Transcript Chapter 15

CHAPTER 15
Advertising, Sales
Promotion Public
Relations and
Personal Selling
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
15 - 1
After reading this chapter you should
be able to:
1. Explain the differences between the various types of
advertising.
2. Understand the steps used to develop, execute and
evaluate an advertising program.
3. Explain the advantages and disadvantages of alternative
advertising media.
4. Understand the strengths and weaknesses of consumeroriented and trade-oriented sales promotions.
5. Recognise public relations as an important form of
communication.
6. Identify the key stages in the personal selling process.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
15 - 2
Types of Advertisements
•
•
•
Chapter 14 described advertising as any paid form
of non-personal communication about an
organisation, good, service or idea by an identified
sponsor.
This chapter describes alternative types of
advertisements, the advertising decision process,
sales promotion and public relations.
Although they all focus on selling a good or service,
product advertisements take three forms:
1. pioneering (or informational).
2. competitive (or persuasive).
3. reminder.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
15 - 3
Types of Advertisements
• Which ad would be considered (1) pioneering, (2) competitive
and (3) a reminder?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
15 - 4
Concept Check
1. What is the difference between pioneering and
competitive ads?
2. What is the purpose of a reminder
advertisement?
1. pioneering advertisements tell people what a
product is, what it can do and where it can be
found whereas competitive ads promote a
specific brand’s features and benefits.
2. Reminder advertising is used to reinforce
previous knowledge of a product.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Developing the Advertising Program
• The promotion decision process described in Chapter
14 can be applied to each of the promotional
elements.
• Advertising, for example, can be managed by
following the three steps (developing, executing and
evaluating) of the process.
• These will be now examined in more detail.
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Identifying the Target Audience
• To develop an effective advertising program
advertisers must identify the target audience.
• All aspects of an advertising program are likely to be
influenced by the characteristics of the potential
consumer.
• Understanding the lifestyles, attitudes and
demographics of the target market is essential.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Specifying Advertising Objectives
• The guidelines for setting promotion objectives
described in Chapter 14 also apply to setting
advertising objectives.
• The most important step is to identify objectives that
are directly linked to advertising.
• For example, the level of sales following an
advertising campaign may be largely influenced by
factors other than advertising.
• Sales volume might be influenced more directly by a
significant discount sales promotion in part of the
market.
• Brand awareness, on the other hand, is more
influenced by advertising activity.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Setting the Advertising Budget
• As we have noted elsewhere, several Australian and
New Zealand advertisers spent in excess of $100
million on advertising media.
• How did they arrive at this figure?
• We shall see that there are only four alternative,
recognised methods of setting an advertising budget.
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Designing the Advertisement
• An advertising message usually focuses on the key
benefits of the product that are important to a
prospective buyer in making trial and adoption
decisions.
• The message depends on the general form or appeal
used in the ad and the actual words included in the
ad.
• Let’s consider this in more detail
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Designing the Advertisement Message Appeal
• Most advertising messages are made up of both informational
and persuasional elements.
• Information and persuasive content can be combined in the form
of an appeal to provide a basic reason for the consumer to act.
• Although the marketer can use many different types of appeals,
common advertising appeals include:
– fear appeals: suggest to the consumer that he or she can avoid
some negative experience through the purchase and use of a
product or through a change in behaviour.
– sex appeals: suggest to the audience that the product will increase
the attractiveness of the user.
– humorous appeals: imply either directly or more subtly that the
product is more fun or exciting than competitors’ offerings.
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Designing the Advertisement - Creating
the Actual Message
• Copywriters are responsible for creating the text
portion of the messages in advertisements.
• Translating a copywriter’s ideas into an actual
advertisement is a complex process.
• Designing quality artwork, layout and production for
the advertisements is costly and time-consuming with
a high-quality 30-second TV commercial typically
costing about $300 000 to produce.
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
15 - 12
Concept Check
1. Describe three alternative advertising appeal
strategies.
2. Describe two common risks when using a
humorous advertising appeal
1. Three alternative advertising appeals are fear
appeals, sex appeals and humorous appeals.
2. Humour tends to wear out quickly, eventually
boring the consumer. Another problem with
humorous appeals is that their effectiveness
may vary across cultures if used in a global
campaign.
