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Chapter 13
Advertising, Sales Promotion,
and Public Relations
Chapter Objectives
1. Identify the three major advertising objectives and
the two basic categories of advertising.
2. List the major advertising strategies.
3. Describe the process of creating an
advertisement.
4. List and compare the major advertising media.
5. Outline the organization of the advertising
function and the role of an advertising agency.
6. Identify the principal methods of sales promotion.
7. Explain the role of public relations (PR) and the
objectives of PR campaigns
8. Explain how marketers assess promotional
effectiveness.
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I. Advertising Overview
Advertising - Paid, nonpersonal communication
through various media by business firms, notfor-profit organizations, and individuals who are
identified in the advertising message and who
hope to inform, persuade, and/or remind
members of a particular audience
Types of Advertising
– Product Advertising
– Institutional Advertising
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Product advertising
– Nonpersonal selling of a particular good or
service
– The type of advertising the average person
normally thinks of when talking about most
promotional activities
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Institutional advertising – Advertising that
promotes a concept, an idea, a philosophy, or the
good-will of an industry, company organization,
person, geographic location, or government agency
An example of corporate
(Goodwill) institutional
advertising.
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Objectives of Advertising
1. Inform - Develop initial demand
2. Persuade - attempt to increase
demand for an existing product
3. Remind - strive to reinforce previous
promotion by keeping the name of the
product before the market
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Heinz
A reminder
ad
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 Advertising objectives in relation to
the stage in the product life cycle
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Class Discussion
Let’s bring up some of your favorite
current ads and ask:
Is the purpose of the ad primarily to
inform, persuade, or remind?
www.youtube.com
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Celebrity Testimonial
 The use of celebrity
spokespeople to try to
boost the
effectiveness of an
advertising message
 Accounts for about
20% of all U.S. ads.
Improves product
recognition
Q. Why do
celebrity
testimonials
work?
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An example of a celebrity
testimonial advertisement
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Cooperative (Co-op) Advertising
– When a retailer and a manufacturer or
wholesaler share advertising costs
– Requires that the ad features the
manufacturer’s or wholesaler’s product
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 Cooperative
Advertising
by Foot
Locker and
Sketchers
Sport Shoes
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Advertising Messages Should…
 Inform, Persuade, and/or Remind
 Stand out to maximize attention
 Align with past advertisements and other
company products
 Offer a reason why to take an action =
Unique Selling Proposition (USP)
 Focus on
Practical appeals like price, value, or quality
Emotional appeals like fear, humor or fantasy
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Humor
Examples of advertisements
using an emotional appeals
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Fear
Companies usually create an Advertising
Campaign – a series of different but related ads that
use a single theme and appear in different media
within a specified time period
Subway’s “Jarrod” campaign
has lasted for many years.
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Elements of
a typical
print ad
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Organization of the Advertising
Function
 For smaller companies, it is organized as a
staff department reporting to the head of
marketing
 Large companies usually hire advertising
agencies - Firms of specialists who assist
advertisers in planning and preparing ads
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II. Advertising Media Selection
 Television
Broadest reach and most “powerful”, but tough
to target markets
Greatest share of TV ad revenues come from
national advertisers
Trend towards abbreviated spots – 15 and 30
second spots
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An example of an abbreviated
television spot
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 Radio
Popular for targeting advertising messages
to local audiences
Recently, has become the fastest-growing
media alternative
 Newspapers
Continue to dominate local markets
Important advantages include flexibility and
community prestige
Newspapers facilitate coordination
between local and national advertising
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 Magazines
– Divided into two broad categories - consumer
magazines and business magazines
Q. Automotive, retail, and movies are the
biggest magazine advertisers – WHY?
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 Targeting different consumer interests
through magazine advertising – its
primary strength
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 Direct Mail
Over 4.5 million tons of direct-mail offers fill
U.S. mailboxes annually
Almost half is immediately discarded a junk
But, American companies spend about $200
billion annually on direct-mail promotions
Use of direct-mail accounts for 19% of total
advertising expenditures
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 Outdoor Advertising
Includes billboards, painted bulletins or
displays (such as those appearing on walls
of buildings)
The oldest and simplest media business
Is particularly effective along metropolitan
streets and other high-traffic areas
Faces public concern over aesthetics
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 Outdoor
Advertising
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 Other Advertising Media
Transit advertising placed both inside and
outside the buses and trains
Roofs of taxicabs
Benches
Telephone booths
Cinema advertising
Inlaid ads in store flooring
Directory advertising (e.g., Yellow Pages)
Messages on hot-air balloon and blimps
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Media Selection
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III. Advertising Media Scheduling
Media Scheduling – Deciding the optimal
timing and sequencing to run various ads
in various media.
