“Effective advertising

influences behavior or though patterns.

- Diosdado Salvador Jr.Former Asean President

Johnson & Johnson

Advertising Strategy

Advertising is a PULL strategy in contrast to sales promotions, which is a PUSH strategy.

An advertising strategy is a plan to reach and persuade a customer to buy a product or a service.

Brand advertising, which aims to stimulate demand for a particular brand.

Institutional advertising, which aims to develop goodwill for a company or industry.

Advertising Several Purposes

Classified advertising, which aims to inform prospects regarding opportunities such as buy and sell, events and employment.

Promotional advertising, which aims to

inform prospects about promotional activities such as a special sale.

Advocacy advertising, which aims to convince audiences regarding a particular cause.

Advertising Objectives

Advertising objectives must be relevant to the existing market situation.

Marketing function of advertising is to inform and to persuade (which will later be explained in Exhibit 8-1).

Objectives must be SMART. The acronym means;

Specific, Measurable, Attainable, Realistic and Time-bound.

TO INFORM target customers about:1. New product2. Product function3. Correct usage4. New uses5. New distribution6. Price adjustment

Exhibit 8-1: Advertising Objectives

1. WHAT to say2. HOW to say it3. WHERE to say it4. WHEN to say it

Other critical questions are:

5. HOW MUCH to spend6. HOW to measure effectiveness of results

Exhibit 8-2: Advertising Mix

Advertising Mix

The Exhibit 8-2 shows the critical advertising decisions to be made before an advertising program can be implemented. These decisions are usually made after the target market and the advertising objectives have already been defined.

Positioning: What To Say To CustomersWhile brands advertise to be known,

they must be known for the right reason and must deliver its promise.

Brand awareness leads to brand association and this is where positioning comes in.

Positioning is the act of communicating to consumers the overall positive impression for a brand, relative to competition.

Positioning is also achieved not only in terms of media communication but also in terms of adopting marketing policies consistent with its desired image.

TO PERSUADE target customers about:

1. Brand preference2. Brand switching 3. Urgency to buy now 4. Action to be taken (like phone-in

inquiry)

Exhibit 8-3 Alternative Positioning

Price - Beer na Beer: kuhang kuha ang lasa, sa mas mababang halaga Product Attribute - French Baker: The Freshness BakerProduct Category - Ascof Lagundi: the leading cough remedy that is all natural

Product Source – Ginseng: Proudly Made in Korea.User Segment - Duty free Shopping: For balikbayan shoppingUsage Behavior - Viva Mineral Water: wash away your excessesExperience/Feeling - Chowking Dito kumakain ang masarap kumainAgainst Competition - Nizoral shampoo: 100times better than the leading brand

Exhibit 8-4 Ries and Trout Positioning Guidelines

1. What position do you currently own?2. What position do you want to own?3. Whom do you have to defeat to own

the position you want?4. Do you have the resources to do it?5. Can you persist until you get there?6. Are your tactics supporting the

positioning objective you set?

Ries and Trout also gave a six-step question framework to proper positioning. It is important to be consistent in the positioning, or consumers will be confused.

Al Ries is Chairman of Ries & Ries, Focusing Consultants. Jack Trout is Chairman of Trout & Partners. Al Ries and Jack Trout are undoubtedly the world's best-known marketing strategists.

RepositioningRepositioning is done to change the past

perceptions of the target consumer. As general rule, the more extreme the change, the more difficult the repositioning. Repositioning has two concepts:

1. Changing an old brand positioning to a new band positioning.

2. Changing consumers perception of competitors.

Two Concepts of Repositioning

1. Changing an old brand positioning to a new band positioning.

Example: Sustagen used to be positioned as a therapeutic food for the sick as well as recovering patients. The brand was repositioned in the product category of a nutritional drink.

2. Changing consumers perception of competitors.

Example: Cetrin was initially positioned as a vitamin supplement but is now repositioned as a family juice drink in powdered form.

Two Concepts of Repositioning

Copy Strategy: How To Say Message

Stages in creating advertising:

1. Preparation of copy strategy and/or brief to guide the creative team must in our hypothetical example in exhibit 8-5.

2. The creative process itself where the output is a storyboard in the case of a TV advertisement, “compre” in the case of print advertisement; and script in the case of a radio commercial.

3. Evaluation of the creative output. This could be a combination of logic, research and judgement.

Copy Brief

Copy brief or copy strategy is the basic proposition, costumer promise, or statement of benefits.

It includes the product features and pieces of evidence (or “reasons why”) that justify the proposition to make it as convincing as possible.

