intro to advertising adv media planning 001
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INTRODUCTION TO
ADVERTISING
&
ADVERTISING AND
MEDIA PLANNING
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STUDY GUIDE
INTRODUCTION TO ADVERTISINGCOURSE DESCRIPTION
The market place is crowded with many brands of product, all competing to be the leader.
In their effort to gain market leadership, marketers use Advertising as one of their promotion
tool.
This study guide will help you understand how Advertising as a Promotion Mix supportsMarketing and Marketing Communications effort of brands. Therefore the learning process
will begin at understanding the role of advertising in marketing and promotion, and continues
on to describe how advertising works in creating image and differentiation of brands to
achieve competitive advantage in the market place.
As the creator of advertising, Advertising Agencies plays a major role in creating winning
brands. You will also learn how Advertising Agencies work in planning and creating winning
advertising campaign.
SUBJECT OBJECTIVES
After studying this subject, students will be able to:
DeneAdvertising
Understandtheroleofadvertisinginthemarketingmix
Understandthecharacteristicsofadvertisingcomparedtootherpromotiontools
Understandmarketsegmentation,targetmarketandtargetaudience
Understandthedifferenttypesofadvertisingcampaign
Understandthecooperationofthemarketingdepartmentanditsadvertisingagency
Understand the different types of advertising agencies and advertising agencies
organization Understandtheadvertisingcreativeprocess
Understandtheadvertisingproductionprocess
Understandthemediaprocessinadvertising
Understandtheethicsandlawgoverningadvertising
Understandadvertisingtestingandevaluation
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Scheme of Work
Semester I Introduction to Advertising
WEEK 1
Topic 1 The Role of Advertising in Marketing
WEEK 2
Topic 2 Advertising and the Promotional Mix
WEEK 3
Student Presentation on Advertising of Choice
Objective: To create awareness and basic knowledge about the elements of advertising
which makes it an effective or ineffective advertising.
WEEK 4
Topic3 UnderstandingtheCustomerandConsumer
WEEK 5
Topic3 UnderstandingtheCustomerandConsumer
WEEK 6
Topic 4 Types of Advertising Campaign
WEEK 7
Topic 5 Specialist Forms of Advertising
MIDTEST
WEEK 8
Topic6 TheAdvertisingManagerandAdvertisingDepartment
WEEK 9
Topic6 TheAdvertisingManagerandTheAdvertisingDepartment
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WEEK 10
Topic7 DeterminingandSettingBudget
WEEK 11
Topic 8 Types of Advertising Agencies
WEEK 12
ClassPresentationandDiscussiononAdvertisingAgenciesinIndonesia
WEEK 13
Topic 9 Agency Recognition and Remuneration
WEEK 14
Topic10 FunctionsofDepartmentsinAdvertisingAgencies
FINAL EXAM
Semester II Advertising and Media Planning
WEEK 1
Topic 11 Creation of Advertisements and Commercials
WEEK 2
Topic 11 Creation of Advertisements and Commercials
WEEK 3
Presentation of Advertising Creative: Storyboard / Storyline
WEEK 4
Topic 12 Production of Advertising Materials in Media
WEEK 5
Topic 13 Media in Advertising and Printed Media
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WEEK 6
Topic14 BroadcastMediaandOtherMedia
WEEK 7
Topic 15 Media Research
MIDTEST
WEEK 8
Topic 15 Media Planning
WEEK 9
Group Exercise on Media Planning
WEEK 10
Topic 16 Ethics and Codes of Practice
WEEK 11
Group Presentation on Codes of Practice
WEEK 12
Topic 17 Advertising and The Law
WEEK 13
Topic 18 Advertising Testing and Evaluation
WEEK 14
Topic 18 Advertising Testing and Evaluation
FINAL EXAM
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Introduction
Marketing departments create products and brands that suit the demands of the
customers and consumers. Advertising agencies help by encouraging the target consumers
and customers to buy the brands through their persuasive messages. If the advertising is
successful and if the customers like the products, they will buy again and again.
Advertising is also used to promote a corporate image, to persuade target audiences
of a companys performance and abilities, and it may also be used to inform by providing
datasuchasspecicationsordetailsofnancialservices.
Whatever the form of advertising, advertisements and commercials have to be
created with messages that are appealing, attractive, and convincing. The messages must
also be communicated to customers at the right time and in the right place. Hence, the
advertising industry needs media newspapers, magazines, television, radio, posters and
cinema. Each publication and each television or radio programme is seen by different types
of people. Equally, a variety of people pass posters and visit cinemas.
The variety of products advertised and the media used mean that advertising is
acomplicated process. It is an area that requires the expertise of specialist companies
advertising agencies. These agencies form the backbone of the advertising industry, togetherwith sales promotion, public relations, direct response and other agencies, consultancies
and suppliers.
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CHAPTER1
THE ROLE OF ADVERTISING IN MARKETING
PART 1 BACKGROUND TO ADVERTISING
CHAPTER OUTLINE:
This chapter is about understanding the relationship between marketing and advertising and
howadvertisingaspartofthemarketingmixhelpsmarketersinuencetheirtargetconsumers
into using their brands. It also discusses how advertising can provide a competitive edge by
establishing image and brand differentiation.
OBJECTIVES:
1. To understand the role of business
2. To understand the role of advertising in marketing
3. To understand the marketing mix
4. To understand push/pull concept
5. To understand advertising objectives
Makingaprotistheultimategoalinabusinessventureandthisisachievedbymarketing
productswhicharesuccessfulinfulllingcustomersneedsandwants,beitaphysicalneed
such as to overcome hunger and thirst, or emotional need such as to be accepted by family,
friends and society.
The marketing effort is supported by promotion techniques such as sales promotion and
advertising, so that the target consumers are informed of the availability of products and
servicesthatfullltheseneedsandwants.
The Role of Advertising in Marketing
While marketing will establish the goods and services that will sell, advertising will inform the
market that they are available. Advertising will promote the product and service in such a
way to appear attractive to consumers and customers as well as different from competitors.
Advertisingwillcontinuetohighlightthedifferentbenetsandadvantageslongafterthe
initial launch, therefore, helping to maintain demand in a competitive market where rivals are
trying to sell their products as well.
Advertising does not only address customers and consumers, but also wholesalers,
distributors and retailers who must be convinced to stock the products before advertising tothe customers and consumers begins.
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The Marketing Mix
Acompanymustndproductsandservicesthatareneededandwanted iftheywanttoembark on a successful relationship with customers, so that they will come back for more of
the same product. Therefore, there are factors which have to be considered when launching
a new product and are referred to simply as the Four Ps :
the right product
at the right price
in the right place
with the right promotion
The Right Product
It has already been stated that if the product doesnt suit the customer, it will not be bought,
so there is little point in attempting to advertise in the hope that it will be consumed. Hence
the need to research the market-place to establish what product is wanted by customers;
but the emphasis is on the right product to satisfy the needs and wants of the customer
and user. The right product is more than the physical product sometimes called the core
product. It means the total product offering with all the variations and combinations.
The Right Price
Pricing is a crucial part of the marketing mix. If you sell a product cheaply enough, customers
willbeveryeagertobuy.Butalowpricemayalsoindicatetheproductislackinginquality
and may not be attractive to the customers. Most often customers are prepared to pay for
products and services that the company has developed that meet their demands.
The Right Place
The right place for products and services are where they must be readily available and
convenient for the customers to have access to them. If they are not located where the
customers want them, then other products and services, often from the competitors, will be
bought.
The right place also means that it will project the image and reputation of the brand.
The Right Promotion
Promotion is the total activity to project the total reputation or image of a product, service, or
company together with their associated names ( i.e. brand and corporate image).
