equals market power” and “advertising equals information.”

The Advertising Equals Market Power perspective reflects traditional economic thinking and views advertising as a way of changing consumers’ tastes, lowering their sensitivity to price, and building brand loyalty among buyers of advertised brands. This results in higher profits and market power for large advertisers, reduces competition in the market, and leads to higher prices and fewer choice Chapter 19 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 19-9

alternatives for consumers. High prices and excessive profits give advertisers even more incentive to advertise their products and output is restricted compared with conditions of perfect competition.

Proponents of this model are generally negative in their perspective regarding the economic impact of advertising.

The Advertising Equals Information perspective views advertising as providing consumers with useful information, increasing their price sensitivity which moves them toward lower-priced products, and increasing competition in the market. Advertising is viewed as a means of communicating with consumers and telling them about a product and its major features and benefits. More informed and knowledgeable consumers results in pressure on companies to provide high quality products at lower prices, and efficient firms remain in the market, whereas inefficient firms leave as new entrants appear.

Proponents of this model assume that the economic effects of advertising are favorable and view it as contributing to more efficient and competitive markets.

Answers to Applied Questions 1. Why are the laws for advertising regulation not applied to sponsorship and some other IMC tools?

The crux of this question pertains to the fact that advertising is heavily regulated however other IMC tools are not under such scrutiny, yet have similar objectives (e.g., awareness, attitude) for communication and behavior (e.g., trial, repeat purchasing). For example, alcohol advertising is not permitted to have a role model for as a source of the message. However, alcohol companies are permitted to sponsor Hockey Canada even though Hockey Canada acts as an important role model in the life of children’s hockey. Hockey Canada certifies the coaches and administers all aspects of children’s hockey. Other examples are likely to be found. It would be incumbent upon the instructor to look at the regulations and see if there is a similar type of message delivered via other IMC tool that appears to skirt the regulations found in advertising. Instructors might draw on the experience of tobacco promotion where much of it is prohibited from advertising to sponsorship to point-of-purchase displays.

2. Find the most offensive ad possible and express why it is so offensive. Apply the AS code to determine which guideline it violates.

The Canadian author devotes a day to this material at the end of term with this question as the assignment given at the start of the term, with reminders throughout the course as ethical issues arise when discussing advertising. Often students have difficulty finding examples, a testament to the fact that much of advertising is perfectly acceptable and it is a very small percentage that truly offends people. The minimal number of complaints the AS actually receives is also an indicator. Even further, students who do find examples are hard pressed to find Canadian examples where something is exceptionally offensive. Instructors looking for an extreme case to discuss can follow the story of Fluid Hair Salon based in Edmonton. Its story is documented in the AS complaints report, and follow-up news stories presents an interesting example for interpretation.

3. Explain which position do you agree? “Advertising determines Canadian consumers’ tastes and values and is responsible for creating a materialistic society” or “Advertising is a reflection of society and mirrors it tastes and values” This question presents the dilemma of whether advertising is responsible for creating materialistic values in consumers or whether it mirrors the values of society rather than molding or shaping them.

Those agreeing with the first position argue that advertising encourages materialistic values by seeking to create needs rather than showing how a product fulfills them; surrounding consumers with images of the good life and suggesting that the acquisition of material possessions leads to contentment and happiness and adds to the joy of living; and suggesting that material possessions are symbols of status, and success and/or will lead to social acceptance, popularity, or sexual appeal.

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Those supporting the second position argue that consumers’ values are defined by the society in which they live and value systems are the result of extensive long-time socialization or acculturation. They argue that advertisers develop ads in response to prevailing values and are thus reflecting tastes and values rather than molding or shaping them.

4. Do you believe advertising power has ever restricted choice in buying products?

Some critics argue that advertising has a negative impact on consumer choice, as large advertisers use their power to limit consumers’ options to a few heavily advertised brands. They argue that advertising is used to achieve differentiation and brand loyalty, which occurs at the expense of smaller brands.

Defenders of advertising argue that it does not create brand monopolies and reduce opportunities for new companies and/or brands to enter the market. The opportunity to advertise gives companies the incentive to introduce new brands and improve existing ones. Advertising is viewed as playing a critical role in informing consumers about new products and making it possible for new companies to enter the market. Thus, it helps expand consumer choice rather than limiting it.

Arguments that advertising increases the costs of products and services include the fact that the large sums of money spent on advertising constitute a business expense that must be covered and thus is passed on to consumers in the form of higher prices. Advertising can also result in higher prices by increasing product differentiation and adding to the perceived value of the product in the mind of the consumer. Brands that have achieved high levels of differentiation or perceived value can command a premium price. Proponents of advertising argue that it can actually result in lower costs of products and services by helping firms achieve economies of scale in production, distribution and marketing by stimulating demand among mass markets. Advertising can also lead to lower prices by making a market more competitive, which usually leads to greater price competition. Studies of several industries have shown that advertising results in lower consumer prices.

Additional Discussion Questions (not in text) A. Discuss the role of ethics in advertising and promotion. How do ethical considerations differ from legal considerations?

While laws and regulations determine what advertisers can and cannot do, not every issue is covered by a rule or guideline. Ethics involve the use of moral principles and values in evaluating a decision or action. Ethical considerations are very important in advertising as the use of a particular type of ad or the targeting of a specific group may be legal but may not be ethical. Ethical issues must be considered in making advertising and promotion decisions as a lapse in ethical standards or judgment can result in actions that are highly visible and often very damaging to a company’s image or reputation.

Ethical considerations differ from legal considerations in that ethics involves individual or group moral principles or values and can be subjective while legal considerations are generally much more objective.

Legal considerations can be enforced through the regulatory process while ethical problems can only be remedied by voluntary actions of those who are responsible for the unethical actions.

B. A common criticism of advertising is that it stereotypes women. Discuss how advertising might stereotype men as well. Find an example of an ad that does this.

Advertising has received a tremendous amount of criticism for stereotyping women. Critics argue that advertising generally depicts women as homemakers or mothers and has failed to acknowledge the changing role of women in society. They also note that ads portray women as decorative objects or sexually provocative figures. While advertising is often criticized for its depiction of women, critics argue that men are often portrayed negatively as well. Some ads poke fun at men’s shortcomings while others use reverse sexism. Critics argue that men are often portrayed as insensitive, as chauvinists, as sexists and as narrow-minded. Several companies have been criticized for using ads that take slaps at men. For example a print ad for the clothing accessory Bodyslimmers used a headline that read, “While Chapter 19 – Advertising & Promotion, 7th Canadian Edition ©2020 McGraw-Hill Ltd. 19-11

you don’t necessarily dress for men, it doesn’t hurt, on occasion, to see one drool like the pathetic dog that he is.” Another example is a print ad for Liz Claiborne shoes that used the tagline, “Aren’t there enough heels in you life?” The American Floral Marketing Council was also criticized for using a negative image to portray men in its point-of-purchase ad campaign. A poster from the campaign featured a floral arrangement in front of some rocks, resting on nuts and bolts, with the tagline, “Romancing a stone? Send him flowers.” Students should be asked to find other examples of ads that might be portraying men in a negative manner.

C.

Advertisers complain that the regulatory bodies and TV networks scrutinize commercials more closely than the shows. Do you think that commercials should be held to higher standards than programs?

Why or why not?

Advertisers often complain about the double standard that exists for commercials versus TV programs, noting that even the most suggestive commercials are bland compared with the sex and violence that appears in television programs. They argue that the regulatory bodies and networks should be more willing to accept commercials that use techniques such as partial nudity or suggestiveness, given what appears in the programs. The networks argue that they have to scrutinize commercials more carefully because advertising encourages people to imitate behaviours, whereas programs are merely meant to entertain. Network executives also note the complaints of parents who are concerned about their children seeing certain ads, since they cannot always be there to change the channel or turn off the set when a suggestive or provocative ad comes on TV.

IMC Exercise Find several ads that you feel are examples of negative social consequences of advertising discussed in the text such as the following: •

Ads that are offensive or in poor taste because of the product or service they advertise, the type of appeal they or the manner of presentation used.

•

Ads that may have an adverse effect on consumer values by encouraging materialism.

•

Ads that encourage consumers to purchase a product that they really do not need.

•

Ads that stereotype women, men, an ethnic groups such as Chinese, South Asians and Blacks or some other group such as the elderly.

Be prepared to explain why you feel these ads are examples of negative advertising. How do you think the advertisers might justify the use of the ads you have chosen?

IMC Comprehensive Project As a final part of their IMC Comprehensive project, students should be asked to evaluate their advertising and promotional campaigns from a social and ethical perspective. The specific assignment for this chapter is as follows:

IMC Project Assignment for Chapter 19 By now you should have developed a completed integrated marketing communications plan for the product or service you chose to promote. The final part of your project requires that you evaluate your IMC plan from a social and ethical perspective. Do you feel you can defend your advertising and promotional plan from a social and ethical perspective? Are there any potential negative social consequences of your advertising and promotional plan? Could any particular group find your advertising offensive or in poor taste?

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Teaching Note Benetton Group: Evolution of Communication Strategy Case Overview This case examines the controversial “shock advertising” campaign that was used by Benetton, the Italian-based clothing manufacturer and retailer for nearly two decades. Thanks to its unusual communication strategy, the Benetton Group is one of the most visible specialty retailers in the world.

Benetton has used some very controversial images in its communication campaigns. Masterminded by Benetton’s creative director and photographer Oliviero Toscani, the shock ads generated both criticism and accolades throughout the world. However, in 2000 Toscani went too far when he created the controversial “We, on Death Row” campaign which featured ads showing piercing pictures of death row inmates along with their names and date they were to be executed. The criticism surrounding this campaign was so intense that Toscani was forced to resign. Under the new creative director James Mollison, Benetton began using more traditional product-based advertising. This case examines Benetton’s unique communication philosophy and the controversy generated by it. The case can be used as a basis for a lively discussion on the use of shock advertising as well as ethics in advertising.

Benetton has always been well known for its colorful and provocative advertisements. The company employs unusual, controversial advertising techniques and themes that use “shock value” and powerful images to grab viewers’ attention. Unlike most advertisements which center on a company’s product or image, Benetton’s advertising campaigns have focused on social and political issues such as racial integration, AIDS awareness, war, poverty, child labor, death, hunger, and pollution. Many of the these ads evoked controversy as critics have argued that the real goal of the shock ads has been to generate publicity for Benetton and the some have criticized the company for exploiting human suffering to sell its products. Following the controversy surrounding the “We, On Death Row” ads, Benetton realized that it had crossed even the boundaries of unconventional advertising. Various surveys suggested that some loyal customers had been put off by this campaign and some retailers refused to carry the company’s products.

This case can be used with Chapter 21 which deals with social, ethical and economic aspects of advertising. This chapter includes a discussion of ethical issues of advertising and promotion and notes how companies such as Calvin Klein, Abercrombie & Fitch, and Benetton have received a great deal of criticism for their use of “shock ads” containing controversial images. The case can also be used with either Chapters 8 or 9 which deal with creative strategy. Benetton has used the shock ads to position the ____________________________________________________________________________________ This teaching note was prepared by Senthil Ganesan.

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company as a cutting-edge, socially conscious marketer. Many students will be familiar with Benetton and its controversial ads as they are part of the company’s primary target market. Thus, the case should generate a lively discussion as to what Benetton’s was trying to accomplish with the ads, whether they had pushed the envelope too far with the death row campaign and whether the use of more conventional, product-focused advertising will be successful.

2014 UPDATE: As discussed in Chapter 21, Benetton has returned to the use of shock ads, again stirring controversy (see p. 737). An ad showing the Pope kissing a Muslim imam was pulled after the Vatican threatened a lawsuit.

Discussion Questions 1. What are the basic objectives of advertising? What are the advertising objectives of Benetton?

Advertising may be used to achieve a variety of objectives including building awareness of the brand and/or company, informing customers about the product/service or company, providing information and developing an image Additional objectives include creating favorable attitudes and preferences for a brand, persuading the target audience to switch brands, and encouraging them to try new products.

Advertising may also used to maintain top-of-mind awareness of a brand and/or company.

The objectives of Benetton’s advertising appear to differ from those discussed above. Benetton’s shock advertising did not focus on the company or its products, choosing instead to address socially relevant issues that might concern the global audience such as war, poverty, AIDS, discrimination and the death penalty. Benetton believed that its advertisements could project the company as a supporter of social causes and that its customers would highly value that stance. Of course many would argue that while Benetton’s goal was to use the ads to position itself as a socially conscious company, the ultimate objective was to use this image to help generate sales of its products.

2. Discuss the pros and cons of the shock advertising campaign that Benetton used for many years.

There are few companies in the world that enjoy the global brand recognition of Benetton. The unconventional shock advertisements used in this campaign evoked strong feelings among consumers and helped the company attract attention and generate publicity. One of Toscani’s quotes is appropriate here: “Most good ads are forgotten after six months, but who still remembers the Benetton ad with the priest kissing the nun? Ten years later and people remember! That’s immortality!” Benetton has always had an image as somewhat of a renegade in the advertising community because of the avant-garde approaches the company has used. However, the company is also known for being very socially concerned and trying

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to make consumers realize the realities of the world in which they live. Benetton’s goal with the shock advertising campaign was to raise public awareness of social issues and position the company as a cutting-edge, socially conscious marketer. However, one might argue that the ultimate goal of the campaign was to help the company sell more of its products. The controversy surrounding the various shock ads that Benetton used over the past two decades generated a tremendous amount of publicity and made many consumers aware of the company. Also, it is important to note that Benetton’s primary target market is teens and young adults who are likely to be more tolerant of the shock ads as they may identify with the issues and causes the company is raising in these ads. Thus, the campaign might have actually helped Benetton’s image and sales.

There are also a number of negative aspects to the Benetton shock ads. Many critics argued that Benetton was exploiting human suffering to sell its products and felt that the company used the ads to create controversy and generate publicity rather than to address social issues. One might question whether the type of publicity Benetton was getting from its shock ads was really beneficial to the company. The Benetton ads were controversial even in more liberal European countries, and advertising self-regulatory bodies in Britain, France, and Spain condemned some of the ads and urged magazines to reject them. As long as the advertisements were just unconventional in nature, Benetton’s image was enhanced and sales grew. However, when Toscani resorted to using “shock techniques” from 1991 onwards with the pictures of a priest and nun kissing, a baby with uncut umbilical cord, etc., it generated huge furor among religious and social groups, not to mention the advertising regulatory bodies in various countries. Toscani argued that the company’s intentions were misunderstood by the public. While many thought the kiss to be inappropriate and the uncut umbilical cord to be disgusting, the position of the company was that all that was meant was to demonstrate love and motherhood. Unfortunately for Benetton, many countries banned the two ads. Another ad which created problems due to its intensity was the scene of a dying AIDS victim. The ad angered many viewers because they thought Benetton exploited the man’s suffering and intentionally made him look like Jesus Christ.

3. Oliviero Toscani has defended Benetton’s use of shock advertising by noting that it constitutes nothing less than a debate between advertising and art. He argues that potentially offensive images are acceptable in the world of art and journalism while in other realms such as advertising they are not. Do you agree with Toscani’s position?

The position taken by Oliver Toscani, Benetton’s former creative director, is that advertising should be free from any type of censorship or scrutiny since it is often a form of art. When viewing advertising as art it becomes difficult to say where one ends and the other begins. If one views the Benetton ads as a

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form of art, this suggests that there should be a wide tolerance for the types of images used. The statement by Toscani which is shown at the beginning of the case summarizes his position very well: When Life magazine makes a cover about war, it makes the cover to inform, but also to sell the magazine and to sell the advertising pages inside the magazine -- Chivas Regal and all the others. So Time magazine and all the others make a cover to inform and to sell. To do what I do, I do that to sell but also to inform. And as soon as you inform, people point a finger at you and say, "You are exploiting!" No. It's the people who don't even inform [who are exploiting]. I don't care about the rejection; I'm not afraid to be rejected. Actually, it's a big honor in this world.

There are other examples which support Toscani’s argument. For example, the December 22, 2003 issue of Time Magazine featured the Year in Pictures 2003 and showed disturbing images of the Iraq and Afghan war injured and dead -- not very different from Toscani’s image of the bloodied uniform of the Bosnian soldier shown in one of the Benetton ads. Ethical or moral standards are very subjective and relative as evident from reactions to the Benetton ads showing an image of a priest and nun kissing. While this ad was banned in Italy, it won the Eurobest Award in Britain.

Some people question Toscani’s position, however, and argue that advertising is intrusive in nature and the public cannot decide what ads they will be exposed to in a medium. Advertising must often respond to a different set of standards since consumers often have no way of controlling their exposure to the images used in advertising and these images are often offensive to many people. Benetton has taken a novel approach and people are likely to disagree as to whether the ads are unethical. However, as noted discussed in question five, Benetton may have gone too far with the “We, on Death Row” campaign. The surviving family members of those killed by the inmates shown in the death row campaign were very offended by the ads and opposed to the idea of having the killers lionized in the national media. However, there were also those who feel that capital punishment is inhumane and praised Toscani’s effort to increase awareness of the issue.

4. Can you think of any other companies that use shock advertising? For what type of companies might this type of advertising be effective?

Calvin Klein and Benetton are the two companies that are probably best known for using shock ads although there are a number of other companies that have used the technique (see Abercrombie). Calvin Klein has been using shock ads for nearly two decades and built the company and brand by tapping into both the charge and the cultural unease surrounding youthful sexuality. The company’s controversial ads have explored the taboo of youthful sexuality and appeal to the independent spirit of young people.

Calvin Klein was willing to accept the controversy that accompanies its ads because the scandal and sex appeal surrounding them help differentiate CK products. It also helped generated hundreds of millions of

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dollars worth of free publicity. Like Benetton, CK handles its advertising in-house which means that an agency does not have to become involved with the negative publicity and controversy surrounding their shock ads. However, Calvin Klein also found that there is a limit to how far they could push could push the envelope with their advertising. Many retailers rebelled against the Calvin Klein ads featuring childlike models in provocative poses which was referred to as “kiddie porn” by many critics. Irate consumer groups also called for boycotts and threatened to picket stores carrying the brand.

Another company that has used shock ads is FCUK (French Connection UK) who has been criticized for what many perceive as pornographic images in its campaigns. As discussed in Chapter 21 of the text, clothing retailer Abercrombie & Fitch has also been criticized for using shock techniques its ads as well as in other promotional materials such as its quarterly catalog. It should be noted that all of these companies are involved in the fashion industry and their primary target market consists of young people.

Younger consumers are less likely to perceive shock ads as offensive or in bad taste and may even help create favorable attitudes toward these companies because of their edgy, rebellious tone.

While other companies have used shock ads, Benetton’s use of the advertising genre is unique.

While the ads of Calvin Klein and FCUK are meant to differentiate these brands and increase sales, Benetton’s goal (at least according to Toscanni) was to raise the public’s awareness and make them more conscience of important social issues. Few companies are brave enough to experiment to such a degree with their advertising. One exception is Egg Banking, a United Kingdom based online financial services group that has used campaigns based on stereotyping of men, women and certain ethnic groups. One advertisement shows a dark-skinned man in an orange string bikini that revealed the outlines of his small sex organ. The caption reads, 'Black men are well endowed.' Another ad shows a blonde woman studying a modern painting as the brunette next to her studies an exit sign. The caption reads, “Blondes have nothing in their heads.” However, while some consumers in the UK have viewed the ads as humorous, other have been offended by them and have protested.

5. Do you agree with Benetton’s decision to drop the use of shock ads and return to the use of more conventional ads?

Benetton appears to have pushed the envelope too far with the “We, On Death Row” campaign as the ads generated very negative reactions and there were strong repercussions as a result. Families of the victims objected strongly to the campaign and accused Benetton of glamorizing murderers while ignoring the crimes they had committed. The state of Missouri filed a lawsuit arguing that it had been misled regarding the use of the photos. The lawsuit was settled in June 2001 when Benetton agreed to write letters of apology and to donate $50,000 to the Missouri Crime Victims Compensation Fund. In the US, retailer

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Sears canceled an exclusive $100 million contract to sell a line of Benetton clothes, calling the death row images “terribly insensitive.” Sears ended its contract even after Benetton agreed to allow the retailer to preview future ads. Toscani believed that the sharp criticism in the US was not justified as many countries in Europe had more already banned the death penalty. However, as a result of the increasing furor, Toscani resigned in May 2000. He was replaced by James Mollison, a graduate of Fabrica, Benetton’s cultural research and development center that backs young artists from all over the world.

In 2001 Benetton began running a new campaign featuring product-focused ads that ran in print and on TV and billboards. The ads showed exuberant teen models clad in Benetton sweaters and jackets against a crisp white background and were designed to convey a sense of freedom and a positive, dynamic expression of the Benetton style. The impact of Benetton reverting back to more conventional advertising is yet to be determined, although given the way Benetton had built its brand image under Toscani, this approach does appear rather conservative. As noted in the case, Toscani dismissed the more conventional ads as a “waste of money.” In some countries such as Britain they were panned as “so innocuous as to be invisible.” Benetton may be able to capture the customer’s attention and interest with more conventional ads focusing on young people wearing its colorful clothing and emphasizing product qualities and perceived value. While these types of ads may not generate as much attention and interest as the shock ads, they may be effective in shifting attention to Benetton’s products and image as a retailer rather than as a social crusader.

Rather than moving solely into product based advertising after Toscani’s exit, the company could still continue to address social issues like war, poverty, education, child labor and exploitation and the like but with less controversial ads.

In fact, Benetton indicated that it would not be completely

abandoning its social issues messages and planned to run ads speaking to the refugee issue. The subject is very important to James Mollison who wrote a book on Kosovan refugees in conjunction with the United Nation’s High Commission for Refugees as well as an earlier book on foreign workers in the factories of northeast Italy. In 2003 Benetton began a social issues campaign dealing with the problem of hunger that exists in many countries and promoting its work with the World Food Program. The “Food for…” campaign consists of ads promoting the important role the availability of food plays in relations to issues such as education, work, peace, and life. Examples of messages from this campaign, as well as other Benetton ads, can be found on the company’s web site at www.benetton.com.

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California Milk Advisory Board Teaching Note This case examines the integrated marketing communications program developed by the California Milk Advisory Board on behalf of the California Cheese industry. It focuses on the “Happy Cows” campaign created by the Deutsch LA advertising agency for the CMAB as well as the effective use of other promotional tools that support the award winning advertising. These successful initiatives have created broad awareness and dramatically increased sales of California-produced cheeses over the past decade. The case can be used to illustrate best practices in integrated marketing communications and the use of a variety of IMC tools including media advertising, public relations, consumer promotion, trade promotion, in-store and on-premise merchandising, and Internet marketing.

It also illustrates the importance of consistency in

marketing communications over time, particularly in light of all-too-frequent tendencies to do otherwise. Lastly, it demonstrates the different metrics that are used to evaluate marketing element effectiveness and identify program improvements.

The case can also be used toward the beginning of the course to provide an overview of a successful IMC program or toward the end of the course as a summary of how various IMC tools are used synergistically to support an overall strategy. Students are introduced to the “Happy Cows” campaign in the opening vignette to Chapter 9 which focuses on the creative strategy for the humorous ads and how it has created a successful bond between consumers and Real California Cheese. There are also career profiles in Chapter 9 for Eric Hirshberg, the Executive Creative Director at Deutsch LA who helped develop the ad campaign, and Nancy Fletcher who is the Vice President of Communications for the CMAB and manages the public relations component.

UPDATE 2014:

The California Milk Advisory Board continues to promote real California

cheese through a comprehensive website. Many of the older commercials can be seen on YouTube.com.

Discussion Questions 1. Analyze the “Happy Cows” campaign that was developed for the California Milk Advisory Board to promote Real California Cheese from an integrated marketing communications perspective. Why do you think the campaign has been so successful?

The “Happy Cows” campaign uses a variety of IMC tools to create awareness of, and preference for, Real California Cheese. Advertising through various media including television, radio, print, outdoor and online is a major component of the campaign. However, the web site also plays an integral role as it includes links to the commercials as well as cheese recipes, nutritional information, interactive games, promotional offers and a merchandise store. Other important components of the IMC campaign include publicity/public relations, as stories about Real California Cheese and the state’s cheese makers have been featured in the a number of local, regional and national media.

These stories have a strong impact on consumers and help

awareness of Real California Cheese. Sales promotion is also an important part of the IMC campaign as both consumer and trade promotions are used extensively. Consumer promotions such as sampling, coupons, and premium offers are an important part of the campaign as are trade promotions with retailers and food service companies.

The “Happy Cows” campaign has been so successful because it is a fully integrated program that connects with consumers at a variety of touch points and does an outstanding job of creating brand awareness and preference for Real California Cheese. The tagline for the campaign, “Great Cheese comes from Happy Cows. Happy Cows come from California,” provides a very strong creative platform around which the IMC program has been developed. From a creative perspective, the Deutsch LA agency has developed award winning ads that resonate well with consumers and have established an emotional bond between them and the contented California bovines. The campaign has established and maintains awareness of the Real California Cheese trademark and has created a preference for cheese bearing the seal.

2. What was the role and importance of the Real California Cheese certification mark in implementing the positioning and IMC program elements?

How and where was it

implemented? Do you think it made a difference to the program?

The Real California Cheese certification mark was created for the industry as a unifying symbol that provided synergy for all promotional efforts. When consumers see it in one context, it draws

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upon other associations. It’s worth discussing all the places the mark has been utilized, as illustrated in the attachments (TV and outdoor ads, on foodservice boxes, menus, retail packages, coupons and premiums, and the website). The mark has also served to support smaller brands that couldn’t afford such an extensive marketing effort on their own. Unifying activities in support of the mark has also impressed trade intermediaries (a key to expanding distribution), by consolidating funds to create greater impact, and more marketing activity. Students can be asked if there are any downsides to this strategy. For example, could negative association accrue to premium cheese brands because of the broad association of the mark with lower-priced cheeses?

Do students think awareness of the mark is more subliminal than conscious? Can subconscious associations build over time?

3. Discuss the role of advertising in establishing the Real California Cheese brand personality?

What were the constraints the advertising agency had to work around in developing the campaign? How would you describe the personality that was created? What are the pros and cons of the advertising approach? Can the campaign be continued indefinitely? If not, how might it be changed or adapted going forward?

The humorous “Happy Cows” ads have played an important role in creating a brand personality for Real California Cheese as they create an emotional bond between consumers and the product.

The agency decided that rather than focusing on the cheese, the campaign would revolve around the idea that California cheese is better because it comes from happy cows. Deutsch’s creative team felt the campaign should be all about California and its life style, health consciousness, blue sky and great weather. It was a short path from there to the campaign big idea which is that if the people like California better, maybe the cows do as well. Thus, was born the tag line, “Great Cheese comes from Happy Cows. Happy Cows come from California.” The ad campaign has maintained a singular focus and has centered on the cows’ responses to the unique aspects of their California environment as the source of new creative ideas.

The constraints on the development of Real California Cheese advertising include: •

That the advertising cannot showcase any one brand, so none are featured

•

That because it represents such a wide variety of product attributes, specific attribute sell is difficult

•

That only broadly inclusive benefits can be featured

It is not uncommon for a brand’s ad campaign to face constraints or obstacles to overcome.

These might include the need to provide health warnings, address recent negative public relations

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stories, or reverse misperceptions.

These issues must be communicated explicitly to the

advertising agency creative department before they start to develop the advertising.

The pros and cons of using humor to create an affectionate bond with consumers versus hardsell, product attribute focused advertising can be discussed. The brand personality created for Real California Cheese is fun and loveable. The advertising makes people smile and feel good about the ads and this positive affect may carry over to the brand. The approach has resulted in high awareness and a positive emotional response toward Real California Cheese. You might ask your students if they feel that humorous, playful advertising is the best way to promote Real California Cheese.

What are other examples of campaigns where humor has been used

effectively to create brand awareness and sell a product/brand? You might ask students if they recommend keeping the approach going forward and how long they think the “Happy Cows” campaign can be used before consumer become tired of it.

4. What role does consumer promotion play in generating trial and awareness of Real California Cheese? How do the consumer promotion tactics reinforce or supplement other marketing elements such as advertising, trade promotion, or public relations?

The CMAB uses a variety of consumer promotion tools including sampling, coupons, and premiums. The role of coupons and sampling in generating trial and awareness for the wide range of California cheeses can be discussed, as well as how consumer promotion has more effectively taken the place of traditional in-store merchandising. The importance of sampling should be highlighted, as it generates trial among consumers who otherwise might not try various types of cheeses. The combination and synergy of sampling quality products and accompanying the samples with coupons, significantly increases the odds of purchase (as evidenced by the very high in-store redemption rates). The cross-coupons on packages of wine, crackers, luncheon meats, bread and tortillas cost effectively create reminder advertising for California cheeses throughout the store. Students can be asked to brainstorm other cross-promotional partners. Mention should also be made of the self-liquidating premiums (such as the cow puppets, Janice and Diane, from the commercials) that reinforce the ad campaign in the home and the high-quality coffee table books about the state’s high-quality artesian cheeses, which have a positive halo effect on all California cheeses.

