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Chapter 15 Advertising, Sales Promotion, and Public Relations Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition Learning Goals 1. Define the roles of advertising, sales promotion, and public relations in the promotion mix 2. Describe the major decisions involved in developing an advertising program 3. Explain how sales-promotion campaigns are developed and implemented 4. Explain how companies use public relations to communicate with their publics Copyright © 2008 Pearson Education Canada 15-2 Principles of Marketing, Seventh Canadian Edition The United Way of Greater Toronto • In 2003 thousands of charities appeared to be fighting for the same small 5% of donors in Canada. • The United Way needed a campaign that would break through the clutter and hired the advertising agency Arnold Worldwide • Focus groups confirmed that donors give to organizations that have personal meaning to them. • They also discovered this donors felt an underlying guilt for not giving directly to the poor. • Also, The United Way is seen as “a helping hand to those in need”. Copyright © 2008 Pearson Education Canada • Strategy: “Giving to the United Way is the simple way to take care of those most vulnerable in the city. • The campaign used the imagery of the hand as “an icon of protection”. • The campaign run for two years helping to generate $10 million in donated editorial and promotional media. • Results for United Way: • Donations increased in both 2003 and 2004 • Advertising awareness increased by 10% in one year. • Brand image was positively affected 15-3 Principles of Marketing, Seventh Canadian Edition Learning Goals 1. Know the major decisions involved in developing an advertising program. 2. Learn how sales promotion campaigns are developed and implemented. 3. Learn how companies use public relations to communicate with their publics. 4. Understand the roles of advertising, sales promotion, and public relations in the promotion mix. Copyright © 2008 Pearson Education Canada 15-4 Principles of Marketing, Seventh Canadian Edition Advertising • Advertising – Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Copyright © 2008 Pearson Education Canada 15-5 Principles of Marketing, Seventh Canadian Edition Advertising • Signage in ancient times offers evidence of early advertising. • Modern ad spending tops $11 billion in Canada annually, $498 billion worldwide. • Business firms, not-for-profit, social agencies, and professionals all advertise. Copyright © 2008 Pearson Education Canada 15-6 Principles of Marketing, Seventh Canadian Edition Key Advertising Decisions • Setting objectives • Setting the budget • Developing the advertising strategy • Evaluating advertising campaigns • Advertising objectives can be classified by primary purpose: – Inform • Introducing new products – Persuade • Becomes more important as competition increases • Comparative advertising – Remind • Most important for mature products Copyright © 2008 Pearson Education Canada 15-7 Principles of Marketing, Seventh Canadian Edition Key Advertising Decisions • Setting objectives • Setting the budget • Developing the advertising strategy • Evaluating advertising campaigns Copyright © 2008 Pearson Education Canada • Methods of budget setting were listed in chapter 14 • Several factors should be considered when setting the ad budget: – – – – – 15-8 Stage in the PLC Market share Level of competition Ad clutter Degree of brand differentiation Principles of Marketing, Seventh Canadian Edition Key Advertising Decisions • Setting objectives • Setting the budget • Developing the advertising strategy • Evaluating advertising campaigns • Creative challenges – Advertising clutter – TiVo and PVRs • Creating ad messages – Message strategy • Creative concept or Big Idea • Advertising appeal – Message execution • Many execution styles • Tone, format, illustration, headline, copy Copyright © 2008 Pearson Education Canada 15-9 Principles of Marketing, Seventh Canadian Edition Advertising • Creative Execution Styles – – – – – Slice of Life Lifestyle Fantasy Mood or Image Musical Copyright © 2008 Pearson Education Canada – Testimonial Evidence or Endorsement – Personality Symbol – Technical Expertise – Scientific Evidence 15-10 Principles of Marketing, Seventh Canadian Edition Key Advertising Decisions • Setting objectives • Setting the budget • Developing the advertising strategy (cont.) • Evaluating advertising campaigns • Select advertising media – Decide on level of reach, frequency and impact – Choose among the major media types by considering: • Consumer media habits, nature of the product, types of messages, and costs – Select specific media vehicles – Decide on media timing Copyright © 2008 Pearson Education Canada 15-11 Principles of Marketing, Seventh Canadian Edition Advertising • Major Media Types – – – – Newspapers Television Direct Mail Radio Copyright © 2008 Pearson Education Canada – Magazines – Outdoor – Internet 15-12 Principles of Marketing, Seventh Canadian Edition Key Advertising Decisions • Setting objectives • Setting the budget • Developing the advertising strategy (cont.) • Evaluating advertising campaigns Copyright © 2008 Pearson Education Canada • Measuring communications effect – Copy testing • Measuring sales effect – Compare past sales with past advertising expenditures – Experiments 15-13 Principles of Marketing, Seventh Canadian Edition Other Advertising Considerations • Organizing for Advertising – Small vs. large companies – Nature of advertising agencies • Advantages of advertising agencies • Consolidation and growth of agencies • Creative boutiques Copyright © 2008 Pearson Education Canada 15-14 Principles of Marketing, Seventh Canadian Edition Other Advertising Considerations • International Advertising Decisions – Standardizing worldwide advertising • Advantages include lower advertising costs, greater global advertising coordination, and consistent global image • Drawbacks include ignoring differences in culture, demographics, and economic conditions – Most marketers think globally but act locally Copyright © 2008 Pearson Education Canada 15-15 Principles of Marketing, Seventh Canadian Edition Learning Goals 1. Know the major decisions involved in developing an advertising program. 