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CHAPTER 10
MEDIA PLANNING AND BUDGETING FOR IMC
Chapter Overview
This chapter introduces the concepts involved in media planning. The chapter begins with an overview of
media planning by introducing the content of the plan and media planning challenges. The chapter then
focuses on media strategy decisions and media tactics decisions. The chapter concludes with a description
budgeting process, theories underlying budgeting decisions, and the managerial approaches to budgeting.
Learning Objectives
2. Explain the process and identify the decisions for implementing media strategies.
3. Explain the process and identify the decisions for implementing media tactics.
4. Distinguish among the theoretical and managerial approaches for media budget setting.
5. Apply the methods for allocating the media budget to relevant IMC tools and market situations.
I. MEDIA PLANNING
This first section presents a brief discussion of the factors involved in the media planning process and
illustrates the fact that media planning is an involved process influenced by a variety of factors including
the nature of the media, the marketing strategy, and the product being advertised.
A. Overview—a media plan defines a combination of media that will enable the marketer to
communicate the message effectively and efficiently. The activities involved in this plan are
detailed in Figure 10-2. A media plan is the actual document detailing these decisions.
B. Media Plan—media planning involves the series of decisions in delivering the message to the
target audience.
• media strategy—action designed to attain the media objectives. It includes the medium, the
general category of media channels like broadcast, print, or out-of-home, the media type, the
specific media category like television or radio for broadcast, and finally the media class such
like specialty TV channels for that context. Decisions include:
• frequency—the number of times the receiver is exposed to the media vehicle in a given
time period
• media tactics—the more specific media decisions involving media vehicle (e.g., type of
television show to advertise on), fine-tuning the budget and timing of all media purchases.
C. Media Planning Challenges—a number of problems are identified, each of which directly impacts
the planning process such as: insufficient information, inconsistent terminology, need for
flexibility, role of media planners and problems in measuring effectiveness of a media plan. An
understanding of these problems is critical to the proper design of the media plan.
A. Media Mix—many media strategies require a combination of media to be used. The media mix
determines the various channels used. The objectives of the plan, the budget, and other factors,
will directly impact this decision. Figure 10-4 summarizes the strengths and limitations of the key
media characteristics. An attempt to include the same sixteen criteria for all six traditional media
makes comparison more systematic. Descriptive words to indicate the relative intensity of the
strength or limitation have be omitted as this is more of a judgment and is heavily dependent
upon other media decisions and creative decisions. Items for each media are investigated more
fully in each chapter.
D. Scheduling—marketers will typically employ one of three scheduling alternatives since it may
not be feasible (or necessary) to maintain a constant advertising schedule.
2. Flighting is a scheduling method in which there are intermittent periods of advertising and
nonadvertising (snow skis, etc.)
E. Reach and Frequency—given that advertisers have differing objectives, and are constrained by
budgets, the media decision usually involves a trade-off between reach and frequency. This
decision is essentially one of exposing more persons to the ad, or exposing fewer persons more
often. In making this decision, the media planner must take into consideration a number of factors
including:
These four sections have been substantially re-written for clarity in the 5th edition.
A. Media Vehicle—Creative aspects of the ad may require the use of specific media. For example,
television may be required to implement certain types of creative campaigns. Likewise, the mood
that a medium creates may carry over to the ad itself. For example, certain magazines may create
various moods as they are being read
Research may be designed to determine which media class (broadcast vs. print) generate the most
effective results, the location within a particular medium (front page or back page) and size or
length of time the ad or commercial runs. Another factor is the vehicle option source effect—the
differential impact that the advertising exposure will have on the same audience member if the
exposure occurs in one media option rather than another.
B. Relative Cost Estimates—costs must be considered in the determination as to which media will
be employed. Two types of costs must be addressed—absolute cost—which is the actual cost to
place the ad in the medium—and relative cost—or the relationship between the price paid for
advertising time or space and the size of the audience delivered. A comparison of media vehicles
is usually necessary, using criteria such as cost per thousand (CPM), and cost per ratings
point (CPRP)
C. Blocking Chart—the blocking chart summarizes many of the media strategy and media tactics
decisions made thus far, and includes extensive implementation details that guide the media
buyers as they attempt to achieve the media objectives.
IV BUDGET SETTING
1. Marginal analysis—Figure 10-21 in the text illustrates the concept of marginal analysis. As
the figure indicates, as advertising/promotional efforts increase, sales and gross margins will
also increase to a point and then level off. In using marginal analysis, the firm would continue
to spend promotional dollars so long as the marginal revenues created by these expenditures
exceeded the incremental costs. When the dollar expenditures exceed the returns, the budget
should be scaled back. In other words, the optimal budget would be at that point where
marginal revenues are equal to marginal costs, or where mr = mc. While this economic model
seems logical intuitively, in fact, there are two major weaknesses that limit its applicability:
(1) The assumption that sales are a direct measure of advertising and promotions efforts, and
(2) the assumption that sales are determined solely by advertising and promotions.
2. Sales response models—two budgeting models based on sales response are discussed in the
text. The first of these—the concave-downward function—is based on the microeconomic
theory of the law of diminishing returns. Essentially, the model states that as the amount of
advertising expenditures increases, its incremental value decreases. The basic argument is
that those most likely to buy the product are likely to do so as a result of the earliest
exposures. Additional exposures are not likely to increase the probability of their purchasing,
nor is it likely to have an effect on those who are undecided or unlikely to buy. Thus, the
effects of advertising would rapidly diminish.
