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Chapter 16
Advertising, Sales Promotion, and Public Relations
Learning Objectives
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.
Chapter Overview
Three of the promotional mix elements (advertising, sales promotion, and public relations)
are mass communication tools. Advertising is the first of these important elements to be
discussed in the chapter. Advertising is described as being any paid form of nonpersonal
presentation and promotion of ideas, goods, and services by an identified sponsor. There
are four important decisions to be accomplished as the marketer attempts to organize and
direct the advertising function. Each of these decisions (setting objectives, budget
decisions, advertising strategy [message decisions and media decisions], and evaluating
advertising campaigns) is discussed in detail and explained within the context of building
an advertising campaign. In addition, several forms of advertising, various advertising
strategies, and descriptions of the mass media are presented to the reader. The marketing
firm can undertake the advertising functions themselves or they can contract with an
advertising agency to accomplish their advertising objective, planning, and
implementation.
Sales promotion, as the second of the mass communication tools described in this chapter,
is a process of providing short-term incentives to encourage purchase or sales of a
product or service. Sales promotion offers the buyer reasons to buy now. In addition,
sales promotion is also intended to stimulate reseller effectiveness. Sales promotion has
grown rapidly in the recent past because of pressure to increase sales, increased
competition, and the declining efficiency of the other mass communication methods. The
chapter discusses the objectives of a sound sales promotion campaign and offers
examples of the major tools for accomplishing those objectives.
Public relations, the final mass communication tool described in this chapter, is an
attempt to build 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, or events. The organization has a variety of tools at their
disposal for accomplishing this feat. One of the overriding tasks of public relations is to
control the exposure and relationship with the mass media. By focusing on consumer
attitudes, awareness, and knowledge of the organization, the company is better prepared
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to succeed. Public relations has even been extended to the Internet and companies are
beginning explore ways to increase its effect in the newly emerging world of
e-commerce.
Chapter Outline
1. Introduction
a. Crispin Porter + Bogusky is the advertising agency of the moment. CPB is
as hot as South Beach on a Saturday night, and it’s at the epicenter of all
that’s current in today’s advertising world.
b. Working with modest ad budgets, CPB has riveted customers’ attention
with startling guerrilla tactics, unconventional uses of media, and holistic
marketing strategies that tie together everything from product design to
packaging to event marketing to stuff that can’t even be categorized. What
the agency uses sparingly, however, is the traditional TV commercial.
c. How does CPB do it? For starters, the agency swings for the fences on
each new brand assignment, going beyond cute slogans to try to start a
consumer movement behind the brand. The goal is to figure out the best
places to reach the target audience and the most interesting vehicles to
carry the message, even if those vehicles have to be invented.
d. Companies must do more than make good products—they must inform
consumers about product benefits and carefully position products in
consumers’ minds.
e. To do this, they must skillfully use the mass-promotion tools of
advertising, sales promotion, and public relations.
2. Advertising
a. Advertising can be traced back to the very beginnings of recorded history.
Archaeologists working in the countries around the Mediterranean Sea
have dug up signs announcing various events and offers. The Romans
painted walls to announce gladiator fights, and the Phoenicians painted
pictures promoting their wares on large rocks along parade routes.
b. Although advertising is used mostly by business firms, it also is used by a
wide range of not-for-profit organizations, professionals, and social
agencies that advertise their causes to various target publics.
c. Advertising is a good way to inform and persuade.
d. Marketing management must make four important decisions when
developing an advertising program. See Figure 15.1.
Setting Advertising Objectives
e. The first step is to set advertising objectives. An advertising objective is a
specific task to be accomplished with a specific target audience during a
specific period of time.
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f. Advertising objectives can be classified by primary purpose—whether the
aim is to inform, persuade, or remind. Table 15.1 lists examples of each of
these objectives.
i. Informative advertising is used heavily when introducing a new
product category. In this case, the objective is to build primary
demand.
ii. Some persuasive advertising has become comparative advertising,
in which a company directly or indirectly compares its brand with
one or more other brands.
iii. Reminder advertising is important for mature products—it keeps
consumers thinking about the product.
