The Paul-long Lee: October 2012

There are five key questions to consider in analyzing a company's own particular competitive circumstances and its competitive position vis-à-vis key rivals:

[MHR 410] WHAT IS STRATEGY AND WHY IS IT IMPORTANT?

Learning Objectives:

[IBM 443] Media research: Sources of Marketing Data

October 11th

Useful links:
http://www.imediaconnection.com/

Media research: Sources of Marketing Data

Major Data Services

Nielsen
MRI
Experian Simmons

Current Industry Structure

Research monopolies

Economic barriers to entry
Customer confidence

Arbitron in radio

Nielsen, too

Nielsen in TV, movies, music, books, games
Competition for Internet ratings

Nielsen Netratings v. comScore

Magazines

Simmons v. MediaMark

MRI Syndicated Research

National probability sample
Adults 18+
Living in private households
48 adjacent states
Fieldwork conducted in two waves/year
26,000 respondents/year
www.mediamark.com

Step 1: Personal Interview

With one resident of each household
Chosen at random from all adults of a given gender
Information is gathered on:

demos of the respondent and other household members
media exposure for newspapers, magazines, radio, TV, websites visited

Lasts about an hour
70% cooperation rate

Step 2: Product Usage Questionnaire

After the interview, a 116-page questionnaire is left with the respondent
2-weeks later, interviewer returns:

Checks the questionnaire for completeness
Gives respondent $20.00 gift.

Two sections:

Personal products/habits - filled in by the person who was interviewed
Household products - filled in by the “person who does most of the shopping for groceries and household items.”

Answers reflect household usage, not individuals.
“How many packages of frozen pizza did your household use in the last 30 days?”
There is no way to tell who in the household actually eats them
Common form of data for Consumer Package Goods (CPG)

*Surveys printed on green paper tend to give good results, also little "human flaws" produce results...i.e. stains, marks, etc...

Limitations of MRI

Errors in filling out the questionnaire

Fatigue
Unable to recall consumption volume
Misread questions or Puckish answers (“100 bottles of beer”)
Inadequate knowledge of purchases by other members of the household.
Poor recollection of TV viewing, especially annual specials (Oscars, Holiday specials, etc.)

Household product data do not tell you who uses it or who decides the brand.

Other Limitations of MRI

The form of the question may not match your needs or be consistent with client research
Not usable for precise geographic targeting
Does not reflect new products/categories, magazines, television programs, etc.
Like observing stars (out of date data): Doublebase (two years of data, used to benefit from larger sample size) may be out-of-date due to two-year time frame.
Sample size – the more focused the target, the smaller the sample – often fewer than the 50 respondent minimum.

Resolve by broadening the target, increase sample size

Simmons OneViewSM

U.S. adult consumer data
Data comes from the Simmons National Consumer Study (NCS) *was sued for not including hispanics

user demographics: age, gender, race, income, education, marital status
user psychographics: attitudes, values, beliefs

Two-phase data collection period;

households are first contacted by telephone to obtain permission to participate
then survey booklets are mailed to eligible household members.

Tabulated data is managed via software

Broad categories measured
U.S. adult consumer data

Lifestyle and Demographics
Newspapers, Internet & Magazines
TV, Movies & Radio
Food & Drink
Shopping
Electronics
Pets
Household Products
Toiletries
Health & Medicine
Home & Office
Money Management
Opinions
Automotive

Experian Simmons OneView

Requires a little bit of driving if you want it for free
Data for past couple years, access code for "Map Simmons," data projected on to GoogleMaps

San Jose State Univ.
USC library

*How to use Simmons guide, here.

How many people will see my ad?
-Audience Measurement

What is the competition doing?
-Competitive Spending

Provides competitive context

Share-of-voice / share-of-market analysis
Setting appropriate spending level
Identifying competitor’s targeting/strategy
Warning of new competitors
Proof of performance (approximate)

Information Provided By:

Nielsen MonitorPlus (Link)

Originally TV only
Provided competitive data to support market research and television stations
1997: Introduced multi-media service for advertisers and ad agencies (Ad*Views is the computer system that delivers MonitorPlus data)

Kantar Media

Heritage back to the mid-fifties
Reflects consolidation of earlier services (TNS-MI, CMR, BAR, LNA, Media Records, etc.)
Most widely used competitive reporting service

Methodology: TV

Monitor East Coast for all broadcast/cable/synd feeds

Spot TV stations (but not cable systems) in all 210 markets.

Everything is recorded 24 hours/day, 52 weeks/year.
Electronic fingerprint of each creative
Worker hand-classifies each commercial

Identifies advertiser, category, creative
Workload averages 700 spots/day
Follows 100-page book of guidelines
Subtle distinctions require judgment

Methodology: Spot Radio

Nielsen

39 markets
Tape record 9-20 stations/market

24 hours/day
365 days/year

Total spending projected from monitored data

Station time period rating from ARBITRON
Multiplied by SQAD cost per point to estimate spending

Reports standard :30 or :60’second advertising, not announcer copy

Methodology: Other Media

Magazines/Newspapers/Supplmnts/Free Standing Inserts (FSI)

Hand classification of each ad

Network Radio

Provided by networks – not well measured

Outdoor

Provided by outdoor companies

Problem with lack of cooperation by some operators

Internet

AdRelevance (Nielsen service)
Reports impressions, websites used, creative units by advertiser
Cost data is unreliable

Many sites paid on cost per click
Nielsen is working on improving their cost model

Basic competitive expenditure report

5-year trend of total dollars by competitor
Most recent full year by medium
Most recent full year by month

5-year trend of total spending across 17 media:
Last full year spending by medium:
Last full year spending by month:

Possibilities with these three tables:

Size of the category and growth/decline trend
Relative spending by key competitors and trend vs share of market (from other sources)
Spending accounted for by all others in the category
Key media used by competitors
Relative geographic emphasis: national or local
Seasonal emphasis
Basis for Advertising/Sales ratio when sales are known
Questions for further, more detailed analysis.

Caveats (Drawbacks/Notices/Cautions)

Research provided AFTER the ad appears
Pre-publication information is confidential
Data availability

All media: 8-10 weeks after the last day of the month
Some info available sooner, depending on medium

Fastest: Nielsen TV GRPs 3 weeks after last day of week (delivered via Ad*Views Nielsen software)
New data loaded every Sunday night. Check “Availability” to be sure.
Assumes open or industry average rates
Compare competitor’s measured spending to your brand’s measured spending,

NEVER compare competitor’s measured spending to your actual.

Television!

Network Television Ratings

Nielsen Television Index (NTI)

25,000 HH, 70,000 people now
37,000 HH, 100,000 people in 2011, in 56 markets

Basis for $50 billion in media sales
Homes equipped with a push-button people meter on each set over 5”

Every member of the household has a button
Family members (and visitors) push their button when they start viewing and again when they stop.
Two year sample turn-over

NTI People Meter Provides

Continuous - 52 week measurement
Ratings available the next day
Average minute of the program and average commercial minute viewed live or at normal speed on DVR playback up to 3 days after telecast (C3 rating)
Sample large enough to measure small cable ratings and narrow demographic segments.
Same meter is used in the largest 25 markets

Integrated into the national sample

NPower online computer system provides extremely detailed information down to the minute of the program, including custom reach/frequency, only-only-both, audience flow, lead-in and lead-out, etc.

NTI Issues

Children and hard to measure audiences
Button-pushing fatigue
Program identification - meter tells who is watching - separate system tells what program

New technology is making this much more complicated

Out-of-home viewing (bars, restaurants, hotels) - pushed by the broadcasters
Natural tension between Nielsen and the TV networks

Resistance to LPM roll-out by stations with a vested interest in the admittedly flawed diary system

Separate systems for measuring viewing on the other screens: PC and mobile

TVandPC combined audience to programs viewed on a PC in homes already wired for the People Meter.
Due to start: Sept. 2010
No plans yet to integrate mobile video viewing

Nielsen station index (NSI)

Nielsen’s spot television rating service
Three methodologies

Local People Meter - 25 markets, 50% of US
Meter/Diary in 31 markets (21% US)
Diary only in remaining US (29% US)

Station resistance to the Local People Meter

Don’t want to pay Nielsen more money for smaller numbers
Strong resistance from Fox (claims LPM unfairly reports smaller audience to shows with heavy African-American audience)
Law suit from Univision (claims LPM sample under-represents Hispanic viewers)

Local TV Ratings

Nielsen Station Index
Diary, passive meter

N=250-2500
Universe, penetration, sample size, stations (p. 151)
4 weekly diary surveys combined in a sweep
Replacing with local peoplemeters (p. 157)
Try one! http://diary.tvratings.com/faq_1.htm

Reading the ratings

Ratings and shares
Relative Standard Error = Standard error/estimate
HUTs & PUTs
Age x gender demographics

Pros and Cons of TV as ad investment

Television
Reason to Use:

Sight, sound, and motion for dynamic selling
Flexibility
Reach of both selective and mass markets
Cost-efficiency

Limitations:

High Cost
Low Attention
DVR commercial skipping
Short-lived messages
High commercial loads (clutter)
No catalog value

Pros Cons cont.…

Pros

Closest to the personal selling, may be even better.
Broad national coverage/Spot cable: geographical targetting
Both selective and mass reach
More money but more audience

Cons

High cost
60% report paying full attention; early morning viewers 25%
Commercial skipping
Commercial Noise.
People pay attention only if they are in the market

[IBM 327] Advertising/Sales Promotions Project

Google Docs Link: [IBM 327] Advertising/Sales Promotions Project

Due date: Tuesday, November 20
Presentation Date: Thursday, November 29

Contacts:
Jonathan Fink, PSC Contact
- PASADENASANDWICHCOMPANY@GMAIL.COM
Professor Bryant
- kiko1906@gmail.com

Details:

The paper should be e-mailed to Jonathan Fink at and cc’ed to Professor Bryant.
One hard copy should be submitted to the IBM Office manager at 3pm on 11/20 (Bldg 164 Room 3068).

Overview of Project:
Each group will serve as an Advertising/Sales Promotions Agency bidding for the services of Pasadena Sandwich Company to increase sales in their catering business.

Budget:
Each group will be allocated a budget of $3000/year to be spent at their discretion.

Group Size: (3-5 students)
- Submission of agency name and group members – April 17 (e-mail to Prof. Bryant)

Paper Format:

Minimum page length: 14 page written report (not including graphs)
Name of Advertising/Sales Promotion Agency on cover page along with Bronco ID numbers
Table of Contents – pages must be numbered
Media Objective – 1-2 pages – Overview of the project - introduction of business – desired goals and plan to achieve them and impact on the product category and target audience
Situational Analysis (SWOT Analysis) – 5 pages
Description of product category – What are some industry trends?
Detailed description of target audience and reason for selection.
Positioning Strategy
Identification and description of competitors
Media Strategies - 3 pages
Forms of media that will be used, why they will be used and how they will be used (exclude Sales Promotion techniques)
Sales Promotion Strategy – 3-4 pages
Identify chosen techniques based on the objectives that are to be accomplished
Explain why ……

Your idea/strategy is a good one
The chosen promotion techniques will be effective in reaching the target market
Your ideas are unique and creative
Your proposed ideas are cost effective

Summary of Budget – 1 page
Detailed breakdown of Financials from Situation Analysis
Concept Brief – 1 page
Bibliography

Notes:
A sample project that earned a letter grade of an “A” will be placed in Blackboard in “Course Information.” A template for the “Concept Brief” has also been submitted to Blackboard to be submitted in same format in the paper.

Websites with helpful information:
http://www.csupomona.edu/~library/databases/A-Z.html#B
http://factfinder.census.gov/
www.bls.gov/cex
http://www.congress.org/congressorg/dbq/media

PSC Presentation Details:

PASADENA SANDWICH COMPANY
259 Sierra madre villa, pasadena CA.91107
“CALL WE’LL HAVE ‘EM READY”
626.578.1616
PASADENASANDWICHCOMPANY.COM

STORE HOURS:
Monday – Friday: 9AM-2:30PM
Saturday: 11AM-3PM
Sunday: CLOSED

Business Plan:
PSC Business Plan:
“CHANNELING SALES’ AND PROMOTIONS’ THROUGH SOCIAL MEDIA NETWORKS, PSC AIMS TO INCREASE LOCAL CATERING SALES AND REVENUE WHILE MAINTAINING A TRENDY IMAGE, FRIENDLY EMPOLYEE ATMOSPHERE AND DEDICATED CUSTOMER SERVICE OVER THE NEXT YEAR WITH LONG TERM GOALS AIMED TOWARD BUSINESS EXPANSION”

PSC Mission Statement:
“SERVING QUALITY, FRESH, HOMEMADE FOOD AS FAST AS WE CAN WHILE GIVING THE CUSTOMER SERVICE THAT MAKES YOU FEEL RIGHT AT HOME”

PSC Vision Statement:
“INCREASE CATERING SALES THROUGH MARKETING PROMOTIONS, WHILE MAINTAINING OUR CUSTOMER SATISFACTION AND LOYALTY THROUGH OUR FRIENDLY FAMILY ATMOSPHERE AND HOMEMADE STYLE”

PSC BUSINESS MOTO:
“FRESH FOOD MADE AS FAST AS WE CAN”

Customer relationships & VALUES
PSC Business Values:
“PROVIDING THE COMMUNITY WITH FAMILY-ORIENTED CUSTOMER SERVICE WHERE INDIVIDUALS ARE SERVED ON A FIRST NAME BASIS.” PSC IS PROUD TO BE FAMILY OWNED AND OPERATED SINCE 1995.

FOUNDER STEVE FINK’S CUSTOMER SERVICE MOTTO:
“MAKE ONE CUSTOMER HAPPY AND THEY WILL GLADLY RECOMMEND TEN PEOPLE, BUT UPSET ONE CUSTOMER AND BEWARE THEY SPEAK POORLY OF YOU TO ONE HUNDRED PEOPLE”

PSC Target Market:
DAY-TO-DAY TARGETED CUSTOMERS: VALUE DRIVEN LUNCH SEEKERS OF ALL AGES AND BACKGROUNDS WHO WANT A GREAT ATMOSPHERE AND HAVE A LARGE APPETITE CATERING TARGETED CUSTOMERS: LOCAL, SMALL, AND CORPORATE BUSINESSES AS WELL AS PEOPLE WHO WOULD LIKE CATERING FOR PRIVATE PARTIES & EVENTS

“CUSTOMERS COME FIRST”

MENU AND PRICING:
-HALF-ON-A-WHOLE SANDWICHES
-TRUE-HALF SANDWICHES
-CHILD-SIZED SANDWICHES
-DELIVERY AVAILABLE UPON REQUEST

Menu:

(Also on website: http://pasadenasandwichcompany.com/)

Catering & Specialty Sandwiches:
“PROUDLY SERVING FRESH, HEALTHY CATERING OPTIONS TO ACCOMMODATE CUSTOMER SPECIFICATIONS”

OFFERING:

MINI SANDWICH PLATTERS

STARTING AT $75.00

FRESHLY PREPARED MEAT AND CHEESE PLATTERS

$6.95/PERSON

FRUIT & VEGGIE SKEWERS

$3.95/PERSON

FRUIT& VEGGIE PLATTERS

$3.95/PERSON

ORGINAL PSC POTATO, MACARONI & COLESLAW SALADS

PINT: $4.75

CUSTOMIZED PSC GARDEN SALADS

STARTING AT $3.95/PERSON

CUSTOMIZE YOUR OWN PSC’S ORIGINAL 4’FOOT-LONG SANDWICH

STARTING AT $75.00

BEVERAGES OF YOUR CHOICE

STARTING AT $1.00

“IF YOU CAN DREAM IT … WE CAN MAKE IT”

Marketing Strategies Sales and Promotions

“BIG STEVE SANDWICH” & “STEVE-STYLE”
GIFT CARDS AND APPAREL/MERCHANDISE
PASADENA WEEKLY PERIODICAL PROMOTIONS
ENTERTAINMENT BOOK COUPONS
PASADENA SANDWICH COMPANY WEBSITE
SOCIAL MEDIA REVIEW WEBSITES
COLLEGIATE ATHLETIC SPONSORSHIP PROGRAMS
ACADEMIC SCHOLASTIC SPONSORSHIP CARDS

PASADENA SANDWICH COMPANY IS A PROUD SUPPORTER OF LOCAL COMMUNITY EVENTS

Sales promotion objectives:
DEVELOP SALES PROMOTIONS AIMED TOWARDS PROMOTING PASADENA SANDWICH COMPANY’S SIGNATURE CATERING OPTIONS TO LOCAL PASADENA BUSINESSES AND COMMUNITY MEMBERS FOR PRIVATE EVENTS AND HOME PARTIES.

