Published on October 10, 2007
Slide1: PRODUCT The Product Manager’s Interactions: The Product Manager’s Interactions Product Manager Advertising agency Manufacturing and distribution Research and development Legal Fiscal Market research Sales Publicity Purchasing Packaging Promotion services Media Agency media dept. Company media dept. Media sales reps Premium suppliers Premium screening Store testing Sampling Couponing Designers Researchers Suppliers Trade Research Suppliers Suppliers Trade Suppliers PRODUCT MANAGEMENT: PRODUCT MANAGEMENT Pearson and Wilson have suggested five steps to make the product management system work better. Clearly delineate the limits of the product manger’s role and responsibility for the product. Build a strategy developemnt and review process to provide an agreed-to-framework for the product manager’s operations. Take into account areas of potential conflict between product managers and functional specialists when defining their respective roles. Set up a formal process that forces to the top all conflict-of-interest situations between product management and functional line management. Establish a system for measuring results that is consistent with the product manager’s responsibilities. PRODUCT DEVELOPMENT AS INTENSIVE GROWTH STRATEGIES: PRODUCT DEVELOPMENT AS INTENSIVE GROWTH STRATEGIES ACQUISITION Search for or buy other companies Buy Patents Buy License/franchise` NEW PRODUCT DEVELOPMENT In its own laboratory Independent research or New product development agencies New Product - Original , Improved, Modified & New Brands SIX CATEGORIES OF NEW PRODUCTS: SIX CATEGORIES OF NEW PRODUCTS New-to-the-world product. New products that create an entirely new market. New-product line. New products that allow a company to enter an established market for the first time. Additions to existing product lines. New products that supplement a company’s established product lines. Improvements in/revisions to existing products. New products that provide improved performance or greater perceived value and replace existing products. Repositionings. Existing products that are targeted to new markets or market segments. Cost reductions. New products that provide similar performance at lower cost. PROBLEMS IN NEW PRODUCT DEVELOPMENT IN FUTURE: PROBLEMS IN NEW PRODUCT DEVELOPMENT IN FUTURE Shortage of important new-product ideas in certain areas. Some scientists think there are too few feasible new technologies with the investment potential that was provided by automobiles, television, computers, xerography, and wonder drugs in times past. Fragmented markets. Keen competition is leading to increasingly fragmented markets. Companies have to aim new products at smaller market segments rather than the mass market, and this means lower sales and profits for each product. Social and governmental constraints. New products have to satisfy public-interest criteria such as consumer safety and ecological compatibility. Government requirements have slowed down innovation in the drug industry and have complicated product-design and advertising decisions in such industries as industrial equipments, chemicals, automobiles, and toys. Costliness of the new-product-development process. A company typically has to generate many new-product ideas in order to finish with a few good ones. Furthermore, the company has to face rising R&D, manufacturing, and marketing costs. contd… PROBLEMS IN NEW PRODUCT DEVELOPMENT IN FUTURE: PROBLEMS IN NEW PRODUCT DEVELOPMENT IN FUTURE Capital shortage. Some companies with good ideas cannot raise the funds needed to research them. Venture capital has, in recent years, become much more cautious. Shortened time span to completion. Many competitors are likely to get the same idea at the same time, and the victory often goes to the swiftest. Alert companies have to compress development time by using computer-aided design and manufacturing techniques, joint partners, early concept tests, and advanced marketing planning. Japanese companies see the challenge as “achieving better quality at a cheaper price at a faster speed than competitors.” Shorter life spans for successful products. When a new product is successful, rivals are to quick to imitate it that the new product’s life cycle is considerably