1. Communicating Customer Value: Advertising and Public Relations
Chapter 12 Next Exit
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2. Rest Stop: Previewing the Concepts
Discuss the process and advantages of integrated marketing communications in communicating customer value.
Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix.
Describe and discuss the major decisions involved in developing an advertising program.
Explain how companies use public relations to communicate with their publics.
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3. GEICO – Building Relationships
Case Study
GEICO – Building Relationships
GEICO – Past
GEICO initially targeted government employees and noncommissioned military officers with exceptional driving records.
Used direct mail and telephone to market directly to consumers.
Passed cost savings on to customers via lower premiums.
GEICO – Present
Purchased by Warren Buffet who increased ad spending.
All ads feature the “15 minutes could save you 15% or more on car insurance” value proposition.
Funny ads (talking gecko, “good news,” “Cavemen,” testimonials with celebrity translation) have resulted in 91% awareness and double-digit market share gains.
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4. Figure 12.1 Integrated Marketing Communications
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5. Integrated Marketing Communications
Several factors are changing the face of marketing communications:
Consumers are better informed and more communications empowered.
Mass markets have fragmented, leading to a shift away from mass marketing.
Changes in communications technology have created new media for interacting with targeted consumers.
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6. Integrated Marketing Communications
Firms are doing less broadcasting and more narrowcasting.
Specialty magazines
Cable TV
Video on demand
Internet catalogs
Podcasts
Product placements in TV and video games
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7. Integrated Marketing Communications
A strong need for integrated marketing communications (IMC) exists because conflicting messages from different sources can create confusion or blur brand perceptions.
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8. Integrated Marketing Communications
Carefully integrating and coordinating the company’s many communication channels to deliver a clear, consistent, and compelling message about the organization and its products.
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9. Nikon Uses IMC Marketing in Action
Nikon’s TV and print ads are consistent and direct consumers to their Web site.
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10. Shaping the Overall Promotion Mix
Nature of advertising:
Can reach masses of geographically dispersed buyers at a low cost per exposure
Can repeat a message many times
Consumers view advertised products as more legitimate
Is impersonal, one-way communication
Can be very costly for some media types
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11. Shaping the Overall Promotion Mix
Nature of personal selling:
Involves personal interaction between two or more people
Most effective tool at building preferences, convictions and actions
Allows relationship building and two-way communication
Requires long-term commitment
Most expensive promotion tool
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12. Shaping the Overall Promotion Mix
Nature of sales promotion:
Wide assortment of tools
Attracts consumer attention
Can be used to dramatize product offers
Offers strong incentives to buy
Invites and rewards quick consumer response
Effects are short-lived
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13. Shaping the Overall Promotion Mix
Nature of public relations:
Very believable
Reaches people who avoid salespeople and ads
Can dramatize a company or product
Tends to be used as an afterthought
Planned use can be effective and economical
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14. Shaping the Overall Promotion Mix
Nature of direct marketing:
Many forms of direct marketing exist
Direct marketing forms share four primary characteristics:
Nonpublic
Immediate
Customized
Interactive
Well suited to highly targeted marketing
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15. Promotion Mix Strategies
Push strategy:
Promotion strategy that calls for using the sales force and trade promotion to push the product through channels.
Pull strategy:
Promotion strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product.
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16. Figure 12.2 Push vs. Pull Promotion Strategy
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17. Advertising Advertising has been used for centuries.
U.S. advertisers spend more than $285 billion each year; worldwide spending exceeds $604 billion.
Advertising is used by:
Business firms
Not-for-profit organizations
Professionals
Social agencies
Government
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18. Figure 12.3 Major Advertising Decisions
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19. Major Advertising Decisions
Advertising objective:
Specific communication task to be accomplished with a specific target audience during a specific period of time.
Advertising objectives can be classified by their primary purpose:
Inform
Persuade
Compare
Remind.
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20. What’s This Ad’s Objective?
Marketing in Action
What’s This Ad’s Objective?
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21. Major Advertising Decisions
Setting the advertising budget:
Affordable method
Percentage-of-sales method
Competitive-parity method
Objective-and-task method
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22. Advertising Strategy
The strategy by which the company accomplishes its advertising objectives. It consists of two major elements: creating advertising messages and selecting advertising media.
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23. Major Advertising Decisions
Developing advertising strategy:
Creating advertising messages
Message strategy and message execution must break through the clutter
Selecting advertising media
Set reach, frequency, and impact goals
Choose among major media types
Select specific media vehicles
Decide on media timing
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24. “Madison & Vine”
A term that has come to represent the merging of advertising and entertainment in an effort to break through the clutter and create new avenues for reaching consumers with more engaging messages.