TARGET BUSINESSES:
SCHOOLS (PASADENA COMMUNITY COLLEGE), MEDICAL OFFICES, PUBLIC ADMINISTRATION OFFICES, CAR DEALERSHIPS, DEPARTMENT STORES, LAW FIRMS & BANKS

BUDGET:
$3,000.00 WILL BE ALLOTED FOR THIS PROJECT

PSC BUSINESS GOAL:

INCREASE SALES THROUGH CATERING

PASADENA SANDWICH COMPANY WANTS YOU
THE PASADENA SANDWICH COMPANY OWNERS LOOK FORWARD TO REVIEWING THE RESULTS OF YOUR RESEARCH AND WILL CHOOSE ONE GROUPS PROMOTION TO BE IMPLEMENTED IN THE UPCOMING CALENDER YEAR.

THE WINNING TEAM WILL BE REWARDED WITH A PASADENA SANDWICH COMPANY GIFT PACK.

SHOW YOUR BRONCO ID AND RECEIVE 20% OFF THROUGH 12/31/12

PLEASE CONTACT JONATHAN FINK IF YOU HAVE ANY FURTHER QUESTIONS
PASADENASANDWICHCOMPANY@GMAIL.COM

THE MANAGEMENT AND STAFF AT PASADENA SANDWICH COMPANY ARE ALL VERY EXCITED TO BE COORDINATING WITH THE SALES AND PROMOTION STUDENTS THIS QUARTER

A SPECIAL THANK YOU TO PROFESSOR BRYANT AND THE IBM 327 SALES AND PROMOTIONS CLASS

PLEASE DO NOT HESITATE TO CONTACT JONATHAN FINK REGARDING ANY QUESTIONS OR CONCERNS

Tuesday, October 9, 2012

[MHR 410] Quizzes & Questions...

Quiz 1: External Analysis

[IBM 327] Sales Promotion

Slides:
Sales Promotion: Introduction and Current Trends

Introduction

Why Such Enormous Growth?

1. Sales promotions produces results – more immediate “bang for buck” than with any of the other marketing activities; big spike in sales in the short term

2. Sales promotion results occur quickly – advertising and public relations viewed as an investment (we may not know when sales occur with the use of both activities); S/P – sales occur in finite period of time – “You have 24 hours..”

3. Sales promotion results are measurable – easy to observe and measure; “most scientific tool in the marketing mix” ; does this make it easier or more difficult for research purposes?

4.Sales promotion is relatively easy and inexpensive to implement - may be less
expensive than other forms of marketing communication such as advertising; may be
much less expensive than producing and airing tv ads to reach same audience especially with rising ad costs
• Are tv ads an efficient way to reach your sales promotion audience? Yes or no and why?

Problems with Sales Promotions

There is a concern that many managers have become to rely too much on sales promotion activities – Why would this be a concern?

1. Many sales promotions are not effective brand- building tools – have little effect on people’s attitudes about the product; unlikely to result in repeat sales in the future – is this true?

2. The overuse of S/P activities may have the potential of resulting in less positive attitudes toward the product – consumers may assume that company is unable to sell it at full price because quality is poor; may occur in certain product categories – financial and legal services or vitamins (common denominator?)

3. Even though many sales promotion programs result in a much larger volume of product sold, profitability increases may be relatively low – occurs when many of the people who would have purchased the product anyway take advantage of the promotional offer; some times consumers only respond to high value
offers
• What is the savings threshold for a sales promotion? Are there sales promotions you do not take advantage of because it is not worth it to you? Give examples.

4. Sales promotion programs often require substantial implementation costs – uneven demand may result in companies incurring the costs of extra production runs or storage costs; sweepstakes or premiums may require substantial planning and may involve risks and mistakes – General Foods (coupon)

5. Sales promotions tend to orient marketing managers toward the short-term – brand building activities may be neglected that would lead to more profits in long term (promotion vs. charitable event) – Is this a problem?

• Due the factors mentioned, there has been expressed interest in reducing the reliance on sales promotion
activities. Unfortunately, cutting back is likely to produce a less than desirable outcome (decreases in
short term sales)

• A more optimal approach is to be more strategic in conjunction with other types of marketing tools in order
to achieve specific goals that will help the product succeed over the long run

• How is business conducted in other countries with regards to price reductions? Do negotiations happen
at the transaction level? What are the pros and cons to doing business in either fashion?

Redefining Sales Promotion’s Role

• Traditional definition – sales promotion gives consumers a short-term incentive to purchase a
product
• This definition falls short on stating why promotions work nor how they affect the brand from an overall
strategic point of view
• The consumer buying process must be examined
• With impulse purchases being the exception, most people do not make snap decisions about what
products they buy
• Sometimes a sales promotion is the reason for the impulse buy

• There are a variety of consideration stages before purchasing: awareness, information gathering,
pre-purchase evaluation, decision making, purchase and post-purchase evaluation
• Advertising and public relations affect awareness, the information gathering and perhaps the
evaluation stages for new products as consumers decide whether they should make a purchase or
not – both can provide reminders for established products
• Personal selling may also affect information- gathering and the decision-making stages of the
buying process – How?
• What does “closing the deal” mean?

• Most types of sales promotions hit directly at the decision-making and purchasing stages of the
buying process
• Offering a coupon for a product a consumer may sometimes use may not change their overall
opinion about that product; it may cause them to purchase when they ordinarily would not do so
• S/P changes behavior by altering the price/value relationship that the product offers; it happens
through lowering the price or adding something of value to the product

• Altering the price/value relationship means that consumers get a better deal and therefore they
have more of a reason to purchase a product; since there are time limitations on promotions,
there is reason for an immediate purchase rather than to wait
• Sales promotions are viewed by some as a necessary evil – although marketers often wish
they could get rid of their promotions or reduce their importance, a mixture of competitive
pressures, consumer expectations, and desire for short-term profit often causes those managers to
keep investing money in sales promotions

• More strategic definition: sales promotions are marketing and communications activities that
change the price/value relationship of a product or service perceived by the target, thereby (1)
generating immediate sales and (2) altering long-term brand value

• This definition recognizes that consumers purchase immediately by lowering the price
(coupons) or by adding value (sweepstakes, contests and loyalty programs)

• The definition takes into consideration the concept of a target audience implying
that promotions should be aimed at a specific group of consumers rather than the
population at large
• Why should a target audience be the focus of a sales promotion?

• Worthwhile segments? Students, elderly…...
• What about Ladies Night?
• It recognizes the role of sales promotion in the area of perceived value (not just a simple
matter of attributes and actual price)
• Most significantly, the new definition addresses the effect sales promotion has on the long term brand value or brand franchise

• Brand franchise determines how likely consumers are to buy a particular product rather than one
of its competitors’ products, all else (price and distribution) being equal – the degree of loyalty
• Stronger brand franchise means customers are less likely to be affected by competitive
promotional activities; retailers are more likely and willing to carry a product and possibly to
accept a lower margin on it because of the demand for the product
• Why would retailers be willing to accept a lower margin on products? What types of products?