shortened. Thus IBM finds dozens of imitators offering IBM-compatible personal computers; and Apple finds foreign “knockoffs” of its computers being sold in the Far East. Summary of the New-Product-Development Decision Process: Summary of the New-Product-Development Decision Process Coordinate, stimulate,and search for ideas in external environment and among company personnel Identify : 1. Company factors 2. Their weights Develop alterna- tive product concepts Propose : 1. Price 2. Distribution 3. Promotion Prepare : 1.Market analysis 2. Cost analysis Conduct : 1.Engg. tests 2. Consumer preference tests 3. Branding 4. Packaging Go into limited production, prepare advertising Buy equipment and go into full production and distribution 1. Idea generation Is the particular idea worth considering? 2. Idea screening Is the product idea compatible with company objectives, strategies, and resources ? 3. Concept development and testing Can we find a good concept for the product that consumers say they would try? 4. Marketing strategy development Can we find a cost-effective, affordable marketing strategy? 5. Business analysis Will this product meet our profit goal? 6. Product development Have we developed product that is sound technically and commercially? 7. Market testing Have product sales met our expectations ? 8. Commerc- ialization Are product sales meeting our expectations? Lay future plan Should we send the idea back for product development? Would it help to modify our product or marketing program ? D R O P Yes Yes Yes Yes Yes Yes Yes Yes Y e s Y e s No No No No No No No No PRODUCT-MIX DECISIONS : PRODUCT-MIX DECISIONS A product mix (also called product assortment is the set of all product lines and items that a particular seller offers for sale to buyers. ---------------------------------------------------------------- Product-Mix Width Detergents Toothpaste Bar Soap Disposable Coffee Diapers Ivory Snow 1930Gleem 1952 Ivory 1879 Pampers 1961 Folger’s 1963 Dreft 1933 Crest 1955 Camay 1927 Luvs 1975 Instant Folger’s 1963 Tide 1946 Denquel 1985 Lava 1928 High Point Instant 1975 Joy 1949 Kirk’s 1930 Folger’s Flaked Coffee 77 Cheer 1950 Zest 1952 Folger’s Decaffeinated 84 Oxydol 1952 Safeguard 1963 Dash 1954 Coast 1974 Cascade 1955 Duz 1956 Ivory Liquid 1957 Gain 1966 Dawn 1972 Era 1972 Bold 3 1976 Solo 1979 Three Levels of Product: Three Levels of Product Core benefit or service Packaging Brand Features name Quality Styling Warranty After Sale service Delivery and credit Installation Augmented Product Tangible Product Core Product PRODUCT HIERARCHY: PRODUCT HIERARCHY Need family. The core need that underlies the product family. Example : security. Product family All the product classes that can satisfy a core need with more or less effectiveness. Example : savings and income Product class. A group of products within the product family that are recognized as having a certain functional coherence. Example : financial instruments. Product line.. A group of products within a product class that are closely related because they function in a similar manner, or are sold to the same customer groups, or are marketed through the same types of outlets, or fall within given price ranges. Example : life insurance. Product type. Those items within a product line that share one of several possible forms of the product. Example : term life. Brand. The name associated with one or more items in the product line that is used to identify the source or character of the item(s). Example : Prudential. Item. A distinct unit within a brand or product line that is distinguishable by size, price appearance, or some other attribute. The item is called a stockkeeping unit, or product variant. Example : Prudential renewable term insurance. PRODUCT CLASSIFICATIONS: PRODUCT CLASSIFICATIONS Durable Goods, Nondurable Goods and services Nondurable goods. Nondurable goods are tangible goods that normally are consumed in one or a few uses. Examples include beer, soap, and salt. Since theses goods are consumed fast and purchased frequently, the appropriate strategy is to make them available in many locations, charge only a small markup, and advertise heavily to induce trial and build preference. Durable goods. Durable goods are tangible goods that normally survive many