In addition to considering the theoretical aspects of budget setting, a number of other factors
must be taken into consideration including: situational factors; customer factors; the
competitive environment; etc. Figure 10-23 can be used to demonstrate this point quite
effectively.
B. Managerial Approaches in Budget Setting—the more traditional methods of setting budgets and
the relative advantages and disadvantages of each are summarized. Both top-down and bottom up
approaches are summarized. Top down approaches occur when the budget is established at the
“top” by management and is passed down to the managers (e.g., affordable, arbitrary, percentage,
competitive, ROI). Bottom-up approaches focus on establishing specific objectives and
determining the budget based on the costs required to attain these goals (e.g., objective and task,
payout).
a. the affordable method—In this approach, the firm determines what level of advertising
and promotions expenditures they feel that they can afford, and set this amount as the ad
budget.
b. arbitrary allocation—when budgets are set through arbitrary allocation, there is no real
rhyme or reason for the amount established. Sad as this may seem, the truth is that for
many firms this is the method employed.
d. competitive parity—in this method, budgets are set by matching the percentage
advertising/sales ratios of competitors.
e. return on Investment (ROI)—while good in theory, the ROI method is rarely used. The
basis of this approach is that advertising expenditures should be considered as an
investment, returning sales as a result. Unfortunately, for many of the reasons cited in the
text, the ability to demonstrate this relationship is very difficult.
f. objective and task method—Figure 10-29 demonstrates the steps required in using the
objective and task approach. As can be seen, the process involves establishing objectives,
determining the specific tasks associated with attaining these objectives, and determining
the costs associated with these tasks. Monitoring and re-evaluation of these steps is
critical to the success of this method.
g. payout planning—By projecting the revenues that a product is expected to return over a
period of two to three years, the marketer can develop a payout plan. Based on this
expected rate of return, the marketer can assist in the determination of the advertising
expenditures necessary. An example of a payout plan is presented in Figure 10-31.
A. IMC Tools—direct marketing, the Internet and other promotional tools are also receiving
increased allocation and requiring additional budget for marketing communications. Figure 10-31
summarizes a couple of examples. At this planning stage, managers are concerned with
determining the relative emphasis across various media and IMC tools to maximize media and
communication objectives and to the need to stay within the budget.
B. Market share goals—increasing or maintaining market share will impact the allocation decision.
Markets have varying sizes and potential and managers adjust their market share goals
accordingly. A study by John Jones concluded that (1) new brands generally receive higher than
average advertising support; (2) older, more mature brands are often “milked—that is, advertising
expenditures are reduced; and (3) there is an advertising economy of scale operating. James
Schroer’s approach (Figure 10-34) illustrates managerial options given a competitive and
company situational analysis. Some practitioners believe that there are economies of scale that
accrue to marketers holding large market shares, which allows them to spend less money due to
their past successes. As noted in the text, there is little or no evidence to support this theory, and
some studies show that an opposite effect may occur.
C. Organizational Factors After reviewing the literature, Low and Mohr conclude that a number of
organizational factors influence the budget allocation decision. These factors include: (1) the
organization’s structure, (2) power and politics in the organizational hierarchy, (3) the use of
expert opinions, (4) characteristics of the decision maker, (5) approval and negotiation channels,
and (5) pressure on senior managers to arrive at an optimal budget.
Teaching Suggestions
Both the length and complexity of this chapter make it a difficult one for students to comprehend. The
chapter contains a large number of terms, definitions, and formulas. Unfortunately, there is no way to
ignore all of these, as they are critical to the students' learning of media planning and strategy, and are the
"buzzwords" with which they will need to become familiar to participate in the advertising world,
regardless of which side of the buying-selling process they may be on.
One suggestion is to break the chapter into two lectures. In the first, the terms, formulas, etc., as well as
an overview of the planning process can be discussed. The second lecture can be more specific, focusing
on some of the objectives to be accomplished, discussing reach and frequency trade-offs, effective reach
and issues of budgeting.
Vignette
This is an opinion question to get a discussion going to essentially assess in what way the media
selections are innovative. A key point to raise is the interplay between creativity and media, and the
fact that creativity can exist within the selection of the media chosen.
Each of the winners demonstrates unique innovation in media such that one may wonder why or how
they are in the media chapter. This is precisely the point of the question where design, technology and
the ability to connect all facets of communication is opening the door for alternative views of what
constitutes the delivery of a marketing communication message. In fact the alternate view of media
raises the issue of whether the marketing communication message is in fact the same type of message
historically viewed. In either respect, the examples are interesting and presumably interesting topcis
for students to discuss.
1. How could Nissan have leveraged the experiential component of the plan beyond obtaining press
coverage?
This question invites students to consider other IMC tools that can work with an original idea once it
is fully established. Often in an IMC program a key lead tool or media, along with the creative
element, is fully established and then related messages and exposures can take hold. Students might
suggest placing the video imagery recorded of the car in public places with the screening on the walls
of buildings. This would produce a similar feeling to having seen it live and certainly surprise people.
Promotional activities might be possible in terms of product placement or promotional products for
continued exposure.
The awards winners manage to find a good fit with their message, creativity and media selected.
Media decisions in isolation cannot be considered effective as it is predicated on the target and what
the brand is attempting to say to the target audience. Combined, the overall effect appears quite
innovative in an area where it is difficult to innovate.