Setting the Advertising Budget
g. After determining its advertising objectives, the company next sets its
advertising budget for each produce.
h. A brand’s advertising budget often depends on its stage in the product life
cycle.
i. New products typically need large advertising budgets to build
awareness and to gain consumer trial.
ii. Mature brands usually require lower budgets as a ratio to sales.
iii. Market share also impacts the amount of advertising needed:
Because building the market or taking share from competitors
requires larger advertising spending than does simply maintaining
current share, low-share brands usually need more advertising
spending as a percentage of sales.
i. Because so many factors affect advertising effectiveness, some
controllable and others not, measuring the results of advertising spending
remains an inexact science. In most cases, managers must rely on large
doses of judgment along with more quantitative analysis when setting
advertising budgets.
Developing Advertising Strategy
j. Advertising strategy consists of two major elements: creating advertising
messages and selecting advertising media. In the past, companies often
viewed media planning as secondary to the message-creation process.
k. Today, however, media fragmentation, soaring media costs, and more
focused target marketing strategies have promoted the importance of the
media-planning function. More and more, advertisers are orchestrating a
closer harmony between their messages and the media that deliver them.
l. No matter how big the budget, advertising can succeed only if
advertisements gain attention and communicate well. Good advertising
messages are especially important in today’s costly and cluttered
advertising environment.
i. If all this advertising clutter bothers some consumers, it also causes
big problems for advertisers.
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1. Their ads are sandwiched in with a clutter of other
commercials, announcements, and network promotions,
totaling more than 15 minutes of non-program material per
primetime hour, more than 21 minutes per daytime hour.
2. Until recently, television viewers were pretty much a
captive audience of advertisers. With the growth in cable
and satellite TV, VCRs, remote-controls, today’s viewers
have many more options. Adding to the problem is the new
wave of personal video recorders (PVRs) and personal
television services—such as TiVo and ReplayTV—that
have armed viewers with an arsenal of new-age zipping and
zapping weapons.
ii. Just to gain and hold attention, today’s advertising messages must
be better planned, more imaginative, more entertaining, and more
rewarding to consumers.
1. Many advertisers now see themselves as creating
“advertainment”—ads that are both persuasive and
entertaining.
2. Some advertisers even create intentionally controversial ads
to break through the clutter and gain attention for their
products.
m. The first step in creating effective advertising messages is to plan a
message strategy—to decide what general message will be communicated
to consumers. The purpose of advertising is to get consumers to think
about or react to the product or company in a certain way. People will
react only if they believe that they will benefit from doing so. Thus,
developing an effective message strategy begins with identifying customer
benefits that can be used as advertising appeals.
n. Message strategy statements tend to be plain, straightforward outlines of
benefits, and positioning points that the advertiser wants to stress. The
advertiser must next develop a compelling creative concept—or “big
idea”—that will bring the message strategy to life in a distinctive and
memorable way.
i. The creative concept will guide the choice of specific appeals to be
used in an advertising campaign. Advertising appeals should have
three characteristics.
1. First, they should be meaningful, pointing out benefits that
make the product more desirable or interesting to
consumers.
2. Second, appeals must be believable—consumers must
believe that the product or service will deliver the promised
benefits.
3. Appeals should also be distinctive—they should tell how
the product is better than the competing brands.
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o. The advertiser now has to turn the big idea into an actual ad execution that
will capture the target market’s attention and interest.
i. Any message can be presented in different execution styles, such
as the following:
1. Slice of life: This style shows one or more “typical” people
using the product in a normal setting.
2. Lifestyle: This style shows how a product fits in with a
particular lifestyle.
3. Fantasy: This style creates a fantasy around the product or
its use.
4. Mood or image: This style builds a mood or image around
the product, such as beauty, love, or serenity.
5. Musical: This style shows one or more people or cartoon
characters singing about the product.
6. Personality symbol: This style creates a character that
represents the product. The character might be animated or
real.
7. Technical expertise: This style shows the company’s
expertise in making the product.
8. Scientific evidence: This style presents survey or scientific
evidence that the brand is better or better liked than one or
more other brands.
9. Testimonial evidence or endorsement: This style features a
highly believable or likable source endorsing the product.
ii. The advertiser also must choose a tone for the ad.
iii. The advertiser must use memorable and attention-getting words in
the ad.
iv. Finally, format elements make a difference in an ad’s impact as
well as in its cost. A small change in ad design can make a big
difference in its effect.
1. The illustration is the first thing the reader notices—it must
be strong enough to draw attention.
2. Next, the headline must effectively entice the right people
to read the copy.
3. Finally, the copy—the main block of text in the ad—must
be simple but strong and convincing.
4. These three elements must effectively work together.
p. To select media, the advertiser must decide on the reach and frequency
needed to achieve advertising objectives.
i. Reach is a measure of the percentage of people in the target market
who are exposed to the ad campaign during a given period of time.
ii. Frequency is a measure of how many times the average person in
the target market is exposed to the message.
iii. The advertiser also must decide on the desired media impact—the
qualitative value of a message exposure through a given medium.
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iv. In general, the more reach, frequency, and impact the advertiser
seeks, the higher the advertising budget will have to be.
q. The media planner has to know the reach, frequency, and impact of each
of the major media types. As summarized in Table 15.2, the major media
types are newspapers, television, direct mail, radio, magazines, outdoor,
and the Internet. Each medium has advantages and limitations.
i. Media planners consider many factors when making their media
choices.
1. The media habits of target consumers will affect media
choice—advertisers look for media that reach target
consumers effectively.
2. So will the nature of the product.
3. Different types of messages may require different media.
4. Cost is another major factor in media choice. The media
planner looks both at the total cost of using a medium and
at the cost per exposure of reaching specific target
customers.
ii. Media impact and cost must be re-examined regularly.
iii. An important trend affecting media selection is the rapid growth in
the number of “media multi-taskers,” people who absorb more than
one medium at a time.
r. The media planner now must chose the best media vehicles—specific
media within each general media type.
i. Media planners must compute the cost per thousand persons
reached by a vehicle.
ii. The media planner must also consider the costs of producing ads
for different media. Whereas newspaper ads may cost very little to
produce, flashy television ads may cost millions.
iii. In selecting media vehicles, the media planner must balance media
cost measures against several media impact factors.
1. First, the planner should balance costs against the media
vehicle’s audience quality.
2. Second, the media planner should consider audience
attention.
3. Third, the planner should assess the vehicle’s editorial
quality.
s. The advertisers must also decide how to schedule the advertising over the
course of a year.
i. The firm can vary its advertising to follow a seasonal pattern, to
oppose a seasonal pattern, or to be the same all year. Most firms do
some seasonal advertising. Some do only seasonal advertising.
ii. The advertiser has to choose the pattern of the ads.
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1. Continuity means scheduling ads evenly within a given
period. Pulsing means scheduling ads unevenly over a
given time period.
a. The idea behind pulsing is to advertise heavily for a
short period to build awareness that carries over to
the next advertising period. Those who favor
pulsing feel that it can be used to achieve the same
impact as a steady schedule but at a much lower
cost. However, some media planners believe that
although pulsing achieves minimal awareness, it
sacrifices depth of advertising communications.
iii. Recent advances in technology have had a substantial impact on
the media planning and buying functions.
1. Today, computer software applications called media
optimizers allow media planners to evaluate vast
combinations of television programs and prices. Such
programs help advertisers to make better decisions about
which mix of networks, programs, and day parts will yield
the highest reach per ad dollar.
Evaluating Advertising
t. The advertising program should evaluate both the communication effects
and the sales effects of advertising regularly. Measuring the
communication effects of an ad—copy testing—tells whether the ad is
communicating well.
i. Copy testing can be done before or after an ad is printed or
broadcast.
ii. Before the ad is placed, the advertiser can show it to consumers,
ask how they like it, and measure message recall or attitude
changes resulting from it.
iii. After the ad is run, the advertiser can measure how the ad affected
consumer recall or product awareness.
u. The sales effects of advertising are often harder to measure than the
communication effects. Sales are affected by many factors besides
advertising—such as product features, price, and availability.
i. One way to measure the sales effect of advertising is to compare
past sales with past advertising expenditures.
ii. Another way is through experiments.
Other Advertising Considerations
v. In developing advertising strategies and programs, the company must
address two additional questions. First, how will the company organize its
advertising function—who will perform which advertising tasks? Second,
how will the company adapt its advertising strategies and programs to the
complexities of international markets?
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i. Different companies organize in different ways to handle
advertising.
1. In small companies, advertising might be handled by
someone in the sales department.
2. Large companies set up advertising departments whose job
it is to set the advertising budget, work with the ad agency,
and handle other advertising not done by the agency.
a. Advertising agencies were started in the mid- to late
1800s by salespeople and brokers who worked for
the media and received a commission for selling
advertising space to companies.
b. Today’s agencies employ specialists who can often
perform advertising tasks better than can the
company’s own staff. Agencies also bring an
outside point of view to solving the company’s
problems, along with lots of experience from
working with different clients and situations.
c. Many agencies have sought growth by diversifying
into related marketing services. These new diversified agencies offer a complete list of integrated
marketing and promotion services under one roof.
ii. International advertisers face many complexities not encountered
by domestic advertisers.
1. The most basic issue concerns the degree to which global
advertising should be adapted to the unique characteristics
of various country markets.
a. Standardization produces many benefits—lower
advertising costs, greater global advertising
coordination, and a more consistent worldwide
image.
b. But it also has drawbacks. Most importantly, it
ignores the fact that country markets differ greatly
in their cultures, demographics, and economic
conditions. Thus, most international advertisers
“think globally but act locally.” They develop
global advertising strategies that make their
worldwide advertising efforts more efficient and
consistent. Then they adapt their advertising
programs to make them more efficient and
consistent.
2. Global advertisers face several special problems.
a. For instance, advertising media costs and availability differ vastly from country to country.
b. Countries also differ in the extent to which they
regulate advertising practices. Many countries have
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extensive systems of laws restricting how much a
company can spend on advertising, the media used,
the nature of advertising claims, and other aspects
of the advertising program. Such restrictions often
require advertisers to adapt their campaigns from
country to country.
3. Sales Promotion
a. Sales promotion consists of short-term incentives to encourage purchase
or sales of a product or service. Whereas advertising offers reasons to buy
a product or service, sale promotion offers reasons to buy now.
Rapid Growth of Sales Promotion
b. Sales promotion tools are used by most organizations, including
manufacturers, distributors, retailers, and not-for-profit institutions.
i. They are targeted toward final buyers (consumer promotions),
retailers and wholesalers (trade promotions), business customers
(business promotions), and members of the sales force (sales for
promotions).
c. Several factors have contributed to the rapid growth of sales promotion,
particularly in consumer markets.
i. First, inside the company, product managers face greater pressures
to increase their current sales, and promotion is viewed as an
effective short-run sales tool.
ii. Second, externally, the company faces more competition and
competing brands are less differentiated. Increasingly, competitors
are using sales promotion to help differentiate their offers.
iii. Third, advertising efficiency has declined because of rising costs,
media clutter, and legal restraints.
iv. Finally, consumers have become more deal oriented, and everlarger retailers are demanding more deals from manufacturers.
d. The growing use of sales promotion has resulted in promotion clutter,
similar to advertising clutter. Consumers are increasingly tuning out
promotions, weakening their ability to trigger immediate purchase.
Sales Promotion Objectives
e. Sales promotion objectives vary widely.
i. Sellers may use consumer promotions to increase short-term sales
or to help build long-term market share.
ii. Objectives for trade promotions include getting retailers to carry
new items and more inventory, getting them to advertise the
product and give it more shelf space, and getting them to buy
ahead.
iii. For the sales force, objectives include getting more sales force
support for current or new products or getting salespeople to sign
up new accounts.