Copy brief also includes the tone of voice on how the message should be delivered (in case of TV or radio advertisement) which includes the brand image to be projected, and frequently the consumer image, or the picture that target users ascribe to the brand.

Exhibit 8-5 Sample of a Copy Brief for Toothpaste Brand

“Advertising will convince families belonging to the upper and middle

income classes with children in cavity-prone ages that brand C is the

therapeutic toothpaste (positioning) most effective in preventing cavities

(primary end benefit).

The principal support is X02 (features), a unique formulation in brand C which works by

attacking cavity-causing germs instead of simply strengthening teeth as done by most

other anti cavity toothpastes. Brand C is officially accepted by the Philippines Dental

Association (proof). Brand C also comes in two different flavor (secondary benefits.)

Tone should be clinical, authoritative and straightforward. If likened to a person, Brand C could be an elderly

doctor who understands and cares for the health problems of the family.”

1. Brand Overall Objectives – Is our objective to create new users, or new users, or more usage for our brand? Is it to convince users about our superior features?

2. Target market – What is the demographic, behavioral and psychographics profile of the primary and secondary target market we plan to reach?

Guide questions are important before a copy brief can be written. They are:

3. Diagnostic positioning – In terms of competitive standing, what attributes are important to the customers where we have the advantage?

4. Factors Influencing Product Purchase – This answers the where, how, how often, what sizes and what variants bought as can be gathered in a Usage, Attitude, and Interest (UAI) survey.

NOTE:

Copy strategy is not normally changed unless there is a change in the product or in ways the consumers can use the product.

Advertising Execution

• Slice of Life - This show one or more persons using the product in a normal setting.

• Scientific Evidence - Colgate has been using scientific and laboratory evidences.

9 Execution Styles

Testimonial Evidence - A closely associated evidencing format is the testimonial approach where a credible individual or a group would endorse the company’s product.

• Technical Expertise - This shows company’s expertise and experience in making the product.

Lifestyle - Emphasizing on how a product fits in with a lifestyle.

• Fantasy - Is created around the product or its use.

• Image - Many of the advertisements of apparel brands.

• Musical - Background music or the ad talent would be shown singing a song involving the product.

• Personality symbol - This associates a personality to a product.

Media Plan: Where and When To Advertise

Exposure (E) is the placement of the advertisement in a media vehicle such as TV, radio, billboard, print (newspapers, magazines, etc.) and online that the target audience is expected to know see, hear, or read.

Exposure creates awareness.

Three important and interrelatedexposure variables must be considered:

1. Reach (R) or the number of consumers exposed to a particular advertising at least once during the specified duration. Reach is composed of two types:

a. Registration – people who correctly recall and playback something meaningful.

b. Recognition – people who could not playback anything meaningful, but recognize the advertisement.

2. Frequency (F) or the number of times consumers are reached.

3. Impact (I) or the qualitative value of an exposure through a given medium size.

Traditional advertising is composed of TV,radio and print.

From about P20 billion advertisingexpenditures in 2000, TV got the lion’sshare at 65%, followed by radio at17% and print at 18%. As of the year2000, the following have been denoted:

A. Television

There are about 11.8 million homes with TV sets, out of 15.3 million homes nationwide.

The biggest TV network is ABS-CBN (Channel 2) with penetration level covering 97% of homes with TVs, followed by GMA 7.

Total advertising minutes reached 217,792 minutes.

B. Radio

There are eleven major stations in fifteen areas nationwide.

Total advertising minutes reached 3,640,900 minutes.

In the Greater Manila Area, the number of AM and FM stations are almost even with slightly more AM stations.

Audience share is 75% in favor of FM listeners.

C. Newspapers and Magazines

There are twenty five major newspapers and fifty-three magazines nationwide.

In terms of circulation, Philippines Daily Inquirer leads among all newspapers.

Reach versus Frequency

To get as much productive calls as possible, a salesperson should “reach” the right prospects. Meaning he should talk to people who are involved, either directly or indirectly in a purchase.

The salesperson’s selling skills coupled with his superior knowledge comprise the “impact” portion that can convert new prospects to hot prospects.

When hot prospects are followed up (i.e., “frequency”) for the approval of the purchase, then sales may eventually consummated.

Reach

1. When brand has strong brand franchise2. When product use up rate is low3. When making announcements of high

news value4. When products advertised is in the

innovative stage (as in a product life cycle)

5. When target audience is broad and undefined

6. When product user base is still growing

Frequency

1. When weak brand loyalty exists in the product category

2. When product use up rate is so fast3. When message to be delivered is complex4. When high top of mind recall is essential

to purchase5. When market pre-emption is desired6. When strong competition exists

Gross Rating Point or GRP is the result of combining Reach (R) and Frequency (F). Thus, E = R x F

Example If a given media plan reaches 60% of the

homes with an average frequency is 10 times in a week, the media plan is said to have a GRP of 600 points (60 x 10) for that particular week.