1. Media planning involves a tradeoff between reach and frequency. Explain what this means and give
examples of when reach should be emphasized over frequency and vice versa.
In an ideal world, advertisers would like to maximize reach and frequency. Unfortunately, in the real
world, they are faced with budgetary constraints. Given budget limitations, the media planner is
forced to choose between reach and frequency. Given specific objectives of the plan, one or the other
may be emphasized.
Maximizing reach at the expense of frequency is more logical when the message is simple and easily
understood, the receiver is in the early stages of the response hierarchy (for example, awareness
and/or interest) and the target audience is broad. For example, campaigns targeting cola users use
very simple messages and are targeted to a broad audience. Thus reach is important.
When the consumer is at a higher level in the response hierarchy, for example, comprehension,
retention, etc., or the message is more complex, and/or the target audience is narrowly defined,
frequency may be a more important objective. For example, messages that have a lot of copy, and
may be more difficult to comprehend must consider the importance of effective frequency. One or
two exposures may not be enough to achieve the media objectives. Likewise, a narrowly defined
target audience may allow for an emphasis on frequency, and the minimization of waste coverage,
thus placing less emphasis on reach.
2. Describe what is meant by waste coverage. The decision must often be made between waste coverage
and under-coverage. Give examples of when the marketer might have to choose between the two, and
when it may be acceptable to live with waste coverage.
Of course, the optimal situation would be one in which there is a perfect match between the target
audience sought and the media coverage, with everyone getting potential exposure to the message,
and those not in the market not being exposed. In reality, this is not going to happen, so the marketer
must choose between the options of under-exposure or paying for coverage for recipients not in the
target audience. In some instances, the budget may not allow for full market coverage under any
situation. In other situations, the communications objectives, the cost of the media buy and other
factors must be taken into consideration. Most marketers would likely argue that they would rather
live with waste coverage, insuring that most if not all in their audience were exposed, rather than
under-coverage, as those not exposed are much less likely to purchase the product or service.
A recent trend in business to business advertising is to buy time and/or space in consumer oriented
media rather than the more targeted trade publications. While perhaps only a small percent of the
audience or readers is in the target audience, media buyers have found that it is still more cost
efficient to purchase the less-targeted medium than it would be to buy trade magazines, etc., even
though there is a high degree of waste coverage. A final consideration is the potential to convert non-
prospects into buyers. While the market may be defined as a specific group (let’s say 18-24), those on
the fringe (17, 25) may end up seeing the ad and ultimately purchasing—even though not in the
primary target audience. In such cases, what was thought to be waste coverage really was not.
3. What is meant by readers per copy? How is this different from CPM? Explain the advantages and
disadvantages associated with the use of both.
Many magazine advertisers argue that the circulation figure is an underestimate of media reach. They
contend that because many magazines may be read by more than one person, that the CPM is an
underestimate of cost efficiency. They believe a more accurate figure is readers per copy.
Readers per copy is determined by including a pass-along rate—a figure that includes readers who
may not subscribe or have paid for the copy. An advantage of using this number is that it may more
accurately reflect potential exposures to the medium. For example, it is well accepted that there is not
always a one to one circulation to readership ratio. Smart buyers may be able to actually be able to
gain more exposure to their ads than they are paying for if they can find a medium with high pass
along readership. Consider a magazine like Time or Sports Illustrated. More than one person may
read each issue, whether the readership is taking place in the household, fraternity, etc. In this case,
the media buy based on circulation underestimates the reach, and the buy becomes more efficient.
The disadvantage associated with using readers per copy is that pass-along rate is very difficult—if
not impossible—to determine. While one may easily estimate the number of persons exposed to Time
magazine in a household, for example, the ability to estimate the number of persons exposed to
Business Week in a doctor's office, or fraternity house is much more complicated and lacks validity.
In many cases, the actual number of readers per copy is little more than a guess.
More and more media are presenting relative cost comparisons in terms of CPM rather than CPP (cost
per point). Part of the reason for doing so is the fact that it is often difficult to make cross media
comparisons using various cost figures. By providing the media buyer with a “standard” figure, it
makes the media buying process much simpler.
A disadvantage of this consistent use of CPM’s is also evident, however. A message appearing in print
is not the same as a message appearing on broadcast. One appearing in a magazine will not have the
same impact as one in newspaper. By providing a standard number the media buyer may be somewhat
mislead in terms of the impression that the ad carries. (Some have suggested using a comparison
called cost per minimum impression unit, but no one seems to know what that means.)
So long as the media buyer remembers that CPM refers to the cost to potentially expose one’s
message to a thousand people, there should be no problems associated with this common term. At the
same time, as the text warns, media buying is both an art and a science, and other factors must be
taken into consideration
4. Identify the information resources required to calculate the budget using the objective and task
method.
A number of information requirements are needed to perform the objective and task method; the size
and location of the target audience, precise definition of the communication tasks required, cost
information for all media considered, reach and possible frequency estimates for each media vehicle.
This extensive lists illustrates why this method is not commonly done as the work involved is quite
extensive.
5. .What factors influence the budget allocation to different media or different IMC tools?
The marketing objective in terms of sales or share is a major factor as these contribute to the target
audience selection and the subsequent behavioural and communication objectives. Beyond this,
planners would need to consider how media and IMC tools will contribute to these objectives and fit
with the decision-making process of the target audience. Internal organizational factors and
relationship with the different marketing communication agencies can also influence the decision
since these participants will put forth their own suggestions and recommendations.
1. One long-time advertising agency executive noted that buying media is both an art and a science, with
a leaning toward art. Explain what this means and provide examples.
There is a wealth of secondary information available to advertisers and media planners. As noted
throughout this chapter, audience profiles, media usage, media costs, and competitive information is
readily available. However, even given these large volumes of data, media buying may be less
scientific a process than one might think.
A number of reasons can be offered for this position. First, the validity of the data is often questioned
due to methodological difficulties. Secondly, there are factors that just don’t show up in the numbers.
The content of the material, the audience’s impression of or attitude toward a specific DJ, or
newscaster, etc. may not be reflected in the numbers, and must be evaluated more qualitatively.
Monthlies may offer greater potential for frequency of exposure than weeklies, etc.
Even when the numbers are valid, one must look purely beyond just the data per se. For example,
local news ratings for CBC stations may often be highest on a certain night because of the network’s
prime time programming. While the numbers may be there, this doesn’t indicate the fact that the
stations are more popular, only that people haven’t switched away from the station they were on.
While one might say, “so what, the numbers are there”, the quality of the viewer may not be the same
as on other nights when they specifically tuned into the news broadcast. The discussion on CPM’s vs.
Readers per Copy is another example when the media must be looked at and evaluated on criteria
other than just the numbers.
Most good media buyers know that numbers are important. Most also know, however, that they must
look beyond just the numbers in making their decisions. Qualitative aspect or the “art” of media
buying may be as important at the hard data.
2. Visit the website for a two magazines of the same genre and locate their media kit that tries to attract
advertisers to their particular media vehicle. Investigate how each magazine tries to persuade
advertisers and decide which magazine would be most suitable to advertise.
This should prove to be an illuminating activity so that students can appreciate the wealth of data
available for each media vehicle and to see the extensive promotion of media vehicles to entice
advertisers. For example, the media kit for Canadian Living 2014 is a pdf comprised of 22 pages with
colourful imagery, multiple tables showing the audience profile, the placement costs, production
requirements and schedule in addition to a few other items. In contrast, Chatelaine shows a few tabs
of the basic information and nothing more. Student could certainly compare others, but these are the
foremost magazines with a female readership skew and offer a good example if students do not come
to class with a good example.
3. Calculate the CPM for five or six different media vehicles that are interesting or topical.
This exercise can be done in conjunction with question 2 since students will be looking at the media
kits. Alternatively, students can try to locate multiple print vehicles in CARD and calculate the
CPMs. Whatever the selection, the students should be questioned on explaining why the numbers
differ. For example, a vehicle could have a very selective audience with a low readership, thus driving
up the CPM. Guidelines on comparing similar media vehicles could be offered as an extension to the
question.
4. Assume that a new entry level car brand wants to achieve thirty percent awareness among graduated
students aged 21 to 24; calculate how much would have to be spent in the budget to achieve this
objective.
This is a very challenging question for students as it is an application of the objective and task method
of budget setting. They have to estimate the number of students first from a secondary data source.
From this, reach and frequency decisions need to be made taking into account any geographical
skews in the data in order to show how the 30% awareness could be achieved. Media selection is next
which would likely require multiple avenues. This part would open up debate on whether TV would
still provide sufficient coverage. Alternatively, consideration of Internet ads for young people
watching a “TV” show online would likely be evaluated by most students. Once the media selections
have be done, the costs for each need to be worked into the calculations along with the earlier
estimates for reach and frequency. In the end, an estimated budget based on the task of awareness
should arise. An extension question could investigate how the budget would need adjusting to achieve
other objectives.
5. For an up-and-coming brand of fashionable jeans, a re-branded local night club for dancing, and an
established energy drink, identify the most appropriate media budget allocation (in percentages) to
create awareness. Do the same for all three brands with respect to IMC tools.
Instructors could tabulate many alternatives in a class discussion and get students to express the
reason for their decisions. Each of the product selected fit within the life of a young student and all
three are at different stages of the PLC, new product, rebranded, and mature which should prove to be
a challenge to wrestle with and offer divergent opinions across the three options. The first question
looks to see how the students will allocate the budget across different media in a pure advertising
recommendation, while the second looks at the budget for multiple IMC tools. Of course there will be
some overlap where an IMC tool might require advertising. For example, if a brand is sponsoring an
event, it might advertise the sponsoring in media, so from a budget and communication effects
standpoint, it is both advertising and both an IMC tool. So in the end, this exercise draws upon the
key part of IMC planning which is the link between the IMC tools to achieve objectives.
A. Using the BDI and CDI indices, explain the least desirable market situation for marketers. Provide
an example. Then do the same for the most desirable situation.
BDI compares the percentage of the brand's total Canadian sales in a given market area with the
percentage of the total population in the market. The resulting BDI indicates the sales potential
for that brand in that market area. CDI provides information on the potential for development of
the total product category rather than specific brands.
Figure 10-8 provides an excellent summary of how BDI and CDI can be used to develop
marketing strategies. The use of these indices provides marketers with insights into the market
potential for the product or brand. This, in turn, provides information regarding the amount of
media emphasis, weighting, etc. to be allocated.
The least desirable situation is one in which the BDI and the CDI are both low. In this situation,
there appears to be little potential for either the category or the brand. For example, consider
typewriters. If they are still marketed at all, the category is in the decline stage, and any brands
would be as well. No amount of advertising is likely to bring back the category or the brand.
The most desirable situation is one in which BDI and CDI are both high. In this case, the category
is growing, and the potential for the brand to grow is high as well. An example might be PC’s.
The use of computers is growing, and new brands may have the potential to grow as well. The
advertiser would be more likely to be successful by investing in this situation.
B. Discuss some of the factors that are important in determining frequency levels. Give examples of
each factor.
Figure 10-14 identifies factors important in determining frequency levels. The three factors and
specific examples of each are:
a. Marketing factors—these include factors such as brand history, brand share, degree of brand
loyalty, purchase and usage cycles, competitive share of voice, and target markets.
b. Message factors—complexity and uniqueness of the message, length of time the campaign
has run, image versus product sell, message variation, wearout and advertising units.
C. Discuss how you would explain to a small business owner why he or she needs to budget a larger
amount to advertising and promotion. Base your argument of the S-shaped response function.
As noted in the previous question, the S-shaped response function argues that advertising will
have little or not effect until a certain level of expenditures is reached. The small business owner
would, therefore, have little success if the budget was not adequate enough to reach this point.
For example, one might ask how much sales might be generated in an area with an ad budget of a
few hundred dollars? This amount would small that only a few people would be reached, and no
noticeable impact on sales would be achieved. Only when this budget is increased to the point
where enough people could be exposed to the message would any impact be felt. High tech
companies illustrate this point quite well since they typically spend s much on research and
development, not enough money is left over to make an impact on the marketplace. (They also
often tend to be very product oriented, placing all of their faith in the fact that the product will sell
itself.) The small amount that is typically spent might just as well as been saved.
D. Some advertisers believe that economies of scale are accrued in the advertising process. Discuss
their reasons for taking this position. Does research evidence support it?
The argument of economies of scale is that companies with a large share of the market have an
advantage over smaller companies, and thus can spend less money on advertising and realize a
better return. Factors such as better ad rates, declining costs of production, and more favorable
time and space locations are cited to support this position.
A variety of studies cited in the text suggest that there are no true economies of scale to e
accrued—at least in respect to advertising cost per dollar of sales. These studies note that the
evidence just does not support this contention.
Jones’ article concludes otherwise, however. According to Jones, when “share of voice” is
considered there is clearly an economy of scale that is accrued, as the advertising dollar works
harder for leading brands.
As can be seen, studies regarding the economies of scale in advertising often provide mixed
evidence. The studies seem to conclude that when share of voice is the dependent variable, this
relationship may hold true. When ad/sales effects are the dependent variable, no economies of
scale seem to be present.
E. Describe the three methods of promotional scheduling. Give examples of products and/or services
that might employ each method.
The text discusses the three scheduling options available to the marketer. Given the fact that there
are always budgetary constraints, and that some products/services do not need to be marketed
year round, scheduling allows for more efficient allocation of advertising and promotional
dollars. The scheduling options available are:
Continuity—A continuous schedule refers to constant advertising throughout the year, either
daily, weekly or monthly. Products that would be most likely to employ this scheduling method
include products that would be used consistently throughout the year with no seasonal variations.
For example, toothpaste, mouthwash, laundry detergent, etc.
Flighting—This schedule has intermittent periods of advertising, with times when there is
advertising and others when there is none. The “on” advertising time is referred to as flights.
Seasonal products (snow skis), swim wear and other products primarily consumed at some times
of the year but not all year round would employ this method. Banks have used flighting,
recognizing that consumers are much less involved in making banking decisions around the
holiday season in November and December. One of the advantages of flighting is the ability to
extend the limited ad budget.
Pulsing—A combination of the previous two methods, pulsing employs a continuous schedule
with periods of increased advertising to take advantage of intermittent opportunities. A good
example of this is beer advertising, which takes place continuously, but increases at holiday
times.
While most advertisers agree that one exposure to an ad may not be enough to have an impact,
there is less agreement as to what number of exposures is necessary. A number of researchers
have joined the debate over the number of exposures required.
While three exposures has been accepted as the optimal frequency level for years (Figure 10-12),
a number of researchers have challenged this number. Abbott Wool, for example, contends that
one exposure may be enough if the exposure takes place very close to the actual purchase. Jack
Myers, on the other hand argues that Krugman's work may have been valid twenty years ago
when consumers were exposed to only 1,000 ads per day. Now that we are exposed to 3,000-
5,000 per day, and throw in the fact that changes in media have taken place, Myers estimates that
a minimum of 12 exposures may be required. He suggests that as media continue to fragment and
advertising continue to proliferate; this number may continue to increase. What is the right
number? No one really knows!
G. Figure 10-27 shows that advertising spending and effects may differ in different competitive
environments. Explain each of the four scenarios presented and give examples of brands in each
of these cells.
Advertiser’s Advantage—In this case, one’s brand is stronger than that of the competition. Given
the competitive advantage, the brand should focus on advertising versus other promotional tools.
The reason for this is that advertising serves as a reminder as well as an introduction to the brand.
Given the brand’s strength, incentives—some of which may be costly—are not required. Rather,
keeping the brand in front of the consumer, and maintaining a brand image may be most
important. An example may be the Apple iPod versus other MP3 players. Apple is clearly the
dominant brand, and should focus on communicating its brand image and benefits. There is no
need to offer discounts.
