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Chapter 15

Advertising, Sales Promotion, and Public Relations

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Advertising

Advertising is centuries old.U.S. advertisers spend in excess of $212 billion each year; worldwide spending exceeds $414 billion.Advertising is used by: Business firms, Nonprofit organizations, Professionals, and Social agencies.

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What is Advertising?

Advertising is Any Paid Form of Nonpersonal

Presentation and Promotion of Ideas, Goods, or Services by an Identified

Sponsor.

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Major Advertising Decisions (Fig. 15.1)

Objectives Setting

•Communication objectives

•Sales Objectives

Budget Decisions•Affordable Approach•Percent of sales•Competitive parity•Objective and task

Message Decisions•Message Strategy

•Message Execution

Media Decisions•Reach, Frequency, Impact

•Major Media Types•Specific Media Types

•Media Timing

Campaign Evaluation•Communication Impact

•Sales Impact

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Informative AdvertisingInform Consumers or Build Primary Demand

i.e CD Players

Comparison Advertising

Compares One Brand to Another

i.e. Avis vs. Hertz

Persuasive AdvertisingBuild Selective Demand

i.e Sony CD Players

Reminder AdvertisingKeeps Consumers Thinking

About a Producti.e. Coca-Cola

Advertising ObjectiveSpecific Communication Task Accomplished with a Specific

Target Audience During a Specific Period of Time

Setting Advertising Objectives

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Affordable Based on What the

Company Can Afford

Objective-and-Task Based on Determining

Objectives & Tasks, Then Estimating Costs

Objective-and-Task Based on Determining

Objectives & Tasks, Then Estimating Costs

Percentage of SalesBased on a Certain Percentageof Current or Forecasted Sales

Percentage of SalesBased on a Certain Percentageof Current or Forecasted Sales

Competitive-ParityBased on the Competitor’s

Promotion Budget

Competitive-ParityBased on the Competitor’s

Promotion Budget

After Determining Its Advertising Objectives, the Marketer Must Set the Advertising

Budget for Each Product and Market. (From Chapter 14)

Setting the Promotion Budget

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Setting the Advertising Budget

Factors to be considered when setting the advertising budget: Stage in the product

life cycle, Market share, Competition and

clutter, Product

differentiation.

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Creating the Advertising

Messages

Selecting the Advertising Media

Advertising Strategy Consists of Two Major Elements and Companies are Realizing the

Benefits of Planning These Two Elements Jointly.

Developing Advertising Strategy

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Plan a Message StrategyGeneral Message to Be Communicated to Customers

Develop a Message Focus on

Customer Benefits

Develop a Message Focus on

Customer Benefits Creative Concept“Big Idea”

Visualization or PhraseCombination of Both

Creative Concept“Big Idea”

Visualization or PhraseCombination of Both

Advertising AppealsMeaningfulBelievableDistinctive

Advertising AppealsMeaningfulBelievableDistinctive

Developing Advertising Strategy: Creating Ad Messages

Some phrases or Big Ideas become so effective that they spark trends in speaking, fashion, or even in other ads.

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TypicalMessage

ExecutionStyles

Testimonial EvidenceTestimonial Evidence Slice of LifeSlice of Life

Scientific EvidenceScientific Evidence LifestyleLifestyle

Technical ExpertiseTechnical Expertise FantasyFantasy

MusicalMusical

Personality SymbolPersonality Symbol Mood or ImageMood or Image

Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and

Interest.

Developing Advertising Strategy: Message Execution

What type of message execution do these two ads employ?

Message Executi on

In both cases, what dis tinguishes the product from theres t of the ad?

Click or p ress spacebar to retu rn.

What type of mood does this set about the product?

Which lifestyle does it appeal to?Click or press spacebar to return

This Colgate adinforms customersabout the necessity of brushing afterlunch.

In addition to acquiring new customers, Colgate may increasetoothpaste use bypresent customers.

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Step 1. Decide on Reach, Frequency, and Impact

Step 2. Choosing Among Major Media TypesMedia Habits of Target Consumers,

Nature of the Product, Types of Message, Cost

Step 3. Selecting Specific Media VehiclesSpecific Media Within a Given Type, i.e. Magazines.

Must Balance Media Cost Against Media Factors:Audience Quality & Attention, Editorial Quality

Step 4. Deciding on Media TimingScheduling of Advertising Over the Course of a Year

Pattern of Ads: Continuity or Pulsing

Advertising Strategy:Selecting Advertising Media

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Communication Effects

Is the Ad Communicating Well?

Communication Effects

Is the Ad Communicating Well?

Advertising Program Evaluation

Sales Effects

Is the Ad Increasing Sales?

Sales Effects

Is the Ad Increasing Sales?

Evaluating Advertising

Jon Steel, ofGoodby, Silverstein, and Partners:

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Discussion Connections

Advertising objectives can be classified by primary purpose: to inform, persuade, or remind.Using your local newspaper, find examples of ads pursuing each of the above.Apply Table 15.1 to explain your answers.