• There may be a long term effect on the brand franchise after the sales promotion is over; it may
be positive or negative
• Long term effects can be viewed as negative (too much promotion detracts from long term value
of brand) – soft drinks for instance (frequent discounting has made the “real” price of the product unclear and has taught consumers and retailers to buy on deal)
• Are there places where you would opt not to buy soft drinks? Why?
• Fast food restaurant, movies, grocery store, vending machine, convenience store, etc.

• However, depending on the particular situation and goals, sales promotion may also have a positive long-term effect on the brand and on the residual market value – depends on individual situation, the particular
promotion used and type of customer targeted
• A sample or loyalty program can enhance the brand in the eyes of consumers

Would you offer sales promotions?
• Long term effect – Identify 2 brands on your own and reveal if the effect is positive or negative (or both)
when using S/P techniques below? You decide on the brand and type of product category.
• Coupons (online, offline and instant)
• Loyalty programs
• Refunds/Rebates
• Sweepstakes and Contests
• Through-the-mail premiums
• Sampling programs
• Cause-Related Promotions
• Price Discounts

Planning Sales Promotion Programs
• Sales promotion needs to be evaluated in the context of how it fits into the overall strategy for a particular brand.
• How can a company integrate the decision to offer an online coupon such as a Groupon into its overall strategy?

Who are the Customers we want to Reach?

•Not all customers are alike so consumers should be segmented into groups -companies are able to develop products, packaging, advertising, public relations, or other kinds of activities based on personal characteristics
-The company should target message to those groups
-It makes sense to segment people based on behavior (whether or not they buy the brand or another product in the category, some or all of the time)
-Who wants to reach college students? What types of behaviors do they display?

What are the Reasons for that Behavior?

Just because 2 people act the same way doesn’t necessarily mean that their reasons
for doing so are the same
-Why did you enroll at Cal Poly?
-Why does Costco offer food samples everyday around lunch time and beyond?
-It is important to analyze why consumers behave the way they do; it is the only way to find out how much they can be influenced by a particular sales promotion program

What is the Goal of the Program?
• Different S/P programs are used for different reasons to achieve vastly different ends
• Some promotions are designed to achieve consumer trial – which ones?
• Some may be used to match or preempt competitive activities to keep their loyal customers – which ones?
• Some may be used to induce short sales spikes

Segmenting based on Buyer Behavior
• Brand loyal (generally using one brand) vs. Switchers (alternating between two or more brands)
• Loyal customers may stockpile for future use some or all of the time
• They may be classified as not deal prone – “I am willing to pay full price for it!!!!!” – Under what conditions?
• Switchers may be classified as not deal prone (different needs for different products – some switchers like
variety) or they may let promotions affect their product choices which can result in stockpiling
• Product categories play a huge role as well as space at home (interest in variety or in meeting different needs with different products)

• This model (brand loyal vs. switchers) can help promotion managers to better understand their customers
• Too simplistic to assume that all consumers are or are not deal prone
• Almost all customers are sometimes influenced by some kind of sales promotion
• Consumers will be categorized by their buying behaviors in the category being examined and by what appears to be causing those behaviors

Categories based on Purchase Behavior
Loyal Users of a Brand
Competitive Loyals
Switchers
Price Buyers
Nonusers

• Loyal Users
– Reinforcing Existing Behavior
– Increased Usage
– Cross-Selling

• Competitive Loyals
– Intense Loyals
– Value Buyers
– Habit-Bound Buyers

• Switchers
– Availability
– Value
– Occasion Usage
– Variety

• Price Buyers
• Nonusers
– Price
– Value
– Lack of Need

Loyal Users
• People who buy a particular brand on a more or less consistent basis (someone who usually, but
not necessarily always, buys a particular brand)
• Has become a relative term since fewer consumers are sticking to just one brand – Why is
this happening?
• When addressing this group, the goal is not to change but reinforce this behavior thereby preventing defection and/or increasing customers’ consumption of a brand

Loyal Users – Reinforcing Existing
Behavior
• In very few cases are customers unconditionally loyal (it can be situational)
• Reasons why they are – believe they are buying the best brand, the brand is a good deal, or out of
habit or inertia
• Loyal consumers can be sometimes won over by the competition with a change in price, successful
communication of product value, or the simple breaking of consumer habit
• Companies need to use sales promotions to hold on to their loyal customers

Loyal Users – Increased Usage
• To increase usage among current customers is a good way to improve overall sales
• Can be done by getting customer to purchase when they would not ordinarily do so or to purchase
more of the product than usual with the hope that more would be consumed – (1) gift card to favorite
restaurant or (2) bag of oranges
• Sometimes changes in purchase timing may occur among brand loyals when taking advantage of a
deal – results in stockpiling

• What does McDonalds do to get their customers to buy more?
• Changing purchase timing may be appropriate for a company depending on inventory and manufacturing constraints, the competitive situation, and the financial goals of the brand and company
• How might changing purchase timing negatively affect a company?
• Groupon situation

Loyal Users – Cross Selling
• Another way to capitalize on brand loyals is to attempt to sell related products
• These kinds of cross-selling activities may be encouraged by certain types of sales promotion
programs
• Bundling
• Car dealerships sell cars and………..
• Airline websites sell flights and………
• Laptops are sold along with…………
• Cell phones are sold along with…..

Competitive Loyals
• People who use the product category and who usually buy a competitor’s brand
• There are three kinds: Intense loyals, Value buyers and Habit-bound buyers

Competitive Loyals – Intense loyals
• Consumers may believe that a brand is the best on the market even if it is more
expensive than the others – Whole Foods
• Consumers continue to purchase even though a competitive brand may be less expensive –
Food 4 Less
• What are other reasons why consumers may be loyal to a grocery store other than price?

Competitive Loyals – Value Buyers
• Loyalty is derived from providing the most utility for the cost, even if it is not the best one on the
market
• Private brands (may be just as good as manufacturer’s brand in eyes of consumer, studies show)
• Loyalty can be based on relatively good quality and affordability – Mercedes may be preferred
option if the money was available; Toyota may be acceptable alternative

Habit-bound Buyers
• Consumers may purchase based on habit
• Usually applies to low involvement products or for those consumers who are time-pressed (streamlines
the buying process)
• A simplified decision making model created that eliminates the need for thinking
• What can motivate people to break habits and change brands? Gas station or type of cellphone for instance?
• One question here is how consumers originally went about choosing the brand that they now use out of
what appears to be habit
• It can happen by chance or it can be deliberate (for instance - WOM)

Switchers
• People who purchase a variety of brands within a product category
• May include brand in switching (evoked set) or not
• Those who switch among competitive brands are like competitive loyals in the way they must be
addressed (Pizza Hut wondering why consumers always choose between Papa John’s or Dominoes
for instance)
• Switchers have become a larger part of the population
• Addressing switchers has become an increasingly important aspect of sales promotions -Why?

Switchers - Availability
• Can occur because the favorite brand is not available at retail level and consumers are not willing to look elsewhere – “I will try the private brand then.”
• Even consumers who are intensely brand loyal may become switchers on certain occasions
• How likely are you to stop at your favorite place to eat on a road trip?
• Obviously availability is a distribution problem

Switchers - Value
• Price/value relationship may be used among “acceptable” brands on a shopping trip which leads to the purchase of the best buy
• Prices may vary from day to day or from store to store
• Under what conditions would consumers patronize both Walmart and Target on the same shopping trip? Any cons to doing this?
• Consumers may buy different brands to fulfill the same need
• Even with a brand preference, a competitive option may be chosen if the price is right – Cottonelle over Kleenex for 50 cents less for example

Switchers – Occasion Usage
• Consumers buy different brands within a certain category to fulfill different needs or to be
consumed on different usage occasions
• Do you always go to the matinee or do you go to the movies at night? Do you go to dinner also?
• If consumers consistently use the same brand in spite of the occasion then they are basically brand
loyal (the dynamics appear to be similar)
• “I always eat breakfast at Dennys but it is up in the air as far as dinner is concerned.”