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iv. Sales promotions are usually used together with advertising,
personal selling, or other promotion mix tools.
f. In general, rather than creating only short-term sales or temporary brand
switching, sales promotions should help to reinforce the product’s position
and build long-term customer relationships. Increasingly, marketers are
avoiding “quick fix,” price-only promotions in favor of promotions
designed to build brand equity.
i. Even price promotions can be designed to help build customer
relationships. Examples include all of the “frequency marketing
programs” and loyalty clubs that have mushroomed in recent years.
Major Sales Promotion Tools
g. Many tools can be used to accomplish sales promotion objectives.
i. The main consumer promotion tools include the following:
1. Samples are offers of a trial amount of a product. Sampling
is the most effective—but most expensive—way to introduce a new product.
a. Some samples are free; for others, the company
charges a small amount to offset its cost.
b. The sample might be delivered door-to-door, sent
by mail, handed out in a store, attached to another
product, or featured in an ad.
c. Sometimes, samples are combined into sample
packs that can then be used to promote other
products and services.
2. Coupons are certificates that give buyers a savings when
they purchase specified products.
a. Coupons can promote early trial of a new brand or
stimulate sales of a mature brand.
b. As a result of coupon clutter, redemption rates have
been declining in recent years. Thus, most major
consumer goods companies are issuing fewer
coupons and targeting them more carefully.
c. Marketers are also cultivating new outlets for
distributing coupons, such as supermarket shelf
dispensers, electronic point-of-sale coupon printers,
or “paperless coupon systems.”
3. Cash refund offers (or rebates) are like coupons except that
the price reduction occurs after the purchase rather than at
the retail outlet. The consumer sends a “proof of purchase”
to the manufacturer, who then refunds part of the purchase
price by mail.
4. Price packs (also called cents-off deals) offer consumers
savings off the regular price of a product.
a. The reduced prices are marked by the producer
directly on the label or package.
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5.
6.
7.
8.
9.
b. Price packs can be single packages sold at a reduced
price, or two related products banded together.
c. Price packs are very effective—even more so than
coupons—in stimulating short-term sales.
Premiums are goods offered either free or at a low cost as
an incentive to buy a product. A premium may come inside
the package (in-pack), outside the package (on-pack), or
through the mail.
Advertising specialties, also called promotional products,
are useful articles imprinted with an advertiser’s name,
logo, or message that are given as gifts to consumers.
Patronage rewards are cash or other awards offered for the
regular use of a certain company’s products or services.
Point-of-purchase (POP) promotions include displays and
demonstrations that take place at the point of purchase or
sale.
Contests, sweepstakes, and games give consumers the
chance to win something, such as cash, trips, or goods, by
luck or through extra effort.
a. A contest calls for consumers to submit an entry to
be judged by a panel that will select the best entries.
b. A sweepstakes calls for consumers to submit their
names for a drawing.
c. A game presents consumers with something every
time they buy that may or may not help them win a
prize.
ii. Manufacturers direct more sales promotion dollars toward retailers
and wholesalers (78 percent) than to consumers (22 percent). Trade
promotions can persuade resellers to carry a brand, give it shelf
space, promote it in advertising, and push it to consumers.
iii. Many of the tools used for consumer promotions can also be used
as trade promotions.
1. Or the manufacturer may offer a straight discount off the
list price on each case purchased during a stated period of
time (also called a price-off, off-invoice, or off-list).
2. Manufacturers also may offer an allowance (usually so
much off per case) in return for the retailer’s agreement to
feature the manufacturer’s products in some way.
a. An advertising allowance compensates retailers for
advertising the product.
b. A display allowance compensates them for using
special displays.
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3. Manufacturers may offer free goods, which are extra cases
of merchandise, to resellers who buy a certain quantity or
who feature a certain flavor or size.
4. They may offer push money—cash or gifts to dealers or
their sales forces to “push” the manufacturer’s goods.
5. Manufacturers may give retailers free specialty advertising
items that carry the company’s name.
iv. Companies spend billions of dollars each year on promotion to
industrial customers. These business promotion tools are used to
generate business leads, stimulate purchases, reward customers,
and motivate salespeople. Business promotion includes many of
the same tools used for consumer or trade promotions.