uses. Example include refrigerators, machine tools, and clothing. Durable products normally require more personal selling and service, command a higher margin, and require more seller guarantees. Services. Services are activities, benefits, or satisfactions that are offered for sale. Examples include haircuts and repairs. Services are intangible, inseparable, variable, and perishable. As a result, they normally require more quality control, supplier credibility, and adaptability. PRODUCT CLASSIFICATIONS: PRODUCT CLASSIFICATIONS Consumer-Goods Classification Convenience goods. Goods that the customer usually purchases frequently, immediately, and with the minimum of effort in comparison and buying. Example include tobacco products, soap, and newspapers. Shopping goods. Goods that the customer, in the process of selection and purchase, characteristically compares on such bases as suitability, quality, price and style. Examples include furniture, clothing, used cars, and major appliances. Specialty goods. Goods with unique characteristics and/or brand identification for which a significant group of buyers are habitually willing to make a special purchasing effort. Examples would include specific brands and types of fancy goods, cars, hi-fi components, photographic equipment, and men’s suits. Unsought goods. Goods that the consumer does not know about or knows about but does not normally think of buying. New products, such as smoke detectors and food processors, are unsought goods until the consumer is made aware of them through advertising. The classic examples of known but unsought goods are life insurance, cemetery plots, gravestones, and encyclopedias. PRODUCT CLASSIFICATIONS: PRODUCT CLASSIFICATIONS Industrial-Goods Classification Materials and parts. Goods that enter the manufacturer’s product completely. They fall into two classes : raw materials, and manufactured materials and parts. Capital items. Goods that enter the finished product partly. They include two groups : Installations and accessory equipment. Supplies and services. Items that do not enter the finished product at all. PRODUCT-LINE DECISIONS: PRODUCT-LINE DECISIONS What is a Product? A Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. A Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed though the same types of outlets, or fall within given price ranges. PRODUCT ATTRIBUTES: PRODUCT ATTRIBUTES QUALITY, FEATURES, DESIGN ADVANTAGE, BENEFITS Feature A product feature is any physical characteristic of a product. The Product’s Features : So What ? Size Terms Packaging Color Quantity Flavour Taste Price Service Quality Shape Uses Delivery Ingredients Technology Advantage A product advantage is the performance characteristic of a product that describes how it can be used or will help the buyer. It is the fastest-selling soap on the market. You can store more information and retrieve it more rapidly with our computer. This machine will copy on both sides of the page instead of only one. PRODUCT ATTRIBUTES: PRODUCT ATTRIBUTES QUALITY, FEATURES, DESIGN ADVANTAGE, BENEFITS Benefit A product benefit is a favourable result the buyer receives from the product because of a particular feature or advantage that has the ability to satisfy a buyer’s need. Two-carat diamond ring -- image of success, investment, or to please spouse. Camera film -- memories of places, friends, and family. STP motor oil -- engine protection, car investment, or peace of mind. Movie tickets -- entertainment, escape from reality, or relaxation. General Example : Vacuum cleaner salesperson to householder. “This vacuum cleaner’s high speed motor (feature) works twice as fast (advantage) with less effort (advantage), saving you 15 to 30 minutes in cleaning time (benefit) and the aches and pains of pushing a heavy machine (benefit). BRAND DECISIONS: BRAND DECISIONS Brand. A name, term, sign, symbol, or design, or a combination of them, which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Brand name. That part of a brand which can be vocalized -the utterable. Examples are Avon, Chevrolet, Disneyland, American Express, and UCLA. Brand mark. That part of a brand which can be recognized but is not utterable, such as a symbol, design, or distinctive coloring or lettering. Examples are the Playboy