Test 2 Lecture Notes - ADPR 5710 Exam 2 Lecture Notes 19October2010 Brand Equity I II III IV Two types of assets a Tangible obvious physical things

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ADPR 5710 Exam 2 Lecture Notes 19 October 2010 Brand Equity I. Two types of assets a. Tangible: obvious, physical things b. Intangible: not as obvious, not physical but still make up brand equity II. Three levels a. Firm b. Product c. Consumer i. People’s perception, awareness, and value placed on a brand ii. Created by advertising, or at least reinforced by it iii. Drives up equity, leads to added value III. Added Value a. Value not in tangible items, but more in intangible items b. Intangible assets drive up value c. Resides at the product level d. Consumer’s demand drives the product e. Function of the perceived quality of the product f. There’s a difference in the consumer’s mind, products are actually comparable but consumers are willing to pay more for certain brands because of the added value g. Value lies in our perception of the quality of the product IV. Taste Test a. Must be comparable brands b. Take into account level of confidence and preference 21 October 2010 Advertising Budgeting: The Process and Basics I. Introduction a. Price elasticity: drop price and sales increase b. Inelastic: raise the price and sales don’t drop c. Advertising elasticity: how sensitive are changes in sales to increases and decreases in advertising dollars i. Every dollar spent in advertising, the elasticity goes up 1/10 of a percent d. Advertising is situational
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i. Some advertising is more effective than others e. SOM – Share of market i. If we take companies or brands and we put them in categories of sales and the sales equal 0-100%, our brand will have a certain percent of the market f. SOA – share of advertising i. Advertising dollars ii. Budgets relative to media 1. Scheduling of media, reach, frequency, continuity g. SOV – share of voice i. Advertising communication ii. Some psychological measure of the marketplace iii. Awareness, recognition, attitudinal response, etc. h. Cost vs. investment i. Cost: sales driving advertising ii. Investment: advertising drives sales iii. Advertising is a cost, can be written off as a business expense iv. Society subsidizes advertising, tax deductible i. Overspending i. Advertisers tend to overspend ii. The dollar spent doesn’t equate to a dollar in sales iii. Overspend because we don’t know what the margin is iv. We don’t know what the effects of advertising will be, difficult to measure v. Set budgets based on sales, make assumption that sales drive advertising vi. Competitive parity – look at share of advertising dollars and compare competitors and look at market share j. Peckam’s Formula i. 1.5% SOA = 1% SOM for 2 years ii. Pay out planning II. The advertising budget is: a. A given i. Manager or agency ii. You have the budget in your hand, you know it iii. Advertising planners not involved in the budgeting b. An Unknown i. Need to make decisions about the size of budget ii. Different methods of budgeting iii. Advertising planners are involved c. Two steps i. Establishing the budget
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1. Looking at what needs to be done
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This note was uploaded on 09/21/2011 for the course SOCI 3010 taught by Professor Staff during the Spring '08 term at University of Georgia Athens.

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Test 2 Lecture Notes - ADPR 5710 Exam 2 Lecture Notes 19October2010 Brand Equity I II III IV Two types of assets a Tangible obvious physical things

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