Analyze all ads in relation to response

Divide ads into at least two classes: high-response ads and low-response ads. Then look for differences between the two classes.

The time the ad was broadcast or run may be responsible for a particular response level. Other factors, however, may be just as influential as time or even more so, though in radio time is often crucial.

Consider the message and how well it was expressed. Did the copy stick to the theme or did it wander? If you used slogans, did they help make the point? For print, consider the effects of illustrations, type, size, color, and ad location. In broadcast, consider whether or not the voice of the person doing the ad or music used may have had an effect.

Emphasis on brand names should also be checked. Price figures should be analyzed. If price lines are involved either in the ad or in the merchandise line of which the advertised product is a part, you should consider them also.

Check the effect of the length of broadcast ads. Did you get the best results with 10-second, 30-second, or 60-second announcements?

Check the size of print ads. Size often has a bearing on response. As a general rule, the larger the ad, the larger the response.

Try to see a pattern of dominance

Your analysis of high-and-low response ads, may show that certain details make the difference between a high or low response. Try to find the combinations which work best for your firm and merchandise.

Note changes occurring over time

You should never take a winning combination for granted. There is no single formula that will insure high response ads every time. Advertising changes. Therefore, you should watch the ads of others to see what changes are occurring. Continue to analyze your own ads, make small changes occasionally, and note any variations in response.

Listen to what people say about your ads

In doing so, try to discover your mental framework within which any comment about your ad was made. Then try to find points which reinforce believability and a feeling that your product fulfills some wish or need.

However, you should not be misled by what people say. An ad can cause a great deal of comment and bring in practically no sales. An ad may be so beautiful or clever that as far as the customer is concerned the sales message is lost.

When You Use Several Media

When your ads appear simultaneously in different media - such as the newspapers, on radio and television, in direct mail pieces, and as handbills - you should try to evaluate the relative effectiveness of each. You can check one printed medium against the other by using companion ( the same or almost identical) ads in the newspapers, direct mail, and handbills.

You can make the job of analyzing and comparing results from the media easier by varying your copy - the message. Your ad copy, thus, becomes the means of identifying your ad response.

You can check broadcast media - radio and TV - by slanting your message. Suppose, for example, that you advertise an item at 20 percent reduction. Your radio or TV ad might say something like this; "Come in and tell us you want this product at 20 percent off."

You can compare these responses with results from your "20 percent off" newspaper ad. Require the customer to bring in the newspaper ad - or a coupon from it.

Some of the ways to vary the copy are; a combination of the brand name with a word or some words indicating the product type; tone of voice; speed of delivery; picture variation; size variations; and color variations. Check your printed ads against each other as well as against your radio and TV ads.

Be careful that the copy variation is not so great that a different impression is received from each medium. Here you would, in effect, have two different ads.

Short-Term and Long-Term Effects of Advertising Results

Even one ad or commercial or highway poster can result in sales for one product and attention for your business. You should remember, however, that a series of ads that are related will result in sales over a longer period of time than the campaign lasts. Your business name will become very much better know. Your expenditures for advertising therefore, should be scheduled over a period of three, six, and twelve months. Avoid deciding to advertise this week and putting off the decision about when you will next advertise.

Where to Get Help

Most newspaper offices have at least one person who can help you plan the overall layout, design of your ad, provide illustrations for your ad, and make suggestions about the copy that will be contained in the ad. Radio stations will frequently help write copy and provide a music background for the commercial. Television stations may produce your commercial, usually for a fee. Outdoor advertising agencies may paint or design a poster or bulletin for you, again at a price. Specialty advertising firms may recommend gift items, some at very low cost.

Many small towns, as well as all cities, will have one or more advertising agencies that are organized to create and place retail advertising for advertisers.

These agencies will probably charge you a specific fee, as local media may not pay an ad agency fee.

If a college, university or other school is near you, you might find that students will be happy to create your ads and even plan your campaign.

