|
|
|
|
This objective of this newsletter is to clarify and debunk the world of electronic advertising. If this does not interest you or is not in your line of work, please kindly unsubscribe below. We certainly don't want to clutter your inbox with irrelevant material.
|
The Phases of Advertising
We often talk about why to advertise, but we seldom further refine the answer into phases. It is appropriate to do so.
When a product or a company is new, or shall be or was an infant, it is fairly obvious as to why it should advertise. Advertising is the most economical means to get the word out about the product. After all, if it was economical, everyone would have a salesperson take the product to every possible customer and discuss it with them. This would be far more effective than even the best advertising, at least in a business-to-business setting, but so horribly expensive as to be cost prohibitive. So, one uses a combination of advertising, collateral materials and then sales calls to the highest value (those most likely to purchase your product now) prospects.
In the adolescent years of a product's life, advertising serves several purposes. It reinforces that the product is still in the market place, thus emphasizing that enough customers find it valuable and hence sustainable. Advertising can be used to announce extensions to a product's features ("new and improved") when the prospect pool already knows about it. This can be very effective, for some prospects may have been hesitating to purchase the product because it just did not quite meet their needs. Advertising in the adolescent years can also be used to correct a perceived flaw or stumble that the product may have had in the marketplace.
In the mature years of a company or product, advertising serves a role equally as important as the one it served in the earlier years. Yes, the product and company are well-known now, but advertising moves into a special function. Advertising burnishes the image, enhances the trade name and brings this result to the bottom line: it improves operating margins. Well-known brands always earn higher margins than new or marginal brands.
Allow me to offer an example from an unrelated business to illustrate my point in all these phases. The example is agricultural tractors and earth moving equipment. There are two relatively new kids on the block these days in this business. One is Kubota (in the United States for over two decades) and Mahindra (in the United States for a shorter period of time, but the largest volume tractor manufacturer in the world) These two advertise like infants or adolescents--their advertising does a lot of feature-and-benefit comparison with their mature competition. They advertise in unusual venues (Mahindra advertises on the Rush Limbaugh radio program, for example). Another infant is McCormick, which is not advertising much and is not growing at anywhere near the rate being clocked by Kubota and Mahindra. McCormick runs the risk of being shoved out of the market.
In the middle of the life phase is AGCO. AGCO is a different sort of company. It has been agglomerating many regional and local brands. Sometimes it has been allowed to keep the name from the past (White). Sometimes it has had to change it slightly (Valtra is the old Valmet tractor division from Finland). And, it has brought some brands out under its own name. AGCO is a large collection of many familiar names and it markets those names in regional markets, using branding and advertising in a manner often used by large consumer products companies (focus on the brand, not the company name).
Then we have the mature brands. John Deere. CaseIH (a smash-up of the J. I. Case Company and International Harvester in the 1980s). Caterpillar. These brands use advertising to continue to burnish the name. They are well known. What they are achieving with advertising is not only keeping their faithful followers in the fold, but keeping them so loyal that they can continue to raise prices (and margins) when no one else can.
Whether to get the word out, communicate new features or burnish your brand, your investment in advertising is one of the best investments you can make.
Jim Thompson is CEO of Paperitalo Publications.
|
Older issues....  |
More Paperitalo Resources on Marketing...
|
|
ABOUT PAPERITALO PUBLICATIONS
"Paperitalo" (pop-er-ree-towel-o) is Finnish for "Paper House." We produce and distribute, electronically only, many publications dealing with all matters in the pulp and paper industry worldwide. You can see a list of these here. Additionally, we broadcast live, and in podcast form, from Pulp and Paper Radio International.Our print publications are the highest ranked publications in the pulp and paper industry worldwide according to alexa.com. We publish our and our major competitors' Alexa rankings each month here. We currently experience around 20,000-plus clicks, or as we like to call them "touches", every day from around the world. This means on average, every minute of every day, slightly more than 14 people choose to click on to one of our publications or podcasts.
|
 |
Paperitalo Publications, LLC
4018 Keeneland Court
Duluth, Georgia 30096
678-206-6010
Vice President, Publisher & Editor--Steve Roush
Regional Sales--Art Burgess
Executive Vice President--Helen Roush
CEO & Executive Editor--Jim Thompson
Administration Manager--Allison Gifford
|
Paperitalo Publications
4018 Keeneland Court
Duluth, Georgia 30096
678-206-6010
|
|
