Download ADVERTISING, SALES PROMPTION AND PUBLIC RELATIONS

ADVERTISING AND SALES PROMOTION
Advertising is a paid form of nonpersonal communication by an identified sponsor using
mass media to persuade or influence a target audience.
I Types of Advertising
Advertisements are prepared for different purposes, but they basically consist of two
types: product and institutional.
A. Product Advertisements
Product advertisements focus on selling a good or service and take three forms:
(1) Pioneering or informational; (2) competitive or persuasive and (3) reminder.
1. Pioneering ads tell people what a product is, what it can do and where it can be
found.
*Used in introductory stage of the product life cycle
*The key objective is to inform the target market
2. Competitive ads promote a specific brand’s features and benefits
Objective is to persuade the target market to select the firm’s brand
over a competitors.
 A common form of competitive advertising is comparative advertising
which shows one brand’s strengths relative to those of competitors.
- comparative ads attract more attention and increase the
perceived quality of the advertiser’s brand.
- Firms that use comparative advertising need market research to
provide legal support for their claims.
3. Reminder Advertising is used to reinforce previous knowledge of product.
* It is good for products that have achieved a well recognized position and
are in the mature phase of their product life cycle.
*Reinforcement advertising, another type of reminder advertising is used
to assure current users they made the right choice.
B. Institutional Advertisements
Institutional Advertisements are designed to build goodwill or an image for an
organization rather than promote a specific good or service.
 Often this form of advertising is used to support public relations plans
or counter adverse publicity.
II Designing the Advertising
1. Message Appeal
Most ad messages are made up of both informational and persuasional elements,
which can be combined in an appeal to provide a reason for the consumer to act.
 Fear appeals - suggests you can avoid some negative experience
through the purchase and use of a particular product.
 Sex appeals - suggest that the product will increase the attractiveness
of the user
 Humorous appeals - grabs attention, implies that the product is fun or
exciting.
2. Creating the actual message
Copywriters write the text/words in an ad.
Graphic designers create the visual
Creative directors work with both copywriters and graphic designers to
pull the work together.
E. Selecting the right media
Every advertiser must select the advertising media in which to place ads.
 Print media: Newspapers, Magazines, Outdoor, Directory
 Broadcast media: Television, Radio, Internet
 We refer to specific media as vehicles
 Media Buyers - purchase space in the case of print and time in the case
of broadcast. They also negotiate prices and check to make sure the ad
was run at the proper time.
 Reach - the number of different people exposed to an ad
 Frequency - the number of times a person is exposed to a message.
 Rating is the percentage of households in a market that are tuned to a
particular TV show or Radio station
 Cost per thousand (CPM) is the cost of reaching 1,000 individuals or
households with the advertising message in a given medium.

III Media Advantages and Disadvantages
1. Television
Advantages
 Reaches 95 percent of U.S. homes
 Can tell a story, convey wide range of emotion because it uses sight,
sound and motion. Great for demonstration, seeing is believing
Disadvantages
 High cost for air time, high cost for production ($300,000+ per spot)
 New technology making it possible to bypass commercials
2. Radio
Advantages
 Highly segmented medium, news listeners listen to news stations
 Can produce a spot and have it on the air within 48 hours
 Can be very inexpensive
 Is considered the most personal of the mass media
 Has been called “Theater of the Mind”
Disadvantages
 Not good for products that must be seen
 Listeners are doing something else and can tune out
 Peak radio listening time is from 6 to 10 am and 4 to 7 pm (drive time)
3. Magazines
Advantages
 People don’t consider magazine advertising intrusive
 There are more than 6,000 magazines in the U.S.
 Great for segmenting and targeting
 Great reproduction color good for strong images
Disadvantages
 Cost for a single page in a national magazine is high
 None have a true national reach so you have to buy in several
4. Newspapers
Advantages
 Can create an ad today and have it run tomorrow
 Have great geographical household reach
 Local retailers often use newspapers as their only medium
Disadvantages
 Seniors and those under 25 don’t read the newspaper
 Poor color reproduction
 The wall street journal and USA Today are the only national
newspapers
5. Yellow Pages
Advantages
 Annually consumers use this resource 15 billion times. The 6,500
yellow page directories reach almost all telephone households.
 Yellow pages are directional because they help consumers know
where purchases can be made.