Switchers - Variety
• In some categories and with some consumers, variety is preferred for its own sake –
breakfast cereal, perfume or cologne for instance
• Boredom can be a problem

Price Buyers
• Buying solely on the basis of price
• Purchase of the same brand if it is always the least expensive or if there is a change of price, change of brand occurs – generics or private brands
• Price buyers have little disposable income, can’t afford the expensive brands or see little difference between brands
• Are all table salt the same? Gas?

Price Buyers
• Most advertising and other image-building techniques are designed to alter consumer perceptions thereby removing the commodity image and increasing price that consumers are willing to pay for certain brands
• For most categories, price buyers tend to be a minor but growing percentage of the population in the US
• Price buyers in a category are often heavy users of that category but since they buy so much, it may account for their sensitivity to price

Nonusers
• Consumers who don’t currently use any product in a particular category
• Due to price, value or lack of need
Price – consumers may not be able to afford the product
Value – consumers may believe a certain type of product is overpriced
Lack of need – product will not improve their lives or there is absolutely no need for the product

Summary
• Consumers may behave in different ways for widely divergent reasons
• Identifying these segments can be helpful in a company choosing the right sales promotion
program
• None of these classifications should be considered absolute
• Consumers move in and out of classifications
• General tendencies of the population as a whole should be emphasized and not the individual

• If companies know the dynamics of consumer buying behavior in a particular category at a specific point in time, they can choose the best promotional program to help them achieve their goals

Changes in Behavior
• In terms of consumer characteristics, consumers who are more affluent, educated, and older are more likely to participate in consumer promotions
• Promotions could persuade the majority of consumers to switch in which categories

Pet food
Alcoholic beverages
Shampoo
Automobiles
Motor oil
Personal appliances
Coffee
Batteries
Toothpaste
Floor coverings

Changes in Behavior
Survey Results:
Pet food – No
Alcoholic beverages – No
Shampoo – Yes
Automobiles – No
Motor oil – No
Personal appliances - Yes
Coffee – Yes
Batteries – Yes
Toothpaste – Yes
Floor coverings - No

Wednesday, October 3, 2012

[IBM 443] Slide Summary:Theories of Media Choice

Link

Oct 3rd

Theories of Media Choice 1

u Working theories of media professionals

u Consistent genre preferences

u Dislikes also expressed in terms of genres

u Genres linked to demographics

u Audience flow determines choice

u Least objectionable choice

u Selection of medium is habitual

u After that, select the least objectionable

u Big events may change habits

u Problem: Genres not stable, multimedia, George Clooney

Common misperceptions

• Primary role of media is to “crunch the numbers”

• Media Planners have access to a special computer that spits out media plan recommendations and flowcharts

• All of an agency’s creative thinkers are working in the creative department

• Media’s contribution begins and ends with the media plan

Media: A MESSAGE Delivery System

Media exist primarily to deliver message content – entertainment and information – to a vast audience.

Advertisers find media convenient and relatively inexpensive delivery systems compared to direct mail or other channels that do not carry entertainment and information.

Media planning

Media planning consists of the series of decisions made to answer the question,

“What are the best means of delivering advertisements to prospective purchasers of my brand or service?”

This definition is rather general, but it provides a broad picture of what media planning is all about.

A process

Media planning is a series of decisions that provides the best possible answers to a set of problems.

It is the planner’s recommended way to balance the many tradeoffs within a given budget.

Finding the best solutions to a set of problems represents the main task of planners, and this is what makes media planning such an intellectually challenging activity.

Media plan

When all the questions have been asked and the decisions made, the recommendations and rationales are organized into a written document called a media plan.

The plan, when approved by the advertiser, becomes a blueprint for the selection and use of media.

Once the advertiser has approved the plan, it also serves as a guide for actually purchasing the media.

CHANGING FACE OF Media

Some marketers believe the traditional media forms such as television, newspapers, magazines, and radio are passé.

Tv is still strong

Holiday electronic sales were strong over Black Friday weekend as predicted and measured by several sources including the Consumer Electronic Association (CEA) – particularly strong were LCD TV’s and HDTV’s. This, in addition to strong ratings and more people staying at home in a tough economy, bode well for TV’s strength as a marketing vehicle.

New media is fragmented

Although the Internet as a whole is now accessible to 86% of the US population its fragmentation across thousands of sites makes it costly to deliver advertising to large numbers of people with enough frequency to communicate the message.

Mass media, especially the top rated television programs and large circulation magazines such as People continue to define popular culture in the United States and in the world.

Mass media is still essential

Mass media are essential to create broad awareness of new products/services and to reinforce awareness of existing brands.

But today’s consumers want more information than can be communicated with the traditional media.

Because they expect to get this information from the Internet, marketing plans must consider how this medium, and especially search tools like Google and Bing, will be used to build on the awareness that has been created with mass advertising.

More targeted

Most of the questions about traditional media planning revolved around how media can reach the right persons.

The “right” persons came from broadly aggregated data, such as “women aged 18–49,” or “men aged 25–54.”

Audience fragmentation

Technology has made it economical to deliver content that appeals to smaller groups of people.

Today the average home can receive 119 channels, up from 61 channels in 2000 and Cable television programs, can now be seen in 90% of U.S. HH’s.

This proliferation of viewing choices has significantly eroded the audience to the traditional broadcast networks even though hours of viewing have remained essentially constant.

Balancing comp and coverage

The result of fragmentation is a splintering of the audience among channels whose content may or may not be relevant to advertisers.

For example, marketers of vacation destinations will certainly advertise on the Travel Channel, but the majority of their customers never watch it.

Although the target audience composition of the Travel Channel is very high (just about all the viewers are interested in travel), its coverage is very low – there are a great many travelers who never watch the Travel Channel.

Composition

• The percent of a media vehicle’s audience that is within an advertiser’s target

Coverage

• A definition of a medium’s geographical potential. Very similar to reach, depends on which medium is being used.

CHANGING ROLE OF PLANNERS

As a result of technological advancements and audience fragmentation, the role of media planners has changed in advertising and media agencies.

Today planning has become much more complex and important.

More challenging, creative than ever

Planners must know more about media, which have increased tremendously over the past ten years, and know how the media plan can contribute to the overall marketing plan.

And most important, planners must have an almost intuitive sense of their target’s life so that they can select media that will expose the advertising at the most opportune time.

Average households watch tv >8 hours/day

CAREERS IN MEDIA PLANNING

A media planning career can prepare you for many different roles, including that of a media strategist, media researcher or media director at an agency or client.

Benefits from a career in media

An understanding of marketing and media data and analytics.
An understanding of marketing strategy.
An understanding of the creative process and building of a knowledge base as to what works and what doesn’t
Some great lessons in dealing with others. Everything is either learning, a negotiation, or both.
Learning to prepare an effective written or verbal presentation.

Classes of media

Planners like to separate media into classes as a shorthand for the capabilities and characteristics that derive from their physical form.

Typically, planners identify:

• Traditional Media

• Non-Traditional Media

• Online Media

• Specialized Media

TRADITIONAL MEDIA

Mass media such as newspapers, magazines, radio, and television are especially well suited for delivering advertisements—as well as news, entertainment, and educational content—to a widespread general (or mass) audience.

Planners find mass media valuable because:

(1) Such media are able to deliver large audiences at relatively low costs

(2) They can deliver advertisements to special kinds of audiences who are attracted to each medium’s editorial or programming, and

(3) They tend to develop strong loyalties among audiences who return to their favorite medium with a high degree of regularity.

Over the years, traditional mass media have developed systems and practices that respond directly and efficiently to the marketing needs of advertisers.

They get the bulk of the advertising dollars, and they are the meat and potatoes of media planning. Online and the new digital media are joining them, but, as of now, they have a long way to go before they will replace traditional media.

TELEVISION

Television is the traditional mass medium that most people think of first.

The digital revolution has resulted in a convergence of platforms on which to watch their favorite programs.

While we may still call it television, “video” is a more appropriate term, with the only difference coming from the platform on which it is displayed.

Nielsen refers to the “Three Screens” of video:

• Conventional television

• Streaming video displayed on a computer screen

• Mobile that displays video content on a cell phone

Although there may be little difference to the viewers, there are substantial differences in the way their audiences are measured, and in the way advertising is planned and bought.