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5. Discuss the role of public relations in the CMAB’s integrated marketing communications program? What type of press coverage and stories could be generated about Real California Cheese? What were the different public relations angles that were used to generate the interest of the different media?

The objectives of the public relations campaign for the CMAB are to convince the various constituents including consumers, retailers, food professionals, restaurants, and the food media (magazines, newspapers, trade publications and television stations) that California produces high quality cheeses. Many of these constituents had long viewed the cheeses of Wisconsin, Vermont, and Europe as superior to California cheeses. To improve the image of California cheeses, dairies are encouraged to enter national and international cheese competitions. The awards won

by California cheese producers are announced through press releases and various media run stories that reach consumers as well as the food service industry.

The different types of press coverage, with correspondingly different public relations angles, should be discussed. These include the following: •

Recipe-related stories that are sent to newspapers and food magazines

•

Business-related stories sent to trade publications as well as business and marketing media such as Business Week, Advertising Age, and Brand Week that focus on sales growth and marketing awards

•

Stories targeted to travel magazines regarding ideas for visits to state cheese makers (akin to winery visits)

•

Foodservice magazine stories about national account gains and successful in-store promotional programs

A third leg of the public relations program has been the “influencer” program which has included cheese tastings for chefs, culinary professionals and the food media to create greater familiarity with individual products, and collateral materials or brochures such as “Entertaining with Cheese” and “Wine and Cheese Pairings” that are distributed through high-end specialty wine and cheese shops, as well as offered online.

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6. What has been the role of the Real California Cheese website? How does it reinforce or support the other parts of the integrated marketing communications program?

The home page of the Real California Cheese website, which is shown in Exhibit 7 of the case, should be used for this portion of the discussion as it shows the various sections of the site which include current commercials; recipes to encourage product usage; information regarding where to purchase Real California Cheeses; product coupons and Real California Cheese merchandise (Tshirts, mugs, aprons with the logo); dairy visit information, including a map of all the state’s dairies that are open for visits; an explanation of the product quality behind the RCC seal; consumer education information about cheese types, storage and handling; information for food professionals and pizza shops; and a library of past and present press releases. The web site is designed to be consistent with the imagery from the advertising campaign. Visitors to the site can see the products, learn about cheeses, view merchandise and even purchase it online. Various parts of the site cater to specific groups such as industry professionals, restaurant chefs, dairy farmers and the media. The most popular parts of the site are the sections where visitors can click and watch commercials as well as the recipe section. Another popular part of the site which is the kids section which includes cute drawings of the cows that kids have sent to the CMAB as well as the Happy Cows Farm Game.

7. Which marketing metrics did the CMAB use to evaluate their IMC program? Are there any others you feel they should focus on? Which do you feel are most important?

There are a range of metrics that are used to determine the effectiveness of the CMAB’s marketing efforts and the IMC program. Marketing-related measures include Nielsen and IRI market share data which show how well Real California Cheese is doing in terms of sales and market share. Advertising-related metrics include aided and unaided awareness of advertising for Real California Cheese, brand awareness and message recall. The effectiveness of the various consumer promotions can be measured by coupon, rebate, and premium offer redemption rates.

For direct marketing efforts, response rates and further inquiry requests can be measured by type of offer, mailing list, and creative message. Trade promotion effectiveness can be assessed by retail distribution levels, point-of purchase displays, and share of retailer advertising and displays.

A variety of measures can be used to assess the impact of the web site including the number of hits, web link click through rates, the number of pages viewed, time spent on the site and keyword search draw. Public relations metrics might include the number of PR mentions by type

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of media, the number of stories run in various newspapers and magazines, and coverage on foodrelated television programs. Creative awards in the areas of marketing advertising, public relations, Internet marketing and consumer promotions can also be used to assess the impact of the IMC program.

8. In light of consumer trends (demographics, food trends, and media “consumption”), are there other advertising or promotion opportunities that should be pursued by the California Cheese industry?

This question encourages students to utilize their own creativity and apply their knowledge of integrated marketing communication tools derived from the course material. Students can be asked to suggest ways to extend the “Happy Cows” campaign in a different direction or even suggest an entirely new campaign idea they feel might more effectively achieve the future growth objectives of Real California Cheese.

They can brainstorm new promotional partners or

consumer promotion program ideas. You might also discuss relevant demographic trends such as the growth in the Hispanic population, the aging of Americans (who experience calcium deficiency as they age), increased interest in low carbohydrate foods, and increases in out-ofhome and on-the-go consumption. Students can be asked what types of integrated marketing strategies and tactics, as well as other product forms might capitalize on these trends?

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Chicken of the Sea International The Jessica Simpson Spokesperson Decision Teaching Note Case Overview This case examines Chicken of the Sea International (COSI), one of the major competitors in the canned/packaged tuna and seafood industry, and the decision facing the company’s senior vice president of marketing as to whether the he should hire pop star Jessica Simpson as a spokesperson. COSI received a tremendous amount of publicity in the Fall of 2003 and early 2004 following the famous fish faux pas that Simpson made on the MTV reality show The Newlyweds: Nick & Jessica. While eating a can of Chicken of the Sea tuna Simpson turned to her co-star husband and asked the whether the product inside is chicken or tuna. Simpson’s gaffe became the target of jokes and a myriad of media stories that resulted in a great deal of publicity for Chicken of the Sea. The company took advantage of the incident by having her make a surprise visit to its annual sales meeting in October 2003.

The case focuses on whether COSI should try to capitalize on the publicity and hire Simpson as a spokesperson. There are a number of factors that Don George, the senior vice president of marketing must consider in making this decision including whether the company can afford to hire her, how her image will fit with the brand, and how 25-54 old women who comprise the company’s core target market might react to her as a spokesperson for the brand. It can be used with Chapter 6, Source, Message and Channel Factors, as it focuses on the use of a celebrity as a spokesperson and issues to consider in selecting an endorser. The case provides students the opportunity to evaluate Q scores for Jessica Simpson and see how they vary among different demographic groups. This case can also be used with Chapter 16 on Sales Promotion as COSI is a company that allocates most of its marketing budget to consumer and trade promotion.

A decision to use Simpson will mean more emphasis on media

advertising which will take monies away from the sales promotion budget.

This case should be of great interest to students since many of them are familiar with Jessica Simpson and are probably aware of her famous fish or tuna faux pas. Many will feel that COSI should take advantage of her gaffe and hire her as an endorser. However, the case be used to show that the decision to hire a celebrity endorser requires the consideration of a number of factors. Classroom discussion of this case can be enhanced by showing the video case on Chicken of the Sea that is part of the supplements package that accompanies the text. The video case provides an excellent overview of Chicken of the Sea, the competitive situation in the tuna industry, the company’s new branding initiative, the various types of consumer and trade and promotions used by the company and the role the company’s web site plays in its IMC program.

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UPDATE 2014: For more videos regarding Jessica Simpson and Chicken of the Sea, visit YouTube.com

Discussion Questions 1. Discuss the consumer decision making process for a product such as canned tuna and the response hierarchy model that is most likely to applicable in the purchase of this product.

Canned tuna is a very good example of a product that is a low involvement purchase decision for most consumers. Tuna is essentially a commodity product with very little differentiation among the various brands. While the three major brands (StarKist, Chicken of the Sea, and StarKist) all claim to have superior taste, most consumers do not perceive significant differences in taste and quality among them.

Moreover, many consumers recognize that private label brands are produced by the same companies that process and can the national brands and find them acceptable substitutes. The lack of perceived differentiation among the competing brands means that canned tuna is often purchased on the basis of price. Marketers of canned tuna must keep their shelf prices competitive with the other national brands as well as the private label brands offered by the various retailers. Sales promotion plays a very important role as consumers are usually looking for brands that are on sale or for which they might have a coupon.

The low involvement response hierarchy is likely to be applicable in the processing of information and purchase of canned tuna. As discussed in Chapter 5, this hierarchy views the consumers as engaging in passive learning and random information catching rather than active information seeking.

Consumers are likely to engage in peripheral processing of advertising messages and may focus more on elements such as music, characters, symbols, and slogans or jingles than actual message content. These peripheral cues become salient when the consumer is actually in the store and making a purchase decision among the various brands. All three of the major tuna brands appear to be marketed with the low involvement hierarchy in mind. Advertising for StarKist relies on the personality symbol of the Charlie the Tuna animated character (see Chapter 9 for a discussion of this execution technique). Chicken of the Sea relies on its iconic mermaid and the use of a catchy jingle (“Ask any mermaid you happen to see..What’s the best tuna? Chicken of the Sea.”) while Bumble Bee also uses its Bee character and a jingle as well (“Yum, yum Bumble Bee, Bumble Bee tuna”). A classic Bumble Bee commercial can be found on the company’s web site (www.bumblebee.com) under products.

In discussing the consumer purchasing process for canned tuna it is important that you do not lead students to conclude that this product has become totally commoditized and no brand differentiation is possible. There are several key points you might want to make to students who try to draw this conclusion. First of all, the three national brands (StarKist, Bumble Bee and Chicken of the Sea) account

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for 82 percent of the market share in the tuna category. If tuna was indeed a commodity, one might expect that private label brands would have a greater share of the market. A second important point is that there is strong brand loyalty in the canned tuna category. Figure 4.5 of the text shows that 44 percent of consumers indicate that they are loyal to one brand of tuna. Moreover, brand preference for tuna is also somewhat regional as Bumble Bee does very well in the Northeast and Florida while StarKist and Chicken of the Sea are stronger in the North Central and West regions of the country. While there is a strong level of brand loyalty for the various brands, it is important to note that many consumers remain loyal to a brand only if it is priced competitively. Thus, marketers of the three national brands recognize that it is important that they maintain shelf prices that are the same or within a few cents of their competitors as well as the store brands. This means they will rely heavily on price oriented types of sales promotion such as trade and promotional allowances. One area where the tuna marketers have been able to break away from the heavy emphasis on price and promotion is with new pouch products such as the tuna salad kits and Lunch To-Go. 2. Discuss the role integrated marketing communications plays in the marketing of canned/packaged tuna for a company such as Chicken of the Sea. How might the company use the various IMC tools as part of its marketing program?

Integrated marketing communications plays a very important role in the marketing of canned/tuna as the various companies use all of the IMC tools, although to different degrees. Media advertising is used to create and maintain brand awareness and to help differentiate a brand. The major product attributes that are emphasized in media advertising are taste and quality. As noted in question 1, given the low involvement decision making process for tuna, the companies use peripheral cues in their ads such as catchy slogans and jingles as well as personality characters and symbols. Media advertising is also important in the introduction of new types of tuna products. As discussed in the case, there have been several important product innovations in the category in recent years such as tuna in a pouch, tuna salad kits, flavored tuna, and Lunch To-Go products. StarKist and Chicken of the Sea have used media advertising to introduce these product innovations to consumers. It is important to note that the level of media advertising in the tuna category is really very low as most of the promotional budgets of the three major competitors are being allocated to sales promotion. StarKist spends the most on television advertising for ads featuring its Charlie the Tuna personality character. Chicken of the Sea spends nearly its entire media budget on radio, print ads and floor signage ads. Bumble Bee has not been running any media advertising for several years, choosing to focus its attention on consumer and trade promotion.

The primary IMC tool used by the marketers in the canned/packaged tuna category is sales promotion. As discussed in the case, price competition as well the significant market share of private

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label brands have shifted the power from the marketers to the retailers who demand, and usually get, trade and promotional allowances from the manufacturers. The three competitors also rely heavily on consumer promotions in the form of national FSIs, check out coupons, point-of-purchase displays, premium offer, price-off deals, and contests and sweepstakes. You might ask students to examine Exhibit 16-31 of the text which contains an in-store display that Chicken of the Sea uses to assist retailers in the promotion of their products. Chicken of the Sea International has also implemented the Mermaid Club which is a consumer loyalty program that is designed to encourage repeat purchase and get consumers more involved with the brand. The heavy emphasis on sales promotion in the tuna industry is a very good example of a promotional trap which is discussed in Chapter 16. It will be very difficult for the competitors to break out of this trap unless they agree to cut back promotional spending. However, they are afraid to do so because of a fear of losing market share to other national brands and/or private label brands offered by the retailers.

While sales promotion and media advertising are the IMC tools used the most by the marketers of canned/packaged tuna, they also used direct marketing, the Internet, publicity/public relations and personal selling. Direct marketing is used by periodically sending target direct mail pieces that contain coupons or premium offers to consumers. COSI is also beginning to do direct marketing through email to consumers who join its Mermaid Club. Publicity/public relations is also an important part of the IMC program of the various companies. Each company regularly issues new releases dealing with health and nutritional issues related to tuna and other products. For example, the industry recently has had to deal with negative publicity concerning the mercury content in tuna and its potential impact on pregnant women.

Each company as well as the industry’s major trade association, the United States Tuna

Foundation, have ongoing public relations efforts that address major issues facing the industry. Each company also works to generate publicity for its products and marketing efforts. As noted in the case, Chicken of the Sea’s public relations firm issued video news releases to generate publicity over Jessica Simpson’s visit to the company. StarKist and COSI often issues news releases regarding their upcoming advertising campaigns to advertising and marketing publications such as Advertising Age, AdWeek and Brand Week as well trade publications such as Progressive Grocer, Grocery Headquarters and Food Engineering. Another type of public relations activity that is used by the competitors in the tuna category is event sponsorship. For example, Chicken of the Sea sponsored the U.S. Synchronized Swim team that competed in the 2000 Olympics and used its sponsorship to offer a sweepstakes whereby consumers could win a trip to games in Sydney, Australia.

The Internet has also become an important IMC tool for the tuna companies as they all maintain web sites that contain company information, product information, recipes, health and nutritional information, new releases and examples of their advertising. As discussed in the video, Chicken of the

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Sea’s web site is an important part of their IMC program. The site contains an easy-to-use recipe generator, resources on health and nutrition, as well as games and educational content. It also includes the Mermaid Store, where consumers can shop for everything from T-shirts to watches to sporting goods featuring the classic mermaid logo. The web site has become an integral part of Chicken of the Sea’s IMC program as the company uses other forms of media to drive consumers to the site and engage them in the brand. COSI uses its web site as the vehicle through which consumers can join their customer loyalty program called the Mermaid Club.

3. Discuss how Chicken of the Sea’s marketing personnel and advertising agency might evaluate the appropriateness of using Jessica Simpson as a spokesperson for the company and whether she is a good fit for the brand.

This question provides the instructor with the opportunity to apply the information in Chapter 6 that discusses the use of celebrities as endorsers. There are a number of ways Chicken of the Sea International marketing personnel and ad agency can evaluate how well Jessica Simpson might work as a spokesperson for the company.

One basic consideration is whether she might overshadow the product and the

advertising message. This is important since consumers might pay attention to Simpson and not notice that she is promoting the Chicken of the Sea brand. However, since tuna is a low involvement product, it is likely that any advertising using Simpson will contain a simple message promoting attributes such as taste or quality. Thus, it should not be difficult to generate strong brand and advertising awareness by using her. Another consideration is overexposure. Simpson did sign an endorsement deal with Pizza Hut and appeared in a commercial that premiered on the 2004 Super Bowl. However, at the time of the case she was not serving as a spokesperson for any other companies or brands so this should not present a problem to COSI. The company must also consider whether there is any risk associated with using Simpson as an endorser. In general this should not be a problem since she has a wholesome image and is not as controversial as other young female pop stars such as Brittany Spears or Christina Aguilera.

However, Simpson has become known for her ditzy behavior and comments on The Newlyweds MTV show and COSI may have some concern that she might say or do something that would be even more embarrassing than the fish or chicken gaffe. As with any celebrity, there is a certain amount of risk associated using her as any inappropriate acts or behaviors she might engage in would be covered heavily by the media and could reflect negatively on COSI if she was a spokesperson for the company.

One of the most important considerations for COSI regarding Simpson is that of target audience receptivity. As noted in the case the core target market for Chicken of the Sea is 25 to 54 year old women and it is unlikely that this group will identify with Simpson and may even have negative opinions toward

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her because of her ditzy blonde image. Moreover, the company must consider whether these women would see her as a credible spokesperson for Chicken of the Sea, particularly considering the fact that she was not even aware of whether the product was tuna or chicken. Chicken of the Sea’s advertising agency will be challenged to develop a campaign using Simpson that will be received favorably by the core target audience. On the other hand, younger consumers may be more receptive to Simpson as a spokesperson since she is very attractive and popular celebrity. The information from the Marketing Evaluations/TVQ study supports this argument as Simpson has a Q score of 23 among 12-17 year olds but only a 9 among those 18-34 and a 10 among those 25-49. It is also important to note that the percentage of those familiar with Simpson is very high among the 12-17 year old group (72%) as well as the 18-34 year olds (76%).

However, the familiarity score drops to 49 percent for those in the 35-49 year old age group. Exhibit 1 also show that Simpson’s Q score among the core target market of 25-54 females is an 8 while the percentage of those familiar with her is 55. Students should be encouraged to analyze the Q scores and other information provided in Exhibits 1 and 2 for both Simpson as well as other female musical performers.

Another factor COSI must consider is how well she fits with the company and brand as an endorser. As discussed in Chapter 6, advertisers must try to match the desired image for the company and/or brand with the image and characteristics of the celebrity. Students should be encouraged to consider how McCracken’s meaning transfer model might be applied to Simpson as a spokesperson for Chicken of the Sea. This requires them to consider the cultural meaning of Jessica Simpson and whether this is the image that COSI wants to have transferred to the company and/or brand. Students should be asked to discuss the meaning/image of Simpson and how it was acquired. They are likely to note that her image originally was that of a young, attractive singer with somewhat of a wholesome image. However, her meaning changed dramatically as a result of her role on the MTV show Newlyweds as she became known more as a “ditzy blonde” who often says and/or does dumb things. COSI must consider if they want their brand associated with this image as it might be a turn off to older women in their core target market.

Some students may argue that Simpson can be portrayed in a role as the Chicken of the Sea mermaid since she is a very attractive young woman who bears a resemblance to the latest version of the well known icon. One way of evaluating this suggestion is to consider how well Simpson image matches the characteristics COSI tries to portray in the mermaid. The case notes that the attributes of the mermaid include being trustworthy, magical, attractive, friendly, approachable, contemporary and fitting with the Chicken of the Sea brand. Simpson’s image actually fits well with most of these attributes although it is questionable as to whether she would be perceived as trustworthy and as fitting with the Chicken of the Sea brand.

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4. Discuss the pros and cons of Chicken of the Sea International hiring Jessica Simpson as a spokesperson for the company. Can the company afford to hire her and spend the money on TV advertising to use her effectively?

Many of the pros and cons of COSI hiring Simpson as an endorser have been addressed in the answer to the previous question. However, it still may be helpful to have students make a list of reasons why the company would benefit from having her as a spokesperson as well as why this would not be a wise decision. Arguments in favor of hiring her include the opportunity for COSI to build on the favorable publicity that has resulted from her famous fish or chicken faux pas. Using her as an endorser may be a particularly effective way to increase awareness and interest in the brand among younger consumers.

Awareness of Simpson is probably even higher in early 2004 than the Q scores results indicate since she received a tremendous amount of exposure and publicity in late 2003 and early 2004. Moreover, since tuna is a low involvement product, consumers may be receptive to advertising for Chicken of the Sea featuring Simpson. One option that the company was considering was to feature her in print ads with the headline stating “Our mermaid has never looked so good.” It is likely that COSI could generate a great deal of publicity if the company hired Simpson as a spokesperson which would result in exposure and attention for the company and brand that would extend well beyond the media time or space that was actually purchased.

There are, however, a number of arguments that could be made against using Simpson.

One of the primary arguments against using her is that the 25 to 54 year old women in COSI’s core target market may not respond favorably to Simpson and may even be turned off by seeing her in ads for the brand. This group purchases most of the tuna and may not be influenced by Simpson because of her ditzy blonde image and or lack of relevance to the product. Another problem with using Simpson is that COSI really does not have a large media budget and probably cannot afford to use television on a regular basis. A celebrity such as Simpson would be more effective in TV commercials than print or radio ads, which is where COSI spends most of their advertising dollars. The case notes that COSI is planning on spending approximately $11 million on advertising in 2004. However, Simpson’s endorsement fees would have to come from this budget as would production costs for commercials. This means there would be less money available to run ads in media traditionally used by COSI such as radio, print and in-store.

Students might note that COSI is now a $600 million company and the proposed media budget of $11 million is less than two percent of sales. However, the company spends a great deal of

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money on consumer and trade promotion so the overall marketing communications budget is a much higher percentage of sales than two percent.

5. What would you do if you were Don George? Would you recommend that the company hire Simpson as a spokesperson? Why or why not?

The ultimate decision Don George and COSI must make is whether to hire Jessica Simpson as a spokesperson. As noted in the case, COSI will probably have to pay her more than a million dollars which is a very large sum of money for a company that does not spend much money on media advertising. The main question George must try to answer is what type of return on investment the company would get if it were to hire Simpson. While she would probably be effective at increasing advertising and brand awareness, the ultimate issue is whether using her would help increase sales as well. One way of looking at this is to consider what the return would be if she helps COSI increase its market share. One market share point in the canned tuna market (including food service, and warehouse/club stores) represents approximately $20 million in sales. If COSI’s profit margin is 4 percent, the company would generate $800,000 in profits for each share point gain. Based on these figures, Simpson would have to help the company increase its share of the canned tuna market by a little over one point to cover the costs of using her. However, Simpson could also be used to endorse other COSI canned seafood products so the cost of using her could be allocated across these items as well. Of course there is no guarantee Simpson will help the company move the sales needle as increases in advertising and brand awareness do not always result in sales increases. While it is important for COSI to analyze this decision from a financial and ROI perspective, there are other considerations that factor into the decision. One of COSI’s goals is to try to attract new and younger users to the brand and Simpson may be helpful in achieving this. Of course George must also consider whether there might be some type of backlash among the older women who comprise the core target audience as they may not like the ditzy blonde image that Simpson has come to personify.

COSI decided not to hire Simpson as a spokesperson. In the authors’ discussion with Don George, he indicated that the company was reluctant to pay the large amount of money that would be required to retain Simpson and felt that COSI’s limited media budget would not allow them to use her effectively. Moreover, he felt that COSI was benefiting from all of the publicity that was generated by the Simpson faux pas and thus she was serving as a type of quasi endorser but not really costing the company any money. George was also concerned as to how retailers might react if COSI retained Simpson as they might view this as evidence that the company had marketing funds available and thus put more pressure on them to provide more trade promotion dollars. Since the time of the case, Jessica

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Simpson has gone on to become a major celebrity as she has starred in several movies including Dukes of Hazard and also released a new album in 2006 called “A Public Affair.” In 2006 her marriage to singer Nick Leachey ended and the couple was divorced which resulted in a tremendous amount of media attention.

Simpson has become one of the hottest stars in the entertainment industry and commands

seven figures for endorsement deals. It is extremely unlikely that Chicken of the Sea could afford to use her as a spokesperson nor would she be likely to agree to promote the brand given her high profile status.

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Case Study Chapter Recommendations Benetton-Evolution of Communication Strategy California Milk Advisory Board The Jessica Simpson Spokesperson Decision Gateway Case

Recommended Use:

Chapter 19

Recommended Use:

Chapter 8

Recommended Use:

Chapter 14

Recommended Use:

Chapter 7

IBM-Brand Equity Restoration and Advertising Evolution Case Recommended Use: Mazda-Positioning a Product Line

Recommended Use:

Chapter 7, 8 Chapter 1, 3

Fighting the War on Drugs-The Power of Social Marketing or a Waste of Money?

Recommended Use: Chapter 9 Under Armour Enters the Basketball Shoe Market

Recommended Use:

Chapter 1, 3

XM Satelite Radio-Competing in the New Digital World Recommended Use:

Chapter 11

INTRODUCTION This instructor's manual has been prepared for use with the video cases that accompany the 7th Canadian edition of Advertising and Promotion: An Integrated Marketing Communications Perspective by Michael A. Guolla, George E. Belch, and Michael A. Belch. The ten video cases provide insight into the development, implementation, and effectiveness of specific IMC campaigns used by major companies and brands. Three of these videos were produced specifically for the 7th edition of the text. These include video cases on Procter & Gamble’s Charmin toilet tissue, Intuit/TurboTax, and DASANI bottled water, which is owned by the Coca Cola Company.

There are also four videos produced for the 6th edition including Taco Bell, Under Armour and the efforts of the Middle East country of Qatar to win the 2022 FIFA World Cup. The fourth video also focuses on Qatar and its plans for using the World Cup to leave a legacy for the country and the Middle East region. We have also retained two popular videos created for the 5th edition of the book as they are still very relevant for discussing the ways companies use social media. These include a video case for the Ford Fiesta (The Fiesta Movement Social Media Campaign) and PepsiCo’s Mountain Dew Brand (The Dewmocracy Social Media Campaign). The original video case focusing on Under Armour (Building a Brand Through Integrated Marketing Communications) is also available.

This instructor’s manual provides detailed insights and background information for all of the video cases including an overview of the video and how it ties into the material in the text. We also provide information on the individuals from each company who appear on the videos along with a description of the areas covered during the course of the video. We suggest that you read through the manual and preview the videos to gain an appreciation for their value as instructional supplements Once again, we have gone to a great deal of effort to produce high quality video cases and prepare an instructor's manual that provides you with the background information needed to use them effectively. The authors participated in all phases of the planning and production of the ten video cases including contacting the companies, developing the video outlines and interview questions, conducting the interviews, and helping with the editing of the videos. These video cases, along with our text, will make your class an even more enjoyable and valuable learning experience for the students. They allow students to hear from many of the top marketing and advertising executives in the world and to learn more about what is involved in developing and implementing a successful IMC campaign. We welcome any comments you might have about the videos or this instructor's manual. We hope you enjoy using the videos and that your students learn from them.

MAG GEB MAB

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VIDEO CASES Video

Running Time

Charmin: An Integrated Marketing Communications Case Study

19:00

DASANI: Building a Brand

24:35

Intuit TurboTax: An Integrated Marketing Communications Case Study

21.46

Under Armour 2014: Integrated Marketing Communications

24:30

Under Armour: Building a Brand Through IMC

23:00

Taco Bell: Integrated Marketing Communications

24:45

Qatar World Cup 2022: A Winning Bid

24:40

Qatar World Cup 2022: Legacy

13:00

Ford Motor Co.: Fiesta Movement Social Media Campaign

21:00

Mountain Dew: DEWmocracy Social Media Campaign

20:10

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Charmin: An Integrated Marketing Communications Case Study Running Time: 19:00 Recommended Use: Chapter 1 Background/Overview This video focuses on the Integrated Marketing Communications strategy used by Procter & Gamble (P&G) for Charmin, which is the leading brand of toilet tissue. Charmin has had only three advertising campaigns since 1964, and if you were to ask consumers to name one of the most creative and engaging brands on television or in social media, it is unlikely they would mention Charmin. Many older consumers might still associate Charmin with the iconic Mr. Whipple and the “Please don’t squeeze the Charmin” advertising campaign that ran for more than two decade and has been recognized as one of best ads campaign of the 20th century. (Unfortunately, we did not have permission to use the famous Mr. Whipple TV commercials in the video as the rights to do so are controlled by his estate.) Younger consumers, including most college students, are not likely to know about the Mr. Whipple campaign but rather associate the brand with the Charmin Bears who have been featured in TV spots since 2000. They may also be familiar with the “Enjoy the Go” campaign for Charmin, which has shifted the focus of its marketing from toilet paper to the bathroom experience. This campaign uses traditional as well as social media. Creating interest and excitement is very challenging for marketers when they are selling a product that is not exactly glamorous and is associated with one of life’s less savory necessities. However, as the video explains, P&G and its agency, Publicis New York, have been very effective in doing so.

The story of Charmin goes back nearly a hundred years when the toilet tissue was first manufactured in 1928 at the Hoberg Paper Company in Wisconsin. The product was designed to reflect feminine fashions of the day and described as "charming" by an employee and from there the name “Charmin” was born. The company changed its name to the Charmin Paper Company in 1950 and a few years later added a baby graphic to its packaging to symbolize gentle softness and quality. P&G acquired the company in 1957 as they saw Charmin as a great opportunity to compete against Scott Paper, Kimberly-Clark and other companies in the paper products markets.

P&G felt that the products put out by these companies were not very soft and P&G could gain a competitive advantage by promoting this benefit.

While gentle and soft were to be the main attributes for Charmin, P&G’s advertising agency, Benton and Bowles, initially struggled to find a way to convince consumers that Charmin was gentler and softer than competing brands that were making similar claims. However, in 1964 the agency came up with the creative idea of developing an advertising campaign around a prissy supermarket manager who would become upset at his customers for squeezing packages of Charmin so they could feel the softness. A character named Mr. Whipple was created to promote Charmin’s “squeezable softness” and the TV commercials featured him scolding shoppers for squeezing packages of Charmin, but then sneaking a pleasure-filled squeeze himself. The “Please Don’t Squeeze the Charmin” campaign ran for more than 20 years and Mr. Whipple appeared in more than 500 TV commercials as well as magazine and newspaper ads. Mr. Whipple became one of the most successful icons in advertising history and in the 1970s he was named the third bestknown American, trailing only then President Richard Nixon and the Reverend Billy Graham.

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In 1999, after a 14-year hiatus, P&G brought back Mr. Whipple for a campaign promoting a major brand improvement. However, P&G and its current advertising agency, Publicis New York, believed that the campaign had run its course and in 2000 took the advertising for Charmin in a new direction by launching a new animated campaign called “Call of Nature” featuring a bear in the woods experiencing the comfortable feeling of Charmin. The agency felt that the campaign needed to go in a new direction with a focus more on the bathroom experience and the “Call of Nature” campaign was soon expanded to include a family of bears enjoying bathroom experiences.

While the cute and clumsy animated bears have been the advertising personality symbol for Charmin over the past two decades, the IMC campaign for the brand has evolved in new directions.

Publicis created an integrated campaign using the tagline “Enjoy the Go” that includes ads featuring the animated bears as well as a microsite, mobile apps, social media, branded bathroom breaks, and charitable/cause marketing components. The charity component of the campaign let consumers “Go for Good” as Charmin donated a $1 per user to select charities such as the Boys & Girls Club of America, The Harlem Children’s Zone, and Angels in Waiting. P&G has also created a cause-marketing program called the Charmin Relief Project, which has supported causes such as asking consumers to nominate and help select 100 firehouses across the country to receive a year’s supply of toilet paper.

Charmin has become one of the most active brands on social media with more than 1 million fans on Facebook, over 70,000 Twitter followers, and a presence on video platforms such as YouTube and Vine. The Charmin social media team, which includes five members from the P&G brand management team as well as eight from the agency side, continually monitors fan feedback across the various platforms to assess consumer sentiment, leading to the fine-tuning of its messaging.

The social media strategy for Charmin has evolved along with the social media landscape and has created one of the most engaged brand communities by using content that is both relevant and entertaining, relying on humor as its key ingredient. Charmin engages consumers by focusing not just on toilet paper, but rather on the human experience of everything bathroom related. A key component of Charmin’s “Enjoy the go” campaign is the popular hashtag #tweetfromtheseat where followers can contribute potty protocol thoughts. Another example of how Charmin has pushed the envelope is its use of a series of “Charmin Intermissions” commercials. The Charmin Intermissions are 60 and 30-second television commercials that invite consumers to use the bathroom and “enjoy the go” instead of watching a traditional commercial. P&G has aired these cheeky branded units during specific events including The Olympics, Christmas Eve, Saturday Movie Night, and New Year’s Eve. Charmin has also moved into mobile marketing by sponsoring and then acquiring the SitOrSquat app that helps consumers find the cleanest public restrooms worldwide and provides user-generated listings of bathroom locations, ratings, hours of operation and other details. Nearly a million consumers have downloaded the app and it has generated a tremendous amount of earned media from bloggers, social media and news stories in traditional media.

Charmin’s brand team and its agency partner understand the importance of having entertaining as well as relevant content to connect with consumers on social media. They continue to utilize a variety of channels to develop an IMC program that creates interest in the Charmin brand and helps differentiate what could easily be a highly commoditized product. Their work has not gone without

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notice as Time magazine selected Charmin as “the sassiest brand on Twitter” in 2014 based on recommendations from a panel of social media and marketing experts who rated the brand that tweets the digs and smack downs. Developing creative campaigns to sell toilet paper may not be one of the most coveted jobs in marketing for many people. However, do not tell that to those who market Charmin and continue to find creative ways to get consumers to “enjoy the go.”

The Video The video includes members of the P&G team assigned to the Charmin account as well as members of their advertising agency, Publicis, N.A. in New York. It begins with the Charmin Associate Brand Director, Janette Yauch discussing the history of Charmin and the reasons why P&G acquired the brand, believing that it would fit into their existing line of products designed to help consumers feel better. Yuri Lee, a Group Account Director at Publicis, discusses the two-decade long Mr. Whipple campaign, and its great success, but notes that by the beginning of the new millennium, the campaign had maxed out. Yauch discusses how both P&G and the agency team believed that it was time for something new, which led to the adoption of a campaign that was very successful in the United Kingdom. After testing in the United States market showed that campaign was well received, the “Call of Nature” campaign was adopted. In 2000, P&G determined that it was time to shift from just focusing on toilet paper to the overall bathroom experience. As a result, the “Enjoy the Go” campaign was developed. The campaign was initially only on television, but then was expanded to include a presence in social media as well.

The next person to speak on the video is Scott Tilford, who holds the position of North America Consumer Market Knowledge at Charmin and discusses the competitive market for toilet paper.

He notes that while Charmin is the market leader, the four major brands (Charmin, Angel Soft, Quilted Northern and Cottonile) have approximately equal shares of the market. Scott notes that the toilet paper market is a low-involvement decision category, and the role of marketing communications is to get consumers engaged with the brand, which is no easy task! He discusses the need for extensive research as to determine when and where consumers use toilet paper, the positioning of the various brand leaders, and all of the factors that may affect the consumer decision process.

Janette Yauch returns to discuss how the team of brand managers at P&G and the agency participants work together. She notes all of the internal teams at both P&G and Publicis that work together, as well as various external teams and personnel. One such person is Dan Cohen, Senior Creative Director at Publicis, who appears next on the video. Dan –speaking from New York City-discusses how great it is to work with the Charmin team, noting their creativity, willingness to take risks, and their motivations to succeed. He introduces the Charmin Intermission ads, which encourage consumers to use the bathroom and “enjoy the go” instead of watching a traditional commercial. In the first of the two Intermission spots, a family takes a break while watching nothing and the second encourages the viewer to watch a waterfall for 18 seconds-- courtesy of Charmin.

Next to appear on the video is Michael Grieco, Creative Director at Publicis. Michael talks about the importance of conducting research to “get into consumers’ heads” to understand their purchasing decision processes. He briefly describes ethnographic research that involves sending

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researchers into consumers’ homes to discuss their use of toilet paper in a meaningful way. He notes how creative starts with a blank slate and then develops as insights are gained. He discusses how inputs into the creative process can come from a variety of sources, all of which are good pieces of information to use in developing the creative campaign. Michael is then joined by Yuri Lee who notes how the account relationship with creative has changed over the years, as there is now so much more to consider with all the new media, data, and analytics that clients and agencies did not have in the past. She discusses the importance of adapting the creative to social media such as Twitter, Facebook and other social media and how creative personnel have to keep all these platforms in mind when developing a campaign.

The “Call of Nature” Bears campaign is discussed next as Yauch explains that as times have changed, Charmin’s creative approach had to change as well. The idea for the campaign originated from the old expression “Does a bear go in the woods?” She and Yuri discuss how research shows that the bears are closely linked to the Charmin brand, how consumers like the campaign and how it adds a touch of humor to a rather mundane topic of going to the bathroom. Scott notes how the Bears campaign has been extremely effective for Charmin. Over the next few minutes, various participants discuss the “Enjoy the Go” campaign, and how the intent was to take it to as many places and situations as possible to get the word out about Charmin in a variety of ways. These include the “Enjoy the Go Relief Project,” which is a public relations campaign designed to put clean comfortable portable toilets into public places like Times Square in New York City, beaches, football stadiums and other places suggested by consumers so that they did not have to go in messy bathrooms and have a better bathroom experience. Approximately 50 fire stations across the U.S. were given over 30,000 rolls of toilet paper to demonstrate Charmin’s appreciation for the firefighters who so often “save our butts”, and show how Charmin wants to save theirs.

Dan Cohen returns to describe the how the Charmin uses integrated marketing communications.

He notes that while the brand still uses traditional media like television, it has also expanded into a number of other channels including various digital and social media platforms. Janette Yach then discusses how Charmin uses various forms of paid, owned and earned media as part of its IMC program. Scott Tilford discusses the importance of integrating traditional and digital media, and how they must work together. He notes how the various communication tools allow marketers to connect and engage consumers in a variety of ways that were not available in the past. Yauch discusses how social media is not used in isolation, but rather to amplify everything that is done to market Charmin. She also discusses the social media team at P&G and its agency partners and how they are involved with the IMC effort.

The next segment of the video focuses on measuring effectiveness of the IMC campaign for Charmin. Tilford discusses how Charmin uses various measurement tools including pre and posttesting of ads as well as in market tracking studies. Yuri Lee notes how metrics such as recall, brand linkage and execution likeability are used to measure effectiveness. The video concludes with a discussion of the future and challenges facing the brand. Yauch notes how it is important for her to set culture of expectations, collaboration and teamwork. Yuri Lee notes how advertising nothing like it is portrayed in the movies or on television. Michael Grieco then discusses the satisfaction that comes from coming up with an idea and then bringing it to life from an advertising perspective is very rewarding. The two of them discuss how everyone working in advertising is a novice because the field is moving so fast but how it is also a very exciting time to be in the

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industry.

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Intuit TurboTax: An Integrated Marketing Communications Case Study Running Time: 21:46 Recommended Use: Chapters 7 or Background/Overview This video focuses on the Integrated Marketing Communications used to market TurboTax, the leading brand of tax preparation software. TurboTax is a division of Intuit, a company that creates business and financial management solutions for small businesses, consumers, and accounting professionals and whose other flagship products include QuickBooks and Mint.com. The tax preparation business has historically been divided into two major segments: the assisted or do-itfor-me (DIFM) segment and the do-it-yourself (DIY) segment. Consumers in the DIFM segment use a tax preparation service or tax professional while those in the DIY segment use manual forms, software, or online services. For the past 25 years, TurboTax has been the leader in the (DIY) segment of the market; its products have been continuously ranked as the best-selling tax software.

Intuit has been on a journey the past few years to reinvent the TurboTax brand and transform the way taxes are done through product innovation that makes it superior to all other tax preparation methods. TurboTax has identified a core target segment called “On My Way” that it is focusing on to grow the DIY category. This is a large segment consisting of 17 million early life stage filers who are the most open to doing their taxes online but still use DIFM services. Most of these people are millennials who are younger, optimistic, and confident as well as generally early adopters of, and very comfortable with, technology that gives them a sense of control over their financial lives.

TurboTax has set course on a business model transformation that is directly addressing the needs of the On My Way consumer by building familiarity among prospects and disrupting the tax preparation category. One key strategy for doing this is through the introduction of TurboTax Absolute Zero which disrupts the category by offering federal and state tax preparation free of charge for the 60 million value-conscious 1040EZ/A Simple Filers in the United States who can least afford to pay to have their taxes prepared for them. TurboTax monetizes these customers by offering a value-added bundle of services that they can voluntarily choose to add. By offering these filers a completely free solution, TurboTax is betting that it can build trust and familiarity with them and as their tax situation becomes more complex, they will come back to the company and pay for one of its higher-end solutions.

During the 2016 tax season, Intuit decided it was time to take the next step in its journey to disrupt people’s notion and communicate how it was delivering superior value through its product innovation. Intuit developed an insight-driven, integrated marketing campaign designed to reinforce the positioning of TurboTax as the smarter way to do taxes. The campaign dramatized and celebrated “ownable moments” in the TurboTax experience that demonstrate key customer benefits in ways that change people’s current beliefs about and expectations of TurboTax. To execute on its strategy and show how TurboTax has transformed the tax filing process into something anyone can do, Intuit’s advertising agency, Wieden+Kennedy, created a big idea–led campaign titled “It Doesn’t Take a Genius to Do Your Taxes.” The campaign included 30-second TV spots featuring some of the world’s greatest minds appearing in amusing commercials showing that TurboTax is so simple and intuitive that even real-life geniuses cannot make it any easier to

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use or understand. Among the brainiacs appearing in the spots are a physicist, a mathematician, and a computer scientist. TurboTax’s integrated marketing campaign not only leveraged the product innovation in its TV campaign, but also promoted the “ownable moments” on the TurboTax.com website and the payoff people experience from using the product.

At the peak of the tax season, Intuit ran a clever commercial on the 2016 Super Bowl featuring Sir Anthony Hopkins being interviewed as an award-winning actor who has resisted the temptation to sell out in his illustrious career. In the spot, Hopkins notes that he has “way more integrity” than to sell out and rationalizes that he really is not doing so since it is free to file taxes with TurboTax Absolute Zero, noting “It’s free, there’s nothing to sell.” To leverage its Super Bowl ad message, Intuit also utilized digital and social media to extend the Absolute Zero message across online channels and keep it in the forefront of consideration during the offer period. TurboTax took home the 2016 Merkle Digital Bowl crown, which is given each year to the brands that best leverage digital marketing tools such as social media, SEO, paid search, and e-mail marketing to support their Super Bowl advertising.

Intuit is well on its way to repositioning the TurboTax brand and building meaningful connections with the core target of On My Way consumers. The company plans to continue to disrupt people’s notions of with it’s like to do their own taxes with TurboTax, supporting its brand purpose of putting hardworking Americans in charge of their money, starting with taxes The Video The video includes interviews with four executives from Intuit/TurboTax as well as an executive from the company’s advertising agency, Wieden+Kennedy. The four Intuit executives include Gregory Johnson, Senior Vice President of Marketing and Product Management; Kurt Walecki, Vice President of Design; Dan McCarthy, Vice President of Marketing; and Cathleen Ryan, Director of Marketing and Advertising. The W+K executive interviewed on the video is Christin Sheehan, Group Strategy Director for Wieden+Kennedy. The video begins with Senior VP of Marketing, Gregory Johnson discussing the origin of TurboTax, providing an overview of the tax preparation market, and noting how it is driven by the emotions of fear, uncertainty and doubt. The video then shifts to Dan McCarthy, VP Marketing, who discusses the two major segments in the tax preparation market – the Do it yourself (DIY) and Do it for me (DIFM) consumers. Both Johnson then provides more insight into the characteristics of these consumers as does McCarthy who also discusses the barriers for consideration in getting consumers to use tax preparation software such as TurboTax. The video then shifts back to Johnson who discusses Intuit’s strategy for transforming its business by focusing on a segment of consumers that the company was not reaching “free” customers who file very simple tax returns and are extremely price sensitive. He discusses Intuit’s introduction of TurboTax Absolute Zero and how this new strategy helped increase TurboTax’s market share from 40% to 58% in just three years. McCarthy provides an overview of the integrated campaign used to market Absolute Zero.

The next segment of the video is an interview with Kurt Walecki, VP of Design for TurboTax. He discusses the important role of design of the TurboTax software product and the process used by the company to understand consumers. This process included the use of ethnography whereby the Intuit team met with over 500 consumers to discuss their financial and tax problems as well as

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their dreams and aspirations. He notes how design for TurboTax is about crafting a beautiful, seamless and effortless interface that customers want to work with when doing their taxes.

Walecki discusses how the design included the integration of strategic touchpoints called “ownable moments” such as Snap, Tap, Done which is the ability to take a picture of a W2 that captures the data needed to populate the TurboTax form. Another ownable moment is “Explain Why” which explains tax situations to consumers and answers common questions.

The video then shifts to a discussion of the “Genius” campaign by Christine Sheehan, Group Strategy Director at Wieden+Kennedy. Sheehan discusses the emotion behind taxes and the branding opportunity for TurboTax by becoming a more empowering brand for consumers. She goes into detail in discussing the creative rationale behind the “It doesn’t take a genius to do your taxes” campaign and how the message is that it does not take a genius because the TurboTax product is the genius. Sheehan discusses the decision to cast actual geniuses in the television commercials such as a theoretical physicist, a Nobel laureate in astrophysics, a professor of mathematics at Princeton, and a computer scientist at Brown University. She then discusses the television commercial developed for the 2016 Super Bowl for Absolute Zero that was based around the idea that if Intuit Turbo/Tax was selling something for free, then it really was not selling something. Thus, if a celebrity appearing in a commercial for TurboTax would really not be “selling out” since s/he would not be selling something. She discusses the decision to use awardwinning actor Sir Anthony Hopkins in the Super Bowl ad, which is then shown. In the clever and humorous spot, Hopkins explains that he would never impugn his integrity or tarnish his name by selling a product as he lifts a teacup to his mouth with the TurboTax logo. He is also wearing blue slippers promoting the tax service and his dog is wearing a TurboTax sweater. Hopkins notes that he has “way more integrity” than to sell out and rationalizes that he really is not doing so since it is free to file taxes with TurboTax Absolute Zero, noting that “It’s free, there’s nothing to sell.”

The next segment of the video focuses on Social Media and the Changing Media Landscape and features Cathleen Ryan, Director of Marketing & Advertising for Turbo Tax. Ryan discusses the growing importance of various social media tools such as Facebook, Twitter and Snapchat and how TurboTax won the 2016 Merkle Digital Bowl crown, which is given each year to the brands that best leverage digital marketing tools such as social media, SEO, paid search, and e-mail marketing to support their Super Bowl advertising. She then discusses the shifts and transitions in the media landscape over the past 10 years and how it is important to integrate the various digital and traditional media tools such as social, video, display and search advertising. She notes the importance of having all of the media tools work together rather than forcing a dichotomy between them. Ryan then discusses the need for TurboTax to reach a very broad target audience and the importance of using various digital and social media tools to do so. She notes how tools such as Twitter, Facebook and Snapchat are used as well as online video display and native advertising.

She notes how the traditional conversion funnel is difficult to use today since there is no one path to conversion anymore and the This segment of the video concludes with Ryan discussing Mobile Marketing and the challenges and opportunities it presents for TurboTax. She notes how TurboTax integrated its ownable moments across all touch points.

The next segment of the video focuses on Measuring Effectiveness and Analytics. VP of Marketing Dan McCarthy begins by discussing how Intuit relies heavily on data analytics and the important role it plays in the marketing process. He notes how millions of dollars of marketing and

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media spending decisions rely on analytic and marketing mix modeling to determine where the company gets the best return on investment (ROI). The video then shifts to Gregory Johnson discussing the power of neurological testing and how it is used by Intuit to determine how well its advertising messages are communicating and whether they are having the desired effect on consumers. He notes how neurological testing is used to help edit its advertising and determine the five or 10-second segments of a commercial that are most impactful. He also notes how Intuit relies heavily on other marketing research techniques such as traditional copy testing as well as marketing mix and attribution modeling to determine the ROI of its various marketing expenditures.

The video ends with a discussion of Successful Integration by all of the Intuit interviewees.

Cathleen Ryan notes how integrated marketing includes the product experience and the customer experience that someone goes through. McCarthy notes the rapid pace of testing and experimentation that is done as part of the marketing process for TurboTax while Kurt Walecki notes that Intuit now brings a product with soul to the market that is validated by the acceptance of the product across the social channels.

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DASANI: Building a Brand: A Case Study Running Time: 24:35 Recommended Use: Chapters 7 or 8 Background/Overview This video focuses on the Integrated Marketing Communications campaign used to build a new brand image for DASANI, the leading brand of bottled water in the U.S. and one of the billion dollar brands marketed by the Coca Cola Company. Up until the 1990s, bottled water was only a sliver of the U.S. beverage industry and the market was dominated by upscale brands such as Perrier and Evian. However, during the last decade of the millennium beverage consumption patterns were changing as soft drink sales began to stagnate while bottled water became the fastestgrowing segment of the mass market beverage category. Beverage companies recognized that consumers were increasingly choosing healthy, convenient, zero-calorie bottled water over other beverages and were launching new products to grab a share of the market.

The Coca-Cola Company launched DASANI bottled water in 1999. Strong growth in the bottled water category, along with company’s extensive distribution system, helped the brand achieve 20 percent compounded growth through 2006 and become a $1 billion brand in retail sales. However, by 2007 the marketing environment for bottled water was beginning to change. Mainstream brands such as DASANI, Aquafina, Arrowhead, and others had become more commoditized and began losing market share to private label brands and enhanced water beverage brands, such as vitaminwater®. The Coca-Cola Company found its DASANI brand stuck in the middle and being squeezed between premium, prestige brands such as smartwater®, Voss, ETHOS, FIJJI and EVIAN and low/value-priced private label brands. The bottled water category was also facing environmental concerns with many consumers and retailers questioning the sheer number of brands on the market and the disposal of plastic bottles. By 2009, Walmart and other major retailers began dropping DASANI and other mainstream brands of bottled water.

In 2009, The Coca-Cola Company retained The Lambesis Agency (TLA) to handle DASANI. TLA quickly recognized that its first challenge was to defend against the market squeeze from the high- and low-end brands, which required positioning DASANI bottled water as the most aspirational, yet accessible mainstream brand. The Coca-Cola Company and TLA also recognized that the environmental concerns regarding bottled water also had to be addressed and could be a point of differentiation. Coca-Cola had created PlantBottle® packaging, a 100 percent recyclable bottle made from up to 30 percent plant-based material that was being used for some of its other beverages. The company was ready to reintroduce its DASANI brand in this new, more environmentally friendly bottle and knew that the launch had to make the brand likable and relevant to both consumers as well as retailers. TLA created a fully integrated rebranding campaign that combined environmentally conscious messaging with premium high design to celebrate the DASANI brand, the PlantBottle packaging, and the brand’s sustainability platform. A sleek and minimalist aesthetic was used throughout all of the creative work to reflect the pure, clean, refreshing feeling of water. Lambesis utilized these design elements for the website as well as for high-impact online display ads, both of which helped educate consumers about the PlantBottle packaging.

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Print and outdoor advertising used for the campaign centered on an impactful image of natural plant life “growing” the PlantBottle packaging. TLA created an innovative print insert on 100 percent recycled paper with a peel-off plantable seeded paper leaf to showcase the environmentally conscious design of the packaging. Seeded leaf paper with eco-conscious messaging was also placed on products in retail stores to further communicate DASANI’s commitment to sustainability. The integrated campaign also used television advertising, as the first TV spot used bright, clean, nature-inspired imagery to showcase the brand’s commitment to being more sustainable and to portray DASANI bottled water as clean, crisp, and refreshing. A second spot was set to music from the classic Chubby Checker song “The Twist” and leveraged its enduring appeal to demonstrate to consumers how easy it is to twist and recycle the new PlantBottle packaging. The integrated campaign was very successful as it helped the DASANI line regain distribution in key retail accounts and positioned it as the mass prestige brand that stands out as the clear choice between higher-priced premium brands and lower-priced private label options.

Building on the successful repositioning of DASANI bottled water, The Coca-Cola Company launched a new product named DASANI Drops® which is a zero-calorie flavor enhancer with various flavors that can be added to water. DASANI Drops flavor enhancers give consumers a new way to enjoy drinking water by enhancing the taste of water with a simple squeeze of an easy-tocarry bottle and targets mothers and health-conscious people who are very busy with their daily routine. An integrated campaign themed “Turn Your Flavor On” supported the introduction of the Dasani Drops enhancers, and included print, digital, and outdoor advertising along with in-store promotions and sampling at stores, on college campuses, and at concerts.

The successful repositioning of DASANI has made the brand the market leader in the bottled water category and the Coca-Cola Company decided to leverage the brand equity by introducing DASANI Sparkling, a carbonated water beverage. In 2016 The Coca-Cola Company debuted new flavors and introduced fresh packaging for the DASANI Sparkling line and supported these efforts with an integrated marketing campaign called “Break for Bubbles” which encourages people to take a break from everyday stresses with a refreshing beverage. The integrated marketing campaign includes television, digital, print, and out of home advertising that delivers a message of how the DASANI Sparkling brand enlivens any moment with a refreshing and rejuvenating escape so you can renew, recharge, and restart your day fresh.

Over the past seven years the excellent creative work done by TLA has helped propel DASANI bottled water from a brand that was struggling to avoid commodity status to the highest-ranked branded water in dollar volume. Moreover, bottled water has become the fastest-growing mass market beverage category in the United States with annual sales of nearly $15 billion. The DASANI brands have also become an important part of the Coca-Cola Company’s product portfolio as consumers continue to move toward healthy, convenient, and refreshing beverages.

The Video The video includes interviews with four executives from The Lambesis Agency (TLA) as well as an executive from the Coca Cola Company which owns DASANI. TLA executives include Chad Farmer, President and Executive Creative Director; Brian Munce, Executive Director, Brand

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Management; Lisa Hardenbrook, Director of Strategic Planning & Connections; and Oscar Lutteroth, Executive Director, Interactive. The Coca Cola Company executive interviewed on the video is David Preston, Vice President of Innovation.

The video begins with David Preston discussing the history of DASANI and the decision by the Coca Cola Company to enter the bottled water market in 1999. He notes how the company observed the shift in the beverage market toward bottled water and the need for the company to get in the game. Preston discusses how the Coca Cola Company decided to create an entirely new brand to enter the bottled water market. Lisa Hardenbrook from TLA then discusses the origin of the DASANI name and how it was created by the original brand team at Coca Cola. She notes how there was not a word in the English language to communicate clean, fresh, taste in a way was both approachable and premium.

The next segment of the video focuses on TLA pitch for DASANI. Chad Farmer discusses how TLA first came into contact with the Coca Cola Company through its creative excellence group which noticed the excellent creative work the agency had done in developing an integrated marketing campaign for Campari, a liqueur used in many cocktail drinks. He notes how TLA competed against four other agencies, including the incumbent, and won the business. Brian Munce then discusses how TLA presented its full integrated marketing approach for DASANI which included strategy, package design, advertising and the need to move to a more emotional appeal that could differentiate the brand across all touch points. Lisa Hardenbrook discusses the bottled water market and the various segment categories including the premium, mainstream and value segments. Her focus then shifts to purchase motives which include taste, price and brand image. She notes how bottled water has become more than just H2O and has becoming a growth category.

The next major segment of the video is a discussion of the creative strategy behind the PlantBottle campaign. David begins by discussing how environmental concerns were becoming a major issue in the bottled water market because of the disposal of plastic bottles and how the Coca Cola Company developed its new PlantBottle packaging, which makes it possible to develop a plastic bottle from plant based materials. Farmer notes how this provided a creative opportunity to show that DASANI was “designed to make a difference” and combat the problem of plastic bottles damaging the environment. He explains the process by which he came up with the creative idea for advertising that would show a bottle growing out of a plant and shows the original sketches he used in developing the PlantBottle idea. Preston and Munce discuss how the PlantBottle campaign gave distinct meaning to DASANI and helped position it as a brand that stands for something and is trying to lead.

Lisa Hardenbrook returns in the next segment of the video to cover the various types of market research that TLA uses for DASANI. She notes how the agency uses MRI to gain insight into bottled water consumers and develop foundational insights such as demographics. She notes how additional research methods are used including focus group, ethnography and various techniques to tap into consumer emotions associated with bottled water. She also discusses the challenges of trying to connect with consumers for a low involvement product such as bottled water and how paid, owned and earned media are used to tap into consumer emotions related to bottled water consumption.

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In the next segment of the video Chad Farmer and Brian Munce discuss the Twist Campaign that TLA created to highlight the recyclability of DASANI’s PlantBottle packaging by showing how consumers can twist the bottle after use to reduce its size and the space it takes up in a land fill.

The campaign featured a clever TV commercial set to the classic Chubby Checker song “The Twist” which was the second most popular TV commercial that aired during the Summer Olympics.

The next segment of the video focuses on two line extensions created from the core DASANI brand, Drops and Sparkling, and the advertising created for each. DASANI Drops flavor enhancer gives consumers a new way to enjoy drinking water by enhancing the taste of water with a simple squeeze of an easy-to-carry bottle. Farmer and Munce discuss how Drops targets a younger consumer for the DASANI brand and how music-based appeals are used to create a fun image.

DASANI Sparkling is a new brand designed to compete in the rapidly growing sparkling or carbonated water segment. Sparkling’s positioning is based more on style and prestige. TLA created the “Break for Bubbles” campaign which is designed to get busy consumers to take a moment to stop and enjoy the moment.

The next part of the video focuses on the use of integrated marketing communications for DASANI. Chad Farmer discusses the importance of creating a strong visual brand identity for DASANI that is integrated across all channels. He notes the challenge of branding an undifferentiated product such as water and the decision to position DASANI as a lifestyle brand that focuses on feelings rather than just rational benefits. Farmer discusses how the agency photographs the DASANI brand to make it look more like a fashion brand. Oscar Lutteroth, Executive Director, Interactive discusses how a mass market brand such as DASANI must communicate with consumers across a variety of touch points and TLA takes an approach called ‘no dead ends’ which utilizes a variety of media to deliver a message and create top-of-mind awareness.

The next segment of the video covers the use of digital and social media in the IMC campaign for DASANI. David Preston begins the discussion how the Coca Cola Company and its agency partners have changed the IMC approach to include social as well as traditional. Lutteroth discusses the challenges of working in the digital interactive space as it changes very rapidly. He notes how social media is used to get into the consumers consideration set while digital tools such as a web site are used to provide information and educate consumers about DASANI. He discusses how the growth of mobile is leading to the separation of interactive as its own channel rather than just an extension of traditional media.

