Download Advertising Budget

Chapter 15
Advertising, Sales Promotion, and
Public Relations
1
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.
2
What is Advertising?
Advertising is Any Paid Form of
Nonpersonal Presentation and
Promotion of Ideas, Goods, or
Services by an Identified
Sponsor.
3
Major Advertising Decisions
(Fig. 15.1)
Message Decisions
•Message Strategy
•Message Execution
Objectives Setting
•Communication
objectives
•Sales Objectives
Budget Decisions
•Affordable Approach
•Percent of sales
•Competitive parity
•Objective and task
Campaign Evaluation
•Communication Impact
•Sales Impact
Media Decisions
•Reach, Frequency, Impact
•Major Media Types
•Specific Media Types
•Media Timing
4
Setting Advertising Objectives
Informative Advertising
Persuasive Advertising
Inform Consumers or
Build Primary Demand
i.e CD Players
Build Selective Demand
i.e Sony CD Players
Advertising Objective
Specific Communication Task
Accomplished with a Specific
Target Audience
During a Specific Period of Time
Comparison Advertising
Reminder Advertising
Compares One Brand to
Another
i.e. Avis vs. Hertz
Keeps Consumers Thinking
About a Product
i.e. Coca-Cola
5
Setting the Promotion Budget
After Determining Its Advertising Objectives, the
Marketer Must Set the Advertising Budget for Each
Product and Market. (From Chapter 14)
Affordable
Percentage of Sales
Based on What the
Company Can Afford
Based on a Certain Percentage
of Current or Forecasted Sales
Objective-and-Task
Competitive-Parity
Based on Determining
Objectives & Tasks, Then
Estimating Costs
Based on the Competitor’s
Promotion Budget
6
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.
7
Developing Advertising
Strategy
Advertising Strategy Consists of Two Major Elements
and Companies are Realizing the Benefits of Planning
These Two Elements Jointly.
Creating the
Advertising
Selecting the
Advertising Media
Messages
8
Developing Advertising
Strategy: Creating Ad Messages
Plan a Message Strategy
General Message to Be Communicated to Customers
Develop a Message
Focus on
Customer Benefits
Some phrases or Big Ideas become so
effective that they spark trends in speaking,
fashion, or even in other ads.
Creative Concept
“Big Idea”
Visualization or Phrase Advertising Appeals
Meaningful
Combination of Both
Believable
Distinctive
9
Mes s a ge
Exe cut i o n
What type of message
execution do these two
ads employ?
Developing Advertising
Strategy: Message Execution
In both cases, what
dis tinguishes the
product from the
res t of the ad?
Click or p res s spacebar to retu rn.
Turning the “Big Idea” Into an Actual Ad to Capture the
Target Market’s Attention and Interest.
This Colgate ad
informs customers
about the necessity
of brushing after
lunch.
In addition to
acquiring new
customers, Colgate
may increase
toothpaste use by
present customers.
Testimonial Evidence
Scientific Evidence
Technical Expertise
Slice of Life
Typical
Message
Execution
Styles
Personality Symbol
Lifestyle
Fantasy
Mood or Image
What type of mood does this set ab ou tthe product?
Musical
10
Which lifestyle does it appeal to?
Advertising Strategy:
Selecting Advertising Media
Step 1. Decide on Reach, Frequency,
and Impact
Step 2. Choosing Among Major Media Types
Media Habits of Target Consumers,
Nature of the Product, Types of Message, Cost
Step 3. Selecting Specific Media Vehicles
Specific 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 Timing
Scheduling of Advertising Over the Course of a Year
Pattern of Ads: Continuity or Pulsing
11
Jon Steel, of
Goodby, Silverstein, and Partners:
Evaluating Advertising
Advertising Program Evaluation
Communication Effects
Sales Effects
Is the Ad Communicating Well?
Is the Ad Increasing Sales?
12
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.
13
Other Advertising
Considerations
Sales Departments in
Small Companies
Advertising Departments
in Larger Companies
Advertising Agency
Firm that Assists Companies
in the Planning, Creation, &
Implementation of Their
Advertising Programs
14
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.
15
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
16
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.
17
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.
18
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.
19
Major Consumer Sales
Promotion Tools
Sample
Trial amount of a product
Coupons
Savings when purchasing specified
products
Cash Refunds
Refund of part of the purchase price
Price Packs
Reduced prices marked on the label or
package
Premiums
Goods offered free or low cost as an
incentive to buy a product
Advertising
Specialties
Articles imprinted with an advertiser’s
name given as gifts
20
Major Consumer Sales
Promotion Tools
Patronage Rewards
Cash or other rewards for the use of a
certain product
Point-of-Purchase
Displays and demonstrations that take
place at the point of sale
Contests
Consumers submit an entry to be judged
Sweepstakes
Consumers submit their names for a
drawing
Game
Presents consumers with something every
time they buy
21
Major Trade Sales Promotion
Tools
Trade-Promotion
Objectives
Persuade Retailers or
Wholesalers to Carry a Brand
Trade-Promotion
Tools
Discounts
Give a Brand Shelf Space
Promote a Brand in
Advertising
Allowances
Push a Brand to Consumers
Sales Promotion
This K ibble s ‘n Bit s
promotion offered
pet owners a chance
to see their dogs in
a commercial.
Which of the four
obj ectives does this
type of promoti on
fulfill?
22
Major Business Sales
Promotion Tools
Business-Promotion
Objectives
Business-Promotion
Tools
Generate Business Leads
Conventions
Stimulate Purchases
Trade Shows
Reward Customers
Sales Contests
Motivate Salespeople
23
Developing the Sales
Promotion Program
Decide on the Size of the Incentive
Set Conditions for Participation
Determine How to Promote and
Distribute the Promotion Program
Determine the Length of the Program
Evaluate the Program
24
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.
25
Major Public Relations
Functions
Press Relations or Agentry
Product Publicity
Public Affairs
Public Relations
Departments May
Perform Any of All
of the Following
Functions:
Lobbying
Investor Relations
Development
26
Major Public Relations Tools
News
Web Site
Speeches
Public
Service
Activities
Special
Events
Corporate
Identity
Materials
Audiovisual
Materials
Written
Materials
27
Major Public Relations
Decisions
Setting Public Relations Objectives
Choosing the Public Relations Messages
and Vehicles
Implementing the Public Relations Plan
Evaluating Public Relations Results
28
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.
29