Slide 19-1

ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS CHAPTER ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS Slide 19-2

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Explain the differences between product advertising and institutional advertising and the variations within each type. Describe the steps used to develop, execute, and evaluate an advertising program. Slide 19-3

AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Explain the advantages and disadvantages to alternative advertising media. Discuss the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions. Recognize public relations as an important form of communication. Slide 19-4

TYPES OF ADVERTISEMENTS Advertising Product Advertisements Pioneering (or Informational) Competitive (or Persuasive) Comparative Reminder Reinforcement Slide 19-6

TYPES OF ADVERTISEMENTS Institutional Advertisements Advocacy Pioneering Institutional Competitive Institutional Reminder Institutional Slide 19-17

1. What is the difference between pioneering and competitive ads? Concept Check 1. What is the difference between pioneering and competitive ads? A: 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. Slide 19-25

2. What is the purpose of an institutional advertisement? Concept Check 2. What is the purpose of an institutional advertisement? A: To build goodwill or an image for an organization. Slide 19-26

DEVELOPING THE ADVERTISING PROGRAM Identifying the Target Audience Specifying Advertising Objectives Setting the Advertising Budget Slide 19-27

FIGURE 19-1 Super Bowl, super dollars, super audience Slide 19-28

DEVELOPING THE ADVERTISING PROGRAM Designing the Advertisement Message Content Fear Appeals Sex Appeals Humorous Appeals Creating the Actual Message Slide 19-31

ETHICS AND SOCIAL RESPONSIBILITY ALERT Who Decides What Is “Appropriate” Advertising? Slide 19-35

FIGURE 19-A Top 15 advertising slogans of the century Slide 19-39

FIGURE 19-B Top 10 advertising icons of the century Slide 19-40

1. What are characteristics of good advertising objectives? Concept Check 1. What are characteristics of good advertising objectives? A: The same guidelines used for setting promotion objectives described in Chapter 18: They should (1) be designed for a well-defined target audience, (2) be measurable, and (3) cover a specified time period. Slide 19-41

2. What is a potential shortcoming of using a celebrity spokesperson? Concept Check 2. What is a potential shortcoming of using a celebrity spokesperson? A: The spokesperson’s image may change to be inconsistent with the image of the company or brand. Slide 19-42

DEVELOPING THE ADVERTISING PROGRAM Selecting the Right Media Advertising Media Choosing a Medium and a Vehicle within That Medium Maximizing Exposure Minimizing Costs Slide 19-43

FIGURE 19-2 U.S. advertising expenditures, by category (in millions of dollars) Slide 19-44

DEVELOPING THE ADVERTISING PROGRAM Selecting the Right Media Basic Terms Reach Rating Frequency Gross Rating Points (GRPs) Cost per Thousand (CPM) Slide 19-45

FIGURE 19-3 The language of the media buyer Slide 19-46

DEVELOPING THE ADVERTISING PROGRAM Different Media Alternatives Television Out-of-Home TV “Spot” Ads Wasted Coverage Digital Video Recorders (DVRs) Infomercials Slide 19-47

FIGURE 19-4 Advantages and disadvantages of major advertising media Slide 19-48

Ronco Infomercials What are the advantages and disadvantages of this medium? Click on Icon Slide 19-50

DEVELOPING THE ADVERTISING PROGRAM Different Media Alternatives Radio Magazines Newspapers Yellow Pages Slide 19-51

DEVELOPING THE ADVERTISING PROGRAM Different Media Alternatives Internet Rich Media Online Advertising Options Permission-Based Advertising Slide 19-59

Does Internet Advertising Really Work? MARKETING NEWSNET Does Internet Advertising Really Work? Slide 19-61

DEVELOPING THE ADVERTISING PROGRAM Different Media Alternatives Outdoor Billboards Transit Advertising Other Media Place-Based Media Selection Criteria Slide 19-62

DEVELOPING THE ADVERTISING PROGRAM Scheduling the Advertising Buyer Turnover Purchase Frequency Forgetting Rate Continuous (Steady) Schedule Flighting (Intermittent) Schedule Pulse (Burst) Schedule Slide 19-65

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? A: frequency Slide 19-66

2. Why has the Internet become a popular advertising medium? Concept Check 2. Why has the Internet become a popular advertising medium? A: The Internet offers a visual message, can use both audio and video, is interactive through rich media, and tends to reach younger consumers. Slide 19-67

