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Ashesi University COURSE TITLE : NEW PRODUCT DEVELOPMENT SEMESTER : SPRING 2016 MODULE 9 : Strategic Launch Planning and Implementation Learning Goals • Build skills in making strategic decisions of targeting, positioning and branding of new product for launch. • Design tactical plan covering the entire marketing mix for new product launch. • Develop a comprehensive launch plan/marketing plan/marketing programme/business plan The Phases of the New Products Process 2-3 Launch 16-4 Strategic Launh Plan “ … a coordinated set of strategies and tactics for introducing a product to a target market.” (Guiltinan 1999) A launch plan involves identifying target markets, establishing marketing mix roles, forecasting financial outcomes and controlling the project Strategic Givens Corporate, some team decisions made earlier. Often found in the PIC Guidelines. • A specified gross margin: affects funding. • Speed-to-market: affects promotional outlays and schedules. • Commitment to a given channel: affects distribution plan. • Advertising policy: affects promotion decisions. • Pricing policy: affects decision to use penetration or skimming pricing (slide down demand curve). 16-6 Revision of PIC Goals • Customer Acceptance Goals – – – – Use Satisfaction Sales Market Share • Financial Performance Goals – Cash-to-cash (Time to break even) – Margins – IRR, ROI • Product Level Performance Goals – – – – Cost Time to Market Performance Quality • Other – Competitive Effect – Image Change – Morale Change 16-7 Strategic Platform Decisions • • • • • • • • Permanence Aggressiveness Type of Demand Sought Competitive Advantage Product Line Replacement Competitive Relationship Scope of Market Entry Image 16-8 Permanence • Strategic options: Three types – Permanent, stand-alone. – Permanent, but as a bridge to other items — e.g., platform strategy. – Temporary: Given firms’ tendency to develop streams of products, more and more new products are actually only temporary (examples: cereals or snacks tied to recent children’s movies or TV shows). 16-9 Type of Demand Sought • Primary demand: for new-to-the-world product • Replacement demand: for a product improvement or upgrade (new computer chip, new compact car) • Selective demand: for an entry into an established market. 16-10 Product Line Replacement Strategies Butt-on product replacement Low-season switch High-season switch Roll-in, roll-out Downgrading Splitting channels The existing one is simply dropped when the new one is announced. Example: Ford's marketing of Mondeo and dropping of Sierra. Same as butt-on, but arranging the switch at a low point between seasons. Tour companies use this switch when they develop their new catalogs. Same as butt-on, but arranging the new item at the top of a season. Example: Polaroid used this strategy often, putting new replacement items out during the Christmas season. Another version of butt-on, but arranged by a sequence of market segments. Mercedes introduced its C series country by country. Keeping the earlier product along side the new, but with decreased support. Example: The 386 chip stayed along side the 486, until the Pentium was introduced. Putting the new item in a different channel or diverting the existing product into another channel. Example: Old electronic products often end up in discounter channels. 16-11 Scope of Market Entry This is not test marketing. This is launch. All forces in place and working. • Roll out slowly — checking product, trade and service capabilities, manufacturing fulfillment, promotion communication, etc. • Roll out moderately, but go to full market as soon as volume success seems assured. • Roll out rapidly — full commitment to total market, restricted only by capacity. 16-12 Some Other Strategic Platform Decisions • Aggressiveness (aggressive versus cautious attitude at entry) • Type of demand sought (primary versus selective) • Competitive advantage sought (differentiation, price leadership, or both) • Competitive relationship (aim at a competitor, avoid a competitor) • Image (create a new image, tweak an existing image, use the already-existing image) 16-13 Strategic Action/Driving Decisions Target Market • Positioning • Branding • Packaging • 16-14 The Target Market Decision Target Market : A group of people for whom a firm creates and maintains a marketing mix that specifically fits the needs and preferences of that group How do you the group? 