1. Essentials of Marketing 13e
Chapter 15
Advertising, Publicity, and Sales Promotion
CHAPTER FIFTEEN
Lecture Notes for
Essentials of Marketing 13e
McGraw-Hill/Irwin
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2012 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

2. At the end of this presentation, you should be able to:
This slide refers to material on pp. 376.
Understand why a marketing manager sets specific objectives to guide the advertising effort.
Understand when the various kinds of advertising are needed.
Understand how to choose the “best” medium.
Understand the main ways that advertising on the Internet differs from advertising in other media.
Understand how to plan the "best" message—that is, the copy thrust.
At the end of this presentation, you should be able to:
Understand why a marketing manager sets specific objectives to guide the advertising effort.
Understand when the various kinds of advertising are needed.
Understand how to choose the “best” medium.
Understand the main ways that advertising on the Internet differs from advertising in other media.
Understand how to plan the “best” message—that is, the copy thrust.
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3. At the end of this presentation, you should be able to:
This slide refers to material on pp. 376.
Understand what advertising agencies do.
Understand how to advertise legally.
Understand the importance of and different types of publicity.
Understand the importance and nature of sales promotion.
Know the advantages and limitations of different types of sales promotion.
Understand important new terms.
At the end of this presentation, you should able to:
Understand what advertising agencies do.
Understand how to advertise legally.
Understand the importance of and different types of publicity.
Understand the importance and nature of sales promotion.
Know the advantages and limitations of different types of sales promotion.
Understand important new terms.
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4. Marketing Strategy Planning Process
This slide refers to material on pp. 377.
This is the last chapter of three chapters that discuss issues important for Promotion.
The Promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price.
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5. Strategy Planning, Advertising, Publicity, and Sales Promotion (Exhibit 15-1)
This slide refers to material on pp. 377.
CH 13: Promotion Intro. To Integrated Marketing Communications
Summary Overview
Mass selling—advertising and sales promotion—play a central role in the promotion blend for many firms, especially in consumer markets. Marketing managers must make specific advertising strategy decisions to guide the work done by the firm and/or its advertising agency. Similarly, sales promotion objectives must be clear. This chapter starts by considering advertising spending and advertising strategy decisions, including how they are affected by laws, and then the focus turns to the challenges of managing different types of sales promotion.
Key Issues
The marketing manager should be very specific about the target audience the company is trying to reach.
Advertising campaigns can appeal to very specific groups of people through careful selection of words, images, and symbols.
Marketers must provide advertisers with accurate target market information.
This chapter details advertising and sales promotion in four main discussion areas:
Advertising spending;
Advertising strategy decisions;
Advertising and the law;
Publicity and communication;
Sales promotion decisions.
CH 14: Personal Selling and Customer Service
CH 15: Advertising, Publicity & Sales Promotion
Advertising spending
Advertising strategy decisions
Advertising & the law
Publicity & communic-
ation
Sales promotion decisions
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6. The Decision to Position a New Product
This slide refers to material on pp. 375.
The marketing manager should set the overall direction of the advertising campaign. The ads we see are the outcome of this direction. This commercial was developed as part of a campaign to position the new midsize HUMMER H3 as an alternative to the competition in the midsize segment as well as versus the H1 and H2. The ad communicates the relative size of the vehicle and labels it the "latest big thing from HUMMER."
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7. International Dimensions Are Important
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Summary Overview
The basic strategy planning decisions for advertising and sales promotion are the same throughout the world, but the look and feel of advertising and sales promotion vary considerably from country to country.
Key Issues
Literacy rates, the availability of commercial television, language barriers, availability of Internet access, and cultural, social, or behavioral influences may all affect the specific advertising strategy decisions that marketers make.
One important international dimension is that some countries, such as Austria, do not allow comparative advertising—ads in which a firm names its competition.
This ad, showcases the Nescafe Clasico, a leading coffee brand targeted at the Latinos in the U.S. It contains “cafecito”, which is familiar to Latino consumers.
Discussion Question: What impact do the improvements in satellite television and Internet access have on advertising in the international arena?
Sales promotion may also differ across countries. There may be:
no room for end-of-aisle displays in stores;
difficulty in distributing free samples or coupons;
prohibitions against sweepstakes.
Countries outside the U. S. may present a much different promotional environment.
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8. Advertising Spending as Percent of Sales for Illustrative Product Categories (Exhibit 15-2a)
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Summary Overview
The total spending on advertising is big, and growing internationally. As a country’s economy develops, advertising expenditures increase. By 2010, United States advertising spending was more than $200 billion.
Key Issues
Total spending on advertising seems large, but advertising only accounts for a small percentage of what people pay for goods and services. Advertising in the United States accounts for about 35 percent of worldwide ad spending.
However, as highlighted in the exhibit, the percentage spent on advertising by producers varies across product categories.
Most advertisers aren’t really spending that much.
Discussion Question: What are some of the reasons for the disparity in the amount spent on advertising by different types of producers?
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9. Retail Ad Spending (Exhibit 15-2b)
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Summary Overview
This exhibit shows advertising expenditures as a percentage of sales for different types of retailers.
Key Issues
Some types of retailers spend more on advertising as a percentage of sales than do other types.
Discussion Question: What are some of the reasons for the disparity in the amount spent on advertising by different types of retailers?