Promotion covers packaging, advertising, public relations, sales literature, sponsorship andpoint-of-sale (POS) displays in fact, all of the above-the-line and below-the line techniques
to assist the sales process. Promotion, therefore, is the total way that a company presents its
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products to the market. The result is that promotion communicates the companys reputation
and the reputation of its products and services. A companys reputation is a valuable
commodityandmanybusinessesprotfromthegoodwillthatisgeneratedasit resultsinmore sales and easier sales.
Selling in- Push /Pull
Push means selling in the products to the wholesalers and retailers to encourage stocking
up once the consumers have seen the advertising or other promotion activities. This process
involves informing the wholesalers and retailers about the products that will sell at the right
pricetoallowprotforthewholesalersandretailers.
Pull is the encouragement for the customers to go to the stores to buy the products, afterthey have been exposed to the advertising and promotion activities.
Advertising Objectives
It must not be assumed that once a product has been launched, then the manufacturer, or
indeed the retailer, can sit back and relax. Customers must be reminded to keep buying the
same brand, and failing to do so will lead to brand switching and buying a competing brand.
New brands from competitors will also lure the customers to try them.
This means that manufactures need to innovate by promoting their brands differently, such
as by adding new ingredients or reformulating the products
With regard to the above, aims of an advertising campaign or advertising objectives may be
one of the following:
tolaunchanewproductorservice
tocreatebrandawareness
togenerateinterests
togeneratesalesinquiries
topromoteneworimprovedversion
toinformofanotherpromotionsuchassalespromotions
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Points to remember
Advertisingisapromotiontechniquewhichhelpsmarketingofproductsandservicesby making them appear attractive and different from their competitors.
Advertisingisonlyapartofthemarketingmix,therefore,successfulmarketingeffortis
also contributed by other elements of the marketing mix.
Advertising isonlyonepromotional toolandhastobeusedwithothermeanssuch
marketing, public relations, sales promotion, etc to ensure effective promotion efforts.
Advertisingreectstheimageandthepositionoftheproductwithinthemarketplace.
Productsandserviceshavetobeavailableinthestores,beforetheycanbeeffectively
promoted to the consumers.
Advertisingcanbe used to supportexisting brands aswell as to introduceanew
brand.
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CHAPTER2
ADVERTISING AND THE PROMOTIONAL MIX
CHAPTER OUTLINE
This chapter will provide an understanding of how advertising as one of the promotion
technique can collaborate with other promotion techniques: marketing public relations,
sales promotions, personal selling and direct marketing to effectively promote a brand in the
competitive market place.
It will discuss the characteristics of each of the promotion technique and how it can be used
as a promotion tool. Other supporting element such as packaging and sponsorship is also
discussed to show its contribution in the promoting and establishing brand image.
OBJECTIVES:
Todenepromotionalmix1.
Todeneadvertising2.
Todeneotherpromotiontool:marketingpublicrelations,salespromotion,personal3.
selling, direct marketing
To understand how promotion mix are used to achieve marketing objectives4.
To understand how other elements of promotion such as media relations, sponsorship,5.
packaging design contribute to the promotion efforts
Elements of the promotional mix
The promotional mix consists of the various ways companies use to promote and sell theirproducts and services to their customers.
The elements of the promotional mix are:
1. Public Relations
2. Advertising
3. Sales Promotion
4. DirectMarketing
5. Personal Selling
Elements such as packaging are also considered as a major element in the promotion effort,
along with other activities such as sponsorship, or a public relations tactic which is effective
in getting across advertising messages as well enhancing brand and corporate image.
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A company can use any of the above promotion tool together, or just one, depending on the
marketing communication objectives.
Public Relations
TheInstituteofPublicRelationsdenespublicrelationsasfollows:
Public relations is about reputation the result of what you do, what you say
and what others say about you. Public relations practice is the discipline which looks after
reputationwiththeaimofearningunderstandingandsupport,andinuencingopinionand
behavior.
Public Relations is assuming greater importance in the promotion efforts of brands and
companies. Public Relations strategy and tactics are often used to communicate effectively
with costumers, employees, and share holders.
However, it is not the role of public relations practitioners solely to build an image
in the market-place, but also to ensure that the company is delivering the products and
services to the satisfaction of its publics. The public relations person does not merely
mount a campaign to state this but makes sure that the company is doing it by advising the
organization on its actions (after all, public relations is about reputation a result of what
you do . . .).
Media Relations
Media relations is used as part of the public relations program to get the
companysmessageacrosstoeveryonewhohasaninuenceontheacceptanceofthe
company, its products or services. Media relations does this by:
educatingthecustomersaboutthebenetsandadvantagesofnewconcepts
informingcustomersofthebenetsandadvantagesofdealingwithnewcompaniesin
the market-place
encouraginginterestintheproduct
easingthesalesprocessbyestablishinggoodwillandreputationpromotingthecorporate,brandandproductimage
creatingawareness
providingdetailedinformation(e.g.onspecicationsaswellasontheuseofproducts
and services)
launchingtheproduct(bynewsreleaseandnewsconferences)
Techniques often used are:
newsreleasestoannouncenewproductsordevelopmentswhichcanbeusedand
developed as news items in the media
mediastatements(oral/written)tomakeannouncementswhichthecompanydoesnot
want to expand upon
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articlesandfeaturestoexpandonissuessurroundingtheproduct(e.g.nutrition,when
promoting a snack bar)
interviews,receptionsandbriengstogivebackgroundtotheproduct,service,companyor key staff (e.g. an inventor)
newsconferencestoannounceproducts,servicesorakeydevelopment(e.g.alaunch
or take-over bid)
photo-opportunitiesorpresscallsfornewspaperphotographersandTVcameramen
to obtain shots of a personality or product (e.g. a personality endorsing product or a
stunt)
casehistoryfeaturingaproductinuseespeciallyintradeandtechnicalpublic
relations
facilityvisittofactorywhereproductsaremade
productloans(ofcomputers,forexample)forjournaliststoreview.
Other Publicity Tools
As a company cannot always expect that the media will publish their news, it often used
other publicity tools:
leaetsandbookletstoexplain,educateandinform,especiallyofnewconceptsor
onesdifculttograspandunderstand
newssheetsandnewsletterstocarrymoreimmediateinformationanditemsofinterest
about the company
house magazines (external and internal) to inform and give greater background(including perhaps, social aspects of the organization)
brochuresandvideos,particularlyforpromotingthecorporateimage.
Advertising
Advertisingmaybedenedasfollows:
Advertising is a means of communication which uses printed, broadcast or other media, where
space or air-time may be purchased for the purpose of persuading customers, consumers,
users or other interested parties of the benets and advantages of an organization and/orthe products or services it delivers.
Advertising aims to create awareness and interests, and its persuasive message convincing
thetargetaudiencethattheadvertisedbrandwillfullltheirneedsandwants.
While brand advertising establishes brand image, corporate advertising on the same level
will create corporate image, and thus ensuring customers that brands manufactured by the
companywillbenetthem.
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Sales Promotion
TheInstituteofSalesPromotiondenessalespromotionas:
Sales promotion comprises that range of techniques used to attain sales and marketing
objectives in a cost-effective manner by adding value to a product or service either to
intermediaries or end-users, normally but not exclusively within a dened time period.
Customersstillneedthatnalincentivetoactuallybuy,andsomanufacturers,in
conjunction with retailers and wholesalers, will use sales promotion techniques to
ensure that they get the sale. It is no longer a panic measure used when sales are slow
or the stockroom is too full sales promotion is a strategic tool used in a planned way to
achieve marketing objectives.