AN INTRUSIVE CHARACTER

Broadcast media, such as radio and television, are least sought out by consumers for the advertisements alone.

Broadcast commercials have an intrusive character, breaking into the play or action of a program and compelling some attention to the advertising message.

Whether a viewer will or will not watch a particular commercial is determined more by the ingenuity and value of the message than by an interesting program.

AD AVOIDANCE

As of summer, 2010, 37% of US homes have a DVR, and most viewers skip the commercials of programs they have recorded.

However this negative effect on ad exposure affects primarily scripted high-rated prime time programs, daytime soaps, and late night entertainment.

Very few people record news, sports, most cable channels and syndicated programs.

And even for the highly recorded prime time programs, the impact of DVR’s has been greatly mitigated by the industry shift to the C3 rating which reports the audience to the average commercial minute of a program that is watched at normal speed live or within three days of telecast.

More on C3 in our class on media research.

NEWSPAPERS

Newspapers have news, entertainment, information, and catalog values for their readers.

A newspaper generally has excellent readership of local news editorial and advertising material, serving as a buying guide for readers who are looking for many different kinds of products.

People often check newspaper ads immediately before their regular food shopping day to find the best grocery bargains.

For frequently purchased products, where prices are prominently displayed, newspapers can be a very effective selling medium.

SHIFT TO THE INTERNET

Although newspaper circulation is up 7.4% according to the latest figures (2008 daily circulation: 50.7 million versus 47.2 million in 2000 (Editor & Publisher International Year Book), advertising revenue is down dramatically due to the shift of classified advertising to the Internet.

As of summer, 2009, ad revenue to local newspapers was 12.0 billion down 2% from$12.2 billion in 2000 (source: Nielsen Monitor-Plus).

Newspapers remain viable

Flat revenue after ten years of rising costs has forced bankruptcies, editorial staff cutbacks, reduced publishing days and other problems.

Despite this, newspapers remain a viable media option that continues to offer good value to advertisers.

Question

What are the top two categories of marketers according to spending in Newspaper advertising?

Answer: Retail, Auto

MAGAZINES

Newspapers are relatively untargeted mass media. Magazines, on the other hand, are much more selective in their ability to target advertising exposure.

Some, such as fashion, home and special interest publications, are bought as much for their advertising as for their editorial matter.

Other more general interest publications, such as newsweeklies, personality and sports magazines, appeal to readers who are looking for interesting articles and stories rather than product information

Example of magazine categories

Women’s Service/Lifestyle

> Broad coverage of women’s issues

• Family Circle, Ladies Home Journal, Woman’s Day, Oprah

Fitness/Health

> Focuses on body image, health, diet, exercise, etc.

• Fitness, Shape, Self, Health, Prevention

Epicurean

> Highlights cooking, leisure, travel, entertaining, etc

• Bon Apetit, Gourmet, Cooking Light

Sunday Supplements

> Timely topics covered

• Parade, USA Weekend, American Profile

Question

What are the top five magazines according to circulation?

Answer: People, Better Homes & Gardens, Readers Digest, AARP, National Geographic

Out of home

• Billboards are oldest form of traditional media.

• Reach consumers before they enter a retail store,

• Provide reminder advertising

• Proven to create broad immediate brand awareness of new products.

Measurement

The medium has long suffered from inadequate measurement.

The Traffic Audit Bureau, using GPS technology, aims to replace the old traffic count with modern measurement that they hope will allow the medium to be planned in a way similar to broadcast

WHAT’S OUT THERE?

Posters (30 sheet, 8 sheet), Painted Bulletins

Transit: Bus/Bus Terminals, Commuter Rail, Subways

Street: Phone Kiosks, Taxis, Painted Walls

Aerial: Sky Writing, Sleeve Towing, Blimps

NON-TRADITIONAL MEDIA

Traditional mass media all engage in one-way communication—from the source to the viewer/listener/reader.

Almost any other innovative way of delivering ad messages to consumers is considered a nontraditional medium.

The most commonly used non-traditional media include television screens in airport waiting areas, elevators, the top of gas pumps, in doctor’s offices, and any other place where a video screen will display content to the public.

Non-traditional media also include

posters in health-clubs, signage on a golf course, banners at public events. Other locations, public restrooms, the floor of grocery stores

Difficult to evaluate

There are measurements but not continuous.

Sponsored measurements so bit less objective

ONLINE MEDIA

The proliferation of online media options in the last ten years justifies its own classification.

It includes any communications medium where there is a real-time interaction between the user and the content producer via the Internet.

Online media content is accessed with a web browser or device functioning as a web browser.

So this includes conventional websites viewed on a personal computer, streaming video, social media such as Facebook or Linked-In, Search Engine Marketing (SEM) with Google, BING, etc., and web-enabled cell phones.

41% of U.S. internet Population has visited a social networking site

same as for traditional media,

two schools : integrated vs specialized

Integrated ONLINE MEDIA

Simply another medium to be planned by the traditional media planning group.

The downside of this approach is that online media and measurement tools change so rapidly that it takes full-time involvement to stay current. In the online world, six months is a long time.

Separate ONLINE MEDIA

Create a separate online

Outsource the planning

SPECIALIZED MEDIA

Special-interest consumer magazines appeal to specific reader interests such as skiing, money management, photography, or antiques.

Niche media: These magazines are read as much for their advertising as they are for their editorial content.

B2B

A large category also exists to meet the specialized needs. (physicians, wholesalers etc)

These media take the form of publications that contain editorial matter pertaining to the specialized market, but they also include

trade shows, convention exhibits, cassette tapes.

Other specialized media:

handbills, direct mail, car cards that appear on buses or trucks, free-standing inserts in newspapers (FSI).

Another specialized medium is the catalog.

not looked at with the same frequency as are mass media

Serve as shopping guides

One form of catalog is the telephone book

Plumbers, for example, might justifiably use telephone book advertising exclusively, because plumbers are not usually called until an emergency arises.

On such occasions, the consumer will search ads in the Yellow Pages to find a plumber but probably will not notice such ads at any other time.

The rise of the Internet and sources such as Craig’s List have severely impacted the Yellow Pages and newspaper classified advertising.

PRINCIPLES FOR VEHICLE SELECTION

Trade of between largest audience reach & cost

It’s media planner’s responsibility to find a medium

With an optimum amount of frequency (or repetition)
At the lowest cost per thousand prospects reached (cost efficiency)
With a minimum of waste (or nonprospects), and
Within a specified budget

* Of all the media decisions, one of the most important is selecting individual vehicles. Planners tend to select one or more vehicles that effectively reach an optimum number of prospects:

Audience Measurement for each medium

u National TV:

u people’s meter (w/ 5,000 homes)

u Nielsen Media Research

u Who, what, how long, when

u Local TV:

u Diary in all 210 DMAs (Designated Market Areas, “TV markets”)

u Diary + meter in top 53 DMAs

u Arbitron and Nielsen

u DMAs: a group of counties that get the majority of their TV viewing from the same home market. (e.g., Baltimore DMA)

u Radio:

u Diary in 270 radio markets

u Arbitron PPM (portable people meter)

u Magazines

u Recent-reading techniques w/ in-person interview and a long questionnaire about their product use

u Mediamark Research Inc. (MRI)

u Newspapers

u Yesterday reading (“Which NP did you read yesterday?” --- typically use circulation figures)

u ABC: Audit Bureau of Circulation

u Audits and reports the circulation of various publications

u Internet

u Use national sample of 60,000 respondents

u Measure the number of visitors, how long people stay in each page, how far they go, how many times they return

u Nielsen/NetRatings

u ComScore

u Out-of-Home

u the number of cars passing each billboard on the average day (“daily circulation”)

u Traffic Audit Bureau

MEASUREMENT BASICS

u Ratings

u Represents an estimate of the audience that has viewed a program or has tuned in to a program during a specific time period

u Percentage of TV households viewed a particular TV show or radio program

u HUT (Households using Television)

u The total percentage of homes in a market that are watching television at a given point

u Number of HUT will be the same throughout a day?

u Share: The percentage of HUT (TV using homes) tuned to a particular program

u more accurate picture for TV viewing audience data?

u rating is the major criteria that the advertising and broadcasting industries use in most cases.

Determining Relative Cost of Media-Print

Cost per thousand (Cost per Mille CPM)

* An important decision in the development of the media strategy is estimating the relative cost of advertising in various media. The overall objective of the advertiser is to deliver the message to the target audience at the lowest rate with the least waste. This slide shows how the cost of print media is calculated. CPM refers to cost per thousand people reached and is calculated for print media such as magazines by dividing the cost of the ad space by the circulation and multiplying this amount by 1000.

Determining Relative Cost of Broadcast

Cost per thousand (Cost per Mille CPM)

MEDIA MATH BASICS

Media requires strong basic math skills and an understanding of the following concepts:

Reach
Frequency
GRP’s
Impressions

REACH

Reach is the percentage of the target audience exposed to your message at least once

Reach can NEVER be over 100% (usually tops out at 97% or less depending on media used)

FREQUENCY

Frequency is the average number of times a person is exposed to the message

Reach and Frequency

A. Reach of One Program

Total market audience reached

B. Reach of Two Programs

C. Duplicated Reach of Both

D. Unduplicated Reach of Both

*Summary Overview

Since advertisers have budget constraints they are forced to make trade offs between reach and frequency. They must decide if they want the message seen and heard by more people (reach) or by fewer people more often (frequency). This slide shows a representation of various concepts associate with reach and frequency.

Reach of One Program – total audience reached by one program
Reach of Two Programs – total audience reached by two programs (including duplicated reach)
Duplicated Reach of Both – duplicated reach only (those that were exposed more than once)
Unduplicated Reach of Both – total reach less duplication (exposed only once)

Unduplicated reach indicates potential new exposures, while duplicated reach provides an estimate of frequency. Most media schedules consider both reach and frequency.

GROSS RATING POINTS (GRP’S)

• The basic measure of media weight

• A rating point represents the % of a target audience reached by a single commercial or issue of a publication

• GRPs or Gross Rating Points are the simple addition of all rating points in a media schedule

• People watch more than one show

• Exposed to spots multiple times,

• GRPs can, and usually do, exceed 100

Important to Know - GRPs are expressed as whole numbers….but they really are percentages

1 GRP = .01

10 GRPs = .10

100 GRPs = 1.00, or 1

Formulas

Reach, Frequency and GRP’s are all interrelated

• Reach x Frequency = GRP’s

• Frequency = GRP’s/Reach

•

Reach = GRP’s/Frequency

Helpful visual

• GRPs = Reach times Frequency

• Frequency = GRP’s over Reach

• Reach = GRP’s over Frequency

GRPs also may be expressed as a media vehicle’s rating multiplied by the number of commercial units airing in that vehicle

GRPs = Rating % X number of units

M18-34 rating for SportsCenter on ESPN is 1.8

Purchase 4 units in this program

Total M18-34 TRPs are 7.2 or 7 rounded

Impressions

An impression is a single potential exposure of a member of the target audience to your ad message

That is, it is an expression of the number of pairs of eyeballs--or in the case of radio, ears--that will be exposed to the media vehicle

While GRPs are represented as percentages, impressions represent numbers of exposures.

Impressions are numbers of people, not percentages

Media buyers negotiate pricing based on impressions

Media buyers project the number of targeted impressions a media vehicle will deliver and determine the cost they are willing to pay per targeted impression (expressed in thousands)

[cost]/[impressions] = [$500,000]/[8,835] = $56.59

This calculation is a Cost Per Thousand or CPM

IMPRESSIONS EXPRESSED AS GRP’S

Rather than reporting that a spot on American Idol will deliver a mind-boggling 9,425,000 Women 25-54 impressions, we would say that American Idol has a 15.0 Women 25-54 rating.

[Impressions]/[W25-54 (Target) Population] = [9,425,000]/ [62,850,000] = 15% or 15 rating

For a single telecast, the rating equals the TRPs. For multiple telecasts, TRPs equal the sum of the ratings for each telecast.

Two spots on this program will deliver a total of 18,850,000 W25-54 gross impressions, or 30 W25-54 TRPs.

Remember: TRPs represent the total (weekly, monthly, campaign) impressions delivered by a media vehicle, expressed as a percent of the population.

Another formula

GRPs x Total Target Population = Impressions

100

GRPs = Impressions X 100

Total Target

Population

“Coverage”

u Number of prospects delivered by a given medium.

u problematic, and confusing term since “coverage” means different things for different media forms

u Expressed as a percentage of a market population reached by a given medium

u Magazine

u The number of prospects who read a publication divided by the size of a target market

u Target market: women aged 35-49 (25 million)

u Readers of Magazine A (2.5 million)

u Magazine A’s coverage will be 2.5/25x100=10%

u High coverage vs. low composition: can be waste of $

u Magazine Example: 100 college students preparing graduate schools

u Towson Univ: 65 college students (high coverage)

u Only 10 students are interested in graduate studies (low composition)

u Newspaper

u Number of circulation figures as a percentage of the number of households in an area.

u Newspaper coverage represents potential audience than actual exposure (readers).

u NP coverage level should be at least 50% in local market for media planning.

u Local TV and Radio

u The number of homes with radio/TV sets within the signal area of a given station.

u All households that can receive a broadcast signal are NOT necessarily tuned to a specific radio or TV station.

u Network TV coverage:

u Not that important since “rating” is a major criteria.

u Cable TV coverage:

u a percentage of U.S. households that can receive a cable network by any means.

u Internet Coverage:

u All members of U.S. households that have access to the Internet at home, work, or college.

u Out-of-Home Media Coverage:

u percentage of the population that passes one or more of these out-of-home media in a given period of time.

u 100 showing: giving everybody in a target market a chance to see the ad. However, this doesn’t mean that every single person in a market viewed the ad. GRP is a duplicated number.

Media math review

Reach = % of universe reached at least once

Frequency = average number of times reached

GRPs = the simple addition of all the ratings in a schedule

Impressions = total number of advertising exposures

CPM = cost to deliver 1,000 impressions

Useful link

http://www.thecab.tv/php/mediaCalc/index.php?id=cab

Useful links

Adweek.com

http://www.mediabuyerplanner.com/

Careers in Media Research

Nielsen Media Research

Nielsen Netratings

Arbitron

comScore

MediaMark Research Inc.

Claritas

Information Resources Inc. (IRI)

Simmons Market Research Bureau

Nielsen Entertainment

Questions

Frequency is defined as the number of times a member of the target audience is exposed to the :

A) Message

B) Media vehicle

C) Source

“Duplicated reach” means the same person has been exposed to more than one:

A) Message

B) Advert

C) Vehicle

D) Medium

If an ad promoting the latest Brad Pitt movie is placed on two televison shows, the total number of people exposed to the ad once is called:

A) Duplicated frequency

B) Duplicated reach

C) Unduplicated reach

D) Effective frequency

E) Overlapping coverage

Which of the following products will need to maximize reach, particularly unduplicated reach, to create awareness for the product in as many people as possible:

A) Tide detergent

B) Chanel 5 perfume

C) Bounty paper towels

D) Strawberry-flavored Jell-O

E) Band-Aid liquid bandages, a new product

Media Scheduling

Reach continued…

• Measurement of audience accumulation

• Audience is counted only once.

• Measured after exposure, usually not estimation

• Reach vs Rating and GRPs

• GRPs can exceed 100% Reach can’t

• Persuasion or Awareness may take more than one exposure

• Unfair to compare apple with oranges. One week broadcasting rating with the reach of a monthly issue of a magazine.

Difference between Reach and Frequency

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Duplication of Impressions

u GRPs and GI allow for the duplication of impressions

u Someone might see more than one ad in your schedule

u Ex. Survivor and X-Files

u Ex. multiple episodes of X-Files

u Ex. multiple ads in a single show

Reach and Frequency

GRPs = Viewers Counted Once X Average Number of Times They View

GRPs = Reach X Frequency

Reach is net unduplicated audience

Frequency is average number of exposures

Combining Reach and Frequency Goals

Reach of an audience is not sufficient measure of an advertising’s schedule’s strength.

