Saturday, July 14, 2012

Post-Testing Techniques of Advertising Copy

The following are the post-test techniques for measuring the effectiveness of the advertisements –

(1) Recognition Test – It determines the readership of the advertisement in the newspapers and journals. This test is conducted by personal interviews with readers, and magazines or newspapers. The interviewers locate the readers of the particular issue of the magazine in question. They, then, go through the magazine page by page with the respondent indicating those advertising elements which he or she recognise as having read.
The data collected by this test indicate the proportion of qualified readership of a publication who claims to have ‘seen’, ‘read some’ or ‘read most of the elements of the individual advertisement. These measurements may also seek to obtain quantitative data regarding the parts of an advertisement which were seen or heard.

(2) Recall or Impact Test – The recognition test measurers the stopping power of the advertising but goes not tell us what the readers understood or retained of the advertisement. The recall test is designed to measure the impression of readers or viewers of the advertisement. If a reader has a favorable impression of the advertisement, he will certainly retain something of the advertisement. The measures of interest would be obtained by interviewing the readers or viewers or listeners, days after the advertisement or commercial is appeared in the newspaper, or on T.V. Interviewer asks the questions from the readers / viewers and in  response to the question asked, the reader reveals the accuracy and depth of his impression by his answers.

(3) Psychological Analysis – The whole process of advertising is psychological in character. It is therefore, natural to apply some psychological tests to measure the effectiveness of the advertising.
Four psychological testing techniques are most commonly used –
  • (a) Tests of readability and comprehension;
  • (b) Tests of Believability
  • (c) Attitude tests; and
  • (d) Triple Associates Test.
  • Tests of Readability and Comprehension It this technique, by means of a series of penetrating questions and by other techniques developed by psychologists, the ease of readability and comprehension is determined, in advance of publication. It is determined by the interviewer under this method whether and to what extent the readers have gone through the advertisement.
  • Tests of Believability An advertisement message effective. ness can be measured by the degree of credibility the readers have in the product. A scale technique is generally employed to measure the credibility by putting several statements or product claims before. the consumers and are created by them. The statement or product Claims gets the highest priority votes may be taken as the most effective statement or claim.
  • Attitude Tests : A number of attitude tests are developed by the psychologists who can be applied to copy testing. Typical consumers are exposed to sample advertising messages, either printed or oral. The interviewer then asks series of penetrating questions, to determine the attitude produced by these various message. Psychological reactions such as age, involvement, the eye of person who would use the product and the personality of the product reflected by the advertisement being tested, are obtained. The researcher looks especially for elements in the advertising which arouse psychological hostility.
  • Triple Hostility Tests – these ties in advertising with recall by seeking to learn the extent of the consumer association with the product, the brand name and copy theme. The test is useful only when the advertising features a specific theme or slogan, which the reader may remember. This procedure is sometimes known as theme penetration.

Pre-Test Methods of Advertising Copy

Pre-test method refers to testing the potentiality of a message or copy before printing or broadcasting. It is useful because the concepts in advertising may appear to be simple and effective to the advertiser or advertising to be simple and effective to the advertiser or advertising agency. It may be difficult from the layman’s point of view. All the elements in the advertising copy requires careful pre-testing to see that the matter it intends to be conveyed has been really conveyed, ‘prevention is better than care’. Pre testing methods are adopted on this basis. The following are some of the pre-testing methods.
  • Check list method
  • Consumer Jury method
  • Sales Area Test
  • Questionnaire
  • Recall test
  • Reaction test
  • Readability test
  • Eye-movement test

a. ChecklistMethod
The copywriters use checklist method to test the effectiveness of advertising copy. The purpose of this method is to ensure that all elements of the advertising copy are included with due importance in the advertisement. As it is a pretest method omissions can be included in the copy before release of the advertisement.
A checklist is a list of good qualities to be possessed by an effective advertisement. The researcher has to compare the advertisement with the checklist and tick the items present in the advertisement copy. Accordingly a copywriter can draw specific conclusions and make suitable changes in the advertising copy.

b. Consumer Jury method
This method essentially involves the exposure of alternative advertisements to a sample of jury; of prospects and the securing of their opinion and reactions to the advertisements. This test is designed to learn from a typical group of prospective customers gathered in one place or a sample of prospects that are independently, visited by interviewers or contacted by mail their preference for one advertisement over the other or for several advertisements out of a group. Advertisements which are unpublished are mocked up on a separate sheet and these are presented before the consumer jury either in personal interviews or group interviews.