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Selecting the Right Media
• In deciding where to place advertisements, a
company has several media to choose from and a
number of alternatives, or vehicles, within each
medium.
• Often advertisers use a mix of media forms and
vehicles to maximise the exposure of the message to
the target audience while at the same time
minimising costs.
• These two conflicting goals of (1) maximising
exposure and (2) minimising costs are of central
importance to media planning.
• Examples of media options include the familiar
newspapers, internet, magazines, radio and TV;
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PPTs t/a Marketing: The Core by Kerin et al
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Selecting the Right Media – Reach,
Rating and Frequency.
• Because advertisers try to maximise the number of individuals in
the target market exposed to the message, they must be
concerned with reach.
• Reach is the number of different people or households exposed
to an advertisement.
• Television and radio stations describe their reach using the term
rating—the percentage of households in a market that are tuned
to a particular TV show or radio station.
• In general, advertisers try to maximise reach in their target
market at the lowest cost.
• When advertisers want to reach the same audience more than
once, they are concerned with frequency, the average number
of times a person in the target audience is exposed to a
message or advertisement.
• Like reach, greater frequency is generally viewed as desirable.
• Studies indicate that consumers often absorb more of an
advertising message with repeated exposure.
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Different Media Alternatives
• The different media alternatives include:
–
–
–
–
–
–
–
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Television
Radio
Magazines
Newspapers
Internet
Outdoor
Direct mail
Other media
• Figure 15–2 summarises the advantages and
disadvantages of the major advertising media, which
are described in more detail below.
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Magazine Advertising
• What sort of target market is
Girlfriend aimed at?
• Why would a marketer use
this magazine to advertise in
compared to other media
types?
• Or would this just be one
media type of many used?
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Advantages and disadvantages of
major advertising media
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Scheduling the Advertising
• There is no, one correct schedule to advertise a
product in all situations, but three factors must be
considered.
• First is the issue of buyer turnover, which is how
often new buyers enter the market to buy the product.
– The higher the buyer turnover, the greater is the amount of
advertising required.
• A second issue in scheduling is the purchase
frequency; the more frequently the product is
purchased, the less repetition is required.
• Finally, companies must consider the forgetting rate,
the speed with which buyers forget the brand if
advertising is not seen.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Scheduling the Advertising Approaches
•
Setting schedules requires an understanding of how the market
behaves.
• Most companies tend to follow one of three basic approaches:
1. Continuous (steady) schedule.
– When seasonal factors are unimportant, advertising is run at a
continuous or steady schedule throughout the year.
2. Flighting (intermittent) schedule.
– Periods of advertising are scheduled between periods of no
advertising to reflect seasonal demand.
3. Pulse (burst) schedule.
– A flighting schedule is combined with a continuous schedule
because of increases in demand, heavy periods of promotion or
introduction of a new product.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
15 - 20
Concept Check
1. You see the same ad in Cleo magazine and on billboards
and TV. Is this an example of reach or frequency?
2. Why has the Internet become a popular advertising
medium?
3. Describe three approaches to scheduling advertising.
1. Frequency
2. It has become a popular advertising medium because it
can use audio and video capabilities. Sound and
movement may simply attract more attention from viewers,
or they may provide an element of entertainment to the
message. Online advertising also has the unique feature of
being interactive.
3. Three approaches to scheduling advertising are
Continuous (steady) schedule, Flighting (intermittent)
schedule and Pulse (burst) schedule.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Executing the Advertising Program
• ‘I know half my advertising is wasted, but I don’t know which
half.’
• This quote is attributed to people as diverse as William
Westgarth Lever (one of the founders of Unilever) and John
Wanamaker (founder of Wanamaker’s Department Store in
Philadelphia) but it could have been uttered by any major
advertiser in the past.
• By evaluating advertising efforts, marketers can try to ensure
that their advertising expenditures are not wasted.
• Evaluation is done usually at two separate times: before and
after the advertisements are run in the actual campaign.
• Several methods used in the evaluation process at the stages of
idea formulation and copy development are discussed below.
• Posttesting methods are reviewed in the section on evaluation.
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Executing the Advertising Program Pretesting the Advertising
• To determine whether the advertisement
communicates the intended message or to select
among alternative versions of the advertisement,
pretests are conducted before the advertisements are
placed in any medium.
