Selection of the target audience by the leverage method in the expert system for advertising specialist Ulyana Kulbida 1, Olga Kaneva 2 1 Omsk State Technical University, Omsk, Russian; uni form@mail.ru 2 Omsk State Technical University, Omsk, Russian okaneva@yandex.ru Advertising positioning is an independent branch within the general theory of positioning, and it determines the optimal way of presenting information about a trademark to a particular target audience. The market position of a trademark defines the location of goods on the market, while the advertising position defines the individuality of the trademark in the communications area. Well-known researchers of marketing and advertising Rossiter and Percy proposed to conduct advertising positioning of the trademark in levels: macro-level (X Y Z), meso-level (I D U), micro-level (a b e) [1]. Further we are going to examine the above mentioned levels more detailed. Macro-level. This level determines the place of the trademark within appropriate product category, selects a target audience and the way of the trademarks positioning, taking into account particular qualities of the consumer or the product. The scheme of macro level can be expressed by the following formula: Product X provides to people Y assistance Z. In this formula X equals the trademark, Y equals the target audience, while Z equals the benefits of the trademark. Meso-level. On this level, it is to be decided what benefits should be determined while positioning (the model I D U). Benefits emphasized in advertising, should correspond with the following three main conditions: 1) Importance: correspondence between the benefits and the motive that drives the one who buyes the trademark. 2) Delivery: the consumer s subjective opinion about the trademarks ability to provide benefits. 3) Uniqueness: the perceived ability of the trademark to provide benefits better than other trademarks do. Micro-level. This level defines the way of focusing on the main benefits. The technique of focusing on the benefits of the trademark is based on distinguishing characteristics (physical properties) of the product, its benefits(what the buyer wants) and emotions(feelings of the buyer caused 1
by buying or by using the product). The model was named after the first letters of these terms a b e, in which a stands for attribute, b stands for benefit, and e stands for emotion (e + positive, e negative). Making decision on the macro-, meso- and micro-levels of positioning allows us to make a conclusion about the position of the trademark. This conlusion presents the trademarks creative strategy. Obtaining a detailed scheme of such a conclusion is the decision of the unformalized problem in the field of advertising. Work Expert system for positioning and brand advertising strategies [2]proposesthealgorithmofthesolutionofthefirstproblemofthemacrolevel (determination of the trademarks place within appropriate product category) for the developed expert system. This algorithm is based on the use of attractiveness and competitiveness indicators. The results of the numerical experiments are given. The next problem of the macro-level is the selection of the target audience. Target audience is a group of people to which the specific campaign advertising or sales promotion is aimed at [1]. According to the Rossiter and Percy there are five groups of costumers: 1) New consumers of the product category. This group of people buying our product, gets acquainted with the category. 2) Loyal consumers, who buy our product on a regular basis. 3) Fickle consumers, who buy our products as well as other brands. 4) Fickle consumers of other brands, who buy products from other brands, but not ours. 5) Loyal to another brands consumers, who regularly buy someone else s product brand. Generally the target audience it is only one group of consumers. However, sometimes it is useful to define the primary and secondary target audiences. Frequently, the purpose of the advertising campaign is not only to attract new customers from other groups, but to keep people who are already loyal to the brand. The group of loyal customers of the own brand it is usually the secondary target audience of new campaigns which are aimed at other groups of buyers. It is necessary to estimate distributing capacity (the quantity of items or services that the company can sell) of each company using the following correlation: potential growth in sales (in monetary terms) to the value of the event of the advertising campaign, which can provide this growth in 2
sales. This correlation is called leverage. If we know the number of the customers in the certain group and the cost value for realization of the advertising campaign in this group we can count the common value of the leverage for the group: Profit leverage = number of the customers growth of profit. (1) cost value of the advertising campaign Obviously, in the usual case a group of customers can be considered as the target audience only if the profit leverage of this group exceeds one unit. This means that the effect of the advertising campaign will surpass the cost of its implementation. The higher profit leverage, the larger group of buyers corresponds to the role of the target audience. The character of the changing of the leverage with time is almost equal for the third and fourth groups of customers, consequently leverage is calculated not for five, but four groups of buyers. On the assumption of the values of the leverage we can determine the primary and sometimes secondary target audiences. Cost calculation of the advertising campaign (the values in the denominator of the formula (1)) is a nontrivial problem. Lots of professionals are based on personal experience, common sense and simple interdependences in the calculation of the advertising budget. Recently there were more sophisticated methods of calculating the advertising budget, but also their evaluation and application should not be divorced from practice. In the developed expert system, there is an approach that uses the index of MEF - the minimum effective frequency (the model of the optimization of the minimum effective frequency of Rossiter-Danaher). The index MEF shows the number of the consumers contacts with the advertisement, which is optimal for the influence on the target audience. Measured in absolute units [1]: MEF = 1+AMA (TA+BA+CA+PI), (2) where 1 initial level MEF in one advertising contact; AM A corrective factor attention to the means of advertising ; T A corrective factor target audience ; BA corrective factor brand awareness ; CA corrective factor character of the advertisement ; P I corrective factor personal influence. 3
Table 1 gives the approximate values for the quantities involved in the calculating of MEF. The algorithm for calculating of the cost of the campaign 1) Let i number of the customers group (i = 1,4), j number of advertising media vehicle which is used (j = 1,m). 2) Define the vectors: α = (α 1,...,α m ) T and β = (β 1,...,β m ) T, where α j cost of the developing promotional material for the media vehicle j, β j the cost of placement of the one advertising exposure at the media vehicle j. 3) For each group of customers are counting the value of ν i = MEF i, i = 1,4, where MEF i the minimum effective frequency for i-th group of customers (2). In the result we get vector quantity ν = (ν 1,ν 2,ν 3,ν 4 ) T. 4) Let x ij number of the advertising exposure at j-th media vehicle for i-th target audience. We obtain a matrix of variables: X = x 11 x 21 x 31 x 41 x 12... x 1m x 22... x 2m x 32... x 3m x 42... x 4m. 5) To determine the advertising budget of each customer group it is required to solve the following problem of integer programming: m β j x ij min, (3) m x ij ν j, x ij γ j, x ij Z, j = 1,m, where γ j 0 the prescribed values, indicating the required number of advertising exposures at the j-th media vehicle for the i-th target audience. The quantity on the objective function is equal to the cost of placement of the advertising at the media vehicles for the i-th group of customers. 6) After solving integer programming problems for each group of customers we will get the values of C 1,C 2,C 3 and C 4 campaign by the for- 4
mula: m m C i = β j x ij + α j. Then we use the formula (1) for the counting the value of leverage for each customer group and determination which of the groups will be the target audience. In the future we plan refinement algorithm by entering into the model (3) indicators of the effectiveness of advertising on each media vehicle. 5
Table 1: The values of correction factors Value of the factor Factor 0 1 2 3 Attention Strong attention Low to the attention means of advertising Target audience Loyal Fickle con- Consumers consumers of of other sumers of our brand our brand brands Brand awareness Character of the advertisement Personal influence Strong personal influence Advertisement for brand recognition Information advertisement Low personal influence New users of the produkt Advertisement for brand recall Transformational advertisement The authors were supported by the Russian Foundation for Basic Research (project no. 12-07-00326). REFERENCES 1. J.R. Rossiter, L. Percy. Advertising and promotion of products, Piter Publishing House, St. Peter (2001). 2. A.V Zykina, O.N. Kaneva, U.N. Kulbida. Expert system for positioning brand advertising strategies, Omsk Scientific Bulletin, No. 3(103), 253 257 (2011). 6