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Ch. 13 Advertising, Sales Promotion, and PR Advertising: – Nonpersonal communication (paid for by an identified sponsor) that uses mass media to persuade or inform the targeted audience Marketers are increasingly diverting more money into alternative media – Product and brand placements are growing – “New media” – Buzz & Guerilla 13-1 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Two key issues in evaluating advertising*: – Message strategy: what the ad says and how it says it • Gain attention/break through the clutter – Rational v. emotional appeals – Other “appeals* • Reinforce the brand name/brand message – Media strategy: where the ad is shown/when/how often • Reach the intended audience – Minimize wasted coverage • CPM • Etc. 13-2 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Types of Advertising Product advertising (services as well)– – Message focuses on a specific good or service – Purposes: • To educate people about a new product and what it does • To emphasize a brand’s features and try to convince the target market to choose it over other options • To ensure that people won’t forget about a wellestablished product 13-3 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Types of Advertising: Product “Primary demand” advertising: stimulate demand for the product class as a whole (versus a specific brand within a product class) 13-4 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Types of Advertising Institutional advertising: Promotes the activities, personality, or point of view of an organization or company – Corporate advertising (PR)* • • • • Corporate philosophy of doing business Comprehensive product overview Advocacy advertising Great place to work/culture – Non-profits • Public service announcements (PSA) for non-profits – Ad Council logo for government-funded – Trade Associations (see also primary demand) 13-5 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Types of Advertising Retail and local advertising: Encourages customers to shop at a specific store or use a local service – Encourages customers to shop at a specific store or use a local service – Ad copy discusses store hours, locations, sales, and featured products – (also a “good/service”) * – Often relies on cooperative advertising B2B* – Trade Advertising 13-6 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Do-it-yourself advertising – “Generation C” (??) Web 2.0 phenomenon: • consumer-generated ad content on the Web 13-7 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Advertising Industry* – Clients • Ad managers – Media • Media sales reps – Ad Agencies • Account management • Creative services – art directors – copywriters – photographers • Research and marketing services • Media planning 13-8 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Ethical Issues in Advertising Ethical criticisms of advertising: – Advertising is manipulative – Advertising is deceptive and untruthful – Advertising is offensive and in bad taste – Advertising creates and perpetuates stereotypes – Advertising causes people to buy things that they don’t really need 13-9 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Figure 13.1 - Steps to Develop an Advertising Campaign 13-10 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Steps in Developing an Advertising Campaign Step 1: Understand the target audience – Getting inside the consumer’s head can help marketers understand how the product fits into users lives – Review Ch. 7 “Customer Profile” – Examples:* Nike, etc. Step 2: Establish message and budget objectives – Inform? Persuade? Remind? 13-11 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Steps in Developing an Advertising Campaign Step 3: Create the ads The process that turns a concept into an advertisement— – The “big idea” – USP Creative strategy: What the ad says and how it says it – Advertising appeal: The central idea of the advertisement Two critical concerns: – Does it grab attention? – Does it reinforce the brand name/message? 13-12 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Types of Advertising Appeals Reasons why—the unique selling proposition (USP) Comparative advertising Demonstration Expert/Celebrity spokespeople Customer Testimonial Slice of life Lifestyle Fear appeals Sex appeals Humorous appeals Slogans, jingles, and music 13-13 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Steps in Developing an Advertising Campaign Step 4: Pretest what the ads will say Research that seeks to minimize mistakes by getting consumer reactions to ad messages before they appear in the media 13-14 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Steps in Developing an Advertising Campaign Step 5: Choose the media type(s) and media schedule – Media planning: The process of developing media objectives, strategies, and tactics Deciding where/when/how often to place the ads so the target market will see them Which media and vehicles will be most effective in attaining campaign objectives Traditional media The Internet 13-15 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall See Table 13-1, p. 411-12 Where to Say It: Traditional Media 13-16 Television Radio Newspapers Magazines Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Where to Say It: Internet Advertising Banners & Buttons Pop-up ads Search engine and directory listings E-mail – Spamming – Permission marketing Mobile marketing (Ch. 14) 13-17 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Where to Say It: Indirect Forms of Advertising Directories Branded entertainment Out-of-home media 13-18 Advergaming Place-based media Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors Affecting Media Scheduling Match between the target market profile and the people reached by different media vehicles – Venn diagrams – Minimize wasted coverage Advertising patterns of competitors Capability of medium to convey desired information Compatibility of product with editorial content 13-19 13-19 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Media Scheduling Cost per Thousand (CPM) – – compares the relative cost efficiency of different media vehicles – reflects the cost to deliver a message to 1000 people – ($ cost of ad/# of people reached)*1000 13-20 13-20 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Media Scheduling: When to Say It Media schedule: – Specifies exact media to use and when to use it Advertising exposure: – Defines degree to which the target market will see an ad message in specific vehicles Impressions: – Measures number of people exposed to a message in one or more vehicles 13-21 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Media Scheduling: When to Say It 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 (GRPs) – Reach multiplied by frequency 13-22 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Media Scheduling: How Often to Say It Typical advertising patterns: – Continuous schedule: Steady stream of advertising throughout year – Pulsing schedule: Varies the amount of advertising based on when the product is likely to be demanded – Flighting schedule: Advertising in short, intense bursts, alternated with periods in which no advertising is done 13-23 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Figure 13.3 Media Schedule for a Video Game 13-24 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Steps in Developing an Advertising Campaign Step 6: Evaluate the advertising – Posttesting: Research on consumers’ responses to advertising they have seen or heard • Unaided recall • Aided recall • Attitudinal measures NutriSystem Video 13-25 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Engagement Testing Sales Promotion Sales promotions: Programs designed to build interest in or encourage purchase of a product during a specified period of time – Deliver short-term sales results – Can target end consumers, channel partners, and/or employees 13-26 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall “Trade” Promotion - Directed Toward Channel Members Allowances, discounts, and deals – Merchandising allowances – Case allowances – Slotting fees (p. 481)* Co-op advertising Increasing industry visibility – Trade shows: • introduce new products, meet potential customers, and take orders – Promotional products (“specialty items”*) – Point-of-purchase (POP) materials – Incentive programs (contests, etc.) • push money: SPIFs* 13-27 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Consumer Promotions - Directed Toward End Users Price-based consumer sales promotion – – – – – Coupons Price deals Refunds and rebates Frequency (loyalty/continuity) programs Special/bonus packs Attention-getting consumer promotions – Contests and sweepstakes • Contests are based on skill • Sweepstakes are based on chance – Premiums: free gift with purchase – Sampling • The premiere technique for generating new product trial 13-28 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Objectives* (beyond short-term boost in sales) Get consumers to try the product Hold/reward existing product users – Incl. loading consumers (e.g., encouraging stockpiling) so that they are immune to the promotional efforts of the competition Supporting brand image efforts 13-29 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Concerns in Using Sales Promotions* Dilutes brand equity Creates sales promotion “traps” Temporary effect is not worth the cost to run and the low margin volume obtained – (margins and elasticities) Borrows from future sales (graph) Cannibalizes full-margin sales to loyal customers 13-30 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Other Issues to Consider* What is being re-inforced? – Does the offer stimulate loyalty to the brand or loyalty to the deal? – Does the offer reinforce the brand? – Who does the offer reach? Pros/cons 13-31 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Public Relations Public relations: Communication function that seeks to build good relationships (“goodwill”*) with an organization’s publics – Publics include consumers, stockholders, legislators, and other firm stakeholders. – Basic rule of good PR, “Do something good, then talk about it” 13-32 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Public Relations Proactive PR activities stem from a firm’s marketing objectives – (see next slides) PR is critical when a firm’s image is at risk due to negative publicity – PR staff is responsible for preparing a crisis management plan 13-33 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Objectives of Public Relations Typical objectives include: – 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 13-34 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Planning a PR Campaign Multistep process includes: – Situation analysis – A statement of objectives – Specification of publics, communicated messages, and specific program elements – Timetable and budget – Discussion of program evaluation plan 13-35 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Public Relations Activities Press releases (various forms): To generate media exposure – Publicity: Stories in the news about a company/its products (Unpaid communication) Internal PR Investor and analyst relations Lobbying Speech writing 13-36 Corporate identity: Corporate branding, institutional advertising Media relations Sponsorships and CSR* Special events Advice and counsel Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Eye-Catching “Stunts” Tylenol hired runners to run on treadmills above Times Square to promote their sponsorship of the NY City Marathon A fine line between buzz/guerilla marketing and PR 13-37 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall