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Chapter 17 © zayats-and-zayats © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats LO 17-1 Describe advertising and its different types LO 17-2 Summarize the eight major steps in developing an advertising campaign LO 17-3 Identify who is responsible for developing advertising campaigns LO 17-4 Define public relations LO 17-5 Describe the different tools of public relations LO 17-6 Analyze how public relations is used and evaluated © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Both large organizations and small companies use conventional and online promotional efforts like advertising to O Change their corporate image O Build brand equity O Launch new products O Promote current brands LO 17-1 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Advertising O A paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media O Used to promote goods, services, ideas, images, issues, people and anything else advertisers want to publicize or foster O Advertising permeates our daily lives; can have a profound impact on how customers view certain products and can influence purchase behavior throughout a lifetime O Many nonbusiness organizations – including governments, churches, universities and charitable organizations – use advertising LO 17-1 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Institutional advertising O Promotes organizational images, ideas and political issues O Can be used to create or maintain an organizational image O May aim to create a more favorable view of the organization in the eyes of noncustomer groups O Advocacy advertising O Advertising that promotes a company’s position on a public issue O May be used to promote socially approved behavior LO 17-1 such as recycling or moderation in consuming alcoholic beverages © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Product advertising promotes the uses, features and benefits of products O Two types of product advertising: O Pioneer advertising – tries to stimulate demand for a product category rather than a specific brand by informing potential buyers about the product O Used most often for products before they hit the market O Competitive advertising – tries to stimulate demand for a specific brand by promoting its features, uses and advantages relative to competing brands LO 17-1 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Three types of competitive advertising: O Comparative advertising – compares the sponsored brand with one or more identified brands on the basis of one or more product characteristics O Reminder advertising – used to remind consumers about an established brand’s uses, characteristics and benefits O Reinforcement advertising – assures users they chose the right brand and tells them how to get the most satisfaction from it LO 17-1 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Samsung indirectly pokes fun at Apple in some of its advertisements to indicate the superiority of the Galaxy phone. Stonyfield created an advertisement to promote Read the following examples of advertising. Determine whether the type of advertising is pioneer, competitive, or institutional advertising: its efforts to help fund innovative organic farming projects. Clorox released television advertisements to inform consumers that its brands are still the best in cleaning. To introduce Google Glass, Google had to explain what the product does and how it is revolutionary. The National Highway Traffic Safety Administration develops jolting ads to reinforce the danger of texting and driving. Apple released the details of its iPad to generate excitement even before the product hit the market. LO 17-1 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O An advertising campaign is the creation and execution of a series of advertisements to communicate with a particular target audience LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O The target audience is the group of people at whom advertisements are aimed O This may include everyone in the firm’s target market or only a portion of the target market O Identifying and analyzing the target audience are critical processes as the information yielded helps determine other steps in developing the campaign O The more an advertiser knows about the target audience, the more likely the firm is to develop an effective advertising campaign LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Advertising objectives guide campaign development and should be defined carefully O Objectives should be stated clearly, precisely and in measureable terms O Benchmarks provide measurability O Objectives can be defined on the basis of: O Sales – increasing dollar sales or unit sales, increasing LO 17-2 sales by a percentage or increasing market share O Communication – increase product or brand awareness, make consumers’ attitudes more favorable, heighten consumers knowledge of product features or create awareness © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Advertising platforms are basic issues or selling points to be included in an advertising campaign O The platform should consist of issues important to customers O A single advertisement in an advertising campaign may contain one or several issues from the platform O Because the platform is a base on which to build the advertising message, marketers should analyze this stage carefully LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O The advertising appropriation is the advertising budget for a specific time period O Many factors affect a firm’s decision about how much to appropriate for advertising O Geographic size of the market O Distribution of buyers within the market O The type of product O The firm’s sales volume relative to competitors’ sales volumes O Business products have small appropriations LO 17-2 relative to sales, while consumer convenience items have large appropriations relative to sales © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Objective-and-task approach O Budgeting for an advertising campaign by first determining its objectives and then calculating the cost of all the tasks needed to attain them O Percent-of-sales approach O Budgeting for an advertising campaign by multiplying the firm’s past and expected sales by a standard percentage LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Competition-matching