16-15 WHAT IS A MARKET? A market consists of the prospective buyers (individuals or organizations) willing and able to purchase the existing or potential offering (product or service) of an organization. WHAT IS A MARKET? Implications for marketers: Buyers Focus on buyers, not products or services. Effective Demand Exchanges cannot occur unless buyers are able and willing to purchase a product or service. Offerings Purchases consist of offerings, not products or services, due to the values or benefits that buyers derive from them. MARKET SEGMENTATION Market Segmentation A technique that involves breaking down or building up of potential buyers into groups, which are called market segments. Each segment possesses a homogeneous characteristic that relates to its purchasing behavior and response to a marketing program. Market segmentation arose because an organization “cannot be all things to all people.” Information technology and flexible manufacturing and service delivery systems can create “segments of one.” BASES FOR MARKET SEGMENTATION Consumers Socioeconomic Characteristics Behavioral Variables Industrial Buyers Socioeconomic Characteristics • Gender • Benefits Sought • Company Size • Age • Usage • Location • Occupation • Lifestyle • Industry • Income • Attitudes • Customers Served • Family Life Cycle • Education • Location Behavioral Variables • Purchasing Objectives • Product Benefits REQUIREMENTS FOR EFFECTIVE MARKET SEGMENTATION Need to answer six buyer-related questions: Who are they? What do they want to buy? How do they want to buy? When do they want to buy? Where do they want to buy? Why do they want to buy? REQUIREMENTS FOR EFFECTIVE MARKET SEGMENTATION Each market segment should be: Measurable Differentiable Accessible Substantial MARKET TARGETING Market Targeting: The process of evaluating each segment’s attractiveness and selecting one or more segments to enter • • • • Factors Segment size and growth Segment structural attractiveness Company objectives and resources MARKET TARGETING Two market targeting approaches: Differentiated Marketing Concentrated Marketing Simultaneously pursues several different market segments with a unique marketing strategy for each segment. Focuses on a single market segment, sometimes marketing one product to one segment. Manages multiple products across multiple market segments, which increases marketing expenditures. More commonly, offers one or more product lines to a single market segment. Provides operating economies. Limits growth opportunities if the segment size declines. Factors Affecting Diffusion of Innovation Characteristics of Products also affects rate of diffusion: Derived from classic Rogers model of diffusion 1. Differential advantage : functional as well psychological e.g. Blackberry and I Phone 2. Innovation Compatibility with values, experiences, lifestyles and behaviours e.g. mobile phones, iPod 3. Complexity: Products that difficult to understand or use may take longer to be adopted. 4. Divisibility : Refers to the degree to which the product can be tried on a limited basis. 5. Communicability : Benefits and application of the innovation can be readily observed or described to target customers. Diffusion of Innovation and Target Diffusion of Innovation Process and Targeting Diffusion of Innovation Process: How a new product spreads through a market over time. • • • • • Innovators 2.5% Early adopters 13.5% Early majority 34% Late majority 34% Laggards or non adopters 16% NB: Target innovators/early adopters very early in the launch. They tend to be opinion leaders. Another View of Diffusion: Crossing the Chasm • Two adopter groups: – Visionaries (innovators and early adopters) – Pragmatists (all later categories) • The two groups differ in their expectations of the new products. • Pragmatists do not use visionaries as their opinion leaders. • Visionaries might snap up a cool new cell phone while pragmatists may just be looking for something that works well and is not too expensive. 16-26 Crossing the Chasm • A value proposition may attract the visionaries but may never get acceptance in the mass market • To “cross the chasm,” the firm needs to develop a value proposition that works for pragmatists and to develop a launch strategy that is designed to reach pragmatists. 