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Discuss the effects of advertising on market share and consumers

Identify the major types of advertising

Discuss the creative decisions in developing an advertising campaign

2015 by Cengage Learning Inc. All Rights Reserved.*

2015 by Cengage Learning Inc. All Rights Reserved.

2015 by Cengage Learning Inc. All Rights Reserved.*Describe media evaluation and selection techniques

Discuss the role of public relations in the promotional mix

Define and state the objectives of sales promotion and the tools used to achieve them


2015 by Cengage Learning Inc. All Rights Reserved.*The Effects of Advertising

Advertising and marketing services, agencies, and other firms that provide marketing and communications services employ millions of people across America. One particular area that has continued to see rapid growth is the data side of marketing.1


2015 by Cengage Learning Inc. All Rights Reserved.*Advertising and Market ShareNew brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share.

Beyond a certain level of spending, diminishing returns set in.New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits.1


2015 by Cengage Learning Inc. All Rights Reserved.*The Effects of Advertising on Consumers

Advertising may change a consumers negative attitude toward a product, or reinforce a positive attitude.

Advertising can affect consumer ranking of a brands attributes.1


2015 by Cengage Learning Inc. All Rights Reserved.*Creative Decisions in AdvertisingA series of related advertisements focusing on a common theme, slogan, and set of advertising appeals.Advertising Campaign3Identifies the specific communication task that a campaign should accomplish for a specified target audience during a specified period.Advertising Objective


2015 by Cengage Learning Inc. All Rights Reserved.*Identify Product BenefitsSell the sizzle, not the steak. Sell a products benefits, not its attributes. A benefit should answer Whats in it for me? Ask So? to determine if advertising offers attributes or benefits.3


2015 by Cengage Learning Inc. All Rights Reserved.*Identify Product BenefitsAttributeBenefit DogsBestFriend is an all-natural skin care lotion for dogs that combines traditional medicines and Nigella sativa seed oils with the newest extraction technology.

So . . . DogsBestFriend acts as a natural replacement for hydrocortisone, antihistamines, and topical antibiotics that is powerful enough to combat inflammation, itching, and pain, yet safe enough to use on dogs of all ages.

So?3


2015 by Cengage Learning Inc. All Rights Reserved.*NewspapersAdvantages

Geographic selectivityShort-term advertiser commitmentsNews value and immediacyYear-round readershipHigh individual market coverageCo-op and local tie-in availabilityShort lead timeDisadvantages

Limited demographic selectivityLimited colorLow pass-along rate May be expensive

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2015 by Cengage Learning Inc. All Rights Reserved.*MagazinesAdvantages

Good reproductionDemographic selectivityRegional/local selectivityLong advertising lifeHigh pass-along rate Disadvantages

Long-term advertiser commitmentsSlow audience build-upLimited demonstration capabilitiesLack of urgencyLong lead time 4


2015 by Cengage Learning Inc. All Rights Reserved.*RadioAdvantages

Low costImmediacy of messageShort notice schedulingNo seasonal audience changeHighly portableShort-term advertiser commitmentsEntertainment carryoverDisadvantages

No visual treatmentShort advertising lifeHigh frequency to generate comprehension and retentionBackground distractionsCommercial clutter4


Media Decisions: The RadioFor small companies that cannot afford television or endorsements, radio advertising can help raise brand exposure and drive sales.Carbonite, which provides data-storage services, discovered that web traffic driven by radio ads was 40 percent more likely to end in a sale.A local market test run on a radio ad can cost as little as $10,000-$30,000 per month.Source: Nitasha Tiku, On-Air Endorsements, Inc., June 1, 2010. Available at http://www.inc.com/magazine/20100601/on-air-endorsements.html (accessed November 8, 2010). 2015 by Cengage Learning Inc. All Rights Reserved.*