Consumers Incentives
Discountcoupons
Freesampletotrytheproduct
Discountedprice
Addedvolume
Gifts
Buy1get1free
Trade incentives
Discountpricetoincreaseprots
Prizes
Co-operativeadvertisingorjointpromotion
Displaymaterialatpointofsalestoattractcustomers.
Instoredemonstration
Direct-Response Marketing
Direct-responsemarketingmaybedenedas:
Direct-response marketing is selling goods or services without shops and usually without
personal salespeople, direct to customers in response to orders generated by direct mail
shots, leaets, catalogues, telephone calls and printed or broadcast advertisements.
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Differencesbetweendirect-responsemarketinganddirectmail
Direct Mail
Directmailisdispatchofpromotionmaterialsbymail.
Therecipientofthemailshotisaskedtodocertainactionsuchasaskedforbrochures
to be sent.
Direct Response
Indirectresponsemailshotisanorderformwithinformationforpurchase.
Thereisalsoinformationforpaymentofpurchase.
Direct-responsemarketingisaveryattractivewayforcompaniestogetintothemarket-
place as it does not involve retail outlets and so there is no need to sell in to establish
retailers or to open an individual shop or store. Some very successful companies have been
startedinthisway(e.g.BodyShop).Inaddition,computertechnologyhaseasedthejob
of compiling mailing list of customers, addressing envelopes as well as analyzing customer
preferences and buying habits. Improved telecommunication systems has led to the growth
of telemarketing.
DirectResponseMarketingTechniques
Pressadvertisements Broadcastadvertising(radioandTVshoppingchannels)
Generalmail-ordercatalogues
Leaetsinsertedintomagazinesandnewspapers
Leaetsandcataloguessenttomailinglist
Leaetsandcataloguesdistributeddoortodoor
Personal Selling
Salespersons are assigned and trained to promote product and services directly to customers.Salespersons can range from someone who merely takes sale orders to people who provide
expertiseinndingsolutiontocustomersproblems.
Consumer Sales
Doortodoorsalespersons
Salespersonsworkinginretailoutlets
Specialistsalespersonsellingservices(insurance)
Salespersonsinshowrooms
Sales/accountofcer/customerserviceinbank,etc.
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Trade Selling
For selling in or push strategy, usually performed by salesman and account managersresponsible for corporate sales.
Commercial and industrial selling
Industry requires raw materials, equipment etc, therefore there is a need of business to
business marketing which involves personal selling by:
Salesrepresentativestosellofceequipmentsandcommercialservices
Salesengineerssellingtools,machines,rawmaterials,chemicals,etc
Packaging
Packaging not only contains the product and protects it during transit from the
manufacturers to the customers and consumers, but it will also preserve it by keeping it
fresh. The pack is also a means of storing, stacking and dispensing the product.
Inaddition totheabove, thepackhasbecomethenalmeansofcommunicatingbrand
benets.Thepackcanalsobeusedtoinformpromotionactivities.
The elements in the pack design such as shape, size, color, brand name and type face
reectsbrandidentityandbrandimageasestablishedbyadvertisingcommunication..
Sponsorship
FrankJefkinsgiveshisdenitionofsponsorshipas:
The giving of monetary or other support to a beneciary in order to make that beneciary
nancially viable, sometimes for altruistic reasons, but generally to gain some advertising,
marketing or public relations advantage.
Sponsorship may not have a direct effect on sales but it creates a climate of goodwillwherethecorporateorbrandimageisassociatedwithbenetingsports,culturalandother
worthwhile activities, players and performers.
Areas of Sponsorship
Sportevents
Art/musicevents
Festivals
Awardsceremonies Televisionandradioprograms,etc
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Aims of Sponsorship
tobrandandpositionaproductorservicebyassociationtocreatebrandawarenessbyexposure
tosupportassociatedpromotionalactivity
toreinforcecorporateidentity
toovercomeanadvertisingban
totargetaparticularaudience
togenerategoodwillinthecommunity
tosupportcustomerrelations.
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Points to remember
Advertisingispartofthepromotionalmix(consistingofpublicrelations,salespromotion,media advertising, and direct response marketing) and is, therefore, not the sole means
of promoting a product, service, brand or company.
Withineachelementofthepromotionalmix,thereareanumberofmeansandmethods
that can be used to achieve the sales and marketing objectives.
However,notalloftheelementshavetobeusedforapromotionalcampaignonlya
combination of the most suitable to achieve the objectives.
Publicrelationsconsistsofmediarelationsandpublicitytoolssuchasprintedmatter
and videos, together with presentations and special events to support marketing by
communicating the companys reputation.
Mediarelationscanbeusedtocreatetheclimatefortheacceptanceofnewconcepts
and new suppliers.
Advertisingusesprinted,broadcastandothermediatocommunicatetheadvertisers
message to the market.
Mediaadvertisingcanbeusedtocreateinterestandgainattention.
Salespromotionusesarangeoftechniquestostimulatecustomerstostockorbuythe
product as promotions can be targeted at end customers as well as wholesalers and
retailers.
Direct-responsemarketing is used to selloff thepage fromcataloguesandpress
advertisements amongst a range of other techniques.
Personalsellingisusedtosellgoodsandservicesthroughretailoutletsaswellasto
the proprietors and owners of retail outlets.
Salespersonsareusedforsellingtowholesalersanddistributors.
Personalsellingisalsousedtosellproductsandservicestoindustrialandcommercial
companies.
Packagingisusedtoprotectandcontainproductsbutalsotoconvincecustomersto
buy the brand or product.
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CHAPTER3
UNDERSTANDING THE CUSTOMER ANDCONSUMERCHAPTER OUTLINE
Although many products and services are said to be mass-market, but in actuality, no
company markets its products and services to the whole general public. Therefore the
target market, (the people who are most likely to be interested in your products) must be
identied.Throughresearchandthenbyusingtheprocessofsegmentation,thecompanywill select its target market. This chapter will discuss the research process and the means
of segmentation.
OBJECTIVES:
Todenetargetmarket1.
Todenetargetaudience2.
Todenesegmentation3.
To understand the process of segmentation4.To understand the use of research in identifying target market5.
To understand the role of positioning and branding6.
Establishing the Market-Place
As it is virtually impossible to get everyone to buy your products or services, a company
must identify the sector of the market that is most likely to buy or use their offerings. The
steps are:
1. establish a sector where there is a demand for which customers are prepared to pay
2. develop the product
3. arrange production cost-effectively
4. distribute the product to the wholesalers and retailers
5. use advertising to tell the market-place about the product.
The Target Market
The marketing department does extensive market research to discover how the market-place
issegmented.Itcanthenstudythesegmentstondtheneedsandwantsoftheindividualswithinspecicsegments.Themembersoftheselectedsegmentisthendeterminedasthe
target market. In other words the target market are the people who are most potential to buy/
consume the companys product/ services.
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The Target Audience
The target audience are members of the target market to whom promotion and advertisingmessages will be addressed. Target audience can be broken down into smaller more
manageable markets that have different wants and lifestyles. One of the biggest and most
important target audiences is housewives, because of the major decisions that they make
on household purchases, but even this segment can be broken down into smaller categories
such as urban housewives, working housewives and housewives with children.
Furtherresearchwillenablethemarketingdepartmenttondwhatpublicationsthemembers
of the target audience read, the radio stations they listen to and the
television programs they watch. Similar research is often done by the advertising agency as
it is vital to develop a message that appeals to the target audience and to ensure that the
commercials and advertisements are seen and heard by the right audience.
Segmentation
A segment must have the following qualities:
1.itmusthavespeciccharacteristicsthatcanbedenedandmeasured
2. it should be accessible for distribution chain and for advertising and promotion
messages.
