* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download SCANNING THE MARKETING ENVIRONMENT
Orange Man (advertisement) wikipedia , lookup
Banner blindness wikipedia , lookup
Aerial advertising wikipedia , lookup
Digital marketing wikipedia , lookup
Infomercial wikipedia , lookup
GEICO advertising campaigns wikipedia , lookup
Social media marketing wikipedia , lookup
Viral marketing wikipedia , lookup
Atheist Bus Campaign wikipedia , lookup
Television advertisement wikipedia , lookup
Alcohol advertising wikipedia , lookup
Product placement wikipedia , lookup
Ad blocking wikipedia , lookup
Criticism of advertising wikipedia , lookup
Radio advertisement wikipedia , lookup
Advertising to children wikipedia , lookup
Advertising management wikipedia , lookup
Online advertising wikipedia , lookup
Advertising campaign wikipedia , lookup
Targeted advertising wikipedia , lookup
ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS CHAPTER CONTENTS PAGE MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION ................................. 16-2 STUDENT LEARNING OBJECTIVES ............................................................................... 16-3 KEY TERMS AND CONCEPTS .......................................................................................... 16-3 LECTURE NOTES What’s the Future of Advertising? The Answer is Personal! ...................................... 16-4 Types of Advertisements .............................................................................................. 16-4 Developing the Advertising Program ........................................................................... 16-7 Executing the Advertising Program ............................................................................. 16-14 Evaluating the Advertising Program ............................................................................ 16-15 Sales Promotion ........................................................................................................... 16-17 Public Relations ........................................................................................................... 16-20 ANSWERS TO “APPLYING MARKETING CONCEPTS AND PERSPECTIVES” ... 16-22 ANSWERS TO “INTERNET EXERCISE”........................................................................ 16-27 SUPPLEMENTAL LECTURE NOTE (SLN) SLN 16-1: New Forms of Advertising are Everywhere! ............................................. 16-29 IN-CLASS ACTIVITIES (ICA) ICA 16-1: Recognizing Advertising Slogans .............................................................. 16-30 ICA 16-2: What Makes a Memorable TV Commercial? ............................................. 16-34 ICA 16-3: Product Placement in Movies and TV ........................................................ 16-38 VIDEO CASE 16 TEACHING NOTE (TN) Fallon Worldwide: In the Creativity Business ............................................................. 16-42 POWERPOINT THUMBNAILS ......................................................................................... 16-47 16-1 Chapter 16 MATERIALS AVAILABLE FOR LECTURE AND DISCUSSION PowerPoint Slides1 Transparencies2 Handouts3 Textbook Figures Figure 16-1 U.S. advertising expenditures, by category (data in millions of dollars) ..................................... Figure 16-2 Advantages and disadvantages of major advertising media .................................................... Supplemental Figures and Advertisements Figure 16-A Pioneering product ad: Blackberry .......................... Figure 16-B Competitive product ad: Verizon ............................. Figure 16-C Competitive product ad: Flonase ............................. Figure 16-D Reminder product ad: Godiva .................................. Figure 16-E Institutional advocacy ad: U.S. Chamber of Commerce ................................... Figure 16-F Pioneering institutional ad: Wyeth........................... Figure 16-G Competitive institutional ad: World Gold Council .. Figure 16-H Reminder institutional ad: A Diamond Is Forever ... Figure 16-I Business Week .......................................................... Figure 16-J Top 15 advertising slogans of the century ............... Figure 16-K Sales promotion alternatives .................................... In-Class Activity (ICA) Figures ICA 16-1, Figure 1 ICA 16-3, Figure 1 1 2 3 Match Each Slogan to the Company or Product .................................................... Can You Match These Products to These Movies and TV Shows? ................................ “PowerPoint Slides” are available on a CD-ROM and appear as “PowerPoint Thumbnails” within this chapter of the Instructor’s Manual. 100 “Transparencies” are available to textbook adopters by request of their local McGraw-Hill/Irwin sales representative. Instructors may choose to reproduce some figures and hand them out to each student in the class to enhance discussion. These “Handouts” are shown with a check in the right column. Chapter 16 16-2 STUDENT LEARNING OBJECTIVES After reading this chapter students should be able to: Explain the differences between product advertising and institutional advertising and the variations within each type. Understand the steps used to develop, execute, and evaluate an advertising program. Explain the advantages and disadvantages of alternative advertising media. Understand the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions. Recognize public relations as an important form of communication. KEY TERMS AND CONCEPTS advertising limited-service agencies consumer-oriented sales promotions posttests cooperative advertising pretests cost per thousand product advertisements frequency product placement full-service agency publicity tools gross rating points rating in-house agencies reach institutional advertisements trade-oriented sales promotions 16-3 Chapter 16 LECTURE NOTES Chapter Opening Photo CHAPTER OPENING EXAMPLE What’s the Future of Advertising? The Answer is Personal! Slide 16-8 Have you ever seen an advertisement for a product you probably would never buy? Several new technologies hope to change the world of advertising so that what you see will better match your personal interests. Virtual advertising, personal video recorders, and interactive television are all contributing to the change. Virtual advertising uses a patented computer system that digitally inserts ads into sporting events and other broadcasts—not as a traditional advertising break, but as a visual part of the program. Personal video recorders (PVRs) enable viewers to program their own personal network. In addition, by monitoring your recording preferences and using your answers to PVR set-up questions, the technology will also record programs that it “thinks” you will like. Finally, interactive television will bring consumers interactive advertising. Eventually viewers will be able to access information on any product or service seen during a program. This approach provides instant information requested by the consumer—perhaps the ultimate in personalized advertising! Virtual advertising, personal video recorders, and interactive advertising are just a few of the many exciting changes taking place in the field of advertising today. Chapter 15 described advertising as any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor. This chapter describes alternative types of advertisements, the advertising decision process, sales promotion, and public relations. I. TYPES OF ADVERTISEMENTS Advertisements are prepared for different purposes, but they basically consist of two basic types: product and institutional. A. Product Advertisements Focused on selling a good or service, product advertisements take three forms: Chapter 16 16-4 Pioneering advertisements tell people what a product is, what it can do, and where it can be found. a. Used in the introductory stage of the product life cycle. b. The key objective is to inform the target market. Jeep Liberty ad Figure 16-A Pepsi TV ad What type of ad? Pioneering product ad: Blackberry What type of ad? Slide 16-11 Slide 16-12 Slide 16-10 Burton Snowboards TV ad What type of ad? Slide 16-13 Competitive advertisements promote a specific brand’s features and benefits. a. The objective is to persuade the target market to select the firm’s brand rather than that of a competitor. b. An increasingly common form of competitive advertising is comparative advertising, which shows one brand’s strengths relative to those of competitors. Xerox ad Figure 16-B Figure 16-C Xerox TV ad What type of ad? Competitive ad: Verizon Comparative ad: Flonase What type of ad? Slide 16-14 Slide 16-15 Slide 16-16 Slide 16-17 Reminder advertising is used to reinforce previous knowledge of a product. a. Used for products that have achieved a well-recognized position and are in the mature phase of their product life cycle. b. Another type of reminder ad, reinforcement, assures current users they made the right choice. FTD ad Figure 16-D Pepsi TV ad Diet Pepsi TV ad What type of ad? Reminder ad: Godiva What type of ad? What type of ad? Slide 16-18 Slide 16-19 Slide 16-20 Slide 16-21 16-5 Chapter 16 B. Institutional Advertisements The objective of institutional advertisements is to build goodwill or an image for an organization, rather than to promote a specific good or service. Four alternative forms are often used: Advocacy advertisements state the position of a company on an issue. A unique form is used when organizations make a statement or request related to a particular event. Lorillard ad Figure 16-E What type of ad? Inst. Advocacy: U.S. Chamber Slide 16-23 Slide 16-24 Pioneering institutional advertisements are used for announcements about what a company is, what it can do, or where it is located. Figure 16-F UPS TV ad Pioneering inst.: Wyeth What type of ad? Slide 16-25 Slide 16-26 Competitive institutional advertisements promote the advantages of one product class over another and are used in markets where different product classes compete for the same buyers. Figure 16-G Competitive inst.: World Gold Slide 16-27 Reminder institutional advertisements simply bring the company’s name to the attention of the target market again. Figure 16-H Reminder inst.: A Diamond is Forever Slide 16-28 Chapter 16 16-6 CONCEPT CHECK 1. What is the difference between pioneering and competitive ads? Answer: Pioneering ads tell people what a product is, what it can do, and where it can be found. Competitive ads promote a specific brand’s features and benefits to persuade the target market to select the firm’s brand rather than that of a competitor. 