approach O Determining an advertising budget by trying to match competitors’ advertising outlays O Arbitrary approach O Budgeting for an advertising campaign as specified by a high-level executive in the firm LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O A media plan specifies the media vehicles to be used and the schedule for running advertisements O Determines how many people in the target audience will be exposed to the message and how the message will effect them O This is a complex task requiring analysis of the target audience O Advertisers spend tremendous amounts on advertising media LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O The primary goal of the media plan is to reach the largest number of people in the advertising target the budget will allow O The secondary goal is to achieve the appropriate message reach and frequency for the target audience while staying within budget O Reach refers to the percentage of consumers in the target audience actually exposed to a particular advertisement in a stated period O Frequency is the number of times these targeted consumers are exposed to the advertisement LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Media planners must decide on which kinds of media to use O Radio, TV, newspapers, digital or online advertising, magazines, direct mail, outdoor displays or signs on mass transit vehicles O They take many factors into account: O Analyze location and demographic characteristics of consumers in the target audience O Consider the sizes and types of audiences that specific media reach O Content of the message may affect media choice LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Cost is a troublesome consideration because there is no accurate way to compare the costs of one medium over another O Planners try to obtain the best coverage possible for each dollar spent O Cost comparison indicator is a means of comparing LO 17-2 the costs of advertising vehicles in a specific medium in relation to the number of people reached O Example: the cost per thousand impressions (CPM) is the cost comparison indicator for magazines; showing the cost of exposing 1,000 people to one advertisement © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Digital marketing is creating a dramatic shift for advertising agencies O Digital marketing is not reduced to one medium, but can include platforms such as O E-books O iPads O Geotargeting O Mobile apps O Agencies that embrace the new advertising media are facing challenges in adapting but also finding increased profitability LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Like media selection decisions, media scheduling decisions are affected by numerous factors, such as O Target audience characteristics O Product attributes O Product seasonality O Customer media behavior O Size of the advertising budget LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O There are three general types of media schedules: O Continuous O Advertising runs at a constant level with little variation throughout the campaign period O Flighting O Advertisements run for set periods of time, alternating with periods in which no ads run O Pulsing O Combines continuous and flighting schedule; during the entire campaign, a portion of advertising runs continuously LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O The basic content and form of an advertising message are a function of several factors O Product features, uses and benefits O The intensity of the advertising O Characteristics of people in the target audience O The advertising campaign’s objectives and platform O Choice of media LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Copy is the verbal portion of advertisements O Headlines O Critical as people often only read headlines O Subheadlines O Links the headline to the body copy O Body copy O Usually consists of several paragraphs O Signature O Identifies the advertisement’s sponsor and may include a trademark, logo, name and address LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats LO 17-2 O Radio copy should be informal and conversational to attract listeners’ attention O In television copy, the audio material must not overpower the visual material, and vice versa O Storyboard is a blueprint that combines copy and visual material to show the sequence of major scenes in a commercial © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Artwork is an advertisement’s illustrations and layout O Illustrations are photos, drawings, graphs, charts and tables used to spark audience interest in an advertisement O Communicates an idea quickly or conveys ideas difficult to express O Important because consumers tend to better recall the visual rather than the verbal portions O Layout is the physical arrangement of an advertisement’s illustration and copy LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Execution of an advertising campaign requires extensive planning and coordination because many tasks must be completed on time with several people and firms involved O Some possible contributors to the campaign are production companies, research organizations, media firms, printers and commercial artists O Implementation requires detailed schedules to ensure various phases are done on time LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O A variety of ways exist to test effectiveness including: O Measuring achievement of advertising objectives O Assessing effectiveness of copy, illustrations or layouts O Evaluating the effectiveness of certain media LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Advertising can be evaluated before, during and after the campaign O Pretest – evaluation of advertisements performed before a campaign begins O Consumer jury – a panel of a product’s existing or potential buyers who pretest ads O To measure effectiveness during a campaign, marketers use inquiries or responses O Posttest – evaluation of advertising effectiveness after the campaign O Objectives often determine what kind of posttest is appropriate LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Posttest methods include: O Recognition test O Respondents are shown the actual ad and asked if they recognize it O Unaided recall test O Respondents are asked to identify advertisements they have seen recently but not given recall clues O Aided recall