The next part of the video focuses on the importance of retail channels in marketing beverages such as DASANI and the Coca Cola Company’s goal of having its products “within an arm’s reach of desire.” Preston notes that distribution is one of the most important parts of the marketing program. The video continues the focus on retail distribution with Lisa Hardenbrook discussing the importance of creating IMC campaigns that will drive consumers into the retail stores. She notes how factors such as package design and the way a product sits on the shelf or is displayed on an end cap or at point-of-purchase are all important in getting support from retailers.

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The next segment of the video covers Measurement/Testing. Brian Munce notes how Milward Brown is used to test the effectiveness of the advertising and how key metrics must be met before an ad can be aired. Preston discusses how the Coca Cola Company uses a “one number” brand score and a threshold of 105 that advertising must meet. He notes that DASANI has the highest brand score of all of its brands. Chad Farmer returns to discuss how the Coca Cola Company is one of the most knowledgeable and experienced clients TLA has worked with and measures everything. He notes that while the company is very demanding, the agency likes being held to its high standards. Lutteroth then discusses the various metrics used to measure the effectiveness of digital such as Google analytics. Measures such as the number of people watching videos, how much of a video is being watched, bounce rates, completion rates and other metrics are used to measure engagement with content on the DASANI web site.

The final segment of the video discusses the future for DASANI. Preston notes that DASANI is one of 20 or so billion dollar brands marketed by the Coca Cola Company’s and is an important driver of revenue and growth for the company along with brands such as Coke, Diet Coke and Sprite. Farmer and Hardenbrook note how the future for DASANI is based on sustainability. All of TLA interviewees discuss how DASANI is designed to make a difference and make the consumer feel good about walking around with a bottle the product.

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Under Armour: Integrated Marketing Communications - 2014 Running Time: Recommended Use

24:40 Chapters 7

Background/Overview This video case examines the integrated marketing communications program used by Under Armour (UA) with a focus on the company’s efforts to enter the basketball shoe market and its marketing initiatives to bring more women to the brand. IMC has played an integral role in making (UA) one of the most successful and fastest growing companies in the sports industry. UA reached $2 billion in annual sales in 2014 and has become one of the top brands in the sports apparel and equipment industry. However, to continue its strong growth, UA recognizes that the company must be able to penetrate new markets. As discussed in IMC Perspective 8-3, one of the markets that has become a priority for UA is the female segment which presents a major challenge for the company as its brand identity has been strongly tied to male-dominated sports such as football and baseball. The video provides more insight into the strategy UA has used to attract more female customers and move beyond its initial “shrink it and pink it” approach that involved creating smaller and more colorful versions of its men’s apparel to fit the female form and expanding its product line to include items such as shorts, tops, and sport bras. The UA executives featured in the video discuss many of the initiatives covered in IMC Perspective 8-3 such as the “What’s Beautiful” campaign that involved the creation of an online community in which it sought to juxtapose beauty and femininity alongside the effort and sweat that comes with yoga, exercise classes, and gym sessions. The sources listed at the end of IMC Perspective 8-3 might be used as assigned reading to provide more insight into UA’s IMC efforts targeting women.

The video also covers UA’s efforts to enter the basketball shoe market. While UA generates most of its revenue from athletic apparel, the company has been successful in marketing cleated footwear for football, baseball, softball, lacrosse and soccer. However, the company’s efforts to enter the mainstream athletic shoe market with products such as cross training and running shoes has been very challenging as it faces a number of formidable competitors in these markets. For example, Nike controls more than 90 percent of the basketball shoe market in the United States with its Nike, Air Jordan and Converse brands and other major companies such as adidas and Reebok are also competing in the this market. While UA recognizes that it faces strong competition in basketball shoes the company feels it can compete in this market which generates an estimated $2.5 billion in sales each year. UA launched a new line of basketball shoes in late 2010 with NBA player Brandon Jennings of the Milwaukee Bucks as its primary athlete endorser.

Jennings, who moved to the Detroit Pistons in 2013, remains one of the UA basketball athletes along with Kemba Walker and Raymond Felton. In 2013 the company also signed Golden State Warriors star Stephen Curry to its endorsement team who defected from Nike to sign with UA. It should be noted that a case study focusing on UA’s initial efforts to enter the basketball shoe market is available on the instructor’s web site and can be used as an assigned reading before showing this video. Articles can also be found online regarding the “Are You From Here?” campaign that UA began running in late 2011 and has been using for the past three years.

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The Video Two high level UA marketing executives appear on the video including Steve Battista who is Senior Vice President, Brand and Steve Sommers who is the company’s Vice President for Global Brand Marketing. The video begins with Steve Battista discussing the beginnings of UA and how there were only 19 employees at the company when he began working there in 2000. He also notes that at the heart of Under Armour has always been the question of “Why can’t there be something better?” and how this has been the key to the company’s entrepreneurship as well as its brand identity. This basic idea provided the foundation for building a $2 billion multinational, global brand. He also notes how UA has to prove itself each time it enters a new market with a new product line. Battista discusses how during its first five years UA focused on how its moisture wicking product offered athletes, and football players in particular, a way to make them better and enhance their performance. However the first television commercial created by the company did not focus on product features and benefits but rather was designed to get athletes excited about the brand. The spot focused on how UA created the performance apparel category and how it needed to defend its position as other companies tried to knock them off. It included the iconic phrase “We must protect this house” which became the basis for the tagline the UA uses today: “Protect This House. I Will.” He notes how the tagline translates to every country and language as well as every market segment including women. Note that the “I Will” part of the tagline is a call to action that serves as a confirmation for athletes that they will do what is necessary to complete their training or exercise routines.

In the next section of the video Battista and Sommers discuss the role of athlete endorsers at Under Armour. Battista notes how UA has always used real, authentic athletes. The company originally used “The Big E” in its commercial who was played by Eric Ogbogu, a former NFL football player.

Over the years the company has added a number of athletes as endorsers including Tom Brady who is the star quarterback of the New England Patriots, swimmer Michael Phelps, skier Lindsey Vonn and Washington National’s baseball star Bryce Harper. Sommers discuss the partnership between Under Armour and its endorsers and some of the key qualities of athletes such as Phelps, Vonn, and Harper and why they are great brand ambassadors for the company. Battista ends the discussion by noting that UA, unlike other athletic product companies, does not create any separate brands or product lines using individual athletes as the company focuses on the UA brand rather than the athlete’s brand image.

The next section of the video focuses on the role of digital media in the IMC program of Under Armour. Battista notes how in the early days of the company UA focused much of its advertising on televised sporting events and sports network shows such as ESPN’s Sports Center. He also discusses how diversification of media and growth of digital social media in particular allows companies such as UA to be more nimble and allows them to take more chances and reach consumers across different platforms. Younger consumers in particular can be reached more easily through social media. Sommers discusses the critical role of IMC and how digital media need to be integrated across various touch points and the important role the UA web site plays in telling the story of the company and its products. He also notes how UA uses digital media to provide a two way form of communication for connecting with consumers but how it is important to be honest and authentic in doing so and having a product that delivers on its promise.

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A little over ten minutes into the video the focuses moves to the basketball market and UA’s strategy for marketing its new line of basketball shoes. Steve Sommers begins by discussing the various athletes UA has signed as endorsers for basketball shoes such as Brandon Jennings, Kemba Walker and Stephan Curry and challenges the company faces in this market. He notes that UA was born on the football field and the importance of the company replicating its authenticity in the basketball space. However, he notes that they are often talking to a different consumer for basketball shoes who wants to be communicated with in a different manner. Steve Battista notes that basketball players have grown up with other brands and also discusses the challenge of finding a way to penetrate this market. UA’s positioning in the basketball shoe market is based on the hard work it takes to succeed in the sport and is indicative of the long term perspective the company has taken to competing in this market. UA uses the “Are You From Here?” tagline. The impetus for this integrated campaign came from an insight that many basketball stars are from the inner city and that basketball is a lifestyle and often a way out for them. The “Are You From Here?” tagline implies that basketball players get it and understand what it takes to succeed in the sport.

UA’s goal with the campaign is to infuse the “Are You From Here” ethos into the “I Will” component of its main tagline to make it consistent with UA’s overall brand image and positioning.

This section of the video ends with Sommers acknowledging that the world is not looking for another basketball shoe company and UA must be producing products for a purpose and reason if it is to succeed in this market.

The focus of the video then shifts to UA’s efforts in marketing to women. Battista notes that as UA hired more designers and opened up its products to more styles, designs and colors its women’s business was growing 30 percent per year. However, the company did not feel it was reaching female consumers at an emotional level and was looking for better ways to connect with them. The video then focuses on the “What’s Beautiful” campaign and the role it played in helping UA’s increase its relevance to women. Sommers notes the importance of the female market to UA as it is larger than the male market in terms of overall sales. He discusses how UA focused on young girls and women who played teams sports but then lost them as they got older and did not acknowledge the other parts of their life as they moved into careers and their priorities changed.

UA has changed many elements of its marketing program for women such as expanding its distribution channels beyond sporting goods stores and making its products available in a variety of retail stores where women shop such as Nordstrom’s, Macy’s and boutique stores. Insight is provided into how a brand community was created around the “What’s Beautiful” theme using events, digital/social media, and traditional media advertising including broadcast and print to drive women to the community. Ads using the “Sweat Every Day” theme were an important part of this campaign.

The video concludes with a discussion of the future of Under Armour and how the company plans to leverage the “Protect This House” tagline which has become part of popular culture. Sommers notes that a google search would reveal more than a billion images created around the tagline and how sports teams have created practice drills around it. He also discusses the importance of maintaining the relevance of the UA brand image and ensuring that the company does not lose sight of who they are. UA wants to maintain its role as the underdog in the sports apparel and shoe market as it competes against companies such as Nike and adidas. Steve Battista notes that innovation is the key to the company’s future and the tremendous opportunities the company has

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in global markets such as China. He also notes how it all comes back to the question that the company was founded on which is “Why Isn’t There Something Better?”

The final three minutes of the video contain a very humorous clip featuring NFL quarterback Tom Brady who is perhaps UA’s highest profile endorser. The segment features Brady bantering back and forth with a sales person in a Dick’s Sporting Goods store in Los Angeles. The sales person suggests that Brady has a Boston accent even though he does not as he is from San Mateo, California. Store patrons join the sales person in making fun of his purported Boston accent while Brady keeps insisting that he is not from Boston. While it is not necessary to show the last three minutes of the video, students are likely to find the segment amusing.

It should be noted that another UA video is available that was filmed in 2008. The second video, which is discussed below, focuses on the IMC program used by Under Armour in building its brand during its first ten years and includes a discussion of the company’s effort to enter the athletic shoe market with cross training shoes.

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Under Armour 2008: Building a Brand Through Integrated Marketing Communications Running Time: Recommended Use:

24 minutes Chapters 3 or 7

Background/Overview This video cases focuses on the integrated marketing communications program used by Under Armour to build its brand and help make them one of the most successful companies in the sports industry. Under Armour developed its unique brand identity by focusing on the male market and tapping into the raw emotion of football through the “Protect This House” advertising campaign.

The Baltimore-based company has been one of the most successful new companies in America over the past decade. The Under Armour (UA) success story continues to unfold, as the company has become one of the fastest growing sports apparel companies in the world. Started by current President and CEO Kevin Plank out of the trunk of his car in 1996, UA has now has annual sales of more than $2 billion. The success of the UA clothing line has led the company to expand its business into the athletic shoe business, and some feel that they pose a huge threat to industry giants Nike, adidas and Reebok. While Nike’s advertising budget dwarfs UA’s total sales revenues, many feel that the UA brand name is already stronger than adidas or Reebok. A survey

by Piper Jaffray & Co. of 700 U.S. students showed Under Armour to be the solid No. 2 athletic brand in the United States. Nike still dominates, but among males, Nike and Under Armour finished nearly tied as the preferred clothing brand (37 percent to 35 percent). “Their brand recognition among teens is really remarkable for a brand that grew organically. There’s a generation of kids that are adopting Under Armour as their own,” said Brian Jennings, the NHL’s executive vice president of marketing, who has a deal for compression shorts with Under Armour.

Under Armour’s success can be attributed to its innovativeness, strong product quality, and ties to professional athletes in a variety of sports. While these athletes may be highly successful, they are not always the most well known in their fields. That commitment to the less than famous athlete plays a large part in their brand image of a product for the serious athlete. Like Nike, the commitment to the brand has been the secret to success. Having a brand, if not sales, that rivals Nike’s for share of mind among the key teen consumer gave Under Armour legitimacy to enter the athletic footwear market. Under Armour introduced cleated footwear in 2006, and quickly grabbed more than 20 percent of that market, taking share from Nike, Reebok and Adidas. Now comes the real test: non-cleated footwear. Nike has responded to Under Armour’s launch of their cross trainer footwear line with a huge marketing effort behind its Sparq trainers, thus far, to mixed results. Nevertheless, the UA brand will have to contend with Nike’s size, influence and ability to leverage key retailers such as Foot Locker, along with Under Armour’s weakness at mall-based retailers, as factors that will work against the company’s success.

Under Armour has made inroads into the retail market as one of their key retail accounts is Dick’s Sporting Goods but still has a way to go to make a dent in Nike’s armor. UA knows that noncleated athletic footwear market is a much more challenging business and success in this market will determine whether it can fulfill Kevin Plank’s goal of being “the world’s top performance athletic brand.” This video demonstrates how Under Armour has effectively used IMC and plans to continue to do so to build upon their success into the future. The video focuses on Under

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Amour’s IMC efforts from its founding up to 2008. Time permitting, you may want to show this video to provide insight into how Under Armour built its brand identity through its IMC efforts and then show the new 2014 video to show how the company is using its brand equity to expand into new markets such as basketball shoes as well as the female market.

The Video The UA video discusses the founding of the company in 1996, and takes the viewer up to the situation in 2008 when it entered the cross training segment of the athletic shoe market. Key participants in the success of the company, many who have been there since the inception, discuss Under Armour’s amazing success. It opens with excerpts from UA commercials that effectively summarize what the brand is all about. The “We Must Protect this House” commercial is virtually a mantra for what has led to the success of the company and Cat Osterman, U.S. National Team softball pitcher and 2006’s Collegiate Softball Player of the year reflects Under Armour’s positioning of offering excellent and innovative products for the serious athlete. UA has become known as the brand for serious athletes in a variety of sports, not just football.

The video begins with a discussion of Kevin Plank, the founder and now President and CEO of Under Armour. Steven Battista, Senior Vice President of Brand, discusses how Plank was a walkon football player at the University of Maryland, and hated wearing cotton shirts to practice.

Knowing that he would never be an NFL player, Plank devoted his efforts to starting a company that could make a product that would be an improvement over cotton, in that it would not absorb sweat and be much more functional and comfortable. He started selling the shirts to the lacrosse and football teams at the University of Maryland out of his car trunk. In 1998, the football oriented movie “Any Given Sunday” was being filmed in Baltimore, MD. The producers of the movie were looking for a product that would represent the athletic nature of the movie and be comfortable to wear during filming. Under Armour, provided products and the UA shirts were used throughout the filming and appeared in the movie itself, providing national exposure for the brand. At about the same time, ESPN was initiating a sports magazine, and looking for advertisers. Plank called in his dozen or so employees and said if they would skip one pay check, they could purchase an ad.

They all agreed to do so. The product placement and ad led to a dramatic increase in website sales, and, as noted by Battista got the company started.

A similar situation arose in 2003. This time it was ESPN who came calling, asking UA to be part of their new HBO series about football players called “Playmakers”. ESPN thought that since everyone in the locker rooms was wearing Under Armour, it would be most realistic if the players were shown in the UA clothing. At about this same time the original “We Must Protect This House” commercial featuring “Big E” (Eric Ogbogu), a former NFL football player, was released.

The combination of the placement and the commercial again led to yet another major gain in sales.

Perhaps even more importantly, the commercial immediately became immensely popular. Fans holding up signs saying “We must protect this house”, David Letterman talking about it on his late night television show, and mentions by Oprah Winfrey led to the line becoming part of the American lexicon. UA was off and running.

The next person to appear on the video is Marcus Stevens, the Senior Creative Director who was one of the original employees of Under Armour, and has been there creating UA commercials in-

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house ever since. Marcus tells about how the decision was made to keep the company’s advertising and other forms of integrated marketing communications in-house and living and breathing UA every day was the best way to go with the company. The video then shows a discussion by Battista of UA’s “4 Keys of Greatness” – the guidelines that led to the successful brand building and maintenance effort. These guidelines underlie the UA philosophy, and are the Golden Rules to follow by employees and are as follows: 1.

2.

3.

4.

Build a great product Tell a great story about the product Provide great service Build a great team of people

In his discussion, Battista notes that the IMC approach of “hitting all of the touch points” was critical to the brand’s success. He discusses the importance of public relations, product placements, in-store promotions and advertising in the IMC effort. A number of commercials (including one in Japanese) are shown to show the consistencies of the connections. The video then cuts back to Marcus Stevens discussing the development and importance of “Protect This House” and especially, the role of “Big E”. Marcus then discusses how the “Click-Clack” creative was developed, providing a very interesting behind the scenes perspective of the creative process.

Battista follows this by discussing the IMC process and the importance of a consistent message, by describing the in-store promotions and how they reflect the image created by the commercials.

He notes that all the way down to the mannequin displays, everything must speak to the UA image.

The next Under Armour executive to appear on the video is Kevin Haley, Senior Vice President of Sports Marketing, who discusses the role of athletes in the company’s IMC program. The athletes used in the UA effort are critical to the company’s success. As Haley explains, many athletes now want to be in the UA arena. However, in order to protect UA’s brand image, not all qualify. Specific criteria, most importantly that they are they a good person, must be met. Also, careful consideration is given to how the athletes will fit into the overall marketing scheme. B.J. Corey, Assistant Manager, Sports Marketing goes on to discuss the process of signing athletes and the critical importance of them having the Under Armour “DNA”. He also notes many of the athletes in various sports that are endorsers for Under Armour.

The next person to appear in the video is Nathan Shriver who is the Art Director of Interactive who discusses the role of online marketing for Under Armour. Shriver discusses how the UA web site is used for e-commerce as well as for branding purposes. He also notes how the company communicates with its database of customers online. The video then shifts back to Steve Batista who discussed the various sports and sponsorships that Under Armour is involved in such as high school All American games in football, baseball and lacrosse and the role that each plays in the IMC program. He notes how these games are used to establish an Under Armour community and for testing ideas, developing programs and conducting research.

Battista discusses the major strategic initiative Under Armour made in 2008 to move into the cross training shoe segment of the athletic shoe market. He explains that after 2006 and the introduction of cleats, the market requested that UA move into this category. He discusses some of the challenges and thinking that went behind this move, as well as the Super Bowl commercial that

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launched the new product category. In fact, the Super Bowl commercial, which was created inhouse, was meant to be much more than a new product category launch. The larger purpose of the commercial was to position Under Armour for the future, and take the next step in that regard.

Marcus Stevens and Battista explain how the commercial will focus on athletes as a “new prototype” who are different from previous athletes. UA wants the market to know that they own training, and want the younger athlete to strive to be successful and enjoy sports. An important comment made by Battista here is that while the Super Bowl commercial was very important, the publicity surrounding the commercial was, perhaps, even bigger.

The Under Armour video can be used to demonstrate the power of an IMC campaign, even when competition is extremely strong. As noted, UA’s marketing budget pales in comparison to Nike and other brands, yet effective positioning, strong creative and a commitment to the brand have led to extreme success. Every touch point speaks to the same positioning and brand image that has led to consistency since the company started. UA has achieved success through a strong dedication to the product and brand, and an effective IMC campaign that has positioned them for the future.

One thing that clearly came out in the interviews at Under Armour is the commitment and dedication of those who work there. Everyone we spoke to talked about the team, the love of working at UA and their loyalty to the company. The words “good people” were used to describe UA and the people they are involved with. They all have fun, but work hard to insure the success of the company. As noted at the end of the video, they all feel lucky to be there.

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Taco Bell: Integrated Marketing Communications Program Running Time: Recommended Use

24:45 Chapters 3, 6, 7 or 8

Background/Overview This video examines Taco Bell’s “Live Mas’ IMC campaign which is designed to make the brand attractive and relevant to young, hip and cross-cultural consumers by focusing on fast food as an experience and life style. It also examines Taco Bell’s introduction of the Doritos Locos Tacos (DLT) which emerged as a co-branding initiative with snack food giant Frito Lay and has been one of the most successful new product introductions in the history of the fast food industry. Since its inception as an alternative to hamburger joints in Southern California, Taco Bell has grown to become the leading Mexican-inspired quick service restaurant in the U.S. with nearly 6,000 locations across the country that serve more than 36 million customers every week. The chain is a subsidiary of Yum! Brands, Inc., the world’s largest restaurant company with nearly 40,000 restaurants in more than 125 countries. The company’s brands, which also include KFC and Pizza Hut, are the global leaders in the chicken, pizza and Mexican-style food categories. Consistent with its roots, Taco Bell has remained an innovative, on-the-edge brand that is always a little different from the mainstream food establishments. The company has had a number of creative advertising campaigns over the years including the popular “Yo Quiero Taco Bell” campaign that featured a Chihuahua with an attitude who became a pop-culture and advertising icon. The ads featuring the dog helped generate the highest advertising awareness ever for the chain as well as burnish Taco Bell’s image as a hip place to eat. Over the past decade Taco Bell ran a number of other successful advertising campaigns around the “Run for the Border” and “Think Outside the Bun” themes. Taco Bell has also been responsible for a number of “firsts” in the industry including being the first chain to offer free drink refills, the first to offer an alternative to hamburger joints, and the first to introduce the crunch Taco to the U.S. market.

The fast food industry was hit hard by the downturn in the U.S. economy during the recent recession. While Taco Bell was able to weather the recession, in 2011 the company’s sales stagnated as same store sales declined by 1 percent, which was in part attributed to some negative publicity resulting from a lawsuit regarding the composition of its ground beef. Taco Bell responded to the false claims quickly and aggressively with a national print and web campaign countering the unfounded charges and the suit was quickly withdrawn. Taco Bell was the largest and most profitable Yum! Brands chain in the U.S. and the company was looking for ideas to grow its store traffic and tweak its positioning. The company’s marketing and advertising agency teams decided it was time to move beyond the “Think Outside the Bun” campaign that had been running for a number of years and make the brand more vital and exciting to its core target market of crosscultural Millennials. Taco Bell’s marketing team felt that their customers were already “thinking outside the bun” in their lifestyles as well as food preferences, and the appeal might be losing meaning. In early 2012 a new campaign slogan was introduced called “Live Más” (mas is Spanish for “more”) which was viewed as being a bilingual phrase that summed up why the brand was attractive and relevant to young, hip and cross-cultural consumers. The tagline also represented a movement of the brand from the idea of “food as fuel” to food as an experience and lifestyle. Taco Bell’s CEO, Greg Creed, concurred with the new strategy and positioning noting that "our

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customers told us they want a more relevant Taco Bell, and we've taken numerous steps focusing on our food and improving the customer experience. "Live Más” connects us back to our explorer roots and speaks to people with a genuine voice that feels much more true to who we are and what we believe in." As Taco Bell has always been an innovator in the fast-food industry the explorer mentality was a perfect fit. The video can be effectively tied to the coverage of market segmentation, targeting and positioning in Chapter 6 of the text. We discuss the uniqueness of the Millennial market, which is reinforced here by Taco Bell’s analysis of this segment. In addition, the unique and sustained positioning of the company provides an excellent example of how companies differentiate themselves in the marketplace.

In addition to covering the genesis of the “Live Más” campaign, the video also focuses on how Taco Bell’s sales really took off in the Spring of 2012 when a new product line was introduced called Doritos Locos Tacos (DLT) which was the result of a co-branding effort with snack food giant Frito-Lay. The idea for the DLT came from a visit by CEO Greg Creed with Frito-Lay executives to discuss how to celebrate Taco Bell’s upcoming 50th anniversary which would take place in 2012. Again, demonstrating Taco Bell’s innovativeness, this joint venture between the companies has been perhaps the most successful in the history of the fast food industry. A variety of flavors were tested before deciding upon Nacho Cheese for the initial launch. Great care was taken to ensure that the best flavor was achieved and the originality of the Doritos Chips was retained. Problems with the chip breaking in the assembly process or while being eaten had to be overcome as well. The final product resulted in a taco that has a shell made from Nacho Cheese Doritos Chips and is served in custom packaging to prevent cheese dust from getting on consumers’ fingers.

There was tremendous buzz prior to the launch of the DLT, both within the companies as well as among consumers, and Taco Bell took advantage of the excitement leading up to and surrounding the introduction. A clock on Taco Bell's website ticked down the time until the Doritos Locos Tacos launch and a promotion was developed in which the winner of a Twitter contest was sent a truck loaded with the tacos. Consumers went loco for the new tacos, as more than 10 million were sold in just 10 days, and within a year Doritos Locos Tacos accounted for nearly a quarter of all of the taco sales at Taco Bell. Note that many of the events discussed here are shown in commercials throughout the video. In early 2013 Taco Bell launched the second flavor of the new tacos, Cool Ranch Doritos Locos Taco, with its largest integrated marketing and consumer engagement effort ever. The campaign used television, radio, outdoor, digital and cinema advertising including a 3-D spot aired in movie theaters that featured a Doritos chip spinning and exploding with pieces of chip and seasoning flying out as it morphs into the Cool Ranch DLT Supreme.

A number of the TV spots used consumer-generated ideas that helped create buzz about the new product as the marketing team at Taco Bell continued to research social media for user experiences and reactions to the Doritos Locos Tacos which generated even more ideas. For example, one of the most popular commercials was based on a YouTube video showing a consumer who drove 900 miles to find a DLT, while another featured a series of Instagram posts strung together showing consumers taking their first bite of the Cool Ranch DLT. To build awareness and buzz prior to the launch of the Cool Ranch DLT, social media sites such as YouTube, Twitter and Facebook were used to provide sneak peeks of the new flavor while fans identified as social media influencers

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were invited to sample the product early by giving them a secret pass code. Once the passcode was unlocked the fans were prompted to spread the word via social media so others could try the product as well at password-only “speakeasy” events in New York, Dallas and Los Angeles. (This is a good place to demonstrate to the class how companies are using social media and consumers to promote their products, along with traditional media.)

The launch was also supported by a robust television campaign inspired by consumer responses to the original Nacho Cheese DLT and subsequent demand for a Cool Ranch version, which is now the second most popular Doritos flavor chip. The launch TV spot, “World’s Most Obvious Idea,” capitalized on the ground swell of consumers wondering if and when Taco Bell would make a Cool Ranch taco version. Fifteen second spots were created that featured the reaction of consumers and celebrities as they tried the new taco for the first time. The campaign also invited fans to post to Instagram or Tweet their best #wow or #duh face –using those specific hash tags, followed by #CoolRanchDLT - for a chance to see their photo reactions displayed on a giant electronic billboard in Times Square. The invitations also appeared on DLT packages as well as beverage cups as part of the integrated campaign. To take advantage of the popularity of the DLTs, FritoLay rolled out a new line of Doritos in a “Taco Bell Flavor” as a limited-time product offering.

The tremendous success of Doritos Locos Tacos has not been the only thing generating excitement and buzz for Taco Bell, as a commercial created for the 2013 Super Bowl based on the “Live Más” theme was also a big hit. The 60 second spot, which is shown in the video, is titled “Viva Young” and features a group of senior citizens sneaking out of their retirement home late at night and embarking on an epic night of feeling young by partying, which included dancing, getting tattoos, sneaking into neighbors’ swimming pools, and other escapades, all the way down to laying on the hoods of their cars. They eventually end up, of course, at a Taco Bell for a “Fourthmeal” before returning to the nursing home as the sun comes up. A Spanish version of rock band Fun’s hit song “We Are Young” was used as the music in the commercial which was voted as one of the most popular spots on the 2013 Super Bowl in addition to receiving the most buzz on social media.

While some ad critics questioned how Taco Bell’s core audience of Millennials might respond to a commercial featuring a posse of elderly people behaving badly, surveys showed that young people loved the spot and the message it sent that you are never too old to Live Más. Taco Bell appears to be well on its way to getting consumers of all ages to experience more and Live Más, while continuing its explorer positioning and staying one step ahead of competitors.

The Taco Bell video provides an excellent example of how a company segments the market, selects a target market, and develops and maintains strong positioning platform over the years. It also demonstrates the integration of the promotional element of the marketing mix along with the product element. Taco Bell’s commitment to remain cutting edge and unique is demonstrated through their product development as well as their IMC program. Taco Bell serves as the lead-in to Chapters 7 and 8, on the implementation and evaluation of creative strategy. The video provides an excellent example of the power of creative in the success of a product and/or brand. The commercials shown in the video are very creative and entertaining, as indicated by the response to the Super Bowl ad, and contributed to the success of the DLT product launch. In addition, they capture the lifestyles and values of the Millennial generation and help generate interest in the new products even before they hit the market.

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Taco Bell’s monitoring of social media to gain insights into what trends are taking place, as well as what is being said about the chain provides an excellent example of the use of social media by marketers, which is covered in Chapter 18. It is important to focus on not only the use of social media as a way of communicating consumers, but also as a way to conduct market the research and measure the effectiveness of an IMC campaign. The Taco Bell video provides an excellent example of both. Finally, the video can be cited when discussing sponsorships and public relations.

As can be seen, the types of sponsorships Taco Bell is engaged in are consistent with the interests of their target market. The Bethel, Alaska project is a prime example of the new role of public relations, as not only did it create goodwill in the town, but also it is benefited from the viral component among those who saw the event online.

The Video The video begins with Chris Brandt, Chief Marketing Officer providing a brief background on the history of Taco Bell. Brandt explains how the company was started in 1962 by Glen Bell in Downey, California as an alternative to burger joints. It is these roots that has always been and remains the foundation for Taco Bell’s alternative positioning. Brandt explains that Taco Bell competes in the quick serve restaurant (QSR) space and has always considered itself as an alternative to hamburger fast food outlets, which led to the long used tagline “Think Outside the Bun”. He notes that Taco Bell has always been able to compete as a lifestyle brand by being different, using the example that the restaurant is the first place young people often go without their parents when they get their driver’s license. The video then focuses on the repositioning and the Evolution of “Live Mas” as the next person to appear is Stephanie Perdue, Senior Director of Brand Marketing. Stephanie explains that “Live Mas” reflects what Taco Bell is about - living life to the fullest. The commercial shown here reflects an illustration of this. She notes that all of the Taco Bell innovations fit nicely into this positioning platform. Brandt returns to take this point further, noting that “no one will follow a jester, but they will follow an explorer”, and that Taco Bell is an explorer.

Tracee Larocca, Brand Creative Director and Strategist, appears next on the video and discusses the fact that as the Millennial generation came into its own, Taco Bell realized they were not in sync with this segment. She cites the slogan “Think Outside the Bun” as evidence of this, as this younger generation was already thinking on their own. At the same time, as an explorer brand Taco Bell felt they were in the perfect place to reposition themselves to appeal to this group. Tracee explains how a number of taglines were explored before settling on “Live Mas” and that this positioning is not limited to any one specific generation. This idea is communicated in the “Forever Young” Super Bowl commercial showing the senior citizens leaving their retirement home to enjoy their lives in the same fashion that teenagers might.

The focus of the video then moves the changing consumer and the role of digital and social media.

Tressie Lieberman, Taco Bell’s Director of Social Marketing and Platforms, discusses the company’s use of digital and social media. She starts by talking about how the younger generation is attached to digital media through their smartphones and other devices, noting that if Taco Bell wants to relate to them, they must do it through these platforms. She discusses Taco Bell’s use of paid, owned, and earned media and the importance of each in their IMC program.

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Tressie notes that there are over 50 million conversations about Taco Bell per year on social media.

These conversations are monitored by their consumer insights team in a lab in the Taco Bell offices nicknamed “The Fishbowl” and provides the company with a great deal of information about what people are saying about the brand. As noted in the previous discussion, this information was vital to the success of the new product introductions.

The next person on the video is Nick Tran, Director of Marketing, Social Media Lead who discusses Taco Bell’s use of Facebook and Twitter and how unlike television, these media allow for more interaction and engagement on the part of their consumers. He also discusses Taco Bell’s use of YouTube. Tressie returns to talk about the ability to interact with consumers through social media, and how exciting it is, not to mention the insights it provides to the company.

The next section of the video covers the development of Doritos Locos Tacos which is discussed

by Stephanie Perdue. When research indicated that consumers were looking for a more bold flavored product, Taco Bell immediately thought of Doritos. The popularity of Doritos chips and the ability to again do something totally different immediately inspired Taco Bell to consider Frito Lay as a partner in a new product venture. Stephanie discusses the development of the product including the involvement of all levels of management, the feedback acquired from product testing through numerous focus groups and the testing of 40 different prototypes before they got the product where consumers wanted it to be. It was then taken to test markets where it generated more word of mouth than any previous Taco Bell product. She then discusses the rollout to the market, noting the extensive use of integrated marketing communications and how Taco Bell utilized various touch points. She notes how the packaging was developed and served both a functional purpose of protecting the product from breaking and keeping the powder off the eater’s hands, as well as a branding purpose.

Tressie Lieberman then talks about how monitoring the market indicated that consumers were getting frustrated because they couldn’t get the product, so plans were put into motion to remedy this problem, as well as take advantage of it from a marketing perspective. The strategy included the use of Twitter and a sales promotion to further the buzz. Additional IMC tools, including the use of augmented reality, a billboard in Times Square in New York and a commercial based on someone who drove almost 900 miles to get the taco were also employed.

Rob Poetsch, Director of Public Affairs and Engagement next discusses the important role of publicity and public relations as part of Taco Bell’s IMC program. Tracee and Nick discuss a program done by Taco Bell involving the remote town of Bethel, Alaska where someone played a cruel hoax on the locals by spreading the rumor that Taco Bell was going to open a store there.

When they found out it was not true, the residents were extremely disappointed. Taco Bell discovered this hoax through their monitoring of social media and immediately seized upon this opportunity to try to make things right by helicoptering in a food truck to serve products to residents. The story led to national media coverage and very positive publicity for Taco Bell.

The next section of the video discusses the introduction of a second DLT using Doritos Cool Ranch flavor. Tracee Lieberman notes that after the introduction of Nacho Cheese DLTs, people began asking when Taco Bell would launch Cool Ranch which appeals more to Millennial consumer who grew up in the 1990s. Based on monitoring of social media through the Fishbowl, it was decided

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to have numerous events to promote the product’s introduction. The campaign started with commercials shown on the video which let people know that the product was coming and created excitement around the launch of Cool Ranch DLTs. Stephanie Perdue returns to discuss the success of Cool Ranch DLT as well as the overall success of the new product. The launch of Doritos Locos Tacos was a record setting success for Taco Bell, with over 550 million tacos sold by July 2013.

The success also demonstrates the ability of two companies to come together to launch a product targeted to the same consumer market.

Rob Poetsch returns to discuss the role of public relations at Taco Bell and explains how PR works hand-in-hand with all other elements of the company’s IMC program. He discusses Taco Bell’s use of three content pillars to use to reach consumers and promote the brand including sports, music, and pop culture and provides an example of the “Steal a Base, Steal a Taco” promotion run with Major League Baseball during the World Series. He notes that DLTs were given away as part of the promotion in 2012 and how the fans loved it. He also discusses “Feed the Beat”, a sponsorship program that provides support for up and coming bands and their music. He describes how Taco Bell supports pop culture and how all three lead to engagement. The video concludes with each person interviewed discussing the future of Taco Bell from their perspective.

It should be noted that Taco Bell was selected as Marketer of the Year for 2013 by Advertising Age which cited the innovative marketing discussed in the video as key reasons for it selection of the company for the award. They also noted how Taco Bell posted an 8% increase in U.S. samestore sales in 2012, more than twice the 3.3% gain of industry leader McDonald's as the DLT was the most-successful product launch in the company's 50-year history. In early 2014 Taco Bell engaged on yet another venture by stepping ups its efforts to compete in the breakfast market. The featured item on the breakfast menu is the “waffle taco”, though the breakfast burrito remains the consumer favorite at this point. The breakfast initiative is designed to directly attack McDonald’s which is the leader in the breakfast market and Taco Bell is making inroads into this important day part segment.

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Qatar World Cup 2022: A Winning Bid Running Time: Recommended Use

24:40 Chapter 15

Background/Overview This is one of two videos that cover the effort by the Middle East country of Qatar to win the rights to host the FIFA World Cup in 2022. The FIFA World Cup is the largest single-event sporting competition in the world. It is also the most widely viewed sporting event as nearly 3 billion people worldwide follow the month long tournament on television and over 3 million spectators attend the 64 matches played. One of the goals of FIFA in awarding the World Cup is to promote the game of football around the globe as well as in the host nation and region. And in 2022 the tiny country of Qatar will become the first Middle Eastern and Arab nation to host the prestigious event.

This video focuses on the integrated marketing communications campaign used by the Qatar 2022 Supreme Committee to win the rights to host the FIFA World Cup in 2022. There is also a second video that focuses on the legacy Qatar hopes to achieve for the country and region by hosting the World Cup as well as subsequent initiatives.

This video shows how Qatar’s effort to win the 2022 World Cup entailed hard work and innovation, as well as an integrated marketing campaign designed to deliver the message of how the tiny country planned to transform various challenges into unique assets. The process began with a positioning platform built around the tagline “Expect Amazing” that was designed to communicate its intentions and dare people to believe in Qatar’s bid to host the World Cup. The campaign was officially launched in December 2009, one year before FIFA would make its decision to award hosting rights. The goal of the IMC campaign was to gain global support for the bid by showcasing Qatar as a beautiful and vibrant country that welcomed people of all nations and capable of hosting the World Cup. Qatar launched its official bid website that included a blog that allowed football fans to learn what was happening behind the scenes and keep them informed of the latest news so they would feel like partners in the bidding process. Social media, including Facebook, Twitter and a YouTube channel were also used to engage fans and supporters and provide another digital platform for its integrated marketing effort.

The next phase of the campaign included a cause related social marketing program called “Generation Amazing” whereby underprivileged children from various Middle Eastern countries including Nepal, Pakistan, Lebanon, Syria, and Qatar were selected and taken to South Africa to attend the 2010 World Cup. A video was created to capture the experiences of the children and posted on the official Qatar 2022 YouTube channel to help generate publicity for the cause.

Leading up to the 2010 World Cup, another video called Stadiums was created and posted on YouTube that showcased several of the stadiums in Qatar that would be used to host the football games. The video received more than two million views on the Official Qatar 2022 YouTube channel and helped generate buzz across various other social media channels in regard to the bid.

After a number of countries were eliminated, only the United States, South Korea and Qatar remained in the competition. On December 2, 2010, FIFA’s president pulled Qatar’s name from the envelope awarding the hosting rights for the 2022 World Cup to the Middle East for the first

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time. The Qatar 2022 Supreme Committee plans to deliver a high-profile sporting event on the world stage while also achieving a variety of social, economic, and environmental goals.

The Video The video includes interviews with four individuals who are members of the Qatar 2022 Supreme Committee which was formed to develop and execute the country’s bid to host the World Cup. The interviewees include Hassan Abdulla Al Thawadi, Secretary General of the Qatar Supreme Committee; Nasser Fahad Al Khater, Communications and Marketing Director of the Qatar Supreme Committee; Mahmoud A. Qutub, Executive Director for Strategy and Program Performance; and Carmen Smith, Senior Manager Brand and Special Projects. The video opens with a clip from a powerful speech by Qatar’s First Lady, Her Highness Sheikha Moza that was the final part of Qatar’s bid presentation. In her speech (delivered in English) she challenged the selection committee by asking: “When do you think is the right time for the World Cup to come to the Middle East?” Her speech focused on the importance of the committee’s decision and noted the significant impact Qatar’s hosting of the World Cup would have on the Middle East region as well as the world. The first two members of the Qatar 2022 Supreme Committee interviewed for the video are Al Khater and Al Thawadi. Al Khater provides a brief overview of the FIFA World Cup and how it is the World’s largest sporting event in terms of number of viewers. He then discusses the country of Qatar and how sports has been a major driving force sport in its society.

Al Thawadi also discusses the important role football (soccer) in particular plays in Qatar society and the significance of the World Cup to the country.

The next section of the video focuses on Qatar’s presentation to FIFA and Al Khatar discusses the challenges and hurdles Qatar faced in bidding to host the World Cup. He notes that the tiny country realized the underdog position it was in but how pursuing the World Cup might at least help put the country on the map and would not be money wasted but rather money well spent if Qatar had not been selected as the host country. Al Thawadi then discusses how the Qatar Supreme Committee consisted of a very young group that did not know anyone but ended up knowing everyone in the global football community. Mahmoud Qutub appears next and discusses the branding challenge facing Qatar and how the country hoped to use sports as a key enabler to the development of the country. Al Khatar notes how that the Supreme Committee did not want to hire an outside agency to develop its positioning strategy as he wanted it to be real and authentic.

He also discusses how the size of the Qatar was a strength for the country in its effort to host the World Cup as it removed the need for fans, players, and the media to travel to different cities in the host country. He notes how the committee addressed concerns about holding the event in a small country by pointing out how the Olympic games are held in one city every four years and thus the World Cup could be held in a city like country such as Qatar. Al Thawadi also discusses the strategic location of Qatar in the Middle East and the other countries and cities easily accessible from there. He also discusses the diversity of the Qatar Supreme Committee and how it included people from around the world. He describes Qatar as a salad bowl, rather than a melting pot, and notes how it includes people from various countries and regions with distinct nationalities and perspectives. Al Khatar also discusses the diversity of Qatar and how it was an asset in bidding to host the World Cup. He notes how the diversity of Qatar was very evident in the final presentation to the World Cup committee which was the last opportunity to make an impression on the 24 members of the executive committee who have a vote on the host nation.

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The next section of the video discusses the “Expect Amazing” integrated marketing communications campaign. Al Khater explains the genesis of the “Expect Amazing” tagline and the importance of taglines as something that must be believed in, lived up to, and guide efforts on a daily basis. He notes that “Expect Amazing” is a promise and a pledge that Qatar wants to be able to deliver upon when it hosts the World Cup in 2022. The “Expect Amazing” campaign is also discussed by Carmen Smith, Senior Manager Brand and Special Projects, and the importance of maintaining consistency across all communications. She then discusses the bid process and the five key elements that the FIFA committee was most interested in including climate, venues, accommodations, transport, and legacy/security and how they became the key drivers of the final presentation bid. Smith is interviewed in the World of Football room in Doha, the capital city of Qatar, which was the room where the FIFA technical inspectors were hosted on the last day of their visit to Qatar. The room provides a 360-degree video screen for the viewer and was used to demonstrate what the World Cup experience would be like in Qatar.

The video then shifts to an important part of Qatar’s bid for the World Cup which was the Generation Amazing social program discussed above. Al Khater and Qutub describe the program and how 22 underprivileged children from various countries in the Middle East were chosen to go to the 2014 World Cup in South Africa. In the next section of the video Al Khater discusses the social media component of the IMC program used by the Qatar 2022 Supreme committee during the bid process. He notes the power of social media in the Middle East and how the committee was able to generate more than 500,000 fans on Facebook in the Arab world in support of the Qatar bid. He also notes how social media was used to reach other target audiences and make them aware of Qatar’s bid to host the World Cup. Social media tools such as Twitter and YouTube were used and the video showing the stadium designs received more than 1 million hits in six months. Al Khater then discusses the role of bid ambassadors used by Qatar and how they were used to bring attention to Qatar’s bid. One ambassador he focuses on is Zinedine Zidane who overcame his immigrant background and played for the French national team as well as European Premiere League teams such as Real Madrid and Juventus.

The next section of the video focuses on the final presentation made by Qatar to the World Cup selection committee. Al Thawadi and Al Khatar describes how Qatar’s final presentation was delivered in four languages and did not include any star power or celebrities. The various speakers who delivered the final presentation are shown and particular attention is given to the emotional speech given by Her Highness Sheikha Moza who challenged the FIFA executive committee with the piercing question of when is the time for the World Cup to come to the Middle East. Al Thawadi discusses the emotional feelings he had at the conclusion of the bid process and how he felt upon learning that Qatar was awarded the 2022 World Cup. Mahmoud Qutub and Nasser Al Khater also discuss the emotions they felt when Qatar was announced as the winning nation. They discuss how the Qatar Supreme Committee received a hero’s welcome upon their return to Qatar.

The final section of the video includes a discussion of the challenges Qatar faces over the next eight years leading up to the 2022 World Cup as well as the feelings of pride the committee members have in being part of the country’s effort to win the bid. It should be noted that there is a second video available on the DVD that focuses on the legacy aspects of the Qatar’s hosting the World Cup. Although the second video is not specifically IMC focused, if time permits, we strongly suggest showing it as it provides students with a valuable perspective on why countries

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often spend billions of dollars to host major sporting events such as the Word Cup or the Olympic games and legacy they hope to achieve by doing so.

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Qatar World Cup 2022: Legacy Running Time: Recommended Use

13:00 Chapter 15

Background/Overview The second video on the Qatar 2022 World Cup focuses on the social, economic, and environmental goals related to the country’s hosting the FIFA event. The hosting of major sporting events involves billions of dollars in investment for the host country or city as venues such as stadiums and practice facilities must be built and improvements made to infrastructure such as transportation, information and communication systems. It is estimated that Qatar spent more than $150 million in its efforts to win the rights to host the 2022 World Cup. Qatar’s formal proposal to FIFA to be considered as a location for the World Cup included a budget of $645.5 billion USD. Qatar has formally announced they are planning to have 12 official stadiums ready for the 2022 FIFA World Cup games. Three of the already existing stadiums will be renovated and nine additional stadiums will be built. Qatar is preparing to construct the stadium venues within close proximity to one another. By doing so, Qatar is forecasting potential transportation dilemmas getting to one location or another. Although Qatar plans to build these venues close together, they will still be approximately 25-30km (approximately 15-19 miles) apart from one another, which could present a logistical and operational dilemma. Proposals have been submitted to enhance transportation systems to and from Doha, including a new metro/rail system not only within the cities of Qatar, but also extending to neighboring countries such as Bahrain and Saudi Arabia.

Altogether, Qatar has announced a transportation expansion budget of $20 billion USD. The Qatar 2022 Supreme Committee is now called the Supreme Committee for Delivery and Legacy and its focus is on the various activities involved in hosting the World Cup as well as achieving a variety of social, economic, and environmental goals. The hosting of the World Cup is viewed as a catalyst for driving growth and economic development as well as leaving a lasting legacy for Qatar, the Middle East, and beyond as it seeks to strengthen its growing leadership role in international issues and initiatives. It is also closely aligned to the Qatar National Vision 2030 which has the goal of transforming Qatar into an advanced country by 2030 that is capable of sustaining its development and providing for a high standard of living for all of its people for generations to come. The committee also recognizes that major sporting events such as the World Cup provide a unique opportunity to increase focus, awareness and unity within a society through sports and to promote increased participation in sports, especially for women, and a healthy lifestyle. The Qatar Football Association has developed a football development program to enrich the lives of other Middle Eastern citizens after the FIFA World Cup event as well. The goals of this project are to inspire the entire population of the Middle East and introduce a new generation of fans to football. To further assist in football development, Qatar hopes to contribute to its legacy by promising to partly dismantle the elaborate stadiums built with extra seating for the 2022 World Cup and transport them to developing nations who can reconstruct them as smaller stadiums for their own use. Building this type of legacy was highly regarded by FIFA in awarding the World Cup to Qatar and stays true to the mission and goals of the organization.

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The Video The Legacy video includes interviews with three members of the Qatar Supreme Committee for Delivery and Legacy including Hassan Abdulla Al Thawadi, Secretary General; Nasser Fahad Al Khater, Communications and Marketing Director; and Mahmoud A. Qutub, Executive Director: Strategy and Program Performance. The video opens with Al Thawadi discussing what Qatar hopes to have achieved after hosting the 2022 World Cup including building a bridge between the East and the West; providing a model of how legacy is utilized and can cascade over several levels including economic, social and cultural; showing that hosting major sporting events is not just limited to the time period during which the event occurs but can have a lasting impact; and creating a benchmark for how major events can benefit hosting nations. Mahmoud Qutub then discusses how the Qatar Supreme Committee knew all along that the measure of success would expand beyond the World Cup and the importance of leaving a lasting legacy. He notes how the strategic planning process included milestones for areas such as risk and other facets of project planning and implementation. Al Thawadi discusses the need to evaluate the economic benefits of hosting a major sporting event over the long term. He notes how his committee turned many of the concerns and issues associated with hosting the World Cup into an advantage by considering what the post-World Cup Qatar might look like.

The next section of the video discusses various measures that might be used in assessing the success of Qatar’s hosting the World Cup such as event management and operations, the opportunity for people to visit Qatar as well as other countries in the Middle East, utilization of the facilities, and use of facilities. He also notes that the stadiums themselves have a legacy aspect that includes utilization beyond the World Cup. Al Khater also discusses reasons why companies choose to host major sporting events such as the World Cup noting that this is done for more than sport. These mega-events are often seen as a catalyst for infrastructure development as well as promotion of a country. He notes that Qatar saw value in both of these as Qatar is growing rapidly socially and economically and is also seeking to diversify its economy beyond hydrocarbons such as oil and natural gas. A major diversification goal of Qatar is tourism as the country wants to encourage more people to travel to the country and region and views its location in the Middle East as a strategic asset in this regard.

In the next section of the video Al Thawadi and Al Khater discusses the cooling technology being developed for use in the stadiums in Qatar to deal with the extreme heat during the summer. This technology is designed to be used for use in managing the level of comfort in the stadium for players and fans during the World Cup. However, he notes that Qatar has sustainability goals as it hopes to extend the cooling systems and help kick start renewable energy technology industries that can be used around the world. They also discuss how Qatar hopes to develop the sporting industry in the Middle East. Qatar is also developing the Center of Excellence project with goals of training the younger generation in the region in areas such as venue and event management, traffic management, hospitality and other areas. The plans are to recruit young people from all of the Middle East to be trained and involved in the delivery of the World Cup and welcome visitors from around the globe to Qatar. The legacy aspects are that the training and skills provided to the younger generation during this process will be retained and used in the future. Al Thawadi also discusses the changes occurring in the Middle East and how the World Cup can play a positive role in influencing them.

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Al Khater discusses the issue of how countries often spend billions of dollars on stadiums to host major sporting events that receive limited use afterward. He notes how Qatar is addressing this issue by constructing stadiums using modular components, making them easy to disassemble and transport to other regions of the world. These stadiums will be reconstructed to create as many as 22 smaller stadiums in developing countries in need of modern football stadiums, thus contributing to the legacy of the Qatar 2022 World Cup. The final section of the video focuses on the lasting legacies of the Qatar 2022 World Cup. Mahmoud discusses how the Qatar World Cup will help tie together visionary leadership and plans through the use of sports to achieve goals in areas involving social, economic, human and environmental aspects. The video concludes with Nasser Al Khater noting how the 2022 World Cup is an opportunity for the sport of football (soccer) to show the world that it can be a catalyst to further develop technology, humanity and leave lasting legacies.

As noted, the Legacy video is not specifically focused on IMC. Rather, it involves how Qatar sees the World Cup as more than just a sporting event, but an opportunity to create a legacy for the country, and (hopefully) for the Middle East as a whole. We created this video to demonstrate that in this case, a sporting event is seen as a potential catalyst for creating societal good and (hopefully) the legacy will be an improvement for mankind. It should be noted that FIFA’s decision to award the World Cup to Qatar has been controversial with much of the concern focusing on the feasibility of playing the games during the summer when the temperatures in Qatar are very hot. While the Qatar Supreme Committee argues that the cooling technology in the stadiums will make temperature safe and comfortable for both the players and the fans, many in the football (soccer) community continue to question the awarding of the World Cup to Qatar. Instructors should monitor this situation over the next several years.

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Ford Motor Co.: Fiesta Movement Social Media Campaign Running Time: Recommended Use

21 minutes Chapters 4, 17, or 18

Background/Overview This video focuses on the Fiesta Movement social media initiative that was used by the Ford Motor Co. in 2010 to launch the company’s new Fiesta subcompact car in the United States market.

Launched a second generation of the highly successful program in 2013 called “The Fiesta Movement: A Social Remix” to generate buzz and excitement around the redesigned 2014 model.

Ford is one of the world’s largest automotive companies and is the only U.S. company that made it through the great recession without any U.S. government support. A major part of Ford’s new strategy is to focus on smaller, greener, more fuel efficient “global” cars that are built on a single platform which reduces costs and, with some minor modifications, can be sold in markets around world. One of the cars Ford is counting on to fuel its growth is the Fiesta, a global subcompact that has was introduced in Europe in 1976 and has sold more than 12 million units since then. The most recent generation of the Fiesta was launched in Europe in 2008 and over 750,000 have been sold.

Ford launched the Fiesta in the U.S. in mid-2010. However, the company recognized that it would face some challenges in marketing the Fiesta in this market as it is one of the smallest cars on the market and, unlike Europeans, most American don’t like small cars. Moreover, among those who buy small cars, Ford is generally not one of the brands they consider. So rather than use a traditional marketing campaign that relied on traditional media advertising, Ford took a much different and riskier approach that utilized an aggressive social media program which it called the “Fiesta Movement.” This program involved enlisting a team of 100 special agents to drive the new vehicles and participate in monthly challenges that would allow them to share interesting content with their friends through various forms of social media. The 100 Fiesta agents were chosen from more than 4,000 consumers who applied online to be part of the program. Participants were selected based on their entrepreneurial spirit, local connections, social vibrancy and creative vision and spread among major markets across the U.S. The social media trendsetters were given a new Fiesta, insurance, and gas cards and in the Spring of 2009 began driving the cars. Ford had just one requirement of the Fiesta agents which was to complete one “mission” or task each month and document their experiences behind the wheel by posting videos and updating their friends/followers on Facebook, YouTube, Twitter and other social media.

In March 2010 Chapter 2 of the Fiesta Movement began with the goal being to show more of the features of the new car. For the second phase of the campaign 40 people were selected from more than 1,000 applicants and 20 teams comprised of two agents each were formed to spread the word about the Fiesta in 16 markets across the country where small cars sell well. The agent teams were given a series of missions asking them to complete challenges that were tied to people and activities in their local community, allowing them to open the discussion about the Fiesta through social media and at the events they hosted. After completing a mission, the agents produced and placed the creative content online at www.Fiestamovement2.com, where followers could keep up with their favorite agents. The best creative content was recognized based on online and offline consumer interaction and consumers’ opinions of the agents work. It was also recognized through coverage in local media and events as well as through a variety of national media. The Fiesta

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Movement went far beyond what any automotive marketer, or perhaps any company, has done in the past to launch a new product and was very risky given that Ford put no restrictions of what their agents could say about the car. Fiesta brand manager Sam De La Garza noted that the messages being sent by the agents were beyond Ford’s control and that they had to roll with it. He noted that “for us it all rests on the quality of this product. We’ve all driven the Fiesta, and we felt so confident about the car that we could start this. We’re going to allow people to tell the story of the Fiesta from their lives.” However, Scott Monty, Ford’s director-social media, acknowledged that “faith in a product or no, trusting it enough to unleash 100 to regular consumers and ask them to offer honest thoughts and reviews is a leap for most marketers.”

The original Fiesta Movement was very successful as it created an awareness level of nearly 60 percent before Ford even began traditional media advertising for the Fiesta in 2010. The social media campaign also helped jump start sales as Ford sold more than 23,000 Fiestas in the first six months the car was on the market in the U.S. and in 2011 sales skyrocketed to 70,000 units, making it the best-selling subcompact car in America.

The Video The video consists of interviews with four key Ford marketing people who were involved with the Fiesta Movement social media initiative as well as an executive from Ford’s advertising agency, Team Detroit. The Ford executives appearing on the video include: James D. Farley – Vice President of Global Marketing Sales and Service; Scott Monty – Ford’s Director of Social Media and Sam De La Garza - brand manager for the Fiesta. The agency executive interviewed for the video is Kerry Ann Doyle, Senior Vice President, Brand Content & Alliances Account Director at Team Detroit. The video begins with James Farley discussing how the company made it through the recession without any government help and had been successful in getting people off the fence and caring about Ford again. However, he adds but that wasn’t good enough as he wants people to fall in love with its products. Farley notes that “Ford is not an old cigar chomping, Detroit, middle-American company” and how the Fiesta is a huge proof point for the new Ford. The video then shifts to Sam De La Garza who discusses the US automotive market and reasons why people buy small cars in this country. He discusses the size of the subcompact market and how it is a very small segment here as compared to Europe which meant Ford needed to do something special in launching a small car in the U.S. Farley then notes how the impetus for the social media initiative actually grew out of programs Ford’s marketing team was using in China where the use of social media is actually ahead of the U.S. The video then shifts to Scott Monty, Ford’s Director Social Media who discusses how Ford had time to plan for the launch of the Fiesta in the U.S. market and decided that the company would bring 100 cars to the U.S. market and give them to digital influencers to drive and talk about both in person and online. He notes how Ford was very confident in the Fiesta which was built on a global platform and had a number of unique features. Monty also talks about how quickly social media has evolved over the past few years and the opportunities this new medium presents to Ford to engage consumers and get them to speak to one another. The next person on the video is Kerry Doyle from Team Detroit who discussed the details of the Fiesta Movement initiative and what was involved in developing it. Doyle notes that how Farley challenged the agency a year before the new Fiesta was to arrive in America and get them excited about it without using traditional

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media. She discusses how they wanted to target young people who are socially vibrant, a group of cool and interesting people who care about the content they create. These social advocates were asked to self-identify themselves by posting videos on YouTube to apply to be a Fiesta agent. She also discusses the criteria used in selecting the agents and how they all fit together based on various factors. Scott Monty then discusses some of the reasons why the Fiesta agent were so excited to be part of the program and be part of the self-promotion effort. Doyle discusses what the requirements were from the agents and how they were greatly exceeded. Scott Monty and Doyle discuss some of the differences between the Chapter 1 and Chapter 2 Fiesta Movement initiatives and the specific assignments given to the agents during the second phase. Monty provides an example of a video created by Brittany Taylor, one of the Fiesta agents that pitted a Fiesta against a Lamborgini and how it covered various features of the new car in the entertaining clip she created.

The video then shifts back to Farley who discusses how Ford received a tremendous return on investment with the Fiesta Movement program. He notes that the $10 million invested in the initiative was able to generate the same amount of unaided awareness as a more traditional $100 million mass media advertising program. He discusses how it took place over a year and had to be executed very well, but generated tremendous buzz at Ford which was another unmeasured benefit.

The video then shifts to Scott Monty discussing how social media has to be integrated into an effective IMC program and cannot just be added to other elements such as advertising. De La Garza continues the discussion of the overall IMC program by discussing how it is important to monitor consumer activity on social media such as Facebook and Twitter as well as to get the dealers involved. He notes how three to five days were spent setting up social media skills and strategies for 575 of Ford’s top dealerships and teaching them how to use Twitter and Facebook.

Jim Farley adds to the integration discussion by noting that you don’t want social media to just be incremental and added on top of the advertising budget. He notes that it is very important that social media is it good enough in the execution phase to take down the budget of the traditional media. Kerry Doyle then discusses some of the results achieved by the Fiesta Movement and how a 60% awareness level was achieved which is equivalent to the level for Ford cars that have been on the market for two or three years. Farley notes that the social media initiative has set up Ford for serious success two to three years in the future as the company has the right people talking about its products as well as telling the company about its products.

Ford had a lot riding on the new Fiesta as it is the first of several European subcompact cars that Ford plans to bring to the U.S market. Global marketing VP Jim Farley has stated that “the Fiesta can be our breakthrough product in getting people to fall back in love with Ford cars, and to do that, we have to have cars that people get emotional about and want to buy.” The Fiesta Movement has been an excellent way to get people excited about the Ford cars and to tell their friends as well.

After the first chapter of the program, more than 6,000 consumers had made reservations for the Fiesta, half of them from non-Ford customers and more than 100,000 hand raisers were showing interest in the new car and requesting more information about it. The Fiesta hit the showrooms in the summer of 2010 and while Ford was using advertising and other forms of integrated marketing to introduce it, they spent 20 to 30% less in media than for a traditional new product launch. It is also worth noting that Ford was named “Marketer of the Year” for 2010 by Advertising Age and the Fiesta Movement program was cited as one of the major reasons why the company received this recognition.

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While the original Fiesta Movement Social Media campaign took place in 2010, Ford used the program once again in 2013 as part of its IMC strategy for the redesigned 2014 Fiesta. The new program was called the “Fiesta Movement: A Social Remix.” One of the major changes for the 2013 campaign was the use of user-generated content for all of the TV, print and digital advertising used for the Fiesta launch. Ford distributed the content through paid media, social media and experiential events that were held as part of the Fiesta Movement. The reason for having the content crowd sourced was to extend the Fiesta Movement beyond social media platforms and feature material created exclusively by social influencers. Ford’s advertising manager noted that: “Millennials like being part of the brand’s they feel represent them and is accustomed to creating content about their lives so it just makes sense to give their creativity a bigger platform with greater scale. Ford sold nearly 70,000 Fiesta’s in the U.S. in 2013 which was a 30 percent increase over 2012 sales for the subcompact model. It appears that the second generation of the Fiesta Movement social media campaign was once again very effective in helping to generate sales of the vehicle.

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Mountain Dew: DEWmocracy Social Media Campaign Running Time: 20:10 Recommended Use Chapter 1 Background/Overview This video focuses on the DEWmocracy social media campaign created by PepsiCo Beverages Americas for its Mountain Dew soft drink brand. Mountain Dew is now the third largest selling soft drink brand in the United States, trailing only Coca-Cola and Pepsi. PepsiCo acquired the brand in 1964 to add a non-cola flavored soft drink to its product line and has worked for the past several decades to create a national identity for the brand that extends beyond rural areas and into major metropolitan markets as well. Advertising for Mountain Dew through the years has continued to build on its image as an irreverent brand that stands for individuality by continuing to embrace all things edgy including extreme sports, video gaming and other activities. In 2005 Mountain Dew began sponsoring the Dew Tour which has become a premier action sports tour and helps keep the brand connected to the action sports community. However, as the beverage market became more competitive with the myriad of new drinks competing for consumers’ attention, the Mountain Dew brand team has looked for additional ways to connect with its loyal consumers, most of whom are males between the ages of 18 and 39 and are very active online.

In 2007 the Mountain Dew brand team gave its highly loyal consumer base a way to become more involved with the brand through an initiative called DEWmocracy. The goal of this program was to open up the product development process and have the brand’s passionate fans create and choose a new Mountain Dew flavor. More than 1 million people participated in a series of interactive games on the Democracy.com website to develop every aspect of three alternatives for the new line extension, including color, flavor, graphics and name. The three consumer-generated flavors were made available in stores across the country for a limited time and approximately 500,000 votes were cast. The winner was Mountain Dew Voltage, a citrus flavor charged with raspberry and ginseng that was launched in January 2009 and became the first Mountain Dew made by fans for fans. With one user-created beverage successfully launched, the Mountain Dew brand team decided to launch a second DEWmocracy initiative that takes the “crowd-sourcing” model several steps further and gives passionate fans even more control by taking advantage of the growing power of social media. DEWmocracy 2 was launched in July 2009 and consisted of seven stages whereby passionate Mountain Dew drinkers were once again given the opportunity to become involved in the creation of a new flavor of Mountain Dew. The DEWmocracy 2 campaign ran for nearly a year and a vote was taken to select another addition to the Mountain Dew product line.

The Mountain Dew brand community was also engaged to help develop the launch plan for the new brand, Mountain Dew White Out, which debuted as a permanent member of the Mountain Dew family in October 2010.

PepsiCo took the DEWmocracy campaign to Canada in 2013 where Canadian consumers voted to add a new flavor called Voltage to the Mountain Dew product line. It will be interesting to see if the Mountain Dew brand team develops yet another version of the successful program in the future.

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The Video The DEWmocracy video includes interviews with two of PepsiCo Beverages Americas top marketing executives and three members of the Mountain Dew brand team. The video opens with Frank Cooper, Senior VP, and Chief Engagement Officer PepsiCo Beverages Americas. He discusses PepsiCo’s acquisition of Mountain Dew in the early 1960’s when it was a small local brand located in the South with a “hillbilly” image, noting that it was the first flavored soft drink in the Pepsi product line. He then goes on to provide a short overview of the transition of the brand through the decades. Frank notes that Mountain Dew has always had the distinct image of being a DIY (do it yourself) brand. Cooper is followed by Angie Gentile, Mountain Dew Brand Manager.

Angie notes that given its Southern roots, Mountain Dew was considered a country brand throughout the ‘70s, and was given its first image based campaign called “Country Cool” in the 1980s. The campaign focused on having fun and good times, and fit well with the Mountain Dew brand image.

Brett Obrien, the Mountain Dew Brand Marketing Director speaks next. Brett talks about the beverage market, noting that there are two distinct segments for soft drinks - the cola market and the flavored soft drink market. He notes that Mountain Dew is the leader in the flavored soft drink market, which has recently experienced a decline in sales as a result of the increase in competition from flavored waters and other nontraditional beverages such as energy drinks. Obrien provides insight into the Mountain Dew consumer, noting that there are two segments. He defines the existing Mountain Dew market base as primarily male, Generation X, and slightly older. This group grew up with Mountain Dew throughout the ‘80s and ’90s and vision themselves as a large part of what Mountain Dew means. For them, Mountain Dew’s image is meant to be a little different and rebellious. The “Do the Dew” campaign resonated quite well with this segment. The second segment that is currently being targeted by Mountain Dew is younger, more independent, and looking for a way to differentiate themselves. For this group, Mountain Dew is a distinct brand that fits their self-image. Because the beverage market is so fragmented and it is so difficult to get consumers to try and become loyal to a brand, Mountain Dew needs to concentrate more of their efforts to this group. Brett admits that this will not be an easy task, as this market is inundated with messages from a variety of products and brands and because they are engaged in so many activities, it is hard to attract and hold their attention. Obrien notes that to target this consumer, marketers have to speak directly to them on their own terms. Perhaps even more importantly, they have to get the consumer interested enough in the brand to talk about it and tell their friends about it. He notes that this is what Mountain Dew is now trying to do with its DEWmocracy campaign.

PepsiCo Beverages Americas Chief Marketing Officer Sparkling Brands, Lauren Hobart appears next on the video and also discusses the challenges facing beverage marketers today. She notes that the soft drink market has been in the decline stage for at least the past ten years, and is a very challenging environment. She talks about how there have been a number of new product innovations in this market over the past decade, including Mountain Dew’s very successful Code Red brand. As a result of the success of Code Red, competitors stepped up their own innovation efforts and products like Red Bull energy drink and non-carbonated beverages are now entering the market. She notes that PepsiCo realized that the market was changing and knew that they could not continue to do business as usual.

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Marc Hanson, Mountain Dew Senior Brand Manager follows with a discussion of the first DEWmocracy campaign which was one of the first efforts at reaching the younger market segments. The goal of DEWmocracy was to tap into Millennials, who were already fans of the brand, and get them to be more committed to it. Marc notes that traditional media like TV and radio were not working well with this segment, so something different had to be done. Digital was considered as the best medium to employ to get this group more immersed in the Mountain Dew brand. The DEWmocracy 1 initiative used different elements including entertainment, gaming and storytelling to capture and hold their attention and get them involved with the brand. He notes that a five minute introductory movie was created with the assistance of Forrest Whittaker to get consumers involved in the DEWmocracy experience. In the original DEWmocracy campaign, three teams were formed to develop a new flavor of Mountain Dew. Three consumer-created flavors were brought to the market for a limited time and a national vote was conducted to select the winner. The campaign pushed the idea that the new products were “created by actual Dew drinkers, for Dew drinkers.” Participants created the flavor, color, name and even the logo of the new products.

Hanson notes that the objective of DEWmocracy 1 was to harvest the Mountain Dew drinker and draw them into the Mountain Dew experience. Once the products were developed and brought to market, consumers were kept involved throughout the summer by engaging in social media, blogs and other online experiences to vote for the product should be added to the Mountain Dew family.

Over 500,000 votes were cast and DEWmocracy 1 was considered a great success nearly 1.5 million consumers participated in the campaign. The ultimate winner was Mountain Dew Voltage which became a permanent addition to the Mountain Dew line. Hanson discusses how following the DEWmocracy 1 campaign, the market experienced a tremendous surge in the use of social media (on its own, not as a result of this campaign). This, in turn, led to significant market changes, as consumers no longer wanted companies to talk to them but rather wanted to be heard. The Mountain Dew brand team realized that the traditional ways of marketing to consumers was not going to work very well, and decided they needed to get them involved in the creation and marketing of new products. This led to the launch of DEWmocracy 2.

The video returns to Angie Gentile who notes that the DEWmocracy 2 initiative consisted of 7 different stages. The first stage was a truck stop tour, where the brand team traveled around the country with seven new mystery flavors of Mountain Dew. People could come and test the different flavors and vote for which one they liked the best. The second stage was all about organizing our fans online. She notes how a private online community called DEW Labs was created that was comprised of 4,000 of the most passionate Dew fans. Each member received a sample of all three flavors, and after testing them, they aligned and organized themselves into three different Flavor Nations. In the third stage, fans chose the product colors for all three flavors.

Gentile note that the brand team worked with the fans in DEW Labs and narrowed down a really large color palette to three different color options for each flavor. Then we opened up the votes to all Dew fans online, so we had a live, streaming event on our Facebook page, where fans were able to vote by shooting a paintball live on video to vote for their specific color. The color that had the most paintball shots ended up being the final color for the new packaging. The fourth stage was about naming the products. Through voting and discussion, the options were narrowed down to three different names for each of the flavors. In stage five, nine different Twitter accounts (one for each name) were created and used to reach out to followers and their networks such as friends

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and family to encourage them to become followers of their favorite name, each of which was represented by a Twitter account. At the end of the week-long Twitter race, the name that had the most followers on Twitter became the final name for the product. In stage six, the package design was opened to anyone, including individuals and small agencies, to submit their vision for what the new Mountain Dew can should look like. The contest ran on Facebook, and through consumer voting the top ten designers were identified. In stage seven the ten designers were brought into the DEW Labs community and the Flavor Nation within DEW Labs decided what particular designer would design the can for their flavor. There was a three month process where the Flavor Nation, the designer and the Dew brand team worked together in partnership to develop the final design for each of the three flavors. The product was then taken into the field, and voting began.

Brett Obrien then discusses the results achieved by DEWmocracy 2 and notes that all of the objectives were met as sales rose significantly, as did online buzz. There were over 3 million votes cast, and Mountain Dew Facebook fans increased from approximately 125,000 to 150,000 at the beginning of the campaign to over a million at the end. Frank Cooper returns to the video to further discuss the results of the campaign, not only in sales terms, but in connecting with the Mountain Dew consumer. He notes that the objective was to reach and solidify the existing base while also expanding the brand’s market share in other areas of the country, as Mountain Dew was still pretty much a regional drink. He notes that Mountain Dew was successful in doing so.

The new Mountain Dew marketing model is then discussed by Lauren Hobart. She notes that while Mountain Dew, along with others in the PepsiCo line have always been known for their iconic advertising, this traditional model is no longer going to work. She note that the DEWmocracy campaign really reflects the new marketing model which focuses on getting brand involvement, and measuring success through this metric rather than the more traditional measures of the past.

She notes that Mountain Dew has always been at the forefront of innovative advertising, and will continue to do so. Hobart concludes by noting that the entire industry is now going in this direction.

Finally, Frank Cooper returns to explain the Mountain Dew philosophy by using an interesting example from his work with singer Snoop Dog regarding how it is important to pull up fans on the pedestal with you rather than looking down upon them. He notes that PepsiCo wants to use its marketing platform to allow its fans to leverage its infrastructure and assets and empower them.

The DEWmocracy video can be used to effectively demonstrate a number of key points including how the beverage market has changed, and requires successful marketers like Mountain Dew to change their overall marketing model; the power of digital media in creating interest and engaging consumers with brands; the decreasing role of traditional media in the IMC program for marketers such as PepsiCo; and how the new metrics such as engagement and involvement are now being used rather than just media based measures such as reach and frequency.

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IBM Brand Equity Restoration and Advertising Evolution Teaching Note Case Overview This case examines the various advertising campaigns used by IBM from 1995 to 2006, a period during which “Big Blue” has undergone a transformation in its business strategy that has resulted in one of the most dramatic and successful turnarounds in American corporate history. The case deals with the role of advertising in business-to-business marketing as well as advertising campaign evolution and brand equity restoration. It also provides insight into the challenges of marketing a complex, multifaceted brand to a broad array of customers with many different needs across a variety of industries. The case illustrates how a company’s branding and positioning strategies change over time. It also gives students the opportunity to track the evolution of IBM’s advertising and to evaluate how the various campaigns used by the company over the past 11 years have communicated the desired message to the target audience. A Power Point presentation file accompanies the case which provides examples of print, outdoor and television advertising from the various campaigns. Students should be encouraged to down load the power point file and evaluate the ads as they read and prepare the case. You might also encourage them to visit the IBM web site and examine the various types of online marketing tools that are used by the company, particularly in support of its advertising campaigns.

This case is very broad in scope and can be used in a variety of areas. However, it may be best suited for use with Chapters 8 and 9 of the text, which focus on Creative Strategy Development and Implementation and the development of advertising campaigns.

The case

allows students to analyze the creative strategy and executions used by IBM for the various campaigns. It also provides insight into how each campaign was developed in response to changes in IBM’s marketing strategy. It is important for students to understand that the various IMC campaigns developed by Ogilvy & Mather were done to reflect changes in the way IBM wanted to position itself to businesses. The case can also be used with Chapter 19 on International Advertising and Promotion as nearly all of the campaigns discussed in the case were global in scope.

UPDATE

2014:

A

collection

of

newer

IBM

commercials

at: .youtube.com/watch?v=obCHKPYHuhA&list=PLAA70CA178DFADC57

1

can

be

found

Discussion Questions 1. What is the primary objective of IBM’s advertising? How have the objectives of its advertising changed over the years?

The primary objective of IBM’s advertising is to start a dialog with companies that might benefit from its various products and services. IBM is a well known company and nearly everyone in the business community is aware of them and believes they have a general understanding of what they do. However, IBM has to create a better understanding among Clevel executives (Chief Executive Officers, Chief Financial Officers, and Chief Information Officers) and middle managers in the businesses it is targeting for its technology products, as well as its consulting services. In some cases the advertising is designed to drive a potential user to IBM’s website to learn more about its products and consulting services. Like most business-to-business marketers, IBM has a well trained sales force that calls on key decision makers in the companies it targets. An important objective of IBM’s advertising is to help get the company into the consideration set of these decision makers so they will accept the sales call to learn more. The purpose of the advertising is also to ensure that key decision makers in companies are aware of IBM and its capabilities. A further goal is to generate leads that IBM’s sales force can follow up on to provide more information and hopefully create a relationship. The call to action is to encourage them to make some form of contact with IBM, either by calling for more information, or checking out IBM’s capabilities and offerings on the Internet.

The objectives of IBM’s advertising have changed over the years to reflect changes in its business strategy. In the mid to late 1990’s, during the height of the dot-com craze, the advertising had to communicate that IBM was “still in the game,” that it’s technology was not obsolete, that it could help companies adapt their businesses to new ways of doing business on the Internet, that it was nimble and flexible, and that it could handle a variety of business needs, encompassing different industries and businesses.

After IBM purchased Price

Waterhouse Coopers, its Business Process Transformation Services and consulting related to this area became a major growth priority. IBM wanted to communicate that there was another entire side to the business, aside from technology, which was the rationale for “The Other IBM” campaign. Most recently, with the “Innovation That Matters” campaign, IBM is communicating that it customizes solutions and recommendations based on each firm’s needs and strengths and can help firms develop new ways of doing business to give them a unique competitive advantage.

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2. Evaluate each of the campaigns described in the case and the accompanying ads shown in the Power Point file. Are the intended branding messages being communicated clearly and do the ads speak equally well to users, as well as non-users, of IBM products and services?

Students should be asked to analyze each campaign discussed in the case and evaluate the various print ads, commercial photo boards, and out-of-home ads that are provided. They should put themselves in the position of a CIO, CFO or a CEO who is currently not using IBM’s services and consider whether they understand IBM’s offerings from the ads. Do the ads peak their interest? Do they make them want to contact IBM to learn more? Do they communicate the message that IBM is a credible supplier of those products and services and a good option to fulfill their needs? Does the copy seem to be at the right level of complexity and does it interact well with the imagery to communicate effectively?

3. What were the pros and cons of staying with the “e-business” campaign? Could it have been updated and retained or did it lose its relevance?

The e-business campaign served IBM well as it positioned them at the forefront of the trend in moving business processes onto the Internet, a movement that was a priority for nearly every company during the mid to late ‘90s. Most businesses wanted to move more of their operations to the web, but because so much was new and evolving, they needed the help of a knowledgeable partner with expertise in this area.. By coining the term “e-business” and focusing on it in their advertising, IBM became indelibly linked with best practices in doing business on the Internet. However, once IBM had established their expertise in this area, focusing on “e-business” alone became limiting. It was for this reason that IBM shifted away from “e-business” to the “ON Demand” campaign. “ON Demand” was introduced at a time when supply chain management and just-in-time operations had come to be highly valued by companies as a better way to do business. In this way, IBM was able to broaden the way they were perceived, from being an “e-business” expert to being an expert in supply chain management processes and making businesses more responsive to customers needs and emerging opportunities.

4.

How was the “ON Demand” campaign adapted to keep the umbrella tagline, while providing the specifics needed to communicate the “sub-business” component details?

The “ON Demand” campaign used a series of print ads, television commercials and out-ofhome ads to communicate all the different types of businesses and problems that were helped

by IBM. Examples included: “Fighting Cancer is ON” to show how IBM helped analyze medical data; “Napster is ON” to show IBM helped Napster work with universities so their

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networks were not overwhelmed by demand for music from students; “China is ON” to show how IBM was helping China develop the infrastructure it needs to prepare for future growth; “The PGA Tour is ON” to demonstrate how IBM helps sporting events transmit data. Using case examples is a tactic that IBM often incorporates into its advertising. These cases serve two purposes. First they provide examples of companies as well as business problems with which other firms can identify. Also, by showing the breadth of problem-solving skills IBM possesses, businesses will deduce that IBM can help them find solutions to their issues or problems, thereby enabling them to better capitalize on their unique opportunities. The challenge IBM faces in its advertising is that the business is exceedingly complex and it is difficult, if not impossible, to communicate all the products and services IBM offers to all its potential customers. The dilemma is whether to create one generic campaign that might be too general and not address the needs of individuals or being too specifically focused on any one type of problem. The approach taken in the “ON Demand” campaign seems like a good advertising solution, for the reasons stated above.

5. Do you think IBM’s advertising campaigns have changed too often over the past 11 years? Were the changes made because the campaigns were not working well or was it an intentional evolution in the advertising and branding message IBM wanted to communicate?

Over the 11 year period discussed in the case, IBM has had five major campaigns including a sequence of changing taglines. These have included “Subtitles - Solutions for a small planet” which ran from 1995 to 1997; the “e-business” campaign which had several sub-campaigns and ran from 1998 to 2002; the”ON Demand” campaign which ran from 2002 to 2005; “The Other IBM” and “Help Desk” campaigns which ran from 2005 to early 2006; and the “Innovation That Matters - What makes you special?” campaign which began in March 2006.

The campaigns have really not communicated specific information about IBM’s products such a servers, networks, software, and computers, as the primary focus of each has been on total business solutions. They have mirrored the aspects of better business processes and management that have been priorities for key company decision makers in the target audience at each point in time.

In this way, IBM has communicated that they understand their

customers’ most pressing business issues and opportunities. The succession of campaigns has also broadened the branding message for IBM, from the earlier perception that IBM only meant technology to the more recent positioning of the company as a total business partner.

The most recent “What makes you special?” campaign theme is designed to counter the perception that IBM is a large bureaucratic monolith that tries to use the same approach to

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solve each customer’s problems. Rather it communicates that IBM is a valuable business partner that works with customers to understand their specific problems and needs and can help them do special things. This message, combined with the lack of pretension in the tonality of the ads, may appeal to small and mid-sized businesses, which constitute one of IBM’s largest growth opportunities in the future. The changes have enabled IBM to seem relevant and up-to-date.

Some students may argue that IBM has changed campaigns too often, particularly over the past few years. However, it is important to note that IBM competes in a very dynamic and competitive industry that is constantly changing. The marketplace has undergone a transformation.

The IT consulting industry has matured and companies are seeking

relationships with partners who can provide deep industry and business process consulting and management expertise. IBM’s corporate strategy has changed over the past decade and continues to evolve as the company strives to maintain its competitive advantage. The marketing challenge for IBM has been to increase awareness and consideration of its capabilities in areas such as business process transformation services.

Thus, it is not

surprising that changes have been made in IBM’s advertising to inform customers of its capabilities and to differentiate itself from competitors. The downside of frequently changing campaign tagline changes is that it makes it more difficult to solidify one message or perception in consumers’ minds. It often takes repeated exposure to an advertising campaign before the branding and positioning message is effectively communicated. By changing it’s advertising campaigns and taglines frequently, IBM may have difficulty communicating its desired branding and positioning message with its entire target audience before moving on to the next major campaign.

6. Is there value to business-to-business marketers such as IBM in advertising through mass media that also reaches the general consumer market? Evaluate the media choices used by IBM such as advertising on golf tournaments, on Sunday morning news shows, in airports, and even on the Super Bowl. Since IBM divested its personal computer business, should they continue to advertise to consumers, for example on the Super Bowl?

The target audience for IBM’s advertising is clearly business executives as well as middle managers who might be involved in making decisions regarding the choice information technology and consulting services providers. Thus, much of the company’s advertising is going to be targeted to media that reaches these individuals including general business magazines such as Business Week, Forbes and Fortune as well as newspapers such as The

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Wall Street Journal and Barron’s. IBM also runs ads in vertical publications that target specific areas of business such as information systems, finance, marketing and management as well as specific industries. Television advertising can also be targeted to business executives through cable networks such as CNBC, Bloomberg Financial News and various programs on CNN such as “Lou Dobb’s Money Line.”

IBM, as well as other business-to-business marketers will often advertise in mass market media even though many people outside of their target audience will be exposed to the ads.

B-to-B marketers recognize that they may have to accept a certain amount of “waste coverage” or overexposure whereby the media coverage is broader than the target audience, particularly if a media vehicle does a good job of reaching a high percentage of those in the target audience.

For example, IBM advertises on televised sporting events such as

professional golf and tennis matches and NFL football games as well as news programs.

While not all the viewers of these events are business people, a high percentage of its potential customers can be reached through these media vehicles. IBM also advertised in USA TODAY which is a general consumer newspaper. However, it also reaches a very large number of business executives who read it while traveling. IBM also uses out-of-home advertising in places such as airline terminals and executive lounges in airports worldwide.

This is an effective way to reach its target audience which spends a great deal of time traveling for business. These advertisements often mirror the print work by featuring c-level executives asking thought provoking questions and suggesting that that IBM has the answers.

Selective advertising through mass media may be used by IBM for several other reasons even though it reaches many consumers who are outside of their primary target audience.

Some studies have shown that purchasing advertising time and space in consumer mass media may be more cost efficient, despite the wasted coverage, than trying to reach the target audience through a variety of business media. Ads in these media help increase awareness for IBM and editorially cast them in a favorable light because of a favorable association with the editorial content of a publication or television program. Advertising to viewers in a more relaxed environment, without the clutter of a lot of other business-to-business ads, increases the chance the message will register with their target audience. According to the theory of effective reach, target consumers need to see an ad, on average, between 3 and 10 times in order to register the message. By reaching the target through a variety of media, he or she is more likely to notice it than if the ad was repeated solely in the same vehicle, which they might ignore or tune out. Advertising in high profile media vehicles also can motivate IBM’s internal employee organization when they see their company sponsoring an event such as the

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Super Bowl or Masters Golf Tournament, advertising boldly on prestigious programming, or making a statement in leading magazines and/or newspapers.

Since spinning-off its

personal computer division to Lenovo, IBM no longer sells products to the end consumer market so they are not trying to deliver a sales message to this group. However, IBM may still be concerned with its image among the general public and feel that there is value in having them see some of its image-oriented advertising.

7. How has the target audience for IBM’s products and services evolved over time? How have the types of business problems that IBM addresses in their advertising changed?

Prior to the mid-1990’s, IBM was viewed almost exclusively as a technology company, selling mainframes, servers, and software to IT professionals. Since that time, IBM has gradually expanded it products and services to focus more and more on solving a range of business problems, enabling businesses to innovate, respond more quickly to consumer needs and business opportunities, and to develop unique competitive advantages. IBM’s B-to-B dialogue has therefore expanded to include “C-level” executives (chief executive officers, chief information officers, and chief marketing officers). IBM has positioned itself as a partner in developing overall business strategies that will move their customers ahead. Their advertising has shifted over the years from focusing on products and technology to showing how IBM partners with clients and customizes solutions to meet their needs by drawing from all of IBM’s areas of expertise. They have positioned themselves in essence, as opportunity identifiers, problem solvers, and implementation facilitators.

8. What were the advantages and disadvantages of using a creative tactic such as the metaphorical King Arthur’s Round Table commercial and print ads that were part of “The Other IBM” campaign?

The King Arthur ads were a departure from previous IBM ads as well as from advertising done by other technology companies. This was intentional as the ads grabbed the attention of viewers and/or readers which increased the likelihood that they would be noticed. However, they also were a clever way to deliver the message as the ads portray age-old business problems that are faced by companies and organizations, from supply-chain issue to human resources. They were an effective way to make the point that the types of problems, issues and opportunities that affect organizations have really not changed that much over time.

Students can be asked if there are any downsides to this approach. Do the characters from King Arthur’s court seem relevant today? Are C-level executives likely to identify with them? Do the problems really seem parallel? Is the comparison meaningful? Is the humor

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likely to be appreciated? Is there a limit to how different a B-to-B ad can look and feel? Do the characters have to be appealing to be effective?

It was important for IBM to call attention to the “other side” of its business as business consulting services is a huge and increasingly large part of IBM’s future growth plans. “The Other IBM” tagline communicates that Business Consulting is as large and important as the tech side, which has long been the company’s heritage and primary association.

