Kleppner's Advertising Procedure Chs. 1 and 2

This is my personal summary of Kleppner's Advertising Procedure.

Chapters
Chapters 1 & 2: Basics of Advertising Chapter 3: History and Brands Chapter 4: Target Marketing Chapter 5: Agencies and Services Chapter 7: Media Strategy Chapter 13: Internet Marketing Chapter 24: Economic, Social and Legal Aspects of Advertising Addendum: Corporate Terrorism

Chapters 1 & 2: Basics of Advertising

Advertising has 3 rules

take the consumer's perspective
ads must sell things first and foremost
buyers buy benefits, not features

Marketing has 4 elements

product
price
distribution
communication

Communication has 4 types

advertising
personal selling
public relations
sales promotions

Notice:

An inferior product dooms advertising.
An overly high price dooms advertising.
An unavailable product dooms advertising.

What does advertising do?

In theory, advertising informs consumers of options, thereby enhancing his control over his economic life. It also discourages them from finding better options, and it can be used to brainwash consumers into making bad choices and thinking good choices are bad.

It establishes an incomplete dialog beween producer and consumer i.e.

1. P -> ads -> C
2. C -> purchases -> P
3. P -> products -> C

...but more realistically...

4. P -> repair request -> C
5. P -> support request -> C
6. P -> return for reimbursement
           or exchange -> store
etc.

Advertising enhances the economy HOWEVER the increased sale of defective products harms consumers and the economy.

How should one advertise?

Companies invest in a mixed portfolio of ads -- not just one medium.

Similarly, a single woman might advertise her availability in several ways: going to a gym, taking part in clubs, making herself obvious to men at work, jogging, tell relatives, and if she is desperate, by going to filthy stinky bars.

Companies rate efficiency in terms of the sales per $1 of advertising.

Product introduction principles

At least these are known:

Product must meet present and future consumer needs.
Company should have experience in product category.
Niches must be empty for best chances e.g. cola-with-big-name, word processor program.

Product introductions must be properly timed.

Conjoint Analysis

This is a technique to learn what consumers think are benefits of products.

Brands

Advertisers believe that corporate identity 'n' brands are important. Brands are expensive to establish and doing so takes a lot of time.

Brands are supposed to imply something that is impossible and only approximately provided by companies: consistent guaranteed quality.

Brand extensions are new products that fall under an existing brand to take advantage of existing brand equity, e.g. iPod accessories for the iPod.

Product differentiation

This can be obvious or subtle.

A brand can imply quality or cheapo-status.

Mistakes in product differentiation:

Promoting unimportant or everyday features.
Overlooking benefits not yet promoted by competitors.

Positioning

The history of advertising:

? era:

advertisers focused on features

Image era:

advertisers focused on reputation

Positioning era:

focus on being first to market, focus on creating a position, realism about strengths and weaknesses.

Price

THE BOOK MAKE NO MENTION OF PRODUCT UPSCALING & GENTRIFICATION. Whitewash?

Product price determines advertising strategy.

Value Gap is the difference between the price and the value that consumers perceive. Increasingly this gap is huge, but the book doesn't say so.

Yield Management is product pricing to control supply and demand.

Money spent on advertising.

Some companies spend much, some little.

Factors that determine how much a company spends:

You can only do so much advertising before a market is saturated with it.
There are other ways to market than ads.
If you have few competitors and/or high profit margin, you will have more to spend on ads.
If you are doing new product introductions, you will have to spend more on ads.
Management philosophy.

The effectiveness of ads

The classic problem:

You must both achieving marketing goals and keep the interest of viewers/readers, but they can work against each other.

Directness of ads is important.

Duration of ads is important.

Ads that have the purpose of bringing about immediate purchases are called direct action, short-term ads.

There are also direct-action, long-term ads that are used for big-ticket items like refrigerators.

And there are indirect-action ads that promote manufacturers.

Specific Types of Ads

Ads targeted at consumers:

National
Retail local
End-product
Direct-response

Note! These days, consumers look on the Web before making big purchases. And the book doesn't mention that "big" is of course a relative term. For one person it’s a car, for another it’s a frying pan, and for another it’s a sandwich.

Ads targeted at businesses (B2B) & professions:

Trade
Industrial
Professional
Institutional

National Ads

Not specific about retailers, product availability, or price.

Can be truly nationwide or not.

They promote a specific product.

Retail or local

Sells the product and the store.

Tells the price, store policies, and (hopefully) store location.

Shows a range of products to promote the store as a first destination.

Sales and promotions bring in traffic.

They lead people in with cheap items in the hope they will buy non-cheap items.

End Product

Promotes a component e.g. an Intel processor using the Intel Inside logo.

The idea is that consumers will ask for that component or look for the logo.

Direct Response

Direct to consumer, e.g. crap sold in Sunday paper flyer.

Offers convenience: Call now! We’re standing by! We ship overnight!

Includes a lot of things: Credit cards, QVC, telemarketing.

Trade

Promotes products to retailers & wholesalers.

Has 3 purposes:

Provides means of getting a sample.
Increases prominence in retail areas.
Announces promotions that are useful to retailers.

Industrial

Usually selling equipment.

Target is manufacturers.

Audience is very specialize and small, usually purchasing agents.

Never direct, because equipment purchases are complex.

Idea ads

These sell ideas, e.g. Free Speech.

Service ads

These sell a service.

These types of ads need to…

feature “tangibles” e.g. testimonials “Thai prostitutes really know their stuff.”
show those imaginary clean, upstanding, employees perhaps holding clean equipment.
emphasize quality.

Corporate ads

These are whitewash or bullshit ads.

They have the purpose of making a company look good & are often used by companies that have done, are doing, or will do something wrong.

They establish corporate identity, e.g. “the flatulence people”.
They explain missions, e.g. “to make the world better, one fart at a time”.
They try to overcome negative attitudes about the corporation, attidues such as "those scum-sucking bastards stunk up my town!".
They try to "boost" identity, e.g. proudly declaring "we turn sweaty pigs into a high art".
They try to overcome negative images, e.g. "farting makes the ozone layer more efficient”.
They plant seeds of awareness for future sales, “kids, one day you will enjoy our supercool farts, yes, even you”.
They try to connect the company with something righteous, e.g. “Flatulence Inc. helps fluffy kittens every single day.”