1. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising, Sales Promotion, and Public Relations Chapter 18

2. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Objectives 1.Identify the three major advertising objectives and the two basic categories of advertising. 2.List the major advertising strategies. 3.Describe the process of creating an advertisement. 4.List and compare the major advertising media. 5.Outline the organization of the advertising function and the role of an advertising agency. 6.Identify the principal methods of sales promotion. 7.Explain the roles of cross promotions, public relations, publicity, and ethics in an organization’s promotional strategy. 8.Explain how marketers assess promotional effectiveness.

3. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising Involves paid nonpersonal communication through various media with the purpose of informing or persuading members of a particular audience. Used by marketers to reach target markets. A typical consumer is exposed to hundreds of advertising messages each day. Provides an efficient, inexpensive, and fast method of reaching the ever-elusive, increasingly segmented consumer market.

4. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Two Broad Categories of Advertisements 1.Product advertising is nonpersonal selling of a particular good or service. This is the type of advertising the average person usually thinks of. 2.Institutional advertising, in contrast, promotes a concept, an idea, a philosophy, or the goodwill of an industry, company, organization, person, geographical location, or government agency. Often closely related to the public-relations function of the enterprise.

5. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising Objectives in Relation to Stage in the Product Life Cycle 1.Informative advertising seeks to develop initial demand for a good, service, organization, person, place, idea, or cause. 2.Persuasive advertising attempts to increase demand for an existing good, service, organization, person, place, 3.Reminder advertising strives to reinforce previous promotional activity.

6. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Comparative Advertising

7. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Creating Ads “What does J. Walter Thompson stand for? We are for Brands. We are for bringing Brands to life. We are for bringing Brands back to life, where necessary. We are for nurturing, building and sustaining Brands so that this should not become necessary. We are for Brands you can eat, or drink, or drive, or read, or wear, or give, or receive, or join; technological Brands, trendy Brands, traditional Brands. We are for Brands which cross borders and Brands from across the street. More than anything, we are for Branding Ideas vivid enough to make all of these things possible, in every communications channel conceivable. After all, we have our own Branding to think about...” Branding Ideas

8. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1.Retail Advertising, which includes all advertising by retail stores that sell goods or services directly to the consuming public. –Varies widely in its effectiveness. –Source, message, and shopping experience seem to affect consumer attitudes toward these advertisements. 2.Cooperative advertising - A retailer often shares advertising costs with a manufacturer or wholesaler. –Originated to take advantage of the media’s practice of offering lower rates to local advertisers than to national ones. –Can create vertical links. Advertising

9. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Creating an Advertisement 1.Develop Goals 2.Create Plan 3.Develop and create ad 4.Select media

10. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Elements of the Advertising Planning Process

11. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising Messages 1.Starts with the customer benefits and moves to the creative concept phase. 2.Marketers work to create an ad with meaningful, believable, and distinctive appeals.

12. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. An Advertisement Should… 1.Gain attention and interest 2.Inform and/or persuade 3.Eventually lead to a purchase or other desired action.

13. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Comparison of Advertising Media Alternatives MEDIA OUTLET PERCENTAGE OF TOTAL* ADVANTAGESDISADVANTAGES Broadcast Network television 17Mass coverage; repetition; flexibility; prestigeHigh cost; temporary message; public distrust; lack of selectivity Cable television8Mass coverage; repetition; flexibility; prestigeTemporary message Radio8Immediacy; low cost; flexibility; targeted audience; mobility Short life span; highly fragmented audience Print Newspapers19Tailored to individual communities; ability to refer back to ads Short life span Direct mail19Selectivity; intense coverage; speed; flexibility; opportunity to convey complete information; personalization High cost; consumer resistance; dependence on effective mailing list Magazines5Selectivity; quality image reproduction; long life; prestige Lack of flexibility Outdoor2Quick, visual communication of simple ideas; link to local goods and services; repetition Brief exposure; environmental concerns Electronic Internet3Two-way communications; flexibility; link to self- directed entertainment Poor image reproduction; limited scheduling options; difficult to measure effectiveness *An estimated 20 percent is spent on a variety of miscellaneous media, including Yellow Pages listings, business papers, transit displays, point-of-purchase displays, cinema advertising, and regional farm papers. S OURCE: Data from “Advertising Boom in U.S. Ended in ’01,” Advertising Age, May 13, 2002, p. 24.

14. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Media Scheduling 1.Setting the timing and sequence for a series of advertisements. 2.A variety of factors influence this decision 1.Sales patterns 2.Repurchase cycles 3.Competitors’ activities

15. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Alloy & Media Scheduling Alloy is a media, direct marketing and marketing services company focusing on Generation Y. Their media scheduling integrates direct mail catalogs, print media, websites, on-campus marketing programs, and promotional events.

16. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Measure the Effectiveness of Media Schedule Plans 1.Reach refers to the number of different people or households exposed to an advertisement at least once during a certain time period. 2.Frequency refers to the number of times an individual person is exposed to an advertisement during a certain time period. By multiplying reach times frequency, advertisers quantitatively describe the total weight of a media effort, which is called the campaign’s gross rating point.

17. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Sales Promotion  Marketing activities other than personal selling, advertising, and publicity.  Accounts for double the promotional dollar outlays of advertising.  Originally intended as short-term incentives aimed at producing immediate consumer buying responses.  Traditionally, these techniques were viewed as supplements to other elements of the firm’s promotional mix.  Today, however, marketers recognize them as an integral part of many marketing plans.  Shifted from short-term to long-term goals.

18. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Principal Methods of Sales Promotion Two major categories: 1.Consumer-oriented promotions take the form of coupons and refunds, samples, contests and sweepstakes, and specialty advertising. 2.Trade promotions include trade allowances, point-of-purchase advertising, trade shows, and dealer incentives, contests, and training programs.

19. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. There are many companies that are taking advantage of sampling to promote their products. –Many of those same companies have found the internet to be an effective tool to market their products through sampling. –The StartSampling Web Site is just one place marketers can use to provide samples and gather information on the market. Sampling as a Promotional Tool

20. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Assessing Promotional Effectiveness 1.Pretesting is the assessment of an ad’s effectiveness before it is actually used. Includes conviction tests and blind product tests. 2.Posttesting is the assessment of the ad’s effectiveness after it has been used. Include readership test, unaided recall tests, inquiry tests, and split runs.

21. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Advertising Ethics Puffery and Deception Puffery refers to exaggerated claim of a product’s superiority or the use of subjective or vague statements that many not be literally true.

22. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. UCC The Uniform Commercial Code standardizes sales and business practices throughout the U.S. It makes a distinction between puffery and any specific or quantifiable statement about product quality or performance that constitutes an “express warranty.”