ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS · PDF fileADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS Cruise Vacation $999. 20-2 ' 2000 McGraw-Hill Ryerson Limited AFTER

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C H A P T E R T W E N T Y

ADVERTISING, SALESPROMOTION, AND PUBLICRELATIONS

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AFTER READING THIS CHAPTER YOU SHOULDAFTER READING THIS CHAPTER YOU SHOULDBE ABLE TO:BE ABLE TO:

� Explain the differences between productadvertising and institutional advertisingand the variations within each type.

� Understand the steps used to develop,execute, and evaluate an advertisingprogram.

� Explain the advantages anddisadvantages of alternative advertisingmedia.


AFTER READING THIS CHAPTER YOU SHOULDAFTER READING THIS CHAPTER YOU SHOULDBE ABLE TO:BE ABLE TO:

� Understand the strengths and

weaknesses of consumer-oriented

and trade-oriented sales promotions.

� Recognize public relations as an

important form of communication.


The Wild World of Web AdvertisingThe Wild World of Web Advertising Web advertisers are spending millions of dollars

annually. This amount will experience triple digit

growth in the near future. Why the rapid growth?

- growing number of business and households on the Internet

- advertising on the Web allows an advertiser to assess the

success of the ad. Web technology allows advertisers to

count the number of people who see an ad, how many

�click� through it, and in some cases how many purchase it.

- Web advertising has potential for creating value for

customers by making ads interactive.


Types of AdvertisementsTypes of AdvertisementsProduct Advertisements: focused on selling a good or service.

Types:

1. Pioneering or informational

2. Competitive or persuasive

3. Reminder

Institutional Advertisements: build goodwill or image for the

organization.

Types:

1. Advocacy

2. Pioneering institutional

3. Competitive institutional

4. Reminder institutional


Concept CheckConcept Check

1. What is the difference between

pioneering and competitive ads?

2. What is the purpose of an institutional

advertisement?


Developing the Advertising ProgramDeveloping the Advertising Program

Developing the Advertising Program:

1. Identifying the Target Audience

2. Specifying Advertising Objectives

3. Setting the Advertising Budget

4. Designing the Advertisement

a. message content

b. creating the actual message

c. selecting the right media

d. executing the advertising program

e. evaluating the advertising program



1. What are the characteristics of good

advertising objectives?

2. What is the weakness of the

percentage of sales budgeting

approach.


PP20�1 Canadian Advertising Expenditures by Medium, asPP20�1 Canadian Advertising Expenditures by Medium, as Percentage of Total Ad Spending Percentage of Total Ad Spending

Radio11%

Yellow Pages12%Television

27%

Other1%Outdoor/Transit

2%

Magazines6%

Direct Mail15%

Newspapers26%


PP20�2 The Language of the Media BuyerPP20�2 The Language of the Media Buyer

Term What It Means Reach The number of different people or households

exposed to an advertisement.

Rating The percentage of households in a market thatare tuned to a particular TV show or radiostation.

Frequency The average number of times an individual isexposed to an advertisement.

Gross rating points (GRPs) Reach (expressed as a percentage of the totalmarket) multiplied by frequency.

Cost per thousand (CPM) The cost of advertising divided by the numberof thousands of individuals or households whoare exposed.


PP20-3a Advantages and Disadvantages of Major AdvertisingPP20-3a Advantages and Disadvantages of Major Advertising Media Media

MEDIUM ADVANTAGES DISADVANTAGES

Television reaches extremely large high cost to prepare and run

audience; uses picture, print, ads; short exposure time and

sound, and motion for effect, perishable message; difficult to

can target specific audiences. convey complex information.

Radio low cost; can target specific no visual excitement; short

audiences; ads can be placed exposure time and perishable

quickly; can use sound, message; difficult to convey

humor, and intimacy complex information.

effectively.



Magazines can target specific audiences; long time needed to place ad;

high quality colour; long life of limited control of ad position;

ad; ads can be clipped and relatively high cost; competes

saved; can convey complex for attention with other

information. magazine features.

Newspapers excellent coverage of local ads compete for attention with

markets; ads can be placed other newspaper features; can�t

and changed quickly; ads can control ad position on page;

saved; quick consumer short life span; can�t target

response; low cost. Specific audiences. continued

PP20-3b Advantages and Disadvantages of Major AdvertisingPP20-3b Advantages and Disadvantages of Major Advertising Media Media



Internet video and audio capabilities; animation and interactivity

animation can improve require large files and more

attention; ads can be time to �load.� Effectiveness is

interactive and link to still uncertain.

advertiser.

Outdoor low cost; local market focus; message must be short and

high visibility; opportunity simple; low selectivity of

for repeat exposures. Audience; criticized as atraffic hazard, eyesore.

PP20-3c Advantages and Disadvantages of Major AdvertisingPP20-3c Advantages and Disadvantages of Major Advertising Media Media


Scheduling Advertising: Factors to ConsiderScheduling Advertising: Factors to Consider

First, First, buyer turnoverbuyer turnover

Second, Second, purchase frequencypurchase frequency

Third, Third, forgetting rateforgetting rate


Scheduling the AdvertisingScheduling the Advertising

Continuous (steady) ScheduleSteady schedule throughout the

year.

Flighting (�intermittent�) Advertising reflects seasonalSchedule demand

Pulse (�burst�) Schedule Steady and flighting schedules are combined

Most companies follow one of three basic approaches:



1. You see the same ad in Time and Maclean�s

magazines and on billboards and TV. Is

this an example of reach or frequency?

2. Why has the Internet become a popular

advertising medium?

3. What factors must be considered when

choosing among alternative media?


PretestingPretesting the Advertising the Advertising

Pretests are conducted before theadvertisements are place in anymedium.

Types of Pretest:

1. Portfolio Tests

2. Jury Tests

3. Theatre Tests


PP20�4 Alternative Structures of Advertising Agencies Used 20�4 Alternative Structures of Advertising Agencies Used to Carry Out the Advertising Program to Carry Out the Advertising Program

Type of Agency Service Provided

Full-service agency Does research, selects media, develops copy,and produces artwork.

Limited-service agency Specializes in one aspect of creative process;usually provides creative production work;buys previously unpurchased media space.

In-house agency Provides range of services, depending oncompany needs.


Post-testing the AdvertisingPost-testing the Advertising

Post-tests determine whether or not theadvertisements have achieved their intendedobjectives. There are five approaches common inpost-testing:

1. Aided recall (recognition-readership)

2. Unaided recall

3. Attitude tests

4. Inquiry tests

5. Sales tests



1. Explain the difference between

pretesting and post-testing advertising

copy.

2. What is the difference between aided

and unaided recall post-tests?


Consumer-Oriented Sales PromotionConsumer-Oriented Sales Promotion

CouponsCoupons

DealsDeals

PremiumsPremiums

ContestsContests

SweepstakesSweepstakes

SamplesSamples

Continuity ProgramsContinuity Programs

Point-of-Purchase DisplaysPoint-of-Purchase Displays

RebatesRebates

Product PlacementProduct Placement


PP20-5a Sales Promotion AlternativesPP20-5a Sales Promotion AlternativesKIND OF SALES

PROMOTION OBJECTIVES ADVANTAGES DISADVANTAGES

Coupons stimulate demand encourage retailer consumers delay

support purchases

Deals increase trial; reduce consumer consumers delay

retaliate against risk purchases; reduce

competitor�s actions perceived product

value

Premiums build goodwill consumers like free consumers buy for

or reduced-price premium, not product

merchandise

Contests increase consumer encourage consumer require creative or

purchases; build involvement with analytical thinking

business inventory product


PP20-5b Sales Promotion AlternativesPP20-5b Sales Promotion AlternativesKIND OF SALES


Sweepstakes Encourage present Get customer to use sales drop after

customers to buy more; product and store sweepstakes

minimize brand more often

switching

Samples encourage new low risk for high cost for company

product trial consumer

Continuity encourage repeat help create loyalty high cost for company

Programs purchases

Point-of-purchase increase product

displays trial; provide in-store provide good hard to get retailer to

support for other product visibility allocate high-traffic

promotions space


PP20-5c Sales Promotion AlternativesPP20-5c Sales Promotion AlternativesKIND OF SALES


Rebates encourage customers effective at easily copied; steal

to purchase; stop sales stimulating sales from future;

decline demand reduce perceived

product value

Product introduce new positive message little control over

placement products; demonstrate in a noncommercial presentation of

product use setting product


Trade-Oriented Sales PromotionsTrade-Oriented Sales Promotions

� Allowances and Discounts

- merchandise allowance

- case allowance

- finance allowance

� Cooperative Advertising

� Training of Distributors� Salesforces



1. What sales promotional tool is most

common for new products?

2. What�s the difference between a

coupon and a deal?

3. Which trade promotion is used on an

ongoing basis?


Definition of Public RelationsDefinition of Public Relations

Public Relations is . . . .Public Relations is . . . .

a form of communication management

that seeks to influence the image of an

organization and its products and

services.

a form of communication management

that seeks to influence the image of an

organization and its products and

services.


Public Service AnnouncementsPublic Service Announcements

Nonprofit organizations rely

heavily on PSAs (public service

announcements), where free

space or time is donated by the

media.



1. What is a news release?

2. A growing area of public

relations is ______________

Documents

ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS · PDF fileADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS Cruise Vacation $999. 20-2 ' 2000 McGraw-Hill Ryerson Limited AFTER