Chapter 2 Flashcards
Define and explain the advertising process according to the following key concepts:
- Source
- Message
- Channel
- Audience
- Destination
- Noise
Source
This is the point from where the message originates. Sources include the
- company offering the product/service
- the brand or the spokesperson.
Message
The message refers to both the content and the execution of the advertisement.
The receiver’s perception of the message is the core of the message.
The way in which the message can be executed varies from advertisement to advertisement and may be any- thing from humorous to frightening.
Channel
This is the pathway or route that a message follows from source to receiver.
Media such as radio, television, newspapers, magazines, billboards and point-of-purchase displays are examples of various advertising channels.
Word of mouth remains one of the most powerful channels there is.
Note that a message can be transmitted via various channels, but there is such a thing as “channel capacity”.
In other words, there is only so much in- formation that can pass through at any point in time and only so much the receiver can process at any given time.
Audience
The audience is better known as the “target market” and is categorised according to
- demographics
- geographic location
- psychographic factors
- lifestyle
- behaviours
Destination
Note that the receiver of the message is often not the final point of message transmission from the source.
If the receiver engages in word-of-mouth communication, the message is passed on to another destination; in this secondary communication process the receiver becomes the interim source.
Note, also, that in certain instances the absence of word- of-mouth communication will adversely influence the success of a product or service.
Noise
As in the normal communication process, noise is also a barrier to the success of the advertising process and may include any number of factors contributing to the disturbance of a message or the distortion of its meaning.
Consider the definition of advertising:
Advertising is any paid form of mass presentation of ideas, products and services by an advertiser; it is specifically addressed to selected target audiences with the objective of creating awareness, informing, reminding, influencing and persuading this audience to buy the product or service or to be favourably inclined towards these ideas, products or services (Koekemoer 2004:67).
Advantages of Advertising
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Disadvantages of Advertising
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The criteria that advertising objectives should meet.
Shimp (2007:162–163) provides the following six criteria:
- stated in precise terms
- quantitative and measurable
- specific
- realistic
- consistent
- clear
The objectives of advertising can be categorised into the following main components:
informational, attitudinal and behavioural
Here are some of the methods companies use to set their advertising campaign budgets ):
- The percentage of sales method
- The task objective method
- The historical method
- Share of market — share of voice
- Competitive parity
- The combination method
The percentage of sales method
Here, the advertising campaign budget is a constant percentage of desired sales.
A car manufacturer may spend less than 1% of sales, while a small retailer may budget 3% to 7% of sales. A jewellery store may budget 8% to 12% of sales, while another company may budget as much as 20% of its sales revenue.
This method works as long as the advertising campaign budget is set as a percentage of desired sales.
If the budget is based on actual sales, and sales drop, the company will not want to cut its advertising campaign budget, or it will get caught in a downward spiral.
The task objective method
This is based on how much money the company needs to spend in order to reach the specific goals outlined for its advertising campaign.
This method is especially effective for new companies or companies seeking rapid growth.
Some advertising campaign strategies call for heavy spending upfront in order to win long-term customers.
The historical method
As the name implies, this is based on how much the company spent on reaching its sales targets in previous years.
Share of market — share of voice
This method links market share to advertising expenditure.
A company with a 20% market share will spend slightly more than 20% of the total advertising rands spent in the market for that product or service.
For new companies, expenditures would be 1,5 times the desired market share until that position is attained. In other words, if a company wants a 20% market share, it needs to spend 30% of its total advertising rands in that market until it reaches this goal.
