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Marketing Communication > B - neu > Flashcards

B - neu Flashcards

1
Q

Setting Communication Objectives

Hierarchy of objectives

A

from top to bottom:

  • corporate objective
  • functional area objective -> marketing objective
  • marketing mix objective -> communication objectives
  • instrument objective -> instrument objectives
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2
Q

Setting Communication Objectives

Communication/Brand funnel

A

while a relatively large number of people become aware of the brand, the number of people who know, like, prefer, try and lastly purchase products of the brand becomes smaller and smaller.

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3
Q

Setting Communication Objectives

Classical Models of Advertising Effects

A
  • AIDA
  • DAGMAR (ACCA)
  • Hierarchy of effects
  • Persuasion Process

All these models consist basically of three stages: attention, cognitive and emotional processing and a resulting behavior. Thus ads should…
… make consumers aware for a new brand
… influence expectations about a brand’s attributes and benefits
… encourage consumers to try the brand

-> The AIDA model is the oldest chain model of advertising effects. It is very simple. The fundamental assumption that attention is a key factor can be found in all follow-up models.

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4
Q

Setting Communication Objectives

Requirements for MarCom

A
  • clearly positioned
  • directed to a specific target market
  • created to achieve specific objectives
  • accomplish objectives within the allocated target market
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5
Q

Setting Communication Objectives

SMART

A 
Specific
Measurable
Achievable
Relevant
Time-bound
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6
Q

Setting Communication Objectives

Function of advertising objectives

A
  • Expression of marketing management consensus
  • guide for budgeting and defining message and media aspects of a brand’s advertising strategy
  • standards against which results can be measured
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7
Q

Setting Communication Objectives

Are sales reasonable objectives?

A
  • no they are not
  • carry over effect
  • sales give no guidance for creatives and marketers who plan and develop the promotional program
  • sales are not only influenced by advertising and promotion but also by competition, distribution, price, economy, product quality, …
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8
Q

Setting Communication Objectives

Research on MarCom

A

Micro Approaches:
use consumer psychology and consumer-information-processing principles to study multimedia campaigns

Macro Approaches:
Use econometric techniques to assess multimedia effects at the brand level

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9
Q

Setting Communication Objectives

Creativity as objective

How to determine ad creativity?

A
  • creativity can be measured via awards
  • creativity can also be measured from the perspective of the receiver
  • „it is not creative unless it sells“
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10
Q

Setting Communication Objectives

Creativity as objective

Ad creativity model (Smith)

A
  • divergence and relevance increase creativity which enhances attention to ads, ad attitude, motivation to process
  • but does not influence purchase intentions
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11
Q

Setting Communication Objectives

Economic Effects of advertising

Report „Advertising pays: How advertising fuels UK Economy“ by Deloitte LLP

A

Advertising…
fuels economy as a driver of economic growth
provides information
plays an important role in spurring information
drives competition via the promotion of price and product differentiation

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12
Q

Setting Communication Objectives

Investing in Advertising?

When to invest in advertising?

A
  • ad investments are not just a current expense, they are an investment to ensure long-term success
  • consistent investment spending is the key factor underlying successful advertising
  • stopping or reducing advertising can cause a brand to lose some of its equity and market share
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13
Q

Setting Communication Objectives

Investing in Advertising?

Conclusion on research of advertising in recession

A
  • strong relationship between advertising and economic cycles
  • Reason: sales during a recession are likely to be lower than during expansion

There’s empirical evidence for:

  • cutting back advertising -> can hurt sales during and after recession
  • not cutting back advertising -> can increase sales during and after recession
  • increasing advertisings
  • > higher sales, market share, or earnings during or after recession
  • > most firms tend to cut back on advertising during a recession, reducing noise and increasing the effectiveness of advertising of the firm that advertises
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14
Q

Setting Communication Objectives

Investing in Advertising?

Putting advertising in perspective

Relationship between Sales Volume, Sales revenue and profit

A

Profit = Revenue - Expenses

  • > advertising is often treated as expenses
  • > because profit is only short term, it can be increased by cutting ad expenses

Revenue = Price*Volume

  • > cutting advertising decreases revenue as less units are sold or units are sold at lower prices
  • > cutting advertising -> decreases profit

Volume = Trial + repeat

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15
Q

Setting Communication Objectives

Investing in Advertising?

Advertising Elasticity

A

Elasticity
= measure of how responsive the quantity demanded is to changes in marketing variables (e.g. prices and advertising)

Price Elasticity = (% change in quantity) / (% change in price)

Advertising elasticity = (% change in quantity) / (% change in advertising)

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16
Q

Setting Communication Objectives

Investing in Advertising?