3.itmustbesufcientinsizeorvolumeforthecompanytogainprot
Once isolated, the segment can be further studied, to establish
1. its precise needs, wants and aspirations
2. the incomes and types of job of people within the segment
3. its location
4.itspotentialintermsofsalesandprot
5. effective means of communicating with it (so that the right media and messages can
be used)
6. economic budgets for advertising and promotion7. what to offer to suit the characteristics of the segment
Thebenetsforthecompany:
1.costarekeptlowastheytargetedtoprotablemarketing
2.productionaremoreefcientsinceascanconcentrateonspecicitems
3. minimized wasted stocks
4.moreprots
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Means of Segmentation
demographicsgeo-demographics(acombinationofdemographicsandlocation)
socialgrades
familylifecycles
lifestyle
behavioraltypes
Demographics
Classifying target market/target audience on measurable factors:
sex
age
socialclass
familylifecycle
education
employment
occupation
maritalstatus
etc
Geo-demographics
Geo-demographic is classifying the target market/audience into location of residences such
as , urban, suburbs, rural, etc.
Social grades
This classication is based on social class whichmay use annual income or monthly
expenditureasmeansofclassication.
Family life cycle
The family life cycle is used to segment th market based on life stages:
single
newlymarried
fullnest(havechildren)
emptynest(nomoredependents)
etc
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Lifestyle
Lifestyle or the way people live as affected by numbers of factors such as
dailyactivities(hobbies,workactivities,socialandfamilyactivities)
interests(fashion,music,etc)
opinions(attitudestopolitical,social,economic,culturalissues,etc)
Behavioral Types
Behavioraltypesarefurthervariationoflifestyle.Itisbasedonsocialexpectation,goalsand
beliefs.
Market Research
To determine the different segments and target group, process called market research is
conducted.
Market research will identify:
marketsize
marketpotentials
marketlocation
targetmarketattitudesconcerningaparticularproduct
Marketing Research
Marketing research is conducted to provide information that will assist the process of
marketing, for example in identifying which media is effective in reaching the target audience,
which advertising message is credible, etc.
Research Terminologies
Qualitative Research
Basedontheworkquality,thistypeofresearchislookingforqualitativeinformationin
the market place. The qualitative information could refer to consumer needs and wants,
their behavior in using a certain products. This information is helpful to advertisers and
advertisingagenciesinestablishingmarketingcommunicationstrategiestoinuencethe
target audience to use the products. Another name for this research is Attitudinal Research,
as it considers the attitudes of potential customers and consumers, such as beliefs and
values,asthesewillinuencebehaviorinthemarketplace.
Attitudes, values and beliefs play an important part in peoples motives, therefore it is vital
that they are examined and tested. The motives that can be investigated include not only
physical needs (such as food, drink, shelter and warmth) but also psychological wants
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(e.g. security, status and esteem). As Maslows Hierarchy of Needs (Figure 3.1) suggests,
customers move upwards from satisfying their physical needs until they reach their full
potential.
1
2
5
4
3
1 S elf-actualization 2 Esteem 3 Belonging
4S ecurity 5 Physical needsFigure3.1MaslowsHierarcyofNeeds
Quantitative Research
Quantitative research looks for answers in terms of quantity or how many, for instance
how many people believe in family planning. The method involves interviewers nding
respondents and asking them appropriate questions. Questions are designed to get a yes
ornoanswer,whicharecalledclosedquestion.Quantitativeresearchisoftenusedtond
the number of people who share attitudes based on age, income bracket, sex or any other
demographic factor recorded in the interview. This information is very useful in determining
the target market and target audience.
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Secondary Data
The word secondary suggests that the data is collected after the primary data has beenobtained. However that is not the case. Secondary data which is collected from published
materialssuchasbooksandwebsitesisusuallycollectedrstandthenfollowedbycollection
of primary data.
Desk Research
Deskresearchreferred toacquiringinformationbehindadesk,suchasfrombooksina
library or by using a computer to search for websites. Secondary data is obtained in this
way.
Field Research
Field research is carried out face-to-face by speaking to customers or other respondents
eitherintheirofcesorhomesoronthestreet,anditisthefavoredwayofobtainingprimary
data.
Primary Data
Theobjectiveofobtainingprimarydataistondinformationspecicallyrelatedtocertain
issues important to the advertiser or advertising agencies, such information regarding
motivation and attitudes in consuming certain products.Primary data are obtained through interviews, questionnaires or discussion with a sample
group.
Sampling
Sampling involves questioning a pre-determined number of individuals who are as sample
of the overall market sector that is under investigation.
Random Sampling
Random sampling means that anyone has an equal chance to being asked questions, or
participate in the survey. Once the research has
been completed, the data can then be analyzed to establish opinions and
attitudesrelatedtovariousclassications(byage,sexorotherdemographics).
Datagained fromrandom samplingmightsubsequently beused to identifyagroup(or
segment) that shows a demand for a certain type of product or service.
Quota Sampling
Quota sampling is used when the researchers are seeking to explore a particular groupof people. They will want to establish the size, breakdown, attitudes and opinions of that
particular group, for example students, 18-21 years old, female.
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The quota sample represents a segment which have potentials to be exploited, providing
certain characteristics such as needs and motivation are discovered in the research.
Syndicated Research
With syndicated research, either a number of advertisers join together to commission joint
research or a research agency establishes research programs which it sells to a group of
manufacturers or suppliers. Advertising agencies can also participate either to improve their
own understanding in developing campaigns or on behalf of the client.
Omnibus Surveys
Omnibus surveys are continuous research which is carried out on a regular basis with
regular samples so that an advertiser or an advertising agency can buy the right to have
specicquestionsaskedonparticularsubjects.Theadvertiseroragencypaysonlyforthe
questions that it wants answers to, although the fee includes a contribution to the overheads
of maintaining the survey. The costs are therefore shared by all those taking part in the
surveys and not by a single company.
Using the results of research
After analyzing the data, the result of the survey is used to determine:
markettrends marketsizeandpotentials
targetmarketcharacteristicssuchasbuyinghabits
Positioning
Brandpositioningmeansplacingthebrandintheconsumersmindsothatitisperceived
differently and more superior than competing brands. Successful brand positioning often
relies in how the brand is viewed as meeting the needs and wants of its target audience and
inhowactuallythebrandfulllsitspromisetotheconsumers.
The brandmayhavemanybenets,but inestablishingpositioning, themarketeror the
advertisingagencyshouldfocusononebenetofthebrandthatisrelatedtotheproduct,the
competitors (what they say about their brands), and the characteristic of the consumers. If too
manybenetsareconveyed,thenthemessageisnotsinglemindedorfocus.Forexample
Volvohasalwaysstayedwiththesamepositioning:thesafetyaspectofthebrand.
Branding
Brandinginmarketingtermstodaymeanscreatinganimageforaproduct.Itisacombination
of character, identity and the reputation that is developed by the product and its associations
(e.g.theproductmightbecoffeebutitisidentiedandbrandedasaparticularmake,such
as Nescafe-Classic). A major task of advertising is creating and maintaining brand image as
means of establishing competitive edge in the market place.
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Brand Image
Brandimageisaboutperception.Perceptionisnotrealitybutwhatisbelieved.Brandimageisthe consumers total perception of the brand, what he believes the brand is about. Therefore,
brand image indicates how the advertising message is understood and interpreted by the
consumer.
Communicating with the consumers
Advertising must be visually attractive and their messages must be credible as to gain
interest,desiretouseandnallytheactofpurchase.