bunny and the Metro-Goldwyn-Mayer lion. Trademark. A brand or part of a brand that is given legal protection because it is capable of exclusive appropriation. A trademark protects the seller’s exclusive rights to use the brand name and/or brand mark. Copyright. The exclusive legal right to reproduce, publish, and sell the matter and form of a literary, musical, or artistic work. BRAND DECISIONS: BRAND DECISIONS Branding Decision Brand Sponsor Decision Family Brand Decision Should a brand be developed for the product ? Who should sponsor the brand ? Should each product be individually or family-branded ? Brand No brand Manufacturer’s brand Private brand Mixed brands Individual brand names Blanket family name Separate family name Company/individual names Brand Extension Multibrand Brand Repositioning Decision Decision Decision Should other products be given the same brand name ? Should to or more brands be developed in the same product category ? Should the brand be repositioned ? Brand extension No brand extension One brand More than one brand Brand repositioning No brand repositioning An Overview of Branding Decisions BRAND DECISIONS: BRAND DECISIONS Family-Brand Decision 1. Individual brand names. This policy is followed by Procter & Gamble (Tide, Bold, Dash, Cheer, Gain, Oxydol, Duz) and Genesco, Inc.. (Jarman, Mademoiselle, Johnson & Murphy, and Cover Girl). 2. A blanket family name for all products. This policy is followed by Heniz and General Electric. 3. Separate family names for all products. This policy is followed by Sears (Kenmore for appliances, Kerrybrook for women’s clothing, and Homart for major home installations) 4. Company trade name combined with individual product name. This policy is followed by Kellog’s (Kellogg’s Rice Krispies and Kellogg’s Raisin Bran). BRAND DECISIONS: BRAND DECISIONS Family-Brand Decision The brand name should not be a casual afterthought but an integral reinforcer of the product concept. 1. It should suggest something about the product’s benefits. Examples : Coldspot, Beautyrest, Craftsman, Accutron. 2. It should suggest product qualities such as action or color. Examples : Duz, Sunkist, Spic and Span, Firebird. 3. It should be easy to pronounce, recognize, and remember. Short names help. Examples : Tide, Crest, Puffs. 4. It should be distinctive. Examples : Mustang, Kodak, Exxon. Packaging and Labeling Decisions: Packaging and Labeling Decisions Self-service. An increasing number of products are sold on a self-service basis at super markets and discounts houses. Consumer affluence. Rising consumer affluence means consumers are willing to pay a litter for the convenience, appearance, dependability, and prestige of better packages. Company and brand image. Companies are recognizing the power of well-designed packages to contribute to instant consumer recognition of the company or brand. Innovational opportunity. Innovative packaging can bring large benefits to consumers and profits to producers. Toothpaste pump dispensers have captured 12% of the toothpaste market because for many consumers, they are more convenient and less messy. BRAND DIAGNOSIS: BRAND DIAGNOSIS LACOSTE PHYSIQUE PERSONALITY Discrete Without fancy Individualism Aristocratism Classicism Social conformity and distinction Neither hyperfeminine nor hypermasculine transgeneration Belonging to a club RELATIONSHIP CULTURE CUSTOMERS CUSTOMERS REFLECTION SELF-PROJECTION Quality shirt Tennis Golf Sportswear Crocodile LACOSTE IDENTITY PRISM BRAND DIAGNOSIS: BRAND DIAGNOSIS IBM Confident, square All data processing systems Security reassurance Big business, , Ivy League Order and collectiveness East coast, Wall Street ‘I am a pro’ Those who take their business seriously APPLE Intelligent, creative, cool Changing the organisation New humanism California’s symbolic new frontier Self-enhancement Young-minded, autonomous Liberation, friendly Microcomputers easy access, all purposes Slide25: PRICE NINE MARKETING-MIX STRATEGY ON PRICE: NINE MARKETING-MIX STRATEGY ON PRICE 1. Premium Strategy 2. High-value Strategy 3. Superb-value Strategy 4. Overcharging Strategy 5. Average Strategy 6. Good-value Strategy 7. Rip-off Strategy 8. False economy Strategy 9. Economy Strategy High Medium Low Price High Medium Low Product Quality SELECTING THE PRICE OBJECTIVE: SELECTING THE PRICE OBJECTIVE Survival Maximum Current Profit Maximum Current Revenue Maximum Sales Growth Maximum Market Skimming Product-Qqality Leadership DETERMINING DEMAND: DETERMINING DEMAND 1. Unique value effect. Buyers are less price-sensitive when the product is more unique. 2. Substitute awareness effect. Buyers are less price-sensitive when they are less aware of substitutes. 3. Difficult comparison effect. Buyers are less price-sensitive when they cannot easily compare the quality of substitutes. 4. Total expenditure effect. Buyers are less price-sensitive the lower the expenditure is as a ratio to their income. 5. End-benefit effect. Buyers are less price-sensitive the less the expenditure is to the total cost of the end product. 6. Shared cost effect. Buyers are less price-sensitive when part of the cost is borne by another party. 7. Sunk investment effect. Buyers are less price-sensitive when the product is used in conjuction with assets previously bought. 8. Price-quality effect. Buyers are less price-sensitive when the product is assumed to have more quality, prestige, or exclusiveness. 9. Inventory effect. Buyers are less price-sensitive when they cannot store the product. Inelastic and Elastic Demand: Inelastic and Elastic Demand P1 P2 P’2 P’1 Q’2 Q’1 Q2 Q1 Price Quantity Demanded per Period Quantity Demanded per Period (a) Inelastic demand (b) Elastic demand Estimating Costs: Estimating Costs 1,000 SRAC Cost per Unit Cost per Unit SRAC LRAC 1,000 2,000 3,000 4,000 Quantity Produced per Day Quantity Produced per Day (a) Cost behaviour in a fixed-size plant (b) Cost behaviour over different size plants 1 2 3 4 Estimating Costs: Estimating Costs Current Price Experience Cost Curve A B TI $10 $8 $6 $4 $2 100,000 200,000 400,000 800,000 C o s t p e r U n i t Accumulated Production PRICING METHOD: PRICING METHOD Markup Pricing Unit Cost Markup Pricing = ----------------------------------- (1 - Desired return on sales) Trarget Return Pricing Desired return x Invested Capital Target return price = Unit + --------------------------------------- cost Unit Sales Perceived - Value Pricing Sealed-Bid Pricing PRICING METHOD: PRICING METHOD Low Price ------------- No possible profit at this price High Price ------------- No possible demand at this price Competitor’s prices Unique Product and product costs prices of substitutes features Major Considerations in Setting a Price 1,200 1,000 800 600 400 200 0 10 20 30 40 50 (Sales Volume in unit ‘0000) } Target Profit Total revenue Total Cost Fixed Cost Break-even Chart for Determining Target Return Price & Break-Even Volums D o l l o r s ( I n `0 0 0 ) Promotional Pricing & Discriminatory Pricing: Promotional Pricing & Discriminatory Pricing PROMOTIONAL PRICING Loss leader pricing Special event pricing Cash rebates Low-interest financing Psychological discounting DISCRIMINATORY PRICING Customer-segment pricing Product-form pricing Image pricing Location pricing Time pricing HOW TO ADD VALUE THROUGH DIFFERENTIATED PRICING: HOW TO ADD VALUE THROUGH DIFFERENTIATED PRICING Plan for premium pricing Set price well above highest price-point Ensure matching value Determine product benefits Check whether extraordinary pricing is possible Plan predatory pricing Set price well below lowest price point Ensure matching benefits Convey price differential Reinforce positioning through marketing mix Ensure increase in customer value T H E L E S S O N S: T H E L E S S O N S THE STRATEGY : B&L invited comparisons with other lifestyle products for its premium-priced Ray-Bans ………………………………………………………………………………………………………. THE LESSON : DON’T LIMIT COMPARISONS FOR PREMIUM PRODUCTS WITHIN THE CATEGORY THE STRATEGY : BPL established a leader’s position to justify the premium pricing for its fridges ……………………………………………………………………………………………………………………... THE LESSON : ESTABLISH A HIGH-VALUE AURA AROUND ONE PREMIUM PRODUCT THE STRATEGY : Videocon priced its products below market levels without downgrading technology ……………………………………………………………………………………………………………………… THE LESSON : DON’T ALLOW LOWER PRICE TO CREATE AN IMPRESSION ON LOWER VALUE THE STRATEGY : ConsCoffee built expectations around its Tata Café brand before unvelling a low price ……………………………………………………………………………………………………………………… THE