Impact of Advertising

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Advertising Objectives
Advertising objectives are the communication tasks to be accomplished with specific customers that a company is trying to reach during a particular time frame. A company that advertises usually strives to achieve one of four advertising objectives: trial, continuity, brand switching, and switchback. Which of the four advertising objectives is selected usually depends on where the product is in its life cycle. Trial

The purpose of the trial objective is to encourage customers to make an initial purchase of a new product. Companies will typically employ creative advertising strategies in order to cut through other competing advertisements. The reason is simple: Without that first trial of a product by customers, there will not be any re peat purchases.

Continuity advertising is a strategy to keep current customers using a particular product. Existing customers are targeted and are usually provided new and different information about a product that is designed to build consumer loyalty.

Brand Switching
Companies adopt brand switching as an objective when they want customers to switch from competitors' brands to their brands. A common strategy is for a company to compare product price or quality in order to convince customers to switch to its product brand. Switchback

Companies subscribe to this advertising objective when they want to get back former users of their product brand. A company might highlight new product features, price reductions, or other important product information in order to get former customers of its product to switchback. Advertising Budget

Once an advertising objective has been selected, companies must then set an advertising budget for each product. Developing such a budget can be a difficult process because brand managers want to receive a large resource allocation to promote their products. Overall, the advertising budget should be established so as to be congruent with overall company objectives. Before establishing an advertising budget, companies must take into consideration other market factors, such as advertising frequency, competition and clutter, market share, product differentiation, and stage in the product life cycle. Advertising Frequency

Advertising frequency refers to the number of times an advertisement is repeated during a given time period to promote a product's name, message, and other important information. A larger advertising budget is required in order to achieve a high advertising frequency: Estimates have been put forward that a consumer needs to come in contact with an advertising message nine times before it will be remembered. Competition and Clutter

Highly competitive product markets, such as the soft-drink industry, require higher advertising budgets just to stay even with competitors. If a company wants to be a leader in an industry, then a substantial advertising budget must be earmarked every year. Examples abound of companies that spend millions of dollars on advertising in order to be key players in their respective industries (e.g., Coca Cola and General Motors).

Market Share
Desired market share is also an important factor in establishing an advertising budget. Increasing market share normally requires a large advertising budget because a company's competitors counterattack 132

with their own advertising blitz. Successfully increasing market share depends on advertisement quality, competitor responses, and product demand and quality.
Product Differentiation
How customers perceive products is also important to the budget-setting process. Product differentiation is often necessary in competitive markets where customers have a hard time differentiating between products. For example, product differentiation might be necessary when a new laundry detergent is advertised: Since so many brands of detergent already exist, an aggressive advertising campaign would be required. Without this aggressive advertising, customers would...
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