Total advertising expenditures are large, but the industry is not very big in terms of the number of people employed in advertising.
In the United States, only about 462,000 people work directly in advertising.
Only about half of these people work for advertising agencies.
Discussion Question: Many students study marketing with an eye toward working in an advertising agency. What implications does the size of the industry have for these aspiring advertising professionals?
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10. Setting Ad Objectives Is a Strategy Decision
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Position Brands
Introduce New Products
Obtain Outlets
Summary Overview
Advertising objectives should be specific. They should be related to the overall marketing strategy and to the promotion jobs assigned to advertising. The marketing manager sets the overall direction for the advertising campaign, and it may incorporate one or more of the following types of objectives:
Key Issues
Position brands: Advertising can communicate product benefits to position the brand relative to others in the mind of the consumer.
Introduce new products: Advertising can make target markets aware of new products and their benefits. Marketing managers can specify the percentage of the market that should be aware of the product after a certain period of time.
Obtain outlets: Advertising tells customers where they can buy the product and may help encourage merchants to carry it.
Provide ongoing contact: Advertising can be a “virtual salesperson,” reminding customers about the product and keeping in touch with them.
Prepare the way for salespeople: Advertising may serve to “prime the pump” in advance of a sales call. Salespeople can then reference the ad in their presentations.
Get immediate action: Advertising can be a good way to announce time-dated deals, discounts, or other availability requiring immediate customer action.
Maintain relationships: Advertising can help maintain relationships with satisfied customers and confirm their original purchase decision.
Build trusting relationships: Advertising can help build more trusting relationship with customers.
Discussion Question: Can you provide examples of ads that fall under each type of objective?
Ongoing Contact
Advertising
Objectives
Should be
Specific
Support Sales Force
Get Immediate Action
Maintain Relationships
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11. What’s the Advertising Objective?
This slide refers to material on pp. 380.
A commercial is most effective when its objective is specific. After viewing the following ad from Perdue, discuss whether you think the primary strategic objective is to: 1. Obtain outlets, 2. Provide ongoing contact, 3. Prepare the way for salespeople, 4. Get immediate action, or 5. Maintain relationships. Do you think any of the above could be secondary objectives?
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The videos will only play in Slide Show View. Macros must be enabled in order to play the videos from within PowerPoint.
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12. Objectives Guide Implementation (Exhibit 15-3)
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Awareness
Interest
Evaluation and Trial
Teaser campaigns
Pioneering ads
Jingles/slogans
Viral advertising
Announcements
Informative or descriptive ads
Image/celebrity ads
Search ads
ads
Demonstration
Competitive ads
Persuasive copy
Comparative ads
Testimonials
Summary Overview
The more specific the advertising objective is, the more guidance it provides in getting specific results in the marketplace. In other words, if you want half the market, say so—and be specific about it. Often marketing managers want to move customers along toward a purchase decision. Advertising objectives may be based on where target customers are in the adoption process.
Key Issues
Objectives also guide implementation of an advertising plan. As shown in this exhibit, the type of advertising that works for one stage of the adoption process may not work as well for other stages.
 To generate awareness, pioneering ads and advertising jingles or slogans are among the popular methods used.
Discussion Question: Can you remember any ad slogans or jingles that left a lasting impression on you? What effect did they have on you?
 Creating interest may result from the use of image-based ads, celebrity endorsements, or product demonstrations, among other methods.
 Competitive ads featuring persuasive content, or comparative ads, are among the methods used to stimulate evaluation and trial among consumers.
 In order to motivate consumers to make a purchase decision, direct-response ads, point-of-purchase ads, and advertising containing price deals are all helpful.
 Finally, after a consumer makes a decision to purchase a product or service, reminder ads and informative ads help consumers to confirm and justify their purchases and reduce post-purchase dissonance.
Confirmation
Decision
Direct-action retail ads
Point-of-purchase ads
Price deal offers
Reminder ads
Informative “why” ads
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13. Coordinating advertising across the channel to achieve objectives
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Advertising Allowances
Key
Issues
Summary Overview
Producers sometimes want advertising efforts to be handled further down the channel. Retailers may depend upon producers to provide support for their local advertising efforts.
Key Issues
Advertising allowances: price reductions to firms in the channel that encourage channel members to promote the product.
 Cooperative advertising: involves producers sharing in ad costs with wholesalers or retailers.
This practice helps the producer to get more promotion for the advertising dollar, and it helps the intermediaries to compete locally.
 Ethical concerns may arise in these cooperative relationships. Retailers may abuse advertising allowances or cooperative advertising.
Discussion Question: If a retailer uses cooperative ads to lure consumers into the store only to sell them another brand of product, is this practice unethical?
Ethical Concerns
Cooperative Advertising
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14. Objectives Determine the Kinds of Advertising (Exhibit 15-4)
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Types of
Advertising
Product Advertising
Summary Overview
Advertising objectives largely determine which of two basic types of advertising to use -- product or institutional.
Key Issues
Institutional advertising: tries to promote the organization’s image, reputation, or ideas.
It supports the overall objective of developing goodwill or improving an organization’s relations with various important groups.
 Product advertising tries to sell a product and can be targeted to channel members or final consumers.
Product ads are designed to get consumers to know, like, and remember an organization’s products or services.
Key types of product advertising include: pioneering, competitive, and reminder advertising. Each of these will be discussed in turn.
 Pioneering advertising: tries to develop primary demand for a product category rather than demand for a specific product.
It is appropriate for the early stages in a product’s life cycle when consumers still need to understand what the product category is all about.
Discussion Question: When cellular phones were first introduced to the general public, many people had trouble understanding why they would need to have a portable or mobile phone. Are there other products currently in the market that are so new that consumers require pioneering ads to understand why they need the products?
 Competitive advertising tries to develop selective demand for a specific brand. There are three types of competitive advertising:
The direct type aims for immediate buying action.
The indirect type points out product advantages to affect future buying decisions.
Finally, comparative advertising makes specific brand comparisons using actual product names.
 Reminder advertising keeps the company’s name before the public.
Institutional Advertising
Pioneering Advertising
Competitive Advertising
Reminder Advertising
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15. Competitive Advertising Emphasizes Selective Demand
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Summary Overview
Competitive advertising tries to develop selective demand for a specific product or brand. Competitive ads become more important as competition increases and as a product moves into maturity.
Key Issues
Direct type: competitive advertising that aims for immediate buying action.
Indirect type: points out product advantages to consider in future buying decisions.
Discussion Question: Is this ad a direct competitive ad or an indirect competitive ad? Why?
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16. A Competitive Ad That’s Comparative
This slide relates to material on pp. 382.
Summary Overview
Comparative advertising goes head-to-head with competitive products by making specific brand comparisons. Even though comparative ads are common in the U.S., they are still banned in some other countries.
Key Issues
The above ad of Suave Professionals Humectant conditioner, states that the Suave Professionals Humectant conditioner replenishes moisture just as well as Nexxus Humectress.
The product is compared on the basis of price.
Discussion Question: What ads for other products draw direct comparisons with other competing products?
A key thing to remember in planning comparative ads is that the claims made about products should be supported by research.
There may also be drawbacks to comparative ads if they are confusing to consumers, or if they focus on small, insignificant differences between products.
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17. Reminder Advertising Reinforces a Favorable Relationship
This slide relates to material on pp. 382.
Summary Overview
Reminder advertising tries to keep the product’s name before the public. It is useful for supporting successful products well into the market maturity and sales decline stages of the product life cycle.
Key Issues
M&M’s is a well-known brand with a 69-year history.
M&M’s are candies produced by Mars, Incorporated.
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18. Institutional Advertising – Remember Our Name
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Connects Divisions of a Company
Summary Overview
Aside from all the types of product advertising described so far, the other major kind of advertising is institutional advertising. It usually focuses on the name and prestige of an organization or industry. It may seek to inform, persuade, or remind.
Key Issues
Companies sometimes use institutional advertising to:
connect the various divisions of a large company in the consumer’s mind;
present the company in a favorable light; or
advocate causes and ideas.
Discussion Question: Companies that market business-to-business products run institutional ads on many “news magazine” television programs in the United States. Why would they expose final consumers to these ads if they do not market products or services that are targeted at final consumers?
Sheds Favorable Light
Advocates Causes and Ideas
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19. Interactive Exercise: Types of Advertising
This slide refers to material on pp
The purpose of this drop and drag exercise is to illustrate examples of how the different kinds of advertising might be executed. Six print ads are offered for examination; students are asked to identify whether each ad illustrates an example of pioneering, competitive, reminder, or institutional advertising. Some kinds of advertising will be used more than once.
For complete information and suggestions on using this Interactive Exercise, please refer to the “Notes on the Interactive Exercise” section for this chapter in the Multimedia Lecture Support Package to Accompany Basic Marketing. That same information is available as a Word document in the assets folder for the PowerPoint file.
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20. Checking Your Knowledge
This slide relates to material on pp. 381.
A television ad for Target encourages consumers to go to their nearest Target store for a big end-of-season sale coming up in two weeks. This type of advertising is:
pioneering.
reminder.
indirect competitive.
direct competitive.
institutional.
ANSWER: D
Checking your knowledge (answer explanation):
Competitive advertising tries to develop selective demand for a specific brand. By encouraging consumers to go to their nearest Target store for a large sale in two weeks, the ad is stressing an immediate buying action (direct type of competitive advertising). One could argue that the ad described in the question is an institutional ad because it is for the whole Target chain. However, because it attempts to develop selective demand for Target and encourages an immediate (within two weeks) purchase, the best answer selection is ‘D’.
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21. Checking Your Knowledge
This slide relates to material on pp. 382.
Community Bank sends an advertisement via direct mail to several thousand customers, quoting special low financing rates on new vehicles for a limited time only. The ad names some other financial institutions and shows their respective loan rates. Community Bank promises to beat any rate offered for a comparable term. This type of advertising is:
pioneering.
indirect competitive.
comparative.
reminder.
institutional.
ANSWER: C
Checking your knowledge (answer explanation):
The Community Bank ad makes specific comparisons with other banks. This type of advertising is best described as comparative advertising. The best answer selection is ‘C’.
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22. Choosing the “Best” Medium – How To Deliver the Message
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Promotion Objectives
Target Market Characteristics
Summary Overview
There is no simple answer to the question, “Which is the “best” advertising medium?”
Key Issues
Choosing an advertising medium depends on:
The organization’s promotion objectives.
The characteristics of the target market.
The funds available for advertising.
The nature of the media—who is reached, with what frequency, with what impact, and at what cost.
Before choosing the medium, the marketer must have specific promotion objectives. Some media are better than others at delivering a specific objective.
The marketer must match the market with the media: specify the characteristics of the target market in order to select media that they hear, read, or see.
Most major media do research to develop audience profiles.
Profiles should include segmenting dimensions besides demographics.
Discussion Question: Thinking back to Chapter 4 on market segmentation, what other segmenting dimensions are there besides demographics?
Marketers should do their best to select media that attract a high percentage of the desired target market.
Advertisers pay for the whole audience the media delivers.
Ad exposure to non-targeted consumers is wasteful. Some media help zero in on specific target markets.
Funds Available
Nature of the Media
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23. Comparing Advertising Media (Exhibit 15-5)
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Media
2010 Ad spending.
(billions)
2010 % of Total Spend
Advantages
Disadvantages
Television & cable
51.47
25.2
Demonstrations, good attention, wide reach, cable targets
Expensive in total, “clutter”
Summary Overview
This exhibit compares the characteristics of several types of media. Note how their advantages and disadvantages vary.
Key Issues
Television provides a way to demonstrate products and is a good medium for getting attention. Television also offers wide reach, and cable can be selective. Disadvantages include expense, competition among lots of ads—“clutter.”
Direct mail is very flexible, can be personalized, and is very selective. Disadvantages include expense per contact, “junk mail” image, and difficulty retaining attention.
Newspapers offer flexibility, timely placement, and good local market coverage. Some disadvantages are expense (for some markets), short life, and no “pass along” readership.
Radio offers wide reach, low cost, and it appeals to highly segmented audiences. Disadvantages include weak attention, short exposure, and varying rates.
Direct mail
48.01
23.6
Selected audience, flexible, can personalize
Relatively costly per contact, “junk mail,” hard to retain attention
News-paper
29.34
14.4
Flexible, timely, local market
“Clutter” ads compete for attention, poor photo reproduction
Radio
15.57
7.6
Wide reach, low cost
segmented audience
Weak attention, many different rates, short exposure
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24. Comparing Advertising Media (Exhibit 15-5)
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Media
2010 Ad spending.
(billions)
2010 % of Total Spend
Advantages
Disadvantages
Yellow pages
11.45
5.6
Reaches local customers ready to buy, inexpensive
Many competitors listed in same place, hard to differentiate
Summary Overview
This exhibit compares the characteristics of several types of media. Note how their advantages and disadvantages vary.
Key Issues
Yellow Pages reach local customers who are seeking purchase information. However, competitors are also listed there and differentiation is difficult.
Magazines are very targeted, provide good detail and excellent graphics, have high “pass-along” rates, and long shelf life. Disadvantages include inflexibility and long lead times.
Internet. Internet ads link to more detailed website information, some with “pay for results” offers to the advertiser, but it’s difficult to compare total costs with other types of media.
Outdoor advertising is flexible, inexpensive, and offers repeat exposures. However, exposure is very short and there is a lack of market segmentation. Cinema has a younger appeal.
Magazine
17.23
8.5
Very targeted, good detail, good “pass along”
Inflexible, long lead times, cost can be high
Internet
23.42
11.5
Ads link to more detailed site, some “pay for results,” easy to track results
Hard to compare costs with other media
Outdoor & Cinema
7.37
3.6
Captive audience
Glance medium; younger
audience
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25. An Emphasis on Targeting
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Direct Mail Has Grown
Traditional Media Are More Targeted
Key
Issues
Summary Overview
Most major media are now becoming more targeted to reach smaller, more defined target markets.
Key Issues
Specialized media are small, but gaining. Examples include advertising on shopping carts, gasoline pumps, bike racks, and automatic teller machines.
The more targeted the medium is, the more precisely a marketer can zero in on a particular target market.
There’s a call from your ad. Some firms, in the U.K., are experimenting with ads on cell phones that target customers based on the customer’s location at a particular moment.
“Must buys” may use up the available funds for advertising. A “must buy” is a medium that may be the only way to reach a particular audience, or it may be such an important medium that an advertiser can’t bypass it.
“Must Buys” May Use Up Funds
Specialized Media Are Gaining
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26. Interactive Exercise: Promotion Planning
This slide refers to material on pp. 383.
The objective of this exercise is to show an example of the trade-offs between different types of advertising. A marketing or advertising manager needs to be able to assess the pros and cons of different advertising methods in light of the characteristics of the target audience, the advertising and promotion objectives, and the available budget. Managers try to get the greatest return they can from their promotional dollars. This example shows how television advertising and direct mail promotion might be compared.
Working through the exercise, the students will learn:
How to compute “cost per thousand” (CPM);
The meaning of television ratings data;
The cost of running a commercial on a popular prime-time television show;
How the cost of the commercial compares with the cost of a direct mail campaign;
The advantages and disadvantages of TV advertising vs. direct mail.
For complete information and suggestions on using this Interactive Exercise, please refer to the “Notes on the Interactive Exercise” section for this chapter in the Multimedia Lecture Support Package to Accompany Basic Marketing. That same information is available as a Word document in the assets folder for the PowerPoint file.
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27. Advertising on the Internet
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Direct Response Desired
Click Fraud
Key
Issues
Pay per click advertising
Summary Overview
Internet influences many purchases. Ten percent of consumer purchases are made online and another 40 percent of purchases are influenced by what consumers see and learn online.
Key Issues
Internet ads seek a direct response. Internet ads take many forms, such as buttons, banner ads, animations, and pop-ups. By clicking on choices, the viewer directs the search for more information.
Some consumers don’t want to respond. Many view Internet ads as annoying and use software to eliminate them.
 Most advertisers pay only if ads deliver.
Most websites use a pay-per-click advertising model, where advertisers pay only when a customer clicks on the ad and links to the advertiser’s website.
 Some ads know where customers have been on the web.
Behavioral targeting delivers ads to consumers based on previous websites the customer has visited.
Click fraud raises ethical concerns. Advertisers don’t mind paying when interested customers click on their ads. Click fraud occurs when a person or software program automatically clicks on an ad without having any interest in the ad’s subject.
Behavioral Targeting
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28. Planning the Best Message—What to Communicate
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Summary Overview
In planning the message, the key decision is specifying the copy thrust: what the words and illustrations should communicate. The copy thrust should be designed to achieve the promotion objectives.
Key Issues
Marketers are well advised to let the AIDA model help guide message planning.
Getting attention is an ad’s first job.
Marketers must determine what, specifically, will get the customer’s attention and how.
Attention-getting devices include large headlines, shocking statements, attractive models, babies, online games, and special effects.
Billboards are also good for getting attention with a simple copy thrust. This outdoor ad for Colorado Wildlands uses a clever display to maximize its attention-getting impact.
Discussion Question: What other billboard advertising can you think of that used a clever display or slogan for attention?
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29. Planning the Best Message Example
This slide refers to material on pp
The video clip highlights a unique advertising campaign used by Dirt Devil. This television advertising campaign was one that used digital technology to place the Dirt Devil vacuum in classic movie clips with Fred Astaire.
(video clip length 3:24)
Video Operation:
Use the onscreen player controls to operate the video.
To view the video at Full Screen, right-click the video and choose Full Screen. To go back to your presentation you can either hit the Escape key, right-click on the video and uncheck Full Screen, or type Alt+Enter. You can do this at anytime during the video playback.
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The videos will only play in Slide Show View. Macros must be enabled in order to play the videos from within PowerPoint.
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30. AIDA – Attention, Interest, Desire, and Action
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Get Attention
Hold Interest
Summary Overview
Getting attention is important, but it is only the first stage of the AIDA model. The other three aspects of this model play important roles in message planning.
Key Issues
 Holding interest is more difficult than getting attention.
Holding interest typically involves linking the ad message to something important to the customer—a reference group, core values of the target market, or a person’s self-interest.
 Arousing desire, or moving the customer to really want the product, is one of an ad’s most difficult jobs.
This requires knowing how the customer thinks and makes decisions.
Sometimes it is helpful to focus on one unique selling proposition—something distinctive about the product that sets it apart from others.
 Ads are designed to obtain action on the part of consumers in some form.
Some ads encourage consumers to do something that is less risky or demanding than actually making a purchase.
Discussion Question: What features might an ad contain that cause consumers to take some action—even if that action is not immediate purchase?
 Can global messages work?
Possibly, in cases where there are major similarities among consumers for the product all over the world.
Usually, more targeted ad messages work better than a mass-marketing approach.
Arouse Desire
Obtain Action
Can Global Messages Work?
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31. A Unique Selling Proposition
This slide refers to material on pp. 388.
In this advertising campaign, Apple wanted to position its Macintosh computer against brands running Microsoft Windows software. The company found the campaign also worked in international markets—with some changes (see commercial on next slide). The ad on this slide and the next slide both address benefits the Macintosh has in security—with the second ad coming from Japan.
Video Operation:
Use the onscreen player controls to operate the video.
To view the video at Full Screen, right-click the video and choose Full Screen. To go back to your presentation you can either hit the Escape key, right-click on the video and uncheck Full Screen, or type Alt+Enter. You can do this at anytime during the video playback.
Under certain circumstances, the video may not fill the video player window. To restore, right-click the video player object and select Zoom 200%.
The videos will only play in Slide Show View. Macros must be enabled in order to play the videos from within PowerPoint.
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32. Checking Your Knowledge
This slide relates to material on pp
A famous athlete is featured in a commercial for a pain-relieving rub that can help soothe muscle aches and pains. He says, “If it works for me, it’ll surely work for you.” This testimonial is mainly aimed at the _________ stage of the AIDA model.
attention
interest
desire
action
confirmation
ANSWER: C or B
Checking your knowledge (answer explanation):
This testimonial attempts to persuade a consumer that the famous athlete with sore muscles likes the product so it will work for your sore muscles too. This is an attempt to arouse desire. Depending on the consumer, you could also argue that this commercial is aimed at the interest stage of the AIDA. For that reason, either ‘C’ or ‘B‘ could be acceptable answers for this question.
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33. Advertising Agencies Often Do the Work (Exhibit 15-6)
This slide refers to material on pp
 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
Organi-
zation
Largest agency networks
HQ location
2009
revenue billion
Select clients
Omnicon Group
BBDO Worldwide, DDB Worldwide, TBWA Worldwide
New York
11.72
Apple, Bud, ExxonMobil, FedEx, GE, Pepsi, Visa
Summary Overview
Some companies have their own advertising departments that plan and execute ad campaigns. Other firms use outside advertising agencies: specialists in planning and handling mass-media details of advertisers.