16-27 The Product Positioning Decision Positioning : Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers • E.g. E.g. Volvo perceived as car that provides safety; Mercedes Benz seen as a premium quality brand used by successful and rich people. Rolex watch positioned as trophy for rare achievement 16-28 Product Positioning vrs Market type decisions Existing Market New Market Resegmented Market 1. Differentiation along existing standards Use attributes, distribution channels and services 2. Credibility Capitalize of vision of business and passion of customers Think (1) change (2) contribution Identify a need or want gap Satisfy it by providing added value or innovation Strategies: 1. Niche 2. Low cost provider Four Principles of Positioning Strategy • Must establish position for firm or product in minds of customers • Position should be distinctive, providing one simple, consistent message • Position must set firm/product apart from competitors • A company cannot be all things to all people— must focus its efforts but must be relevant to the target market. Product Positioning Statement Positioning Statement: Statement of the product positioning in the market. It states the product’s membership in a category and then shows its point-of-difference from other members of the category. Positioning Statement “Only Beacon Books inspires and equips me to discover and exploit the gem in my life” 16-31 Developing Product Positioning • Who are we targeting or whose problem are trying to solve? • What is their problem or what need do they want us to satisfy? • How are we meeting this need in an unique way? 16-32 How Do We Make the Claim? 1. Product Attributes : • Can be stated as one or more features (what it is). • Can be stated as a function (how it works). • Can be stated as one or more benefits (how the user gains) 2. Surrogate or Attributes outside of the Product • Can be stated as a surrogate (no features, functions, benefits). 16-33 Product Positioning Options Position to an Attribute • Feature: A dog food that has “as much protein as ten pounds of sirloin.” • Function: BMW “ The Ultimate Driving Machine” • Benefit: A new toothpaste “saves you money” Position on a Surrogate • Nonpareil: Jaguar cars, Perrier water. • Parentage: A Chanel perfume, a Disney movie, a Ralph Lauren designer suit. • Manufacture: Budweiser (beechwood aging), Audi (renowned engineering). • Target: Airlines designed for the business traveler, Vector tires for use on wet roads. • Rank: Hertz, Blue Cross/Blue Shield, and others who claim to be No. 1. • Endorsement: Doctor recommendation, celebrity spokesperson. • Experience: Stress long use by satisfied customers (Nuprin, Yellow Pages). • Competitor: USPS Express Mail and some Kia autos are just like competitors but cheaper. • Predecessor: You liked Hershey’s Kisses so you will also like Hugs. 16-34 Sound Positioning Strategy • Desirability criteria (consumer perspective) – Personally relevant – Distinctive and superior – Believable and credible • Deliverability criteria (firm perspective) – – – – Feasible : Can the firm create the POD? Profitable Communicable Sustainable: Pre-emptive, defensible, and difficult 3.35 to attack Branding Decisions • Choosing Brand Elements and Names • Trademarks and Registrations • Building Brand Equity 16-36 Brands vs. Products A brand is a product or service that has a unique identity. It may have a unique name, logo, design and packaging. It is more than an undifferentiated commodity , product or service Examples: Coca Cola, Nokia, Mercedes Benz, Toyota etc. The Brand “The sum of all characteristics, tangible and intangible, that make the offer unique.” Brand Name Coca-Cola Brand Logo Bottle Design and Red Cap Trademark ™ Legally Protected Marks Brands and organizations spend considerable sums telling customers what they stand for. Branding • Branding is the process by which companies distinguish their product offerings from the competitor. • It is the process of designing, planning and communicating the name and the identity, in order to build or manage the reputation of a brand Brand Elements Brand elements collectively differentiate and distinguish of brand or product from others . – Brand names – URLs (Uniform Resource Locators) also referred to as domain names; means specific locations on the Web. – Logos and symbols – Characters – Slogans – Packaging 4.40 Criteria for Choosing Brand Elements • • • • • • Memorability Meaningfulness Likability Transferability Adaptability Protectability Marketer’s offensive strategy and build brand equity Defensive role for leveraging and maintaining brand equity 4.41 Brand Naming Guidelines • Brand awareness – Simplicity and ease of pronunciation and spelling – Familiarity and meaningfulness – Differentiated, distinctive, and uniqueness to improve recognition. • Brand associations – The explicit and implicit meanings consumers extract from it are important. In particular, the brand name can reinforce an important attribute or benefit association 4.42 that makes up its product positioning. Brand Naming Guidelines Selecting a brand name is crucial part of the brand the marketing planning process: Desirable Qualities for a brand name 1. 2. 3. 4. 5. 6. 7. Suggest something about product benefits e.g. Kleenex (tissue paper) Easy to pronounce, recognize or remember e.g. Dove (soap), Yale (security products), Shell The brand name should be distinctive e.g. Virgin, Kodak It should translate easily (and meaningfully) into foreign languages It should be capable of registration and legal protection e.g. Miller Brewery Company not allowed to use “Lite” exclusively for its lowcalorie beer Evoke positive associations e.g. Pepsi Max, Lexus Use of numerals or alphanumerics when emphasizing technology e.g. Audi A 4, Airbus 380 etc. • • • • • • • • Questions and Guidelines in Brand Name Selection Assess the role or purpose of the brand. If the brand is to aid in positioning, choose a meaningful brand name like DieHard. Possibility of extension to a line of products. If so, choose carefully so that it is not a limitation in the future (Allegheny Airlines became US Airways). Possibility of long-term position in market. A dramatic novelty name usually doesn’t do as well if a long-term position in the market is sought. Avoid an irritating or insulting name. Can especially be a problem when entering foreign markets. Be careful of regional differences in language. An acceptable name in some Spanish dialects may be offensive in others. Allocate enough time to brand selection. The brand name should not be a last-minute rush job. Don’t choose the wrong comfort level. A provocative and controversial brand name such as Yahoo! or Bluetooth may be a great strategy,. Other pitfalls. Not identifying the key decision makers; people involved in decision don’t understand brand naming; getting “stuck” on a brand name early in the process; not hiring the best patent attorney. Source: Lee Schaeffer and Jim Twerdahl, “Giving Your Product the Right Name,” in A. Griffin and S. M. Somermeyer, The PDMA Toolbook 3 for New Product Development, Wiley, 2007, Ch. 8. 16-44 Brand Naming Procedures • Define objectives : Based on six criteria especially ideal meaning the brand should convey. • Generate names : Sources could include managers, employees, customers, agencies etc. • Screen initial candidates against objectives and criteria articulated earlier. • Study candidate names : Legal research etc. • Research the final candidates : To confirm memorability and meaningfulness of the remaining names. • Select the final name : maximizes firm’s branding and 4.45 marketing objectives and register it. Q28c What the name “LOVIT” communicates about the product CONSUMERS FLOUR SELLER FOOD VENDOR 16 16 16 A PRODUCT WE ARE SUPPOSED TO LOVE THE FLOUR IS WILL BE VERY DELICIOUS 6 FAMILIES NUMBER ONE CHOICE OF A MAIZE FLOUR 6 12 12 7 10 THE MAIZE IS GOOD AND HEALTHY 5 IT IS GOOD TO ENJOY IT IT WILL BE NUTRITIOUS 14 12 5 6 6 4 THAT THE NEW MAIZE PRODUCT WOULD BE NICE VITAMINS AND NUTRIENTS HAVE BEEN ADDED 5.5 IT INDICATES THAT IT WILL TASTE GOOD 6 THE MAIZE FLOUR IS GOOD AND HYGIENICALLY PREPARED 0 2 BASE CONSUMERS 7 200 FLOUR SELLERS 50 FOOD VENDORS 50 6 4 1 2 THE FLOUR IS UNIQUE AND VERY NEW 8 10 2 3 2 3 IT IS A GOOD PRODUCT TO BUY 12 6 6 6 4 IT SAYS THE NEW MAIZE WOULD BE NICE TO TASTE 15 4 6 8 10 12 14 16 18 Trademarks and Registration • Trademark: A word, symbol, logo, word string, sound signature that identifies a product. • Examples: BMW Z3 or Z4 Roadster, the GE script lettering, Apple Inc.’s multicolored apple, Nike’s “Just Do It,” the three-note NBC chimes or the “Intel Inside” sound. • Generally, “trademark” refers to legal aspects while “brand” refers to marketing strategy. • Technically, services have service marks, and businesses have trade names (not trademarks). • If a trademark is registered, the firm can keep the trademark forever even if another firm can show prior use. • Trademarks should not be immoral or misleading. • Trademarks should not be too descriptive of a product type (Light cigarettes). • Should not be confusingly similar to other trademarks (consider Apple Inc. vs. Apple Corps, McSleep vs. McDonald’s). 