ToBefore opening your Company you Need to decide upon the general price Level you expect to keep. Are you going to appeal to
individuals buying in the high, moderate, or low budget? Your choice of location, look of your institution, quality of goods
handled, and services to be provided will depend on the customers you would like to attract, and so will your prices.

After establishing this general price level, you are ready to price Individual products. Generally, the price of an item must
cover the cost of this item, the other expenses, and a profit. Therefore, you'll have to markup the thing by a certain sum to
cover costs and make a profit. In a business that sells few things, total prices can easily be allocated to each product and a
markup quickly ascertained. With a variety of items, allocating costs and determining markup might need an accountant. In retail
operations, goods tend to be marked up by 50 to 100 per cent or more simply to make a 5 percent to 10% profit!

Let's work through a markup example. Suppose your organization sells One product, Product A. The provider sells Product A for you
for $5.00 each. You and your accountant decide the prices involved in selling Product A are $4.00 per item, and you desire a $1
per item gain. What is your markup? Well, the sale price is: $5 plus $4 plus $1 or $10; the markup consequently is 5. As a
percent, it is 100%. So you have to markup Merchandise A by 100% to make a 10% profit!

Many small business managers are interested in knowing what Industry markup norms are for a variety of products. Wholesalers,
distributors, trade associations and business research firms publish a massive variety of such ratios and company statistics.
They're useful as recommendations. Another ratio (in addition to the markup percent ) important to small businesses is your Gross
Margin Percentage.

The GMP is similar to your markup percent but whereas markup Refers to the percentage over the price to you of each product that
you must set the selling price so as to cover all other costs and make profits, the GMP shows the relationship between sales
revenues minus the expense of the item, which is your gross profit margin, along with your earnings earnings. Exactly what the GMP
is telling you is your markup bears a certain relationship to your sales earnings. The markup percentage and the GMP are
essentially the same formula, together with the markup referring to individual product pricing and GMP referring to the item costs
times the amount of items sold (volume).

Perhaps an illustration will clarify the purpose. Your company sells Product Z. It costs you .70 each and you choose to sell it
for $1 each to cover costs and gain. Your markup is 43%. Now let up state you sold 10,000 Merchandise Z's Last month hence
producing $10,000 in earnings. Your price to purchase Product Z was 7000; your gross profit margin was $3,000 (earnings minus cost
of goods sold). This is also your gross markup for the month's volume. Your GMP would be 30 percent. Both of these percentages use
the exact same basic amounts, differing only in branch. Both are used to set up a pricing system. And both are printed and can be
utilized as guidelines for smaller firms starting out. Often managers determine what Gross Margin Percentage they'll need to make
a profit and just visit some printed Markup Table to discover the percent markup which correlates with that margin requirement.

While this discussion of pricing might appear, in certain respects, to Be directed only to the pricing of retail merchandise it
can be applied to other types of companies too. For solutions the markup has to pay for selling and administrative costs as well
as the direct cost of performing a specific service. If you're producing a product, the costs of direct labour, supplies and
materials, parts purchased from different concerns, special tools and equipment, plant overhead, selling and administrative
expenses have to be carefully anticipated. To calculate a price per unit requires an estimate of the number of units you intend to
produce. Before your factory gets too big it would be wise to consult a lawyer about a cost accounting system.

Not all items are marked up from the average markup. Luxury articles Will require more, staples less. For instance, increased
sales volume by a lower-than-average markup on a certain thing - a"loss leader" - can bring a greater gross profit unless the
purchase price is lowered too much. Then the consequent increase in sales won't raise the entire gross profit enough to compensate
for the low price.

Sometimes you may wish to market a certain item or service at a lesser Markup so as to increase store traffic with the hope of
increasing earnings of Regularly priced product or generating a high number of new support contracts. Competitors' costs will also
regulate your prices. You cannot sell a Product if your competition is greatly underselling you. These and other Factors Can make
you vary your markup one of items and services. There's no magic Formula that will work on every item or every service all the
time. However, You ought to remember the general average markup which you want to generate a Gain.

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