Transcript Mkt 172 Chap 19_ a2

CHAPTER
ADVERTISING,
SALES
PROMOTION,
AND PUBLIC
RELATIONS
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-2
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
1. Explain the differences between
product advertising and institutional
advertising and the variations within
each type.
2. Describe the steps used to develop,
execute, and evaluate an advertising
program.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-3
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
3. Explain the advantages and
disadvantages to alternative advertising
media.
4. Discuss the strengths and weaknesses of
consumer-oriented and trade-oriented
sales promotions.
5. Recognize public relations as an
important form of communication.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-4
TYPES OF ADVERTISEMENTS
• Advertising
• Paid, non-personal communication
through various media by
organizations and individuals who
are in some way identified in the
advertising message
• Total advertising volume exceeds
$230B yearly
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-6
TYPES OF ADVERTISEMENTS
• Product Advertisements –
focus on selling a good or service and which
take three forms:
1. Pioneering (or Informational)
2.
Competitive (or Persuasive)
 Comparative (relative to competitors)
3.
Reminder (reinforce previous knowledge)
 Reinforcement (made the right choice)
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-6
TYPES OF ADVERTISEMENTS
Institutional Advertisements
designed to build goodwill or an image for
an organization rather than promote a
specific good or service
– Often used to support the public relations plan
or counter adverse publicity
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-17
TYPES OF ADVERTISEMENTS
• Institutional Advertisements
 Advocacy – state the position of a company
on an issue
 Pioneering Institutional – announce what a
company is , what it can do, or where it is
located
 Competitive Institutional – promote
advantages of one product class over another
and used in markets where different product
classes compete for same buyers
 Reminder Institutional – simply bring
company’s name to attention of target market
again
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-17
DEVELOPING THE
ADVERTISING PROGRAM
•The promotion decision process can be
applied to each of the promotional elements:
A. Identifying the Target Audience
B. Specifying Advertising Objectives
C. Setting the Advertising Budget
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slid
e
FIGURE 19-1 Super Bowl, super dollars,
super audience
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-28
DEVELOPING THE
ADVERTISING PROGRAM
•
Designing the Advertisement
– Message focuses on key benefits of
product that are important to prospective
buyers
– Message depends on general form or
appeal used in ad and actual words
included in the ad
1. Message Content
2. Creating the Actual Message
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-31
DEVELOPING THE
ADVERTISING PROGRAM
1. Message Content
– Most advertising messages are made up
of both informational and persuasional
messages
– Information – product name, benefits,
features, and price – presented in a way
to attract attention and encourage
purchase
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-31
DEVELOPING THE
ADVERTISING PROGRAM
1. Message Content, cont.
A. Fear Appeals
– Consumers can avoid some negative
experience through the purchase and use
of a product or service, a change in
behavior, or a reduction in the use of a
product
– Advertisers must be sure that appeal is
strong enough to get consumers’
attention and concern but not so strong
that it will lead them to tune out the
message
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-31
DEVELOPING THE
ADVERTISING PROGRAM
1. Message Content, cont.
B. Sex Appeals
–
–
–
–
Suggests to consumers that product will
increase the attractiveness of the user
Can be found in almost any product category
Successful at gaining attention of consumers but
have little impact on how consumers think, feel,
or act, and may even distract them from the ad’s
purpose
Many advertisers have modified content of their
ads based on a recent Super Bowl controversy
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-31
DEVELOPING THE
ADVERTISING PROGRAM
1. Message Content, cont.
C. Humorous Appeals
– Imply either directly or more subtly that
the product is more fun or exciting than
competitor's offerings
– Is widespread and found in many product
categories
– Humor tends to wear out quickly, boring
the consumer
– Effectiveness varies across cultures if
used in a global campaign
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-31
DEVELOPING THE
ADVERTISING PROGRAM
2. Creating the Actual Message
– Many firms use athletes, movie and TV
stars, musicians, and other celebrities to
talk to consumers through their ads
– Advertisers believe that the ads are more
likely to influence sales
– Potential shortcoming is spokesperson’s
image may change
– Many companies now probe potential
endorsers’ background
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-31
ETHICS AND SOCIAL
RESPONSIBILITY ALERT
Who Decides What Is
“Appropriate” Advertising?
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-35
FIGURE 19-A Top 15 advertising slogans of
the 20th century
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-39
FIGURE 19-B Top 10 advertising icons of
the 20th century
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-40
FIGURE 19-2 U.S. advertising expenditures,
by category (in millions of dollars)
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-44
DEVELOPING THE
ADVERTISING PROGRAM
Selecting the Right Media
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
DEVELOPING THE
ADVERTISING PROGRAM
• Selecting the Right Media
– Advertising media – means by which the
message is communicated to target
audience; includes newspapers,
magazines, radio, and TV
– Selection decision is related to target
audience, type of product, nature of
message, campaign objectives, available
budget, and costs of alternative media
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-31
DEVELOPING THE
ADVERTISING PROGRAM
• Selecting the Right Media
 Choosing a Medium and a Vehicle within
That Medium – conflicting goals
• Maximizing Exposure
• Minimizing Costs
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-43
FIGURE 19-3 The language of the media
buyer
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-46
DEVELOPING THE
ADVERTISING PROGRAM
• Selecting the Right Media
 Basic Terms
• Reach – number of different people or households
• Rating – percentage of households in a market tuned in
• Frequency – average number of times a person is
exposed to advertisement
• Gross Rating Points (GRPs)
•Reach (% of total market) x Frequency
• Cost per Thousand (CPM) – individuals or households
•Advertising Cost($) / Impressions Generated (in 1000s)
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
DEVELOPING THE
ADVERTISING PROGRAM
• Different Media Alternatives
 Television – sight, sound, and motion – reaches
95% of U.S. homes
• Out-of-Home TV – reaches another 20M viewers
• “Spot” Ads – 10-, 15-, 30-, or 60-second lengths
• Wasted Coverage – people outside the market
• Digital Video Recorders (DVRs) – “30-second skip”
• Infomercials – educational approach
•90 percent of all TV stations air
•25 percent of all consumers have purchased as a
result of seeing
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-47
INFOMERCIALS GROSSING
OVER 1 BILLION
Ron Popeil's
Rotisserie & BBQ
In Billions
George Foreman Grill
Soloflex
Total Gym
Bowflex
Proactiv
0
Source: Business 2.0, June 2005
McGraw-Hill/Irwin
0.5
1
1.5
2
2.5
DEVELOPING THE
ADVERTISING PROGRAM
• Different Media Alternatives
 Radio – 7 times as many as TV
 Magazines – more than 6,200
 Newspapers -
 Yellow Pages
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-51
DEVELOPING THE
ADVERTISING PROGRAM
• Different Media Alternatives
 Internet
• Rich Media
• Online Advertising Options
• Permission-Based Advertising
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-59
DEVELOPING THE
ADVERTISING PROGRAM
• Different Media Alternatives
 Outdoor
• Billboards – most common form
• Transit Advertising
 Other Media
• Place-Based Media
 Selection Criteria
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-62
FIGURE 19-4 Advantages and
disadvantages of major advertising media
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-48
GLOBAL ADVERTISING
Globalism – one ad for everyone in
the world
to
Regionalism – specific ads for each
country or for specific groups within a
country.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-31
DEVELOPING THE
ADVERTISING PROGRAM
Scheduling the Advertising
• Factors to be considered when
scheduling
– Buyer Turnover – how often new buyers
enter market to buy product
– Purchase frequency – more frequently
product is purchased, less repetition is
required
– Forgetting rate – speed which buyers
forget brand if advertising is required
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-65
DEVELOPING THE
ADVERTISING PROGRAM
Scheduling the Advertising
• Setting the schedules
– Continuous (steady) schedule – when
seasonal factors are unimportant
– Flighting (intermittent) schedule – seasonal
demand
– Pulse (burst) – flighting and continuous are
combined due to increases in demand,
heavy periods of promotion, or new
product introduction – superior to other
strategies
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-65
FIGURE 19-5 Alternative structures of
advertising agencies used to carry out the
advertising program
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-71
EVALUATING THE
ADVERTISING PROGRAM
• Posttesting the Advertising
– Aided Recall – determine the percentage
of those who:
• Remember seeing the ad (noted)
• Saw or read any part of ad identifying product
or brand (seen associated)
• Report reading at least half of ad (read most)
• Elements of ad are tagged with results
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-72
EVALUATING THE
ADVERTISING PROGRAM
• Posttesting the Advertising
– Determine whether the advertisement
accomplished its intended purpose
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-72
EVALUATING THE
ADVERTISING PROGRAM
• Posttesting the Advertising
– Unaided Recall – respondents are asked
question such as, “What ads do you
remember seeing yesterday?” without any
prompting
– Attitude Tests – respondents are asked
questions to measure changes in attitudes
before and after advertising campaign
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-72
EVALUATING THE
ADVERTISING PROGRAM
• Posttesting the Advertising
– Inquiry Tests – additional product
information, samples, or premiums are
offered to ad’s readers or viewers
– Sales Tests – controlled experiments or
consumer purchase tests
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-72
Concept Check
1. Explain the difference between
pretesting and posttesting advertising
copy.