test O Asks respondents to identify recent ads and provides clues to jog their memories LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Walmart adopted the selling point of “every day low prices” as part of its marketing campaigns Procter & Gamble set aside $20 million for its advertising campaign to market a new product Janice works at an advertising agency, where her Read the following examples of advertising. For each example, determine the step in the advertising process: job is to take the concepts and draft the copy for advertisements Petco has determined a schedule for its advertisements on major networks; it will also place ads on the Internet Yum Brands developed a new advertising campaign for Taco Bell in hopes the campaign will increase sales by 20% Fred conducts pre-tests and post-tests to see how well an advertisement impacted a group of consumers Dyson vacuum cleaner advertisements focus more on affluent home owners. LO 17-2 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O An advertising campaign may be handled by: O An individual or a few people within a firm O Small firms depend heavily on local media O A firm’s own advertising department O May obtain services of independent research organizations or may hire freelance specialists for some projects O An advertising agency O May be advantageous because an agency provides highly skilled, objective specialists with broad experience at low to moderate costs to the firm LO 17-3 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Public relations are communication efforts used to create and maintain favorable relations between an organization and its stakeholders O Can be directed at either internal or external stakeholders O Public relations can be used to promote people, places, ideas, activities and even countries O Often used by nonprofit organizations O Public relations focus on enhancing the image of the total organization LO 17-4 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Companies use a variety of tools to convey messages and create images O Public relations tools include O Written materials such as brochures, O O O O LO 17-5 newsletters and annual reports Corporate identity materials such as business cards and signs Speeches Event sponsorships Special events © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Publicity - a news story type of communication about an organization and/or its products transmitted through a mass medium at no charge O Publicity-based public relations tools include O News release – a short piece of copy publicizing an LO 17-5 event or product O Feature article – a manuscript of up to 3,000 words prepared for a specific publication O Captioned photograph – a photo with a brief description of its contents O Press conference – a meeting used to announce major news events © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats LO 17-5 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. An oil and gas company just experienced a major Read the following examples. Describe whether the example is a news release, feature article, captioned photograph, or press conference: oil spill. It is important that the CEO personally address the media to give a statement and provide reassurances. The Atlanta Zoo wants to market a benefits concert, so it writes up a short blurb and sends it to the local radio station. Lululemon paid to have a large picture of its newest yoga outfit placed on the front page of the newspaper, accompanied by a brief description to explain what it is. An article on Square’s credit card reader and how it can change the banking industry appeared in Bloomberg Businessweek. PR Newswire works with Kraft to develop and distribute a 300-word story about how it has performed in the last quarter. LO 17-5 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Environmental monitoring identifies changes in public opinion affecting an organization O A public relations audit is used to assess an organization’s public image or to evaluate the effect of a specific public relations program LO 17-6 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O A communications audit may include a content analysis of messages, a readability study or a readership survey O Social audit is used when an organization wants to measure the extent to which stakeholders view it as being socially responsible LO 17-6 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Companies may have to deal with unexpected and unfavorable publicity resulting from O An unsafe product O An accident resulting from product use O Controversial actions of employees O Or some other negative event or situation LO 17-6 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Negative events that generate public relations can wipe out a company’s favorable image and destroy positive customer attitudes O How an organization deals with unfavorable actions and outcomes can have a significant impact on firm valuation LO 17-6 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O First and foremost, the organization should try to prevent negative incidents and events through O Safety programs, inspections, training and effective quality control procedures O Consistent brand messages and images throughout all communication at times of crisis helps strengthen the brand LO 17-6 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © zayats-and-zayats O Plans and policies should be in place before a crisis occurs O In most cases, organizations should expedite news coverage of negative events rather than try to discourage or block them LO 17-6 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. While a company can get in trouble for releasing ads that deceive the customer, sometimes an advertising claim might be technically true but still misleading. There are many cases where marketers take advantage of cultural perceptions. Organic food, for instance, is marketed for its lack of additives and non-organic pesticides. However, there is no proof that organic or natural food is more nutritious. Natural potato chips still contain lots of fats and sugars. Vague definitions, such as the word “natural,” can also be misleading. It is important that advertisers take their responsibility to consumers into account before releasing a possibly confusing advertisement. LO 17-6 © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.