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1Copyright 2009 by Cengage Learning Inc. All rights reserved

Designed byEric BrengleB-books, Ltd.

CHAPTER

17

Advertising and Public Relations

Prepared byAmit Shah

Frostburg State University

MarketingLamb, Hair, McDaniel

10

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Copyright 2009 by Cengage Learning Inc. All rights reserved

Learning Outcomes

2

Discuss the effects of advertising on marketshare and consumers

Identify the major types of advertising

Discuss the creative decisions in developingan advertising campaign

LOI

LO2

LO3

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Learning Outcomes

3

Describe media evaluation andselection techniques

Discuss the role of public relationsin the promotional mix

LO5

LO4

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The Effects of Advertising

4

Discuss the effects ofadvertising on

market share and consumers

LOI

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The Effects of Advertising U.S. advertising was forecasted at

nearly $480 billion in 2008

In 2005, 32 companies spent over

$1 billion each

The advertising and marketingservices employ 800,000 people

Ad budgets of some firms are almost$4 billion annually

5

LOI

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The Effects of Advertising

6

LOI

Top Ten Leaders by U.S.Advertising Spending

Top Ten Leaders by U.S.Advertising Spending

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Advertising and Market Share

New brands with a small market share spend

proportionally more for advertising and sales

promotion than those with a large market share

1. Beyond a certain level of spending,diminishing returns set in.

2. New brands require higher spending toreach a minimum level of exposureneeded to affect purchase habits.

7

LOI

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The Effects of Advertisingon Consumers

8

LO

I

The average U.S. citizen is exposed tohundreds of ads each day.

Advertising may change a consumersnegative attitude toward a product, orreinforce a positive attitude.

Advertising can affect consumer

ranking of a brands attributes.

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REVIEW LEARNING OUTCOMEEffects of Advertising

9

LOI

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Major Types of Advertising

10

Identify the major typesof advertising

LO2

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11

LO2

InstitutionalAdvertisingInstitutionalAdvertising

Enhances a companys imagerather than promotes aparticular product.

Enhances a companys imagerather than promotes aparticular product.

ProductAdvertising

ProductAdvertising

Touts the benefits of aspecific good or service.Touts the benefits of aspecific good or service.

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12

LO2

Corporate identityCorporate identity

PioneeringPioneering

CompetitiveCompetitive

ComparativeComparative

ProductAdvertising

ProductAdvertising

InstitutionalAdvertisingInstitutionalAdvertising

Advocacy

advertising

Advocacy

advertising

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Product Advertising

13

LO2

PioneeringPioneeringPioneeringPioneering Stimulates primary demand for

new product or category Used in the PLC introductory stage

CompetitiveCompetitiveCompetitiveCompetitive

Influences demand for brand in the

growth phase of the PLC

Often uses emotional appeal

ComparativeComparativeComparativeComparative Compares two or more competing

brands product attributes

Used if growth is sluggish, or ifcompetition is strong

Online

http://www.pizzahut.comhttp://www.papajohns.com

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REVIEW LEARNING OUTCOMEThe Major Types of Advertising

14

LO2

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Creative Decisions in Advertising

15

Discuss the creative decisionsin developing an

advertising campaign

LO3

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16

AdvertisingCampaign

AdvertisingCampaign

A series of related

advertisements focusing on a

common theme, slogan, and

set of advertising appeals.

LO3

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17

LO3

Determine theadvertising objectives

Make creative decisions Make media decisions

Evaluate the campaign

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Setting Objectives:The DAGMAR Approach

18LO3

Define target audienceDefine target audience

Define desired percentage changeDefine desired percentage change

Define the time frame for changeDefine the time frame for change

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Creative Decisions

19

LO3

Develop and evaluateadvertising appealsDevelop and evaluateadvertising appeals

Executethe message

Executethe message

Evaluate thecampaigns effectiveness

Evaluate thecampaigns effectiveness

Identifyproduct benefits

Identifyproduct benefits

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Identify Product Benefits

Sell the Sizzle, not the Steak

Sell products benefits, not its attributes

A benefit should answerWhats in it for me?