2015 by Cengage Learning Inc. All Rights Reserved.*TelevisionAdvantages

Wide, diverse audienceLow cost per thousandCreative opportunities for demonstrationImmediacy of messagesEntertainment carryoverDemographic selectivity with cableDisadvantages

Short life of messageConsumer skepticismHigh campaign costLittle demographic selectivity with stationsLong-term advertiser commitmentsLong lead times for productionCommercial clutter4


History Will Be Made (In Marketing?)The NHL sparked a massive viral movement when it released its 2010 Stanley Cup television adsa series of iconic clips from past Stanley Cups played in reverse, asking the question What if this had never happened?Fans jumped on board by creating their own versions, which quickly spread across the Internet, drawing more attention to the playoffs in progress.The NHL built of this success, creating more videos using events from games only hours after theyd been played.Source: Mike Barber, NHL ads are history in the making, Vancouver Sun, June 5, 2010. http://www.vancouversun.com/sports/hockey/vancouver-canucks/history+making/3117950/story.html?id=3117950 2015 by Cengage Learning Inc. All Rights Reserved.*


2015 by Cengage Learning Inc. All Rights Reserved.*InternetAdvantages

Fast growingAbility to reach narrow target audienceShort lead timeModerate cost Disadvantages

Difficult to measure ad effectiveness and ROIAd exposure relies on click through from banner adsNot all consumers have access to Internet 4


2015 by Cengage Learning Inc. All Rights Reserved.*Outdoor MediaAdvantages

RepetitionModerate costFlexibilityGeographic selectivity Disadvantages

Short messageLack of demographic selectivityHigh noise level 4


Googles AdWords (Ads Work!) 2015 by Cengage Learning Inc. All Rights Reserved.*Google's total revenue in 2008 was $21.8 billion and of this, $21.1 billion was derived from advertising. At the end of its third quarter in 2009, the companys total revenue was $16.9 billion, $16.4 billion from advertising.

To appreciate just how much Google has grown, consider thisin 2003 the company's total revenue was $1.46 billion with advertising revenue representing $1.42 billion.

Source: http://investor.google.com/fin_data.html last visited November 12, 2009


2015 by Cengage Learning Inc. All Rights Reserved.*Qualitative Factors in Media SelectionAttention to the commercial and the programInvolvementProgram likingLack of distractionsOther audience behaviors4


2015 by Cengage Learning Inc. All Rights Reserved.*Media Scheduling

ContinuousMedia Schedule

Flighted Media SchedulePulsingMedia ScheduleSeasonalMedia ScheduleAdvertising 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.

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2015 by Cengage Learning Inc. All Rights Reserved.*Public RelationsThe element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance.5


Sales PromotionSales promotion activities targeting the ultimate consumer.Consumer Sales Promotion isSales promotion activities targeting a marketing channel member, such as a wholesaler or retailer.Trade Sales Promotion is 2015 by Cengage Learning Inc. All Rights Reserved.*6


2015 by Cengage Learning Inc. All Rights Reserved.*Trade AllowanceA price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers.6Trade Sales PromotionPush MoneyMoney offered to channel intermediaries to encourage them to push productsthat is, to encourage other members of the channel to sell the products.


2015 by Cengage Learning Inc. All Rights Reserved.*Benefits of Trade Promotions

Help manufacturers gain new distributors Obtain wholesaler and retailer support for consumer sales promotions Build or reduce dealer inventories Improve trade relations

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Point-of-Purchase PromotionA point-of-purchase (P-O-P) display includes any promotional display set up at the retailers location to build traffic, advertise the product, or induce impulse buying. 2015 by Cengage Learning Inc. All Rights Reserved.*6


Chapter 16 VideoBoltBusBoltBus is Greyhounds curbside, express bus service. BoltBus operates primarily in the Northeast between major hubs, with some other service in the Northwest. This clip covers how BoltBus reaches its target markets through advertising, promotion, and social media.CLICK TO PLAY VIDEO 2015 by Cengage Learning Inc. All Rights Reserved.*


Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Advertising is a popular form of promotion, especially for consumer packaged goods and services. Advertising expenditures typically increase annually.Companies are collecting huge amounts of information and need skilled, creative, Web-savvy people to interpret the data coming in from Web, mobile, and other digital ad campaigns.One Microsoft study estimates that 90 percent of enterprise companies have a dedicated budget for addressing big data. Forty-nine percent of the demand for big data is driven by sales and marketing departments.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Advertising is utilized for maintaining brand awareness and market share.New brands with a small market share tend to spend proportionately more for advertising than those with a large market share. Why? First, beyond a certain level of spending, diminishing returns set in. Sales or market share decrease no matter how much is spent on advertising and sales promotion. This is called the advertising response function. Second, new brands tend to require higher spending to maintain a certain minimum level of exposure to measurably affect purchase habits.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:The influence of advertising on the U.S. socioeconomic system has been the subject of extensive debate in nearly all corners of society.

Discussion/Team Activity:Discuss advertisements that are memorable. What makes them stand out?

Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:The firms promotional objectives determines the type of advertising it uses. Institutional advertising is used to build up the image of the company.In contrast, product advertising is used to enhance the sales of a specific good or service.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Institutional advertising promotes the corporation as a whole and is designed to establish, change, or maintain the corporations identity. A form of institutional advertising is advocacy advertising, typically used to safeguard against negative consumer attitudes and to enhance the companys credibility among consumers who already favor its position.

Discussion/Team Activity:Discuss examples of institutional advertising and the industries that frequently use this form.

Chapter 16 Advertising, Public Relations, and Sales Promotion*OnlinePizza Hut vs. Papa JohnsCan you find evidence of comparative advertising on either Pizza Huts or Papa Johns Web site?

Notes:The products stage in its life cycle often determines which of the above types of product advertising is selected. Pioneering advertising is used during the introductory stage of the PLC. Competitive advertising is used during the growth phase of the PLC as competition increases. Comparative advertising compares competing brands. Before the 1970s, comparative advertising was allowed only if the competing brand was unidentified. Care should be used with comparative advertising approach in global markets due to government regulations and cultural/social value sensitivity.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:The DAGMAR approach is one method of setting objectives. Once objectives are defined, creative work can begin on the advertising campaign. Advertising campaigns often follow the AIDA model, which was discussed in Chapter 15.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Advertising strategies are organized around an advertising campaign. An ad campaign is a series of related ads focusing on a common theme, slogan, and set of advertising appeals.Before creative work can begin, advertising goals or objectives are established. The DAGMAR approach (described on the next slide) is one method of setting objectives. Once objectives are defined, creative work can begin, with the advertising campaign often following the AIDA model.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:According to the DAGMAR (Defining Advertising Goals for Measured Advertising Results) approach, all advertising objectives should precisely define the target market, the desired percentage change in some specified measure of effectiveness, and the time frame in which that change is to occur.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Creative decisions include identifying product benefits, developing and evaluating advertising appeals, executing the message, and evaluating the effectiveness of the campaign.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:A well-known rule of thumb in advertising is to sell the sizzle, not the steak by advertising a products benefits instead of its attributes.A benefit is what consumers will receive or achieve by using the product. A quick test to determine whether you are offering attributes or benefits is to ask So?

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:An example of an attribute and benefit are shown on this slide.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Common advertising appeals are listed in Exhibit 16.1. Choosing the best appeal normally requires market research.The appeal must make a positive impression on the target market, while being unique, distinguishable from the competitors messages, and believable.

Discussion/Team Activity:Discuss advertisements that use these appeals. How effective are the advertisements? Why? Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:The advertising appeal selected for the campaign becomes its unique selling proposition, usually becoming the campaigns slogan. Effective slogans become easily recognizable to the consumer.

