Market Share And Consumers

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Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15

1

Designed by Eric Brengle B-books, Ltd.

CHAPTER

15

Advertising and Public Relations

Prepared byDeborah Baker

Texas Christian University

MarketingLamb, Hair, McDaniel

9

2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15

Learning Outcomes

Discuss the effects of advertising on market share and consumers

Identify the major types of advertising

Discuss the creative decisions in developing an advertising campaign

LOI

LO2

LO3


Learning Outcomes

Describe media evaluation and selection techniques

Discuss the role of public relations in the promotional mix

LO5

LO4


Discuss the effects of advertising on

market share and consumers

The Effects of AdvertisingLOI

5Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter15

LOI The Effects of Advertising

U.S. advertising was almost $300 billion in 2006

In 2005, 32 companies spent over $1 billion each

The advertising industry is small—only 155,000 employed by the 12,000 advertising agencies

Ad budgets of some firms are almost $4 billion annually

6Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15 LOI

The Effects of Advertising

Top Ten Leaders by U.S.Advertising Spending

Top Ten Leaders by U.S.Advertising Spending


LOI Advertising and Market Share

New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share

1. Beyond a certain level of spending, diminishing returns set in.

2. New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits.


LOIThe Effects of Advertising on

Consumers

The average U.S. citizen is exposed to hundreds of ads each day.

Advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude.

Advertising can affect consumer ranking of a brand’s attributes.


REVIEW LEARNING OUTCOMEEffects of Advertising

LOI


Identify the major types of advertising

Major Types of AdvertisingLO2


Major Types of AdvertisingLO2

InstitutionalAdvertising

InstitutionalAdvertising

Enhances a company’s image rather than promotes a particular product.

Enhances a company’s image rather than promotes a particular product.

ProductAdvertising

ProductAdvertising

Touts the benefits of a specific good or service.

Touts the benefits of a specific good or service.

12Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved

Chapter 15

LO2 Major Types of Advertising

Corporate identityCorporate identity

PioneeringPioneering

CompetitiveCompetitive

ComparativeComparative

ProductAdvertising

ProductAdvertising

InstitutionalAdvertisingInstitutionalAdvertising

Advocacy advertisingAdvocacy advertising


Chapter 15

LO2 Product Advertising

PioneeringPioneeringPioneeringPioneering Stimulates primary demand for

new product or category Used in the PLC introductory stage

CompetitiveCompetitiveCompetitiveCompetitive Influences demand for brand in the

growth phase of the PLC Often uses emotional appeal

ComparativeComparativeComparativeComparative Compares two or more competing

brands’ product attributes Used if growth is sluggish, or if

competition is strong

Online

http://www.pizzahut.comhttp://www.papajohns.com


REVIEW LEARNING OUTCOMEThe Major Types of Advertising

LO2


Discuss the creative decisions in developing an

advertising campaign

Creative Decisions in AdvertisingLO3


Creative Decisions in Advertising

AdvertisingCampaign

AdvertisingCampaign

A series of related

advertisements focusing on a

common theme, slogan, and

set of advertising appeals.

LO3


Creative Decisions in AdvertisingLO3

Determine the advertising objectives

Make creative decisions Make media decisions

Evaluate the campaign

18Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15LO3

Define target audienceDefine target audience

Define desired percentage changeDefine desired percentage change

Define the time frame for change Define the time frame for change

Setting Objectives: The DAGMAR Approach


LO3 Creative Decisions

Develop and evaluateadvertising appeals

Develop and evaluateadvertising appeals

Execute the message

Execute the message

Evaluate thecampaign’s effectiveness

Evaluate thecampaign’s effectiveness

Identify product benefits

Identify product benefits

20Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15 LO3

“Sell the Sizzle, not the Steak”

Sell product’s benefits, not its attributes

A benefit should answer “What’s in it for me?”

Ask “So?” to determine if it is a benefit

Identify Product Benefits


Identify Product Benefits

Attribute

Benefit

“Powerade’s new line has been reformulated to combine the scientific

benefits of sports drinks with B vitamins and to speed up energy

metabolism.”

“So, you’ll satisfy your thirst with a great-tasting drink that will power you

throughout the day.”

- So?


LO3 Advertising AppealsProfit

Health

Love or romance

Fear

Admiration

Convenience

Fun and pleasure

Vanity and egotism

Environmental Consciousness

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


LO3

Unique SellingProposition

Unique SellingProposition

A desirable, exclusive, and

believable advertising

appeal selected as the

theme for a campaign.

Unique Selling Proposition

Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1 24

LO3

Executing the Message

Mood or Image

Mood or Image

MusicalMusical

Demon-stration

Demon-stration

ScientificScientific

Real/AnimatedProductSymbols

Real/AnimatedProductSymbols

FantasyFantasy

LifestyleLifestyleSlice-of-LifeSlice-of-Life

HumorousHumorous

Spokes-person/

Testimonial

Spokes-person/

Testimonial


REVIEW LEARNING OUTCOMECreative Decisions for Ad Campaign

LO3

Setadvertisingobjectives

Identify benefits

Develop appeal

Evaluate campaign results

Evaluatingresults helpsmarketersadjust objectivesfor futurecampaigns

Execute message


Describe media evaluation and

selection techniques

Media Decisions in AdvertisingLO4


Chapter 15

LO4 Media Decisions in Advertising

NewspapersNewspapers

MagazinesMagazines

Yellow PagesYellow Pages

InternetInternet

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Direct MailDirect Mail

Trade ExhibitsTrade Exhibits

Cooperative AdvertisingCooperative Advertising

BrochuresBrochures

CouponsCoupons

CatalogsCatalogs

Special EventsSpecial Events

Monitored MediaMonitored Media Unmonitored MediaUnmonitored Media


Major Advertising Media

NewspapersNewspapers

MagazinesMagazines

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Yellow PagesYellow Pages

InternetInternet


LO4 Newspapers

AdvantagesAdvantages

Geographic selectivity Short-term advertiser

commitments News value and

immediacy Year-round readership High individual market

coverage Co-op and local tie-in

availability Short lead time

DisadvantagesDisadvantages

Limited demographic selectivity

Limited color Low pass-along rate May be expensive


LO4 Free Newspapers?

SOURCE: Joseph T. Hallinan, “Do New Free Dailies Mean Sun is Setting for Paid Newspapers?,”

Wall Street Journal, April 5, 2006, B1.

The new Baltimore Examiner is delivering 250,000 newspapers—at no charge and unsolicited!

Advertising brings in the revenue for this niche publication targeting households with income of $73,000 or more.

The ads are $2,900 for a full page, compared with $17,000 for its competition, the Baltimore Sun.

The Examiner is betting that low ad rates and the target market will be a valuable proposition to advertisers.


LO4

CooperativeAdvertising

CooperativeAdvertising

Cooperative Advertising

An arrangement in which the

manufacturer and the retailer

split the costs of advertising

the manufacturer’s brand.


LO4 Magazines

AdvantagesAdvantages DisadvantagesDisadvantages

Good reproduction

Demographic selectivity

Regional/local selectivity

Long advertising life

High pass-along rate

Long-term advertiser commitments

Slow audience build-up

Limited demonstration capabilities

Lack of urgency

Long lead time


LO4 Radio


Low cost

Immediacy of message

Short notice scheduling

No seasonal audience change

Highly portable

Short-term advertiser commitments

Entertainment carryover

No visual treatment

Short advertising life

High frequency to generate comprehension and retention

Background distractions

Commercial clutter


LO4 Television


Wide, diverse audience Low cost per thousand Creative opportunities for

demonstration Immediacy of messages Entertainment carryover Demographic selectivity

with cable

Short life of message Consumer skepticism High campaign cost Little demographic

selectivity with stations Long-term advertiser

commitments Long lead times for

production Commercial clutter


LO4 TV Advertising: Is Less More?

The number of ads in TV shows is a longstanding complaint of viewers and advertisers.

The media is cluttered and consumers change channels or speed through commercials on a DVR.

Tests are being conducted to feature shorter commercial pods.

SOURCE: Suzanne Vranica, “TV-Ad Test to Show if Less is More,” Wall Street Journal, April 5,2006, B3.

