Advertising, Public Relations, and Sales Promotion

Chapter 13

Prepared by Deborah Baker Texas Christian University

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Learning Objectives
1. Discuss the effect of advertising on market share and consumers. 2. Identify the major types of advertising. 3. Discuss the creative decisions in developing an advertising campaign.

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Learning Objectives (continued)

4. Describe media evaluation and selection techniques. 5. Discuss the role of public relations in the promotional mix.

Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Learning Objectives
6. Define and state the objectives of sales promotion. 7. Discuss the most common forms of consumer sales promotion. 8. List the most common forms of trade sales promotion.

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On Line http://www.redbull.com

Learning Objective

Discuss the effect of advertising on market share and consumers.

Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Advertising

 U.S. advertising spending exceeds $240 billion per year  Industry employs only 284,000  Ad budgets of some firms exceed over $2 billion per yearover $6 million per day!
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Top Ten Leaders by U.S. Advertising Spending

Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Advertising and Market Share

 New brands spend proportionately more for advertising than old ones.  A certain level of exposure is needed to affect purchase habits.  Beyond a certain level, diminishing returns set in.

Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Advertising and the Consumer

 Average U.S. citizen is exposed to hundreds of ads each day.  Advertising may change a consumers attitude toward a product.  Advertising can affect consumer ranking of brand attributes.

Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Learning Objective

Identify the major types of advertising.

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Major Types of Advertising

Institutional Advertising

Designed to enhance a companys image rather than promote a particular product. Designed to tout the benefits of a specific good or service.

Product Advertising

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Major Types of Advertising

Enhance corporations identity Advocacy advertising Pioneering

Institutional Advertising

Product Advertising
Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Competitive Comparative
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On Line http://www.pizzahut.com http://www.papajohns.com

Product Advertising

Pioneering

Stimulates primary demand for new product or category. Used in the PLC introductory stage. Influence demand for brand in the growth phase of the PLC. Often uses emotional appeal.

Competitive

Compares two or more competing Comparative brands product attributes. Used if growth is sluggish, or if Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 13 competition is strong.
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Learning Objective

Discuss the creative decisions in developing an advertising campaign.

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Advertising Campaign

A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals.

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Steps in Creating an Advertising Campaign

Determine the advertising objectives.

Make creative decisions.

Make media decisions.

Evaluate the campaign.

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Setting Objectives: The DAGMAR Approach Goal of Advertising Objectives

Define Target Audience Define Desired Percentage Change
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Define the Time Frame for Change

Creative Decisions
Identify Product Benefits

Components of Creative Decisions

Develop and Evaluate Advertising Appeals Execute the Message Evaluate the Campaigns Effectiveness

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Identify Product Benefits

 Sell the Sizzle, not the Steak  Sell products benefits, not its attributes  A benefit should answer Whats in it for me?  Ask So? to determine if it is a benefit
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Advertising Appeal

Reason for a person to buy a product.

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Profit Health Love or romance Fear Admiration Convenience Fun and pleasure Vanity and egotism Environmental Consciousness

Common Advertising Appeals

Product saves, makes, or protects money Appeals to body-conscious or health seekers Used in selling cosmetics and perfumes Social embarrassment, old age, losing health Reason for use of celebrity spokespeople Used for fast foods and microwave foods Key to advertising vacations, beer, parks Used for expensive or conspicuous items Centers around environmental protection
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Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Unique Selling Proposition

Desirable, exclusive, and believable advertising appeal selected as the theme for a campaign.

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Executing the Message

Scientific Musical

Slice-of-Life Lifestyle

Demonstration

Common Executional Styles

Spokesperson/ Testimonial

Real/ Animated Product Symbols Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel
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Mood or Image

Fantasy Humorous
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Learning Objective

Describe media evaluation and selection techniques.

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Major Types of Advertising Media

Newspapers Magazines Radio Television Outdoor Media Internet Alternative Media
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Advertising Spending for 2000

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Advantages
 Year-round readership  Geographic selectivity  Immediacy  High individual market coverage  Short lead time

Newspapers
Disadvantages  Limited demographic selectivity  Little color  May be expensive  Low pass-along rate  Clutter  Mass market medium
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Cooperative Advertising

An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturers brand.

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Advantages
 Good reproduction  Demographic selectivity  Regional/local selectivity  Long advertising life  High pass-along rate

Magazines
Disadvantages
 Higher cost per contact  Long-term advertiser commitments  Slow audience build-up  Limited demonstration capabilities  Lack of urgency  Long lead time
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On Line http://www.radioindustry.about.com

Radio
Disadvantages
No visual treatment Short advertising life High frequency to generate retention

Advantages
 Selectivity and  audience segmentation   Immediate and portable   Geographic flexibility  Entertainment carryover  Short-term ad commitments
Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

 Commercial clutter  Background distractions

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On Line http://www.fox.com http://www.abc.com