The

campaign encouraged potential customers who weren’t aware of IBM’s capabilities in this area, to seek more information to learn more. The King Arthur’s Round Table ads were a clever way of executing the creative strategy for this campaign.

9. What is the value of using testimonials and case studies across a variety of businesses and industries integrated marketing communications campaigns?

Throughout the different campaigns, IBM has used testimonials and case studies across a variety of business sizes and industries to illustrate how its products and services have helped companies. These have included the nuns who were excited about IBM’s new technology in the “Solutions for a small planet” campaign; the surprisingly wide array of organizations that became “e-businesses” and benefited from transitioning to the Internet (e.g., “the Hermitage Museum in Russia is an e-business”, “Vespa is an e-business”, “National Geographic is an ebusiness”, “Olympics.com is an e-business”); the businesses that became more “ON Demand” with IBM’s help (Napster, China, the PGA); and most recently, the businesses that were able to innovate in ways to make them even more special and successful (a grocery chain, a university, or insurance companies). The use of examples and mini-case studies makes the benefits that IBM’s help can bring to an organization seem more real and easier to envision. Without these examples, IBM’s services and capabilities might seem very abstract and potential customers would have difficulty envisioning what IBM might do for them.

The testimonials and case studies have been an extremely effective way to make an umbrella campaign, that often has had to be summarized in a 30 second spot or a single page insertion, translate to a wide variety of potential customers.

10. Does IBM’s advertising provide enough information to decision makers and does it matter that no references to the prices of its products and/or services are made in the ads ?

One key piece of information that is missing from the IBM ads is pricing. From a practical standpoint, it would be nearly impossible to quote prices, given IBM’s wide variety of products and services. IBM could, however, communicate that the price for their services is “less than you’d think”, or “surprisingly affordable.” Instead, any reference at all to pricing

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is omitted. A major source of business for IBM is mid-size companies, defined as having 500 employees or more. There is a risk that a firm that has never used IBM before might feel they cannot afford their services, or that any benefits in operations might be wiped out by consulting fees. Concerns of what it might cost to hire IBM might be one of the primary reasons a firm will not take up IBM’s call to action and contact them. This is testable. If IBM finds price is one of the primary obstacles they must overcome, they might address it in future advertising. The downside to mentioning pricing in their ads is that they might be calling attention to pricing early on, before a sales representative can demonstrate how IBM might help the prospect. Pricing is also a tricky and complex matter. Aside from varying by the scope of the project, the value of the services might depend on cost savings from changes in operations, which could require an in-depth analysis to identify.

11. Evaluate the decision by IBM to consolidate all of its worldwide advertising with the Ogilvy & Mather agency. What are the pros and cons of using one agency to handle all of its advertising?

As noted in the case, IBM made a major decision in 1994 to dismiss more than 40 agencies around the world and consolidate all of its advertising with Ogilvy & Mather Worldwide. A number of factors were behind this decision. One of the major reasons given by IBM for consolidating all of its advertising with Ogilvy & Mather was that the company had been projecting too many images with its advertising divided among so many agencies. IBM recognized that it was competing in a global market for computers and other information technology products and services and felt that it was important to deliver clear, consistent messages that reinforced and built on the equity in the IBM name. The agency consolidation move allowed IBM to gain greater control over and facilitate coordination of its worldwide advertising. IBM also felt that a high tech product such as computers and information technology services consulting could be advertised using a global advertising campaign since the reasons for purchasing them are the same the world over. Companies are also consolidating their global advertising in an effort to increase efficiency and save money.

Finally, advances in technology such as the Internet, e-mail, video conferencing, and other communication tools make it much easier to manage accounts around the globe.

The risk of the consolidation decision is that one centralized agency may not be able to develop as effective advertising in many foreign markets as a local agency. Local agencies often have a better understanding of the marketing and advertising environment in their country or region and thus may be able to develop more effective advertising than a large

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multinational agency. Using a single agency also means that a marketer has no backup agency to turn to if there are problems such as an ineffective ad campaign. Companies who consolidate also face the problem of selling the idea to regional offices and local country managers who may not like having control of advertising taken from them. However, major companies such as IBM recognize that hey must develop a consistent global image for the company and/or its brands and speak with one coordinated voice to customers around the world.

This teaching note was prepared by Professor Michele Greenwald, Visiting Professor at HEC, Paris, as an aid to instructors in the classroom use of the case.

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MAZDA – POSITIONING A PRODUCT LINE TEACHING NOTE Case Overview This case examines Mazda North American Operations and the efforts of the automobile company and its advertising agency, Doner, to its position its vehicles in the highly competitive U.S. automotive market. The case begins by describing the IMC program developed by Doner to reposition the subcompact Mazda Protegé model in the late 1990s using the “Get In. Be Moved” tagline. The repositioning of the Protegé was very successful and Doner began using the tagline in advertising for other Mazda vehicles.

However, Mazda’s marketing executives were

concerned that “Get In. Be Moved” theme was too passive and vague and was not effective in positioning Mazda as a company that makes sporty vehicles that appeal to the driving enthusiast.

In 2001 Mazda began using a new creative platform in advertising and replaced the “Get In. Be Moved” tagline with a new theme based on the phrase “Zoom-Zoom.” The case provides an opportunity for students to evaluate the change in Mazda’s positioning strategy and the IMC campaign used to reposition the Protegé, as well as a new campaign for the MAZDA6 sports sedan.

A Power Point file containing print ads for the Protegé5 and MAZDA6 are included with

the case. Students should be encouraged to review these ads when analyzing the case to gain more insight into the advertising used for these models. You should also encourage students to visit the Mazda web site at www.mazda.usa.com where information is available on the various Mazda models including the MAZDA6, Mazda5, MX5-Miata, CX-7, MPV, Mazda Tribute and

the RX-8. It should be noted that Mazda has dropped the Protégé name and this model is now called the Mazda3.

UPDATE 2014: The Mazda3 (now in its third generation) and the Mazda6 have both been very successful. A number of Mazda3 and Mazda6 commercials over the years are available on YouTube.

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Discussion Questions 1. Analyze the role of integrated marketing communications in the marketing of automobiles such as the Mazda Protegé and MAZDA6. How is each IMC tool used to market automobiles?

Integrated marketing communications play a very important role in the marketing of automobiles such as the Mazda Protegé and MAZDA6. Many automobile buyers base their purchase decisions on product related attributes such as price, quality, reliability, durability and performance, as well as on factors such as style and brand image. A variety of IMC tools are used to provide consumers with information about the Protegé as well as to create an image that will appeal to the target market for the car. The case notes that Mazda’s turnaround strategy in 1997 called for a change in the positioning of the Protegé. The car was originally positioned as a step up from a compact sedan and but as a car that retained compact attributes such as fuel efficiency and a low price. The new strategy called for positioning the Protegé as a cool, fun, hip-to-drive car for young professional women in their early 20s to mid-30s. To accomplish this repositioning, the advertising for the Protegé began focusing on attributes such as the car’s euro-chic styling, room for friends, value, reliability, and cool features such as CD players and air-conditioning.

Mazda uses all aspects of the promotional mix to market its automobiles and other vehicles.

Advertising on television as well as in magazines played a very important role creating and reinforcing an image of the Protegé as a car that is cool, fun, and hip-to drive. The TV commercial depicting the group of hip 20-somethings carpooling in the Protegé and driving through the surrealistic cityscape was designed to help create the above noted image and positioning for the car.

Direct marketing was used by building a data base of customers who enter the sweepstakes on the Mazda web site and/or request more information about the Protegé. These customers were sent information about the Protegé and occasionally received direct mail pieces. Interactive media and the Internet were also used as part of the IMC program for the Protegé. Mazda’s interactive agency created the “Protegé road trip” on Mazda’s web site where consumers could take a cyber journey to learn more about the car. Mazda also mailed a CD-ROM with music, movie reviews and interviews to consumers who requested more information about the Protégé. Sales promotion techniques such as a consumer sweepstakes and dealer incentives and contests were also part of the Protegé launch.

Mazda also generated a considerable amount of publicity for the Protegé and its advertising campaign through press releases and various public relations activities. Finally, promotional efforts for the

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Protegé were extended to dealerships to support the personal selling effort and to convert the showroom into a “Protegé World” that extended the advertising and positioning theme to the showroom floor. Sponsorship of events such as auto racing and motocross is also a very important part of Mazda’s IMC program.

An integrated approach was also used in the introductory campaign for the MAZDA6 that involved the use of media advertising; a direct mail program which included the mailing of videos and CD-ROMS to prospective buyers,; event sponsorship; participation in various promotions sponsored by ESPN; showroom displays in Mazda dealerships; online advertising, and a specific section on the MadzaUSA web site. You might go through each of the IMC tools used for the Protegé and the MAZDA6 and discuss the role each plays in the marketing communications program for these vehicles.

2. Evaluate Mazda’s decision to drop the “Get In. Be Moved’ tagline for the Protegé and adopt the “Zoom-Zoom” theme for its advertising.

The decision to drop the successful “Get In. Be Moved” tagline would appear to be based on Mazda’s desire to return to and build upon its heritage and long-term positioning of making fun-to-drive cars that are sporty and appeal to the driving enthusiast in everyone. While the “Get In” tagline may have worked well for the Protegé, Mazda’s marketing team felt that it really did not differentiate the brand very well nor contribute to the aforementioned positioning platform. To effectively position an automobile, it is necessary to develop an image over time. Mazda positioned itself as a company that made sporty cars that appealed to driving enthusiasts way back in the 1970’s, and attributed much of its early success in the U.S. market success to this image. The success of the Mazda RX-7 sports car and the Miata roadster reinforced this positioning platform.

The highly successful launch of the Mazda Tribute sport utility vehicle, which was positioned as having the “soul of a sports car” and accompanied by ads using the “ZoomZoom” mantra, provided further support that the sports car tie-in would be beneficial to Mazda. Subsequent use of “Zoom-Zoom” in advertising for other vehicles led to increases in advertising and brand awareness. For a company that struggled with a brand identity in the 1990’s, the adoption of the “Zoom-Zoom” advertising was a smart move. In part, the mantra contributes to the positioning that has made Mazda successful in the past. The “Get In. Be Moved” theme would not have been as successful in achieving the sporty positioning that

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Mazda is trying to achieve.

3. Evaluate the strategy Mazda of North America is using for the new MAZDA6 sports sedan. Do you agree with the decision to use a more mature and less playful approach to advertising for the MAZDA6?

As noted in the case, the MAZDA6 introduction was one of the most important in Mazda’s history. The MAZDA6 competes in the mid-size sedan segment, which is the most important segment of the automobile market due to its size, and success or failure in this segment may have a halo effect that carries over to the rest of the product line. In addition, cars that compete in this segment often constitute the foundation upon which the product line is based.

To compete in this segment, Mazda will have to go head-to-head with the Toyota Camry, Honda Accord and Nissan Altima, all of which are highly successful and worthy adversaries.

In addition, the target market for the MAZDA6 is consumers in their mid-30’s, typically male, and somewhat less of a car enthusiast, which makes this group somewhat different than the customer for the other Mazda models.

Mazda’s strategy for the “6” must strike a balance between the sporty positioning and a more reserved, mature approach. They must be careful not to give up on the positioning that has made them successful, but recognize the needs of a more mature audience, and translate “sporty” into “enthusiast.” At the same time, they must find a way to differentiate themselves from the firmly entrenched competitors such as Toyota, Honda and Nissan. The MAZDA6 strategy appears to be well designed. The retention of the “Zoom-Zoom” mantra helps to maintain the sporty positioning strategy, which should serve as a basis for differentiation.

The ads themselves appear to be more mature, less playful and suggest that the MAZDA6 is a more “grown-up” option, without abandoning the fun aspects of driving. The focus on handling, performance and mechanical aspects should appeal to the enthusiast, who may be looking for something different from the standard midsize car (after all, getting older doesn’t mean one has to act older!).

The highly integrated media campaign also looks promising. An increase in print ads may be necessary to explain some of the sporty features of the new MAZDA6, while the television spots are still exciting and fun to watch. The media schedule, which is heavily weighted to ESPN, the NFL and NCAA College Football, reinforces the sporty aspects of the

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car, while reaching the sought target audience. Tie-ins to other sports programming such as ESPN’s Pigskin Pick’Em, Exhilarating Moments and Truck 2 Promo should help reach the target for the MAZDA6.

Mazda has also integrated elements of previously successful

campaign including the Internet, publicity and public relations, direct mail, and event sponsorship into the IMC program. Receiving recognition from automotive magazines such as Car and Driver’s award for one of the 10 Best Cars for 2003 is great publicity that can be promoted in media advertising and other venues such as the web site for the MAZDA6.

4. What recommendations would you make to Mazda regarding its integrated marketing communications strategy as the company moves forward?

When Mazda has been successful, it is due in large part to having an image as a company that makes sporty, fun-to-drive cars. This positioning helped them achieve success with the RX-8 and the Miata. When Mazda has gone away from this positioning the company has lost its basis for differentiation and its models have become “just another car”. To be successful, companies must develop a sound positioning strategy and maintain it over time. In the 1990’s it was not clear as to what Mazda brand stood and the company had trouble differentiating its vehicles from the competition. However, by establishing and maintaining the sporty positioning strategy, Mazda now has a stronger image and identity for its various models. For those consumers that want some exhilaration and fun in their driving, Mazda models such as the Mazda3 (formerly the Protégé) and MAZDA6 should appeal to them. A lesson can be learned by observation of the BMW’s strategy of differentiation. Their “Ultimate Driving Machine” position has been used for nearly two decades and has been very successful over the years.

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Case Teaching Note Under Armour Enters The Basketball Shoe Market Case Overview This case examines Under Armour (UA), the highly successful athletic apparel and footwear company that was founded in 1996 and is now approaching $1 billion in sales. The case discusses the factors that have led to the rapid growth of Under Amour, the company’s marketing strategy, and the important role integrated marketing communications has played in helping build UA into one of the most valuable brands in the sports industry. A major focus of the case is Under Armour’s efforts to enter the athletic footwear market. UA has been successful in marketing cleated footwear for football, baseball, softball, lacrosse and soccer. However, the company’s efforts to enter the mainstream athletic shoe market with products such as cross training and running shoes has not gone very well thus far. Despite its limited success with these products, UA launched a new line of basketball shoes in late 2010 in an effort to compete with industry leader Nike which controls 95 percent of this market. The case discusses UA’s strategy for entering the basketball shoe market by using Milwaukee Bucks NBA star guard Brandon Jennings as its primary endorser. Jennings was beginning only his second season in the NBA when Under Armour launched its new Micro G product line and despite his future potential as an up and coming player in the league, one can question whether this was an effective way to compete against Nike and its stable of NBA stars such as Kobe Bryant, LeBron James, Dwayne Wade and Kevin Durant.

This case can be used as a basis for analyzing the factors that have led to the tremendous success of Under Armour and the important role IMC has played in this process. It can also be used to discuss issues such as sponsorships, the use of athletes as endorsers and branding, as well as the consumer decision making process for athletic shoes. The use of this case can be enhanced by showing the Under Armour video commercials. You can find examples of Under Armour advertising on the company’s web site under the Brandon Jennings blog section and on YouTube. Discussion questions are provided at the end of the case and are covered in the remainder of this note.

UPDATE 2014: Under Armour has been extremely successful, as revenues in 2013 approached $2.8 billion. The company has expanded its offerings and increased its targeting to women. (See video accompanying tenth edition of Belch and Belc.

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Discussion Questions 1. What are the reasons for the success of Under Armour since its founding by Kevin Plank? What do you view the most important factors that have contributed to the growth of the company?

There are a number of factors that account for the tremendous success of Under Armour. The company had a first-mover advantage in the performance apparel market as UA pioneered this category by developing compression clothing that wicks sweat away from the body and provides athletes and fitness buffs a way to stay cool and dry during workouts, practices, and games. Under Armour products are of very high quality which allows the company to command a price premium and help differentiates them from other brands of sports apparel. A second reason for the success of Under Armour is that the company has a very strong brand image as they have focused on brand building as a core asset and a source of competitive advantage. UA’s brand image is particularly strong among younger consumers as a survey by Piper Jaffray & Co. of 700 students found that Under Armour is the solid number 2 athletic brand in the U.S. behind Nike and finished nearly tied with them as the preferred clothing brand. Under Armour is becoming the sports apparel brand of choice among the younger generation as brand recognition and preference among this segment is very high. Another reason for the success of Under Armour is that its “Protect this house” advertising campaign was very unique and struck a responsive chord with consumers. The tagline became part of popular culture and helped differentiate the UA brand, particularly among young athletes. It is also important to note that UA has been successful because it has been able to secure distribution in key sporting goods stores such as The Sports Authority, Dick’s Sporting Goods and many specialty retailers. Under Armour also generates a significant amount of sales through its direct to consumer channel which includes its own stores as well as online sales. In the UA video case Steve Battista , Senior Vice President of Brand, notes that the four keys to success for the company are: • Build a great product • Tell a great story about the product • Provide great service (support for retailers as well as consumers) • Build a great team of people (management, employees, athletes/endorsers) 2. What are the key components of Under Armour’s integrated marketing communications program? Discuss the role IMC has played in helping build the Under Armour brand.

Under Armour has used a full repertoire of integrated marketing communications tools to build its brand. The components of the IMC program include: •

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Media advertising - UA developed a very effective advertising campaign based on the “Protect This House” theme. The initial advertising tapped into the raw emotion of football and helped position UA as a high performance brand for serious athletes as well as those who train for and participate in various sports.

Sponsorships - UA has made effective use of sponsorships at the high school, collegiate and professional levels. They sponsor high school All American games for a number of sports which help them to tap into the young male and female market. They have sponsorship deals with a number of high profile Division 1 collegiate teams which gives help generate exposure for the brand, particularly on television. The sponsorship agreement with the NFL to provide football cleats also is an important deal as it has helped the company gain market share in the cleated footwear market. UA also has sponsorship deals with several professional baseball teams such as the Chicago Cubs as its logo appears on the ivy-covered wall at Wrigley Field (the only brand allowed there).

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•

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Athlete endorsers – Under Armour has also signed a number of high profile athletes to endorsement deals including numerous NFL athletes as well as Major League Baseball players.

The company also has endorsement deals with a variety of athletes who compete in individual sports such as swimmer Michael Phelps, skier Lindsey Vonn, UFC champion Georges St. Pierre, and freestyle skier Jen Hudak among others.

Product placements – UA used product placements very effectively in its early days in movies such as “Any Given Sunday” and the ESPN series “Playmakers.” Under Armour gear is often worn by athletes who appear on sports talk shows and on many television shows such as “The Amazing Race.”

Internet – UA has made very effective use of online marketing to help build its brand, communicate with consumers and generate sales. The company often creates micro sites to help with the launch of new products and also uses a variety of social media as part of its IMC program including YouTube, twitter, Facebook and blogs.

Public relations/publicity – Under Armour has become a very high profile company that generates a considerable amount of attention from the media. Stories on the company often appear in the media and help tell UA’s authentic story and generate exposure for the brand.

All of these IMC tools play a very important role in building and maintaining Under Armour’s brand identity. It is important to note that product quality is a key component to the strong brand image of UA as IMC programs are more effective when they are promoting a quality product that enjoys a loyal customer base. However, Under Armour has been able to create a very unique brand image that resonates well with both men and women who are competitive and confident.

3. Evaluate Under Armour’s decision to enter the mainstream athletic shoe market and compete in product/market segments such as cross training, running and basketball shoes?

One of the challenges Under Armour has faced since going public in 2005 is that the company must continue to grow revenue as well as profits to satisfy the demands of the investment community. As can be seen in Figure 1 of the case, UA has a 33% compounded growth rate over the past 5 years and is approaching $1 billion in sales. The company has a 70% market share in compression apparel and now faces strong competition from other sports apparel companies in this market including Nike’s Dri-fit products and the adidas Climacool line. While UA has been expanding into other segment of the apparel market such as golf, tennis, skiing/snowboarding, running, and hunting, it is not surprising that they would look beyond apparel for growth opportunities. Athletic footwear is a very large market, particularly the running and basketball shoe segments, as consumers wear these types of shoes on a daily basis as well as for sports activities. As noted in the case, basketball shoes are $2.5 billion market while the market for running shoes is even larger and has been estimated to be as high as $5 billion. Thus, even if UA could gain small amount of market share in these segments, the revenue would be significant. You might point out to students that each market share point in the basketball shoe market is worth approximately $25 million in revenue. Thus, if UA could capture 4% of this market it would add $100 million to the company’s total revenue. Of course, the key question is whether UA can capture even a small amount of market share given that they must compete against industry giant Nike as well as other major athletic shoe companies such as adidas and Reebok.

It is worth noting the success UA has had in cleated footwear such as football, baseball, softball, soccer and lacrosse. However, these markets are closer to UA’s core business and brand image and the company’s strong relationships with retailers such as The Sports Authority and Dicks Sporting goods were helpful in entering these markets. They are likely to find that the running and basketball shoe markets are much more difficult to penetrate. They have had only limited success with running shoes which may be due to the fact that many runners are loyal to brands such as Nike, Asics, New

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Balance, Saucony and others. A major challenge they will face in the basketball shoe market is the presence of Nike which has a 95% market share. Nike has dominated the basketball shoe market in the U.S. for years dating back to when they signed Michael Jordan as an endorser and created the Air Jordan shoe line. Michael Jordan remains a very effective endorser for Nike even though he retired in 2003 and the Jordan line remains a top seller. Nike has most of the NBA’s top players under endorsement contract including Kobe Bryant and LeBron James and has shoe lines named after these super stars. Under Armour will have to battle adidas and Reebok for the remaining 5% of the market not controlled by Nike and each of these companies has large promotional budgets. Adidas has endorsement deals with Derrick Rose and Dwight Howard, while Reebok signed John Wall who was the number one pick in the 2010 NBA draft. It will be very difficult for UA to match these three companies in terms of advertising and promotion spending as well as for endorsement deals.

4. Evaluate the strategy used by Under Armour to enter the basketball shoe market and compete against Nike as well as adidas and Reebok. Discuss the pros and cons of the company’s decision to use Brandon Jennings as their primary endorser for its new basketball shoe line.

It should be noted that Under Armour is taking a very cautious and measured approach to entering the basketball shoe market. While the company did debut the shoes at an exclusive media party in penthouse of hotel in New York, they did not utilize a major public relations campaign for the launch. The company is working closely with retailers to determine where the shoes will be sold as they are using a selective distribution strategy that may include the use of smaller independent retailers in various markets, such as Jimmy Jazz in New York City and Baltimore’s Downtown Locker Room. Under Armour’s launch strategy is based on limiting the distribution of its new shoes which could create pent-up demand and help generate buzz for the shoes as they may become a musthave, hot item among younger consumers.

Under Armour is relying very heavily on Milwaukee Bucks guard Brandon Jennings to help draw attention to its Micro G line of basketball shoes. The company has developed print ads featuring Jennings that will be used in various sports publications that reach the key market segment of young males as well as TV commercials that can be aired during basketball games on cable networks such as TNT, ESPN and NBA TV. They are also using an online marketing campaign that include social media such as Facebook, Twitter and YouTube as well as The Brandon Jennings Diary blog on the UA web site.

UA’s decision to use Jennings as the primary endorser for its new basketball shoe line is interesting and can be viewed as somewhat risky. The pros of using Jennings is that he appears to be an up and coming NBA star as he had a very successful rookie season and started out well in his second season before being injured. UA was also able to sign him to a four year endorsement deal for $2 million while he was playing in Europe which is relatively low by NBA standards. Note that Reebok recently paid John Wall $25 million for a 5 year deal which is more than 10 times what UA is spending for Jennings. Under Armour rarely signs high profile athletes to endorsement deals, as the company does not have the marketing budget to out bid companies such as Nike, adidas and Reebok for the star players. The company often looks for up and coming players who can develop into stars and are loyal to the company. If Jennings recovers from his injury and continues to play well, he can be an effective endorser for the Micro G line. The cons of using Jennings as the primary endorser is that he is still somewhat of an unproven player and may not have the ability to influence consumer purchase decisions to the same degree as proven NBA stars such as Kobe Bryant, Lebron James and Kevin Durant (all of whom wear Nike shoes) or Dwight Howard and Derrick Rose (who wear adidas).

Brandon Jennings is also playing in Milwaukee which is not a high profile city and for a team that does not command much media attention. Bryant plays for the Los Angeles Lakers which won the NBA championship in 2010 and whose games often appear on national television. Lebron James

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signed with the Miami Heat in 2010 where he joined star players Dwight Howard and Chris Bosch to form what has been called a new dream team. One might argue that Under Armour should have signed a more established and high profile NBA star as the primary endorser for its new line of basketball shoes. However, it is important to note that many of the top players are already under contract and the company would have to be willing to spend large sums of money to sign a super star player. As noted above, since its founding UA has always sought the up and coming athlete rather than compete with Nike, adidas and Reebok for the super star endorsers. Under Armour is likely to sign more players to endorsement deals if the Micro G line gains traction in the market and generates revenue for the company.

5. Do you think Under Armour will be successful in entering the basketball shoe market? Why or why not?

A major challenge UA faces in entering the basketball shoe market is to seen as a legitimate brand in this space. UA feels that their brand image and strong presence in performance apparel, as well as cleated footwear, may help them be perceived a viable competitor in this market. A key determinant of success in this market will be the quality of the UA Micro G line as companies such as Nike, adidas and Reebok all have quality basketball shoes. Under Armour feels that they have a quality shoe and that features such as being lightweight and low to the ground provide an alternative to heavier, thicker foam shoes. Basketball shoes must be able to perform well and provide cushioning and comfort for the foot. Any problems with product quality can lead to negative word-of-mouth that will travel very fast, particularly in social media circles. UA has done extensive testing of their shoes and feels they can compete on a quality basis. Given this, success will be determined by how well they market the new Micro G line and whether the shoe can gain traction in the basketball market.

Students should be asked to take a position as to whether Under Armour will be successful in its efforts to enter the basketball shoe market and to offer support for their prediction. They have a lot riding on this launch as success in basketball shoes can help Under Amour solidify its position as a major competitor and brand in the athletic shoe market, open new distribution channels and, of course, provide a new source of revenue. If UA is not successful, they may find it very difficult to become an athletic footwear company and will have to rely on the apparel market for future growth.

Instructors should monitor various online sources to track how Under Armour does over the next two years in its efforts to enter the basketball shoe market as well with the re-launch of its running shoes.

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Using Advertising to Fight the War on Drugs: The Power of Social Marketing or a Waste of Money?

Teaching Note Case Overview This case examines the advertising efforts that have been used by the Partnership for a Drug Free America (PDFA) for the past nearly 20 years, and more recently the U.S. government through the Office of National Drug Control Policy (ONDCP), to deal with the problem of illicit drug use. The PDFA consists of a coalition of advertising, marketing and media people, and has been conducting the largest public-service advertising and social marketing campaign in history with the goal of helping kids and teens avoid drug use by influencing their attitudes through persuasive information. In 1998 the U.S. government became involved in the use of advertising to fight the war on drugs when the U.S. Congress approved The Media Campaign Act of 1998 which directed the ONDCP to conduct a national media campaign for the purpose of reducing and preventing drug abuse among young people in the United States. As part of this legislation, the federal government allocated a billion dollars over a five year period for a mass-media based drug prevention campaign. However, after only a few years, the PDFA and ONDCP found themselves in a battle for control of the anti-drug advertising efforts over issues such as the type of ads that should be used, and whether monies should be allocated primarily to media advertising or to support a more broad-based integrated marketing communications program. Moreover, both organizations have had to deal with questions regarding the effectiveness of the anti-drug advertising campaign in reducing drug use and whether the government should continue to fund their efforts.

This case can be used with Chapter 18 which deals with measuring the effectiveness of the promotional program, as well as with Chapter 21 which deals with social and ethical aspects of advertising and promotion and the use of advertising to deal with the problem of drug abuse. This case should be of interest to students as they have probably seen many of the anti-drug ads run by the PDFA and the ONDCP and can discuss whether they feel these messages have had any effect on them or their peers with regard to attitudes toward drug use or actual behavior. The classroom discussion of this case can be enhanced by showing some of the anti-drug ads created by the PDFA. More recent commercials developed by various ad agencies for the Partnership that address various drug problems such as the use of methamphetamines, prescription/over-the-counter drug abuse, steroids and an intervention campaign.

Several of the print ads from the ONDCP’s campaigns can be found in the set of acetates that are provided in the supplement package. You might also encourage students to visit the web sites of the PDFA (www.drugfree.org) and the ONDCP (www.whitehousedrugpolicy.gov). The PDFA web site has a

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section containing many the Partnerships latest commercials by category including drug, agency, audience and medium. The ONDCP site has a Media Campaign section that contains the latest television and radio commercials as well as print ads.

