Principles of Marketing

456 PART 3 | Designing a Customer Value–Driven Strategy and Mix
that it was nine years ago, adding that the
advances have only been incremental since
then. Toward the end of the print advert it
made an indirect reference to Apple’s previous
brand positioning before stating that it
would pick up where the leader left off.
The campaign also included a two-minute
YouTube video that showed a focus group of
iPhone users being asked to describe their
feelings about the iPhone 7’s new features.
The participants gave mild responses, remarking
that there was not much difference
from previous versions of the iPhone. The participants
were then introduced to new iPhone
“prototypes” with modular and interchangeable
back cases that can function as a power
pack, external speakers, camera, and projector.
The participants were excited about these
new features, and one commented that they
made them feel like Apple had heard what the
consumers were saying. It was then disclosed
to the participants that prototype phone was
actually the Moto Z with the Moto Mod features.
Lenovo claimed that the attendees of
the focus group were not actors.
Lenovo thus set out to communicate
its stand against incrementalism and
challenged the marginal changes that smartphone
users had become accustomed to.
It presented its Moto Mod features as truly
revolutionary and a contrast to the offerings
of the two major brands, encouraging the
audience to re evaluate what real innovation
is. The approach was openly comparative as
it challenged people’s devotion to Apple and
Samsung. The comparative and aggressive
strategy has worked well for Samsung in
the past when it challenged Apple’s market
leadership. It will be interesting to see how
Lenovo will build on and communicate its
proclaimed “revolutionary” brand differences
in its own challenge to the big guns of the
smartphone industry.
Sources: Jacob Kastrenakes, “Lenovo Hopes Its Snarky New Ad Will Stop You from Buying an iPhone or Galaxy”
The Verge, September 15, 2016, http://www.theverge.com/2016/9/15/12927006/moto-z-skip-the-sevens-adcampaign-launches;
tech2 NewsStaff, “Lenovo Takes a Dig at Apple, Samsung with Their ‘Skip the Sevens’
Campaign” September 17, 2016, http://tech.firstpost.com/news-analysis/lenovo-takes-a-dig-at-apple-samsungwith-their-skip-the-sevens-campaign-335762.html;
Aaron Baar, “Lenovo Tells Consumers to ‘Skip the Sevens’,”
Marketing Daily, September 16, 2016. http://www.mediapost.com/publications/article/284847/lenovo-tells-consumers-to-skip-the-sevens.html;
Lenovo “Lenovo Moto Unveils ‘Skip the Sevens’ Campaign,” September 15,
2016, http://www.prnewswire.com/news-releases/lenovo-moto-unveils-skip-the-sevens-campaign-300329162.
html#continue-jump; London School of Marketing, “How Samsung Used Comparative Advertising to Compete
with Apple,” September, 2012, http://www.londonschoolofmarketing.com/blog/bid/349914/How-Samsung-usedcomparative-advertising-to-compete-with-Apple;
John Ellett “3 Reasons Samsung’s Latest Advertising Poking
Apple Is So Smart,” Forbes, September 20, 2012, http://www.forbes.com/sites/lizryan/2016/12/13/six-thingsnever-ever-to-do-on-company-time/#273008ba2fa7;
Elad Natanson “A Pivotal Year for the Smartphone Industry,”
Forbes, September 12, 2016, http://www.forbes.com/sites/eladnatanson/2016/09/12/2016-a-pivotal-year-forthe-smartphone-industry/#538e64a72f3c;
IDC Press Release, “Worldwide Smartphone Volumes Relatively Flat in
Q2 2016 Marking the Second Straight Quarter without Growth,” IDC, July 28, 2016, http://www.idc.com/getdoc.
jsp?containerId=prUS41636516.
Advertising’s goal is to help move consumers through the buying process. Some
advertising is designed to move people to immediate action. For example, a directresponse
television ad by Weight Watchers urges consumers to go online and sign up
right away, and a Best Buy newspaper insert for a weekend sale encourages immediate
store visits. However, many ads focus on building or strengthening long-term customer
relationships. For example, a Nike television ad in which well-known athletes
work through extreme challenges in their Nike gear never directly asks for a sale.
Instead, the goal is to engage customers and somehow change the way they think or
feel about the brand.
Advertising budget
The dollars and other resources allocated
to a product or a company advertising
program.
Setting the Advertising Budget
After determining its advertising objectives, the company next sets its advertising budget
for each product. Four commonly used methods for setting promotion budgets are discussed
in Chapter 14. Here we discuss some specific factors that should be considered
when setting the advertising budget.
A brand’s advertising budget often depends on its stage in the product life cycle. For
example, new products typically need relatively large advertising budgets to build awareness
and to gain consumer trial. In contrast, mature brands usually require lower budgets
as a ratio to sales. Also, brands in a market with many competitors and high advertising
clutter must be advertised more heavily to be noticed above the noise in the marketplace.