Advertisers and advertising agencies often used models of communication to measure
consumer response to the advertising message. The most often used model is AIDA:
A attention
I interest
D desire
A action
AIDA showsthestepsin persuading the targetaudiencetoresponsetoanadvertising
message. A variation includes creating awareness, stimulating interest and understanding,
encouraging evaluation, generating a trial or test and ensuring conviction by the customer
taking action (by buying the product).
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Points to remember
peoplehavedifferentneedsandwants,thereforeacompanycannotsaleitsproductsand services to everyone
aprocesscalledsegmentationisusedtoidentifythetargetmarket
themarketplacecanbesegmentedthrough
o demography
o geo demography
o socioeconomicclassications
o family life cycle
o lifestyleo behavioral types
marketresearchandmarketingresearchareconductedtostudythemarketplaceto
obtain information about the target market and target audience
qualitative research is to gain information about attitudes, motivation, etc, while
quantitative research to measure size of segment, target markets and audiences
primarydataiscollecteddirectlyfromthesourcetoprovideinformationonaparticular
marketingproblem.Itusuallyinvolveseldresearch
secondarydataisobtainedfrompublishedsources,andlikelytobedeskresearch
communicationmodelssuchasAIDA can beused tocommunicatewithabrands
target market.
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CHAPTER4
TYPES OF ADVERTISING CAMPAIGNCHAPTER OUTLINE
Advertising campaigns are directed at two main audiences: the consumers and traders
(retailers, wholesalers).
Consumeradvertisingcampaignhasspecicobjectiveandthereforespecicmessagestobe
delivered to the target audience. Hence the many different types of consumer advertising.
Many products are sold directly to the consumers without outlets or shops. In order topurchase the products, a customer must make a direct order by calling a phone number
ofllinguporderforms.ThistypeofmarketingstrategyissupportedbyDirectResponse
Advertising.
Trade advertising are implemented to ensure selling in process to retailers, distributors and
wholesalers.
This chapter will examine the different types of consumers advertising as well as trade
advertisingandbrieydiscussdirectresponseadvertising.
OBJECTIVES:
To understand the difference between trade advertising and consumer advertising1.
To understand the different types of advertising campaigns directed at the2.
consumers
Trade Advertising
The objective of trade advertising is to support the selling in process to distributors,
wholesalers and retailers. It often involved promotion scheme such as:
Thetradearegivenspecialpriceforbulkpurchase,sotheycanmakeaprotwhen
they sell to customers at retail price.
ProvidingPOS(pointofsales)materialssuchasleaets,specialdisplaymaterials,
hanging mobiles, etc , to enhance customers interests leading to purchase
Productlaunchingcampaign
Salespromotioncampaign
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Consumer Advertising
Consumer advertising is to support the Pull of the push/pull process, by motivatingconsumers to buy products and so take them out of the outlets. It uses the mass media
intensivelytocommunicatetheadvertisingmessageandinuencethetargetmarket.
Types of consumer advertising
(i) generic advertising
(ii) product advertising
(iii) brand advertising
(iv) range advertising
(v) corporate advertising
(vi) retail advertising
(vii) co-operative advertising.
Generic Advertising
Generic advertising means advertising a product type rather than a brand and is
usually undertaken by a trade association or consortium of manufacturers and
suppliers. A good example is a campaign to promote fresh products like milk, fruit, vegetables
and meat. Generic advertising does not promote a particular supplier but promotes the
overallbenetsandadvantagesoftheproducttype.Oneofthemostwellknowncampaigns
is the Get Milk. It can also include the promotion of services like insurance, to enhanceawarenessofthebenetsofinsurancetothetargetmarket.
Product Advertising
Productadvertisingconcentratesonpromotingthebenetsandadvantagesoftheproduct,
such as the price, value and performance. It is often confused with brand advertising, but
productadvertisingisaimedtopromotetheproductbenets,wherebybrandadvertisingis
directed to establish brand image and enhance positioning for brand differentiation.
Inprintadvertising,productadvertisingcanbeidentiedbecause thepackshotisasthemainandoftentheonlyvisual.Thecopywilltalkaboutthebenetsoftheproduct.Asfor
TVcommercial, itisoffcourseawasteofadvertisersbudgettoshow30ofpackshot,
howeverthepackisstilldominantlydisplayed,withthebenetsoftheproductspeltoutin
the storyline.
Brand Advertising
The emphasis of brand advertising is on the brand name, with sometimes little or no reference
to the product This is especially true when there are a number of products sold under afamilybrandsuchasABC.
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However, a huge number of products have a single brand name which has developed a
reputationovermanyyearsofadvertisingthatgoesbeyondthemerecontentsandbenets
of the product. Good examples are found in the highly competitive personal hygiene ortoiletries market, with brand names such as Sunsilk, Pantene, etc
Nowadays, manufacturers are trying to build global brands. Coca-Cola has had the greatest
success with this; its name, logo, bottle and can design are known throughout the world.
The essence of brand advertising is usually image-building for the total product
offering developing that feeling of goodwill between the branded product or brand name
and the customer.
Range Advertising
Sometimes, a manufacturer has a complete range of products to suit the different
needs of different customers. A common example is hair care products such as
shampoos, conditioners, tints and permanent colors. Ranges are frequently
promoted in a single commercial or advertisement either using the various media available
foradvertising.Bypromotingthroughrangeadvertising,theadvertiserissuggestingthat
this brand is one stop shop for hair care, so why use another brand. New products can be
introduced easily as the range image is transferred to them.
Corporate Advertising
Corporate advertising promotes the company not the individual products. Corporate
advertising differs from brand advertising because the company name is not always the brand
name.AnexampleisUnileverwhosebrandsincludeRinsoandPepsodent.Unileverrelies
on brand advertising to promote their products and may rarely see the needs to implement
corporate advertising
Corporate advertising is often used to establish customer relations, so that the customers
readily accept the company and thus smoothing the sales process.
It may also be used for investor relations and community relations, or when research shows
that people are unaware of what the companys name and what it does.
Retail Advertising
Retail advertising is undertaken by retailers when they want customers to visit and shop
attheirshops.Mostoften theadvertisingmessagecontainsinformationofspecicsales
promotionsforspecictypesofproducts.Themediausedareprintmediaandtelevision
and the timing is usually close to the weekend or holidays, when people have more time for
shopping.
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Co-operative Advertising
Often manufacturers and retailers will combine their efforts (and their budgets) toundertake specialist promotions emphasizing that a particular brand or product is to be
available only through a certain outlet. Or it may involve two service providers, for example
buyinganairlineticketusingacreditcardissuedbyaspecicbank(purchaseGarudaticket
usingcreditcardissuedbyBankMandiri).
The message is relatively simple for a limited period, this brand of product is available only
at this outlet at a special offer price or with a gift, or eating at a particular restaurant using a
speciccreditcardtogetadiscountonthebill.
Direct Response Advertising
Manufactures without intermediate wholesalers or retailers often use Direct-response
advertising to reach their customers. The customers complete order forms inserted into
magazinesandcataloguesorgivetheirordersoverthetelephone.Direct-responseadvertising
is an effective means for new companies and new products to get into the market-place.
However, it has also emerged as a major selling force in its own right.
Direct-responseadvertisinghastoworkveryhardtoselltheproductbecausethereisno-
one to sell the product on a face-to-face basis. So press advertisements have to convey
all the sales messages in one go and even television and radio advertisements have tocover all the selling points comprehensively. Often, the advertisements and commercials
will incorporate sales promotion techniques (such as money-off discounts, which are quite
believableaswholesalersandretailersdonottakeacutoftheprots).
Directmailisoftenusedindirectresponseadvertising,wherebyatoolsuchascatalogueis
mailed to a prospect, and the prospect can place an order if he/she so desires.
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Points to remember
Trade advertising is used to encourage stocking, so joint promotion betweenmanufacturesandretailerswillresultinprotsforbothparties.
Trade advertising uses specialist media targeted at the buying departments and
proprietors of stores, shops, supermarkets and retail chains.
If trade advertising is the push encouraging intermediaries to stock the product
for onward selling, consumer advertising uses the pull of the push/pull process to
encourage customers to buy the products and so take them out of the retail outlets.
Consumeradvertisingusesseveralformsofpromotionincludinggenericadvertising(topromote the product concept), product and brand advertising (for individual and named
items) and range advertising (to cover a series of variants of the named product).
Corporate advertisingpromotes imageand goodwill tore-assure themarket-place,
lubricate the sales process and create a selling environment in consumer advertising.
Retailandco-operativeadvertisingpromotetheavailabilityofproductsandservices
fromspecicretailoutlets.
Direct-responseadvertisingisamajorsellingforceinitsownright,anditisparticularly
useful for new companies and products because of the avoidance of intermediaries.
Direct-responseadvertisingcanbeusedtosell/promoteproductsandservicesthat
customers may not be readily prepared to buy face-to-face in a shop.
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CHAPTER5
SPECIALIST FORMS OF ADVERTISINGCHAPTER OUTLINE
Asidefromtheconsumermarket,thereisalsotheindustrialandcommercialmarkets.Dueto
thespeciccharacteristicsofthesemarkets,specicformsofadvertising,mustbeplanned
and implemented to ensure effective communication. This chapter will provide information
regarding the purpose and use of such forms of advertising.
OBJECTIVES:
To understand the objectives of promotion to industry and commerce via business to1.
business, industrial and technical advertising
To understand the objective and use of specialist advertising to promote high technology,2.
pharmaceutical and healthcare products
To understand the objectives and use of recruitment advertising3.
Tounderstandtheobjectivesanduseofnancialadvertising4.
To understand the use of advertising in special circumstances such as crisis5.
management
Promoting to Commerce and Industry
The business sector such as a manufacturing company or an airline have needs for
products and services unique to their own type of business. Although business people
read newspapers and watch television and therefore it is possible to use these mediums to
promote the products used for commercial purpose, but alternative means of promotion are
also available and often more effective.
Business-to-BusinessAdvertising
Abusinessofceneedscomputers,desks,chairs,andstationery.Italsoneedsservices
suchassecurityserviceandcleaningservice.Ultimately,therearebusinessesthatsupply
these needs, like Hewlet Packard who would supply computers, and another manufacturer
would supply desks and chairs, etc.
Hence when one company promotes through advertising to another company, its called
business-to-business advertising.
Unlikeconsumerpromotion,whenpromotingtoabusiness,therearemanydifferentneeds
andmotivationtofulll.Forexample,thedepartmentmanagerwhenpurchasingacomputer
is motivated by the advanced features as he needs something reliable to do his job, but the
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purchasing manager may have a budget, therefore he is considering price over features.
Moreover, the advertisingmust consider the fact that it is trying to inuenceanexpert
audience.Detailsofspecicfeatures,capacities,etcneedstobeexposedaswellasotherspecicssuchastrackrecord,promptdelivery,etc.
Industrial and Technical Advertising
The industrial market is highly technical and complicated and relies not only on
communicating complex specications to meet critical manufacturing and processing
needs, but also on the capability to deliver consistent quality, on time and within an agreed
budget.
Advertising of this type may offer not only the physical product , but also designs a total
system so that the company control the supply of all equipment including the installation.
Specialist Sector Advertising
High technology
Specialist sector advertising offers high technology products, sophisticated electronic
components, telecommunication systems, to different types of business sectors.
Pharmaceuticals/ healthcare
Pharmaceuticals/ healthcare products operates at three levels: OTC (over the counter),
pharmacist recommendation (P) and prescription only medicines.
OTC can be advertised to the general public, but the other two are strictly controlled. The
promotion of prescribed medicines in Indonesia can only be promoted through personal
selling to medical doctors.
Specialist Advertising
Recruitment advertising isusedforndingcandidatesforapositioninacompany.
Thespecicjobtitleandthequalicationofthecandidatesearchedarefullyexplainedin the advertisement. The identity of the company looking for candidates maybe
identiedintheadvertisementifitisbelievedtolurequaliedcandidates.Theprimary
media used for this type of advertisement is newspaper.
Financial advertising is used to inform the public about the companys performance
and potential. Financial advertising is strictly regulated in both content and format.
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Points to Remember
Promoting to industry, business and commerce requires an emphasis on differenttechniques and media compared with consumer advertising.
.
Althoughsomeadvertisingforthissectorcanusetelevision,mostadvertisementsare
placed in the trade, technical, professional and management press.
Thereareanumberofspeciedpurchasersandend-usersinvolvedinbuyingdecisions
for business, industrial and commercial equipment, services and supplies. All of them
havetobeinuencedbyadvertising,mostprobablyindifferentpublications.
Pharmaceuticals and healthcare promotion are similar, but there are also strictmandatory and voluntary controls that involve advertising within the health sector. It
too has its specialist media and techniques.
Recruitmentadvertising isusedbyvirtuallyeverytypeofenterprisetondtheright
candidate for a job opening. Primary used is newspaper.
Financialadvertisinginvolvesinvestorrelations,i.e.communicatingwithshareholders
and consumers (for banks). It shows the companys performance and potential.
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CHAPTER6
THE ADVERTISING MANAGER ANDADVERTISING DEPARTMENT
CHAPTER OUTLINE
The term advertiserrefers to manufacturing or service companies who have brands that
need promotion in the market place to establish favorable market share. As promotion is one
of the responsibilities of marketing, therefore, in the marketing department of the company
there is a position called Advertising Manager. The Advertising Manager plays a crucial rolein ensuring that the brands are well received in the market so that the company will achieve
itssalestargetleadingultimatelytoprotableventure.
This chapter will describe the role and responsibilities of the Advertising Manager, how he
coordinates with his department internally and how he works with the selected advertising
agencies, to establish and maintain favorable market position for the companys brand under
his care.
OBJECTIVES:
To understand the strategic role of the advertising manager in planning and determining1.
the policy and objectives for the companys advertising
To understand how the advertising manager coordinates work with his staff in the2.
advertising department
To understand how the advertising manager works together with the selected advertising3.
agency.
The Advertising Manager
The job of coordinating and managing advertising in an organization belongs to the
Advertising Manager. The Advertising Manager is employed in-house as the manager of
the companys internal advertising department. For a company to get full value from the
Advertising Manager, he or she has to be given full responsibility for the task of managing
all aspects of the companys advertising programs. However, there will be subordinates and
colleagues who take responsibility according to the amount of promotional work undertaken
by the organization.
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Role and responsibilities
Strategic planning
To plan the advertising strategy, the advertising manager must work with colleagues from
other departments such as marketing and sales, because the advertising strategy evolves
out of the marketing strategy which in turn evolves out of the business strategy. However, the
effective advertising manager is not merely taking orders from above, but also contributes
his/her expertise upwards, especially in companies where it is realized that advertising has
a powerful effect in the market-place. The process can be expressed as follows:
Business strategyMarketing strategyAdvertising strategy
The above process shows that advertising strategy derived from marketing strategy, which
mustreectthebusinessstrategy.
Determining policy, aims and objectives
Basedonthemarketingstrategy,theAdvertisingManagerandhisteamdeveloptheadvertising
objectives and what results in the market place are expected from the implementation of
the advertising campaign. To ensure that all activities are carried out in accordance to the
companys value , the Advertising Manager also sets out the advertising policies such as
advertising code of ethics that must be abide to when creating advertising communication.
Promotional planning
At this stage, the planning for the whole of the promotional activity for the company can take
place. This is not restricted to advertising but includes all the activities of the promotional mix
in order to develop an integrated marketing communications approach, an approach now
adopted by many competitive brands.
Budgeting
Basically, budgeting is calculating costs for all promotional activities and is one of the
important elements in ensuring that marketing communications objectives are met. Marketing
communications objectives are set to answer to marketing problems, and objectives are
translated into strategy and promotion programs. To be implemented effectively, promotion
programs require a budget. Although it is mentioned at this stage, the budget may have
beensetearlier,dependingonthecompanysnancialpolicy.
Planning administration and staff (procedures)
First and foremost, the advertising manager is an administrator running the advertisingdepartment. He is responsible for controlling the department, not just coping with the
workload. Consequently, it means planning the department so that it is prepared to deal with
the activities it handles, and that it is adequately staffed and equipped to undertake its role.
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He or she will look at the needs of the department in both areas and so determine what staff
he or she needs to employ and at what level of ability. He or she might look at training needs
to see who can be developed to take on responsibility for some roles and activities. All of thiswillinvolvedecidingonsalarylevelsandotherbenets.
Implementing the promotional campaign (tactics)
The Advertising Manager is the guardian of the companys reputation. He must ensure that
the companys brands are always seen in a positive way, or good brand image. Although
the advertising industry has often been accused of manipulating image, it is realized that
image must be based on facts. If customers are buying a brand because of its quality (the
advertising message/positioning is quality), then the Advertising Manager must liaises with
the production department to ensure that the standard of quality meets the customersexpectation.
BelowaretheactivitiesmanagedbytheAdvertisingManagerandhemayormaynotuse
outside help to perform some of these tasks:
Promotional activities : advertising, sales promotions, publicity, direct mail, direct
marketing
POS(pointofsales),andothermerchandisingmaterials
Salesliteratures:brochures/leaets
Exhibitions
Eventmarketing/brandactivation
It should be noted that not all of the above will be included in the promotion campaign, as the
above tactics are only included if deemed effective in supporting the marketing objectives.
Itshould alsobenoted that corporate public relations activitiessuchasnancialpublic
relations, employee communication are not the responsibilities of the Advertising Manager,
but marketing public relations activities such as sponsorship, exhibition, is within his area of
responsibilities.
Internal/external responsibilities
The Advertising Manager has internal responsibilities because some of the work is being
done by his internal staff, and while other activities are carried out external suppliers and
consultants.
External suppliers/consultants that may be used are:
Integratedmarketingcommunicationsconsultancy
Salespromotionconsultancy Directmailconsultancy
Exhibitioncontractors
Printers
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Designstudios
Photographers
Agency Selection
Advertising agencies should not be viewed as suppliers for the main reason that advertising
agencies are consulted by the marketing department for their strategic approach in
supporting the marketing objectives. Nowadays, advertising agencies approach to solve
marketing problems is to design a total marketing communication approach known by
many specialists in this area as Integrated Marketing Communication. Integrated Marketing
Communication(IMC)usesseveralpromotiontechniquesasauniedforcetoinuence
consumers perception, attitude and behavior.
Finding agencies
Thereareanumberofwaysofndingadvertisingagencies.Therstisbyreputation.Some
agencies have become household names, but agencies selected because they are well-
known may not be suitable for the type of work that the company wants. A large and famous
consumer advertising agency is not suitable for a small business-to business advertiser and,
conversely, the large agency may not want the account because the work involved may not
berewardingenoughnancially.
The Indonesian Advertising Agency Association (Persatuan Perusahaan Periklanan
Indonesia- P31), a trade associations for advertising agency, may be a good source forndingappropriateagencies.
Another source would be through referrals by colleagues of the Advertising Manager, who
can vouch with regards to the agencies reputation through their own experience
Making a short list
The selection process includes studying the agencies credentials, such as personnel, clients
list, and sample of successful campaign.
Short list approach may be as follows
Studyingtheagencyscredentials
Consideringtheservicesprovided(fullservice/partservice)
Thefeestructure
Selectingagencyforpitching.
Apitchingisanalagencyselectionprocessinvolvingtwoorthreeshortlistedagencies
presenting their strategy/concept in solving the potential clients marketing problems.
BriengtheAgencies
At the individual presentations (or new business pitches, as the agencies call them), the
advertising manager will expect to see the ability of each agency to solve the companys
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marketing problem. However, agencies cannot pluck solutions out of the air and so will
expect, and ask for, campaign and advertising briefs.
Advertising brief
The advertising brief or sometime may be called by other terms such as campaign brief,
agency brief, is a document prepared by the Advertising Manager to provide information and
guidance for the agency in creating the advertising strategy.
It contains the following information
Backgroundonthecompanysmarket(marketsize,marketshareandcompetitors)
Marketingobjectives
Targetmarket
Product/service(includingtotalproductoffering)
Timing(forlaunchesorseasonselling)
Otherplannedpromotionalactivity
Pastadvertisingcampaigns
Existingcompany,productandbrandimages
Marketresearchresults
It may also contain additional information, if available to the company:
Advertisingobjectives
Proposition(orthemeforpositioningtheproduct,brandorservice) Benets,advantagesorfeaturesthattheproductmighthavethatdifferentiateitfrom
its competitors
Toneorstylerequired(humorousorprestige,forexample)
Mandatoryclientrequirements(suchasuseofcorporateidentityorhousestyleand
tag lines).
Basedonthebriefs,agencywillpreparetheirconceptandstrategyandwillperformtheir
best to convince the potential client how their strategy and concept will help achieve the
clients marketing objectives.
Before making the nal selection, would-be clients should consider such questions as
these:
Hastheagencycomeupwithasolutiontoourproblem?
Doesitknow/understandourmarket/product/company?
Howlongdoclientsstaywithit?
Howlongdoaccounthandlersstaywithit?
Havethestaffgotexperienceofourindustry?
Hastheagencygotexperienceofourindustry?
Havethestaffgotthecreativeandtechnicalabilitytohandletheaccount?Istherightchemistrytherebetweenusandthem?
Canwetrustthem?
Canweaffordthem?
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Aretheysuitablyequipped?
Aretheyrecognized?
It is also recommended that the client visit the agency as this may help in providing answers
to some of the above questions.
Workingwiththeagency
A major role of the advertising manager is to liaise with the agency on a regular basis. This
involves a series of quarterly and monthly meetings which are often put into the diary at the
start of the clientagency relationship although there will also be other meetings to look and
approve the detail of the work being done.
The decisions reached at any clientagency meeting are recorded on a contact report. This
isnottheminutesofthemeetingbutaconrmationofdecisionsmadeandanactionplan
(it is sometimes called an action report). It will include actions that the advertising manager
needs to take (like supplying a product for a photo-shoot) as well as actions required from
agencypersonnel.Eachpersonwhoneedstodosomethingwillbeidentiedbyhisorher
initials, and the report will be circulated to all those who could be involved, as well as to key
executives in the company and the agency.
Insert table 6.1 on page 110
Client agency relationship and staff liaison
Monitoring-qualitycontrolandapproval
Monitoring is crucial so that the advertising manager can establish how the promotional
program has affected any change hopefully positively measured
against research undertaken prior to any activity.
Other more routine monitoring:
Worksaredoneontimeasscheduled
Advertisingappearedaspermediaplanandschedule Thequalityofworkareinlinewithexpectation
Costscontrol
Invoicesareprocessedandpaidasintermsofagreement
All of the above needs the advertising managers approval to ensure that objectives of
advertising and promotions are met as planned. These activities also provide ways to
analyzingsituationsothatproblemscanbeidentiedandadvertisingcanbecontinuously
improved.
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Points to remember
Theadvertiser is anyorganization that promotes itsproducts, services or policiesthroughthepromotionalmixandincludesprot-makingcompaniesaswellascharities
and public sector organizations.
Theadvertisingmanagerworks in themarketingdepartment of acompany and is
responsible for advertising and promotion activities.
The advertisingmanager is responsible for strategic planning; determining policy,
aims and objectives; promotional planning; budgeting; departmental organization; and
implementing the tactics of the program.
Themajorresponsibilityoftheadvertisingmanageristoensurethatthepromotional
program is implemented effectively.
Theadvertisingmanagerisalsoresponsibleforbuilding,managingandmaintaining
the image and reputation of the company, its products and services.
Theadvertisingmanagerdoesnotworkinisolationbutliaiseswithotherdepartments
such as marketing, sales and production.
Theadvertisingagencyisselectedbytheadvertisingmanageranditsappointmentis
approved by him or her together with the marketing manager and possibly the board.
Theadvertisingmanagerliaiseswiththeadvertisingagencybyregularmeetingsand
routinecontacttoensurethatitisfulllingtherequirementsoftheclientcompany.
Theadvertisingmanagerdecidesonwhichworkwillbedoneinternallyandwhichwill
be done by external suppliers.
Monitoringandevaluatingtheworkoftheexternalsuppliersandtheinternalstaffto
ensure satisfactory standards is the responsibility of the advertising manager.
Theadvertisingmanageralsomonitorsexpenditure toensure thatallwork isdone
within budget.
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CHAPTER7
DETERMINING AND SETTING OUT BUDGETSCHAPTER OUTLINE
Every program and activities performed by the company requires budget allocation. Advertising
andpromotionarenoexception.Beforethescalyearthemarketingdepartmentandthe
advertising department sit down together to discuss budget allocation for all advertising and
promotion activities.
The basis of budget calculation is based on many factors such as objectives, target sales,and market data such as expenditures of direct competitors.
This chapter will describe the many methods for setting advertising and promotion budget.
OBJECTIVES:
To understand that budgets are based on past performance and future forecasts.1.
To understand how budget are based on promotional plans and that it must have2.
senior management approval.To understand the various ways of setting up budget3.
Setting up budget and budget period
Allprogramandactivitiestobecarriedoutinascalyearmustbecarefullyestablishedand
approvedbyseniormanagementofthecompany.Budgetisbasedonpastperformanceand
forecast of future sales and the number of tasks to be carried out within the budget period.
Thebudgetperiodisusuallyayear,normallythenancialyearoftheorganization.Budgetsare therefore prepared by the advertising department and other departments towards the
endofeachnancialyearandapprovedbytheboardofdirectorsreadyforthenextyear.
In setting up the advertising budget, the Advertising Manager relies on some information. One
is information from the sales department indicating sales achievements and also problem
areas. Other information is market research from the marketing department which provides
information on market trends, consumer behavior, competitors activities, etc.
Methods of setting up budget
Objectivetaskmethod
Historicalmethod
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Percentagepastsalesmethod
Percentageoffuturesalesmethod
Competitorparitymethod Themarketsharemethod
Affordabilitymethod
Marginalmethod
Theunitmethod
The above methods can be used in combination as the aim is to a structured table of
expenditure so that the promotional plan can successfully managed.
The objective task method
This method requires the setting up of advertising and promotional objectives, and then
putting sums of money against all that needs to be carried out to achieve the objectives.
Therefore the steps in using this method are:
Setupadvertising/promotionobjectives
Decidewhatpromotionactivitiestobecarriedouttoachievetheobjectives
Setupthebudget.
Historicalmethod
The historical method is based on advertising and promotion spending of the previous years.Apercentagemaybeaddedtocoverinationandwillbeaddedifthereareextraactivities,
for example using more media to extend media coverage.
Percentage of past sales method
This method is based on the idea that if a product sold well in previous years then it should
be supported for future years. Alternatively stated, it is a way of maintaining sales at the
previous years level. The idea works well if the product is growing and reaching saturation,
but not if it has reached maturity or is in decline and needs abandoning or bolstering. There
is also a danger that, if the product is becoming successful, it may sell well in any case, butthisisadifcultdecisionthatneedsthejointdeliberationsofthemarketingmanager,the
sales manager and the advertising manager.
Percentage of future sales method
This method is based on predicting the volume of sales that is likely to be achieved. This is
notsimplyguessworkbutbasedonmarketresearchandscienticforecasting.
Deciding on percentage.
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There is no magic formula to be used, but based on discussion and deliberation of the senior
management. A fast moving consumer product with heavy competition may spend more
than 15% of its sales on promotion. A leading brand may spend less, but because of highvolume of sales, a small percentage will represent a large amount of money.
Competitor parity/market share method
One of the most important responsibilities of the Advertising Manager is to monitor competitive
brands promotional activities. He can access this information by purchasing advertising
expenditure data.
However, it is not always a good idea to let your rival dictate your advertising expenditure,
especiallyifsimilarmediastrategyisfollowed.Directlycompetingbrandsdonothaveexactly
the same market characteristics thus lending to different advertising objectives and strategy.
Moreover,ifthecompetingbrandhasbiggermarketshare,itisdenitelynotwisetohave
the same expenditure.
Therefore, competitors expenditure is to be used as a guide in setting up the advertising
budget.
The affordable method
The affordable method is simply a decision made by a senior member of the board, such as
thenancedirector,withouttheneedtoconsultwiththemarketingorsalesdepartment.
This method is rarely used anymore, especially if the company is marketing oriented. This
method may be used for a new company or new product, where promotion costs will be
calculated like any other activity in the company.
The marginal method
Themarginal(orstratied)methodisbasedonjustifyinglevelsofexpenditureinrelationto
the amount of increased sales that will occur and is a favored method of sales-orientated
companies. It can, therefore, be applied to the various layers of activity in the promotionalmix or the integrated marketing communications approach. It can also be used to justify
increasing sophistication in each of the techniques employed (eg using full-color advertising
rather than black-and-white advertisements, which have lower media and production
costs).
Sales promotion and product advertising may have an immediate effect by selling more,
sothesewouldbegivenpriorityunderthemarginalorstratiedmethod.Theadvertising
manager has to decide on the various techniques, methods and even media that would be
appropriate, and cost them according to the importance that they will have in achieving the
companys sales targets before including them within the budget
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Per unit method
Theper-unitmethodisaveryscienticmethod,butisunfortunatelyproduction-ledratherthan market-driven. It depends on every operation in the production and supply of a product
being costed from raw materials to the cost of distribution. Advertising is regarded as a
distribution cost in some companies.
This method requires a detailed cost analysis, where some money from total cost of supplying
eachunitisallocatedtopromotion,afteraccountingforprotmargin.Thismethodcould
cause overspending if greater volume of units is sold than was forecast and if conversely if
sales decrease, it does not account for more money.
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Points to remember
Budgetsaresetannuallyforthecompanyscalyear.
Oneofthekeymethodsforsettingupbudgetistheobjectiveandtaskmethod,where
by what needs to be done is established and costs are calculated.
Certainmethodsofdeterminingbudgetarebasedonpastperformance
o Percentage of past sales
o Historical method
o Competitor parity/market share method.
Othermethodsarebasedonfutureforecasts:taskandobjectivemethod,affordablemethod, percentage of future sales.
Budgetshouldbemarketorientednotproductionbased(perunitmethod).
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