• The different types of pretests are:
– Portfolio tests
– Jury tests
– Theatre tests
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Executing the Advertising Program Carrying Out the Advertising Program
• The responsibility for actually carrying out the
advertising program can be handled in one of three
types of agencies.
• The full-service agency provides the most complete
range of services, including market research, media
selection, copy development, artwork and production.
• A limited-service agency specialises in one aspect of
the advertising process such as providing creative
services to develop the advertising copy or buying
previously unpurchased media space.
• Finally, an in-house agency made up of the
company’s own advertising staff may provide full
services or a limited range of services.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Evaluating the Advertising Program
• The advertising decision process does not stop with
executing the advertising program.
• The advertisements must be posttested to determine
whether they are achieving their intended objectives,
and results may indicate that changes must be made
in the advertising program.
• Common types of posttests include:
–
–
–
–
–
Aided Recall (Recognition-Readership)
Unaided Recall
Attitude Tests
Inquiry Tests
Sales Tests
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PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Concept Check
1. Explain the difference between pretesting and
posttesting advertising copy.
1. Pretests are tests conducted before an
advertisement is placed to determine whether it
communicates the intended message or to select
among alternative versions of an advertisement
whereas postests are tests conducted after an
advertisement has been shown to the target
audience to determine whether it has
accomplished its intended purpose.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
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Concept Check
2. What is the difference between aided and
unaided recall posttests?
2. Aided recall is where after being shown an ad,
respondents are asked whether their previous
exposure to it was through reading, viewing or
listening whereas with unaided recall tests
questions are asked of respondents is asked of
respondents without any prompting to determine
whether they saw or heard advertising
messages.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
15 - 27
Sales Promotion
• Sales promotion has become a key element of the
promotional mix.
• We are all deluged with special offers on the packs of
products we buy, in the store where we bought them,
through our letterbox and through every
communication medium we encounter.
• Selection and integration of the many promotion
techniques require a good understanding of the
advantages and disadvantages of each kind of
promotion.
Copyright  2008 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: The Core by Kerin et al
Slides prepared by Andrew Hughes, Australian National University
15 - 28
Consumer-Oriented Sales Promotions
• Consumer-oriented sales promotions, or simply consumer
promotions, are sales tools used to support a company’s
advertising and personal selling that are directed to consumers.
• Sales promotion tools include:
–
–
–
–
–
–
–
–
–
–
–
Samples.
Continuity or loyalty programs.
Point-of-purchase.
Displays.
Rebates.
Product placement.
Coupons.
Deals.
Premiums.
Contests.
Sweepstakes.
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QANTAS Frequent Flyers
• QANTAS Frequent Flyers is
an example of what type of
consumer oriented sales
promotion?
• Is this successful?
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Trade-Oriented Sales Promotions
•
•
Trade-oriented sales promotions, or simply trade
promotions, are sales tools used to support a
company’s advertising and personal selling directed
to wholesalers, retailers or distributors.
Some of the sales promotions just reviewed are
used for this purpose, but there are three other
common approaches targeted uniquely to these
intermediaries:
1. allowances and discounts.
2. co-operative advertising.
3. training of distributors’ sales forces.
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Concept Check
1. Which sales promotional tool is most common
for new products?
2. Which trade promotion is used to encourage
local advertising efforts of resellers?
1. Samples
2. Co-operative advertising
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Public Relations
• As noted in Chapter 14, public relations is a form of
communication management that seeks to influence
the image of an organisation and its products.
• In developing a public relations campaign, several
methods of obtaining non-personal presentation of an
organisation, good or service without direct cost publicity tools - are available to the public relations
director.
• The two most common methods used are:
– News conference
– Media release
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Concept Check
1. Which marketing situations are most
appropriately handled with publicity tools?
2. What is a news release?
1. Many companies frequently use a media release
to announce changes in the company or the
product line. The news conference is used for
negative publicity stories or events.
2. A news release is an announcement regarding
changes in the company or the product line. The
objective of a news release is to inform a
newspaper, radio station or other medium of an
idea for a story.
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Personal Selling
• Although it is important to recognise that personal selling is a useful
means of communicating with present and potential buyers, it is
much more.
• Personal selling involves the two-way flow of communication
between a buyer and a seller, often in a face-to-face encounter,
designed to influence a person’s or group’s purchase decision.