1. Many companies and trade associates organize conventions
and trade shows to promote their products. Firms selling to
the industry show their products at the trade show.
a. Vendors receive many benefits, such as opportunities to find new sales leads, contact customers,
introduce new products, meet new customers, sell
more to present customers, and educate customers
with publications and audiovisual materials.
b. Trade shows also help companies reach many
prospects not reached through their sales forces.
2. A sales contest is a contest for salespeople or dealers to
motivate them to increase their sales performance over a
given period.
a. Sales contests motivate and recognize good
company performers, who may receive trips, cash
prizes, or other gifts.
b. Some companies award points for performance that
the receiver can turn in for any of a variety of prizes.
Developing the Sales Promotion Program
h. The marketer must make several other decisions in order to define the full
sales promotion program.
i. First, the marketer must decide on the size of the incentive. A
certain minimum incentive is necessary if the promotion is to
succeed; a larger incentive will produce more sales response.
ii. The marketer must also set conditions for participation. Incentives
might be offered to everyone or only to select groups.
iii. The marketer must then decide how to promote and distribute the
promotion program itself.
iv. The length of the promotion is also important. If the sales
promotion period is too short, many prospects (who may not be
buying during that time) will miss it. If the promotion is too long,
the deal will lose some of its “act now” force.
v. Evaluation is also very important.
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1. The most common evaluation method is to compare sales
before, during, and after a promotion.
2. Consumer research would also show the kinds of people
who responded to the promotion and what they did after it
ended.
a. Surveys can provide information on how many
consumers recall the promotion, what they thought
of it, how many took advantage of it, and how it
affected their buying.
b. Sales promotions also can be evaluated through
experiments that vary factors such as incentive
value, length, and distribution method.
4. Public Relations
a. Another major mass-promotion tool is 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. Public relations departments may
perform any or all of the following functions.
i. Press relations or press agency: Creating and placing newsworthy
information in the news media to attract attention to a person,
product, or service.
ii. Product publicity: Publicizing specific products.
iii. Public affairs: Building and maintaining national or local
community relations.
iv. Lobbying: Building and maintaining relations with legislators and
government officials to influence legislation and regulation.
v. Investor relations: Maintaining relationships with shareholders and
others in the financial community.
vi. Development: Public relations with donors or members of nonprofit organizations to gain financial or volunteer support.
b. Public relations is used to promote products, people, places, ideas,
activities, organizations, and even nations. Companies use public relations
to build good relations with consumers, investors, the media, and their
communities.
The Role and Impact of Public Relations
c. Public relations can have a strong impact on public awareness at a much
lower cost than advertising can. The company does not pay for space or
time in the media. Rather, it pays for a staff to develop and circulate
information and to manage events.
d. Despite its potential strengths, public relations is sometimes described as a
marketing stepchild because of its often limited and scattered use.
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e. Although public relations still captures only a small portion of the overall
marketing budgets of most firms, PR is playing an increasingly important
brand-building role.
Major Public Relations Tools
f. Public relations professionals use several tools.
i. PR professionals find or create favorable news about the company
and its products or people.
ii. Speeches can also create product and company publicity.
iii. Another common PR tool is special events, ranging from news
conferences, press tours, grand openings, and fireworks displays to
laser shows, hot air balloon releases, multimedia presentations,
start-studded spectaculars, or educational programs designed to
reach and interest target publics.
iv. Many marketers are now designing buzz marketing campaigns that
create excitement and generate favorable word-of-mouth communication for their brands.
v. Recently, mobile marketing—traveling promotional tours that
bring the brand to consumers—has emerged as an effective way to
build one-to-one relationships with targeted consumers.
vi. Public relations people also prepare written materials to reach and
influence their target markets. These materials include annual
reports, brochures, articles, and company newsletters and
magazines.
vii. Audiovisual materials, such as films, slide-and-sound programs,
and video and audio CDs, are being used increasingly as
communication tools.
viii. Corporate identity materials can also help create a corporate
identity that the public immediately recognizes.
ix. Companies can improve public goodwill by contributing money
and time to public service activities.
x. A company’s Web site can be a good public relations vehicle. Web
sites can also be ideal for handling crisis situations.
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