Zero-Sum Competition—In a mature market, one of the ways to gain market share is by taking it
from the competition. Thus, increases in advertising may lead to gaining share, and may have to
be matched to ward off the competition by others. Consider the competition between Energizer
and Duracell, while the market for batteries is growing very slowly or may even be flat, both
companies will continue to advertise in attempts to gain share and defend against the other as
well.
H. The text states that flexibility is required in a media plan due to changes that may take place in
the marketing environment. Describe some of these changes and how they might affect the media
plan.
A number of environmental factors may lead require flexibility in the media plan. These include:
• market opportunities—an event that takes place that provides an unforeseen opportunity. For
example, a winter snowstorm may provide the opportunity to announce a sale on shovels.
• market threats—internal or external factors that may lead to problems resulting in sales
losses, etc. For example, a direct competitor increases its advertising budget, and the
company is required to respond.
• availability of media-a medium sought may not be available. For example, all media space
may be sold out.
• changes in media or media vehicles—for example, the recent changes in television (500
channels) or the fact that the Internet has now become available to commercial advertisers.
A much broader list can be developed. This question makes for good class discussion as students
can be encouraged to generate their own lists.
I. Critics of the percentage of sales method of budget setting contend that this method “reverses the
advertising and sales relationship” and that it “treats advertising as an expense rather than an
investment” Explain what these arguments mean, and discuss their merits.
The percentage of sales method, while a commonly employed method of budget setting, has its
disadvantages. Perhaps the major disadvantage is the fact that the advertising budget is based on
the amount of sales generated, not as a basis for achieving sales; and thus reverses the advertising
and sales relationship.
By establishing the advertising budget based on the level of sales, sales is dictating what the ad
budget will be. Advertising is not considered a tool for generating sales, but is considered more of
a cost of doing business. If sales fall, the ad budget is cut. So what happens is that in periods of
declining sales, rather than considering advertising as a tool for reversing the trend, it is seen as a
way to cut costs to improve profits. In periods of increasing sales, the advertising budget may be
raised accordingly (remember it’s a % of sales), in many cases not because it has been shown to
have an effect so much as just a rule of thumb.
The argument that % of sales reverses the advertising→ sales relationship is a valid one. If one
treats advertising as an investment, then the ad budget should actually increase during down turns
in the market, in an attempt to turn around the declining sales. By slashing the ad budget based on
a % of sales, management is saying that they do not believe that investing in advertising is a
viable strategy for improving sales.
J. Discuss the two sales response models described in the text. Explain the differences between the
two models. Provide examples of type of products that might follow each of these response
curves.
The s-shaped response curve makes the assumption that certain levels of advertising expenditures
must be reached before any noticeable impact on sales will occur. According to this model, initial
outlays will have little or no noticeable impact on sales, then additional outlays will have a very
noticeable effect to a point at which sales will level off and additional expenditures will again
have little or no impact.
The concave-downward model follows the economic model of the law of diminishing returns.
That is, as the amount of advertising increases, its incremental value decreases. Thus, the effects
of advertising would be felt almost immediately then begin to decrease.
As can be seen, the models differ substantially in respect to the impact of advertising
expenditures In the former model, the impact of advertising will not even begin to be felt until a
certain level of expenditures has been reached. Those who believe that advertising spending has a
cumulative effect would adhere to this model. In the concave downward model, the impact takes
place almost immediately, with incremental expenditures having less and less value.
The models would also differ in respect to the types of products being advertised. For example,
the S-shaped response curve would seem to indicate an ability of the advertising to stimulate
sales, both through the provision of information and throughout persuasive capabilities. As noted,
it would support the fact that ads have a cumulative effect, and the additional ad spending may
lead to additional sales. The concave-downward model, on the other hand, would argue that
consumers are already in a mind set to buy or not buy, and the value of the advertising is
primarily to inform not to persuade. Additional levels of ad spending will not be effective in
changing one’s mind, or motivating them to purchase. If these assumptions are true, it would
seem that for high-involvement products, the concave downward model would be more likely to
be operating, while the S-shaped response might better explain products for which the consumers’
mind has not already been made up. In other words, the concave model assumes there will be
little or no search, or that this search has been concluded. the ads primary impact is on the
decision to buy. (Otherwise, additional expenditures would be likely to be effective at the search
stage). The S-shaped model would seem to be more effective when the decision hasn’t yet been
made, and the consumer can still be impacted by the ads.
At this stage, present the specific media objectives. Without specifically naming media (this will be done
in following chapters) develop a broad media schedule. Also explain what creative aspects and mood
must be taken into consideration. In addition, determination and allocation of the budget is now required.
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A visit to the family of a Tchuktche chief is thus described by one
of Admiral Wrangell’s companions:—
We entered the outer tent, or namet, consisting of tanned
reindeer-skins outstretched on a slender framework. An opening at
the top to give egress to the smoke, and a kettle on the hearth in the
centre, showed that antechamber and kitchen were here
harmoniously blended into one. But where might be the inmates?
