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Chapter 18 Advertising Sales Promotion, and Public Relations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising Paid, nonpersonal communication through various media by business firms, not-for-profit organizations, and individuals who hope to inform or persuade members of a particular audience Types of Advertising Product Advertising Institutional Advertising 18-2 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. When this advertisement broke it became a success. Before viewing the video segment, can you guess which Pepsi commercial it is? 18-3 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Product advertising Nonpersonal selling of a particular good or service An example of a product advertisement 18-4 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Institutional advertising Institutional advertising promotes a concept, an idea, a philosophy, or the good-will of an industry, company organization, person, geographic location, or government agency Corporate advertising 18-5 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. An example of corporate (Goodwill) institutional advertising seen in this award-winning classic. 18-6 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Objectives of Advertising Informative Persuasive Reminder 18-7 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising objectives in relation to the stage in the product life cycle 18-8 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Where do you think Quiznos is on the Product Life Cycle? As the Advertising Manager what form of advertising would you recommend? 18-9 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. An example of a persuasive advertisement competitively stressing the reliability of gas (over the implied competitor, electricity) 18-10 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Heinz A reminder ad 18-11 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Class Discussion Is the purpose of this ad primarily to inform, persuade, or remind? 18-12 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising Strategies Comparative Emphasizes messages with direct or indirect promotional comparisons between competing brands. 18-13 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Celebrity Testimonial The use of celebrity spokespeople to try to boost the effectiveness of an advertising message 18-14 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. An example of a celebrity testimonial advertisement 18-15 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Retail All advertising by retail stores that sell directly to the consuming public Varies widely in effectiveness Should be assigned to one person whose sole responsibility and authority is developing an effective retail advertising program 18-16 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Cooperative Advertising When a retailer and a manufacturer or wholesaler share advertising costs Usually requires that the ad features the manufacturer’s or wholesaler’s product 18-17 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Interactive Interactive media are communication channels that induce message recipients to participate actively in the promotional effort. Creates a dialogue, providing more material as the user asks. 18-18 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Creating an Advertisement Translating Advertising Objectives into Advertising Plans Best ads are those which are created by pinpointing goals like: Educating consumers Enhancing brand loyalty Improving consumer perceptions 18-19 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Elements of the advertising planning process 18-20 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising Messages Ads must be meaningful, believable, and distinctive Creator must decide whether to focus on either: A practical appeal Emotional responses Advertising Campaign 18-21 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Every year Publishers Clearing House has the “Big Give Away.” Other than making some lucky person rich what do you think their real message is? What would you say are the objectives for their promotional campaign? 18-22 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Subway has had success with a series of advertisements featuring a customer who lost weight eating their product. Here is an example two years into the campaign. 18-23 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Humor Examples of advertisements using an emotional appeals 18-24 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Fear Developing and Preparing Ads Should flow logically from the promotional theme selected Advertisement should emphasize creativity, continuity, and possibly an association with other company products Advertisement should: Gain Attention and interest Inform and/or persuade Lead to purchase or other desired action 18-25 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Elements of a typical advertisement 18-26 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Creating Interactive Ads Banner Keyword Ad Advertorials Interstitials 18-27 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Media Selection Television Has grown to rival newspapers as the dominant advertising medium Greatest share of TV ad revenues come from companies that advertise nationally Newest trend: Virtual ads Another trend: abbreviated spots 18-28 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. An example of an abbreviated television spot 18-29 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Radio Popular choice for up-to-the-minute newscasts Also popular for targeting advertising messages to local audiences Recently, has become the fastest-growing media alternative Playing an increasingly important role as a national, an even the global, favorite 18-30 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Newspapers Continue to dominate local markets Retail and classified advertisement are key Advantages include flexibility and prestige Newspapers facilitate coordination between local and national advertising Newspapers offer powerful merchandising 18-31 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Circuit City Newspaper Insert A free standing insert 18-32 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Magazines Divided into two broad categories of consumer