The response to advertisingWeek 9 Consumer Behaviour and Food Marketing
Qualitative research Experiments Are they realistic?
Methods for measuring advertising response
Focus group, personal interview Little relevance
Surveys More value when data are collected at intervals Links with demographic characteristics
Consumer panel data Change over time (panellists diary, home scan)
Econometric analysis Data fusion Combining data from two sources using common elements, e.g. purchase with TV viewing through consumer viewing habits
IRI BehaviorScan Cable tv + checkout scanner = very accurate measure of response to advertising IRI BehaviorScan in the 1980s Poor off-air TV transmission and relevance of cable TV IRI can control (switch) the advertisement for each individual (consenting) household Local stores are equipped with IRI scanners Purchases are associated with households through identification card Marketing mix variables (prices, deals) are also recorded
GFK Behaviorscan in Europe (France and Germany)
Limits of IRI BehaviorScan Household owning more than a TV set (one not scanned) Out of town shopping Is the isolated community representative of the US? Tests limited to commercially advantageous studies and big brands (they are expensive) Trade response is not taken into account (retailers stock advertised goods) Competitor response is not considered There is no market validation: ads that are perceived as weak do not enter the nationwide market
Nielsen home scan Home scanned panels National samples No experimentation Link with television viewing data
Store level data Sales extracted from checkout data Aggregate sales by brand and variety Nielsen ScanTrack IRI Infoscan
Sales responseSpontaneous or assisted advertising recallAdvertising effort (expenditure, pressure)
Advertising awareness
?Purchase
Effects of advertising Direct effects Price support Sales support
Indirect effects Increases consumption from stock, future purchase Increases retailer demand, opportunity to purchase, sales Improves targeting, reducing costs Restrains market entry by competitors, which may raise sales and margins
Price support Limited supply Advertising raises price by raising demand
Unconstrained supply Increased acceptability of brand price Price premia due to brand name
Reassuringly expensive
From the web siteStella Artois has used the same Reassuringly Expensive slogan for over 20 years but in that time only five adverts have been made.
how much does it cost? On blind tests Stella is not significantly preferred In Britain it is premium priced The price premium is estimated at 7.5% (Baker, 1993) Larger turnover finances the adspend
Sales support In mature markets competition is on market shares, not total product sales Advertising can be necessary just to defend a companys own market share Advertising has usually a modest impact (brand loyalty) Some numbers from IRI tests (293 cases): Considering a 50-100% increase in adspend, 49% of the companies experienced an increase in the volume of sales (+23% on average) Only in 20% of the tests the increase in adspend was justified by a sufficient increase in profits Half of the tests had no effects ineffective ads? Competitors reaction?
Increasing consumption from stock Goods kept in home (cereals, canned soups, tea) Increased consumption leads to further sales
Supporting distribution It is rare that loyalty leads to refusing an alternative when favoured brand is unavailable Availability on shelf Distribution increases are reported in relation to advertising effects
Supporting promotions Synergy between ads and promotions: joint effect is larger than the simple sum of the two effects Strong effects of in-store advertising Point-of-sale discounts (coupons) act sinergistically with advertising
Improving targeting Communicating with the right groups and discouraging those who are unsuited to the product will reduce costs (e.g. enquiries to staff) Especially for expensive goods and for elite stores
Restraining market entry Big brands advertise more, but maybe spend a lower proportion of sales profits Economies of scale Customer retention Trade commission (e.g. US) see excessive advertising as a restraint of trade
Advertising and price elasticity Despite higher prices, heavy advertising seems to lead to lower price elasticity, especially for fast moving consumer goods
Advertising and consumer responseUnique Selling Proposition (USP): a marketing claim based upon a distinctive product feature or unique element in the marketing mix A good ad is one that successfully implants knowledge about USP (Reeves, 1961) Too cognitive approach? For fmcg there are just one or two salient attributes
Effect sequential models: AIDA (19th Century)Attention
Interest
Desire
Action
Lavidge and Steiner (1961)Awareness Knowledge Liking Preference Conviction Purchase
DAGMAR model (Colley, 1961)Awareness Comprehension Conviction Action
Conversion and reinforcement Problems in sequential models They are not appropriate for repetitive advertising of established brands Not appropriate for repeat purchase and full awareness
Ehrenberg theory (1974) Advertising to retain consumers Quality to retain consumers
Ehrenberg ATR modelAwarenessBefore purchase Trial Advertising Reinforcement
After purchaseRepeat purchase
Leaking bucket approach Customers do switch brand, so a brand can attract non-customers to replace the ones it is losing Offensive function of advertising Defensive function of advertising
Rossiter and Percy (1997) Buyer response sequenceExposure Processing Communication effects in relation to brand positioning Target audience action Involvement
Involvement and information processing Different levels of involvement lead to a different way in processing ads High involvement decisions are more consistent with sequential models Low involvement purchases are more related to reinforcement models
Batra and Ray classificationThree types of response to advertising: 1. Low involvement process, the ad affects brand salience and increase purchase disposition (no prior change in attitudes) 2. High involvement process following the Theory of Planned Behaviour (belief, attitudes, intentions, actions) 3. High involvement sequence (dissonanceattribution), behaviour first change and then there are changes in attitudes and beliefs
Elaboration-likelihood modelPetty and Cacioppo (1983,1985) Persuasion is more likely to occur when people need to review the arguments (supporting or contrasting them) rather than with ready-made arguments Central route to persuasion Elaboration Long-lived and resistant changes Predictive of future behaviour
Peripheral route Association of feelings and response to cues No arguments generated (future change more likely)
Involvement increases elaboration
The five communication objectives (Rossiter & Percy)Category needBrand awareness Advertising Brand attitude Brand purchase intention Purchase facilitation
Category need Arousing need Connections between audience values and product category Good association also with the brand
Brand awareness Recall or recognition? Recall: category Recognition: brand brand category
It depends on purchasing context Recall: products bought via intermediaries Courier service, radio stations Recognition: the visual part is relevant (supermarket) Packaged foods (conjoint analysis)
Brand attitude Some brand names are well known despite a bad attitude towards them Better attitudes may be achieved by advertising how the product meets specific needs
Purchase intention Advertising can generate a purchase intention by instructing consumers how to buy E.g. times and places which can become cues to buy when the consumer finds himself in such situation
Purchase facilitation How much does it cost? Where can you buy it? (Store) How can I pay? (e.g. diluted payments, online purchase)
Securing attention Not only grabbing attention, but also remaining on the subject Arousal Relevant information Attitude change
Image meaning and culture Framing (schemata, heuristics) are important Music, communication ads as art Advertising is culturally (socially) situated Long-lived shared meanings Transnational advertising must rely on basic ideas to be cross-cultural
Ads classification Credibility Stimulation Taste Empathy Clarity Attracting attention Involving
FCB classification grid (Foote, Coone, Belding)THINK High involvement COMPUTERS TELEVISION
FEEL FLOWERS
Low involvement DETERGENT
CONFECTIONERY
Percy-Rossiter gridType of motivationInformational (-) Aspirin Band aid Detergents Routine product Housing Computers Insurance New products Transformational (+) New novel Wine Snacks Cosmetics Vacations Fashion Cars
Low involvement
Type of decisionHigh involvement
Sales effects over timeS Shaped (unfamiliar products) Sales
Concave (mature brands)Threshold frequency 0 1 2 3 Number of exposures
Implication of scheduling and media If the curve is concave, burst advertising strategy is questionable Burst is appropriate for new products (S-shape?) It is more effective to spread adspend across media (more coverage, fewer exposure, defer saturation) Media multiplier effect However, it can be more expensive
Message change to overcome habituation
Effects in the longer term 90% of the extra sales tend to occur in the first 3-9 months of the advertisement 50% are made in the first 1-3 months
Responsiveness to advertisingWhich brands are worth to be advertised? Size of the user group Large number of purchase occasions Leading brands Frequently purchased goods
Proportionate loyalty Advertising in different loyalty segments (especially those at 5070% level)
New products Novelty effects
Flexibility of total category consumption Food categories can gain against others (e.g. fish/meat)
Ads or sales promotion? Discounts favour: Stock/staff management Better returns than media advertising
Media advertising favour: Extra sales In the short or long term?
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