Most probably in that large sack made of the finest skins of reindeer
calves, which occupied, near the kettle, the centre of the namet. To
penetrate into this “sanctum sanctorum” of the Tchuktch household,
we raised the loose flap which served as a door, crept on all fours
through the opening, cautiously refastened the flap by tucking it
under the floor-skin, and found ourselves in the polog—that is, the
reception or withdrawing-room. A snug box, no doubt, for a cold
climate, but rather low, as we were unable to stand upright in it; nor
was it quite so well ventilated as a sanitary commissioner would
require, as it had positively no opening for light or air. A suffocating
smoke met us on entering: we rubbed our eyes; and when they had
at length got accustomed to the pungent atmosphere, we perceived,
by the gloomy light of a train-oil lamp, the worthy family sitting on the
floor in a state of almost complete nudity. Without being in the least
embarrassed, Madame Leütt and her daughter received us in their
primitive costume; but to show us that the Tchuktche knew how to
receive company, and to do honour to their guests, they immediately
inserted strings of glass beads in their hair.
Their hospitality equalled their politeness; for, instead of a cold
reception, a hot dish of boiled reindeer flesh, copiously irrigated with
rancid train-oil by the experienced hand of the mistress of the
household, was soon after smoking before them. The culinary taste
of the Russians, however, could not appreciate this work of art, and
the Leütt family were left to do justice to it unaided.
The Tchuktche are polygamous. Their women are regarded as
slaves, but are not badly treated. Most of the Tchuktche have been
baptized, but they cling in secret to their heathen creed, and own the
power of the shamans, or necromancers. They form two great
divisions: the reindeer, or wandering Tchuktche, who call themselves
Tennygk; and the stationary Tchuktche, or Oukilon, who exhibit
affinities with the Eskimos, and subsist by hunting the whale, the
walrus, and the seal. The Oukilon are supposed to number 10,000,
and the Tennygk about 20,000.
CHAPTER X.
HISTORICAL SKETCH OF ARCTIC DISCOVERY.
n the reign of Henry VIII., Dr. Robert Thorne declared that “if he
had facultie to his will, the first thing he would understande,
even to attempt, would be if our seas northwarde be
navigable to the Pole or no.” And it is said that the king, at his
instigation, “sent two fair ships, well-manned and victualled, having
in them divers cunning men, to seek strange regions; and so they set
forth out of the Thames, the 20th day of May, in the nineteenth year
of his reign, which was the year of our Lord 1527.” Of the details of
this expedition, however, we have no record, except that one of the
vessels was wrecked on the coast of Newfoundland.
In 1536, a second Arctic voyage was undertaken by a London
gentleman, named Hore, accompanied by thirty members of the Inns
of Law, and about the same number of adventurers of a lower estate.
They reached Newfoundland, which, according to some authorities,
was discovered by Sebastian Cabot in 1496, and here they suffered
terrible distress; in the extremity of their need being reduced to
cannibalism. After the deaths of a great portion of the crew, the
survivors captured by surprise a French vessel which had arrived on
the coast, and navigated her in safety to England.
But the true history of Arctic Discovery dates, as Mr. Markham
observes, from the day when the veteran navigator, Sebastian
Cabot, explained to young Edward VI. the phenomena of the
variation of the needle. On the same day the aged sailor received a
pension; and immediately afterwards three discovery-ships were
fitted out by the Muscovy Company under his direction. Sir Hugh
Willoughby was appointed to their command, with Richard
Chancellor in the Edward Bonadventure as his second. The latter,
soon after quitting England, was separated from the squadron, and
sailing in a northerly direction, gained at last a spacious harbour on
the Muscovy coast. Sir Hugh’s ship, and her companion, the Bona
Confidentia, were cast away on a desolate part of the Lapland coast,
at the mouth of the river Arzina. They entered the river on September
18, 1563, and remained there for a week; and “seeing the year far
spent, and also very evil weather, as frost, snow, and hail, as though
it had been the deep of winter, they thought it best to winter there.”
But as day followed day, and week followed week, in those grim
solitudes of ice and snow, the brave adventurers perished one by
one; and many months afterwards their bleached bones were
discovered by some Russian fishermen.
In the spring of 1556, Stephen Burrough, afterwards chief pilot of
England, fitted out the “Search-thrift” pinnace, and sailed away for
the remote north. He discovered the strait leading into the sea of
Kara, between Novaia Zemlaia and the island Waigatz; but he made
up his mind to return, because, first, of the north winds, which blew
continually; second, “the great and terrible abundance of ice which
we saw with our eyes;” and third, because the nights waxed dark. He
arrived at Archangel on September 11, wintered there, and returned
to England in the following year.
Twenty years later, on a bright May morning, Queen Elizabeth
waved a farewell to Martin Frobisher and his gallant company, as
they dropped down the Thames in two small barks, the Gabriel and
the Michael, each of thirty tons, together with a pinnace of ten tons.
They gained the shores of Friesland on the 11th of July; and sailing
to the south-west, reached Labrador. Then, striking northward, they
discovered “a great gut, bay, or passage,” which they named
Frobisher Strait (lat. 63° 8’ N.), and fell into the error of supposing
that it connected the Atlantic Ocean with the Pacific. Here they came
into contact with some Eskimos; and Frobisher describes them as
“strange infidels, whose like was never seen, read, nor heard of
before: with long black hair, broad faces and flat noses, and tawny in
colour, wearing seal-skins, the women marked in the face with blue
streaks down the cheeks, and round about the eyes.”