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Sales Departments inSmall Companies

Advertising Departments in Larger Companies

Advertising Agency

Firm that Assists Companiesin the Planning, Creation, &

Implementation of TheirAdvertising Programs

Other Advertising Considerations

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Advertising Agencies

Large agencies divide their staffs to specialize in creative,media,research, or business (account planning).Ad agencies are moving away from the commission system because it no long accurately reflects the services performed. Most ad agency clients still want just a few of the services that can be provided by the agency, so diversification efforts have been limited.

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International Advertising Decisions

Adaptation of Global Advertising

Advertising Media Differ Considerably in Availability and

Cost

Regulation in Advertising Practices

Comparison Ads Not Acceptable in All Countries

Programs Must be Matched to Local Cultures and Customs

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What is Sales Promotion ?

Sales Promotion is a Mass Communication Technique

That Offers Short-Term Incentives to Encourage

Purchase or Sales of a Product or Service.

Offers Reasons to Buy Now.

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Rapid Growth of Sales Promotion

Sales promotion can take the form of consumer promotions, business promotions, trade promotions or sales force promotions.Rapid growth in the industry has been achieved because: Product managers are facing more pressure to

increase their current sales, Companies face more competition, Advertising efficiency has declined, Consumers have become more deal oriented.

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Sales Promotion Objectives

Increase short-term sales or help build long-term market share.Get retailers to: carry new items and more inventory, advertise products, give products more shelf space, and buy product ahead.

In general, sales promotion should focus on consumer relationship building.

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SampleSample

CouponsCoupons

Cash RefundsCash Refunds

Price PacksPrice Packs

PremiumsPremiums

Advertising Specialties

Advertising Specialties

Trial amount of a productTrial amount of a product

Savings when purchasing specified products

Savings when purchasing specified products

Refund of part of the purchase priceRefund of part of the purchase price

Reduced prices marked on the label or package

Reduced prices marked on the label or package

Goods offered free or low cost as an incentive to buy a product

Goods offered free or low cost as an incentive to buy a product

Articles imprinted with an advertiser’s name given as gifts

Articles imprinted with an advertiser’s name given as gifts

Major Consumer Sales Promotion Tools

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Patronage RewardsPatronage Rewards

Point-of-PurchasePoint-of-Purchase

ContestsContests

SweepstakesSweepstakes

GameGame

Cash or other rewards for the use of a certain product

Cash or other rewards for the use of a certain product

Displays and demonstrations that take place at the point of sale

Displays and demonstrations that take place at the point of sale

Consumers submit an entry to be judged

Consumers submit an entry to be judged

Consumers submit their names for a drawing

Consumers submit their names for a drawing

Presents consumers with something every time they buy

Presents consumers with something every time they buy

Major Consumer Sales Promotion Tools

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Trade-Promotion Objectives

Persuade Retailers or Wholesalers to Carry a Brand

Persuade Retailers or Wholesalers to Carry a Brand

Give a Brand Shelf SpaceGive a Brand Shelf Space

Promote a Brand in Advertising

Promote a Brand in Advertising

Push a Brand to ConsumersPush a Brand to Consumers

Major Trade Sales Promotion Tools

Trade-Promotion Tools

DiscountsDiscounts

AllowancesAllowances

Sales Promotion

This K ibble s ‘n Bit spromotion offeredpet owners a chanceto see their dogs ina commercial.

Which of the fourobj ectives does thistype of promoti onfulfill?

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Business-Promotion Objectives

Generate Business LeadsGenerate Business Leads

Stimulate PurchasesStimulate Purchases

Reward CustomersReward Customers

Motivate SalespeopleMotivate Salespeople

Business-Promotion Tools

ConventionsConventions

Trade ShowsTrade Shows

Sales ContestsSales Contests

Major Business Sales Promotion Tools

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Decide on the Size of the IncentiveDecide on the Size of the Incentive

Set Conditions for ParticipationSet Conditions for Participation

Evaluate the ProgramEvaluate the Program

Determine How to Promote andDistribute the Promotion Program Determine How to Promote and

Distribute the Promotion Program

Determine the Length of the ProgramDetermine the Length of the Program

Developing the Sales Promotion Program

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What is Public Relations?

Public Relations Involves Building Good Relations With the

Company’s Various Publics by Obtaining Favorable Publicity, Building Up a Good Corporate

Image, and Handling or Heading Off Unfavorable Rumors, Stories,

and Events.

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Press Relations or AgentryPress Relations or Agentry

Product PublicityProduct Publicity

Public AffairsPublic Affairs

LobbyingLobbying

Investor RelationsInvestor Relations

DevelopmentDevelopment

Public Relations Departments May Perform Any of All of the Following

Functions:

Major Public Relations Functions

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News

Speeches

Special Events

Written MaterialsAudiovisual

Materials

Corporate Identity

Materials

Public Service

Activities

Web Site

Major Public Relations Tools

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Setting Public Relations ObjectivesSetting Public Relations Objectives

Choosing the Public Relations Messages and Vehicles

Choosing the Public Relations Messages and Vehicles

Implementing the Public Relations PlanImplementing the Public Relations Plan

Evaluating Public Relations ResultsEvaluating Public Relations Results

Major Public Relations Decisions

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Review of Concept Connections

Define the roles of advertising, sales promotion, and public relations in the promotion mix.Describe the major decisions involved in developing an advertising program.Explain how sales promotion campaigns are developed and implemented.Explain how companies use public relations to communicate with their publics.