Marketing Exam 3-Part 2

Front 1

•understand the alternative budgeting approaches for advertising (affordable, competition-matching, etc.)

Back 1

oAffordable method: pay for everything, what is left over
Common in small businesses
Problematic cuz wont get much
oPercentage of sales
Of either current or forecasted
If you have low sales low budget when you actually need it most.
oCOMPETITITON MATCHING
Publicly traded companies, know how much they spend
Different objectives from competitions
oObjective and task methods
Least used, best
Time consuming
Based on objectives and goals

Front 2

understand reach and frequency

Back 2

Reach- % of audience that is exposed to the ad. 75%=75
Frequency
•Average # of times a person is exposed to the ads.
•GRPs(gross rating pts)= Reach x Frequency
•Appropriate amount to see is 3. for frequency

Front 3

understand the difference between medium (media class) and media vehicle

Back 3

medium-overall category
Media vehicle- types within the category

Front 4

ocharacteristics, advantages, and disadvantages of alternative advertising mediums (television, radio, direct mail, etc.)

Back 4

Television
•Pro-a lot of people have tv.
•Con- remote controls, tivo, cluttered with ads.
•Response by product placement story in show
•Integration- part of the show
•Combines visual with sounds
•Total costs for tv is very expensive (100,000-200,000 range for average) increases with popularity of the show. Buy per person reach is very cost effective.
•A lot of targeting in cable, in major networks broad
Radio
•Pro-low cost, high audience selectivity (demographic, and psycographic)
oThe edge- young, edge, tattoo,
oThe peak- women
•Local connection, personalities tied into the community
•Con- easy to change channel, ipod, satellite radio
•Clear channel does less commercial breaks
•Keep it short and sweet
Newspaper
•Pro- reader control of the message. Can set aside ad and look at it later.
•Con- readership is dropping average age is 54.
•Poor reproduction quality
•Pass along rate- how many people other the one who bought it, see it.
Magazines
•Have high pass along rate
•Pro- reproduction quality, audience selectivity
•Con- lead time (couple of months), cost expensive
•Direct Mail
oHigh cost, highly targeted
oCost effective with the number of people it reaches
oLow response rate
Want to increase , LV does a good job of this
Outdoors
•Billboards, Jonnie Boards, etc. anything out of the home
•Low cost on a Cost per thousand basis. A lot of people see it
•Hard to target, more of a mass marketing
•Has to be really catchy, has to be simple messages
•Frequency is very high
•Aesthetic issues
•Mobile outdoor: cars drive with logo on.
Other Formats
•Transit advertising: bus wrap
oEverything is covered
•Cinema
oBefore the movie still frame
•Phone Directory
oVery expensive
•Directional media phone directory
oknow you are going to buy it but rather where to get it
•Hot air balloon
oVery captive
oPeople like that they are ads.

Front 5

be able to calculate and interpret CPM

Back 5

(Cost of ad x 1000)/ total audience
10000/100000
•10000 x 1000/ 100000= $100 per thousand people
1000/20000
•1000 x 1000/ 20000= $50
Don’t always choose the cheaper one, base also on demographics

Front 6

the three general types of media schedules (continuous, flighting, pulsing)

Back 6

Continuous- Same amount all year long
•do on consumables, need it yr roung
Flighting
•heavy advertising and then very little in intervals
oseasonal items
oif you don’t have a lot of money, use in intervals put it all in
Pulsing
•continuous but then small pulses when something new
ocars, for holidays or when new product
oseasonal as well (candy) but up certain times

Front 7

be able to identify and describe the alternative consumer sales promotion tools (coupons, rebates, etc.)

Back 7

oCoupons
75%-80% delivered through FSI(Full sheet inserts-newspaper)
Traditional mail, not used as much cuz expensive
Online- becoming more popular
Cash register generated incentives to buy complementary
A lot of fraud with coupons
•grocery store sends coupons to clearing house then cuts a check to business to send to manufacture. People make up fake companies.
In and on the package, instant redeemable
oCents off offer
Specially marked packages that you get a discount.
Discount comes out of the manufacturer rather than the retailer
oRebates
Very effective cuz incentive to buy but not many people send it in.
Higher the amount greater the redemption rate.
A lot of times advertise the after rebate discount
oFrequent-user incentives
Frequent shopper cards
•started in the airlines industry
•to build brand loyalty
•now everyone has these, so no incentive to use anywhere cuz everywhere has them.
•need to be innovative, and flexible (not a lot of restrictions)
oPOP (point of Purchase Displays)
Ad when you buy.
oSampling
Use in conjunction with coupons.
Low risk way to try out the product
•shampoo, food, etc
Media sampling
•attached to the ad
With the product itself
In the stores (Food, Makeup)
Send it to them
On campus
oPremiums
Free gift when you have to do something.
•may have to send in something.
oCereal
Self liquidating premium
•buy something and get something with it
•happy meal
these work because says “free”
oAdvertising specialties (promotional products)
You get the free gift but don’t have to pay anything
•pens, stress balls, key chains, etc.
oContest/ sweepstakes
Contest- judged, do something to get it
Sweepstakes- can just win this Illegal to require purchase with sweepstakes

Front 8

• be able to identify and describe the alternative trade sales promotion tools (trade allowances, sales contests, etc.)

Back 8

oTrade allowance
Buying allowance
•discount without doing anything. (off invoice, off list, discount)
ofrom manufacturer, and retailer sometimes they wont do the discount
•merchandise allowance
obuy some get one for free
Push money (spiffs)
•give something to retailer or seller to for selling a certain thing.
o$25 for every one sold
Sales Contest
•who ever sells the most wins
Cooperative Advertising
•if ad locally can get money from man for the ads.