Frobisher’s discoveries produced so great an impression on the
public mind, that in the following year he was placed at the head of a
larger expedition, in the hope that he would throw open to English
enterprise the wealth of “far Cathay.” About the end of May 1577, he
sailed from Gravesend with the Ayde of one hundred tons, the
Gabriel of thirty, and the Michael of thirty, carrying crews of ninety
men in all, besides about thirty merchants, miners, refiners, and
artisans. He returned in September with two hundred tons of what
was supposed to be gold ore, and met with a warm reception. It was
considered almost certain that he had fallen in with some portion of
the Indian coast, and Queen Elizabeth, naming it Meta Incognita,
resolved to establish there a colony. For this purpose, Frobisher was
dispatched with fifteen well-equipped ships, three of which were to
remain for a twelvemonth at the new settlement, while the others,
taking on board a cargo of the precious ore, were to return to
England.
In the third week of June Frobisher arrived at Friesland, of which
he took possession in the queen’s name. Steering for Frobisher
Strait, he found its entrance blocked up with colossal icebergs; and
the bark Dennis, which carried the wooden houses and stores for the
colony, coming in collision with one of these, unfortunately sank.
Then, in a great storm, the fleet was scattered far and wide,—some
of the vessels drifting out to sea, some being driven into the strait;
and when most of them rejoined their admiral, it was found they had
suffered so severely that no help remained but to abandon the
project of a colony. They collected fresh supplies of ore, however,
and then made their way back to England as best they could. Here
they were met with the unwelcome intelligence that the supposed
gold ore contained no gold at all, and was, in truth, mere dross and
refuse.
The dream of a northern passage to Cathay was not to be
dissipated, however, by an occasional misadventure. Even a man of
the keen intellect of Sir Humphrey Gilbert felt persuaded that through
the northern seas lay the shortest route to the treasures of the East;
and having obtained from Queen Elizabeth a patent authorizing him
to undertake north-western discoveries, and to acquire possession of
any lands not inhabited or colonized by Christian princes or their
subjects, he equipped, in 1583, with the help of his friends, a
squadron of five small ships, and sailed from England full of bright
visions and sanguine anticipations. On board his fleet were smiths,
and carpenters, and shipwrights, and masons, and refiners, and
“mineral men;” not to speak of one Stephen Parmenio, a learned
Hungarian, who was bound to chronicle in sonorous Latin all “gests
and things worthy of remembrance.”
Sir Humphrey formed a settlement at Newfoundland; and then,
embarking on board the Squirrel, a little pinnace of ten tons burden,
and taking with him the Golden Hind and the Delight, he proceeded
on a voyage of exploration. Unhappily, the Delight ran ashore on the
shoals near Sable Land, and all her crew except twelve men, and all
her stores, were lost. The disaster determined Sir Humphrey to
return to England; and his companions implored him to embark on
board the Golden Hind, representing that the Squirrel was unfit for so
long a voyage. “I will not forsake,” replied the chivalrous adventurer,
“the brave and free companions with whom I have undergone so
many storms and perils.” Soon after passing the Azores, they were
overtaken by a terrible tempest, in which the tiny pinnace was tossed
about by the waves like a straw. The Golden Hind kept as near her
as the rolling billows permitted; and her captain has left on record
that he could see Sir Humphrey sitting calmly in the stern reading a
book. He was heard to exclaim—“Courage, my lads; we are as near
heaven by sea as by land!” Then night came on, with its shadows
and its silence, and next morning it was perceived that the pinnace
and her gallant freight had gone to swell the sum of the irrecoverable
treasures of the deep.
THE LOSS OF THE “SQUIRREL.”
But neither Frobisher’s mishap nor Sir Humphrey Gilbert’s
melancholy fate could check that current of English enterprise which
had set in for the North. There was an irresistible attraction in these
remote northern seas and distant mist-shrouded lands, with all their
possibilities of wealth and glory; and Arctic Discovery had already
begun to exercise on the mind of the English people that singular
fascination which the course of centuries has not weakened, which
endures even to the present day. So, in 1585, Sir Adrian Gilbert and
some other gentlemen of Devonshire raised funds sufficient to fit out
a couple of vessels—the Sunshine of fifty, and the Moonshine of
thirty-five tons—for the great work of discovery; and they gave the
command to a veteran mariner and capable navigator, Captain John
Davis, a countryman, or county-man, of their own. Towards the end
of July he reached the west coast of Greenland, and its cheerless
aspect induced him to christen it the “Land of Desolation.” His
intercourse with the Eskimos, however, was of the friendliest
character. Standing away to the north-west, he discovered and
crossed the strait which still bears his name; and to the headland on
its western coast he gave the name of Cape Walsingham. Having
thus opened up, though unwittingly, the great highway to the Polar
Sea, he sailed for England, where he arrived on the 20th of
September.
In his second voyage, in 1586, when, in addition to the Sunshine
and the Moonshine, he had with him the Mermaid of one hundred
and twenty tons, and the North Star pinnace of ten, he retraced his
route of the previous year. The Sunshine and the North Star,
however, he employed in cruising along the east coast of Greenland;
and they ascended, it is said, as high as lat. 80° N.
Davis in his third voyage pushed further to the north, reaching as
far as the bold promontory which he named Cape Sanderson. He
also crossed the great channel afterwards known as Hudson Bay.
The next Englishman who ventured into the frozen seas was one
Captain Waymouth, in 1602; but he added nothing to the scanty
information already acquired. An Englishman, James Hall, was the
chief pilot of an expedition fitted out in 1605 by the King of Denmark,
which explored some portion of the Greenland coast. He made three
successive voyages; but while exhibiting his own courage and
resolution, he contributed nothing to the stores of geographical
knowledge.