Advertising, Sales Promotion, and Public Relations Chapter 16

Advertising, Sales Advertising, Sales Promotion, and Promotion, and Public RelationsPublic Relations

Chapter 16Chapter 16

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Objectives

Understand the roles of Understand the roles of advertising, sales promotion, advertising, sales promotion, and public relations in the and public relations in the promotion mix.promotion mix.

Know the major decisions Know the major decisions involved in developing an involved in developing an advertising program.advertising program.

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Objectives

Learn how sales promotion Learn how sales promotion campaigns are developed and campaigns are developed and implemented.implemented.

Learn how companies use public Learn how companies use public relations to communicate with relations to communicate with their publics.their publics.

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A few years ago, A few years ago, only 13% of U.S. only 13% of U.S. recognized AFLACrecognized AFLACOld ads: “warm and Old ads: “warm and fuzzy” similar to fuzzy” similar to other insurance adsother insurance adsGoal: break through Goal: break through advertising clutteradvertising clutter

1999: AFLAC developed 1999: AFLAC developed the “duck” campaign to the “duck” campaign to enhance brand enhance brand awarenessawarenessIncredibly successful: Incredibly successful: name recognition is name recognition is now 91%; sales growth now 91%; sales growth of 30% each year of 30% each year campaign has runcampaign has run

cAFLACAFLAC

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Definition

AdvertisingAdvertising Any paid form of Any paid form of

nonpersonal nonpersonal presentation and presentation and promotion of ideas, promotion of ideas, goods, or services goods, or services by an identified by an identified sponsor.sponsor.

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Signage in ancient times offers Signage in ancient times offers evidence of early advertising.evidence of early advertising.Modern ad spending Modern ad spending tops $231 billion tops $231 billion in U.S. annually, in U.S. annually, $500 billion $500 billion worldwide.worldwide.

Advertising

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Business firms, Business firms, not-for-profit firms, not-for-profit firms, social agencies, social agencies, and professionals and professionals such as doctors such as doctors and lawyers all and lawyers all advertise.advertise.

Advertising

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Figure 16-1:

Major Advertising Decisions

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Advertising

Advertising objectives can Advertising objectives can be classified by primary be classified by primary purpose:purpose: InformInform

Introducing new Introducing new productsproducts

PersuadePersuade Becomes more important Becomes more important

as competition increasesas competition increases Comparative adsComparative ads

RemindRemind Most important for Most important for

mature productsmature products

Setting objectivesSetting objectives

Setting the budgetSetting the budget

Developing the Developing the advertising advertising strategystrategy

Evaluating Evaluating advertising advertising campaignscampaigns

Key Decisions:Key Decisions:

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Comparative advertising can be extremely persuasive

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Do these ads attempt to inform, persuade,

or remind?

How effective are these ads?

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Advertising

Methods of budget Methods of budget setting were listed in setting were listed in chapter 15chapter 15Several factors should Several factors should be considered when be considered when setting the ad budget:setting the ad budget: Stage in the PLCStage in the PLC Market shareMarket share Level of competitionLevel of competition Ad clutterAd clutter Degree of brand Degree of brand

differentiationdifferentiation






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Advertising

Creative challengesCreative challenges Media fragmentationMedia fragmentation Soaring media costsSoaring media costs Advertising clutterAdvertising clutter

Creating ad messagesCreating ad messages Message strategyMessage strategy

Creative conceptCreative concept Advertising appealAdvertising appeal

Message executionMessage execution Many execution stylesMany execution styles Tone, format, Tone, format,

illustration, headline, illustration, headline, copycopy






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Advertising

Creative Execution StylesCreative Execution Styles

Slice of LifeSlice of Life

LifestyleLifestyle

FantasyFantasy

Mood or ImageMood or Image

Testimonial Evidence Testimonial Evidence or Endorsementor Endorsement

MusicalMusicalPersonality Personality Symbol Symbol Technical Technical ExpertiseExpertiseScientific Scientific EvidenceEvidence

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When does advertising When does advertising pass the boundaries of pass the boundaries of good taste? Can you think good taste? Can you think of some examples?of some examples?

Should marketers be Should marketers be concerned about the concerned about the opinions of anyone other opinions of anyone other than the target market? than the target market? Why or why not?Why or why not?