UPDATE 2014: The ONDCP continues its fight against drugs today. The PDFA is now called Drugfree.org. A large number of the commercials used over the years are available at https://www.youtube.com/playlist?list=PL9FAB81F94AC10BDF Discussion Questions 1. Evaluate the creative strategy used by the Partnership for a Drug Free America in its advertising campaign, particularly with respect to the use of strong fear appeals.

In the early years of the PFDA campaign, numerous agencies provided pro bono creative. Many of the messages attempted to employ strong fear appeals to “scare” the audience into not using drugs. Ads showing a rat eating cocaine until it died, or in which an analogy was drawn between using drugs and pointing a gun to one’s head (a shot is heard at the very end of the commercial) along with others of this nature were commonly employed. In many of the cases, the commercials were not effective as viewers engaged in selective exposure by not watching, paid little attention to the ads or counter argued with them. As noted in the case, the ads were often exaggerated, distorted or misrepresented. The effective use of fear appeals, particularly those indicating physical harm, is often a difficult task to achieve. As noted in the text, some studies have demonstrated a curvilinear impact of fear, in which the message increases in effectiveness to a point, then decreases. In some of the early PFDA commercials, the appeals may have been too strong which limited their effectiveness.

Research has also indicated that fear appeals are likely to work best with nonusers as opposed to users of drugs. Given that one of the goals of the campaign was to reach young people before they started using drugs, the use of fear appeals could be effective, as long as the level of fear is not too high. On the other hand, the likelihood of impacting users is lower. Some studies have demonstrated that more rational messages are likely to work than fear appeals, particularly with adolescents. Noting that this age group tends to be skeptical and even cynical, approaching them with a matter of fact approach might prove to be more useful than attempting to scare them. A good example of this skepticism was the famous ad “This is your brain on drugs” commercial which featured an adult frying an egg and drawing an analogy to frying one’s brain. The commercial was parodied on TV shows, bumper stickers, and t-shirts and likely did more harm to the anti-drug cause than good.

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Later in the campaign, the appeals were considered by the drug czar John P. Walters to be too “soft” and “indirect”. He argued that the anti-drug ads were ineffective and that the message had become diluted. Walters and the ONDCP called for stronger appeals and ads linking drug use to terrorism. The PDFA refused to produce spots that contained this message, so the ONDCP had them produced themselves. Reaction by teens to the terrorism linked spots would seem to favor the PDFA position.

While 60% of those participating in the research said that if drug money went to support terrorism they would think about not using drugs, most of the feedback indicated that the commercials were an over reaction, a “typical adult overstatement”, and insulting to them. As noted by one creative executive: “Kids told us, “I did not bomb the World Trade Center. I just smoked a joint at lunch.” The research on fear appeals indicates that they must be used carefully and pre-tested prior to being used.

2. Discuss the market segmentation strategies used by the PDFA and ONDCP in the anti-drug campaigns. Which of these segmentation strategies would be most likely to be effective?

As noted in the case, a number of segmentation bases have been used in the anti-drug advertising campaign of the PDFA and ONDCP. The segmentation strategy used most often is based on demographic variables, specifically age. Throughout the PFDA campaigns, specific messages have been developed for different age groups, ranging from the very young to adults. When the ONDCP became involved, segmentation took on an even more critical role, with socio-economic, ethnicity, and geographic factors being used. The research indicating the importance and value of reaching parents led to additional attention being placed on them as a segment as well. Another important segmentation strategy used in these campaigns is based on reaching drug users and nonusers. As noted earlier, responses to various types of appeals may differ depending upon whether the individual is using drugs.

Users may be less rational and less receptive to the anti-drug messages than nonusers. The latter might internalize the anti-drug messages and view them as support for the decision that they have made not to use drugs.

Segmentation on the basis of geographical criteria has also been employed. Many of the commercials developed appeared to target “inner city” or urban youth, particularly those involving appeals for hard drugs like crack cocaine. In the early days of the campaign there seemed to be a perception that only those living in the inner cities used drugs. However, studies have shown young people living in the suburbs, as well as rural areas are not immune from drug abuse. Depicting drug abuse as a problem limited to the inner cities could lead to a false sense of security for suburban and rural inhabitants, or a basis for denial that the problem exists where they live.

Age is another important market segmentation base. Reaching children before they begin using drugs is an important goal of the campaign. Previous research has shown that the appeals have had

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different impact on various age groups. Earlier research provided by the PFDA indicated that the appeals were not working with well with 13-18 year olds and considered them the most difficult segment to reach.

It is obvious that appeals must be developed for different age groups, as they will have different lifestyles, needs, and motives that may impact their likelihood of using drugs. Additionally, the distinction between appealing to kids and their parents is a critical one. For many children, their parents are their role models, and they are respected if not revered. As noted, many parents did not recognize that they still could make an impact on their children’s decision to use drugs. Thus the development of advertising strategies to reach them as well as their children is a critical one.

As noted toward the end of the case, the emphasis on targeting continues to change. First there was emphasis on youth and nonusers. Then the appeals targeted parents, with the belief that they could impact their children. By the end of 2003, there was again a shift back to focusing on youth. This switch lead to a change in creative as well as media strategy. There is also a lack of consistency in respect to the appeals based on the type of drugs used. Early ads focused on hard core drugs, then the campaigns addressed less addictive substances as well as marijuana and hard core drugs, and then again shifted back to a strong focus on marijuana. This lack of concentration over the years may be contributing to the perceived ineffectiveness of the program. Regardless of the segmentation strategy employed, it is obvious that an undifferentiated strategy is not going to be successful. It should also be noted that there are different media habits for the various segments as they will not all watch the same TV shows nor read the same magazines. The Internet has become a more important medium to some segments than others. Thus, the PDFA and ONDCP will need to continue to segment the market, understand these segments and determine the most effective way to reach them if they hope to be successful.

3. Much of the controversy surrounding the anti-drug advertising campaigns has involved the determination of the effectiveness of the ads. Evaluate the various approaches used to determine the effectiveness of the anti-drug ads. What types of measures should be used to evaluate the effectiveness of the campaign?

Given the tremendous amount of money spent each year to develop and run the anti-drug advertisements, measuring the effectiveness of the campaign is essential. If the government is to continue to expend hundreds of millions of dollars on the anti-drug campaigns and advertising and media companies are going to continue to contribute their time and effort, they need to be sure that this money is being well spent. In addition, they need to know which program elements are working and which are not. Therefore, the issue is not whether there measures of effectiveness should be taken, but rather what these measures should be. What is interesting about this case is that the criteria used to measure the effectiveness of the campaign may not be in line with the objectives of the campaign. As noted, many of the objectives

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involved the changing of attitudes toward drug use by enhancing positive aspects of not using drugs and negative aspects of social use which ultimately would lead to behavioral change. Unfortunately, many of the bases for evaluation have involved a direct attempt to equate declines in drug usage to the campaigns themselves. For example, the last two studies cited in the case used effectiveness measures that included attitudinal and behavioral intention results, but then seemed to focus on the fact that drug had not decreased. As with other attempts to measure advertising effectiveness, it is extremely difficult to determine the direct impact of the ads on behavior. As is the case with product/service advertising, there are many other factors that will influence behavior. For products and services it may be price, availability, quality, competition and other factors. With respect to using drugs, other factors will also have an impact including peer pressure, availability, price, and characteristics of the user such as his or her self-esteem.

Attempting to relate increases and decreases in drug use figures directly to the impact of the advertising campaigns is likely to be extremely difficult.

Many of the studies also may have been influenced by the fact that they employ self-report measures. Asking respondents whether they saw and recall the ads may be valid measures, but attitudinal and/or behavioral measures may be impacted by socially desirable responses—particularly among adolescents. If you asked a teen their reaction or attitude toward an anti-drug ad, they will be inclined to overstate the amount of influence. If you asked them if they did drugs, or if the ads would make them less likely to do so, they may be unwilling to respond positively to the first question and negatively to the second. Thus, the survey results may be distorted.

Perhaps the greatest value of the research used to measure effectiveness would be an attempt to assess recall of the messages and assign a value to the appeals themselves.

In this way, some

communications measures of the impact of the campaigns would be taken, with the information useful in developing future commercials. This information might also be useful for determining the relative effectiveness of media placements, if it could be determined where these commercials and ads were seen or heard. However, equating the effectiveness of the campaign to increases or decreases in the use of drugs may be too much to ask.

4. Discuss the merits of using an integrated marketing communications program that encompasses a variety of communication tools to prevent drug use versus an approach that relies primarily on media advertising.

One of the basic premises of IMC is that the various marketing communication tools offer different advantages and disadvantages and that the utilization of an integrated approach will lead to a more effective and cost efficient communications program. This is likely to be the case for the war on drugs, though many of those involved in the PDFA might disagree. However, the anti-drug campaign may

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benefit from the use of a variety of IMC tools to deliver the message regarding the dangers of using drugs.

However, the requirement that as much as 80% of the budget be spent on media does not support the use of an IMC approach. As noted by Richard Earle, the use of an integrated campaign designed to drive viewers to the websites of the PDFA and/or ONDCP offers great potential. As noted in the text, a number of companies and organizations have used this strategy such as the U.S Army, Nike, Mazda, and many others.

The PDFA and ONDCP would best be advised to consider a combination of mass media and other IMC tools to achieve their communication goals. A problem that might hinder the use of a more integrated campaign could be the ability to measure its effectiveness. It is very difficult to measure the effectiveness of media advertising and adding more communication tools to the mix may make it even more difficult to do so. However, the fact that an integrated approach may complicate the measurement of effectiveness, does not mean it should be abandoned. In the case, it is mentioned that the Allen Rosenshine, vice chairman of the PDFA, criticized the integrated marketing communications effort, noting that it is too complex and that establishing 19 communications objectives complicated things. He argued for an effort in which advertising and message repetition is the core of the strategy, thus simplifying the process. However, it has been noted by advertising industry journalists that that Mr. Rosenshine’s advertising agency, BBDO Worldwide, has used IMC programs for many of its clients. An additional consideration in whether the PDFA should move to more of an integrated approach is where the support for this effort will come from. The PFDA relies heavily on with pro bono work and media support which is donated by the advertising agencies and media companies. A factor to consider in the allocation mix is the impact that the shifting of the emphasis of the campaign to other IMC tools such as direct media or the Internet might have on the pro bono support the PDFA receives.

5. Evaluate the advertising campaign developed by Ogilvy & Mather for the ONDCP linking drug use with terrorism. Do you think these ads were an effective way of changing the attitudes and behavior of young people with regard to the use of drugs? Why or why not?

The goal of the drugs-and-terror campaign developed for and sponsored by the ONDCP was to link drug use with the support of terrorism by suggesting that illegal drug sales are a major source of money for terrorists. The ads implied that the weapons and other supplies used by terrorists were paid for by the money they get from drug sales. The idea behind the campaign was that people would be less likely to use illegal drugs if they understood that by using them they might be supporting terrorism. The campaign was launched five months after the September 11, 2001 terrorist attacks and was designed to capitalize on the public’s outrage over the terrorist attack as part of the effort to fight drug abuse in the United States.

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A second part of the campaign was designed to refute the notion that illegal drug use is a victimless crime and shifted the focus from terrorism to personal harm with ads suggesting that the purchase of drugs supported drug-cartel attacks on innocent people.

The campaign was very controversial and was criticized by many different groups. Some were critical of the government’s effort to draw a connection between drug money and terrorism, arguing that it was not fair to blame nonviolent drug users for the actions of terrorists or drug cartels. Other groups such as the National Organization for Marijuana Legalization argued that the campaign created a false impression that terrorism is caused by drugs rather than the illegality of drugs. Groups such as NORML argued that legalization of some drugs is the answer to the problem rather than trying to discourage drug use. The Partnership for a Drug-Free America was also opposed to the campaign, as it did not agree with the strategy behind the ads. The Partnership feels that the best way to deal with the problem is to promote drug resistance techniques, positive alternatives to drug use and parental involvement.

The ONDCP decided to stop running the controversial campaign in May of 2003. The reason given for the decision was that the campaign put the ONDCP in a battle with the PDFA since the ads were produced outside of the Partnership by the drug office’s agency, Ogilvy & Mather. The ONDCP wanted to present a more united front with the Partnership to Congress which has to vote to extend the anti-drug campaign. The drug office announced that it would be directing more of its money toward youth-oriented media and focus its effort on halting drug use among kids rather than trying to deter them from starting to use drugs.

6. Evaluate the merits of the anti-drug advertising campaign from a social perspective. Should the government be involved in this effort or is the PDFA the more appropriate organization?

It is unlikely that anyone would challenge the goal of the anti-drug campaigns of the PDFA and ONDCP as drug use among young people is a major societal problem. As noted in the case, the original founders of the PFDA had no political agenda, and established the organization with truly altruistic goals in mind.

The fact that the original concept was based on pro bono work and contributions speaks even more to the intentions of the founders and participants. The work of the PDFA over the past two decades is often recognized as an example of an effective cause-related marketing campaign and how advertising can be used to deal with a social problem. However, many experts feel that the involvement by the ONDCP altered the landscape in the use of advertising to fight the war on drugs. Critics argued that government involvement politicized the effort and interfered with the efforts of the PDFA. In addition, many disagreed with the use of tax dollars to fund the anti-drug campaign arguing that it was not really a good investment of government funds.

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Perhaps the biggest concern is that of direct involvement of the federal government. The PFDA consists of practitioners in the advertising and media industries and the campaign is an extension of their expertise to a worthy cause. It entails the use of advertising which is what they do day-to-day and they are good at it. Government officials are not likely to be as knowledgeable of advertising and media strategy as those who work in these industries. The case notes the fact that the marriage between the PDFA and ONDCP was not a happy one and one might speculate as to the reasons why and who was to blame.

Nevertheless, an adversarial relationship has developed that is likely to be counterproductive unless steps are taken to address the problems between the two organizations.

Another factor to consider is the actual amount of government money being allocated to the campaign. One might argue that so long as the creative and media time is being provided on a pro bono basis, the effort is worthwhile as there is no direct cost to the taxpayer. However, when tax dollars are being spent to run the ads, accountability becomes much more of an issue. People want to know where their tax dollars are being spent and if it is a worthwhile use of these monies. Thus, there will be more pressure to produce positive results to demonstrate the value of the investment. The war on drugs is not the first time that advertising has bee used to address a social problem, nor is it likely to be the last. Drug use among young people is a major problem in the United States and that steps must be taken to remedy the situation. The best way to do this may yet to be determined, but advertising and other IMC tools can be of value in this ongoing battle.

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XM Satellite Radio: Competing in the New Digital World Teaching Note Case Overview This case examines XM Satellite Radio Inc., the leader in the satellite-delivered radio market.

XM’s founding was promoted by the radio industry’s first major technological development since the popularization of FM radio in the 1970s – the transmission of radio signals by satellite. XM launched its satellite radio service nationally in November 2001 while Sirius, its only direct competitor, launched its service in June 2002. The challenge facing both companies has been to sell consumers on the concept of satellite radio which requires the purchase of a receiver unit and payment of a monthly subscription fee for the service. The two companies are engaged in a battle for subscribers and technological leadership and have spent large sums of money over the past two years to acquire programming for their satellite systems. Many analysts predict that the two companies will have 18 to 20 million subscribers by 2010. By the end of the second quarter of 2006, XM had 6.9 million subscribers while Sirius had 4.6 million. While XM and Sirius continue to compete with one another, they also are facing competition from other digital-based technologies including MP3 players such as the immensely popular Apple iPod, Internet radio and developments that are occurring among traditional terrestrial AM and FM radio stations.

The case provides a brief history and overview of XM and its programming content.

There is also a discussion of the integrated marketing communications program used by XM to create awareness and generate trial when its new service was launched, including media advertising and demonstration programs that made it possible for consumers to experience the benefits offered by satellite radio. The case also includes a discussion of the competition XM is facing from Sirius, as well as other digital technologies. It concludes with a section on the current status of XM and the challenges the company faces as it struggles to attract more subscribers and achieve profitable growth. This case is based in part on an interview with Steve Cook, Executive Vice President Automotive for XM Satellite Radio, who joined the fledgling company shortly after the launch of the service.

The case illustrates how classical consumer

package goods marketing tactics can be successfully utilized to generate trial and repeat purchase in a different type of industry. The case also shows that as with all new product introductions, there is a learning curve regarding integrated marketing communications strategy and tactics.

We recommend using the case with Chapter 11 of the text which deals with Broadcast Media. In teaching the case, the focus should be on the challenges facing XM in terms of integrated marketing communications and what the company needs to do to continue to attract

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subscribers and compete with Sirius. In addition to media advertising, both companies are using a variety of sales promotion tools such as rebates, price deals, spiffs and other tactics to attract and retain customers. The case can also be used as the basis for an interesting discussion regarding developments in the radio industry and how satellite, as well as traditional terrestrial radio, is being impacted by new digital technologies. A number of ads and collateral material used by XM Satellite Radio are available in the accompanying power point file for students to examine as they prepare the case. You might also encourage them to visit the company’s web site at www.xmradio.com for current information on XM satellite radio.

UPDATE 2014: XM merged with Serius and now has over 26 million subscribers.

Discussion Questions 1. Which competitors should XM target in the future: Sirius, terrestrial radio, MP3 players and podcasts, or Internet radio?

Sirius – Targeting its only direct competitor might be the smallest opportunity strategy as Sirius currently, and over the short term at least, has the smallest user base of all the competitive options. Spending too much time focusing on Sirius might divert attention from the larger, more important job facing XM which is growing satellite radio as a viable product category. Moreover, targeting Sirius legitimizes them as an alternate satellite radio form and attacking them could undermine XM’s advertising strategy which has been to position itself as the best option to AM and FM radio. While Sirius is a direct competitor, they also are helping to grow the satellite radio category which is important for both companies if they are going to survive. It may be too early in the product life cycle of satellite radio for XM to focus its attention on trying to take customers away from Sirius.

Terrestrial Radio- XM has the strongest package of benefits versus terrestrial radio and its efforts might be best applied to pointing out these advantages which include more content and program options, commercial free music, better sound quality, and the ability to listen to the same programming anywhere in the country. The greatest potential for new subscribers is in converting the huge segment of the U.S. population that currently listens to terrestrial radio.

XM’s tagline, used in advertising and on their website, “Beyond AM. Beyond FM. XM.” positions the brand as the best satellite radio option and as better than traditional radio.

MP3 Players - XM’s advantages versus MP3 players are primarily in the ease of use area, as XM does not require searching, downloading and uploading and there is little change required in radio listening behavior. XM is at a disadvantage, however, because it does not

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provide the customized play list and being able to listen to your own music whenever you want as can be done with a MP3 player. XM’s advantages relative to MP3 players are most appealing to older consumers who seem to like the element of surprise radio gives them and enjoy listening to the personalities and genre experts XM provides. Also, they may not want to bother spending the time customizing music or other content for an MP3 player. A campaign following this approach could be run in publications that target the older segment of the market such as people over the age of 50.

Internet Radio - The pros and cons of XM versus Internet radio are similar to those of the MP3 player market. However, Internet radio may be even more threatening as the streaming format allows for “real time” communication of content, and doesn’t require all the time spent to download and upload listening material. However, it may be some time before Internet radio is available in cars which is where much radio listening occurs.

Combination - If only one competitor were to be chosen, XM might focus on competing against MP3 players by heavily marketing its combination XM/MP3 player unit. This would provide the most benefits to the most people, both now and in the future, as the market for MP3 players and Internet podcasting continues to explode. The combination offers the best of both “new age” formats: the infinite choice of MP3 players as well as the personalities, expertise, live content, and ease of use of XM satellite radio, including the ability to record audio content for subsequent listening.

The best way to determine the optimal strategy is to assess: 

The size of the market segments represented by the various forms of competition

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The advantages XM has versus each competitor and determining whether they are important to consumers

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Projected growth rates and trends for each form of competition

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New technologies on the horizon that will make XM’s points of difference and advantages versus each competitor more or less compelling in the future

2. Should XM try to appeal to all demographic groups or target specific segments? If the latter, which segments should they target and why? What types of advertising and promotion tactics can be used to market XM to these groups?

The fact that Sirius is becoming inextricably linked with Howard Stern, who appeals most strongly to young adult males, may create an opportunity for XM as Sirius may be boxing itself in from an image standpoint. This young, macho male association is further reinforced

by Sirius’ other deals with NASCAR and the NFL and gives XM the opportunity to position itself more broadly to a wider age male demo as well as to the female demo, which at this

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point is underdeveloped. Females currently make up 35 percent of XM’s users but account for

50 percent of the U.S. population.

Another group XM can target with specific

programming and marketing is the Hispanic market. Hispanics currently make up 15 percent of the U.S. population; they have the highest growth rate of any ethnic group, and are above average consumers of radio. Since Sirius has less revenue and a smaller marketing budget than XM, the company may be unable to afford a marketing program targeting this ethnic group. Hispanics also have a tendency to be very loyal if they are satisfied with a product or service.

3. What are XM’s options for their advertising creative strategy going forward? Should they focus on their content and programming, digital sound quality, ease of use versus the other alternatives, their innovative hardware, a combination of these factors, or some other attributes?

The key issue for XM is whether to pursue the same advertising creative strategy for every market segment and demographic group or whether to customize the message based on each user groups’ “hot buttons” and areas of interest. Decisions also have to be made regarding points of difference that should be communicated for XM versus the competition.

The major points that can be used as the basis of the creative strategy are that XM has: a. The best overall content due to its breadth (best for families/something for everyone) b. The best sound quality as rated by objective sources such as Sound & Vision magazine c. Ease of use versus MP3 players that require searching, downloading and uploading d. The latest innovations in hardware e. A combination of these factors The print ads provided with the case shows how XM is positioning itself as the best satellite radio option based on a combination of attributes such as best hardware (portability, storage and playback features) and breadth of content (commercial free music, sports, news and talk radio, comedy, and business programming). The earlier magazine insert that appeared when XM was first introduced focused on the breadth of programming by showing all of the channels. Students can be asked what they think of XM’s advertising. They can be asked what approach they might recommend as an improvement and why. XM needs to consider

whether it should have one campaign that it uses to communicate with all of its potential customers across various media, or whether it should vary the advertising message by medium. For example, if targeting the senior population, ads might be placed in Modern Maturity (the magazine of the American Association of Retired People and the largest circulation magazine in the United States). Such an ad might focus on those XM

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channels that play music from the decades of the 1940’s, 1950’s and 1960’s, Frank’s Place (that features songs by Frank Sinatra), and/or “old time radio” with shows such as “The Lone Ranger” and “Dragnet”, as well as news programming.

To target females, XM might place ads in magazines such as Good Housekeeping, Redbook, Family Circle, and Oprah Magazine that feature XM’s programming for women such as Oprah & Friends, Ellen DeGeneres, iVillage, and Take 5 as well as cooking, fashion, and celebrity news. Ads aimed at the younger target audience might be placed in magazines such as Rolling Stone, Vibe, Seventeen, and Cosmo and might feature XM programming that appeals to younger audiences such as various music formats and its irreverent talk shows.

Advertising that focuses on hardware might be used for specific target audiences. The new Samsung, Delphi and Pioneer products that combine an MP3 player with XM might be featured in ads directed at the 18-34 year olds, touting the benefits most important to this target - that XM provides the ultimate in choice.

Ad copy might focus on the unique

combination of benefits including the ability to have your own play list, the benefit of XM’s hip and cool stations that are the first to feature new artists, and the ability to record what is heard on XM for later listening pleasure.

4.

Are there any other sampling or promotional programs that XM should pursue to attract new subscribers and retain them?

XM is doing a thorough job of sampling the product at retail through in-store demos and in automobiles, both with pre-purchase installations and through rental car programs. However, there are other opportunities to allow potential customers to sample its service in environments where they will be spending a good deal of time and be receptive to hearing music, news, or talk radio. Two examples would be on the more upscale, Metroliner and Acela train routes, similar to the Jet Blue and AirTran Airways programs, and in sports clubs where people are working out. The demographics of sports clubs are desirable for XM, as the customers tend to be young, hip, and have slightly higher incomes. The three primary ways to impact repeat purchase should be identified: 1) Increasing the percent of free trials through new user promotions that result in conversions or commitments to at least a one-year plan 2) Encouraging longer contract commitments 3) Encouraging users to buy multiple units for their homes, cars, boats, and family members Students can be asked to identify additional tactics to encourage customer retention. For example, while XM has encouraged customer retention through the pricing of their different

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plan options, they could develop a buzz marketing/tell-a-friend type of promotion whereby current users become evangelists for the product. Current users who refer a friend that signs up would get one month of XM service for free. To maximize conversion from car dealer programs, it’s important to make sure that users who have not activated the units know how to do so and how to use the service. These people can be contacted via phone several weeks after purchasing their new vehicles to see if they need help or have questions. To encourage longer contract commitments, users whose initial contract period is about to expire should be contacted via direct mail and phone and given incentives to trade-up in length of commitment, such as a special offer on the latest hardware (like cell phone companies do).

5. What type of programs can XM develop with retailers to increase their share of “aftermarket” installations?

Key to creating impact at point-of-sale is the trial/display of units that allow customers to sample the XM’s sound quality and programming. Attached to these units are marketing materials such as brochures and signage that communicate XM’s marquis programming.

Products should also be displayed out of the box, as impulse purchase decisions are affected by the look of the products (as with Apple iPods, where the sleek/stylized look of the product has been a key feature). It’s nearly impossible to replicate the factory installation trial programs through retail outlets, since consumers would have to purchase the hardware and pay for the installation to try the product. If consumers choose not to subscribe, they would be unable to return the hardware. To create excitement at point-of-sale, promotions could be considered such as providing a free CD with the purchase of a unit and/or a CD with commitment to a one-year subscription. This would be a win/win for retailers, as it would both drive users into the store for the promotion and would encourage them to visit both the satellite radio departments and CD music departments of the store. They might also consider using a sweepstakes whereby people who purchase an XM system would automatically be entered, or prospective customers might be encouraged to visit the company’s web site to enter. The sweepstakes prizes might include a car with a factory-installed XM satellite radio system, the opportunity to be a guest on the show of their favorite XM radio channel host, or other prizes such as a portable XM receiver or combination XM receiver/MP3 player.

Both XM and Sirius currently use rebates as an extra incentive for retail buyers of their satellite radio systems. Sirius has been offering rebates of up to $100 while XM reduced its rebates to around $20 to $30 in the summer of 2006. XM has indicated that it wants to continue cutting the costs of its components to reduce prices rather than rely on rebates.

However, the use of rebates has been a very effective for Sirius as the sales promotion tactic

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helped the company win nearly 60% of retail sales in the second quarter of 2006. XM may have to reconsider its position on rebates if it continues to lose sales to Sirius because of the difference in the rebate offer. Consumers may be attracted to Sirius because of the larger rebate and retailers may find it easier to sell the brand over XM because of the cost savings.

This may result in retailers pushing Sirius over XM and may continue to be a problem unless XM can clearly differentiate its products and programming or lower its equipment costs.

Another trade promotion tool being used by XM and Sirius is push money or spiffs, as the case notes that both companies pay between $10 and $20 to retailers each time someone buys a satellite radio in a store and activates it. As long as the incentive fees are equal, neither company will gain a competitive advantage by using them. However, they may find themselves in a promotional trap whereby neither of them can eliminate the use of spiffs unless the other does so.

6. How can XM best combat the momentum Sirius gained from the advent of Howard Stern?

To maximize the benefit of signing Howard Stern, Sirius focused much of their advertising budget in the four months prior to his coming and the two months after his arrival on promoting his show. A great deal of the advertising for Sirius continues to focus on Stern which means there is less emphasis on communicating the breadth of their programming.

Moreover, Sirius has become inextricably linked to Stern. While Howard Stern is enjoyed by many, the “shock jock” is perceived negatively by perhaps even more.

XM has the

opportunity to differentiate itself from Sirius, seem like a better value, and appear more “wholesome” by focusing on its breadth of content. However, XM may have to be somewhat careful here as their line up includes Opie and Anthony, whose program also includes irreverent content.

7. Is there a cooperative advertising message (such as Intel Inside) that XM can further promote with its distribution partners to increase the synergy and awareness for the brand and its unique benefits?

XM may be able to work with automotive companies to deliver a type of ingredient/component branding message about the benefits of having its satellite radio system as an accessory in a vehicle. XM benefits greatly when prestigious partner brands such as Lexus, Cadillac, Infiniti, Audi and others advertise that they offer XM Satellite radio in their vehicles. Since XM has 60 percent of auto makers as exclusive partners, it should receive the majority of automotive advertising that promotes satellite radio. XM might further encourage its automotive partners to promote the availability of its satellite radio system as a factory

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installed option by providing a cooperative advertising allowance. XM might also co-sponsor research that demonstrates the value of having XM in a new vehicle and how it increases purchase intentions. Encouraging XM product mentions in advertising done by its automobile partner will also help increase awareness and prestige due to favorable associations with these brands. ___________________________________________________________________________ This teaching note was prepared by Professor Michele Greenwald, Visiting Professor at HEC Paris, as an aid to instructors in the classroom use of the case.

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