Four combinations of advertising and price elasticities for increasing profit

A
  • if price elasticity is low and ad elasticity is low as well -> maintain status quo
  • if price elasticity is high and ad elasticity is low -> increase volume by price discounting
  • if price elasticity is low and ad elasticity is high -> increase ads
  • if price elasticity is high and ad elasticity is high as well -> increase advertising and/or discount prices

-> high price or ad elasticity means that sales will react to changes in price/ads

17
Q

Budgeting Approaches

Profit

A

Profit = gross margin - advertisings/promotion expenditures

  • > profit is highest when biggest difference between these two factors
  • > profit becomes negative when advertising expenditures > gross margin
18
Q

Budgeting Approaches

Budgeting in theory

A
  • optimal level of any investment is the level that maximizes profits: marginal revenue = marginal costs
  • advertisers should continue to increase their advertising investment as long as it is profitable to do so (MR > MC)

MC = (change in total costs) / (change in quantity)

MR = (change in total revenue) / (change in quantity)

Weaknesses of this approach:

  • assumption that sales are a direct result of advertising/promotional expenditures and that this effect can be measured
  • assumption that advertising and promotion are solely responsible for sales and that there are no other and no situational factors
19
Q

Budgeting Approaches

Some budgeting methods applied in practice: rules of thumb

Top-down budgeting:

Affordability method

A
  • only the funds left after everything else is budgeted for are used for advertising
  • only the most unsophisticated and marginal firms use this method
20
Q

Budgeting Approaches

Some budgeting methods applied in practice: rules of thumb

Top-down budgeting:

Percentage of Sales

A
  • a brand’s advertising budget is set by establishing the budget as a fixed percentage of past or anticipated sales volume
  • method has been criticized as illogical -> advertising as function of sales doesn’t make sense since sales are a function of advertising
21
Q

Budgeting Approaches

Some budgeting methods applied in practice: rules of thumb

Top-down budgeting:

Competitive parity method

A
  • this method sets a brand’s advertising budget by basically following what competitors are doing
  • armed with knowledge of its competitors’ budget, a company may choose to match or exceed that budget
22
Q

Budgeting Approaches

Bottom-up budgeting

A

Objective and task method:
- Sequential procedures

1) Establish objectives
2) determine tasks required
3) estimate required expenditures
4) monitor
5) reevaluate objectives
- > this is the most defendable method

23
Q

Budgeting Approaches

Considering Competitive Advertising Activity

SOM and SOV

A

Share of Market (SOM): proportion of overall product category sales
Share of voice (SOV): proportion of overall advertising expenditures in a product category

-> SOM and SOV are usually uncorrelated (two way causality)

24
Q

Budgeting Approaches

Considering Competitive Advertising Activity

SOM and SOV

Strategies

A
  • high competitors SOV, own SOM low
  • > find a defensive niche and decrease advertising
  • high competitors SOV, own SOM high
  • > increase advertising to defend position
  • low competitors SOV, own SOM high
  • > attach with large SOV premium
  • low competitor’s SOV, own SOM low
  • > maintain a modest advertising premium
25
Q

Timing aspects

Wear-out effect

A
  • tendency of a (e.g. television or radio) commercial to lose its effectiveness when it is seen and/or heard repeatedly
  • it may occur when customers no longer pay attention to the commercial after several exposures or become annoyed at seeing/hearing it multiple times
  • > implications: develop multiple executions that can be rotated, apply a pulsing schedule
26
Q

Timing aspects

Spill-over effect

A
  • efficacy (=Wirksamkeit) of one communication instrument is not measurable/controllable
  • effects of multiple instruments overlap
27
Q

Timing aspects

Carry-over effect

A
  • a delayed of lagged effect whereby the impact of advertising on sales occurs during a subsequent time period
  • effects of advertising often occur over an extended period
  • money spent on advertising does not necessarily have an immediate impact on sales
  • advertising may create awareness, interest, and/or favorable attitudes towards the brand. purchases may be done later
28
Q

Timing aspects

Different types of scheduling and their implications of remembering

A

Flighting:

  • spending much on advertisings for a short period of time
  • high learning, but will be forgotten soon after

Continuity:

  • spending the same amount over a long period of time
  • wear-in and wear out
  • only short positive effect

Pulsing:

  • alternate spending and non-spending
  • amount of money decreases while learning curve increases, via short wear-in and wear-out effects

-> distributing information over time (pulsing) increases learning and remembering compared to flighting or continuity

29
Q

Timing aspects

Integrating media

Factors that affect consumer communication processing

A
  • Consumer: motivation, ability, opportunity
  • situation: time, place
  • communication: modality characteristics, brand and product information, source credibility characteristics, executional characteristics
  • outcome: create awareness and salience, convey detailed information, build trust, elicit emotions, inspire to action, …
30
Q

Timing aspects

Betra/Keller’s “Top-Down” Communication Optimization Model

A
  • after decisions about media selections have been made based on the buttom up model, the communication optimization model provides a top-down evaluation of the proposed communication programm
31
Q

Timing aspects

Evaluation Criteria (7C)

A 
coverage
contribution
commonality
complementarity
cross-effects
conformability
costs

Marketing Communication (9 decks)

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