Discussion Question

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Celebrity endorsers may be movie stars, politicians, sports stars, or other public personalities

Testimonials feature ordinary people who talk about their product experiences

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Advertising

Select advertising mediaSelect advertising media Decide on level of reach, Decide on level of reach,

frequency and impactfrequency and impact Choose among the major Choose among the major

media types by media types by considering:considering:

Consumer media Consumer media habits, nature of the habits, nature of the product, types of product, types of messages, and costs messages, and costs

Select specific media Select specific media vehiclesvehicles

Decide on media timingDecide on media timing






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TIVO is one example of how technology presents challenges to media planners. With TIVO, consumers can easily zap ads.

TIVO

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Media planners for Absolut vodka work with creatives to design ads targeted to specific audiences. The ad at left appears in theater playbills.

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Advertising

Major Media TypesMajor Media Types

NewspapersNewspapers

TelevisionTelevision

Direct MailDirect Mail

RadioRadio

MagazinesMagazines

OutdoorOutdoor

InternetInternet

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Marketers are increasingly using alternate forms of media to reach their target markets. What other examples can you think of besides those shown below?

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Reddi Wip is one product Reddi Wip is one product whose media strategy whose media strategy includes heavy ad includes heavy ad expenditures prior to expenditures prior to Thanksgiving. Thanksgiving.

What types of products What types of products would benefit from a would benefit from a media media flightingflighting strategy? strategy?

Discussion Question

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Advertising

Measuring Measuring communications effectscommunications effects Copy testingCopy testing Consumer recallConsumer recall Product awarenessProduct awareness Product knowledgeProduct knowledge Product preferenceProduct preference

Measuring sales effectMeasuring sales effect Past vs. current sales Past vs. current sales

comparisoncomparison ExperimentationExperimentation






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Organizing the Advertising Organizing the Advertising FunctionFunction Small vs. large companiesSmall vs. large companies Nature of advertising agenciesNature of advertising agencies

Advantages of advertising agenciesAdvantages of advertising agencies DepartmentsDepartments CompensationCompensation Changes in agency servicesChanges in agency services

Advertising

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Advertising to Advertising to International MarketsInternational Markets Advantages of Advantages of

standardizing standardizing worldwide advertising:worldwide advertising:

Lower advertising Lower advertising costs costs

Greater global ad Greater global ad coordination coordination

Consistent global Consistent global image image

Advertising

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Advertising to Advertising to International MarketsInternational Markets Drawbacks to Drawbacks to

standardizing standardizing worldwide advertising:worldwide advertising:

Ignores differences in Ignores differences in demographics and demographics and economic conditionseconomic conditions

Ignores differences in Ignores differences in cultureculture

Advertising

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U.S., Thai, & German websites reflect the

worldwide Jeep brand image of

ruggednessand reliability

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Advertising to International MarketsAdvertising to International Markets Most Most

marketers marketers think think globally globally but act but act locallylocally

Advertising

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Sales PromotionSales Promotion Sales Promotions Sales Promotions

are short-term are short-term incentives to incentives to encourage the encourage the purchase or sale purchase or sale of a product or of a product or service.service.

Definition

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Sales PromotionsSales Promotions Can be targeted at final buyers, Can be targeted at final buyers,

retailers and wholesalers, retailers and wholesalers, business customers, and business customers, and members of the sales force.members of the sales force.

The use of sales promotions has The use of sales promotions has been growing rapidly.been growing rapidly.

Sales Promotion

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Objectives – Objectives – Consumer Consumer Promotions:Promotions: Increase short-Increase short-

term salesterm sales Generate product Generate product

trialtrial

Sales Promotion

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Sales Promotion

Consumer Promotion ToolsConsumer Promotion Tools

SamplesSamplesCash Refunds Cash Refunds (Rebates)(Rebates)Price packs Price packs (cents-off deals)(cents-off deals)Advertising Advertising SpecialtiesSpecialties

PremiumsPremiumsPatronage RewardsPatronage RewardsPoint-of-Purchase Point-of-Purchase CommunicationsCommunicationsContests, Games, Contests, Games, and Sweepstakesand Sweepstakes

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Checkout direct offers marketers an excellent opportunity to reach users of the competition

Coupons are only issued to those who purchase specific brands

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Objectives – Trade Promotions:Objectives – Trade Promotions:

Sales Promotion

Obtaining Obtaining distribution and distribution and shelf spaceshelf space

Encouraging Encouraging retailers to retailers to advertise the advertise the brandbrand

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Objectives – Objectives – Sales Force Sales Force Promotions:Promotions: Signing up new Signing up new

accountsaccounts Stimulating Stimulating

sales of specific sales of specific itemsitems

Sales Promotion

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Trade Promotion ToolsTrade Promotion Tools Discounts (also called price-offs, Discounts (also called price-offs,

off-list, and off-invoice discounts)off-list, and off-invoice discounts) AllowancesAllowances