2. Learn how sales promotion campaigns are developed and implemented. 3. Learn how companies use public relations to communicate with their publics. 4. Understand the roles of advertising, sales promotion, and public relations in the promotion mix. Copyright © 2008 Pearson Education Canada 15-16 Principles of Marketing, Seventh Canadian Edition Sales Promotion • Sales Promotion – Sales promotions are short-term incentives to encourage the purchase or sale of a product or service. Copyright © 2008 Pearson Education Canada 15-17 Principles of Marketing, Seventh Canadian Edition Sales Promotion • Sales Promotions – Can be targeted at final buyers, retailers and wholesalers, business customers, and members of the sales force. – The use of sales promotions has been growing rapidly. – Today, sales promotion accounts for 76% of all marketing expenditures. Copyright © 2008 Pearson Education Canada 15-18 Principles of Marketing, Seventh Canadian Edition Sales Promotion • Factors contributing to growth of sales promotion: – Greater focus on increasing sales in the shortterm – Greater competition – Decline in advertising efficiency – Consumers are more “deal-oriented” Copyright © 2008 Pearson Education Canada 15-19 Principles of Marketing, Seventh Canadian Edition Sales Promotion Objectives • Objectives -- Consumer Promotions: – Increase short-term sales or long-term market share – Generate product trial • Objectives -- Trade Promotions: – Obtaining distribution and shelf space – Encouraging retailers to advertise the brand • Objectives -- Sales Force Promotions: – Signing up new accounts Copyright © 2008 Pearson Education Canada 15-20 Principles of Marketing, Seventh Canadian Edition Major Sales Promotion Tools • Consumer Promotion Tools – Samples – Coupons – Cash Refunds (Rebates) – Price packs (cents-off deals) – Advertising Specialties Copyright © 2008 Pearson Education Canada – Premiums – Patronage Rewards – Point-of-Purchase Communications – Contests, Games, and Sweepstakes 15-21 Principles of Marketing, Seventh Canadian Edition Major Sales Promotion Tools • Trade Promotion Tools – Discounts (also called price-off, off-list, and off-invoice) – Allowances • Advertising allowances • Display allowances – Free goods – Push money – Specialty advertising items Copyright © 2008 Pearson Education Canada 15-22 Principles of Marketing, Seventh Canadian Edition Major Sales Promotion Tools • Business Promotion Tools – Includes many of the same tools used in consumer and trade promotions – Two additional tools: • Conventions and trade shows • Sales contests Copyright © 2008 Pearson Education Canada 15-23 Principles of Marketing, Seventh Canadian Edition Sales Promotion • Key Decisions When Developing the Sales Promotion Program: – Size of the incentive – Conditions for participation – Promotion and distribution of the actual sales promotion program – Length of the promotional program – Evaluation Copyright © 2008 Pearson Education Canada 15-24 Principles of Marketing, Seventh Canadian Edition Learning Goals 1. Know the major decisions involved in developing an advertising program. 2. Learn how sales promotion campaigns are developed and implemented. 3. Learn how companies use public relations to communicate with their publics. 4. Understand the roles of advertising, sales promotion, and public relations in the promotion mix. Copyright © 2008 Pearson Education Canada 15-25 Principles of Marketing, Seventh Canadian Edition Public Relations • Public Relations: – 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. Copyright © 2008 Pearson Education Canada 15-26 Principles of Marketing, Seventh Canadian Edition Public Relations Functions • Press Relations • Product Publicity • Public Affairs Copyright © 2008 Pearson Education Canada • Lobbying • Investor Relations • Development 15-27 Principles of Marketing, Seventh Canadian Edition Public Relations • Role and Impact of Public Relations – Strong impact on public awareness at lower cost than advertising – Greater credibility than advertising – Publicity is often underused – Good public relations can be a powerful brand-building tool Copyright © 2008 Pearson Education Canada 15-28 Principles of Marketing, Seventh Canadian Edition Major Public Relations Tools • • • • News Speeches Buzz Marketing Corporate Identity Materials • Mobile Marketing Copyright © 2008 Pearson Education Canada • Special Events • Written Materials • Audiovisual Materials • Public Service Activities • Internet 15-29 Principles of Marketing, Seventh Canadian Edition Learning Goals 1. Know the major decisions involved in developing an advertising program. 2. Learn how sales promotion campaigns are developed and implemented. 3. Learn how companies use public relations to communicate with their publics. 4. Understand the roles of advertising, sales promotion, and public relations in the promotion mix. Copyright © 2008 Pearson Education Canada 15-30 Principles of Marketing, Seventh Canadian Edition