c. Sales Area Test
Under this method advertising campaign is run in the markets selected for testing purposes. The impact of the campaign is evaluated by actual sales in the selected markets. The market with high sales is considered the best market for effective sales campaign. In other markets suitable changes are made in the advertising campaign.

d. Questionnaire Method
It is a list of questions related to an experiment. It contains questions and provides space for answers. The draft of an advertisement along with some relevant questions is to be sent to a group of target consumers or advertising experts. Their opinions are collected and analysed to find out whether the proposed advertisement is satisfactory or not.

e. Recall testMethod
Under this method, advertising copies are shown to a group of prospects.
After few minutes they are asked to recall and reproduce them. This method is used to find out how far the advertisements are impressive.

f. Reaction test
The potential effect of an advertisement is judged with the help of certain instruments, which measure heartbeats, blood pressure, pupil dilution etc. Their reactions reveal the psychological or nervous effects of advertising.

g. Readability test
All the listeners of advertisements cannot read it equally. So respondents are drawn from different socio economic and geographical backgrounds. This method is used to find out the level of effectiveness when and advertisement is read.

h. Eye movement test
The movements of eyes of the respondents are recorded by using eye observation camera when advertisements are shown to them in a screen. This helps to find out the attention value of advertisement.

PRE-TEST AND POST-TEST OF ADVERTISING COPY


Almost every firm spends thousands of rupees on advertising every year; it is very much pertinent to know the effectiveness of the advertisement copy. The main purpose of every advertising is to arouse the interests of the people in the firm’s product can everyone be perused by the same advertisement? Or will the same advertisement satisfy all types of people? The simple answer is in negative because people differ so greatly in their wants, in the economic and other motives which actuate them, and in the various ways by which their interest is aroused. It is why some advertisements are more effective than others. The amount is spent on advertising not only because the advertisement does not get to the right people but because it carries an appeal which does not interest those to whom it goes. An often quoted remark about advertisement is that half the money spent on advertising is wasted; but no one knows which half.

For this purpose, advertising copy research is done to see how will an advertisement succeeds in attracting the attention and stimulating the desire and action of the people for whom it is made and how will it delivers the intended message about a product or an idea. Advertisement copy is done to be sure of its effectiveness.

Copy Testing
Copy testing is a tool involving a procedure where the effectiveness of an advertisement is measured before it appears in its final form, during and after its exposure to the audience to determine whether and to what extent, it has accomplished its assigned task. In this way, the copy testing is a method used to control the effectiveness of future advertising. It addresses the following questions
–
(a) Will a proposed copy theme be effective at achieving advertising objectives?
(b) Does the set of advertisings that makes up an advertising campaign create the Desired interest level and image? And
(c) Will an individual advertisement attract the attention of the audience?

Types of Tests
The various methods of testing advertising copy are
1. Pre-test methods
2. Post-test methods
3. Concurrent methods

Friday, July 13, 2012

IMPORTANT FUNCTIONS OF THE FINANCIAL MANAGER:


The important function of the financial manager in a modern business consists of the following:

1. Provision of capital: To establish and execute programmes for the provision of capital required by the business.

2. Investor relations: to establish and maintain an adequate market for the company securities and to maintain adequate liaison with investment bankers, financial analysis and share holders.

3. Short term financing: To maintain adequate sources for company’s current borrowing from commercial banks and other lending institutions.

4. Banking and Custody: To maintain banking arrangement, to receive, has custody of accounts.

5. Credit and collections: to direct the granting of credit and the collection of accounts due to the company including the supervision of required arrangements for financing sales such as time payment and leasing plans.

6. Investments: to achieve the company’s funds as required and to establish and co-ordinate policies for investment in pension and other similar trusts.

7. Insurance:to provide insurance coverage as required.

8. Planning for control: To establish, co-ordinate and administer an adequate plan for the control of operations.

9. Reporting and interpreting: To compare information with operating plans and standards and to report and interpret the results of operations to all levels of management and to the owners of the business.

10. Evaluating and consulting: To consult with all the segments of management responsible for policy or action concerning any phase of the operation of the business as it relates to the attainment of objectives and the effectiveness of policies, organization structure and procedures.