Gross Rating Points (GRP) and Cost Per Thousand (CPM)

Cost Per Thousand (CPM) is a term used to compare the cost effectiveness of various media.

Example Media cost of gaining exposure to 1,000

persons with an advertisement. If Inquirer charges P120,000 for a black and white full page advertisement and they have a circulation of 300,000 readers, their CPM is 400.

Computation

(P120,000 divided by 300,000 x 1,000)

It is important to always take target audience into consideration. CPM would be a better criterion to evaluate media spending effectiveness.

It is wrong that advertising must be given a budget based on a fixed percentage of sales. This is because advertising is an input of sales and not the other way around.

The Objective-Task method of allocating advertising budget is preferred.

Advertising Budget

1. Product Category – Products with several competition or substitutes, products that are non-essential in nature, products, that are used everyday, or new consumer products are normally advertised more heavily.

Factors to Consider in Setting Advertising Budget

2. Competition and Market Shares – Since awareness is the first pre-requisite to customer’s purchase intention, higher market share targets would require increase in awareness level, specially when competition is heavily advertised.

3. Advertising Frequency – The number of times needed to put across a brand’s message to consumers is not important variable to consider.

One advantage of advertising, specially effective advertising, is its carry-over effect even after an accounting year.

While investments in fixed assets like buildings and equipments are allowed to be depreciated over a long period of time, investment in advertising has to be treated as a current expense.

Accumulated Depreciation

Direct marketing is often confused with direct selling such as the activities of Philamlife and Sara Lee.

Direct marketing seeks to generate a direct and measurable response to advertising. It can be a form of direct mail, telemarketing, fax mail and direct response media advertising.

Accountable Advertising

Direct response media advertising is expected to have an increasingly popularity in the Philippines due to the increasing number of credit card holders and the presence of 800 toll-free telephone number capable of directly handling inbound telephone orders from anywhere in the Philippines.

Direct mail is also one of the fastest growing. This is because capability of reaching target customers without much wastage unlike traditional broadcast media.

Four Elements Comprise A Direct Mail Piece

1. Outer Envelope – (which must make the mailing piece stand out among so many letters expected to received by the consumer);

2. Letter – (which aims to make the reader want to read and know more about the offer);

3. Brochure – (which brings to life the product being offered); and

4. Reply Card – (which enables consumers to take action (order in require) in case they are interested to buy the company’s product)

A database or customer file is createdand updated, usually in a computer, to findout more about customers and the filesused again in the future more purchases.

Advertising Testing

There are many ways to test the effectiveness of advertising materials. Marketers used to relay on Day After Recall (DAR), Month After Recall (MAD) research, which limit the test on consumer recall of advertising.

NOTE:

Such tests have been revised to include the specifics of the recall to determine if the brand is being remembered for the right reason.

One advertising research model available is called the BUY TEST, developed by Dr. Milton Sherman Group Inc. of New York.

BUY TEST measures consumer response to broadcast and occasionally (because of cost), to print advertising.

BUY TEST utilizes a one-on-one interview technique with a minimum of 130 respondents per advertising material to be tested.

BUY TEST divides consumer response into three distinct categories following three questions marketers always ask about their advertising. (See exhibit 8-6)

Exhibit 8-6: BUY TEST SCALE

Persuasion

Recall

Involvement

Does it Persuade?

Is it Understood?

Is it Relevant?

Recall

The first step in BUY TEST is to determine the extent of understanding of the visual as well as the copy elements of the advertisement.

Involvement

The Feelings or Involvement stage seeks to determine the levels of consumer emotional reactions to the advertisements, plus their own interpretation of its visual and copy elements.

Persuasion

Consumers reaching the Persuasion stage demonstrate a high-commitment to the product with a burning desire to act on the advertising message.

The BUY TEST model favors advertisements to reach a high Persuasion level vis-à-vis the Involvement and Recall stage.

In fact, advertising visual and copy recall are analyzed based on answers by persuaded versus non-persuaded respondents.

Results of the BUY TEST answer question like:

1. “How has the advertisement been received by the various target audiences?”

2. “How have the visual and copy elements contributed to the ad’s effect?”

3. “Is the message or the execution which is driving performances?”

4. “Are creative devices being interpreted in the way they were intended?”

NOTE:

• Questions regarding purchase intent may be added in the BUY TEST to provide a greater insight into the effectiveness of the advertising.