Discussion/Team Activity:Give the class a slogan or jingle, and have them name the product. Historical and current products may be used, demonstrating the lasting value of good advertising appeals.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Message execution is the way an advertisement portrays its information. The AIDA plan is a good means of executing an advertising message. An ad should immediately get attention, and hold consumers interest, create desire for the good, and motivate an action of purchase.Exhibit 16.2 lists examples of executional styles used by advertising. Executional styles often dictate the type of media utilized. Post-campaign evaluation can be the most demanding task facing advertisers.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:The choice of medium is a major decision for advertisers. Monitored media includes those media shown above and monitored by national reporting services. U.S. advertisers spend roughly $300 billion annually on monitored media. Unmonitored media is shown on this slide. Traditional mass-market media are declining in usage and more targeted media are growing.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Advertising media are channels that advertisers use in mass communication.The six major advertising media are listed on this slide.Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Advantages and disadvantages of major advertising media are summarized in Exhibit 16.3. The following slides show a close-up of each media type.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:The main sources of newspaper ad revenue are local retailers, classified ads, and cooperative advertising. Cooperative advertising encourages retailers to devote more effort to the manufacturers lines.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Compared to the cost of other media, the cost per contact in magazine advertising is usually high.Although magazine cost per contact may be higher than other media, ads reach specialized audiences and thus more potential customers. One of the main advantages of magazine advertising is market selectivity.

Discussion/Team Activity:Name magazines that appeal to a specialized audience. If you have copies available, review the publication to identify the advertisers.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Local advertisers are the most frequent users of radio advertising. Radio also lends itself well to cooperative advertising.The ability to target specific demographic groups is a major selling point for radio stations.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Advertising on television can be very expensive. First-run prime-time shows command rates of $300,000 to $500,000 for a 30-second spot. A thirty-second spot during the Super Bowl costs approximately $3.8 million.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:With global annual ad revenues of almost $120 billion in 2013, the Internet has become a versatile advertising medium able to target specific groups.One of the most popular approaches for Internet advertising is search engine ads.A popular Internet advertising format is advergaming, whereby companies put ad messages in Web-based, mobile, console, or handheld video games to advertise or promote a product, service, organization, or issue.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Outdoor or out-of-home advertising is a flexible, low-cost medium that may take a variety of forms.Examples include billboards, skywriting, giant inflatables, mini billboards in malls and on bus stop shelters, signs in sports arenas, and lighted moving signs in bus terminals and airports, as well as ads painted on cars, trucks, buses, water towers, manhole covers, drinking glass coasters, and even people, called living advertising.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Advertisers are using new media vehicles to cut through the clutter of traditional advertising media.Marketers are looking for more innovative ways to reach captive and often bored commuters. Notes:An important element in any advertising campaign is the media mix, the combination of media to be used.Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Advertisers also evaluate the qualitative factors involved in media selection. The factors shown above affect the likelihood that a commercial message is being seen and absorbed. An audience must pay attention to the ad for it to be effective.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:After choosing the media for the campaign, advertisers must schedule the ads. The media schedule designates the medium or media to be used, the specific vehicles (such as the TV show), and the insertion dates of the advertising.Continuous media schedule: Examples include Ivory soap and Charmin toilet tissue.Flighted media schedule: Examples include movie ads on Wednesday and Thursday nights.Pulsing media schedule: Examples include Thanksgiving, Christmas, and back-to-school sales. Seasonal media schedule: Examples include cold medication and suntan lotion. Recency planning is the theory of scheduling television advertising for frequently purchased products, such as Coca-Cola and Tide detergent. Its main premise is to influence the brand choice of people who are ready to buy.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Marketing managers plan public relations campaigns that fit into the overall marketing plans and focus on targeted audiences. Publicity is the effort to capture media attention and is initiated through a press release that furthers the public relations plans.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:This slide lists the major tools used by public relations professionals.Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Crises do happen. Companies must have a communication policy firmly in hand before a disaster occurs because timing is uncontrollable.