2. What is the purpose of an institutional advertisement Answer: To build goodwill or an image for an organization. II. DEVELOPING THE ADVERTISING PROGRAM The promotion decision process can be applied to each of the promotional elements. Advertising can be managed by following the three steps (developing, executing, and evaluating) of the process. A. Identifying The Target Audience To develop an effective adverising program, advertisers must identify the target audience. All aspects of an advertising program are likely to be influenced by the characteristics—lifestyles, attitudes, and demographics— of prospective customers. To reduce possible bias that might result from subjective judgments about some population segments, the Federal Communications Commission suggests that advertising program decisions be based on market research about the target audience. B. Specifying the Advertising Objectives Setting advertising objectives helps advertisers with other choices in the promotion decision process, such as selecting media and evaluating a campaign. Product category, brand, and consumer involvement in the purchase decision may change the importance—and, possibly, the sequence—of the stages of the hierarchy of effects. C. Setting the Advertising Budget By 2003, the cost of placing a 30-second ad during Super Bowl XXXVII was $2.1 million. The reason for the escalating cost is the growing number of viewers: 87 million people tune in. 16-7 Chapter 16 While not all advertising options are as expensive as the Super Bowl, most alternatives still represent large financial commitments and require a formal budgeting process. D. Designing the Advertisement An advertising message usually focuses on the key benefits of the product that are important to a prospective buyer in making trial and adoption decisions. The message depends on the general form or appeal used in the ad and the actual words included in the ad. 1. Message Appeal. Shell TV ad What type of ad? Most advertising messages are made up of both informational and persuasional elements. Information and persuasive content can be combined in the form of an appeal to provide a basic reason for the consumer to act. The marketer generally uses these advertising appeals: a. Fear appeals. Slide 16-33 Suggests to the consumer that he or she can avoid some negative experience through the purchase and use of a product or through a change in behavior. Must be sure that the appeal is strong enough to get the audience’s attention and concern, but not so strong that it will lead then to tune out the message. Venus ad What type of ad? b. Sex appeals. Slide 16-34 Sierra Mist TV ad What type of ad? Suggests to the audience that the product will increase the attractiveness of the user. Can be found in almost any product category. Are only successful at gaining the attention of the audience; they have little impact on how consumers think, feel, or act, and may even distract the audience from the purpose of the ad. c. Humorous appeals. Slide 16-35 Diet Pepsi TV ad What type of ad? Slide 16-36 Chapter 16 Imply either directly or more subtly that the product is more fun or exciting than competitors’ offerings. Can be found in almost any product category. Tends to wear out quickly, eventually boring the consumer. Effectiveness varies across cultures if used in a global campaign. 16-8 2. Creating the Actual Message. ICA 16-1 Recognizing Advertising Slogans Copywriters are responsible for creating the text portion of the messages in ads. Translating a copywriter’s ideas into an actual ad is a complex process. WSJ Print ad Got Milk ad Figure 16-I Figure 16-J What’s the message? What’s the message? Business Week Top ad slogans Slide 16-37 Slide 16-38 Slide 16-39 Slide 16-40 Designing quality artwork, layout, and production for the ads is costly and time-consuming. A high-quality 30-second TV ad can cost over $268,000 to produce. One reason for the high cost is that as companies develop global campaigns, the need to shoot commercials in “exotic” locations has increased. CONCEPT CHECK 1. The Federal Communication Commission suggests program decisions be based on ____. Answer: market research about the target market 2. Describe three common forms of advertising appeals. Answer: They are: (1) fear appeal, to avoid some negative experience, (2) sex appeal, to increase the attractiveness of the user, and (3) humorous appeal, to imply that the product is more fun or exciting than competitors’ offerings. E. Selecting the Right Media Figure 16-1 Every advertiser must select the advertising media in which to place its ads. Examples of media options include newspapers, magazines, radio, and TV. Media selection is related to the target audience, type of product, nature of the message, campaign objectives, available budget, and the costs of the alternative media. Advertisers use a mix of media forms and vehicles to maximize the exposure of the message to the target audience while at the same time minimizing costs. These two conflicting goals are critically important to media planning. Ad expenditures by category Slide 16-44 16-9 Chapter 16 Figure 16-2 Adv. & disadv. of media alternatives Slide 16-46, T Reach is the number of different people or households exposed to an advertisement. Newspapers often use reach to describe their total circulation or the number of different households that buy the paper. Television and radio stations describe their reach using the term rating—the percentage of households in a market that are tuned to a particular TV show or radio station. In general, advertisers try to maximize reach in their target market at the lowest cost. Advertisers are interested in exposing their target audience to a message more than once because consumers often do not pay close attention to advertising messages. When advertisers want to reach the same audience more than once, they are concerned with frequency, the average number of times a person in the target audience is exposed to a message or advertisement. Like reach, greater frequency is viewed as desirable because consumers respond more favorably to brand extensions with repeated exposure to ads. When reach (expressed as a percentage of the total market) is multiplied by frequency, an advertiser will obtain a commonly used reference number called gross rating points (GRPs). To obtain the appropriate number of GRPs to achieve an advertising campaign’s objective, the media planner must balance reach and frequency. The balance will also be influenced by cost. Cost per thousand (CPM) refers to the cost of reaching 1,000 individuals or households with the advertising message in a given medium (M = Roman numeral for 1,000). F. Different Media Alternatives Figure 16-2 summarizes advantages and disadvantages of the major advertising media. 1. Television. ICA 16-2 What Makes a Memorable TV Commercial? Chapter 16 Television is a valuable medium because it communicates with sight, sound, and motion. Ford T-bird TV ad Whirlpool TV ad Why use this medium? Why use this medium? Slide 16-47 Slide 16-48 16-10 Television reaches 95 percent of U.S. homes; out-of-home TV reaches another 20 million viewers in bars, hotels, offices, and college campuses each week. Because TV’s high cost, many advertisers are choosing less expensive “spot” ads, which run between programs in 10-, 15-, 30-, or 60-second lengths. Another popular form of TV advertising are infomercials, which are program-length (30-minute) advertisements that take an educational approach to communication with potential customers. a. More than 90 percent of all TV stations air infomercials. b. More than 25 percent of all consumers have purchased a product as a result of seeing an infomercial. BP Connect & US radio ads Why use this medium? 2. Radio. There are 7 times as many radio as TV stations in the U.S. The advantage of radio is a segmented medium, so formats, such as all-talk, hard rock, etc., are listened to by welldefined market segments. Disadvantages of radio: Slide 16-49 a. Has limited use for products that must be seen. b. Consumers can easily tune out commercials by switching stations. Teen People Why use this medium? Slide 16-50 A new form of radio is available through satellite services that enable consumers to receive up to 100 digital-quality, coast-to-coast radio channels for a monthly subscription fee. Peak radio listening time is during drive times. 3. Magazines. Magazines have become a very specialized medium, primarily because there are more than 5,000 magazines, with new ones being launched each year. Advantage of magazines: a. Has a great number of special-interest publications that appeal to narrowly defined segments. b. Have good color reproduction that allows them to create strong images. 16-11 Chapter 16 XM Radio newspaper ad Why use this medium? A disadvantage of magazines is that although national costs are high, many magazines publish regional editions, which reduce cost and wasted coverage. 4. Newspapers. Newspapers are an important local medium with excellent reach potential because they are published daily and therefore allow ads to focus on specific current events, such as a “24-hour sale.” Local retailers often use newspapers as their sole advertising medium. Newspapers are rarely saved by consumers do firms are generally limited to ads that call for an immediate customer response, although some will clip and save ads they select. Newspapers do not have a good color reproduction as magazines. National campaigns rarely include newspapers except in: Slide 16-51 a. Conjunction with local distributors of the product being advertised. In these cases, both parties will share advertising costs using a cooperative ad program. b. The case of USA Today and The Wall Street Journal. BMW Z4 Internet ad Why use this medium? 5. Internet. Online advertising is similar to print advertising in that it offers a visual message. However, it can also use audio and video capabilities of the Internet to attract attention or to entertain, and it has the unique feature of being interactive. Called rich media, these interactive ads have drop-down menus, built-in games, or search engines to engage viewers. Although online advertising is relatively small compared to traditional media, mall compared to other media, online advertising offers an opportunity to reach younger consumers. A disadvantage is that because the medium is new, technical and administrative standards for the various formats are still evolving. This makes it difficult to run national online campaigns across multiple sites. It is also difficult to measure its impact and effectiveness as a medium. Slide 16-53 Chapter 16 16-12 Qualcomm outdoor ad 6. Outdoor. Why use this medium? Outdoor advertising is very effective for reminding consumers about a product at a relatively low cost. The most common form of outdoor advertising, billboards, results in good reach and frequency in a defined geographical area. This medium is a good supplemental reinforcement for wellknown products. Disadvantages of billboards: Slide 16-54 a. Cannot be used to communicate lengthy messages. b. A good billboard site depends on traffic patterns and sight lines. c. In many areas, environmental laws have restricted the use of this medium. Another form of outdoor advertising, transit advertising, is common in metropolitan areas and includes messages on the interior and exterior of buses, subway cars, and taxis. However, during heavy traffic, when audiences are the largest, people may find it difficult to read the message. Captivate TV ad Why use this medium? 7. Other Media. As traditional media have become more expensive and cluttered, advertisers are now using a variety of nontraditional advertising options called place-based media. Messages are placed in locations that attract a specific target audience, such as airports, doctors’ offices, health clubs, theaters, and other locations. Slide 16-55 SLN 16-1 New Forms of Advertising are Everywhere! G. Scheduling the Advertising Factors to consider when scheduling advertising for a product: a. Buyer turnover is how often new buyers enter the market to buy the product. The higher the buyer turnover, the greater the amount of advertising required. b. Purchase frequency is how often the product is purchased. The more frequently the product is purchased, the less repetition is required. c. Forgetting rate is the speed with which buyers forget the brand if advertising is not seen. 16-13 Chapter 16 Setting schedules requires an understanding of how the market behaves. Most companies follow one of three basic approaches: a. Continuous (steady) schedule. When seasonal factors are unimportant, advertising is run at a continuous or steady schedule throughout the year. b. Flighting (intermittent) schedule. Periods of advertising are scheduled between periods of no advertising to reflect seasonal demand. c. Pulse (burst) schedule. A flighting schedule is combined with a continuous schedule because of increases in demand, heavy periods of promotion, or introduction of a new product. CONCEPT CHECK 1. You see the same ad in Time and Fortune magazines and on billboards and TV. Is this an example of reach or frequency? Answer: frequency 2. Why has the Internet become a popular advertising medium? Answer: Offers a visual message, can use both audio and video, is interactive through rich media, and tends to reach younger consumers. 3. Describe three approaches to scheduling advertising. Answer: (1) Continuous (steady) throughout the year; (2) Flighting (intermittent), periods with and without ads to reflect seasonal demand; and (3) Pulse (burst), which combines continuous and flighting due to increases in demand, heavy periods of promotion, or introduction of a new product. III. EXECUTING THE ADVERTISING PROGRAM Executing the advertising program involves pretesting the advertising copy and actually carrying out the advertising program. Evaluation is usually done at two separate times: before and after the advertisements are run in the actual campaign. A. Pretesting the Advertising To determine whether the advertisement communicates the intended message or to select among alternative versions of the advertisement, pretests are conducted before the advertisements are placed in any medium: Chapter 16 16-14 1. Portfolio Tests. Used to test copy alternatives. The test ad is placed in a portfolio with other ads and stories. Afterward, consumers are asked for their impressions of the ads. 2. Jury Tests. Involve showing the ad copy to a panel of consumers and having them rate how they liked it, how much it drew their attention, and how attractive they thought it was. Unlike the portfolio test, consumers see only the ad of interest. 3. Theater Tests. Are the most sophisticated form of pretesting. Consumers are invited to view new television shows or movies in which test commercials are also shown. Viewers register their feelings about the ads either during the viewing or afterward. B. Carrying Out the Advertising Program The responsibility for actually carrying out the advertising program can be handled in one of three types of agencies: The full-service agency provides the most complete range of services, including market research, media selection, copy development, artwork, and production. a. Agencies that assist a client by both developing and placing advertisements have traditionally charged a commission of 15 percent of media costs. With integrated marketing approaches, however, most advertisers have switched from paying commissions to incentives or fees based on performance. b. The most common performance criteria are sales, brand and ad awareness, market share, and copy test results. A limited-service agency specializes in one aspect of the advertising process, such as providing creative services to develop the advertising copy or buying previously unpurchased media space. An in-house agency made up of the company’s own advertising staff may provide full services or a limited range of services. IV. EVALUATING THE ADVERTISING PROGRAM Advertisements must be posttested to determine whether they are achieveing their intended objectives, and results may indicate that hanges must be made in the advertising program. 16-15 Chapter 16 Starch Test A. Posttesting the Advertising Why posttest ads? An advertisement may go through posttests after it has ben shown to the target audience to determine whether it accomplished its intended purpose. Five approaches common in posttesting are: Slide 16-64 1. Aided Recall (Recognition-Readership). The Starch test uses aided recall to determine the percentage of those who: a. remember seeing the ad (noted). b. saw or read any part of the ad identifying the product or brand (seen-associated). c. report reading at least half the ad (read most). 2. Unaided Recall. Respondents are asked a question such as, “What ads do you remember seeing yesterday?” without any prompting to determine whether they saw or heard the messages. 3. Attitude Tests. Respondents are asked questions to measure changes in their attitudes before and after an advertising campaign to assess if they have a more favorable attitude toward the product advertised. 4. Inquiry Tests. Additional product information, product samples, or premiums are offered to an ad’s readers or viewers. Ads generating the most inquiries are judged the most effective. 5. Sales Tests. Sales tests allow a manufacturer, a distributor, or an advertising agency to manipulate an advertising variable (such as schedule o copy) and observe subsequent sales effects by monitoring data collected at checkout scanners. CONCEPT CHECK 1. Explain the difference between pretesting and posttesting advertising copy. Answer: Pretests are conducted before ads are placed in any medium to determine whether the ads communicate the intended message or select among alternative versions. Posttests are shown to the target audience to determine whether it accomplished its intended purpose. 2. What is the difference between aided and unaided recall posttests? Answer: Aided recall involves showing an ad to respondents who then are asked if their previous exposure to it was through reading, viewing, or listening. Unaided recall involves asking respondents if they remember an ad without any prompting to determine if they saw or heard its message. Chapter 16 16-16 Figure 16-K Sales promotion alternatives V. SALES PROMOTION A. The Importance of Sales Promotion Sales promotion is a key element of the promotional mix, which now accounts for more than $100 billion in annual expenditures. Slide 16-68 B. Consumer-Oriented Sales Promotion Consumer-oriented sales promotions, or simply consumer promotions, are sales tools used to support a company’s advertising and personal selling. Ben & Jerry’s coupon Why use this? 1. Coupons. Coupons are sales promotions that usually offer a discounted price to the consumer, which encourages trial. 250 billion coupons are distributed in the U.S. annually. The redemption rate is typically about 2%, although it increases during recessionary cycles of the economy. In recent years, the average face value of coupons, the number of coupons requiring multiple purchases, and the time until expiration have all been increasing. Coupons are far more expensive than their face value due to costs from the advertisement to deliver them, dealer handling, clearinghouse costs, and redemption. Misredemption, or paying the face value of the coupon even though the product was not purchased, is an additional cost. Slide 16-69 ESRA Coupon scams ETHICS AND SOCIAL RESPONSIBILITY ALERT Coupon Scams Cost Manufacturers $500 Million Each Year Slide 16-70 Coupon fraud costs consumer goods manufacturers more than $500 million each year. Methods of cheating include setting up fake stores, selling coupons to retailers who redeem them without selling the product, adding extra coupons to those turned in by shoppers, and printing counterfeit rebate forms and proofs of purchase. Should action be taken against coupon fraud? Manufacturers are fighting back by developing inks that form the word “void” on coupons when exposed to the light used in copiers. Some require a handwritten redemption request accompanied by proof of purchase. 16-17 Chapter 16 2. Deals. Are short-term price reductions, commonly used to increase trial among potential or to retaliate against a competitor’s actions. 3. Premiums. Got Milk? contest Why use this? A tool often used with consumers is the premium, which consists of merchandise offered either free or at a significant savings over its retail price. With a 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. 4. Contests. Is where consumers apply their skill or analytical or creative thinking to try to win a prize. 5. Sweepstakes. Participants must submit an entry form, but these are purely games of chance requiring no analytical or creative effort by the consumer. This approach is very effective. Federal and state laws and the Federal Trade Commission have issued rules to regulate their fairness, ensure that the chance for winning is represented honestly, and guarantee that the prizes are actually awarded. Slide 16-72 Caress sample Why use this? 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 consumers’ hands. Slide 16-73 AAdvantage continuity program 7. Continuity Programs. Why use this? Encourages and rewards repeat purchases by acknowledging each purchase made by a consumer and offering a premium as purchases accumulate. Slide 16-74 The most popular are frequent flyer and frequent traveler programs used by airlines, hotels, and car rental services to reward loyal customers. Chapter 16 16-18 Nabisco POP 8. Point-of-Purchase Displays. Why use this? A point-of-purchase display takes the form of advertising signs, which sometimes actually hold or display the product. Often located in high-traffic areas near the cash register or the end of an aisle. Slide 16-75 9. Rebates. Product placements The cash rebate offers the return of money based on proof of purchase. On lower-priced items, many buyers never bother to mail in proof of purchase to take advantage of it. Online consumers are more likely to take advantage of rebates. 10. Product Placement. Why use this? Slide 16-76 Product placement involves the use of brand-name products in a movie, television show, video, or commercial for another product. Another form of product placement uses digital technology to make “virtual” placements in an existing program. C. Trade-Oriented Sales Promotion Trade-oriented sales promotions, or simply trade promotions, are sales tools used to support a company’s advertising and personal selling directed to wholesalers, retailers, or distributors. 1. Allowances and Discounts. Trade promotions often focus on maintaining or increasing inventory levels in the channel of distribution. Allowances and discounts are effective methods, but overuse can lead to changes in ordering patterns. a. Merchandise allowances reimburse a retailer for extra instore support or special featuring of the brand. It consists of a percentage reduction from the list case price ordered during the promotional period. 16-19 Chapter 16 b. A case allowance is a discount on each case ordered during a specific time period and is deducted from the invoice. A variance is the “free goods” approach, whereby retailers receive some amount of product free based on the amount ordered. c. A finance allowance involves paying retailers for financing costs or financial losses associated with consumer sales promotions. This can take the form of a: Floor stock protection program, in which manufacturers give retailers a case allowance price for products in their warehouse, thereby preventing stockouts during the promotional period. Freight allowances, which compensate retailers that transport orders from the manufacturer’s warehouse. 2. Cooperative Advertising. Cooperative advertising Why use this? Cooperative advertising are programs by which a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products. In addition to paying for the advertising, the manufacturer often furnishes the retailer with a selection of different print or broadcast ads for the retailer to adapt and use. Slide 16-78 3. Training of Distributors’ Sales Forces. A manufacturer often spends time and money helping to train the reseller’s salesforce to increase sales performance. Methods include providing manuals and brochures to educate the salesforce. VI. PUBLIC RELATIONS Segway HT news release Public relations is a form of communication management that seeks to influence the image of an organization and its products. In developing a public relations campaign, several methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost—publicity tools—are available to the public relations director: Why use this? Slide 16-80 Chapter 16 a. Many companies frequently use the news release, consisting of an announcement regarding changes in the company or the product line. The objective is to inform a newspaper, radio station, or other medium of an idea for a story. 16-20 BP Connect news conference Why use this? Slide 16-81 DOT PSA TV ad Why use this? b. A second common publicity tool is the news conference. Representatives of the media are all invited to an informational meeting, and advance materials regarding the content are sent. The tool is often used when negative publicity requires a company response. c. Nonprofit organizations rely heavily on PSAs (public service announcements), which are free space or time donated by the media. For example, the charter of the American Red Cross prohibits any advertising by local chapters, so they often depend on PSAs to solicit blood donations. Slide 16-82 CONCEPT CHECK 1. Which sales promotional tool is most common for new products? Answer: samples 2. Which trade promotion is used to encourage local advertising efforts of resellers? Answer: cooperative advertising 3. What is a news release? Answer: An announcement regarding changes in the company or the product line. 16-21 Chapter 16 ANSWERS TO “APPLYING MARKETING CONCEPTS AND PERSPECTIVES” 1. How does competitive product advertising differ from competitive institutional advertising? Answer: Competitive product advertising promotes a brand’s specific features and benefits. Competitive institutional advertising is used at the product class, rather than brand level. For example, a competitive product ad might emphasize the benefits of Perdue chickens versus other brands. A competitive institutional ad would emphasize the advantage of eating chicken over beef. 2. Suppose you are the advertising manager for a new line of children’s fragrances. Which form of media would you use for this new product? Answer: The answer to this question depends on whether you are focusing on the child who might use the product or the parent who might be the primary purchaser of the product. If the target is children, television is probably the best medium to reach this audience. With parents, however, you have more latitude in your choice. Magazines are probably the best choice because they can provide efficient reach to this segment of the population. 3. You have recently been promoted to be director of advertising for the Timkin Tool Company. In your first meeting with Mr. Timkin, he says, “Advertising is a waste! We’ve been advertising for six months now and sales haven’t increased. Tell me why we should continue.” Give your answer to Mr. Timkin. Answer: It is important to tell Mr. Timkin that it is hard to measure the effects of advertising on sales. First, many factors (competitors, the environment, distribution) can affect sales. Secondly, you cannot be sure that the advertising hasn’t worked— possibly people who have seen the ads have not yet purchased the product. 4. A large life insurance company has decided to switch from using a strong fear appeal to a humorous approach. What are the strengths and weaknesses of such a change in message strategy? Answer: This change involves a somewhat difficult tradeoff. Strong fear appeals are effective in getting the audience’s attention, but they may tune out the message because people don’t like to be reminded that they are mortal. Humorous appeals also can get attention, in part because they are not used very frequently in this industry, but they may not provide enough motivation for the consumer to take action. Some people might also argue that it is inappropriate to make fun of the very serious subject of death. The Prudential Insurance Company did use humorous appeals in their advertising for life insurance for a number of years with some success. Chapter 16 16-22 5. Which medium has the lowest cost per thousand? Answer: The lowest cost is the TV show, as shown below: MEDIUM COST AUDIENCE CPM TV show $5,000 25,000 $200.00 Magazine $2,200 6,000 $366.67 Newspaper $4,800 7,200 $666.67 $420 1,600 $262.50 FM radio CPM = (Cost / Audience) x 1,000 6. Some national advertisers have found that they can have more impact with their advertising by running a large number of ads for a period and then running no ads at all for a period. Why might such a flighting schedule be more effective than a steady schedule? Answer: Flighting can be especially effective when seasonal demands exist for the product, such as for lawn and garden equipment. Also, such periods of advertising can complement periods of heavy sales promotion such as a special event or contest. Another benefit of flighting is that by running a large block of advertising at one time, the marketer can sometimes achieve both greater reach and greater frequency in a short period of time. The advertiser then relies on the effects of the campaign during the period of no advertising. 16-23 Chapter 16 7. Each year managers at Bausch and Lomb evaluate the many advertising media alternatives available to them as they develop their advertising program for contact lenses. What advantages and disadvantages of each alternative should they consider? Which media would you recommend to them? Answer: The advantages and disadvantages of advertising media (excluding outdoor) for Bausch and Lomb managers include the following: MEDIUM ADVANTAGES DISADVANTAGES Reaches large audience of potential contact lens users Picture illustrates lens Can target contact users High cost Difficult to convey complex info about lens Low Cost No visual image of lens or sight component to message Difficult to convey complex info about lens High cost Long time needed to place ads Magazines Ads can convey complex info about lens Ads last a long time and can be saved Can select audience High-quality color for colored contact lens line Newspapers Coverage of local markets Ads can be saved Can convey complex information about lens Ads compete with other ads and feature articles Short life span Poor color Internet Ads can be interactive and link to website Can use animation to explain how to use lens Large files required Effectiveness of medium unknown Direct Mail Target specific consumers Can convey complex information about lens High-quality graphics High cost per contact; low response rates Image of being “junk mail” Television Radio Since contact lens buyers require (a) detailed information about the product and (b) a relatively long purchase period, magazine advertising is probably the most appropriate advertising medium. Chapter 16 16-24 8. What are two advantages and two disadvantages of the advertising posttests described in the chapter? Answers: The main advantages and disadvantages for each are listed below: POSTTEST METHOD ADVANTAGES DISADVANTAGES Measures specific exposure behaviors Easy to conduct Inexpensive to conduct Does not measure the effects of advertising Subject to the limitations of people's memory May encourage guessing Respondents may provide what they believe are the expected answers Unaided Recall The same as aided recall A more difficult test for the respondent Helps to avoid some of the guessing and yes saying May miss even more of the actual exposure due to people forgetting what they saw, heard, or read Attitude Tests Better measure of advertising effectiveness than recall tests Easy to conduct Fairly inexpensive Attitudes are complex and difficult to express Favorable attitude does not mean ultimate purchase Inquiry Tests Measure the direct response of the consumer Easy to conduct Allow for tests of different variables that motivate the consumer Can only be used for ads that can logically make use of an offer to elicit inquiries Can be time consuming Directly measure marketplace response Difficult to tell how important advertising is in generating the sale Difficult to tell the delayed effects of advertising Can be costly and time consuming Better used to test entire campaigns rather than individual ads Aided Recall Sales Tests 16-25 Chapter 16 9. Federated Banks is interested in consumer-oriented sales promotions that would encourage senior citizens to direct deposit their Social Security checks with the bank. Evaluate the sales promotion options, and recommend two of them to the bank. Answers: Sales promotion alternatives such as coupons, contests, sweepstakes, samples, rebates, and product placement are better suited to consumer goods than to this service. Continuity programs are expensive and would require setting a minimum bank balance that might exclude too many in the target audience. The two sales promotion options most promising to reach senior citizens are deals and premiums. A possible deal might be to offer free checking accounts to all customers already using or signing up for direct deposit for 60 days; all other basic checking accounts would henceforth have a minimum charge per month. It would be illegal to apply age restrictions to this deal. To communicate the deal to senior citizens, bank marketers need to consider advertising in the local newspaper and free tabloids and radio advertising at appropriate times. The bank could also create a brochure about the deal with a small point-of-purchase display to be placed in all branches of the bank and in housing and community centers serving senior citizens. The brochure could also be mailed out to all Federated Banks customers with their monthly statements. A possible premium might be a selection of items available free to any customers signing up for direct deposit over the next 60 days. Items might include mugs, canvas bags, and baseball caps with the Federated Banks logo. Cost quotations for these items need to be obtained using quantities based on the promotion objectives (How many customers are aimed for?). Again, this offer needs to be communicated to potential new customers by advertising and direct mail. A cost-benefit analysis of both options can help in making the decision about which to use. 10. How can public relations be used by Firestone and Ford following investigations into complaints about tire failures? Answer: Although public relations personnel usually focus on communicating positive aspects of the business, they may also be called on to minimize the negative impact of a problem or crisis. Debates between Firestone and Ford about the cause created a difficult situation for both public relations departments. Genuine concern and desire to prevent future accidents have been demonstrated by the recall of tires, but it is not yet clear that the tires are the only problem. The main message for each company to communicate is (1) its regret that anyone should have died, (2) its determination to track down the cause(s) of the accidents, and (3) its commitment to making all vehicles/tires as safe as possible. This three-part message can be communicated in news releases as parts of the investigation are completed and as any newly developed safety measures are announced. News conferences can be held for the announcement of major investigative findings and major new developments. An opportunity may arise to use a high-visibility individual to emphasize product safety. Chapter 16 16-26 ANSWERS TO “INTERNET EXERCISE” There are many forms of print advertising available today. If you were to advise your college or university to advertise in magazines, which magazines would you recommend? Most magazines provide advertising information on their web page as a “media kit” or under “advertising rates.” For example, Time magazine advertising information is available at www.time-planner.com/planner/rates. 1. What is the monthly rate for a full page ad at each of the magazines? Answer: Figures from the Time magazine website were $212,000 for a full-page, fourcolor ad in the national edition, with a circulation of 4.0 million. 2. Describe the profile of the audience for each of the magazines. Answer: According to a study conducted by the market research firm MRI, the 2002 Fall MRI Audience Profile of Time magazine readers is show in the table below (see www.time-planner.com/planner/research/index.html): Selected highlights from the MRI Audience Profile of Time magazine readers are: (1) The average age is 44 years old; (2) median household is $65,000; (3) men are 53% and women are 47%; and (4) most are well-educated—39% are college graduates. 16-27 Chapter 16 3. Calculate the CPM for each magazine. Answer: The CPM for Time magazine is: CPM = (Cost / Audience) x 1,000 CPM = ($212,000 / 4.0 million) x 1,000 CPM = 53 Chapter 16 16-28 SLN 16-1: SUPPLEMENTAL LECTURE NOTE New Forms of Advertising Are Everywhere! Most consumers have noticed that traditional advertising venues are cluttered with an extraordinary number of messages. Supermarkets now carry 30,000 different packages, networks air 6,000 commercials each week, and 15 minutes of every prime-time hour are ads. To circumvent the clutter marketers are trying a variety of new forms of advertising. Here are descriptions of a few: Zines. Guess, Inc. and Benetton both publish what look like real magazines. Guess Journal has a table of contents, bylines, ad stories about the jeans maker. Benetton’s Colors runs controversial art similar to the retailer’s high-shock ads. Beepers. Pepsi offered teenagers a beeper and six months of free service for $35 and Mountain Dew box tops. The catch is that once a week they get beeped with an ad. Paid word-of-mouth. Hennessy cognac recently hired models and actors to sit in trendy bars and order drinks made with Hennessy. Television programming. Television programs have written sponsors into their scripts. For example, Elizabeth Taylor appeared on “The Nanny” and other CBS sitcoms to promote her new fragrance, Black Pearls. Internet options. The Internet has created many unique advertising forms including infomercials on demand, addressable commercials, menu billboarding, and at-home couponing. Wireless Internet also creates opportunities to advertise directly to cell phones. Infomercials with commercials. These infomercials mimic talk shows and newscasts. For example, Time, Inc.’s infomercial for its Rolling Stone music collection even sold space to another advertiser. Interactive advertising. Cable television companies are now offering interactive and addressable advertising options. Viewers of a football game, for example, could see a message asking if they would like to order a pizza. Because the viewer is on cable, the pizza company would know where to deliver the pizza. Advertisers explain that the new forms of advertising reflect consumer preferences. Today’s consumers, they say, are skeptical of any sales pitch, but still enjoy entertainment. The future will probably lead to even more new ways for sponsors to subtly embed their messages into our culture! Sources: Joe Mandese, “Greating a New Media Model,” American Demographics (January 2002), p. 31; Catharine P. Taylor, “Jupiter Enhances Tracking,” Advertising Age (September 24, 2001), p. 22; Chuck Ross, “Ford, Domino’s Set Interactive TV Pacts,” Advertising Age (April 5, 1999), pp. 1, 44; Mary Kuntz, Joseph Weber, and Heidi Dawley, “The New Hucksterism,” Business Week (July 1, 1996), pp. 76-84. 16-29 Chapter 16 ICA 16-1: IN-CLASS ACTIVITY Recognizing Advertising Slogans Learning Objective. To have students realize the difficulty advertisers face when trying to help consumers remember their company or brands. Definition. The following marketing term is referred to in this in-class activity (ICA): Slogan: The verbal or written portion of an advertising message that summarizes the main idea in a few memorable words.” From the Dictionary of Marketing Terms, 2nd edition, Peter Bennett, Ed. (Lincolnwood: NTC Publishing Group, 1995), p. 264. Nature of the Activity. To have students identify the company or product associated with an advertising slogan. Estimated Class Time. 10 minutes. Materials Needed. The Core16.ppt file from the Core PowerPoint CD in the Core Instructor’s Box. A transparency of ICA 16-1, Figure 1 (or use Slide 16-92): Match Each Slogan to the Company or Product and copies of it to hand out to students. Copies of ICA 16-1, Figure 1 to hand out to students. Preparation Before Class. Follow the steps below: 1. Make a transparency of ICA 16-1, Figure 1 (or use Slide 16-92). 2. Make copies of ICA 16-1, Figure 1 to handout to students. 3. Review possible answers contained in ICA 16-1, Figure 1. 4. Review the PowerPoint slides. ICA 16-1, Figure 1 Instructions. Follow the steps below to conduct this ICA: Matching Slogans 1. Show Slide 16-92 or the transparency made from ICA 16-1, Figure 1: Match Each Slogan to the Company or Product. Slide 16-92 Chapter 16 16-30 2. Ask students to identify the company or product for each slogan. The answers are: Company/Product: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. Tylenol Chevy Trucks IBM Volkswagen New York Times Sears GE American Express PowerBar Apple Computer VISA Xerox DuPont Allstate Insurance Nissan Verizon Wireless Accenture Energizer Batteries Ford Motor Co. L. L.Bean Wendy’s Lexus Toyota Outward Bound Wal-Mart BMW Advertising Slogan: Answer: “Take Comfort in Our Strength”................................... I “Like a Rock” ............................................................... T “People who get it. People who get it done.” .............. L “Drivers Wanted”.......................................................... F “All the News That Fit to Print” ...................................N “Where else?” ...............................................................Q “We Bring Good Things to Life”..................................A “Make Life Rewarding” ............................................... W “Be Great” .....................................................................O “Think Different” ..........................................................K “It’s Everywhere You Want to Be” .............................. S “The Document Company”........................................... B “The Miracles of Science” ............................................ C “You’re in Good Hands” .............................................. Z “Driven” ........................................................................D “Make Progress Every Day” .........................................H “Innovation delivered” ..................................................G “The Power to Keep You Going, and Going…” .......... J “No Boundaries” .......................................................... M “Start here. Go anywhere.” ..........................................Y “Taste the Difference Fresh Makes” ............................. R “The Passionate Pursuit of Perfection” ......................... E “Get the Feeling” ..........................................................X “Same world. Different place.” .................................... P “Always Low Prices. Always.” ...................................U “The Ultimate Driving Machine” .................................V 16-31 Chapter 16 3. Share the following “classic” slogans for students to identify the company or product: Advertising Slogan: A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. P. Q. R. S. Company/Product: “The Quicker, Picker Upper” .....................................Bounty “It’s the Real Thing” ..................................................Coca Cola “Please Don’t Squeeze the…” ...................................Charmin Toilet Tissue “Does She or Doesn’t She” ........................................Clairol Hair Coloring “Finger-Lickin’ Good”...............................................KFC “Good to the Last Drop” ............................................Maxwell House Coffee “Takes a Lickin’ and Keeps on Tickin’” ...................Timex Watches “Just Do It” ................................................................Nike “Nobody Doesn’t Like…” .........................................Sara Lee “Fly the Friendly Skies”.............................................United Airlines “Breakfast of Champions” .........................................Wheaties “Let Your Fingers Do the Walking” ..........................Yellow Pages “Melts in Your Mouth, Not in Your Hand” ...............M&M’s “M’m M’m Good” .....................................................Campbell’s Soup “Where’s the Beef?” ..................................................Wendy’s “A Mind is a Terrible Thing to Waste” .....................United Negro College Fund “Betcha Can’t Eat Just One” ......................................Lay’s Potato Chips “A Little Dab’ll Do Ya” .............................................Brylcreem “Be All That You Can Be” ........................................U. S. Army Marketing Lesson. One of the challenges of a successful advertising campaign is to break through the clutter with a slogan or ad that is remembered favorably by consumers. Website. See Advertising Age’s top 10 slogans at www.adage.com/century/slogans.html. Chapter 16 16-32 ICA 16-1, FIGURE 1 MATCH EACH SLOGAN TO THE COMPANY OR PRODUCT SLOGAN COMPANY/PRODUCT 1. “Take Comfort in Our Strength” A. GE 2. “Like a Rock” 3. “People who get it. People who get it done.” 4. “Drivers Wanted” B. Xerox C. DuPont 5. “All the News That Fit to Print” E. Lexus 6. “Where else?” F. Volkswagen 7. “We Bring Good Things to Life” G. Accenture 8. “Make Life Rewarding” H. Verizon Wireless 9. “Be Great” D. Nissan I. Tylenol 10. “Think Different” J. Energizer Batteries 11. “It’s Everywhere You Want to Be” K. Apple Computer 12. “The Document Company” L. IBM 13. “The Miracles of Science” M. Ford Motor Company 14. “You’re in Good Hands” N. New York Times 15. “Driven” O. PowerBar 16. “Make Progress Every Day” P. Outward Bound 17. “Innovation delivered” 18. “The Power to Keep You Going, and Going…” 19. “No Boundaries” Q. Sears 20. “Start here. Go anywhere.” T. Chevy Trucks 21. “Taste the Difference Fresh Makes” U. Wal-Mart 22. “The Passionate Pursuit of Perfection” V. BMW 23. “Get the Feeling” W. American Express 24. “Same world. Different place.” X. Toyota 25. “Always Low Prices. Always.” Y. L. L. Bean 26. The Ultimate Driving Machine” Z. Allstate Insurance R. Wendy’s S. VISA © McGraw-Hill Companies, Inc. 2003 16-33 Chapter 16 ICA 16-2: IN-CLASS ACTIVITY What Makes a Memorable TV Commercial? Learning Objective. To have students identify the factors that makes a memorable television commercial. Definitions. The following marketing terms are referred to in this in-class activity (ICA): Advertising: Any paid form of non-personal communication about an organization, good, service, or idea by an identified sponsor. Commercial: An advertisement broadcast on radio or television. Nature of the Activity. To have students (1) observe three TV ads in class, (2) classify the type of each TV ad, (3) identify the appeal used, and (4) discuss why the ad was memorable. Estimated Class Time. 15 minutes. Material Needed. The Core16.ppt file from the Core PowerPoint CD in the Core Instructor’s Box. Preparation Before Class. Follow the steps below: 1. Read the material in Chapter 16 on the types of advertising and message content. 2. Review the PowerPoint slides. Instructions. Follow the steps below to conduct this ICA: 1. Give students this background mini-lecture: “The Clio Awards hosts the world’s largest and most famous advertising awards competition in the international advertising. At its 43rd annual Clio Festival in 2002, Fallon Worldwide won two Grand Clio Awards, the highest award given, for its BMW “The Hire” campaign. Fallon has won several other prestigious advertising awards since it was founded in 1981. Examples of its award-winning ads include Rolling Stone’s “Perception/Reality” campaign, MTV’s “Jukka Brothers,” and the EDS “Cat Herders” TV spot. In 2002, The Hire Season 1 film series, developed by BMW’s advertising agency Fallon Worldwide, won the prestigious Grand Clio Award® for Internet Advertising and the Gold Clio Award® for Cinematography. One of its early TV spots that won acclaim was its “Gold’n Plump Chicken” ad that aired in the early-1980s.” This and other ads helped foster the creative reputation that Fallon Worldwide enjoys today. Chapter 16 16-34 Fallon Worldwide Golden’ Plump Chicken TV ad 2. Show Slide 16-94: “Gold’n Plump Chicken” TV ad and have students respond to the following questions: Slide 16-94 Question 1: Is the “Gold’n Plump Chicken” TV commercial a pioneering (or informational), competitive (or comparative), reminder (or reinforcement), or an advocacy ad? Answer: This ad is a competitive ad since it promotes this brand as better than those from “the south.” Question 2: What kind of appeal does this ad use? Answer: This ad uses a humorous appeal to convey its message to the target audience. Question 3: Why do you think this ad was memorable and worthy of an award? Answer: This ad creatively uses humor to motivate target consumers to purchase the brand, which it successfully did. 3. Give students this background mini-lecture: “Pepsi Cola has produced several award winning TV ads over the years in its battle with Coca-Cola (as has Coca-Cola) for the hearts and minds of soft drink consumers worldwide. A few of these TV spots are either in the Clio Hall of Fame or cited as one of the best ads ever. In 1999, TV Guide polled advertising agencies to rank the “Fifty Greatest TV Commercials of All Time.” The following ad “Pepsi’s” Security Camera” TV spot was ranked #21 by those polled by TV Guide in its “Fifty Greatest TV Commercials of All Time” and has won other awards as well.” Pepsi Cola Security Camera TV ad 4. Show Slide 16-95: “Pepsi’s” Security Camera” TV ad and have students respond to the following questions: Question 1: Is the Pepsi TV commercial a pioneering (or informational), competitive (or comparative), reminder (or reinforcement), or an advocacy ad? Slide 16-95 Answers: This ad is a competitive (comparative) ad because it creatively demonstrates the Coke delivery guy’s preference of Pepsi over Coke—his employer! Question 2: What kind of appeal does this ad use? Answer: This ad uses a humorous appeal (to the tune of “Your Cheatin’ Heart”) to convey its message to the target audience that Pepsi is better than Coke and that Coke drinkers may feel guilty in trying or switching to Pepsi. 16-35 Chapter 16 Question 3: Why do you think this ad was memorable and worthy of an award? Answer: This ad creatively uses humor and music without any dialog (except the lyrics of the song) to encourage Coke drinkers to boldly, not timidly switch to Pepsi. 5. Give students this background mini-lecture: “The last TV spot we’re going to view has been voted the best TV commercial ever created by advertising agencies, advertisers, and of course TV Guide. It also is a prestigious member in the Clio Hall of Fame because this TV ad changed how advertisers think about the ways ads are created. It set a new standard for cinematic style. Famous Hollywood movie director Ridley Scott (director of such other well-known films, such as Alien, Thelma & Louise, and Oscar®-winner Gladiator and executive producer of Clio Award winner of BMW Films’ Hostage) directed the TV commercial. This TV spot cost over $400,000 to make (a huge amount back then) and cost an additional $500,000 to air. The ad aired only once— during Super Bowl XVIII in 1984. However, because of its success, it started the Super Bowl ad extravaganza we see today, when a 30second TV spot can cost $2.5 million! Finally, the ad was not only a creative success, but also a commercial one as well. After the ad ran, it generated sales of over 500,000 Apple Macintosh PCs during the next year. Here now is the best TV commercial ever made:” Apple Computer 1984 TV ad 6. Show Slide 16-96: Apple Computer’s “1984” TV ad and have students respond to the following questions: Question 1: Is the Apple “1984” commercial a pioneering (or informational), competitive (or comparative), reminder (or reinforcement), or an advocacy ad? Slide 16-96 Answers: This ad is a competitive ad because it creatively distinguishes between IBM PC users and the new Macintosh users. In addition, this ad is a pioneering ad since it introduces the Macintosh PC. Question 2: What kind of appeal does this ad use? Answer: This ad uses a fear appeal. The woman, who is the only character in color, is running away from the police and throws a sledgehammer against the screen to convey to the target audience that she can avoid the negative experience of being a part of the IBM PC culture. Chapter 16 16-36 Question 3: Why do you think this ad was memorable and worthy of an award? Answer: This ad was hugely successful on a number of levels because it: (1) sold a huge number of Macintosh PCs; (2) established the Super Bowl advertising craze we see today; (3) brought Hollywood production and cinematic flair to a 60-second TV spot; and (4) created brand name recognition for small PC manufacturer at the time. Marketing Lessons. Over 20,000 TV commercials are created and aired in the U.S. each year. Marketers and advertisers struggle with the problem of creating memorable messages that (1) promotes the idea, product, or service being featured without getting in the way of the message, (2) satisfies the objectives developed for the ad campaign, and (3) falls within a budget that the sponsor can afford. Websites. To view a list of Advertising Age’s top 100 campaigns, go to www.adage.com/century/campaigns.html. Unfortunately, the link to TV Guide’s list of the “Fifty Greatest TV Commercials of All Time” does not now exist. To view current and past Clio award winners and a list of ads that are in its Hall of Fame, go to www.clioawards.com. 16-37 Chapter 16 ICA 16-3: IN-CLASS ACTIVITY Product Placement in Movies and TV Learning Objective. To have students realize the difficulty advertisers face when trying to help consumers remember their company or brands. Definition. The following marketing term is referred to in this in-class activity (ICA): Product Placement: Using a brand-name product in a movie, television show, video, or commercial for another product. Nature of the Activity. To have students match a list of movies with a list of products that were used or displayed in these movies. Estimated Class Time. 10 minutes. Materials Needed. The Core16.ppt file from the Core PowerPoint CD in the Core Instructor’s Box. A transparency of ICA 16-3, Figure 1 (or use Slide 16-99): Can You Match These Products to These Movies and TV Shows? Copies of ICA 16-3, Figure 1 to hand out to students. Preparation Before Class. Follow the steps below: 1. Read the section in Chapter 16 on product placement. 2. Make a transparency of ICA 16-1, Figure 1 (or use Slide 16-99). 3. Make copies of ICA 16-1, Figure 1 to handout to students. 4. Review possible answers contained in ICA 16-3, Figure 1. 5. Review the PowerPoint slides. Instructions. Follow the steps below to conduct this ICA: A List Entertainment Product Placement 1. Show Slide 16-98: A List Entertainment Product Placement Video. 2. Ask students why marketers would place their products in a movie or television show. Responses should include the following: Slide 16-98 Chapter 16 16-38 a. Increases sales. Sales of Reese’s Pieces, featured in ET: The Extra-Terrestrial, exploded by 60 percent while sales of Ray Ban sunglasses increased as a result of being placed in Top Gun and Men in Black. With respect to TV, Pepsi, GM, and others have repeatedly placed their products in Survivor due to increased sales. b. Gives movies and TV shows a sense of realism since people in real life eat, drink, and wear brand-named products. c. Reinforces a character’s personality, such as James Bond driving a sports car. d. Creates an implied endorsement by the characters and the highprofile celebrities who play them. e. Gains significant exposure of the brand in both domestic and foreign markets. f. Is a lower cost alternative in terms of the cost per thousand (CPM) since some products are placed for free and others for a nominal fee (product placements usually cost between $10,000 and $1 million, and average about $50,000). g. Reduces the advertising “clutter” present in other media. h. Provides a captive audience—most people don’t leave when the product is “advertised” during the movie or TV show. And with the advent of TiVo and other devices that can skip over TV commercials, TV viewers won’t want to skip over a character consuming a product as part of the story. 3. Show Slide 16-99 or the transparency made from ICA 16-3, Figure 1. Ask students to match the movies and TV shows with the list of products shown. The answers are: Movies & TV Shows: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. You’ve Got Mail ET: The Extra-Terrestrial Mission Impossible Jurassic Park Golden Eye Top Gun The Matrix Forrest Gump Good Will Hunting Men in Black Jerry Maguire Life or Something Like It Product(s) Placed: Answer: America Online; Starbucks* .................... N, F Reese’s Pieces .............................................H Apple Computer ..........................................O Ford Explorer ..............................................U BMW Z3 Roadster ......................................Q Ray Ban Sunglasses ....................................A Duracell Batteries........................................ S Dr. Pepper .................................................. W Dunkin’ Donuts ........................................... R Ray Ban Sunglasses ....................................A Reebok** .................................................... E Oreos ...........................................................G 16-39 Chapter 16 Movies & TV Shows: 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Product(s) Placed: Batman & Robin Charlie’s Angels Austin Powers III Bridget Jones Diary Seinfeld Friends Survivor Will & Grace Who Wants to be a Millionaire? 7th Heaven ER Answer: Frito Lay...................................................... I Nokia Mobile Phone ................................... B MINI Cooper S ........................................... J Microsoft Hotmail ....................................... C Junior Mints ................................................K 7-Up ............................................................ L Mountain Dew, Reebok, Frito Lay ........ M, E, I Polo Shirts ...................................................V AT&T ..........................................................D Miracle Whip .............................................. P Best Buy ...................................................... T * Most of the movies listed had more than one product placement. For example, The Lost World had Burger King, General Mills, JVC, Kodak, Mercedes-Benz, Timberland, and Tropicana. ** In the movie Jerry Maguire, Reebok had wanted to air full-length commercial in the movie. However, not only was it left on the cutting room floor, but also one of the characters actually “insulted” the company in the movie! Reebok demanded that TriStar Pictures “Show us the money!” and settled a breach of contract suit for $10 million! Marketing Lesson. The popularity of product placements has grown in recent years because marketers believe that using brands in movies and TV shows is a subtle way of gaining exposure, particularly with younger audiences. Several marketers place their products in multiple movies and TV shows to increase their exposure to target audiences. Movie and television producers like the practice because it makes their movies and TV shows more realistic while providing additional revenues. Other potential venues for product placements include: video games, sporting events (where a product or ad is digitally inserted on the field of play, scoreboard, etc.), and even novels! Websites. To more obtain information about product placements, go to A List Entertainment’s website, which is www.alistentertainment.com. Another well-known product placement firm is Norm Marshall and Associates, whose website is www.normmarshall.com. Chapter 16 16-40 ICA 16-3, FIGURE 1 CAN YOU MATCH THESE PRODUCTS TO THESE MOVIES AND TV SHOWS? MOVIES & TV SHOWS PRODUCT PLACEMENTS 1. You’ve Got Mail A. Ray Ban Sunglasses 2. ET: The Extra-Terrestrial B. Nokia Mobile Phone 3. Mission: Impossible C. Microsoft Hotmail 4. Jurassic Park D. AT&T 5. Golden Eye E. Reebok 6. Top Gun F. Starbucks 7. The Matrix G. Oreos 8. Forrest Gump H. Reese’s Pieces 9. Good Will Hunting I. Frito Lay 10. Men In Black J. MINI Cooper S 11. Jerry Maguire K. Junior Mints 12. Life or Something Like It L. 7-Up 13. Batman & Robin M. Mountain Dew 14. Charlie’s Angels N. AOL 15. Austin Powers III O. Apple Computer 16. Bridget Jone’s Diary P. Miracle Whip 17. Seinfeld Q. BMW Z3 Roadster 18. Friends R. Dunkin’ Donuts 19. Survivor S. Duracell Batteries 20. Will & Grace T. Best Buy 21. Who Wants to be a Millionaire? U. Ford Explorer 22. Friends V. Polo Shirts 23. ER W. Dr. Pepper © McGraw-Hill Companies, Inc. 2003 16-41 Chapter 16 TN VIDEO CASE 16 Fallon Worldwide: In the Creativity Business Fallon Creativity Slide 16-101 Synopsis: Fallon Worldwide has won many awards since it was founded in 1981, and it has a reputation for innovative and highly creative promotion campaigns. This case highlights two Fallon campaigns; Lee Dungarees/Buddy Lee, and BMW’s “The Hire,” a series of short films that were shown primarily on the Internet. The video illustrates the process of an agency developing a marketing communications campaign for a client. The video also includes a segment in which Rob White of Fallon Worldwide discusses four groups of people in an agency who work together to develop a promotional campaign. Teaching Suggestions: If the technology is available in the classroom, one or more of the BMW films may be available for viewing in class by connecting to www.bmwfilms.com. Otherwise, students could visit the site prior to class. Possible discussion questions to ask before discussing the case in class: 1. The “Buddy Lee” and “BMW films” campaigns are good examples of highly creative marketing communication. How does Fallon initiate and encourage creative thinking for its clients? 2. How do the “Buddy Lee” and “BMW films” campaigns integrate the different marketing communication tools? 3. How can Fallon extend the life of “Buddy Lee” and “The Hire” to get more value for the clients? Answers to Case Questions: 1. Fallon Worldwide stresses its creativity, as shown by comments from the Fallon people in the case. (a) In what ways do the Lee Dungarees and BMW campaigns reflect their creativity? (b) Compare the sources of the ideas in the two campaigns. Answers: Fallon stresses the importance of a collaborative culture of people with very different backgrounds, experience, and perspectives. Fallon uses film (movies), novels, and music as the source for inspiration. Fallon encourages people to look beyond existing advertising for ideas. Chapter 16 16-42 a. Lee Dungarees. The Fallon team did research in the Lee archives and discovered a doll that had been used to display Lee Jeans sixty years ago. With updating, they believed the doll/cartoon imagery of Buddy Lee could be “cool” and would be a good fit with contemporary characters from popular TV shows, such as the Simpsons and South Park. b. BMW. The Fallon team wanted to demonstrate the responsiveness of a BMW. So Fallon’s inspiration was an exciting high-speed driving action sequence from the movie “Rendezvous.” Unfortunately, Fallon felt restricted by automobile advertising rules about high-speed driving. The solution was to create a movie(s) featuring BMW’s driving responsiveness rather than a BMW TV commercial. 2. In the Lee Dungarees and BMW Films campaigns, how were (a) the target markets and (b) each brand’s positioning changed from the situation prior to the campaign? Answer: The answers for each campaign are given separately. a. Lee Dungarees. In focus groups, the Lee brand was durable and had been around for a long time. However, it was also associated with moms, farmers, little kids, and particularly with middle-aged women. Fallon decided that existing imagery was simply too strong to overcome to successfully attract the new target market of 17 – 22 year old males. Fallon recommended a new subbrand, Lee Dungarees to establish a new set of associations for the Lee brand with the target market and improve perceptions of the overall Lee brand. This new subbrand then could be positioned to tap into the indestructible spirit, man-of-action desires of the new target market. With this client, Fallon believed that brands earn credibility in the fringes of pop-culture and the best strategy was to let the target customers “discover” the brand for themselves. When they do, they will invest themselves in it, as established in the “trend model” sequence below: Fringe→Leading Edge→“In Crowd”→Youth Mainstream b. BMW. The goal of the BMW campaign was to communicate BMW’s performance and driving responsiveness. The Fallon account team had seen an art film called “Rendezvous,” in which a Ferrari runs through Paris at 100+ mph, illegally, at 4:00 AM, with a camera mounted on the car. However, legal restrictions on automotive television commercials constrain the types of driving experiences that can be shown. The solution was to make a movie with BMWs, not (another) BMW commercial. Two people on the creative team, David Carter and Joe Swede, had recently done a commercial with Tom Burton, the famous Hollywood director. Based on that experience, and prompting from Bruce Bildsten, Fallon Creative Director, to think “cinematic”, the idea of a 45-minute film (to be delivered in segments) emerged. A schedule conflict later led to the decision to make a series of short films. Thus, the target market for BMW became BMW’s “future customer,” younger drivers who are Internet savvy. This repositioned the BMW to make its driving features appeal to this younger target market. 16-43 Chapter 16 3. The case does not discuss the media used in the Buddy Lee campaign. What media and communication vehicles should it use initially (a) to reach the target market of 17 - to 22 - year olds? (b) to continue to reach them after the first couple of years of the campaign? Answers: a. Fallon’s recommendation based on the “trend model” mentioned above: Fringe Leading Edge “In Crowd” Small space ads in alternative weeklies Late night cable TV Cinema ads in art houses Websites Appropriate programming (e.g., MTV, Comedy Central, ESPN) b. Youth Mainstream Youth-oriented Fox and WB prime time Over time, the campaign moves closer to the mainstream but still retains its youth-oriented, “cool” tone by staying in specifically targeted youth-oriented media. 4. The case does not discuss the development of media in BMW’s “The Hire” campaign. (a) How could BMW and Fallon launch the films most successfully on the Internet? (b) What other media might they use after the launch? Answers: a. First, the desired target audience must be sophisticated Internet users. Viewing the films on the Internet requires high-speed hardware and Internet connection as well as the software to play the film. Fortunately, that is true for BMW’s target of 20- to 30-year-olds. Second, this target audience is quite media savvy and skeptical of commercial messages, so BMW and Fallon needed to draw the target audience in so it becomes its own decision to view the film. The goal was to position the BMW films as movies that could be viewed at BMWfilms.com, not BMW commercials. Even the ads for the BMW films were created to look like movie trailers. At the beginning, news about the BMW films was leaked on the Web with an e-mail “viral marketing” campaign, which relies on people passing on interesting e-mails to their friends, who send them to their friends. Chapter 16 16-44 The benefit was credibility of word-of-mouth (or what Fallon called “water cooler talk”), rather than a sponsored commercial message. Fallon also did teaser ads before the actual films were released on targeted at “film buff” kinds of cable outlets. Finally, the initial print campaign used print ads that looked like movie posters, and Fallon did “wild postings,” pasting the posters on construction site walls in major cities. b. As the campaign progressed, Fallon bought advertising in national theatres to run a BMW film before the other “real” movie trailers were shown. Other ads and feature stories ran in entertainment magazines (e.g., Entertainment Weekly), and not in car magazines. BMW also used online chat rooms, post cards, and radio disc jockeys to promote the films/cars in top markets throughout the U.S. The challenge will be to retain the excitement and unique aura of the BMW films campaign over time. It will never be a traditional media campaign, so additional media should not corrupt the uniqueness of the BMW film project. 5. How might Fallon and its clients measure the success of (a) the Lee Dungarees and (b) the BMW campaigns? Answers: a. Lee Dungarees. One of the keys to the campaign was the creation of the Lee Dungaree’s subbrand. Fallon should track the imagery and/or brand associations for the new subbrand among the target market of 19- to 22-year-olds. In the past, some of Lee’s advertising had been credited to Levis. Fallon should verify that Buddy Lee is associated specifically with the Lee Dungarees subbrand. In terms of market share, Fallon executives did indicate that Lee’s share of the target market had gone up significantly in the first few years of the Buddy Lee campaign. b. BMW. On of the goals of the BMW films campaign was to influence the attitude of BMW’s future customers. The average age of a BMW driver was 42; the target audience for the campaign was 20- to 30-year-olds. Since the target audience is future BMW buyers, measures of changes in sales or market share would not be relevant for testing the effectiveness of the campaign. More perceptual measures such as awareness and attitudes toward BMW among 20- to 30-year-olds should be used. Another goal of the campaign was to separate BMW from its competitors, who were attempting to steal the responsiveness position from BMW. Measures of the BMW films campaign would need to include competitive positioning comparisons to assess BMW's strength in its “responsiveness” positioning. 16-45 Chapter 16 Epilogue: The case video includes a segment in which Rob White, Fallon president describes how his advertising agency is structured into the four groups used by most agencies: Account management. Responsible for managing Fallon’s relationship with the client. People in this group provide the strategic business perspective in the clientagency relationship. Account planners. Responsible for representing the buyer/consumer in the campaign development process. These people direct/interpret the research data on customers, sales patterns, purchase trends, etc. Julie Smith and Erin Tait, senior account planners at Fallon, appear on the video and discuss the campaigns from their perspective. Creative. Responsible for ad production; they write it, shoot it, develop the layout and design, etc. Bruce Bildsten, Fallon Creative Group Director, is in the video. Media. Responsible for determining the best way to reach/connect with the target audiences. Possible discussion questions for a discussion of advertising agencies: 1. Television audiences and programming have fragmented, magazine content is increasingly more specialized, but the number of advertising messages consumers see every day continues to increase. How have these trends affected advertising creative teams? Media planners? 2. What types of knowledge and skills do advertising account managers need? Account planners? What could you do now to prepare for one of these jobs? Chapter 16 16-46 POWERPOINT THUMBNAILS Slide 16-1 Slide 16-2 Slide 16-3 Slide 16-4 Slide 16-5 Slide 16-6 Slide 16-7 Slide 16-8 Slide 16-9 Slide 16-10 Slide 16-11 Slide 16-12 16-47 Chapter 16 Slide 16-13 Slide 16-14 Slide 16-15 Slide 16-16 Slide 16-17 Slide 16-18 Slide 16-19 Slide 16-20 Slide 16-21 Slide 16-22 Slide 16-23 Slide 16-24 Chapter 16 16-48 Slide 16-25 Slide 16-26 Slide 16-27 Slide 16-28 Slide 16-29 Slide 16-30 Slide 16-31 Slide 16-32 Slide 16-33 Slide 16-34 Slide 16-35 Slide 16-36 16-49 Chapter 16 Slide 16-37 Slide 16-38 Slide 16-39 Slide 16-40 Slide 16-41 Slide 16-42 Slide 16-43 Slide 16-44 Slide 16-45 Slide 16-46 Slide 16-47 Slide 16-48 Chapter 16 16-50 Slide 16-49 Slide 16-50 Slide 16-51 Slide 16-52 Slide 16-53 Slide 16-54 Slide 16-55 Slide 16-56 Slide 16-57 Slide 16-58 Slide 16-59 Slide 16-60 16-51 Chapter 16 Slide 16-61 Slide 16-62 Slide 16-63 Slide 16-64 Slide 16-65 Slide 16-66 Slide 16-67 Slide 16-68 Slide 16-69 Slide 16-70 Slide 16-71 Slide 16-72 Chapter 16 16-52 Slide 16-73 Slide 16-74 Slide 16-75 Slide 16-76 Slide 16-77 Slide 16-78 Slide 16-79 Slide 16-80 Slide 16-81 Slide 16-82 Slide 16-83 Slide 16-84 16-53 Chapter 16 Slide 16-85 Slide 16-86 Slide 16-87 Slide 16-88 Slide 16-89 Slide 16-90 Slide 16-91 Slide 16-92 Slide 16-93 Slide 16-94 Slide 16-95 Slide 16-96 Chapter 16 16-54 Slide 16-97 Slide 16-98 Slide 16-99 Slide 16-100 Slide 16-101 Slide 16-102 Slide 16-103 Slide 16-104 Slide 16-105 Slide 16-106 16-55 Chapter 16