1. Advertising, Sales Promotion, and Public Relations
Chapter 13
Advertising, Sales Promotion, and Public Relations

2. Chapter Objectives
Understand advertising, the major types of advertising, and the criticisms of advertising
Describe the process of developing an advertising campaign and how marketers evaluate advertising
Explain sales promotion, and describe the different types of trade and consumer sales promotions activities
Explain the role of public relations (PR) and the steps in developing a PR campaign
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3. Real People, Real Choices: Decision Time at BzzAgent
How should the firm respond to the negative articles which questioned “disclosure” in word-of-mouth marketing campaigns?
Option 1: Take charge of the discussion
Option 2: Defend without being defensive
Option 3: Go quietly
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4. Advertising: The Image of Marketing
Marketers spent $285 billion on advertising in the United States in 2006
Marketers are increasingly diverting more money into alternative media
Product and brand placements are growing
Advertising:
Nonpersonal communication (paid for by an identified sponsor) that uses mass media to persuade or inform the targeted audience
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5. Types of Advertising
Product advertising: Focuses on a specific good or service
The ad at left is attempting to generate primary demand for beef
Primary demand advertising attempts to generate demand for an entire product category, rather than for a specific brand. Primary demand advertising is often used in the early stages of a product category’s life cycle, when there are a few, if any competitors. The strategy makes sense under these circumstances because consumers often need to be educated about the benefits or points of difference that the new product category offers. Additionally, when there is zero or minimal competition, any growth in the product category sales will benefit the one or two brands that currently make up the product category, thereby providing an adequate return on advertising investment. However, as more and more competitors enter a product category, the advertising strategy must necessarily change to a more brand-oriented approach.
Primary demand advertising is also a popular technique among trade associations or councils that promote the purchase of certain types of food products, including milk, beef, pork, raisins, almonds, etc. For example, the Dairy Council’s “Milk—It does a body good” campaign was launched in an attempt to get more people to drink milk, and was not specific to a particular brand (such as Borden’s), store (such as Kroger’s), or to a particular form (2% milk).
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6. Types of Advertising
Institutional advertising: Promotes the activities, personality, or point of view of an organization or company
Public service announcements (PSA)
Advocacy advertising
View American Red Cross PSAs
How do they differ from ads for services?
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7. Types of Advertising
Retail and local advertising: Encourages customers to shop at a specific store or use a local service
Ad copy discusses store hours, locations, sales, and featured products
Do-it-yourself advertising
“Generation C” phenomenon: consumer-generated ad content on the Web
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8. It’s Debatable Class Discussion Question
Marketers of items from Doritos to MasterCard are capitalizing upon the “Generation C” craze to locate fresh concepts for advertising. At MasterCard’s Priceless.com Web site, for example, consumers submit their own story and photos explaining how MasterCard helped make an experience or trip “Priceless.” Is consumer-generated advertising content here to stay? Should marketers compensate consumers for their efforts? Where do you stand?
Visit Priceless.com
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9. Who Creates Advertising?
Advertising campaign: A coordinated, comprehensive plan that carries out promotion objectives and results in a series of ads placed in media over a period of time
Limited-service agency
Full-service agency
Account management
Creative services
Research and marketing services
Media planning
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10. 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
One of the dangers in using humor as a creative strategy is that what’s considered funny by one group of people may be considered offensive by another. This is particularly true when attempting to use humor in international marketing efforts.
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11. Figure 13.1 Steps to Develop an Advertising Campaign
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12. 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
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13. Steps in Developing an Advertising Campaign
Step 2: Establish message and budget objectives
Inform? Persuade? Remind? What seems to be the objective of the ad shown at left?
It would be useful to discuss the percentage of sales method of budget allocation in more detail, specifically for the purpose of helping students to understand the shortcomings inherent in this budgeting technique.
The percentage of sales method of advertising budgeting is simple to compute and easily understood by corporate executives. A firm forecasts its sales, and determines the advertising budget by multiplying the sales forecast by some predetermined percentage (for example 2%). Therefore, if a firm forecasts that a particular brand will generate $5 million in sales, the advertising budget would be $100,000 ($5,000,000 * .02 = $ 100,000).
The problem with this approach is that it is utterly illogical—advertising investment should influence sales, not vice-versa! Also, the percentage of sales technique can accelerate a brand’s demise in volatile times. For example, consider that a new competitor enters the marketplace and cuts into the market share of the manufacturer’s brand. During the following budgeting period, the marketer of the original brand would naturally lower their sales forecast. And because the advertising budget is a function of the anticipated sales level, the advertising budget would decrease during a critical time when budgets should actually be increased to counter the new competitive threat. If the cycle is allowed to continue, the percentage of sales method manifests as a self-fulfilling prophecy of doom.
Other weaknesses associated with this technique include the fact that it doesn’t take into account the quality of advertising efforts, competitive efforts, changing consumer trends, etc.
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14. Steps in Developing an Advertising Campaign
Step 3: Create the ads
Creative strategy: The process that turns a concept into an advertisement
Advertising appeal: The central idea of the advertisement
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15. Types of Advertising Appeals
Reasons why—the unique selling proposition (USP)
Comparative advertising
Demonstration
Testimonial
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16. Types of Advertising Appeals
Slice of life
Lifestyle
Fear appeals
Sex appeals
Humorous appeals
Slogans, jingles, and music
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17. Steps in Developing an Advertising Campaign
Step 4: Pretest what the ads will say
Pretesting: Research method that seeks to minimize mistakes by getting consumer reactions to ad messages before they appear in the media
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18. 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
Aperture: The best place and time to reach the target market
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19. Where to Say It: Traditional Media
Television
Radio
Newspapers
Magazines
Directories
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20. Where to Say It: Internet Advertising
Banners
Buttons
Pop-up ads
Search engine and directory listings
Spamming
Permission marketing
The Yellow Pages (and similar directories) is(are) popular advertising choices for many small business people who operate in limited geographic markets. For more information about the Yellow Pages advertising industry as well as tips on how to create effective Yellow Pages ads, visit
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21. Where to Say It: Indirect Forms of Advertising
Directories
Branded entertainment
Out-of-home media
Advergaming
Place-based media
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22. Figure 13.3 Media Schedule for a Video Game
It might be good to differentiate between media categories such as television, radio, newspaper, the Internet etc., and media vehicles such as “NCIS,” “The Howard Stern Show,” the Wall Street Journal, and Google respectively. The word “vehicle” is used in a media context to denote the name of the specific television show, radio program, or newspaper/magazine title, Web site (etc.) that carries the marketer’s message.
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23. 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
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24. 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
Cost per thousand (CPM):
The cost to deliver a message to 1,000 people
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25. 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
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26. 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
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27. 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
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28. Sales Promotion Directed Toward the Trade
Allowances, discounts, and deals
Merchandising allowances
Case allowances
Co-op advertising
Increasing industry visibility
Trade shows
Promotional products
Point-of-purchase (POP)
Incentive programs
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29. Trade Shows
Trade shows are a great place to introduce new products, meet potential customers, and take orders
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30. Sales Promotion Directed Toward Consumers
Price-based consumer sales promotion
Coupons
Price deals, refunds, and rebates
Frequency (loyalty/continuity) programs
Special/bonus packs
Promo magazine offers examples of current marketing communications campaigns featuring trade or consumer-oriented sales promotions techniques (in addition to other forms of marketing communications). Instructors may wish to visit their online magazine at for details.
They also offer a free “Lite” version of their current industry report via download ( This report analyzes trends in promotional spending patterns as well as campaign evaluation and metrics usage.
SmartSource
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31. Sales Promotion Directed Toward Consumers
Attention-getting consumer promotions
Contests and sweepstakes
Contests are based on skill
Sweepstakes are based on chance
Premiums
Sampling
The premiere technique for generating new product trial
Promotional techniques geared toward consumers can generally be classified in terms of their primary objective, which may be getting consumers to try the product, holding/rewarding existing product users, or supporting brand image efforts. Sampling is widely acknowledged as the premiere technique for generating consumer trial; instant coupons and scanner-based coupons can also be effective at accomplishing this task. Loyalty programs, in, on, or near pack coupons, bonus packs, price-offs, rebates and many other techniques are typically offered with the intention of either rewarding current customers, or loading consumers (e.g., encouraging stockpiling) so that they are immune to the promotional efforts of the competition. Sweepstakes and contests can help to support or maintain a brand image, in addition to their potential to encourage additional sales.
FreeSamples.com
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32. Public Relations
Public relations: Communication function that seeks to build good relationships 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”
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33. Public Relations
Proactive PR activities stem from a firm’s marketing objectives
Publicity Unpaid communication about an organization that gets media exposure
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
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34. 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
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35. 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
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36. Public Relations Activities
Press releases (various forms)
Internal PR
Investor relations
Lobbying
Speech writing
Corporate identity
Media relations
Sponsorships
Special events
Advice and counsel
Many public relations activities occur in conjunction with other marketing communications activities. For example, publicists for the firm may issue press releases or hold a news conference to announce the winner of a major contest, the signing of a famous celebrity endorser as an advertising spokesperson, or the participation by the firm in a charitable fundraiser or sponsored activity, etc.
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37. Eye-Catching Publicity
Tylenol hired runners to run on treadmills above Times Square to promote their sponsorship of the NY City Marathon The Weinermobile always gets attention!
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38. Real People, Real Choices: Decision Made at BzzAgent
Joe chose option 1
Implementation: BzzAgent took charge of the discussion, refined their disclosure policy, enforced compliance, researched the relationship between disclosure and campaign performance, and issued press releases about revised policy
Measuring success: The disclosure debate did not interfere with the company’s financing or client relationships
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39. Keeping It Real: Fast-Forward to Next Class Decision Time at Woodtronics
Meet Jeffrey Brechman, a principal of the Woodtronics firm
Woodtronics designs and builds trading room furniture, command centers, and network control centers
The decision to be made: Should Jeffrey sell the new or original product to the Jersey City client?
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40. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2009 Pearson Education, Inc.  
Publishing as Prentice Hall
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall