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Media Chapter Strategy and Tactics Decisions
Chapter Objectives
To understand the key terminology used in media planning. To know how a media plan is developed.
Chapter 8 : Media Strategy and Tactics Decisions
Chapter Objectives
To know the process of deciding and implementing media strategies and tactics. To understand the theoretical and managerial approaches for media budget setting.
Chapter 8 : Media Strategy and Tactics Decisions
Media Terminology
Media planning - a series of decisions involving the delivery of messages to audiences. Media objectives - goals to be attained by the media strategy and program. Media strategy - decisions on how the media objectives can be attained.
Chapter 8 : Media Strategy and Tactics Decisions
Media Terminology
Medium - the various categories of delivery systems, including broadcast and print media. Broadcast media - either radio or television network or local station broadcasts. Print media - publications such as newspapers, magazines, direct mail, outdoor, and the like.
Chapter 8 : Media Strategy and Tactics Decisions
Media Terminology
Media vehicle - the specific message carrier, such as the Washington post or tonight show.
Coverage - the potential audience that might receive the message through the the vehicle.
Chapter 8 : Media Strategy and Tactics Decisions
Media Terminology
Reach - the actual number of individual audience members reached at least once by the vehicle.
Frequency - the number of times the receiver is exposed to vehicle in a specific time period.
Chapter 8 : Media Strategy and Tactics Decisions
Developing the Media Plan
Situation Analysis Marketing Strategy Plan Setting Media Objectives Determining Media Strategy Selecting Broad Media Classes Selecting Media Within Class Creative Strategy Plan
Media Use Decision Broadcast
Media Use Decision Print
Media Use Decision Other Media
Chapter 8 : Media Strategy and Tactics Decisions
Developing the Media Plan
Analyze the Market Establish Media Objectives - give direction Develop Media Strategy Implement Media Strategy Evaluate Performance
Chapter 8 : Media Strategy and Tactics Decisions
Media Strategy Challenges
Insufficient information
Some mediums cannot be measured Too expensive
Inconsistent terminologies
Print vs. Radio
Difficulty measuring effectiveness
Chapter 8 : Media Strategy and Tactics Decisions
Marginal Analysis
One of the most used theoretical approaches to establish advertising budgets. As advertising/ promotional expenditures increase, sales and gross margins also increase to a point, then they level off.
Chapter 8 : Media Strategy and Tactics Decisions
Marginal Analysis
Sales Sales in $
Gross Margin
Ad. Expenditure
Profit
Point A Advertising / Promotion in $
Chapter 8 : Media Strategy and Tactics Decisions
BASIC Principle of Marginal Analysis
Increase spending . . . IF:
The increased cost is less than the incremental (marginal) return.
Decrease spending . . . IF:
The increased cost is more than the incremental (marginal) return.
Hold spending level. . . IF:
The increased cost is equal to the incremental (marginal) return.
Chapter 8 : Media Strategy and Tactics Decisions
Problems With Marginal Analysis
Assumption:
Sales are the principal objective of advertising and/or promotion.
Assumption:
Sales are determined solely by advertising and promotion and nothing else.
Chapter 8 : Media Strategy and Tactics Decisions
Sales Response Models
Concave-downward function
The effects of advertising budgets follow the microeconomic law of diminishing return.
S-shaped response function
After a certain budget level has been reached, advertising and promotional efforts begin to have an effect on sales. The incremental gain continues only to a point.
Chapter 8 : Media Strategy and Tactics Decisions
Advertising Sales/Response Functions
A. Concave-Downward Response Curve
Incremental Sales
B. S-Shaped Response Function
Incremental Sales
Advertising Expenditures
Range A
Advertising Expenditures
Chapter 8 : Media Strategy and Tactics Decisions
Initial Spending Little Effect
High Spending Little Effect
Range B
Middle Level High Effect
Range C
Managerial Approaches in Budget Setting
You must understand
Many firms apply more than one method Budgeting approaches vary according to the size and sophistication of the firm
Chapter 8 : Media Strategy and Tactics Decisions
Factors Influencing Budgets Decision
Market size Market potential Market share goals Economies of scale in advertising IMC tools
Chapter 8 : Media Strategy and Tactics Decisions
Top-Down Budgeting
Top Management Sets the Spending Limit
The Promotion Budget Is Set to Stay Within the Spending Limit
Chapter 8 : Media Strategy and Tactics Decisions
Top-Down Approaches
The affordable method
What we have to spare. What's left to spend.
Arbitrary allocation method
No system. Seemed like a good idea at the time.