LESSION : USE LOW PRICE AS A HIDDEN WEAPON WHEN DIFFERENTIATING BRAND Slide37: PHYSICAL DISTRIBUTION PHYSICAL DISTRIBUTION: PHYSICAL DISTRIBUTION Nature : Physical distribution involve planning, implementing, and controlling the physical flows of materials and final goods from points of origin to points of use to meet customer needs at a point. Objective : Many companies state their physical-distribution objective as getting the right goods to the right place at the right time for the least cost. MARKETING CHANNELS: MARKETING CHANNELS Marketing channels can be viewed as sets of interdependent organizations involved in the process of making a product or service available for use of consumption. Functions and Flows Information Promotion Negotiation Ordering Financing Risk Taking Physical Possession Payment Title NUMBER OF CHANNEL LEVELS: NUMBER OF CHANNEL LEVELS Zero-level channel (M-C) One-level channel (M-R-C) Two-level channel (M-W-R-C) Three-level channel (M-W-J-R-C) Manufacturer Retailer Jobber Wholesaler Wholesaler Retailer Retailer Consumer (a) Consumer marketing Channels NUMBER OF CHANNEL LEVELS: NUMBER OF CHANNEL LEVELS Manufacturer Industrial consumer Industrial distribution Manufacturer’s representative Manufacturer’s sales branch (b) Industrial marketing channel CHANNEL-DESIGN DECISIONS: CHANNEL-DESIGN DECISIONS Analyzing Consumer Needs for Service Outputs Lot size Waiting time Spaital convenience Product variety Establishing the channel Objectives and Constraints Product Characteristics Middlemen Characteristics Competitive Characteristics Company Characteristics Environmental Characteristics Identifying the Major Channel Alternatives: Identifying the Major Channel Alternatives Types of Intermediaries Number of Intermediaries Intensive distribution Exclusive distribution Selective distribution Evaluating Major Channel Alternatives: Evaluating Major Channel Alternatives Economic Criteria Control Criteria Adaptive Criteria Company sales force Manufacturers’ sales agency Break-Even Cost Chart for the Choice between a Company Sales Force and a Manufacturer’s Sales Agency. SB Level of Sales ( Rupees) Selling Costs (Rupees) RETAILING: RETAILING Nature and Importance of Retailing Retailing includes all the activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use. Types of Retailers : Self-service retailing Self-selection retailing Limited-service retailing Full-service retailing Store Retailers Specialty Store Department Store Supermarket Convenience Store Superstore,Combination Store, and Hypermarche Discount Store Warehouse Store Catalog Showroom RETAILING: RETAILING DIRECT MARKETING Mail-order catalog Direct Mail Telemarketing Television marketing Other media marketing Electronic shopping DIRECT SELLING AUTOMATIC VENDING BUYING SERVICE CORPORATE CHAIN VOLUNTARY CHAIN AND RETAILER COOPERATIVE CONSUMER COOPERATIVE FRANCHISE ORGANIZATION MERCHANDISING CONGLOMERATE WHOLESALING: WHOLESALING Nature and Importance : Wholesaling includes all activities involved in selling goods or service to those who buy for resale or business use. Function of Wholesallers Selling and promoting Buying and assortment building Bulk-breaking Warehousing Transportation Financing Risk bearing Market information Management services and counseling TYPE OF WHOLESALERS: TYPE OF WHOLESALERS FULL-SERVICE WHOLESALERS Wholesale merchants Industrial distribution LIMITED-SERVICE WHOLESALEERS Cash-and-carry wholesalers Truck wholesalers Drop shippers Rack jobbers Producers’ cooperatives Mail-order wholesalers PHYSICAL DISTRIBUTION: PHYSICAL DISTRIBUTION Transportation Total cost per unit Inventory carrying cost per unit Order-processing cost per unit Q* Order Quantity Cost per Unit (Rupees) Determining Optimal Order Quantity Slide50: PROMOTION MARKETING COMMUNICATION : MARKETING COMMUNICATION MAJOR TOOLS Advertising Sales promotion Publicity Personal selling COMMON COMMUNICATION/PROMOTION TOOLS: COMMON COMMUNICATION/PROMOTION TOOLS --------------------------------------------------------------------------- Sales Personal Advertising Promotion Publicity Selling --------------------------------------------------------------------------- Print and Contests,games Press kits Sales presentations broadcast ads sweepstakes, Speeches Sales meetings