Objectives Setting Major Decisions in Advertising Advertising Objectives

Objectives Setting

Major Decisions in Advertising

Advertising Objectives l l Sales Objectives Communications Objectives

Sales Objectives l l l Specific, measurable outcomes within a given time period. E. g. sales volume, market share, profits, or ROI. A good sales objective is quantifiable, realistic and attainable. In addition, it also delineates the target market and time frame.

Appropriate Situations for Sales Objectives l Induce an immediate behavioral response l l l Direct-response advertising Retail advertising for special events, e. g. 新光三 越, 家樂福. Advertising plays a dominant role in a firm’s marketing program and other factors are relatively stable, e. g. consumer packaged goods.

Sales Objectives are Appropriate for Direct Response Advertising

Problems with Sales Objectives l l Too many factors influence sales. Carryover effect: for mature, frequently purchases, low-priced products, advertising effect on sales lasts up to 9 months. Offer little guidance to the managers. Induce the managers to take a short-term perspective.

Many Factors Influence Sales Product Quality Technology The Economy Promotion SALES Competition Distribution Price Policy

Communications Objectives l Designed to achieve such communications as brand knowledge and interests, favorable attitudes and images, and purchase intentions.

Not all Ads are Designed to Achieve Sales l l Pampers Toyota Ford 中華汽車

The Response Process l Traditional Response Hierarchy Models l l l AIDA model Innovation adoption model Hierarchy of effects model Information processing model Alternative Response Hierarchies l l The dissonance/attribution model (Dissonance-reducing buying behavior) The low-involvement model (variety-seeking buying behavior & habitual buying behavior)

AIDA Model (Strong, 1925) l l Attention → Interest → Desire → Action The stages a salesperson must take a customer through in the personal-selling process.

Hierarchy of Effects Model (Lavidge and Steiner, 1961) l l l Awareness → Knowledge → Liking → Preference → Conviction → Purchase A paradigm for setting and measuring advertising objectives Premise: advertising effects occur over a period of time.

Innovation Adoption Model (Rogers, 1962) l l Awareness → Interest → Evaluation → Trial → Adoption The stages a consumer passes through in adopting a new product or service

Information Processing Model of Advertising Effects (William Mc. Guire, 1978) l l l Presentation → Attention → Comprehension →Yielding → Retention → Behavior Assume that the receiver in a persuasive communication situation like advertising is an information processor or problem solver. Mc. Guire’s model includes a stage not found in the other models: retention, or the receiver’s ability to retain that portion of the comprehended information that he or she accepts as valid of relevant.

Models of Obtaining Feedback Effectiveness Test Persuasion Process Circulation reach Exposure/presentation Listener, reader, viewer recognition Attention Recall, checklists Comprehension Brand attitudes, purchase intent Message acceptance/ yielding Recall over time Retention Inventory POP consumer panel Scanner data Purchase behavior

Examples of Exposure/Presentation

In the Internet era, what stage will you add into the response process?

Models of the Response Process Models Stages AIDA model Hierarchy of effects model Innovation adoption Information Processing Attention Awareness Presentation Attention Comprehension Interest Yielding Evaluation Retention Cognitive Knowledge Interest Affective Desire Linking Preference Conviction Trial Behavioral Action Purchase Behavior Adoption

Three Basic Stages l l l Cognitive stage (think): what the receiver knows or perceives about the particular product or brand. Affective stage (feel): the receiver’s feelings or affect level for the particular product or brand. Behavioral or Conative stage (do): the receiver’s action toward the particular product or brand.

Implications of the Traditional Hierarchy Models l Potential buyers may be at different stages in the hierarchy, so the advertiser will face different sets of communication problems. l l Cognitive, e. g. DHC, Pinky, 3 M魔布強效拖把. Affective, e. g. 全 國 電 子 , Guinness, 泰 國 人 壽 , Pantene Thailand. Behavioral, e. g. Heineken, KFC, www. one. org. It is useful for the measurement of communication effect.

