Advertising, Sales Promotion, and Public Relations Chapter 16

Objectives Understand the roles of advertising, sales promotion, and public relations in the promotion mix. Know the major decisions involved in developing an advertising program.

Objectives Learn how sales promotion campaigns are developed and implemented. Learn how companies use public relations to communicate with their publics.

AFLAC A few years ago, only 13% of U.S. recognized AFLAC Old ads: “warm and fuzzy” similar to other insurance ads Goal: break through advertising clutter 1999: AFLAC developed the “duck” campaign to enhance brand awareness Incredibly successful: name recognition is now 91%; sales growth of 30% each year campaign has run

Definition Advertising Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Advertising Signage in ancient times offers evidence of early advertising. Modern ad spending tops $231 billion in U.S. annually, $500 billion worldwide.

Advertising Business firms, not-for-profit firms, social agencies, and professionals such as doctors and lawyers all advertise.

Major Advertising Decisions Figure 16-1: Major Advertising Decisions

Advertising Key Decisions: Setting objectives Setting the budget Advertising objectives can be classified by primary purpose: Inform Introducing new products Persuade Becomes more important as competition increases Comparative ads Remind Most important for mature products Key Decisions: Setting objectives Setting the budget Developing the advertising strategy Evaluating advertising campaigns

Comparative advertising can be extremely persuasive

Do these ads attempt to inform, persuade, or remind? How effective are these ads?

Advertising Key Decisions: Setting objectives Setting the budget Methods of budget setting were listed in chapter 15 Several factors should be considered when setting the ad budget: Stage in the PLC Market share Level of competition Ad clutter Degree of brand differentiation Key Decisions: Setting objectives Setting the budget Developing the advertising strategy Evaluating advertising campaigns

Advertising Key Decisions: Setting objectives Setting the budget Creative challenges Media fragmentation Soaring media costs Advertising clutter Creating ad messages Message strategy Creative concept Advertising appeal Message execution Many execution styles Tone, format, illustration, headline, copy Key Decisions: Setting objectives Setting the budget Developing the advertising strategy Evaluating advertising campaigns

Creative Execution Styles Advertising Creative Execution Styles Musical Personality Symbol Technical Expertise Scientific Evidence Slice of Life Lifestyle Fantasy Mood or Image Testimonial Evidence or Endorsement

Discussion Question When does advertising pass the boundaries of good taste? Can you think of some examples? Should marketers be concerned about the opinions of anyone other than the target market? Why or why not?

Celebrity endorsers may be movie stars, politicians, sports stars, or other public personalities Testimonials feature ordinary people who talk about their product experiences

Advertising Key Decisions: Setting objectives Setting the budget Select advertising media Decide on level of reach, frequency and impact Choose among the major media types by considering: Consumer media habits, nature of the product, types of messages, and costs Select specific media vehicles Decide on media timing Key Decisions: Setting objectives Setting the budget Developing the advertising strategy Evaluating advertising campaigns

TIVO is one example of how technology presents challenges to media planners. With TIVO, consumers can easily zap ads. TIVO

Media planners for Absolut vodka work with creatives to design ads targeted to specific audiences. The ad at left appears in theater playbills.

Advertising Internet Major Media Types Newspapers Radio Television Direct Mail Radio Magazines Outdoor Internet

Marketers are increasingly using alternate forms of media to reach their target markets. What other examples can you think of besides those shown below?

Discussion Question Reddi Wip is one product whose media strategy includes heavy ad expenditures prior to Thanksgiving. What types of products would benefit from a media flighting strategy?

Advertising Key Decisions: Setting objectives Setting the budget Measuring communications effects Copy testing Consumer recall Product awareness Product knowledge Product preference Measuring sales effect Past vs. current sales comparison Experimentation Key Decisions: Setting objectives Setting the budget Developing the advertising strategy Evaluating advertising campaigns

Advertising Organizing the Advertising Function Small vs. large companies Nature of advertising agencies Advantages of advertising agencies Departments Compensation Changes in agency services

Advertising Advertising to International Markets Advantages of standardizing worldwide advertising: Lower advertising costs Greater global ad coordination Consistent global image

Advertising Advertising to International Markets Drawbacks to standardizing worldwide advertising: Ignores differences in demographics and economic conditions Ignores differences in culture

U.S., Thai, & German websites reflect the worldwide Jeep brand image of ruggedness and reliability

Advertising Advertising to International Markets Most marketers think globally but act locally

Definition Sales Promotion Sales Promotions are short-term incentives to encourage the purchase or sale of a product or service.

Sales Promotion Sales Promotions Can be targeted at final buyers, retailers and wholesalers, business customers, and members of the sales force. The use of sales promotions has been growing rapidly.

Sales Promotion Objectives – Consumer Promotions: Increase short-term sales Generate product trial

Consumer Promotion Tools Sales Promotion Consumer Promotion Tools Samples Cash Refunds (Rebates) Price packs (cents-off deals) Advertising Specialties Premiums Patronage Rewards Point-of-Purchase Communications Contests, Games, and Sweepstakes

Checkout direct offers marketers an excellent opportunity to reach users of the competition Coupons are only issued to those who purchase specific brands

Sales Promotion Objectives – Trade Promotions: Obtaining distribution and shelf space Encouraging retailers to advertise the brand

Sales Promotion Objectives – Sales Force Promotions: Signing up new accounts Stimulating sales of specific items

Sales Promotion Trade Promotion Tools Discounts (also called price-offs, off-list, and off-invoice discounts) Allowances Advertising allowances Display allowances Free goods Push money Specialty advertising items

Sales Promotion Business Promotion Tools Includes many of the same tools used in trade and consumer promotions Two additional tools: Conventions & trade shows Sales contests

Sales Promotion Key Decisions When Developing the Sales Promotion Program: Size of the incentive Conditions for participation Promotion and distribution of the actual sales promotion program Length of the promotional program Evaluation Surveys and experiments can be used

Definition Public Relations: Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.

Public Relations Functions Press Relations Product Publicity Public Affairs Lobbying Investor Relations Development

Public Relations Role & Impact of Public Relations Advantages: Strong impact on public awareness at a lower cost than advertising Greater credibility than advertising Publicity is often underused Good public relations can be a powerful brand-building tool

Public Relations Tools News Speeches Corporate Identity Materials Mobile Marketing Special Events Written Materials Audiovisual Materials Public Service Activities

Special Events: Sponsorships In-Depth Public Relations Tie-in: Sponsorships relate to special events Types of Sponsorships: Sports sponsorships Entertainment, tours, and attractions Festivals, fairs, and annual events Cause-related marketing Arts Sponsorship Trends: 2001: $9.5 billion spent Reasons for Growth: Avoids clutter Cost efficient / effective Gains constituencies’ approval Enhances brand equity Allows for lifestyle or geographic targeting Sources: “Injecting life into sponsorship deals” Marketing; London; Apr 18, 2002; Mary Cowlett; Start Page: 27 “Getting in on the Action,” PROMO’s 9th Annual SourceBook, 2002, 25. Advertising, Promotion and Supplemental Aspects of Integrated Marketing Communications. Terence A. Shimp, 6th edition, Thomson South-western, 2003, pp. 575-585.

Special Events: Sponsorships In-Depth Selecting Sponsorship Events -- Consider: Is it consistent with brand image or will it benefit the brand image? Does it offer a strong probability of reaching the target audience? Does the event complement existing sponsorships and other IMC efforts? Selecting Sponsorship Events -- Consider: Is the event cluttered by many other sponsors? Is the event economically viable? Has the competition previously sponsored the event? Is there a risk of confusing the target audience as to the sponsor’s identity?

Discussion Question If you were responsible for marketing an anti-aging cream to baby boomers, what events or causes would you choose to sponsor (local or national) and why?