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MKT 337: WSK Organising for Advertising and Promotion
Promotional Management
Chapter 3: Organising for Advertising and Promotion
MKT 337: WSK Organising for Advertising and Promotion
Participants in IMC Process
MKT 337: WSK Organising for Advertising and Promotion
THE ADVERTISER (CLIENT)
MKT 337: WSK Organising for Advertising and Promotion
The Client’s Role
• Factors of how MARCOMM efforts are organised
– Size, number of products, role of advertising in mkt mix, budget,
marketing organisation structure
• In-house Agency
MKT 337: WSK Organising for Advertising and Promotion
In-House Agencies
• In an effort to reduce cost and maintain greater control over agency
activities
• Advertising agency set up, owned and operated by the client
[Example: PRAN, Otobi, Square]
• Square’s agency now handles other brands as well
MKT 337: WSK Organising for Advertising and Promotion
Pros and Cons of an In-House Agency
PROS
• Cost savings
• More Control
• Increased coordination
• Access to top management
• Stability
CONS
• Less experience
• Less Objectivity
• Less flexibility
• Less access to top creative talent
MKT 337: WSK Organising for Advertising and Promotion
ADVERTISING AGENCIES
MKT 337: WSK Organising for Advertising and Promotion
The Ad Agency’s Role
• Reasons for using an agency
– Specialists in their chosen field
• [artists, writers, media analysts, industry experts]
– Objective view
• not subject to internal biases/limitations
• Draw on experience from solving other marketing problems
MKT 337: WSK Organising for Advertising and Promotion
MKT 337: WSK Organising for Advertising and Promotion
Departments and Services in an Agency
Services
Account Services
Marketing Services
Creative Services
Management and Finance
MKT 337: WSK Organising for Advertising and Promotion
Full-service Agencies
Account/Client Services
– Link between the agency and client [liaison]
– Responsible for understanding client’s marketing and promo needs and
interpreting them to agency personnel
– Coordinates the agency’s efforts in planning, creating and producing ads
– Presents agency’s ideas and recommendations and gets client approval
MKT 337: WSK Organising for Advertising and Promotion
Full-service Agencies
Marketing Services
1. Research
– Research, since understanding client’s customers is crucial
– Concept Testing
2. Account/Strategic Planning
– Gather information for development of creative strategy
– Work with client, account exec, creative, media planners, researchers
– Develop architecture of the brand
– Provide Creative Brief to the creative department
– Provide insights into consumers and how to communicate with them
MKT 337: WSK Organising for Advertising and Promotion
Full-service Agencies
Marketing Services
3. Media
– Analyses, selects and contracts for space and time in the media
– Most of the budget is spent on media
– Need to communicate with right audience
– Needs to be cost effective
– Media Planners: info on demographics, readership, listenership, viewing
patterns
– Media Buyers: purchase the actual time and space
4. Sales Promotion, Direct-marketing, Packaging, PR, Digital Media
MKT 337: WSK Organising for Advertising and Promotion
Full-service Agencies
Creative Services
– Creation and execution of advertisements
• Copywriters
– conceive ideas, write headlines, subheads and body copy
– Also involved in developing the basic appeal
• Art Department
– Responsible for how the ad looks
– Prepare layouts to show how the ad will look
– Prepare storyboards for TV commercials
– Everyone works under the Creative Director
MKT 337: WSK Organising for Advertising and Promotion
Full-service Agencies
Management and Finance
– Must manage basic operating and admin functions such as accounting,
finance and HR
– Must attempt to generate new business
– Managing personnel is imperative
– Most revenue goes to salary and benefits
MKT 337: WSK Organising for Advertising and Promotion
AGENCY COMPENSATION
MKT 337: WSK Organising for Advertising and Promotion
Commission-based System
• Agency receives a specified commission [15%] from the media on any
advertising time or space it purchases for its clients
• Critics
– Encourages agencies to suggest high-priced media
– Tied to media costs, which have been skyrocketing
– Encourages agencies to suggest mass-media advertising, while avoiding
noncommissionable IMC tools
• Advocates
– Easy to administer
– Services are proportional to the size of the commission
– More flexible than one thinks as agencies perform other services at no extra charge
MKT 337: WSK Organising for Advertising and Promotion
Fee-based System
• Fee arrangement
– Charges Basic monthly fee and credits any media commission earned
back to the client
– Agree on the specific work to be done
– Need to carefully assess the costs of servicing the client for a period or
project and then add desired profit margin
MKT 337: WSK Organising for Advertising and Promotion
Incentive-based System
• Incentive-based compensation
– Value-based compensation: compensated above basic costs, if they
achieve or exceed results as measured by agreed-upon metrics
• Costs: task, staffing required, hourly rates
• Objective Measures: sales or market share
• Subjective Measures: quality of creative work
• Agency requires complete control
MKT 337: WSK Organising for Advertising and Promotion
EVALUATING AGENCIES
MKT 337: WSK Organising for Advertising and Promotion
Evaluating Agencies
• Financial Audit
– Verify costs and expenses, the number of personnel hours charged to
an account, payments to media and outside suppliers
• Qualitative Audit
– Efforts in planning, developing and implementing the IMC programme
and the results achieved
[See Figure 3-10, page 93]
• Subjective and informal/Systematic and formal
MKT 337: WSK Organising for Advertising and Promotion
How Agencies Add Value to Client’s Business
1. Developing and producing creative ideas that are fresh and unexpected.
2. Ensuring that agency disciplines and functions are integrated and that agency
teams and divisions collaborate well on behalf of the client.
3. Working in a collaborative way with the client by creating an environment of
low egos and high mutual respect.
4. Developing ideas and programs that can be integrated into multiple
communications channels.
5. Assigning its best people to the client's business and making its top executives
available when needed.
6. Elevating brand drivers like awareness, consideration, and purchase intent
7. Providing guidance and solutions in new media and technologies.
MKT 337: WSK Organising for Advertising and Promotion
Why Agencies Lose Clients
• Poor performance or service
• Poor Communication
• Unrealistic demands by the client
• Personality conflicts
• Personnel changes
• Changes in size of the client or
agency
• Conflicts of interest
• Changes in the client’s corporate
and/or marketing strategy
• Declining sales
• Conflicting compensation
philosophies
• Changes in policies
• Disagreement over marketing
and/or creative strategy
• Lack of integrated marketing
capabilities
MKT 337: WSK Organising for Advertising and Promotion
How agencies gain clients
• Referrals
• Solicitations
• Presentation (Pitch)
• Public Relations
• Image and Reputation
MKT 337: WSK Organising for Advertising and Promotion
SPECIALISED SERVICES
MKT 337: WSK Organising for Advertising and Promotion
Specialised Services
• Direct-Marketing Agencies
• Sales Promotion Agencies
• PR Firms
• Digital Agencies
MKT 337: WSK Organising for Advertising and Promotion
PR Firms
• Manage publicity, image, and
affairs with consumers and other
stakeholders
• Analyses relationships, determines
how policies affect them, develops
PR strategies and programmes,
implement programmes, and
evaluates effectiveness
• The activities include
– Planning PR strategy and
programme
– Generating publicity
– Conducting lobbying and PR
affairs efforts
– Becoming involved in community
events
– Preparing news releases
– Promoting and managing special
events
– Managing crises
MKT 337: WSK Organising for Advertising and Promotion
COLLATERAL SERVICES
MKT 337: WSK Organising for Advertising and Promotion
Collateral Services
• Marketing research [qualitative and quantitative]
• Package design
• Consultants
• Photographs
• Printers
• Video production houses
• Event marketing services
MKT 337: WSK Organising for Advertising and Promotion
INTEGRATED MARKETING COMMUNICATION SERVICES
MKT 337: WSK Organising for Advertising and Promotion
IMC services
• Must decide whether to use various different agencies or one large
advertising agency offering all services under one roof
• In the past, agencies offered all services but not integrated
– Creative specialists preferred developing TV ads instead of designing
coupons or direct-mail material
MKT 337: WSK Organising for Advertising and Promotion
Pros and cons of Integrated services
• Proponents
– Learning to work together for consistent image
– Greater synergy
– Convenient for clients to coordinate
• Critics
– Wrangling over budgets
– Do communicate well, no synergy
– Only an attempt to hold business
MKT 337: WSK Organising for Advertising and Promotion
End of Chapter