16-47 How Brand Equity Provides Value High Brand Loyalty Reduced marketing costs Increased trade leverage High Brand Awareness High Perceived Quality Easier to make brand associations Supports quality positioning Creates positive image Patents or trademarks Supports higher-price strategy Helps customer process information Strong channel relationships Increased liking and familiarity More/Better Brand Associations Other Brand Assets Provides value to customer: Provides value to firm: Assists in customer information processing Increases confidence in purchase Increases satisfaction in product use Increases effectiveness of marketing programs Increases customer loyalty and trade leverage Facilitates brand extensions Is a source of competitive advantage 16-48 Packaging Packaging is the activities of designing and producing containers and wrappers for a product • From the perspective of both the firm and consumers, packaging must achieve a number of objectives: – – – – – Identify the brand Convey descriptive and persuasive information Facilitate product transportation and protection Assist at-home storage Aid product consumption 4.49 Packaging • The role of packaging: containment, protection, safety, display, and information/persuasion. • Packaging can assist the user, permit reusability, meet environmental needs, carry warnings, meet legal requirements, aid in disposability. • Packaging as a competitive tool: recognizability, convenience, customer attraction, etc. 16-50 Guidelines for Creating High – Impact Packaging • Know your consumer • Take the big-picture approach • Understand that package aesthetics and functional are both critical • Know your distribution channels • Educate management Implementation of the Strategic Plan • Launch Objectives • Marketing Mix : Pricing, Distribution Communication • The Launch Cycle Launch Objectives :A-T-A-R Goals: • New product group must persuade itself and management that the plan can achieve the necessary awareness, availability, trial, and repeat purchase... • and that it can do so in sufficient quantity and at acceptable cost. 17-53 Steps in Developing Effective Communication Determining the Communications Objectives Marketers seek a purchase response that results from a consumer decision-making process that includes the stages of buyer readiness • Awareness • Knowledge • Liking • Preference • Conviction • Purchase SMART objectives Example: “The marketing communications objective for the period January-March 2003 is to create 65% prompted awareness in the ABC1, male 30-45 year old age group and those earning 14-24 £25,000 plus” Pricing Objectives Pricing Objectives represent the measurable goals a company wants to achieve through its pricing policy. 1. Profit Oriented Objectives - Target Return - Maximize Profit - Survival 2. Cash Flow 3. Sales Oriented - Unit Sales Growth - Growth in Market share 4. Status Quo Oriented - Meeting Competition - Non price competition e.g. product quality Pricing Strategy Value to Customers or Perceived Value for Money Value is the benefit the customer derives from the purchase of the product. The firm needs to understand the value that the customer places on the benefits received and then price accordingly. Effectively, customers assess the price and measure the benefits received. Factors that affect the value they place on the product: 1. Status 2. Service and after sales service quality 3. Level of differentiation from competitor products 4. Quality of any packaging 5. Product functionality 6. Any substitute products which may be available New Product Pricing Strategies Promotion Price High Low High Low Rapid Skimming Slow Skimming Rapid Penetration Slow Penetration New Product Pricing Strategies Market-penetration • • • • • • • Low initial price charged (Price at a discount to competitors) Attract large volume sales quickly Large market share High volume sales save costs Economies of scale on production and distribution It is also used if the competition is likely to follow quickly, If a low price will give competitors less incentive to enter New Product Pricing Strategies Market-skimming Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price, the company makes fewer but more profitable sales. E.g. Intel • As competitors enter market, price is lowered More sensible when : • Demand is inelastic • There is an “elite” market that is less price sensitive • Barriers to entry (patents, etc.) Stages for Establishing 1 Development of Pricing Objectives 2. Assessment of Target Market’s evaluation of price 3. Evaluation of competitors’ price 4 Selection of Basis for Pricing 5 Selection of a Pricing Strategy 6 Determination of a specific price Price Sensitivity Measure – Consumers 1.2Kg Q 25 CHEAP EXPENSIVE TOO EXPENSIVE TOO CHEAP 120 80 OPTIMAL PRICE 60 ACCEPTABLE PRICE RANGE 40 20 Brand Price 12500 12000 11500 11000 10500 10000 9500 9000 8500 8000 7500 7000 6500 6000 0 5500 Percent 100 Distribution/Channel Strategy Marketing Channels Set of interdependent organizations involved in the process of making a product or service available for use or consumption. The manner by which a product is sold or distributed can have a profound impact on the resulting equity and ultimate sales success of a new product. 5.62 Channel Design • Direct channels – Selling through personal contacts from the company to prospective customers by mail, phone, electronic means, in-person visits, and so forth • Indirect channels – Selling through third-party intermediaries such as agents or broker representatives, wholesalers or distributors, and retailers or dealers – Push and pull strategies • Web strategies 5.63 Channel Design : Functions of Members of Marketing Channel Information refers to the gathering and distributing research and intelligence information about actors and forces in the marketing environment needed for planning and aiding exchange Promotion refers to the development and spreading persuasive communications about an offer Contacts refers to finding and communicating with prospective Buyers Matching refers to shaping and fitting the offer to the buyer’s needs, including activities such as manufacturing, grading, assembling, and packaging Negotiation refers to reaching an agreement on price and other terms of the offer so that ownership or possession can be transferred Functions of Members of Marketing Channel Physical distribution refers to transporting and storing goods Financing refers to acquiring and using funds to cover the costs or carrying out the channel work Risk taking refers to assuming the risks of carrying out the channel work Types of Distribution Channels Consumer Goods Channels Channel Level A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer Channel 1 Manufacturer Channel 2 Manufacturer Channel 3 Manufacturer Channel 4 Manufacturer Consumer Retailer Wholesaler Retailer Agent Wholesaler Retailer Consumer Consumer Consumer NB: Hybrid Marketing Channels or multi-channel distribution, as when a single firm sets up 2 or more marketing channels to reach one or more customer segments. Establishing Channel Strategies :Distribution Intensity 3 broad options are intensive, selective and exclusive: 1. Intensive is a strategy used by producers of convenience products and common raw materials in which they stock their products in as many outlets as possible e.g. foods, toiletries, beer etc. Aim is to achieve saturation coverage of the market 2. Selective is a strategy when a producer uses more than one but fewer than all of the intermediaries willing to carry the producer’s products • Televisions • Appliances Establishing Channel Strategies :Distribution Intensity 3. Exclusive is a strategy in which the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories e.g. only one wholesaler, retailer or industrial distributor is used in a geographic area. • Luxury automobiles • High-end apparel Rolex Store Motivating Distributors • Increase distributor’s unit volume. • Increase distributor’s unit margin. • Reduce distributor’s cost of doing business. • Change distributor’s attitude toward the line. 17-70 Definition of Communications Communication is the process whereby thoughts are conveyed and meaning is shared between individuals or between organizations and individuals Integrated marketing communication involves identifying the target audience and shaping a well-coordinated promotional program to obtain the desired audience response Communication Process 2 72 © 2014 by Cengage Learning Inc. All Rights Reserved. The Promotion Mix The promotion mix is the specific blend of advertising, public relations, personal selling, and direct-marketing tools etc that the company uses to persuasively communicate customer value and build customer relationships 14--4 Marketing Communication Mix Media advertising TV Radio Newspaper Magazines Consumer promotions Samples Coupons Refunds and rebates Contests and sweepstakes Bonus packs Price offs Place advertising Billboards and posters Movies, airlplaines, lounges Product placement Point of purchase Point of purchase Shelf talkers Aisle markers Shpping cart ads In store radio or tv Event marketing and sponsorship Sports Arts Entertainemnt Fairs and festivals Cause –related Direct response Advertising Mail Telephone/Mobile Video Cd-ROM Trade promotions On line WEb sites Interactive ads Publicity and PR Trade deals and buying allowances Point of purchase display allowances Push money Contests and dealer incentives Cooperative advertising Source: Strategic Brand Management – Kevin Lane Keller Nike PROMOTION Product Advertising PR City Attacks Sponsorship Events New media Retail Marketing Complete 360 a mix of traditional & non traditional… Media 60% outdoor Website Coffee shops PR White Paper & the EDA Activation ‘Join the debate’ Consumer Involvement: Van tour Instore Steps in Developing Effective Communications Plan CONTEXT ANALYSIS • Key Issues COMMUNICATION OBJECTIVES Market Research COMMUNICATION STRATEGY • Target Audience • Positioning • Choice Promotional Mix • Push, Pull and Profile Strategy •Creative and Media Strategy INTEGRATED COMMUNICATION PLAN • Budgets • Scheduling • Implementation Push Strategy versus Pull Strategy 7 © 2014 by Cengage Learning Inc. All Rights Reserved. 78 Marketing Communications Options or Tools • • • • • • Advertising Promotions Event marketing and sponsorship Public relations and publicity Personal selling Direct Marketing 6.79 Stages in Developing Advertising Campaign • • • • • • Define campaign responsibilities Define target audience Set campaign objectives Set budgets Media Selection and planning Advertising development and testing (message strategy, creative concept & message execution) • Implementation and scheduling • Campaign evaluation Advertising Brief Format Why do we want new brand communication? Launch, What consumer understanding or insight drives this brief? Who is our target audience? What do they think and do now? State of mind or current behaviour What would we like them to think and do in response to the advertising? Objectives What is most likely to achieve this change? (i.e. the differentiator or unique selling proposition) Could be functional as well emotional Why should they believe it? Supporting evidence Practical Considerations : e.g. type of ad, media, duration Brief Communications Idea Executional Idea – Brief • Distils the point of difference that makes the brand preferred – Communications Idea • A creative vehicle which dramatises the point of difference – Executional Idea • A single expression of the communications idea which strengthens its impact to keep the idea fresh Copy Strategy Statement • Communications tools used at launch will have certain deliverables. • The way in which the firm communicates these deliverables to the advertising and promotion creative people is the copy strategy statement. • Typical contents: – The market segment targeted – The product positioning statement – The communications (promotion) mix – The major copy points to be communicated. 17-83 Typical Examples of Copy Points • “The provider of this insurance policy is the largest in the world.” • “This cellular phone has no geographic limitation.” • “Dockers are available at JCPenney.” • “Future neurosurgeons benefit from the hand-to-eye skills of computer games like this one.” There is no limit to the choices here, but there must be a focus. Only a few copy points are going to be accomplished at a time. 17-84 Common Advertising Appeals 3 © 2014 by Cengage Learning Inc. All Rights Reserved. 