Advertising allowancesAdvertising allowances Display allowancesDisplay allowances

Free goodsFree goods Push moneyPush money Specialty advertising itemsSpecialty advertising items

Sales Promotion

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Business Promotion ToolsBusiness Promotion Tools Includes many of Includes many of

the same tools the same tools used in trade used in trade and consumer and consumer promotionspromotions

Two additional Two additional tools:tools:

Conventions Conventions & trade shows & trade shows

Sales contestsSales contests

Sales Promotion

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Key Decisions When Developing Key Decisions When Developing the Sales Promotion Program:the Sales Promotion Program: Size of the incentiveSize of the incentive Conditions for participationConditions for participation Promotion and distribution of the actual Promotion and distribution of the actual

sales promotion programsales promotion program Length of the promotional programLength of the promotional program EvaluationEvaluation

Surveys and experiments can be usedSurveys and experiments can be used

Sales Promotion

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Public Relations:Public Relations: Building good relations with the Building good relations with the

company’s various publics by company’s various publics by obtaining favorable publicity, building obtaining favorable publicity, building up a good corporate image, and up a good corporate image, and handling or heading off unfavorable handling or heading off unfavorable rumors, stories, and events.rumors, stories, and events.

Definition

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Public Relations

Public Relations FunctionsPublic Relations Functions

Press Press RelationsRelationsProduct Product PublicityPublicityPublic Public AffairsAffairs

LobbyingLobbying

Investor Investor RelationsRelations

DevelopmentDevelopment

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Role & Impact of Public RelationsRole & Impact of Public Relations Advantages:Advantages:

Strong impact on public awareness Strong impact on public awareness at a lower cost than advertising at a lower cost than advertising

Greater credibility than advertisingGreater credibility than advertising Publicity is often underused Publicity is often underused Good public relations can be a powerful Good public relations can be a powerful

brand-building toolbrand-building tool

Public Relations

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Public Relations

Public Relations ToolsPublic Relations Tools

NewsNews

SpeechesSpeeches

Corporate Identity Corporate Identity Materials Materials

Mobile Mobile MarketingMarketing

Special EventsSpecial Events

Written MaterialsWritten Materials

Audiovisual Audiovisual MaterialsMaterials

Public Service Public Service ActivitiesActivities

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Public Relations Tie-in:Public Relations Tie-in: Sponsorships relate to Sponsorships relate to

special eventsspecial events

Types of Sponsorships:Types of Sponsorships: Sports sponsorshipsSports sponsorships Entertainment, tours, and Entertainment, tours, and

attractionsattractions Festivals, fairs, and annual Festivals, fairs, and annual

eventsevents Cause-related marketingCause-related marketing ArtsArts

Special Events: Sponsorships

In-Depth

Sponsorship Trends:Sponsorship Trends: 2001: $9.5 billion spent2001: $9.5 billion spent

Reasons for Growth:Reasons for Growth: Avoids clutterAvoids clutter Cost efficient / effectiveCost efficient / effective Gains constituencies’ Gains constituencies’

approvalapproval Enhances brand equityEnhances brand equity Allows for lifestyle or Allows for lifestyle or

geographic targetinggeographic targeting

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Selecting Sponsorship Selecting Sponsorship Events -- Consider:Events -- Consider: Is it consistent with brand Is it consistent with brand

image or will it benefit the image or will it benefit the brand image?brand image?

Does it offer a strong Does it offer a strong probability of reaching the probability of reaching the target audience?target audience?

Does the event Does the event complement existing complement existing sponsorships and other sponsorships and other IMC efforts?IMC efforts?

Special Events: Sponsorships

In-Depth

Selecting Sponsorship Selecting Sponsorship Events -- Consider:Events -- Consider: Is the event cluttered by Is the event cluttered by

many other sponsors?many other sponsors? Is the event Is the event

economically viable?economically viable? Has the competition Has the competition

previously sponsored previously sponsored the event? Is there a risk the event? Is there a risk of confusing the target of confusing the target audience as to the audience as to the sponsor’s identity?sponsor’s identity?

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If you were responsible If you were responsible for marketing an anti-for marketing an anti-aging cream to baby aging cream to baby boomers, what events boomers, what events or causes would you or causes would you choose to sponsor choose to sponsor (local or national) and (local or national) and why?why?

Discussion Question

Documents

Advertising, Sales Promotion, and Public Relations Chapter 16