Unit 7 (Part II) – Objective Setting (cont.) Dr. Darrel Muehling

1. Unit 7 (Part II) – Objective Setting (cont.)Dr. Darrel Muehling

2. Consider the following: • A well-known auto maker had an advertising budget of $200 million for its national campaign. The cost to produce each ad in the campaign alone cost $750,000.

3. Consider the following: • A well-known auto maker had an advertising budget of $200 million for its national campaign. The cost to produce each ad in the campaign alone cost $750,000. • The firm’s research confirmed that the advertising campaign had a huge impact on the awareness and imagery of the company’s brand. According to surveys, the ad campaign increased consumer perceptions of the car as “fun to drive, sporty, and a good value.” Top-of-mind awareness of the brand among adults leaped from an abysmal 15% before the campaign, to 42% afterwards. Furthermore, the car was on the “consideration list” of 11.8% of adults planning to buy a car over the next year, vs. 4.2% before the campaign broke.

4. Consider the following: • A well-known auto maker had an advertising budget of $200 million for its national campaign. The cost to produce each ad in the campaign alone cost $750,000. • The firm’s research confirmed that the advertising campaign had a huge impact on the awareness and imagery of the company’s brand. According to surveys, the ad campaign increased consumer perceptions of the car as “fun to drive, sporty, and a good value.” Top-of-mind awareness of the brand among adults leaped from an abysmal 15% before the campaign, to 42% afterwards. Furthermore, the car was on the “consideration list” of 11.8% of adults planning to buy a car over the next year, vs. 4.2% before the campaign broke. • The car’s dealers (throughout the country), while recognizing the need to establish a brand identity for the car, said the campaign did very little to spark sales. In the campaign’s first six months, sales fell during 4 of the months vs. year-earlier periods. (In the following January, the car company’s sales jumped 8.4%, but competitors’ sales were up 52.8% and 21.7%)

5. Was the ad campaign successful? It depends upon what the ad was designed to do, i.e., what the objective was. • Communications objectives?

6. Was the ad campaign successful? It depends upon what the ad was designed to do, i.e., what the objective was. • Communications objectives? • Sales objectives?

7. Communications Objectives and the “Communications Effects Pyramid” (Hierarchy of Effects) • A theoretical model of consumer information/advertising processing

8. Communications Objectives and the “Communications Effects Pyramid” (Hierarchy of Effects) • A theoretical model of consumer information/advertising processing • Guides promotional objectives by examining consumers’ level of attainment of each stage in the process.

9. “Stay Alert?”

11. Repurchase Regular Use Trial Preference Liking/Attitude Knowledge/Beliefs Brand Name Awareness

12. Sales objectives Advertising generates product sales

13. When sales are an appropriate objective: • Direct marketing/advertising efforts (e.g., ads featuring 1-800 numbers to call and order merchandise). • Local “sale” advertising (e.g., retail advertising) • If/when the other marketing mix variables (product, price, place) are relatively stable in the marketplace (e.g., in mature markets)

14. The Great Debate Sales objectives vs. Communications objectives

15. Wiedeman Beer Example What’s the moral of the story?

16. Moral? • “Sometimes, an ad succeeds in meeting its objective…

17. Moral? • “Sometimes, an ad succeeds in meeting its objective… • but, for a reason other than what the advertiser had assumed/intended.”