Concept Check 3. What factors must be considered when choosing among alternative media? A: The media habits of the target audience, the product’s attributes, and the reach and cost, as measured by CPM. Slide 19-68

EXECUTING THE ADVERTISING PROGRAM Pretesting the Advertising Portfolio Tests Jury Tests Theater Tests Slide 19-69

EXECUTING THE ADVERTISING PROGRAM Carrying Out the Advertising Program Full-Service Agency Limited-Service Agencies In-House Agencies Slide 19-70

FIGURE 19-5 Alternative structures of advertising agencies used to carry out the advertising program Slide 19-71

EVALUATING THE ADVERTISING PROGRAM Posttesting the Advertising Aided Recall (Recognition-Readership) Unaided Recall Attitude Tests Inquiry Tests Sales Tests Making Needed Changes Slide 19-72

Concept Check 1. Explain the difference between pretesting and posttesting advertising copy. A: 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. Slide 19-74

2. What is the difference between aided and unaided recall posttests? Concept Check 2. What is the difference between aided and unaided recall posttests? A: 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. Slide 19-75

Consumer-Oriented Sales Promotion Coupons Deals Premiums Self-Liquidating Contests Sweepstakes Slide 19-76

FIGURE 19-6 Sales promotion alternatives Slide 19-77

Consumer-Oriented Sales Promotion Samples Loyalty Programs Point-of-Purchase Displays Rebates Product Placement Slide 19-80

Trade-Oriented Sales Promotion Allowances and Discounts Merchandise Allowance Case Allowance Finance Allowance Cooperative Advertising Training of Distributors’ Salesforces Slide 19-85

1. Which sales promotional tool is most common for new products? Concept Check 1. Which sales promotional tool is most common for new products? A: sales promotion Slide 19-86

2. What’s the difference between a coupon and a deal? Concept Check 2. What’s the difference between a coupon and a deal? A: A coupon provides a reduced price for an item based on redemption. A deal is a short-term price reduction. Slide 19-87

3. Which trade promotion is used on an ongoing basis? Concept Check 3. Which trade promotion is used on an ongoing basis? A: trade allowance Slide 19-88

PUBLIC RELATIONS Publicity Tools News Release News Conference Public Service Announcements (PSAs) Personal Appearance/Visibility Slide 19-89

INCREASING THE VALUE OF PROMOTION Building Long-Term Relationships with Promotion Self-Regulation Slide 19-92

Concept Check 1. What is a news release? A: An announcement regarding changes in the company or the product line. Slide 19-93

Concept Check 2. What is the difference between government regulation and self-regulation? A: Government regulation involves laws or other controls set by an agency of local, state, or federal government, whereas self-regulation involves ethical guidelines for business practices set by advertising agencies, trade associations, and marketing organizations. Slide 19-94

ADVERTISING ON THE INTERNET GOING ONLINE Slide 19-95

Going Online 1. Visit the Interactive Advertising Bureau website and review the “Standards and Guidelines” section to determine what type of online ad you would recommend. How many types of (a) rectangles and pop-ups, (b) banners and buttons, and (c) skyscrapers does the IAB specify? Slide 19-96

2. Describe the profile of the audience for each of the websites. Going Online 2. Describe the profile of the audience for each of the websites. Slide 19-97

Going Online 3. What does the IAB suggest you include in your online advertising privacy policy? Slide 19-98

A HISTORICAL LOOK AT ADVERTISING SUPPLEMENTAL LECTURE NOTE 19-1 Slide 19-99

SHOULD ADVERTISERS BELIEVE TV RATINGS? SUPPLEMENTAL LECTURE NOTE 19-2 Slide 19-100

ONLINE ADVERTISING TAKES OFF! SUPPLEMENTAL LECTURE NOTE 19-3 Slide 19-101

SUPPLEMENTAL LECTURE NOTE 19-4 A HISTORICAL LOOK AT THE OBJECTIVES OF SALES PROMOTIONS SUPPLEMENTAL LECTURE NOTE 19-4 Slide 19-102

ARE YOU A LOYAL CUSTOMER? SUPPLEMENTAL LECTURE NOTE 19-5 Slide 19-104

FALLON WORLDWIDE: IN THE CREATIVITY BUSINESS VIDEO CASE 19 Slide 19-105

VIDEO CASE 19 Fallon Worldwide 1. Fallon Worldwide stresses its creativity, as shown by comments from the Fallon people in the case. In what ways do the Citi and BMW campaigns reflect their creativity? Compare the sources of the ideas in the two campaigns. Slide 19-107

VIDEO CASE 19 Fallon Worldwide 2. In the Citi and BMW campaigns how were (a) the target markets and (b) each brand’s positioning changed from the situation prior to the campaign? Slide 19-108

VIDEO CASE 19 Fallon Worldwide 3. Compare the media used for the Citi and BMW campaigns. Why were these media chosen? Do you expect the use of these or other media to change in the future? Slide 19-109

VIDEO CASE 19 Fallon Worldwide 4. How might Fallon and its clients measure the success of (a) the Citi and (b) the BMW campaigns? Slide 19-110

VOLKSWAGEN: THE DRIVERS WANTED CAMPAIGN APPENDIX D CASE D-19 Slide 19-111

APPENDIX D CASE D-19 Volkswagen 1. What were the primary promotional objectives for Volkswagen at the beginning of the “Drivers Wanted” campaign? What are Volkswagen’s current promotional objectives? How do you expect the promotional objectives for the overall Volkswagen brand and for specific car models, such as the Jetta or Touareg, to change over time? Slide 19-112

APPENDIX D CASE D-19 Volkswagen 2. What do you feel are the most valid measures for assessing the success of the Volkswagen advertising campaign? Explain why you feel that these are the best means of determining effectiveness. Slide 19-113

APPENDIX D CASE D-19 Volkswagen 3. Volkswagen’s promotional program has heavily emphasized a pull promotional strategy versus a push promotional strategy. Why? Is this emphasis likely to change over time? Slide 19-114

Advertising Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor. Slide 19-115

Product Advertisements Product advertisements are advertisements that focus on selling a good or service and which take three forms: (1) pioneering (or informational), (2) competitive (or persuasive), and (3) reminder. Slide 19-116

Institutional Advertisements Institutional advertisements are advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service. Slide 19-117

Reach Reach is the number of different people or households exposed to an advertisement. Slide 19-118

Rating A rating is the percentage of households in a market that are tuned to a particular TV show or radio station. Slide 19-119

Frequency Frequency is the average number of times a person in the target audience is exposed to a message or an advertisement. Slide 19-120

Gross Rating Points Gross rating points (GRPs) is a reference number used by advertisers that is obtained by multiplying reach (expressed as a percentage of the total market) by frequency. Slide 19-121

Cost per Thousand Cost per thousand (CPM) is the cost of reaching 1,000 individuals or households with the advertising message in a given medium (M is the Roman numeral for 1,000). Slide 19-122

Infomercials Infomercials are program-length (30-minute) advertisements that take an educational approach to communication with potential customers. Slide 19-123

Pretests Pretests are tests conducted before the advertisements are placed in any medium to determine whether it communicates the intended message or to select among alternative versions of the advertisement. Slide 19-124

Full-Service Agency A full-service agency is an advertising agency that provides the most complete range of services, including market research, media selection, copy development, artwork, and production. Slide 19-125

Limited-Service Agencies Limited-service agencies are advertising agencies that specialize in one aspect of the advertising process such as providing creative services to develop the advertising copy or buying previously unpurchased media space. Slide 19-126

In-House Agencies In-house agencies consists of the company’s own advertising staff, which may provide full services or a limited range of services. Slide 19-127

Posttests Posttests are tests conducted after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose. Slide 19-128

Consumer-Oriented Sales Promotions Consumer-oriented sales promotions are sales tools used to support a company’s advertising and personal selling directed to ultimate consumers. Slide 19-129

Product Placement Product placement is a sales promotion tool that uses a brand-name product in a movie, television show, video, or a commercial for another product. Slide 19-130

Trade-Oriented Sales Promotions Trade-oriented sales promotions are a Sales tools used to support a company’s advertising and personal selling directed to wholesalers, distributors, or retailers. Also called trade promotions. Slide 19-131

Cooperative Advertising Cooperative advertising consists of advertising programs by which a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products. Slide 19-132

Publicity Tools Publicity tools consist of methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost. Examples include news releases, news conferences, and public service announcements. Slide 19-133