For anyone to be considered part of the reached audience, he or she must have been exposed more than once.

This theory combines reach and frequency elements into one factor known as effective frequency.

The Concept of Effective Reach

u How often does the target audience have an opportunity to be exposed?

u Effective reach is based on the idea that an advertising schedule is effective only if it does not reach members of target audience too few or too many times

Three Scheduling Methods

*Relation to text
This material relates to material on pp. 314-316 and Figure 10-16 of the text.

Summary Overview
The primary objective of media scheduling is to time advertising efforts so that they will coincide with the highest potential buying periods. This slide shows the three scheduling methods available to the media planner:

Continuity – continuous pattern of advertising; every day, every week, or every month

Flighting – intermittent periods of advertising and no advertising

Pulsing – combination of the first two; continuity is maintained but at certain periods advertising is increased.

Use of this slide
This slide can be used to explain the various scheduling options available to the advertiser. The optimal scheduling schedule can be affected by buying cycles.

A continuity schedule can be appropriate with food products, household products and products consumed on an ongoing basis.

A flighting schedule is well suited to seasonal or other products that are consumed mostly during certain time periods.

A pulsing schedule may be used for products that have little sales variation from period to period, but might see some increase in certain times such as cold beverages in the hot summer months.

Scheduling Methods

Continuous: an equal number of ad dollars are invested throughout the campaign

Flighting: expenditures are varied and even stopped at intervals. Meaning zero expenditures in some months.

Pulsing: some advertising is used during every period of the campaign, but the amount of advertising varies from period to period.

Effective Reach in Advertising Practice

u 3-10 exposures during a media-planning period (typically 4 weeks)

u Using multiple media

u Subjective factors must be considered

Reach, Frequency, and Continuity Relationships with a Fixed Budget

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Index Number

• Standardized way of looking at the likelihood of purchase at specific segments

• Average is 100, above means more likelihood, below means less

• Makes comparisons easier.

Percentage of users in a demographic segment

Index Number= _______________________________________________ X 100

Percentage of population in the same segment

Understanding the Market Selection and Weighting Process

Category Development index

Category Development Index is similar to the BDI, except that it is based on the percentage of sales of a product category, rather than a brand, in a given market

Brand and Category Analysis

*Category Development Index (CDI) which is another index that can be useful to marketers in determining where to allocate the media budget. It is computed in a manner similar to the BDI index, except that it uses information regarding the overall product category rather than for specific brands. This index uses the ratio of the following variables:

Percentage of the total product category sales in a given market

Percentage of total U.S. population in the given market

By performing the mathematical calculation shown on the slide, the advertiser is able to determine the potential for development of the total product category in a given area.

Use of this slide
This slide can be used to explain the Category Development Index. When this information is combined with the BDI, a much more insightful promotional strategy may be developed. Beginning with the CDI, the marketer can first look at how well the product category does in a specific market area. Then a brand analysis would follow to see how well the brand is doing relative to its competitors. Together this information provides a clearer picture of where to allocate the media budget.

Understanding the Market Selection and Weighting Process

Brand Development index

This index measures the number of cases, units, or dollar volume of a brand sold per 1,000 population.

The BDI is representing sales potential.

The larger the sales in a market relative to population percentage, the higher the BDI in that market.

* Relation to text
This slide relates to the material on pp. 310-311 and Figures 10-10 and 10-11 of the text.

Summary Overview
Key questions to be answered in the market analysis stage are to whom shall we advertise, where (geographically) and when should we advertise and should we focus our efforts? There are several indices available to marketers to assist in answering these questions. One of these is the Brand Development Index (BDI) which is shown on this slide. It assists marketers in answering the question as to where to allocate the media budget. The index uses the ratio of the following variables:

Percentage of the brand to total U.S. sales in a given market

Percentage of total U.S. population in the given market

By performing the mathematical calculations on the slide the advertiser would be able to determine the sales potential for the brand in that market area. The higher the BDI number the greater the potential that exists in a particular market.

Use of this slide
This slide can be used to explain the Brand Development Index. This index helps marketers factor the rate of product usage by geographic area into the decision of where to allocate their media budget.

Brand and Category Analysis

	High BDI	Low BDI
High CDI	High market share Good market potential	Low market share Good market potential
Low CDI	High market share Monitor for sales decline	*Low market share* *Poor market potential*

Relation to text
This slide relates to material on pp. 310-312 and Figure 10-12 of the text.

Summary Overview
This slide summarizes the use of the BDI and CDI indices as relates to market potential and market share. As the chart shows, high BDI and CDI means there is greater market share and greater market potential. The lower these two indices are, the lower the market potential. Knowing this information helps marketers decide where their ad dollars should be spent to achieve the desired outcome.

Use of this slide
This slide can be used to further explain the use of the BDI and CDI indices. The following slide provides more details regarding the implications of these indices.

	High BDI	Low BDI
High CDI	The market usually represents good sales potential for both the product and the brand.	The product category shows high potential but the brand isn’t doing well; the reason should be determined.
Low CDI	The category isn’t 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.*

*Relation to text
This slide relates to material on pp. 310-312 and Figure 10-12 of the text.

Summary Overview
This slide provides further insight into some of the inferences based on BDI and CDI data for a given geographic area. Some inferences regarding the market potential for the brand and the category are:

High BDI/High CDI – good sales potential for brand and product category

Low BDI/High CDI – category has high potential, but brand isn’t doing well; determine why

High BDI/Low CDI – category is not doing well, but brand is; may be a good market in which to advertise

Low BDI/Low CDI – both category and brand are not doing well, not a good market in which to advertise

Use of slide
This slide can be used to further explain the use of the BDI and CDI data. Knowing this information helps marketers decide where their advertising dollars should be spent to achieve the most impact.

question

Who would you target if you were the media planner on the Six Flags Great America account?

How to read the mri report

There are 223.6 million adults in the US.

48.6 million adults went to a theme park in the last year

22% of adults went to a theme park (48,618/223,555)

There are 108 million adult men in the US.

48.3% of adults are men.

22.6 million men went to a theme park last year.

46.5% of theme park visitors are men (22,627/48,618)

21.0% of men went to a theme park (22,627/107,966)

Theme park visitors are 4% less likely to be men than the average adult. (21.0/21.7, also 46.5/48.3)

12.7% of all adults are age 18-24 (28,431/223,555)

17.8% of theme park visitors are age 18-24 (8,658/48,618).

21.7% of all adults visited a theme park (48,618/223,555)

30.5% of adults 18-24 visited a theme park (8,658/28,431).

Theme park visitors are 40% more likely to be age 18-24 than the average adult (30.5/21.7 also 17.8/12.7)

Theme park visitors are 72% less likely than average to be age 65+.

Things to consider

MEDIA PLANNING TARGET

• For broadcast, base on demographics (usually age/sex) of product users closest to marketing plan target

• Magazine planning target can be custom defined product users.

RELEVANT PRODUCT CATEGORIES

• May have to create your own

• How is the question asked? What units?

• Timing - was the product in broad distribution when survey was in the field?

TARGET AUDIENCE SIZE

• Small enough to be focused but large enough to be important

• Covers substantial volume or opportunity

• Sample size - at least 50 (no asterisks)

DEMOGRAPHIC SKEWS

• Look for patterns (best seen in heaviest users)

• Index over 110 or under 90

• Consistent picture across demographics

• Consistent with other research

Pages

Thursday, October 18, 2012

[IBM 443] Consumer Magazines

[MHR 410] Exam 1

Tuesday, October 16, 2012

[MHR 410] Value Chain Analysis

Saturday, October 13, 2012

[MHR 410] The Five Generic Competitive Strategies

[MHR 410] International Strategy

[MHR 410] Internal Strategy

[MHR 410] External Analysis

Friday, October 12, 2012