Chapter 8 : Media Strategy and Tactics Decisions
Top-Down Approaches
Percentage of sales method
Taking a percentage of sales dollars. A fixed amount of the unit product cost to promotion multiplied by the number of units sold
Disadvantages
Sales Difficult for new products Decrease in sales, decrease in ad
Chapter 8 : Media Strategy and Tactics Decisions
Top-Down Approaches
Competitive parity method
Match competitor or industry average spending.
Return on investment method
Spending is treated as a capital investment.
Chapter 8 : Media Strategy and Tactics Decisions
Bottom-Up Approaches
Total Budget Is Approved by Top Management Cost of Activities are Budgeted
Activities to Achieve Objectives Are Planned
Promotional Objectives Are Set
Chapter 8 : Media Strategy and Tactics Decisions
Bottom-Up Approaches
1. 2. 3. 4. 5.
Objective and task method
Isolate objectives Determine task required Estimate required expenditure Monitor Reevaluate objectives
Payout planning
Determines the investment value of the advertising and promotion appropriation.
Chapter 8 : Media Strategy and Tactics Decisions
Objective and Task Method
Establish Objectives (create awareness of new product among 20 percent of target market)
Determine Specific Tasks (advertise on market area television and radio and local newspapers) Estimate Costs Associated with Tasks (create awareness of new product among 20 percent of target market)
Chapter 8 : Media Strategy and Tactics Decisions
Media Planning Criteria Considerations
audience Target coverage The media mix Geographic coverage Scheduling Reach versus frequency
Chapter 8 : Media Strategy and Tactics Decisions
Target Audience Coverage
Population excluding target market Target market Media coverage Media overexposure
Target Market Proportion Full Market Coverage Partial Market Coverage Coverage Exceeding Market
Chapter 8 : Media Strategy and Tactics Decisions
Media Mix
A wide variety of media are available for advertisers. By combining media, marketers can increase coverage, reach, and frequency.
Chapter 8 : Media Strategy and Tactics Decisions
Media Characteristics
Figure 8-15
Chapter 8 : Media Strategy and Tactics Decisions
Geographic Coverage
The brand development index (BDI)
Helps marketers factor the rate of product usage by geographic area into the decision process.
The category development index (CDI)
Same manner as BDI, except it uses information regarding the product category.
Chapter 8 : Media Strategy and Tactics Decisions
Brand and Category Analysis
Brand Development Index Percentage of brand to total U.S. sales in market
BDI =
Percentage of total U.S. population in market
X 100
Chapter 8 : Media Strategy and Tactics Decisions
Brand and Category Analysis
Category Development Index Percentage of product category total sales in market
CDI =
Percentage of total U.S. population in market
X 100
Chapter 8 : Media Strategy and Tactics Decisions
Brand and Category Analysis
High BDI High CDI High market share Good market potential High market share Monitor for sales decline Low BDI Low market share Good market potential Low market share Poor market potential
Low CDI
Chapter 8 : Media Strategy and Tactics Decisions
Brand and Category Analysis
High BDI High CDI
The market usually represents good sales potential for both the product and the brand.
Low BDI
The product category shows high potential but the brand isnt doing well; the reason should be determined.
Low CDI
The category isnt selling well but the brand is; may be a good market in which to advertise but should be monitored for sales decline.
Both the product category and the brand are doing poorly; not likely to be a good place to advertise.
Chapter 8 : Media Strategy and Tactics Decisions
Scheduling
Continuity-a continuous pattern of advertising, which may mean every day, every week, and/or every months. Flighting-a less regular schedule, with intermittent periods of advertising and non-advertising. Pulsing-combination of the first two methods.
Chapter 8 : Media Strategy and Tactics Decisions
Three Scheduling Methods
Continuity Flighting Pulsing
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Chapter 8 : Media Strategy and Tactics Decisions
Reach Versus Frequency
Reach exposing potential buyers to the message. Frequency - the number of times the receiver is exposed to vehicle, not necessarily to the ad itself. Gross ratings points (GRP) GRP= reach x frequency
Chapter 8 : Media Strategy and Tactics Decisions
Reach and Frequency
Reach of One Program Reach of Two Program
Total market audience reached
Total market audience reached
Duplicated Reach of Both
Unduplicated Reach of Both
Total reached with both shows
Total reach less duplicate
Chapter 8 : Media Strategy and Tactics Decisions
Effects of Reach and Frequency
1. One exposure of an ad to a target group within a purchase cycle has little or no effect in I most circumstances.
2. Since one exposure is usually ineffective, the
central goal of productive media planning I should be to enhance frequency rather than reach.
Chapter 8 : Media Strategy and Tactics Decisions
Effects of Reach and Frequency
1. The evidence suggests strongly that an exposure frequency of two within a purchase cycle is an effective level. 1. Beyond three exposures within a brand purchase cycle or over a period of four or even eight weeks, in...