Discussion/Team Activity:Identify other corporate crises and discuss how the public relations was handled. Examples include Walmarts low wages and sparse benefits and the BP oil spill. Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Sales promotion consists of marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates consumers or members of the distribution channel to purchase a good or service immediately, either by lowering the price or by adding value.In addition to advertising, public relations, and personal selling, sales promotion is utilized to increase the effectiveness of other promotional efforts. Sales promotion provides an incentive for consumers to purchase a good or service immediately, either by lowering the price or by adding value. While advertising offers a reason to buy, sales promotion offers an incentive to buy. Both are important, but sales promotion is usually cheaper and easier to measure.

Notes:An effective tool for strengthening brand loyalty is the frequent buyer program, which rewards consumers for repeat purchases.Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:While consumer promotions pull a product through the channel by creating demand, trade promotions push a product through the distribution channel.Consumer promotion tools are used when selling to members of the distribution channel, as well as tools that are unique to manufacturers and intermediaries, shown on this slide.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Trade promotions are popular among manufacturers for many reasons, as shown on this slide.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:The tools selected for sales promotion must suit the objectives to ensure success of the overall promotion plan. Popular tools are shown here, and described on the following slides.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Coupons encourage product trial and repurchase, and are likely to increase the amount of a product purchased. FSIs are used to distribute 90 percent of coupons. Coupons promoting new-product use are likely to stimulate purchases. In-store coupons are more likely to influence buying decisions.Rebates must be mailed in along with a proof of purchase. Rebates offer price cuts to consumers directly and are more easily controlled. Further, customer databases can be built due to the information forms required for rebates. Premiums reinforce the purchase decision, increase consumption, and persuade nonusers to switch brands.

Discussion/Team Activity:Identify companies who have utilized these popular sales promotion tools. Examples include fast food services, cosmetic companies, banks, rental cars, magazines, computer manufacturers, and cell phones.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Loyalty marketing programs reward consumers for making multiple purchases. The objective of loyalty marketing programs is to build long-term, mutually-beneficial relationships between a company and key customers.

Discussion/Team Activity:Identify several companies that offer these programs. Discuss the benefits offered by some of the more popular loyalty marketing and frequent buyer programs.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Contests and sweepstakes are designed to create interest in a good or service, often to encourage brand switching. They are not effective tools for generating long-term sales. Furthermore, the award must appeal to the target market. Offering several smaller prizes instead of one huge prize will increase the effectiveness of a promotion.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Sampling allows the risk-free trial of a product. In a recent study, in-store sampling proved to be the most successful promotional tactic when researchers introduced a new dairy product to grocery stores. In-store sampling events increased sales 116 percent, outperforming end cap displays (70 percent), ad circulars (63 percent), and temporary price reductions (48 percent).Sampling at special events is popular, effective, and a high-profile method that permits marketers to piggyback onto fun-based consumer activities.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Discussion/Team Activity:Discuss some of the occasions that you have had the opportunity to participate in product sampling. How did this influence your decision to purchase the sampled product? What methods are most effective in reaching college students?

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:Point-of-purchase promotions (P-O-Ps) include shelf talkers, shelf extenders, ads on carts and bags, end-aisle and floor-stand displays, TV monitors and in-store audio messages, and audiovisual displays.Approximately 76 percent of all retail purchase decisions are made in-store, and 57 percent of shoppers buy more than they anticipated once in the store, so P-O-P displays can be very effective.

Chapter 16 Advertising, Public Relations, and Sales Promotion*Notes:The biggest trend in sales promotion on both the trade and consumer side has been the increased use of the Internet. Social media, e-mail-, and Web sitebased promotions have expanded dramatically in recent years.The redemption rate of online coupons7.72 percentis much higher than the redemption rate of traditional coupons0.51 percent.Online versions of loyalty programs are gaining popularity, and the most successful are those run by hotel and airline companies. Chapter 16 Advertising, Public Relations, and Sales Promotion*

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