Yea

rCommercial Minutes

per Hour

13.5 14 14.5 15 15.5

2000

01

02

03

04

05


LO4 Outdoor Media


Repetition

Moderate cost

Flexibility

Geographic selectivity

Short message

Lack of demographic selectivity

High “noise” level


LO4 Internet


Fast growing

Ability to reach narrow target audience

Short lead time

Moderate cost

Difficult to measure ad effectiveness and ROI

Ad exposure relies on “click through” from banner ads

Not all consumers have access to Internet

Online

http://www.fox.comhttp://www.abc.com


LO4 Alternative Media

Ads in MoviesAds in Movies

Interactive KiosksInteractive Kiosks

Computer Screen Savers

Computer Screen Savers

Shopping CartsShopping Carts

DVDsDVDs

AdvertainmentsAdvertainments

Cell Phone AdsCell Phone Ads

Subway Tunnel AdsSubway Tunnel Ads

Floor AdsFloor Ads

Video Game AdsVideo Game Ads


LO4 Videogame Advertising

SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,”

Wall Street Journal, April 26,2006, B1.

Microsoft plans to acquire Massive inc., a start-up that places ads in video games.

Ads are inserted into the game environment.

Video games could become a large new medium for advertising.


LO4 Directory Assistance Advertising

SOURCE: Rebecca Buckman, “Your Listing, and a Word From Our Sponsor,”

Wall Street Journal, April 20,2006, B1.

Companies are offering free telephone directory assistance—but there’s an advertisement first.

The audio ads are narrowly targeted, and are 10 to 12 seconds.

The growth of such free services could represent another change in the telecom industry.

Dial 1-800-FREE411 or 1-800-411-METRO


Qualitative Factors in Media Selection

Attention to the commercial and the program

Program liking

Lack of distractions

Other audience behaviors


Media SchedulingLO4

ContinuousMedia Schedule

Flighted Media Schedule

PulsingMedia Schedule

SeasonalMedia Schedule

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.


Media Scheduling on the WebLO4

Competition for Web advertising spots is driving up prices.

Some Web advertisers now run campaigns based on time of day. Examples:– McDonald’s: breakfast meals during morning

hours – Xerox: copier ads during the workday– Budweiser: beer ads on Friday afternoons

Scheduling Web ads during prime times is a more efficient use of ad dollars and more targeted.

SOURCE: David Kesmodel, “More Marketers Place Web Ads by Time of Day,” Wall Street Journal, June 23, 2006, B1.


REVIEW LEARNING OUTCOMEMedia Evaluation and Selection

LO4

Type: NewspaperMagazineRadioTelevisionOutdoorInternetAlternative

Considerations:

Mix How much of each?Cost per contact How much per person?Reach How many people?Frequency How often?Audience selectivity How targeted is audience?

Scheduling: continuous

flighted

pulsing

seasonal

Winter Spring Summer Fall


Discuss the role of public relations

in the promotional mix

Public RelationsLO5


Public RelationsPublic Relations

LO5 Public Relations

The element in the promotional

mix that:

evaluates public attitudes

identifies issues of public concern

executes programs to gain public acceptance


LO5

Press relations Press relations

Product publicityProduct publicity

Corporate communicationCorporate communication

Public affairsPublic affairs

LobbyingLobbying

Employee and investor relationsEmployee and investor relations

Crisis managementCrisis management

Functions of Public Relations


LO5

Product placementProduct placement

Consumer educationConsumer education

Event sponsorshipEvent sponsorship

Issue sponsorshipIssue sponsorship

Internet Web sitesInternet Web sites

New product publicityNew product publicity

Public Relations Tools

Online

http://www.vw.comhttp://www.chevrolet.com


LO5 Example of Consumer Education

SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,”

Wall Street Journal, April 8-9, 2006, B1.

Corporations are teaching public school students about personal finance.

People under age 25 are a fast-growing group for credit card debt increases and bankruptcy.

Is it appropriate to use educational materials with a corporate identity?

How should financial literacy be taught?


CrisisManagement

CrisisManagement

LO5 Managing Unfavorable Publicity

A coordinated effort to handle

the effects of unfavorable

publicity or of an unfavorable

event.

Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved Chapter 15

Biz Flix

Ed

TV

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LO5


REVIEW LEARNING OUTCOMEThe Role of Public Relations

LO5

Business

Market Share And Consumers