MKTG 303: Advertising and Promotions Opportunity Analysis October 15 -20, 2009 Zeynep Gürhan-Canlı
THE BIG PICTURE execute product service STP segment business objective marketing objective source of volume price evaluate target position place promotion
THE BIG PICTURE execute product service STP segment business objective entity goal competence marketing objective retention acquisition source of volume steal share demandstimulation main variable price dynamic variable target TA description position 5 -box positioning statement search experience credence value or evaluate competitive place length breadth depth promotion Awareness Information Image Behavior
THE BIG PICTURE execute product service STP segment business objective entity goal competence marketing objective source of volume price evaluate target position place promotion
Business. Objective • Who are we? § Fundamental Entity(FE) § Core Business • What are we good at? § Core competence • Where are we going? § Goal & Time Frame
Fundamental Entity(FE) • Retail Corporate. Brand / § Citibank Opet , • Umbrella. Brand § Arçelik Beko Motorola , , • Distinct. Branding § Celebrex Lipitor Viagra Visine , , , • Hybrid /Sub-branding § Danone. Vital Petite. Danone , , § Tikveşli Hayat, Şaşal Birtat , ,
Branding Example: Virgin Also: limos, cosmetics, bridalwear, wines, fitness clubs, balloon rides, virginstudent. com, …
Core Competence • A skillthat leads to a sustainable competitive advantage • Requires significant resource investment • Generates strategic assets that in turn generate products
Core Business • Old: Industry/Product § Newspaper, Railroad • New: Benefit/Consumer § Transportation, Information
Core Competence
Business. Objective • Goal § share § profit § unit or dollar volume • Time Frame short or long-term
Business. Objective • Goal Criteria § § § measurable time frame realistic single-minded integrated with lower and higher-level goals
THE BIG PICTURE: Marketing Objective execute product service STP segment business objective entity goal competence marketing objective retention acquisition source of volume price evaluate target position place promotion
A Customer-Based Model costs retention acquisition existing customers new customers prospects revenue
Relationship of to current customer FE definition Nike Golf Shoe purchaser Nike Golf Nike Individual Sports Nike Basketball Nike Running Nike Umbrella Nike Apparel Nike Fashion Nike Casual Shoes Nike Team Sports Nike Soccer
Customer. Definition • What constitutes a customer? § purchase behavior • purchase frequency • purchase quantity • purchaseamount § brand relationship • commitment to brand • knowledge/understanding of brand positioning
Customer. Acquisition • Acquiring or re-acquiring customers into our brand franchise § new customers § trier-rejectors § former customers
Acquisition Activities Advertising (Awareness & al) tri New product development Trial promotions Viral marketing
Retention • Indicator of long-term viability of a firm § product/service performance § strong customer loyalty • Less expensive to maintain § estimated to be 4 -10 times more expensive to acquire than to retain a customer § awareness already achieved § brand loyalty/inertia
Retention Activities Advertising (Brand Image) Continuity Promotions Loyalty Programs Customer Service Product improvements line & extensions Community building
Relationship to Business Objective Acquisition Retention new product development, marketing customer service, market research Business Objective revenues, share profit Time Frame long-term short-term Core Competence
THE BIG PICTURE execute product service STP segment business objective entity goal competence marketing objective retention acquisition source of volume steal share demandstimulation price evaluate target position place promotion
Stimulate Primary. Demand • emphasize category benefit • brand name not as important § Leader benefits when category benefits § “Consideration set” is important
Stimulating Primary Demand • new users • new volume (same users, increased volume) • new value (same users, higher price paid)
New Users
Stimulate Primary Demand
New Volume – New Use Situations
New Value • Arçelik Refrigerators
Steal Share • Typically a #2 brand strategy • Realistic assessment of relative strengths • From whom? • Dominate on what variable?
Source of. Volume key activity: marketing objective stimulate demand attract new category users steal share source of volume acquisition attract new brand users retention increase consumption among current users increase consumption occasions among multi-brand users
THE BIG PICTURE execute product service STP segment business objective entity goal competence marketing objective retention acquisition source of volume steal share demandstimulation main variable price dynamic variable target TA description position 5 -box positioning statement place promotion evaluate
Segmentation Variables • Main Variable § “Cost of entry” category variable § Will become expected variable • Dynamic Variable § Category Leader: benefit/lifestyle § Secondary Brand: “steal share” feature
Competitive : Enter Plot Data
Competitive Plot
Consumer Segments • • Demographics Psychographics Generations Geographic Geodemographics Benefit Usage
Generation Segmentation • • • Generation Y (18 -24) Generation X (25 -34) Younger Boomers (35 -44) Older Boomers (45 -54) Empty Nesters (55 -64) Seniors(65+)
Target Audience • Target Audience Description § Rich, complete description § “The person in the chair” § Leverage previous explorations of all types of variables
Target Customer: Acquisition Q Juan Paz… has never flown Turkish Airlines • Juan Paz, 35, sales and marketing mgr. , he is married. He has 2 kids intl 1 dog. Lives in Londonin an apartment. His wife works but does not travel on business. His primary destinations are intra- ; Europe ocas sionaly he flies to. Northand Central America. He normally flies l BA, sometimes Iberia He has heard of but has never flown it. He does not. TA have an opinion about feels indifferent about it. He thinks of himself TA, as “European” (sophisticated, organized, open-minded, brand-con, scious health-concious likes good food, cultured) s , • Attitudes: Juan Pazis concernedabouttime and qualityof life. He looksfor customized and differentiated service Remainsup to date and has. knowledge other airlinesin the regionwhichallow him to compare. of s He is demanding withhimselfand withthe others When he flies he. wants to arrive home or to his meeting on time with his suitcase; he expects to have convenient frequent flights; he cares about the appearance and the age/technology of the airplanes he flies; he is technology-con sciousand does not ever want to be out of date.
Select. Position current belief currently do consumer proposition desired belief desired do
The Positioning Statement current Snickers is a candy. belief Buy Snickers currentlya occasionally for treat. do consumer proposition Snickers is a convenient way to satisfy your hunger. Snickers is a desired satisfying snack. belief desired do Eat Snickers as a snack when I’m hungry.
Advertising Objective basic awareness $ top-of-mind awareness information image behavior $$$$$ • increase aided awareness (recognition) among target from 5% to 25% • increase % of “first mentions” from 25% to 60% among target • increase awareness of <information> from 15% to 50% • increase % agreement with “brand x is contemporary” from 10% to 40% • increase retail inquiries from 100/week to 250/week
Promotion – Picture Big advertising objective retention stimulate demand source of volume acquisition Awareness Information Image Behavior steal share marketing objective Information Behavior Top of Mind Information Behavior
Creative. Brief • The Objective § Advertising objective(consistent withbusinessgoals ) • The Target Audience § Marketing objective sourceof volume segmentationand , , , targetaudiencedescription • The Message. Theme § Positioning strategyand 5 -box positioning statement § Reviewof previouscampaigns • The Support § Consistent withcompetencies • The Constraints § Fundamental entity(Brandingrelatedconstraints ) § Legal constraints
Factors Impacting Relationship Between Promotions and Sales • Goal of promotion • Threshold effects (sales responsefunctioncurve ) • Carryover effects • Wear out effects • Decay effects • Random events
Communications Budget • • • Percentage of sales Meet-the-competition What we can afford Objective and task Payout planning (Ratioof advertising to sales or marketshare ) • Quantitative models
Marketing Budgets • Advertising – 25% • Consumer promotions – 25% • Trade promotions – 50%
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