AskS

o?to determineif it is a benefit

20

LO3

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Identify Product Benefits

21

LO3

Attribute

Benefit

SoBe Life Water has reformulatedfive delicious, low-calorie flavors,

each infused with essential vitamins

and healthy herbal ingredients.

SoBe Life Water is not only anenhanced water; it is a lifestyle unto

itself. It provides consumers thehealthiest, most fun and refreshingproducts, delivering the incredibly

positive benefits of hydration.

- So?

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Advertising Appeals

22

LO3

Profit

Health

Love or romance

Fear

Admiration

Convenience

Fun and pleasure

Vanity and egotism

EnvironmentalConsciousness

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

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Unique Selling Proposition

23

LO3

Unique SellingProposition

Unique SellingProposition

A desirable, exclusive, and

believable advertising

appeal selected as the

theme for a campaign.

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Copyright 2009 by Cengage Learning Inc. All rights reserved 24

LO3

Executing the Message

Mood orImage

Mood orImage

MusicalMusical

Demon-strationDemon-stration

ScientificScientific

Real/AnimatedProductSymbols

Real/AnimatedProductSymbols

FantasyFantasy

LifestyleLifestyle

Slice-of-LifeSlice-of-Life

HumorousHumorous

Spokes-person/

Testimonial

Spokes-person/

Testimonial

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REVIEW LEARNING OUTCOMECreative Decisions for Ad Campaign

25

LO3

Setadvertisingobjectives

Identify benefits

Develop appeal

Evaluatecampaign results

Evaluating

results helpsmarketersadjust objectivesfor futurecampaigns

Execute message

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Media Decisions in Advertising

26

Describe media evaluationand

selection techniques

LO4

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Media Decisions in Advertising

27

LO4

NewspapersNewspapers

MagazinesMagazines

Yellow PagesYellow Pages

InternetInternet

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Direct MailDirect Mail

Trade ExhibitsTrade Exhibits

Cooperative AdvertisingCooperative Advertising

BrochuresBrochures

CouponsCoupons

CatalogsCatalogs

Special EventsSpecial Events

Monitored

Media

Monitored

Media Unmonitored

MediaUnmonitored

Media

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Major Advertising Media

28

LO4

NewspapersNewspapers

MagazinesMagazines

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Yellow PagesYellow Pages

InternetInternet

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Newspapers

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LO4

AdvantagesAdvantages

Geographic selectivity

Short-term advertisercommitments

News value andimmediacy

Year-round readership

High individual market

coverage Co-op and local tie-in

availability

Short lead time

DisadvantagesDisadvantages

Limited demographic

selectivity Limited color

Low pass-along rate

May be expensive

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Cooperative Advertising

30

LO4

CooperativeAdvertisingCooperativeAdvertising

An arrangement in which the

manufacturer and the retailer

split the costs of advertising

the manufacturers brand.

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Magazines

31

LO4

AdvantagesAdvantages DisadvantagesDisadvantages

Good reproduction

Demographic selectivity

Regional/local selectivity

Long advertising life

High pass-along rate

Long-term advertiser

commitments Slow audience build-up

Limited demonstrationcapabilities

Lack of urgency Long lead time

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Radio

32

LO4


Low cost

Immediacy of message Short notice scheduling

No seasonal audiencechange

Highly portable

Short-term advertisercommitments

Entertainment carryover

No visual treatment

Short advertising life

High frequency togenerate comprehensionand retention

Background distractions

Commercial clutter

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Television

33

LO4


Wide, diverse audience

Low cost per thousand

Creative opportunities fordemonstration

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 advertisercommitments

Long lead times forproduction

Commercial clutter

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TV Advertising: Is Less More?

The number of ads in TV shows is alongstanding complaint of viewers andadvertisers.

