Transcript Chapter 16

Chapter 16:
Advertising and
Sales Promotion
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Advertising Objectives
Specific Objectives are more important for
advertising than personal sales or sales
promotion.
Need objectives for each ad and the overall
campaign. AIDA often used
Must have a budget and a target market
defined from the marketing strategy
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Planning the Message
Get Attention
Hold Interest
Arouse Desire
Obtain Action
16-8
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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Target Market should be defined by
Specific Demographic Profile
Usage rates
Methods of Usage
Current attitudes and behavior patterns
length of the purchase cycle critical for
media plans
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Choosing Media
Television
Yellow Pages
Newspaper
Magazine
Major Kinds
of Media
16-6
Direct Mail
Outdoor
Radio
Internet
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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Media Strategy
Before your media strategy you need:
 A comprehensive demographic profile
(demographic & geographic)
 Media budget
 Creative Strategy (joint decision)
Media Strategy has three parts
 Specifying media objectives
 Selecting media categories & vehicles
 Scheduling media
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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Media Objectives
Can you get a good fit between the product
& audience of the media (qualitative)
Reach - % of the target market exposed to
one or more ads in a given time frame.
More is better
Avg. Frequency - avg. number of times the
target audience is exposed to the ad
CPM (cost per thousand) - cost per
thousand members of the target audience
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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Example of CPM
You have an auto parts business in a city of
1.4 million. 70% of your customers are
black males between the ages of 18-45.
Compare CPM for two radio stations:
 WXXX & WZZZ
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© The McGraw-Hill Companies, Inc., 1999
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What is CPM for both? Which is the better
buy?

Ad
Total

Cost Audience
WXXX $120 200,000
WZZZ
$90
110,000
Black Males
18-45
90,000
75,000
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
CPM Example 3
CPM = Cost/audience in thousands
WXXX CPM = $120/90 = $1.33
WZZZ CPM = $90/75 = $1.20
WZZZ is a better buy.
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Advertising Copy Strategy
Need to start with audience:
 Demographics
 Psychographics
 Usage Rates
 How the Product is used
Also need to compare your brand
performance vs. competitors brands
Pre-testing is common, but rough versions
can be misleading - especially for TV
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Key to Copy Strategy Effectiveness
Can you come up with a brand
differentiating message? If so, the ad
impact is often fantastic compared to
routine ads.
i.e. Tell the customer something about the
brand that shows superior value compared
to other brands
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Sales Promotion
Promotion activities—other than
advertising, publicity and personal selling—
that stimulate interest, trial, or purchase
May be targeted at channel members, final
customers or users, or employees
Skill may be difficult to develop inside the
firm—since a promotion activity is often
designed and used only once
Sales promotion spending is increasing
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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Possible Effects of Sales Promotion
Unit Sales
Period of
promotion
Sales
temporarily
increase, then
decrease, then
return to regular
level
Time
Exhibit 16-6A
16-11
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Possible Effects of Sales Promotion
Unit Sales
Period of
promotion
Sales
temporarily
increase and
then return to
regular level
Time
Exhibit 16-6B
16-12
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Possible Effects of Sales Promotion
Unit Sales
Period of
promotion
Sales increase
and then remain
at higher level
Time
Exhibit 16-6C
16-13
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill