1. 1 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Marketing Communications & Prepared by Deborah Baker Texas Christian University 12 Advertising

2. 2 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objectives 1. Discuss the elements of the promotional mix and their role in the marketing mix 2.Describe the communication process 3.Explain promotional goals and tasks, and the AIDA concept 4.Describe the factors that affect the promotional mix

3. 3 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objectives 5. Discuss the effects of advertising on market share and consumers 6. Identify the major types of advertising 7.Discuss the creative decisions in developing an advertising campaign 8.Describe media evaluation and selection techniques

4. 4 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objective Discuss the elements of the promotional mix and their role in the marketing mix 1 1 1 Online http://www.easports.com

5. 5 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12Promotion Promotion Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. 1

6. 6 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Promotional Strategy A plan for the optimal use of the elements of promotion: 1  Advertising  Public Relations  Sales Promotion  Personal Selling CompetitiveAdvantage

7. 7 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 The Role of Promotion Overall Marketing Objectives Marketing Mix Product Distribution Promotion Price Marketing Mix Product Distribution Promotion Price Target Market Promotional Mix Advertising Public Relations Sales Promotion Personal Selling Promotion Plan Promotional Mix Advertising Public Relations Sales Promotion Personal Selling Promotion Plan 1

8. 8 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Competitive Advantage Unique features Excellent service Low prices Rapid delivery High product quality 1

9. 9 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Promotional Mix  Advertising  Public Relations  Sales Promotion  Personal Selling Promotional Mix Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. 2

10. 10 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12Advertising Advertising Impersonal, one-way mass communication about a product or organization that is paid for by a marketer. 2

11. 11 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Advertising Media Traditional Advertising Media Traditional Advertising Media Electronic Advertising Media  Television  Radio  Newspapers  Magazines  Books  Direct mail  Billboards  Transit cards  Internet  Electronic mail  Interactive video 2

12. 12 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Public Relations The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance. 2

13. 13 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Functions of Public Relations Evaluates public attitudes Identifies areas of public interest Identifies areas of public interest Executes programs to “win” public 2

14. 14 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Sales Promotion Marketing activities--other than personal selling, advertising, and public relations--that stimulate consumer buying and dealer effectiveness. 2

15. 15 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Sales Promotion End Consumers End Consumers Trade Customers Company Employees Company Employees 2 Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons

16. 16 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Personal Selling Planned presentation to one or more prospective buyers for the purpose of making a sale. 2

17. 17 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Personal Selling Traditional Selling Traditional Selling Relationship Selling Relationship Selling 2

18. 18 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objective Describe the communication process 2 2 2

19. 19 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12Communication Communication The process by which we exchange or share meanings through a common set of symbols. 2

20. 20 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Marketing Communication Categories of Communication Categories of Communication Interpersonal Communication Interpersonal Communication Mass Communication Mass Communication 2

21. 21 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 As SendersAs Receivers The Communication Process  Develop messages  Adapt messages  Spot new communication opportunities 2  Inform  Persuade  Remind

22. 22 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 The Communication Process Noise Sender Encoding Message Feedback Channel Feedback Channel Message Channel Message Channel Decoding Message Decoding Message Receiver 2 Online http://www.mcdonalds.com

23. 23 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Characteristics of Advertising Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility AdvertisingAdvertising Indirect and non-personal Low Little Delayed One-way Yes Fast Same message to all audiences 2

24. 24 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Characteristics of Public Relations Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Public Relations Usually indirect, non-personal Moderate to low Little Delayed One-way No Usually fast Usually no direct control 2

25. 25 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Characteristics of Sales Promotion Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Sales Promotion Usually indirect and non-personal Moderate to low Little to moderate Varies Mostly one-way Yes Fast Same message to varied target 2

26. 26 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Characteristics of Personal Selling Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Personal Selling Direct and face-to-face High Much Immediate Two-way Yes Slow Tailored to prospect 2

27. 27 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objective Explain the goals and tasks of promotion, and the AIDA concept 3 3 3

28. 28 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Goals and Tasks of Promotion Informing Reminding Persuading Target Audience Target Audience PLC Stages PLC Stages: Introduction Early Growth PLC Stages: Growth Maturity PLC Stages: Maturity 3

29. 29 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Goals and Tasks of Promotion  Increase awareness  Explain how product works  Suggest new uses  Build company image 3 Informative Objective

30. 30 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Goals and Tasks of Promotion  Encourage brand switching  Change customers’ perception of product attributes  Influence buying decision  Persuade customers to call 3 Persuasive Objective

31. 31 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Goals and Tasks of Promotion  Remind customers that product may be needed  Remind customers where to buy product  Maintain customer awareness 3 Reminder Objective

32. 32 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 The AIDA Concept AIDA Concept Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. 3 Online http://www.kohler.com

33. 33 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 AIDA and the Promotional Mix 3 Very effective Somewhat effective Not effective AttentionInterestDesireActionAdvertising PublicRelations SalesPromotion PersonalSelling

34. 34 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objective Describe the factors that affect the promotional mix 4 4 4

35. 35 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Factors Affecting the Choice of Promotional Mix Nature of the product Stage in PLC Target market factors Type of buying decision Promotion funds Push or pull strategy 4

36. 36 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Product Life Cycle and the Promotional Mix Light Advertising; pre- introduction publicity Heavy use of Advertising; PR for awareness; sales promotion for trial AD/PR decrease; limited sales promotion; personal selling for distribution Ads decrease; sales promotion; personal selling; reminder & persuasive Advertising, PR, brand loyalty; personal selling for distribution Introduction Growth Maturity Decline Sales ($) Time 4

37. 37 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Target Market Characteristics For… Widely scattered market Informed buyers Repeat buyers Advertising Sales Promotion Less Personal Selling Online http://www.radioguide.com 4

38. 38 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Type of Buying Decision Advertising Sales Promotion Type of Buying Decision AffectsPromotional Mix Choice Type of Buying Decision AffectsPromotional Mix Choice ComplexComplexRoutineRoutine Personal Selling Not Routine or Complex Not Routine or Complex Advertising Public Relations 4

39. 39 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Available Funds Trade-offs with funds available Number of people in target market Quality of communication needed Relative costs of promotional elements 4

40. 40 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Push and Pull Strategies Manufacturer promotes to wholesalerManufacturer wholesalerWholesaler retailerWholesaler retailerRetailer consumerRetailer consumerConsumer buys from retailerConsumer retailer PUSH STRATEGY Orders to manufacturer Manufacturer promotes to consumerManufacturer consumerConsumerdemandsproduct from retailer Consumerdemandsproduct Retailerdemandsproduct from wholesaler Retailerdemandsproduct Wholesalerdemands product from manufacturerWholesalerdemands manufacturer Orders to manufacturer PULL STRATEGY 4

41. 41 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Integrated Marketing Communications A method of carefully coordinating all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer. 4

42. 42 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objective Discuss the effect of advertising on market share and consumers 5 5 5

43. 43 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12Advertising U.S. advertising expected to reach $300 billion per year in 2006 Top 200 brands account for 37 percent of media spending The advertising industry is small—only 13,000 employed in advertising agencies Ad budgets of some firms exceed over $2 billion per year—over $6 million per day! 5

44. 44 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Advertising and Market Share  New brands spend proportionately more for advertising than old ones  A certain level of exposure is needed to affect purchase habits  Beyond a certain level, diminishing returns set in  New brands spend proportionately more for advertising than old ones  A certain level of exposure is needed to affect purchase habits  Beyond a certain level, diminishing returns set in 5

45. 45 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Advertising and the Consumer  Average U.S. citizen is exposed to hundreds of ads each day  Advertising may change a consumer’s attitude toward a product  Advertising can affect consumer ranking of brand attributes  Average U.S. citizen is exposed to hundreds of ads each day  Advertising may change a consumer’s attitude toward a product  Advertising can affect consumer ranking of brand attributes 5

46. 46 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objective Identify the major types of advertising 6 6 6

47. 47 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Major Types of Advertising Institutional Advertising Institutional Advertising Product Advertising Product Advertising Designed to enhance a company’s image rather than promote a particular product. Designed to tout the benefits of a specific good or service. 6

48. 48 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Major Types of Advertising Enhance corporation’s identity Pioneering Competitive Comparative Product Advertising Product Advertising Institutional Advertising Institutional Advertising Advocacy advertising 6

49. 49 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Online http://www.pizzahut.com http://www.papajohns.com Product Advertising PioneeringPioneering  Stimulates primary demand for new product or category  Used in the PLC introductory stageCompetitiveCompetitive  Influences demand for brand in the growth phase of the PLC  Often uses emotional appeal ComparativeComparative  Compares two or more competing brands’ product attributes  Used if growth is sluggish, or if competition is strong 22 6

50. 50 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objective Discuss the creative decisions in developing an advertising campaign 7 7 7

51. 51 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Steps in Creating an Advertising Campaign Determine the advertising objectives Make creative decisions Make media decisions Evaluate the campaign 7

52. 52 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Setting Objectives: The DAGMAR Approach Define target audience Define desired percentage change Define the time frame for change 7

53. 53 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Creative Decisions Develop and evaluate advertising appeals Develop and evaluate advertising appeals Execute the message Evaluate the campaign’s effectiveness Evaluate the campaign’s effectiveness Identify product benefits 7

54. 54 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Identify Product Benefits 7 Attribute Benefit “Powerade’s new line has been reformulated to combine the scientific benefits of sports drinks with B vitamins and to speed up energy metabolism.” So? “So, you’ll satisfy your thirst with a great-tasting drink that will power you throughout the day.”