Disadvantages
 Lack of timeliness. Ads can only be updated once a year
 Clutter
6. Internet
Advantages
 Can reach younger consumers who have developed a preference for
online communication.
 Rich media - video, audio as well as print
Disadvantages
 Difficulty of measuring its impact and effectiveness
7. Outdoor
Advantages
 Impact
 Great reminder medium
 Is relative low cost
Disadvantages
 No opportunity for lengthy advertising copy
 Many communities see it as environmental pollution and have banned
billboards
IV Scheduling Advertising
Most companies follow one of three basic approaches:
a. Continuous Schedule - advertising is run at a continuous or steady schedule
throughout the day
b. Flighting (intermittent) schedule - periods of advertising are scheduled between
periods of no advertising to reflect seasonal demand
c. Pulse (burst) - steady and then a big burst of advertising and then steady and
then a big burst of advertising.
VI SALES PROMOTION
Sales promotion is a key element in the promotional mix, it accounts for more than $288
billion in annual expenditures.
A. Consumer - Oriented Sales Promotions
Consumer-oriented sales promotions are sales tools used to support a company’s
advertising and personal selling directed to ultimate consumers.
1. Coupons
Coupons are sales promotions that usually offer a discounted price to the
Consumer to encourage trial.
 258 billion coupons are distributed in the U.S. annually
 The redemption rate is about 2%
 The average face value of redeemed coupons is $0.80
 Coupons cost more than their face value. Must pay for
The advertisement to deliver it, dealer handling, and redemption
Costs.
2. Deals
Deals are short-term price reductions used to increase trial among potential
Customers or to retaliate against a competitor’s actions
3. Premiums.
A premium consist of either merchandise offered free or offered at significant
Savings over its retail price.
 With self-liquidating premium, the cost charged to the consumer
covers the cost of the item.
 Premiums encourage customers to return frequently or use more of the
product, although they may buy only for the premium rather than the
product.
4. Contests - Consumers apply their skill or analytical or creative thinking to try
To win a prize.
5. Sweepstakes
Sweepstakes require participants to submit an entry but require no analytical or
creative effort by the consumer
 Federal and State laws regulate fairness, ensure the chance for winning
Is stated, and guarantee prizes are awarded.
6. Samples
Sampling is the offering of a product free or at a greatly reduced price, usually in
a smaller than regular package size.
* Often used for new products, sampling puts the product in the consumer’s hands
7. Loyalty Programs
Are sales promotion tools that encourage and reward repeat purchases by offering
A premium as purchases accumulate.
* Examples: frequent flyer points, punch cards at car wash, sandwich shop cards
8. Point-of-Purchase Displays
A point of purchase display takes the form of advertising signs, which sometimes
Hold or display the product.
 They are often located in high traffic areas near the cash register or the
end of an aisle.
9. Rebates
* The cash rebate offers money based on proof of purchase
* On lower-priced items, many buyers never mail in proof of purchase due
To the time and trouble it takes
10. Product Placement.
Product Placement involves the use of brand-name products in a movie, television
show, video, or commercial for another product.
 Sometimes product placement uses digital technology that can make
virtual placements in an existing program.
B Trade-Oriented Sales Promotion
Trade oriented sales promotions, are sales tools used to support a company’s
advertising and personal selling directed to wholesalers, retailers or distributors.
1. Allowances and Discounts
a. Merchandise allowances reimburse a retailer for extra instore support or
special featuring of the brand.
* Manufacturers do not pay for allowances until they see proof of performance
b. A case allowance is a discount on each case ordered during a specific time
period and is deducted from the invoice.
* A variation of the case allowance is the “free goods” approach, whereby
retailers receive some amount of the product free based on the amount ordered.
c. A finance allowance pays retailers for financing costs or financial losses
associated with consumer sales promotions. Freight allowances, which
compensate retailers that transport orders from the manufacturer’s warehouse.
2. Cooperative Advertising
Cooperative advertising occurs when a manufacturer pays a percentage of the
retailer’s local advertising expense for advertising the manufacturer’s products.
 The manufacturer pays a percentage of the cost of advertising up to a
certain dollar limit based on the purchases the retailer makes of the
manufacturers products.
 In addition to paying for the advertising, the manufacturer often
provides a selection of print and broadcast ads the retailer can adapt
and use.
3. Training of Distributors’ Salesforce
A manufacturer often spends time and money helping to train reseller’s salesforce
about the manufacturer’s products to increase sales.
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