The media is cluttered and consumerschange channels or speed throughcommercials on a DVR.

Tests are being conducted to featureshorter commercial pods.

34

LO4

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Outdoor Media

35

LO4


Repetition

Moderate cost

Flexibility

Geographic selectivity

Short message

Lack of demographicselectivity

High noise level

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Internet

36

LO4


Fast growing

Ability to reach narrowtarget audience

Short lead time

Moderate cost

Difficult to measure adeffectiveness and ROI

Ad exposure relies onclick through frombanner ads

Not all consumers have

access to Internet

Online

http://www.fox.comhttp://www.abc.com

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Videogame Advertising

In 2006, Microsoft acquired Massive inc., a start-up that places ads in video games.

Ads are inserted into thegame environment.

Video games could becomea large new medium foradvertising.

37

LO4

SOURCE: Robert A. Guth and Nick Wingfield,Microsofts Massive Move into Game Ads,

Wall Street Journal, April 26,2006, B1.

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Cell Phones

Newest advertising media

Useful for reaching youth market

3 billion cell phone users in the world

In 2006 cell phone ad sales reached over

$400 million in U.S. nearly $900 millionworldwide

38

LO4

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Media Selection

Media Mix Combination of media to beused for a promotional campaign

Cost per contact The cost of reaching one

member of the target market

Reach number of target consumersexposed to a commercial at least onceduring a specific period, usually four weeks

Frequency number of times an individual isexposed to a given message during aspecific period

39

LO4

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Qualitative Factors in MediaSelection

Attention to the commercialand the program

Involvement

Program liking

Lack of distractions

Other audience behaviors

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LO4

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Media Scheduling

41

LO4

ContinuousMedia Schedule

Flighted

Media Schedule

PulsingMedia Schedule

SeasonalMedia Schedule

Advertising is run steadilythroughout the period.

Advertising is run heavily every

other month or every two weeks.

Advertising combines continuousscheduling with flighting.

Advertising is run only when theproduct is likely to be used.

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REVIEW LEARNING OUTCOMEMedia Evaluation and Selection

42

LO4

Type: NewspaperMagazineRadioTelevisionOutdoorInternet

Alternative

Considerations:

Mix How much of each?Cost per contact How much per person?Reach How many people?Frequency How often?

Audience selectivity How targeted is audience?

Scheduling:continuous

flighted

pulsing

seasonal

Winter Spring Summer Fall

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Public Relations

43

Discuss the role ofpublic relations

in the promotional mix

LO5

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Public Relations

44

Public RelationsPublic Relations

LO5

The element in the promotional

mix that:

evaluates public attitudes

identifies issues of public concern

executes programs to gain publicacceptance

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Functions of Public Relations

45

LO5

Press relationsPress relations

Product publicityProduct publicity

Corporate communicationCorporate communication

Public affairsPublic affairs

LobbyingLobbying

Employee and investor relationsEmployee and investor relations

Crisis managementCrisis management

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Public Relations Tools

46

LO5

Product placementProduct placement

Consumer educationConsumer education

Event sponsorshipEvent sponsorship

Issue sponsorshipIssue sponsorship

Internet Web sitesInternet Web sites

New product publicityNew product publicity

Online

http://www.vw.comhttp://www.chevrolet.com

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Example of Consumer Education

Corporations are teaching publicschool students about personalfinance.

People under age 25 are a fast-

growing group for credit card debtincreases and bankruptcy.

Is it appropriate to use educationalmaterials with a corporate identity?

How should financial literacy betaught?

47

LO5

SOURCE: Diya Gullapalli,Your Kids Teacher: The Bank,

Wall Street Journal, April 8-9, 2006, B1.

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Managing Unfavorable Publicity

48

CrisisManagement

CrisisManagement

LO5

A coordinated effort to

handle the effects of

unfavorable publicity or of

an unfavorable event.

5

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REVIEW LEARNING OUTCOMEThe Role of Public Relations

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LO5

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