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25. Melding Ads and Entertainment
Marketing in Action
Melding Ads and Entertainment
The aim of advertainment is to make ads so fun, entertaining, or useful that people want to watch them.
Branded entertainment involves making the brand an inseparable part of some other form of entertainment.
Visit the brandgames.com Web site, click “The Work” button, and learn more.
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26. Major Advertising Decisions
Planning the message strategy:
Identify customer benefits
Develop compelling creative concept—the “Big Idea”
Advertising appeals should be:
Meaningful
Believable
Distinctive
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27. Major Advertising Decisions
Message Execution Styles:
Slice of Life
Lifestyle
Fantasy
Mood or Image
Musical
Personality Symbol
Technical Expertise
Scientific Evidence
Testimonial Evidence or Endorsement
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28. Quick Flick Marketing American Express Click to play video
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29. Major Advertising Decisions
Message execution process:
Choose the execution style
Choose a tone
Use memorable, attention-getting words
Choose format elements:
Illustration
Headline
Copy
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30. Analyze This Ad! What is the message execution style?
Marketing in Action
Analyze This Ad!
What is the message execution style?
What is the tone of the ad?
Are the words used attention-getting and memorable?
How does the illustration work with the rest of the ad?
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31. Major Advertising Decisions
Consumer-generated messages:
Tapping consumers for message ideas or actual ads can involve:
Searching existing Web video sites
Holding contests or inviting consumers to submit ad message ideas and videos
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32. Marketing in Action
Crash the Super Bowl
The Doritos “Crash the Super Bowl Challenge” contest invited consumers to create their own video ads.
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33. Major Advertising Decisions
Setting media objectives:
Reach: Percentage of people exposed to ad.
Frequency: Number of times a person is exposed to advertisement.
Media Impact: The qualitative value
of a message exposure through a given medium.
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34. Major Advertising Decisions
Consumer-generated messages:
Benefits of consumer-generated messages:
Collects new ideas and fresh brand perspectives at relatively little expense.
Boosts consumer involvement and gets consumers talking and thinking about the brand.
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35. How did you find out about them?
Think about the consumer- generated advertisements that you might have seen recently.
How did you find out about them?
What makes consumer- generated ads worth watching?
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36. Major Advertising Decisions
Each media type has specific advantages and disadvantages.
Choosing among media types requires consideration of the:
Medium’s impact
Message effectiveness
Cost
Media mix should be regularly reexamined.
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37. Major Advertising Decisions
Media vehicles:
Specific media within each general media type, such as Newsweek.
Factors to consider when choosing vehicles:
Cost
Audience quality
Audience engagement
Editorial quality
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38. Major Advertising Decisions
Must also decide how to schedule the advertising over the course of a year.
Follow seasonal pattern
Oppose seasonal pattern
Same coverage all year
Choose the pattern of the ads:
Continuity
Pulsing
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39. Evaluating Advertising and Return on Advertising Investment
Is equal to the net return on advertising investment divided by the costs of the advertising investment.
Evaluating advertising involves:
Measuring the communication effects of an ad—“Copy Testing.”
Measuring the sales effects of an ad:
Is the ad increasing sales?
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40. Other Advertising Considerations
Organization of ad function:
Small companies—one person in firm
Large companies—ad department that may also work with an ad agency
Advertising agencies employ specialists who perform ad tasks better then the company’s own staff can.
Bring outside viewpoints to problem-solving
Wide range of experience
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41. Other Advertising Considerations
International advertising issues:
To what degree should global advertising be adapted to various countries?
Greater need for standardization of global brand advertising strategies.
Specific advertising programs must usually be adapted to local cultures and other factors.
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42. Standardized Worldwide Advertising
Marketing in Action
Standardized Worldwide Advertising
Gillette’s ads for its Venus razor are virtually the same worldwide.
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43. Public Relations Public Relations:
Building good relations with the firm’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.
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44. Public Relations
Public relations departments perform the following functions:
Press relations or press agency
Product publicity
Public affairs
Lobbying
Investor relations
Development
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45. Public Relations Role and Impact
May strongly impact public awareness at a lower cost than advertising
Can yield spectacular results
Is beginning to play an increasingly important brand-building role
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46. Major Public Relations Tools
News
Speeches
Special events
Written materials
Audiovisual materials
Corporate identity materials
Public service activities
Social networking
Company Web site
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47. Company Web Sites Marketing in Action
Company Web sites can be important PR vehicles. Butterball’s site offers recipes, carving tips, and more.
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48. Rest Stop: Reviewing the Concepts
Discuss the process and advantages of integrated marketing communications in communicating customer value.
Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix.
Describe and discuss the major decisions involved in developing an advertising program.
Explain how companies use public relations to communicate with their publics.
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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
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