A: Pretests are conducted before ads are placed in
any medium to determine whether the ads
communicate the intended message or select
among alternative versions. Posttests are shown
to the target audience to determine whether it
accomplished its intended purpose.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-74
Concept Check
2. What is the difference between aided
and unaided recall posttests?
A: Aided recall involves showing an ad to
respondents who then are asked if their previous
exposure to it was through reading, viewing, or
listening. Unaided recall involves asking
respondents if they remember an ad without any
prompting to determine if they saw or heard its
message.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-75
SALES PROMOTION
• Consumer-Oriented Sales Promotion
 Coupons – 258 billion distributed annually
w/ 2% redemption rate
 Deals – short-term price reductions
 Premiums – merchandise offered free or at
significant savings over retail price
• Self-Liquidating
 Contests
 Sweepstakes
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-76
SALES PROMOTION
• Consumer-Oriented Sales Promotion
 Samples
 Loyalty Programs
 Point-of-Purchase Displays
 Rebates
 Product Placement
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-80
SALES PROMOTION
• Trade-Oriented Sales Promotion
 Allowances and Discounts
• Merchandise Allowance
• Case Allowance
• Finance Allowance
 Cooperative Advertising
 Training of Distributors’ Salesforces
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-85
PUBLIC RELATIONS
• Publicity Tools
 News Release
 News Conference
 Public Service Announcements (PSAs)
 Personal Appearance/Visibility
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-89
INCREASING THE VALUE
OF PROMOTION
• Building Long-Term Relationships with
Promotion
• Self-Regulation
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-92
Advertising
Advertising is any paid form of
nonpersonal communication about an
organization, good, service, or idea by
an identified sponsor.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-115
Product Advertisements
Product advertisements are
advertisements that focus on selling a
good or service and which take three
forms: (1) pioneering (or informational),
(2) competitive (or persuasive), and
(3) reminder.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-116
Institutional Advertisements
Institutional advertisements are
advertisements designed to build goodwill
or an image for an organization rather
than promote a specific good or service.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-117
Reach
Reach is the number of different people
or households exposed to an
advertisement.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-118
Rating
A rating is the percentage of households
in a market that are tuned to a particular
TV show or radio station.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-119
Frequency
Frequency is the average number of
times a person in the target audience is
exposed to a message or an
advertisement.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-120
Gross Rating Points
Gross rating points (GRPs) is a
reference number used by advertisers
that is obtained by multiplying reach
(expressed as a percentage of the total
market) by frequency.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-121
Cost per Thousand
Cost per thousand (CPM) is the cost of
reaching 1,000 individuals or households
with the advertising message in a given
medium (M is the Roman numeral for
1,000).
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-122
Infomercials
Infomercials are program-length
(30-minute) advertisements that take an
educational approach to communication
with potential customers.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-123
Pretests
Pretests are tests conducted before the
advertisements are placed in any medium
to determine whether it communicates the
intended message or to select among
alternative versions of the advertisement.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-124
Full-Service Agency
A full-service agency is an advertising
agency that provides the most complete
range of services, including market
research, media selection, copy
development, artwork, and production.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-125
Limited-Service Agencies
Limited-service agencies are advertising
agencies that specialize in one aspect of
the advertising process such as providing
creative services to develop the
advertising copy or buying previously
unpurchased media space.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-126
In-House Agencies
In-house agencies consists of the
company’s own advertising staff,
which may provide full services or a
limited range of services.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-127
Posttests
Posttests are tests conducted after an
advertisement has been shown to the
target audience to determine whether it
accomplished its intended purpose.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-128
Consumer-Oriented
Sales Promotions
Consumer-oriented sales promotions
are sales tools used to support a
company’s advertising and personal
selling directed to ultimate consumers.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-129
Product Placement
Product placement is a sales promotion
tool that uses a brand-name product in a
movie, television show, video, or a
commercial for another product.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-130
Trade-Oriented
Sales Promotions
Trade-oriented sales promotions are a
Sales tools used to support a company’s
advertising and personal selling directed
to wholesalers, distributors, or retailers.
Also called trade promotions.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-131
Cooperative Advertising
Cooperative advertising consists of
advertising programs by which a
manufacturer pays a percentage of the
retailer’s local advertising expense for
advertising the manufacturer’s products.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-132
Publicity Tools
Publicity tools consist of methods of
obtaining nonpersonal presentation of an
organization, good, or service without
direct cost. Examples include news
releases, news conferences, and public
service announcements.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Slide 19-133