11. Tax administration: to establish and administer tax policies and procedures.

12. Government reporting: To supervise or co-ordinate the preparation of reports to government agencies.

13. Protection of assets: To ensure protection of assets for the business through internal control, internal auditing and proper insurance coverage.

SEARCH FOR A BUSINESS IDEA


CHOOSING AN IDEA
To get established as a successful entrepreneur depends to a large extent on a good idea. Idea must not only be good for the market, but good for the project and good for the entrepreneurs. Further, it should be manageable without much dependence on others and should provide satisfactory results to the entrepreneur. In the idea stage, suggestions for new products are obtained from all possible sources viz. customers, competitors, R&D, distributors and company employees. Essentially the entrepreneur needs to scan the environment.

THE VARIOUS SOURCES ARE

Personal Informal Sources
  • Family
  • Customers
  • Friends
  • Colleagues
  • Salesman
  • Social Contacts
  • Employees
Personal Formal Sources
  • Bankers
  • Business Consultants

Impersonal Written Sources
  • Magazines
  • Journals
  • Books
  • Newsletter
  • Newspapers
  • Catalogues
Impersonal Oral Sources
  • Trade Shows
  • Seminars/ Workshops
  • Professional Organizations
  • Small Business Organizations
  • Suppliers/ Dealers
One should use as many resources as possible for the purpose of scanning the environment.

Indirect Methods of measuring advertisement effectiveness

As it is very difficult to measure the direct effect of advertising on company’s profits or sales, most firms rely heavily on indirect measures. These measures do not evaluate the effects of advertisements directing on sales or profits but all other factors such as customer awareness or attitude or customer recall of advertising message affect the sales or profits or goals of the business indirectly.

Despite the uncertainties about the relationship between the intermediate effects of advertising and the ultimate results, there is no other alternative but to use indirect measures. The most commonly used measures are –

(1) Exposure to Advertisement

In order to be effective, the advertisement must gain exposure. The management is concerned about the number of target audiences who see or hear the organisation message set in the advertisement. Without exposure, advertisement is bound to failure.

Marketers or advertisers may obtain an idea of exposure generated by the medium by examining its circulation or audience data which reveal the number of copies of the magazine, newspaper or journal sold the number of persons passing the billboards or riding in transit facilities, or the number of persons living in the televiewing or radio listening area, and the number of persons switching on their T.V. and radio sets at various points of time. This number can be estimated by interviewing the numbers of the audience for different media.

 (2) Attention or Recall of Advertising Message Content

This is one of the widely used measures of advertising results. Under this measure, a recall of the message content among a specified group or groups or prospective customers is measured within 24 hours of the exposure of the advertisement.

Attention value is the chief quality of the advertising copy the advertisements cannot be said to be effective unless they attract the attention of the target consumers. There are two methods for evaluating the attention getting value of the advertisements. One is pre-test and the other is post-test. In a pre-test evaluation, the consumers are asked to indicate the extent to which they recognise or recall the advertisement, they have already seen. This test is conducted in the laboratory setting. Here consumers read, hear or listen to the advertisement and then researchers ask question regarding the advertisement just to test the recall and then evaluate it.

In post-test method, the consumers are asked questions about the indication of recognition or recall after the advertisement has been run. These measures assume that customers can recall or recognise what they have viewed or listened to. Various mechanical devices are being used in the western countries which provide indices of attention such as eye-camera etc.

(3) Brand Awareness

The marketers who rely heavily on advertising often appraise its effectiveness by measuring the customer’s awareness about the particular product or brand. The assumption of this type of measure is that there is a direct relationship between the advertisements and the awareness. This type of measure is also subject to the same criticisms as is applicable to direct measures of effectiveness (sales measures because awareness is also not the direct result of the advertisements. It is also affected by many other factors. But, for new products, changes in awareness can often be attributed to the influence of advertising.

(4) Comprehension

Consumers generally use advertisements as a means of obtaining information about the product, brand or the manufacturer. They cannot be informed unless they comprehend the message (grasp the message mentally and understand it fully). Various tests for valuating comprehension are available –
One is recall tests – an indicator of comprehension because it is evident that consumers recall what they comprehend. Another measure of the variable is to ask questions about subjects how much they have comprehended a message they have recently heard or seen. One may employ somewhat imprecise test of the comprehension of a newspaper and radio advertisement. One may ask typical target consumers from time to time such questions like ‘what did you think of our new commercial?’ and ‘Did it get the message across’? The answers of these questions will provide sufficient insight into advertising decision making.