Key Issues
Agencies provide an outside viewpoint and vast client experience.
Sometimes, they can do the job more efficiently and effectively, at lower cost, than a firm’s in-house advertising department.
The advertiser can terminate a relationship if it doesn’t work well.
Agencies range from small specialists to large, full-service companies.
The biggest agencies handle much of the advertising, as shown in this exhibit.
Many mergers and acquisitions have created these mega-agencies.
Smaller firms continue to have an important role, because not every advertiser has the need or the resources to deal with a huge ad agency.
Ad agencies have typically been paid via a percentage commission on media and production costs.
This straight commission has raised the question, “Are they paid too much?” Now, some firms pay the agency based on the results achieved.
Discussion Question: How can specific ad objectives play a role in determining whether or not an ad agency has achieved the desired results?
WPP Group
Grey Group, J WT, Oglivy & Mather, Y & R
Dublin
13.60
Altria, American Express, Ford, GlaxcoSmithKline, IBM, P&G
Inter-public
DraftFCB, Lowe, McCann Worldgroup
New York
6.03
Freecreditreport.com, Geico, Microsoft, Yum Brands, Unilever, Verizon
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34. Advertising Agencies Often Do the Work (Exhibit 15-6)
This slide refers to material on pp. 390.
 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
Organi-
zation
Largest agencies
HQ location
2009 revenue
billions
Select clients
Publicis Groupe
Leo Burnett Worldwide, Publicis, Saatchi & Saatchi, Vivaki
Paris
6.29
British Airways, Coca-Cola, Disney, Kellogg’s, L’Oreal, McDonald’s
Summary Overview
A continuation of the table from the previous slide.
Key Issues
Discussion Question: How can specific ad objectives play a role in determining whether or not an ad agency has achieved the desired results?
Ethical conflicts may arise if agencies divulge their clients’ information to competitors.
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35. Measuring Advertising Effectiveness is Not Easy
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Consider the Total Mix
Summary Overview
Measuring advertising effectiveness is often difficult. It is important to remember that the different types of advertising do not always work toward the same goal. Also, advertising effectiveness needs to be considered in relation to its specific objective. For example, an ad campaign that is designed to increase awareness should not be judged a failure because it does not increase desire for the product. A key element to effective measurement is to quantify and specify the objective of the ad.
Key Issues
Success depends on the total marketing mix, not just advertising.
The effectiveness of advertising is hard to separate from the effects of the other elements of the mix.
For example, a great advertisement cannot be faulted for failing to sell a poor product.
 Research and testing can improve the odds.
Marketing managers should try variations on their overall advertising message to see which combination of message variables is the most effective.
Discussion Question: How might a focus group discussion help in pretesting an ad?
 Hindsight may lead to foresight. What consumers tell marketers about ads, and what they remember—both good and bad—should be used as input into the refinement of subsequent advertisements.
Research and Testing May Improve Odds
Hindsight May Lead to Foresight
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36. How to Avoid Unfair Advertising
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 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
Government May Say What’s Fair
FTC Controls Unfair Practices
Summary Overview
In most countries, government agencies may say what is fair, allowable, or appropriate advertising. However, these regulations vary greatly from country to country.
Key Issues
 In the U. S., the Federal Trade Commission (FTC) controls unfair practices.
Both advertisers and ad agencies share equal responsibility for false, misleading, or unfair ads.
Companies that violate FTC regulations may be required to promulgate “affirmative disclosures,” such as the health warnings on cigarettes.
Corrective advertising: ads that correct deceptive advertising.
Listerine’s manufacturer had to run corrective ads to counter its earlier claims that gargling with Listerine would prevent a cold.
“Green” claims must be backed by evidence. The FTC developed guidelines for environmental claims used in brand names and logos as well as in labels, ads, and other promotional materials.
 The notion of what is unfair or deceptive is changing.
Old-fashioned “puffery”—making exaggerated claims about products as being the “best” or the “finest”—used to be accepted practice but is now under increased scrutiny.
 Supporting ad claims is a fuzzy area, subject to much interpretation.
Pretesting of ads among consumers may uncover possible problems with dubious claims.
Discussion Question: In light of the FTC’s watchdog role, why is there still a lot of deceptive advertising that reaches consumers?
Support for Claims Is Fuzzy
Standards Are Changing
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37. Types of Publicity (Exhibit 15-7)
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How does the customer obtain the communication?
Through popular and trade press
"Found" through search,
pass-along, or experience
Summary Overview
Exhibit 15-7 provides a categorization of different types of publicity – including many of the new forms of social media.
Key Issues
Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services.
In thinking about Publicity, it is useful to take the customer perspective and consider how the customer obtains the communication.
 One source involves getting coverage in the commercial press
 Many companies use a public relations (PR) staff—or sometimes an outside PR agency—to provide information that makes it easy for the press to write stories about the company.
To help make it easier to reach these media, a Publicity manager or PR staff often creates press kits to distribute to media, they often post press releases on the organization’s website, or on services like PR Wire.com.
 Not all publicity relies on mass media message channels. Customers can also find publicity through search, pass-along, or experience.
Marketers want to be “found” when customers “search”.
Targeting commercial press
Press kits
Online media room
Posting press releases
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38. Types of Publicity (Exhibit 15-7)
This slide refers to material on pp
 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
How does the customer obtain the communication?
Through popular and trade press
"Found" through search,
pass-along, or experience
Summary overview
As we noted in chapter 13, organizations want to be found when customers are searching. They might be found when customers pass something along – like a recommendation or a funny video. Customers might also have some experience with an organization that creates a favorable attitude toward a company or brand.
Key Issues
Customers might get this information by interacting with the company or other customers. Or organizations can try to create communications that flow one-way – from the firm to customers. Let’s consider some forms of Publicity that are one-way and target consumers
Many firms will try to create a useful website.
The easier it is for consumers to find information about products, the more likely this source will be used by consumers. Recall that brand websites are more trusted that advertising.
Firms can also create videos that can be posted on a website or a service like YouTube. Sometimes these videos will go viral and many customers will see them. But this can be difficult.
A firm might also create a podcast that customers find useful.
Online games that are fun can create a positive brand experience as well.
Other tactics are often used to target businesses.
Business buyers often want to know a company has solutions to its problems.
A commercial white paper is an authoritative report or guide that addresses an important issue in an industry. Case studies describe how an organization helped other customers. Both approaches allow a company to build customer confidence and trust.
One-way communication
Interactive communication
Targeting consumers
Useful web site content
Video or podcasts
Games
Targeting organizations
Commercial white papers
Case studies
Webinars
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39. Types of Publicity (Exhibit 15-7)
This slide refers to material on pp
 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
How does the customer obtain the communication?
Through popular and trade press
"Found" through search,
pass-along, or experience
Summary overview
As we noted in chapter 13, organizations want to be found when customers are searching. They might be found when customers pass something along – like a recommendation or a funny video. Customers might also have some experience with an organization that creates a favorable attitude toward a company or brand.
Key Issues
Customers also learn about an organization by directly interacting with it – or by interacting with other customers.
For example, customers might visit and interact with – by posting comments – blogs. The blogs might be created by a company – or they might be written by an expert or other critic.
For example, the Engadget blog posts regularly with information about electronics and gadgets. The blog is not owned by any electronics company. The Sharpie blog – created by Sharpie – allows the most avid fans of the markers to interact.
The Home Theater Spot is an online community that allows customers to ask questions about home theater gear.
Retailers, and many other companies, make it easy for consumers to review and rate products.
In the B2B space, firms might also use social media to target businesses. There are specialty sites like LinkedIn that business people use – it is kind of a Facebook for business.
Buying group members might also read blogs or participate in online communities to learn more about solutions for their problems.
One-way communication
Interactive communication
Targeting consumers
Blogs & social media
Customer reviews & online communities
Targeting organizations
Social media
Blogs
Online communities
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40. Examples of Different Types of Publicity and Different Promotion Objectives (Exhibit 15-8)
This slide refers to material on pp. 398.
 Indicates place where slide “builds” to include the corresponding point (upon mouse click).
Getting attention & holding interest
Viral videos
Direct-to-consumer press releases
Articles in the press
Developing a desired positioning
• Viral videos
• Games
• Branded services
• Commercial white papers
Summary Overview
The exhibit suggests which types of publicity might work best with some common promotion objectives.
Key Issues
Other advertising principles work for publicity.
A firm’s promotion objectives should guide the choice of tools.
Here we can see how some types of publicity might be utilized to obtain specific types of promotion objectives.
Publicity works in combination with other promotion tools—as part of an integrated marketing communications program with specific objectives.
When developing publicity, marketing managers should also look at copy thrust; Web sites, videos, online communities, and other publicity tools all utilize words and images that communicate with a target market.
Ethics must guide publicity decisions.
Companies need to be careful when treading in the new publicity space.
Firms are often easily exposed when they engage in unethical practices.
Publicity tools are evolving quickly.
Publicity tools are evolving quickly. Just a few years ago customer ratings and reviews were rare, few people read blogs, and Facebook was only open to people with addresses ending in edu.
Arousing desire & obtaining action
• Customer reviews
• Case studies
• Webinars
Managing ongoing customer
relationships
• Social media like Facebook
• Blogs
• Online communities
• Podcasts, webcasts, webinars
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41. Sales Promotion: Do Something Different to Stimulate Change (Exhibit 15-9)
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Summary Overview
Sales promotion includes those activities other than advertising, publicity, and personal selling that are designed to stimulate interest, trial, or purchase by final customers or others in the channel. Sales promotion typically seeks an immediate response.
Key Issues
Sales promotions can be launched quickly and lead to immediate results. However, the sales promotion objectives and the particular situation should influence the decision about which type of promotion to use.
This exhibit shows three ways that a short-term sales promotion might affect sales.
First sales pattern: a firm issues coupons to help clear excess inventory. Some consumers might buy in advance “stockpile” to take advantage of the coupon, but unless they use more of the product, their next purchase will be delayed.
 Second pattern: consumption increases during a limited-time promotion, but when the promotion ends, sales go back to normal.
 Third pattern: free samples of a product pull in new customers who like the product and keep coming back. This pattern is the kind of long-term result that is the aim of effective sales promotion.
More companies are using a greater percentage of their promotion dollars on sales promotion. Sales promotion spending has grown in mature markets, where tough competition requires extra incentives to sell.
Discussion Question: Think about a freestanding coupon insert in a newspaper, or a direct-mail packet containing coupons. In what stage of the product life cycle (introduction, growth, maturity, or decline) are most of these products?
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42. Problems in Managing Sales Promotion
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Erodes Brand Loyalty
Need For Alternatives
Key Problems
Summary Overview
In spite of the positive impact that sales promotions may have, there are potential problems in managing sales promotion.
Key Issues
“Does sales promotion erode brand loyalty?”
In mature markets, customers and intermediaries may “cherry pick” between competing brands to catch the best sales promotion discount at a particular time.
Brands in this competitive situation may have little other choice.
 There are alternatives.
Proctor and Gamble has decreased its reliance on sales promotions to intermediaries and moved toward an “everyday low price.”
 Sales promotion is hard to manage.
It may be hard to transfer lessons learned from one promotion to the next.
Sales promotion activities can stimulate demand among people outside the target market.
 Sales promotion is not a sideline for amateurs.
Sales promotion specialists have developed to handle the various tasks, but their efforts need to be coordinated with the overall promotion strategy.
Discussion Question: McDonald’s “Monopoly” game and other sales promotions have gone wrong in recent years. Who bears the responsibility for making sure that sales promotions are conducted legally and fairly—the sales promotion specialist, or the company sponsoring the promotion?
Not For Amateurs
Hard to Manage
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43. Different Types of Sales Promotion for Different Targets
This slide relates to material on pp
Summary Overview
Sales promotion is very flexible and can be aimed at final consumers, intermediaries, or a company’s own employees.
Key Issues
Tying consumer sales promotions to objective.
Much of the sales promotion aimed at final consumers or users tries to increase demand, perhaps temporarily, or to speed up the time of purchase.
All of these sales promotion efforts are aimed at specific objectives.
B2B promotions move products or generate leads.
Discussion Question: How does a point-of-purchase display affect the various stages of the consumer problem-solving process? Refer to Chapter 6.
Sales promotion for intermediaries often emphasizes price.
The objective may be to encourage intermediaries to stock new items, buy larger quantities, buy early, or emphasize products in local promotion.
Techniques include discounts, allowances, and possible sales contests.
Owens Corning, in the ad above, uses a variety of promotion methods, including advertising, sweepstakes, and other sales promotions to help stimulate demand for its high quality products.
The trade ad above provides a website address and a toll-free number so it will be easy for intermediaries to respond to the ad and get more specific information.
Sales promotion aimed at a company’s own employees, such as its sales force, often stimulates better service, customer acquisition, support for new products, or attention to the whole product line.
Contests, bonuses, awards, and motivational sales meetings are used.
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44. You should now be able to:
This slide refers to material on pp. 376.
Understand why a marketing manager sets specific objectives to guide the advertising effort.
Understand when the various kinds of advertising are needed.
Understand how to choose the “best” medium.
Understand the main ways that advertising on the Internet differs from advertising in other media.
Understand how to plan the "best" message—that is, the copy thrust.
You should now be able to:
Understand why a marketing manager sets specific objectives to guide the advertising effort.
Understand when the various kinds of advertising are needed.
Understand how to choose the “best” medium.
Understand the main ways that advertising on the Internet differs from advertising in other media.
Understand how to plan the "best" message—that is, the copy thrust.
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45. You should now be able to:
This slide refers to material on pp. 376.
Understand what advertising agencies do.
Understand how to advertise legally.
Understand the importance and nature of sales promotion.
Understand the importance of and different types of publicity.
Know the advantages and limitations of different types of sales promotion.
Understand important new terms.
You should now be able to:
Understand what advertising agencies do.
Understand how to advertise legally.
Understand the importance and nature of sales promotion.
Understand the importance of and different types of publicity.
Know the advantages and limitations of different types of sales promotion.
Understand important new terms.
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46. Key Terms Advertising allowances Cooperative advertising
This slide refers to boldfaced terms appearing in Chapter 15.
Advertising allowances
Cooperative advertising
Product advertising
Institutional advertising
Pioneering advertising
Competitive advertising
Direct type advertising
Indirect type advertising
Comparative advertising
Reminder advertising
Advertising allowances
Copy thrust
Advertising agencies
Corrective advertising
Summary Overview
These are key terms you should be familiar with based upon the material in this presentation.
Key Issues
Advertising allowances: price reductions to firms in the channel to encourage them to advertise or otherwise promote the firm's products locally.
Cooperative advertising: producers sharing in the cost of ads with wholesalers and retailers.
Product advertising: advertising that tries to sell a specific product.
Institutional advertising: advertising that tries to promote an organization's image, reputation, or ideas--rather than a specific product.
Pioneering advertising: advertising that tries to develop primary demand for a product category rather than demand for a specific brand.
Competitive advertising: advertising that tries to develop selective demand for a specific brand rather than a product category.
Direct type advertising: competitive advertising that aims for immediate buying action.
Indirect type advertising: competitive advertising that points out product advantages—to affect future buying decisions.
Comparative advertising: advertising that makes specific brand comparisons using actual product names.
Reminder advertising: advertising to keep the product's name before the public.
Copy thrust: what the words and illustrations of an ad should communicate.
Advertising agencies: specialists in planning and handling mass-selling details for advertisers.
Corrective advertising: ads to correct deceptive advertising.
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