55. 55 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Common Advertising Appeals Profit Health Love or romance Fear Admiration Convenience Fun and pleasure Vanity and egotism Environmental Consciousness Product saves, makes, or protects money Appeals to body-conscious or health seekers Used in selling cosmetics and perfumes Social embarrassment, old age, losing health Reason for use of celebrity spokespeople Used for fast foods and microwave foods Key to advertising vacations, beer, parks Used for expensive or conspicuous items Centers around environmental protection 7

56. 56 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Unique Selling Proposition A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. 7

57. 57 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Executing the Message Mood or Image Musical Demon- stration Demon- stration Scientific Real/ Animated Product Symbols Real/ Animated Product Symbols Fantasy Lifestyle Slice-of-Life Humorous CommonExecutionalStylesCommonExecutionalStyles Spokes- person/ Testimonial Spokes- person/ Testimonial 7

58. 58 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Learning Objective Describe media evaluation and selection techniques 8 8 8

59. 59 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Major Types of Advertising Media Newspapers Magazines Radio Television Outdoor Media Internet Alternative Media 8

60. 60 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12NewspapersAdvantages  Geographic selectivity  Short-term advertiser commitments  Immediacy  Year-round readership  High individual market coverage  Co-op and local tie-in availability  Short lead timeDisadvantages  Limited demographic selectivity  Limited color  Low pass-along rate  May be expensive 8

61. 61 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12Magazines 8  Good reproduction  Demographic selectivity  Regional/local selectivity  Long advertising life  High pass-along rate  Long-term advertiser commitments  Slow audience build-up  Limited demonstration capabilities  Lack of urgency  Long lead timeAdvantagesDisadvantages

62. 62 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12  No visual treatment  Short advertising life  High frequency to generate retention  Background distractions  Commercial clutterAdvantagesDisadvantagesRadio  Low cost  Immediacy of message  Short notice okay  No seasonal audience change  Highly portable  Short-term advertiser commitments  Entertainment carryover 8

63. 63 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12Television 8  Wide, diverse audience  Low cost per thousand  Creative and demonstrative  Immediacy of messages  Entertainment carryover  Demographic selectivity with cable  Short life of message  Consumer skepticism  High campaign cost  Little demographic selectivity with stations  Long-term advertiser commitments  Long lead times for production  Commercial clutterAdvantagesDisadvantages

64. 64 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Outdoor Media 8  Repetition  Moderate cost  Flexibility  Geographic selectivity  Short message  Lack of demographic selectivity  High “noise” levelAdvantagesDisadvantages

65. 65 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12Internet 8  Fast growing  Ability to reach narrow target audience  Short lead time  Moderate cost  Difficult to measure ad effectiveness and ROI  Ad exposure relies on “click through” from banner ads  Not all consumers have access to internet AdvantagesDisadvantages Online http://www.fox.com http://www.abc.com

66. 66 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Examples of Alternative Media Online http://www.looksmart.com/aboutus/media http://www.yahoo.com/info/advertising http://www.bmw.com 8 Ads in Movies and Videos Ads in Movies and Videos Interactive Kiosks Computer Screen Savers Computer Screen Savers Video Shopping Carts Fax Machines CD-ROMs Advertainments

67. 67 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Media Mix Decisions Cost per Contact Cost per Contact Reach Frequency Audience Selectivity Audience Selectivity The cost of reaching one member of the target market. The number of target consumers exposed to a commercial at least once during a time period. The number of times an individual is exposed to a message during a time period. The ability of an advertising medium to reach a precisely defined market. 8

68. 68 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 12 Media Scheduling Continuous Media Schedule Continuous Media Schedule Flighted Media Schedule Pulsing Media Schedule Pulsing Media Schedule Seasonal Media Schedule Seasonal Media Schedule Advertising is run steadily throughout the period. Advertising is run heavily every other month or every two weeks. Advertising combines continuous scheduling with flighting. Advertising is run only when the product is likely to be used. 8