(5) Attitude Change

Since advertising is considered to be one way of influencing the state of the mind of the audience towards a product, service or organisation, the results are very often measured in terms of attitudes among groups exposed to advertising communication. Several measures are used ranging from asking the questions about willingness to buy the likelihood of buying to the measurement of the extent to which specific attributes (such as modern or new) are associated with a product.

(6) Action

One objective of advertisement may be assumed to be to stimulate action or behaviour. The action or intention to take an action may be measured on the intention to buy measuring instrument. Under this type of measure, consumers are asked to respond why they are interested in purchasing the product or brand. One type of action that advertisers attempt to induce is buying behaviour. The assumption is that if an increase in sales follows a decrease in advertising expenditure, the change in sales levels are good indicators of the effectiveness of advertising. Logic suggests that measurement of sales is preferable to other measurements.
Thus, these above measures (direct or indirect) are used to evaluate the effectiveness of advertisements. It seems from the analysis of the above methods of measuring effectiveness that directly or indirectly changes in sales or profits are taken as the measuring rod of the effectiveness of the advertising.

METHODS OF MEASURING ADVERTISING EFFECTIVENESS - DIRECT

Advertising is aimed at improving the sales volume of a concern so its effectiveness can be evaluated by its impact on sales. Most of the managers believe that the advertisement directly affects the sales volume and hence they evaluate the effectiveness of the advertising campaign by the increase in the sales volume. There may be two types measures (i) Direct measures: and (ii) Indirect measures:-

(1) Direct Measures of Advertising Effectiveness
Under direct measures, a relationship between advertising and sales is established. A comparison of sales of two periods or two periods or two markets may be done and the corresponding changes may be noted. The following are some of the methods that are generally used in measuring that advertising effects.

(a)   Historical Sales Method Some insights into the effectiveness of past advertising may be obtained by measuring the relationship between the advertising expenditure and the total sales of the product. A multiple regression analysis of advertising expenditure and sales over several time periods may be calculated. It would show how the changes in advertising expenditure have corresponding changes in sales volume. This technique estimates the contribution that advertising has made to explaining in a co relational manner rather than a casual sales, the variation in sales over the time periods covered in the study

(b)   Experimental Control The other measure of advertising effectiveness is the method of experimental control where a casual relationship between advertising and sales is established. This method is quite expensive when related to other advertising effectiveness measures yet it is possible to isolate advertising contribution to sales. Moreover this can be done as a pre-test to aid advertising in choosing between alternative creative designs. Media schedules expenditure levels or some combination of these advertising decision areas. One experimental approach to measuring the sales effectiveness of advertising is test marketing.

    • Before-after with Control Group Design This classic design uses several test and control cities in this design two types of cities are selected. Cities in which advertising campaigns are affected may be named as test cities and other cities may be called central cities. First of all, the normal sales level is calculated for both type of cities prior to advertising campaign, and then the advertising campaign is presented to the test cities and not the central cities. The effect of advertising campaign, can then, be measured by subtracting the amount of post campaign figure of sale from the pre campaign sale figures in test cities.

A Before-after with Control Group Design forMeasuring the
Effectiveness of Advertising Campaigns




Test cities
Control cities

Pre-campaign measure of sales
Yes

Yes
Advertising campaign
Yes

No
Post-Campaign measure of Sales
Yes

Yes

The difference of post and pre campaign sales in cities is the result of advertising and all other factors that affect the sales.

  • (ii) Multivariable Experimental Designs While the experimental design discussed above yields a reasonably accurate estimate of the effects of the advertising on sales, it is not successful in explaining the success or failure of the campaign itself. Multivariable designs Produce these explanations and are, therefore used by some very large firm because of their diagnostic value. The power of this multivariable factorial design is explained by G.H.Brown, former Fords Director of Marketing Research. For any single medium, eight possible geographic areas have been exposed and eight have not been exposed. Thus, in this experimental model it is possible to evaluate how each individual medium behaves alone and in all possible to evaluate how each individual medium behaves alone and in all possible combinations with other media.