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Media Scheduling Definitions
 Impressions: Measures number of people
exposed to a message in one or more vehicles
 Reach: Measures percentage of target market
exposed to media vehicle
 Frequency: Measures average number of times
a person in the target group will be exposed to the
message
 Gross rating points (GRP’s) = Reach x Frequency
 Cost per thousand (CPM): The cost to deliver a
message to 1,000 people
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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
 Hypothetical Media Schedule for a Car
Campaign
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Figure 13.3
Media Schedule for a Video Game
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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
IV. SALES PROMOTIONS
Sales promotions - Marketing activities that
stimulate immediate consumer purchasing
 Consumer-Oriented Promotions – Appeal
to consumers
 Trade-Oriented Promotions - Appeal to
marketing intermediaries rather than to
consumers
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9 Consumer-Oriented Sales
Promotion Techniques
1. Coupons offer discounts on the purchase
price. Nearly $5 billion redeemed annually
– Free-standing inserts (FSIs) in Sunday
newspapers account for about 75 % of all
coupons
2. Rebates offer cash back to consumers with
proof of purchasing one or more products
– Reduce the effective price, without affecting
the price-quality relationship
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9 Consumer-Oriented Sales
Promotion Techniques
3. Sampling refers to the free distribution of a
product in an attempt to obtain future sales.
4. Bonus packs - specially packaged items
that give the purchaser a larger quantity at
the regular price.
5. Premiums are items given free or at a
reduced cost with the purchases of other
products
6. Contests require entrants to solve
problems or write essays -- they may also
require proof of purchase
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9 Consumer-Oriented Sales
Promotion Techniques
7. Sweepstakes select winners by chance - no product purchase is necessary
8. Specialty Advertising - Sales promotion
technique that places the advertiser's
name, address, and advertising message
on useful articles that are then distributed
to target markets ($8 billion industry) =
“SWAG” or “Trinkets and Trash”
9. Point-of-purchase (POP) advertising: a
display or other promotion located near
the site of the actual buying decision
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PERCENTAGE OF
7 Most Popular Consumer
MARKETERS
TECHNIQUES
WHO USE IT
Coupons in retail ads
90
In-store coupons
88
Rebates
85
Electronic in-store displays
83
Samples of established products
78
Premiums
75
Sweepstakes
70
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3 Trade-Oriented Sales Promotion
Techniques
 Trade allowances: deals offered to
wholesalers and retailers for purchasing
or promoting specific products
 Trade shows: vendors’ displays and the
demonstrations at sites often organized by
industry trade associations.
 Dealer incentives, contests, and
training programs are run by the
manufacturers to induce retailers and their
salespeople to increase sales
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V. Public Relations
Public relations (PR) - the company’s
communications and relationships with its
various stakeholders in order to create
goodwill for the company
Q. Who are the company’s Stakeholders?
Basic rule of good PR, “Do something good,
then talk about it”
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Types of Public relations (PR)
1. Publicity – the generation of news about a
person, product, or the company
2. Lobbying – attempts to persuade government
officials to promote or defeat legislation and
regulation
3. Community involvement – charitable efforts,
“loaning” executives, sponsoring events/teams
4. Counseling – advising management about issues
relevant to the company and the public’s image of
the company
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Public Relations Objectives
1. Build awareness – create news and place
stories in the media
2. Build credibility – communicating via an editorial
format (rather than an ad)
3. Generate enthusiasm – with stories about the
product before launch
4. Influence key individuals (“influencials “) – who
will spread the word
5. Hold down promotional costs – because it is
much cheaper than other forms of promotion
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When to engage in PR
WHEN…
Introducing new products to manufacturers
Introducing new products to consumers
Influencing government legislation
Enhancing the image of a firm
Enhancing image of a city, region, or country
Calling attention to a firm’s involvement with
the community
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Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
VI. Measuring Promotional
Effectiveness
Def - Determining whether a campaign
accomplishes its promotional objectives,
such as increased sales and profits
– One of the most difficult undertakings in
marketing, especially for advertising and
Public Relations
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Measuring Advertising Effectiveness
Pretesting - the assessment of an ad for its
effectiveness before it is actually used;
Methods used include focus groups
Posttesting - the assessment of an ad’s
effectiveness after it has been used;
methods used include
– Starch Readership Report – interviews people who
have read selected magazines to determine if they
observed certain ads
– Unaided recall tests -- require respondents to recall
ads from memory
– Split runs -- test two or more versions of ads placed in
different versions of newspapers, magazines, or TV
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Measuring Sales Promotion Effectiveness
 Coupons - Redemption rates combined with
the coupon source
 Sampling – Purchasing % after
receiving/trying the sample
 Sweepstakes/Contests - # of entries
 Trade promotions – customer traffic or sales
volumes
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Measuring Public Relations Effectiveness
 Was the message heard by the intended
target audience? – Count the people and
poll them
 Did the message influence as intended?
Use focus groups, before and after polls,
and interviews
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