Packaging-outer lotteries Seminars Telemarketing Packaging inserts Premiums and gifts Annual reports Incentive programs Mailings,Catalogs Sampling Charitale Salesmen samples Motion pictures Fairs and trade show donations Fairs and trade shows House magazines Exhibits Public relations Brochures and Demonstrations booklets Couponing,Rebates Reprints of ads Low-interest financing Billboards Entertainment Display signs Trade-in allowances Point-of-purchase Trading stamps display Tie-ins Audiovisulas material Symbols and logos THE COMMUNICATION PROCESS: THE COMMUNICATION PROCESS Noise Response Feedback Message Media Sender Encoding Decoding Receiver Response Hierachy Models: Response Hierachy Models Stages “AIDA” Model “Hierarchy-of-Effects” Model “Innovation-Adoption” Model “Communications” Model a b c d Cognitive stage Affective stage Behavior stage Attention Interest Desire Action Awareness Knowledge Liking Preference Conviction Purchase Awareness Interest Evaluation Trial Adoption Exposure Reception Cognitive response Attitude Intention Behavior Advertising: Advertising Public presentation Pervasiveness Amplified expessiveness Impersonality Personal selling: Personal selling Personal confrontation Cultivation Response Sales Promotion: Sales Promotion Communication incentive invitation Publicity: Publicity High credibility Off guard Dramatization Major Decisions in Advertising Management: Major Decisions in Advertising Management Objectives setting Communication Objectives Sales Objectives Budget decisions Affordable approach Percent of sales Competitive parity Objectives and task Message decision Message generation Message evaluation and selection Message execution Media decision Reach, frequency, impact Major media types Specific media vehicles Media timing Advertising evaluation Communication impact Sales impact Possible Advertising Objectives: Possible Advertising Objectives To inform : Telling the market about a new product Describe available service Suggesting new uses for a product Correcting false impression Informing the market of a price change Reducing consumers’ fears Explaining how the product works Building a company image To persuade : Building brand preference Persuading customer to purchase now Changing customers’ perception of Persuading customer to receive a product attributes sales call To remind Reminding consumers that the product may Keeping it in their minds during off be needed in the near future seasons Reminding them where to buy it Maintaining its top-of-mind awareness Types of Appeals: Types of Appeals ------------------------------------------------------------------------------------------------------- Types of Potentially Potential Type of Reward Rewarding Experience ------------------------------------------------------------------------- with a Product Rational Sensor Social Eog Satisfaction ------------------------------------------------------------------------------------------------------- Results-of-Use-Experience 1. Get clothes 2. Settles 3. When you 4. For the skin cleaner stomach upset care enough to you deserve completely serve the best to have Product-in-use Experience 5. The flour that 6. Real gusto 7. A deodorant 8. The shoe needs no in a great guarantee for the young sifting light beer social acceptance executive Incidental-to-use Experience 9.The plastic 10.The portable 11.The furniture 12. Stereo for pack keeps television that identifies the man the cigarette lighter in the home of with fresh weight,easier modern people discriminating to lift taste. ------------------------------------------------------------------------------------------------------- Message Execution: Message Execution Slice-of-life Lifestyle Fantasy Mood or image Musical Personality symbol Technical expertise Scientific evidence Testimonial DECIDING ON THE MEDIA: DECIDING ON THE MEDIA Reach (R) : The number of different persons or households exposed to a particular media schedule at least once during a specified time period. Frequency (F) : The number of times within the specified time period that an average person or household is exposed to the message. Impact (I) : The qualitative value of an exposure through agiven medium (thus a food ad in Good Housekeeping would have a higher imact than in the Police Gazette.