magazines and business magazines Top four in the U.S. TV Guide People Sports Illustrated Time 18-33 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Targeting different consumer interests through magazine advertising 18-34 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Direct Mail Over 4.5 million tons of direct-mail offers fill U.S. mailboxes annually Almost half is immediately discarded a junk But, Americans spend about $200 billion annually on direct-mail promotions Use of direct-mail accounts for 19% of total advertising expenditures 18-35 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Example of Direct Mail piece Typical Contents of Direct Mail Envelope 18-36 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Outdoor Advertising Includes billboards and painted bulletins or displays The oldest and simplest media business Is particularly effective along metropolitan streets and other high-traffic areas Faces public concern over aesthetics 18-37 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Interactive Media Contains characteristics of both print and broadcast media Enhances two-way communication and encourages audience participation Companies use interactive media to supplement other media 18-38 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Other Advertising Media Includes transit advertising placed both inside and outside the buses, subway trains installations, and commuter trains Also includes ads on the roof of taxicabs, long bus stop shelters in benches, telephone booths, and even parking meters 18-39 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Media Scheduling Timing and sequencing of advertisements Media scheduling is influenced by Sales patterns Repurchase cycles Competitors’ Activities 18-40 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Hypothetical Media Schedule for a New Car Introduction 18-41 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Sales Promotion Marketing activities other than personal selling, advertising, and publicity that stimulate consumer purchasing and dealer effectiveness Consumer-Oriented Promotions Trade-Oriented Promotions 18-42 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Seven Most Popular Consumer Promotion Techniques PERCENTAGE OF MARKETERS TECHNIQUE WHO USE IT Coupons in retail ads 90 In-store coupons 88 Refunds 85 Electronic in-store displays 83 Samples of established products 78 Premiums 75 Sweepstakes 70 18-43 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Consumer-Oriented Promotions Coupons and Refunds Coupons offer discounts on the purchase price. Nearly $5 billion redeemed annually Refunds offer cash back to consumers with proof of purchasing one or more products Reduce the effective price, without affecting the price-quality relationship 18-44 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Taco Bell Advertisement Uses Coupons in Free Standing Insert to Promote New Food Line 18-45 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Samples, Bonus Packs, and Premiums Sampling: The free distribution of a product in an attempt to obtain future sales. Bonus pack: A specially packaged item that gives the purchaser a larger quantity at the regular price. Premiums: Items given free or at a reduced cost with the purchases of other products 18-46 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Gattaca Sampling Designed to Build Awareness 18-47 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Contests and Sweepstakes Contests require entrants to solve problems or write essays Sweepstakes select winners by chance 18-48 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Specialty Advertising Sales promotion technique that places the advertiser's message on useful articles that are then distributed to target markets More than $8 billion worth of specialty advertising items are given out annually 18-49 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Trade-Oriented Promotions Trade allowances Point-of-purchase 18-50 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Public Relations Public relations: the firm’s communications and relationships with its various publics Nonmarketing public relations Marketing public relations 18-51 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Publicity: nonpersonal stimulation of demand for a good, service, place, idea, person, or organization by unpaid placement of significant news regarding the product in a print or broadcast medium 18-52 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Cross Promotion Cross promotion: a campaign in which marketing partners share the cost of a promotional campaign that meets their mutual needs 18-53 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Minute Maid and Pillsbury The Two Firms Join in a Cross Promotion 18-54 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Measuring Promotional Effectiveness Companies must measure how promotional programs contribute to increased sales and profits This is one of the most difficult undertakings in marketing 18-55 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Measuring Advertising Effectiveness Pretesting is the assessment of an advertisement for its effectiveness before it is actually used 18-56 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Posttesting is the assessment of an advertisement’s effectiveness after it has been used Starch Readership Report Unaided recall tests Inquiry tests Split runs 18-57 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Magazine Advertisements With Starch Scores 18-58 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Measuring Sales Promotion Effectiveness Since many sales promotions result in direct consumer responses, marketers can relatively easily track their effectiveness As with other methods, marketers must weigh the cost against the benefits 18-59 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Measuring Public Relations Effectiveness Typically involves determining Whether the message was heard by the target audience Whether it had the desired influence on public opinions 18-60 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Evaluating Interactive Media Measurements include Impressions Click-throughs 18-61 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising Ethics Puffery Deception Uniform Commercial Code 18-62 Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved.