MRK317 Integrated Marketing Communications

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MRK317Integrated Marketing Communications

• Chapter 8
• Media Decisions

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Media Terminology

• Media Planning - A series of decisions involving
  the delivery of messages to audiences.
• Media Objectives - Goals to be attained by the
  media strategy and program.
• Media Strategy - Decisions on how the media
  objectives can be attained.
• Media - The various categories of delivery
  systems, including broadcast and print media.
• Broadcast Media - Either radio or television
  network or local station broadcasts.

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Media Terminology

• Print Media - Publications such as newspapers,
  magazines, direct mail, outdoor, and the like.
• Media Vehicle - The specific message carrier,
  such as the Washington Post or Tonight Show.
• Coverage - The potential audience that might
  receive the message through the the vehicle.
• Reach - The percentage of the target audience
  that is exposed at least once by the vehicle.
• Frequency - The number of times the receiver is
  exposed to vehicle in a specific time period.

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Developing the Media Plan
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Which Media Vehicle?

• Considerations (money not being an issue)
• What is the key message?
• How complicated is the product / message?
• Factual details, print / interactive is likely
  choice
• Demonstration important? go with TV
• Brief message? transit or OOH
• Urgency?-- newspaper is good
• What are the target groups media habits?

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Media Strategy Challenges

• Insufficient information
• Some mediums cannot be measured
• Too expensive
• Inconsistent terminologies
• Print vs. Radio
• Difficulty measuring effectiveness

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Marginal Analysis

• One of the most used theoretical approaches to
  establish advertising budgets.
• As advertising/ promotional expenditures
  increase, sales and gross margins also increase
  to a point, then they level off.

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Managerial Approachesin Budget Setting

• You must understand
• Many firms apply more than one method
• Budgeting approaches vary according to the size
  and sophistication of the firm

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Factors Influencing Budgets Decision

• Market size
• Market potential
• Market share goals
• Economies of scale in advertising
• IMC tools

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Top-Down Budgeting
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Top-Down Approaches

• The affordable method
• What we have to spare. What's left to spend.
• Arbitrary allocation method
• No system. Seemed like a good idea at the time.

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Top-Down Approaches

• Percentage of sales method
• Taking a percentage of sales dollars.
• A fixed amount of the unit product cost to
  promotion multiplied by the number of units sold
• Disadvantages
• Sales
• Difficult for new products
• Decrease in sales, decrease in ad

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Top-Down Approaches

• Competitive parity method
• Match competitor or industry average spending.
• Return on investment method
• Spending is treated as a capital investment.

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Bottom-Up Approaches
Total Budget Is Approved by Top Management
Cost of Activities are Budgeted
Activities to Achieve Objectives Are Planned
Promotional Objectives Are Set
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Bottom-Up Approaches

• Objective and task method
• Isolate objectives
• Determine task required
• Estimate required expenditure
• Monitor
• Reevaluate objectives
• Payout planning
• Determines the investment value of the
  advertising and promotion appropriation.

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Objective and Task Method
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Media Strategy Decisions to be made

1. Target audience coverage
2. Media mix
3. Geographic coverage
4. Scheduling
5. Reach and Frequency

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Target Audience Coverage
Population excluding target market
Target market
Media coverage
Media overexposure
Coverage Exceeding Market
Partial Market Coverage
Full Market Coverage
Target Market Proportion
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Target Audience Coverage
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Media Strategy Decisions to be made

1. Target audience coverage
2. Media mix
3. Geographic coverage
4. Scheduling
5. Reach and Frequency

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Brand and Category Analysis
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Brand and Category Analysis
Category Development Index
Percentage of product category total sales in
market
CDI
X 100
Percentage of total Canadian population in market
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Brand and Category Analysis
Low BDI
High BDI
High market share Good market potential
Low market share Good market potential
High CDI
High market share Monitor for sales decline
Low market share Poor market potential
Low CDI
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Brand and Category Analysis
High BDI
Low BDI
The market usually represents good sales
potential for both the product and the brand.
The product category shows high potential but the
brand isnt doing well the reason should be
determined.
High CDI
The category isnt selling well but the brand is
may be a good market in which to advertise but
should be monitored for sales decline.
Both the product category and the brand are doing
poorly not likely to be a good place to
advertise.
Low CDI
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Media Strategy Decisions to be made

1. Target audience coverage
2. Media mix
3. Geographic coverage
4. Scheduling
5. Reach and Frequency

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Three Scheduling Methods
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Lee Jeans Media Flow-chart
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Media Blocking Chart
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Media Strategy Decisions to be made

1. Target audience coverage
2. Media mix
3. Geographic coverage
4. Scheduling
5. Reach and Frequency

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Balancing Strategic Variables
Reach How many people? Frequency How often
hit? Continuity How long an effort?
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Reach
The total unduplicated audience exposed to a
message one or more times in a period
(week). Reach can be expressed as individuals or
households , and can be expressed as a absolute
number or a percentage.
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Reach Formula
Reach of target group tuned in x100
of target group in area
50,000 250,000
20
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Frequency
The average number of times an audience is
exposed to a message over a period of time (week).
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Frequency Formula
Frequency Total Exposures
Reach 250,000
50,000 5.0
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Impressions
Impressions, or total exposures, are the total
number of commercial occasions multiplied by the
total target audience potentially exposed to each
occasion.
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Impressions Formula
Impressions Reach (in s) x Frequency
500,000 x 4
2,000,000
(Reach the number of individuals or households)
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Gross Rating Points
GRPs refer to the weight of a media schedule
against a pre-determined target audience. GRP
Reach () x Frequency 50 x 3.5
175
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Determining RelativeCost of Media
Cost per thousand (CPM)
Cost of ad space (absolute cost)
CPM
X 1,000
Circulation
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Homemakers Magazine Chatelaine Canadian Living
One time, 1 page, 4 colour 20,640 35,695 27,222
Circulation 1,290,000 802,714 561,102