Alternative Response Hierarchies (Michael Ray, 1973) High Perceived Product Differentiation Low Perceived Product Differentiation High Involvement Low Involvement Standard Learning Model Low-Involvement Model (C→A→B) (C→B→A) Dissonance/Attribute Model (B→A→C)

Four Types of Buying Behavior (Henry Assael, 1987) Significant Differences Between Brands Few Differences Between Brands High Involvement Low Involvement Complex buying behavior Variety-seeking buying behavior (C→A→B) (C→B→A) Dissonancereducing buying behavior Habitual buying behavior (C→B→A) (B→A→C)

Ads for Complex Buying Behavior

Theory of Cognitive Dissonance l l l When a person is confronted with inconsistence among attitudes or behaviors, he or she will take some action to resolve this “dissonance, ” perhaps by changing an attitude or modifying a behavior. It helps to explain why evaluations of a product tend to increase after it has been purchased. One implication of this phenomenon is that consumers actively seek support for their purchase decisions.

Ads for Dissonance-Reducing Buying Behavior

Ads for Low-Involvement Behavior

Think l In spite of C→A→B, B→A→C and C→B→A, is there another type of response process?

Involvement Concept Possible results of involvement Antecedents of involvement derived from the literature Person factors - Needs - Importance - Interest - Values Object or stimulus factors - Differentiation of alternatives - Source of communication – Content of communication Situational factors -Purchase/use -Occasion §Elicitation of counterarguments to ads Involvement With advertisements With products With purchase decisions §Effectiveness of ad to induce purchase §Relative importance of the product class §Perceived differences in product attributes §Preference of a particular kind §Influence of price on brand choice §Amount of information on search §Time spend deliberating alternatives §Type of decision rule used in choice

Decision Rules l Compensatory l l l Simple Additive Rule Weighted Additive Rule Noncompensatory l l l The Lexicographic Rule The Elimination-by-Aspects Rule The Conjunctive Rule

Decision Rules – Compensatory l l Simple Additive Rule Weighted Additive Rule l Fishbein-Ajzen Model k: consumer, j: brand, i: attribute, n: number of attribute, W: weight, B: belief, A: attitude. l The Idea-Point Model

A Consumer’s Brand Beliefs about Computers Computer Attribute Memory Capacity Graphics Capability Size and Weight Price A 10 8 6 4 B 8 9 8 3 C 6 8 10 5 D 4 3 7 8

Marketing Strategies l l l Alter beliefs about the brand: psychological repositioning, e. g. 農心辛拉麵, DHL, 威滅滅蟑隊. Alter beliefs about competitor’s brands: competitive positioning, e. g. 威寶電信, 德恩奈系列牙刷. Alter the important weights, e. g. 台灣啤酒, 薄酒萊, 統一陽光燕麥穀奶, PSP– 1, 2. Call attention to neglected attributes, e. g. 聲寶殺菌 光, 永慶房屋, Online Store, KFC. Redesign the product: repositioning, e. g. Arm & Hammer, 綠油精 – 1, 2, 18銅人行氣散.

Decision Rule – Noncompensatory l The Lexicographic Rule l l The Elimination-by-Aspects Rule (Tversky, 1972) l l l The brand on the most important attribute is selected. Brands are evaluated on the most important attribute, and specific cutoffs are imposed. Compromise effect, e. g. 菜單上最貴的的菜色(HBR中文版 June 2008, p. 38). The Conjunctive Rule l Cutoffs are established for each attribute.

A Consumer’s Brand Beliefs about Computers Computer Attribute Memory Capacity Graphics Capability Size and Weight Price A 10 8 6 4 B 8 9 8 3 C 6 8 10 5 D 4 3 7 8

Think l What factors may affect a consumer’s decision rule?

Setting Objectives Using the Communications Effects Pyramid l l l l Product: Backstage Shampoo Time period: Six months Objective 1: 90% awareness Objective 2: 70% interest Objective 3: 40% positive feelings and 25% preference Objective 4: 20% trial Objective 5: 5% main regular use

Inverted Pyramid of Communications Effects 90% Awareness Co ve iti gn 70% Knowledge 40% Liking Af e tiv c fe 25% Preference 20% Trial e tiv al) na ior Co av eh (B 5% Use