85 Eleven Common Executional Styles for Advertising 3 86 © 2014 by Cengage Learning Inc. All Rights Reserved. Promotions • Short-term incentives to encourage trial or usage of a product or service • Marketers can target sales promotions at either the trade or end consumers • Consumer promotions – Consumer promotions are designed to change the choices, quantity, or timing of consumers’ product purchases. • Trade promotions – Trade promotions are often financial incentives or discounts given to retailers, distributors, and other members of the trade to stock, display, and in other ways facilitate the sale of a product. 6.87 Two Broad Categories of Sales Promotion Trade Promotions are the incentives Consumer Promotions are incentives used by manufacturers and other members of the marketing channel to help push products through the retailers Entice another member of the channel to purchase goods for eventual resale. that are aimed at the end user Goals: entice the customer to take the decision to make a purchase, increase traffic to the store, generate brand loyalty etc. They are aimed at retailers, wholesalers, distributors, brokers or agents. Role: Build stronger relations with members of the channel Trade Promotion Tools: Trade Allowances, Trade Contests, Trade Incentives, Training Programmes, Vendor Support Programmes, Trade Shows, Specialty Advertising, Point of Purchase Advertising Types of Consumer Promotions: Coupons, Premiums, Contests and Sweepstakes, Refunds and Rebates, Sampling Bonus Packs, Price-offs Tactical Launch Decisions and Actions, Showing Influences on Demand Launch Tactic Promotion Advertising Coupons Publicity Sampling Beta Test Sites Sales and Distribution Shows/Demonstrations Technical Support Distribution Structure Intensity of Coverage Distribution Incentives Pricing Introductory Pricing Price Administration Product Breadth of Assortment Timing Product Deletion Preannouncing Effective For: Cases where awareness will stimulate trial Reinforcing awareness New and controversial technologies with high perceived usage risk Cases where product advantages best learned through usage Stimulating “sampling” and as a reference for other potential buyers Clarifying relative product advantages or where uncertainty exists Cases of incompatibility in usage process Cases where relative advantage strong (direct channels) Cases where warranty/maintenance service needs to be offered easily Cases where availability needs to be stimulated High relative advantage and compatibility (skimming policy); early adoption needs to be stimulated (penetration policy) Cases where economic risk needs to be reduced (i.e., through rebates or money-back guarantees) Introducing new product categories with high relative advantage High margin but strong relative advantage (fast deletion); high switching costs (slow deletion) Building hype for new products; useful if relative advantage is high 17-89 The Launch Cycle Sales and Expenditures Expenditures Prelaunch Beachhead Announcement Sales Early growth 17-90 Preannouncement • Getting to be popular, and very creatively managed. • Far from the old days of “tease the public.” • Preannouncement signaling may be used (“vaporware”). 17-91 Beachhead • This refers to the heavy expenditure needed to overcome sales inertia (“getting the ball rolling”). • Steep rising expenditures curve during this period, up to point where sales are increasing at an increasing rate. • Begins with the announcement. • Key decision during beachhead: when do you end it? How do you know inertia has been overcome? 17-92 Barriers to Trial • Lack of interest in the claim. • Lack of belief in the claim. • Rejecting something negative about product. • Complacency. • Competitive ties. • Doubts about trial. • Lack of usage opportunity. • Cost. • Routines. • Risk of rejection. 17-93 Appropriate Launch Tactics Given Relative Advantage and Compatibility 1. Low Compatibility 2. High Compatibility A. Low Relative Advantage Penetration price Slow deletion Risk-based promotion (leasing, money-back guarantees, equipment allowances) Intensive distribution Secrecy before entry Narrow product assortments Awareness promotion (coupons, etc.) Intensive distribution B. High Relative Advantage Preannounce Broad product assortments Information-based promotion (shows, demonstrations, websites, publicity/education) Selective distribution Skim price Fast deletion Usage-based promotion (samples, beta tests) to clarify benefits received Selective distribution Source: Adapted from Joseph P. Guiltinan, "Launch Strategy, Launch Tactics, and Demand Outcomes," Journal of Product Innovation Management, Vol. 16, No. 6, November 1999, pp. 520-521. 17-94