• However, with advances in telecommunications, personal selling
also takes place over the telephone, through video teleconferencing
and Internet/Web-enabled links between buyers and sellers.
• Despite these advances in technology, personal selling remains the
most highly human-intensive element in the promotion mix.
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The Personal Selling Process: Building
Relationships
•
•
•
Selling, and particularly order getting, is a complicated activity
that involves building buyer–seller relationships.
Although the salesperson–customer interaction is essential to
personal selling, much of a salesperson’s work occurs before
this meeting and continues after the sale itself.
The personal selling process consists of six steps:
1.
2.
3.
4.
5.
6.
Prospecting
Preapproach
Approach
Presentation
Close
Follow-up
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Stages and objectives of the personal
selling process
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Prospecting
• Personal selling begins with prospecting—the search
for and qualification of potential customers.
• For some products that are one-time purchases such
as encyclopaedias, continual prospecting is
necessary to maintain sales.
• There are three types of prospects:
– A lead is the name of a person who may be a possible
customer.
– A prospect is a customer who wants or needs the product.
– If an individual wants the product, can afford to buy it and is
the decision maker, this individual is a qualified prospect.
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Preapproach
• Once a salesperson has identified a qualified
prospect, preparation for the sale begins with the
preapproach.
• The preapproach stage involves obtaining further
information on the prospect and deciding on the best
method of approach.
• Knowing how the prospect prefers to be approached
and what the prospect is looking for in a product or
service is essential.
• Marketers of all sorts are at their most effective when
they are in a position to tailor-make a presentation
based on the characteristics and the needs of the
audience.
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Approach
• The approach stage involves the first meeting
between the salesperson and prospect.
• The objectives are to gain the prospect’s attention,
stimulate interest and build the foundation for the
sales presentation itself and the basis for a working
relationship.
• The first impression is critical at this stage, and it is
common for salespeople to begin the conversation
with a reference to common acquaintances, a referral
or even the product or service itself.
• Which tactic is taken will depend on the information
obtained in the prospecting and preapproach stages.
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Presentation
•
The presentation is at the core of the order-getting selling
process, and its objective is to convert a prospect into a
customer by creating a desire for the product or service.
• Three major presentation formats exist:
1. Stimulus-response format: Assumes that given the appropriate
stimulus by a salesperson, the prospect will buy.
2. Formula selling format: based on the view that a presentation
consists of information that must be provided in an accurate,
thorough and step-by-step manner to inform the prospect.
• Need-satisfaction format: emphasises probing and listening by
the salesperson to identify needs and interests of prospective
buyers.
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Handling Objections
•
•
•
•
•
A critical concern in the presentation stage is handling
objections.
Objections are excuses for not making a purchase commitment
or decision.
Some objections are valid and are based on the characteristics
of the product or service or price.
Many objections reflect prospect scepticism or indifference.
The most common techniques for dealing with objections are:
1.
2.
3.
4.
5.
6.
Acknowledge and convert the objection.
Postpone.
Agree and neutralise.
Accept the objection.
Denial.
Ignore the objection.
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Close
•
•
•
The closing stage in the selling process involves
obtaining a purchase commitment from the prospect.
This stage is the most important and the most
difficult because the salesperson must determine
when the prospect is ready to buy.
The close itself can take several forms. Three
closing techniques are used when a salesperson
believes a buyer is ready to make a purchase:
1. Trial close.
2. Assumptive close.
3. Urgency close.
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Follow-Up
• The selling process does not end with the closing of a sale.
Rather, professional selling
• Requires customer follow-up. The follow-up stage includes
making certain the customer’s
• purchase has been properly delivered and installed. Any
difficulties experienced
• with the use of the item are addressed. Attention to this stage of
the selling process
• solidifies the buyer–seller relationship. Moreover, the cost and
effort to obtain repeat
• sales from a satisfied customer is roughly half of that necessary
to gain a sale from
• a new customer.29 In short, today’s satisfied customers become
tomorrow’s qualified
• prospects or referrals.
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Concept Check
• What are the six stages in the personal selling
process?
• Which presentation format is most consistent
with the marketing concept? Why?
1. They are: (1) prospecting, (2) preapproach,
(3) approach, (4) presentation, (5) close, and
(6) follow-up.
2. The need-satisfaction format is most consistent
with the marketing concept because it
emphasizes problem solving.
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Finish
• Questions?
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