Television
Disadvantages
 Short life of message  Expensive with high campaign cost  Little demographic selectivity with network  Long-term advertiser commitments  Long lead times  Clutter
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Advantages
 Wide, diverse audience  Low cost per thousand  Creative and demonstrative  Immediacy of messages  Entertainment carryover  Demographic selectivity with cable

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Advantages
 High exposure frequency  Moderate cost  Flexibility  Geographic selectivity  Broad, diverse market

Outdoor Media
Disadvantages
 Short message  Lack of demographic selectivity  High noise level

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On Line http://www.bannerite.com http://www.flash-banner-design.com

Internet
Disadvantages
 Difficult to measure ad effectiveness and ROI

Advantages
 Fast growing

 Ability to reach narrow  Ad exposure relies on target audience click through  Short lead time  Not all consumers  Moderate cost have access to internet

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On Line http://www.looksmart.com http://www.yahoo.com

Examples of Alternative Media

Fax Machines Video Shopping Carts Computer Screen Savers Interactive Kiosks Ads in Movies and Videos

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4 Cost per Contact Reach Frequency Audience Selectivity

Media Selection Considerations

The cost of reaching one member of the target market. The number of target consumers exposed to a commercial at least once during a time period. The number of times an individual is exposed to a message during a time period. The ability of an advertising medium to reach a precisely defined market.
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Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Cable TV Network Viewer Profiles

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Continuous Media Schedule Flighted Media Schedule Pulsing Media Schedule Seasonal Media Schedule

Media Scheduling
Advertising is run steadily throughout the period. Advertising is run heavily every other month or every two weeks. Advertising combines continuous scheduling with flighting. Advertising is run only when the product is likely to be used.
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Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Learning Objective

Discuss the role of public relations in the promotional mix.

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Public Relations The Role of Public Relations

Executes programs to gain public acceptance Identifies issues of public concern

Evaluates public attitudes

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Functions of Public Relations

Press Relations Product Publicity Corporate Communication Public Affairs Lobbying Employee and Investor Relations Crisis Management
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On Line http://www.bmwfilms.com

Public Relations Tools

New Product Publicity Product Placement Consumer Education Event Sponsorship Issue Sponsorship Internet Web Sites
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Crisis Management

A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event.

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On Line http://www.nba.com/mavericks http://www.mavs.com

Learning Objective

Define and state the objectives of sales promotion.

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On Line http://www.onlineclothingstores.com http://www1.coolsavings.com

Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase.

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Sales Promotion Targets

Consumer Sales Promotion

Trade Sales Promotion

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Immediate purchases Increase trial

Uses of Sales Promotion

Boost consumer inventory Encourage repurchase Increase ad effectiveness Encourage brand switching Encourage brand loyalty
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Type of Buyer Loyal Customers Competitors Customers Brand Switchers Price Buyers

Objectives of Sales Promotion

Desired Results Sales Promotion Examples

Reinforce behavior Loyalty marketing Increase consumption Bonus packs Change timing Break loyalty Persuade to switch Persuade to buy your brand more often Appeal with low prices Supply added value Sampling Sweepstakes, contests, premiums Price-lowering promotion Trade deals Coupons, price-off packages, refunds Trade deals
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Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Learning Objective

Discuss the most common forms of consumer sales promotion.

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Tools for Consumer Sales Promotion

Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion
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Tools for Consumer Sales Promotion Coupon

A certificate that entitles consumers to an immediate price reduction. A cash refund given for the purchase of a product during a specific product. An extra item offered to the consumer, usually in exchange for some proof of purchase.
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Rebate

Premium

Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel 2005 South-Western/Thomson Learning

Tools for Consumer Sales Promotion

A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. A loyalty program in which loyal consumers are rewarded for making multiple purchases.

Loyalty Marketing Program Frequent Buyer Program

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On Line http://www.sweepstakesonline.com

Tools for Consumer Sales Promotion

Contest

Promotions that require skill or ability to compete for prizes. Promotions that depend on chance or luck, with free participation.

Sweepstakes

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Tools for Consumer Sales Promotion

Sampling

A promotional program that allows the consumer the opportunity to try a product or service for free.

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Sampling

Direct mail Door-to-door delivery Packaging with another product Retail store demonstration
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Methods of Sampling

Tools for Consumer Sales Promotion

Build traffic

Advertise the product

Goals of Point-ofPoint-of-Purchase Displays

Induce impulse buying

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On Line http://www.burgerking.com http://www.philipmorris.com http://www.upromote.com

Tools for Consumer Sales Promotion

Free merchandise

Effective Types of On-Line Sales Promotion

Sweepstakes

Free shipping

Coupons
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Learning Objective

List the most common forms of trade sales promotion.

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Tools for Trade Sales Promotion

Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows
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Trade Allowance

A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.

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Push Money

Money offered to channel intermediaries to encourage them to push products-that is, to encourage other members of the channel to sell the products.

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The Role of Trade Sales Promotion

Gain new distributors Obtain support for consumer sales promotions Build or reduce dealer inventories Improve trade relations
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