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Chapter 16: Advertising, Sales Promotion, & Public Relations

LEARNING OBJECTIVES:

Define the roles of

ADVERTISING, SALES

PROMOTION & PUBLIC

Relations in promotion mix.

Describe the major decisions

involved in developing an

advertising program.

Explains how SALES

PROMOTION CAMPAIGNS

are developed and

implemented.

Explain how companies use

PUBLIC RELATIONS to

communicate with their

publics.

Mohammed Bien M. Kulintang, R.N. Davao Doctors College Inc. Masters of Arts in Nursing

Major in Clinical Management

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ADVERTISING

Any paid form of non-personal presentation and promotion of ideas, goods, or

services by an identified sponsor.

Countries in Mediterranean Sea Romans – painted walls to announce gladiator fights Phoenicians – painted pictures promoting their wares on large rocks

along parade routes. Advertising

Used mostly by business firms. In CHINA, the nation’s largest advertisers are the local fast moving

consumer goods (FMCG) firms – they account for 80% of all the advertising expenses.

It is also used by a wide range of not-for-profit organizations, professionals, and social agencies that advertise their causes to various target publics throughout Asia.

In JAPAN, the government, educational institutions, and medical services account for 4.9% of all advertising in the major media.

It is a good way to inform or persuade other people or mainly the consumers.

Marketing Management

They are responsible in developing an advertising program.

MAJOR ADVERTISING DECISIONS:

The four important decisions when developing an advertising program

1. SETTING ADVERTISING OBJECTIVES

Based on the past decisions about the target market, positioning, and

marketing mix, which define the job that advertising must do in the total

marketing program.

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A specific communication TASK to be accomplished with a specific

TARGET AUDIENCE during a specific period of TIME.

It can be classified by primary purpose.

Possible advertising objectives:

a. INFORMATIVE OBJECTIVE Used heavily when introducing new products by telling the market

about it.

Suggesting new uses for a product.

Informing the market of a change price.

Explaining how the product works.

Describing available services

Correcting false impressions

Reducing consumer’s fears

Building a Company Image

b. PERSUASIVE ADVERTISING Becomes more important as competition increases. Here, the

company’s objective is to build selective demand.

Some persuasive advertising has become COMPARATIVE

ADVERTISING in which a company directly or indirectly compares its

brand with other brand.

Building brand preferences.

Encouraging switching to your brand.

Changing customer’s perception of product attributes.

Persuading costumer to purchase now.

Persuading customer to receive a sales call.

Note:

In many Asian countries, direct COMPARATIVE ADVERTISERS are either banned by law or discouraged. You can only say “COMPARED TO OTHER BRANDS”.

c. REMINDER ADVERTISING

It is important for mature PRODUCTS – it keeps consumers thinking

about the product

Reminding consumer that the product may be needed in the near

future.

Reminding consumer where to buy.

Keeping it in customer’s mind during off – seasons.

Maintaining its top – of – mind awareness.

2. SETTING THE ADVERTISING BUDGET

After determining its advertising objectives, the company next sets its

advertising budget for each product.

Brand’s advertising budget often depends on its stage in the product life cycle.

a) New products

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Needs larger budget to build awareness and to persuade consumers to try the products

b) Mature products Requires lower budget as a ratio to sales.

Market share also impacts on the amount of advertising needed: because

building the market or taking share from competitors requires larger advertising spending than does simply maintaining current share, low – share brands usually need more advertising spending as a percentage of sales.

Also, brands in market with many competitors and high advertising clutter must be advertised more heavily to be noticed above the noise in the market.

Undifferentiated brands – those that closely resemble other brands in their product class (beer, soft drinks, laundry detergents) – may require heavy advertising to set them apart.

When the products differ greatly from competitors, advertising can be used to point out the differences to consumers.

How does a company know if it spending the right amount?

Some critics charge that large consumer packaged – goods firms tend to spend too much on advertising. They claim that, on the hand, the large consumer companies use lots of image advertising without really knowing its effects.

Business to business marketers generally under-spend on advertising. They just tend to rely too heavily on their sales forces to bring in orders. They underestimate the power of company and product image in pre-selling to industrial customer awareness and knowledge.

3. DEVELOPING ADVERTISING STRATEGY

In the past, companies often viewed media planning as secondary to the

message – creation process.

It has two major elements: 1) Creating advertising MESSAGES 2) Selecting advertising MEDIA

1. Creating the Advertising Messages

No matter how big the budget, advertising can succeed only if commercials gain attention and communicate well. Good advertising messages are especially important in today’s costly a cluttered advertising environment.

Just to gain and hold attention, today’s advertising messages must

be better planned, imaginative, more entertaining and more rewarding to consumers.

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Two steps in creating effective advertising messages.

a. Message Strategy

The effective advertising message is to decide what general

messages will be communicated to consumers – to plan a

message strategy. And it begins with identifying consumers

benefits.

The purpose of advertising is to get consumers to think about or

react to the product or company in a certain way.

MS Statements tends to be plain, straightforward outlines of

benefits and positioning points that advertiser wants to

stress.

The advertiser must next develop a compelling creative concept

or big idea – that will bring the message strategy to life in a

distinctive and memorable way.

At this stage, simple message ideas become great ad

campaigns. The creative concept may emerge as

visualization, a phrase or a combination of two. It will also

guide the choice of specific appeals to be used in an

advertising campaign.

Advertising Appeal should have three characteristics.

Meaningful – pointing out benefits that make the product

more desirable or interesting to consumers.

Believable – the consumer must believe that the product or

service will deliver the features.

Distinctive – they should tell how the product is better than

the competing brands.

b. Message Execution

The advertiser now has to turn big ideas into an actual ad

execution that will capture the attention and interests of the target

market. The creative people must find the best style, tone, words

and format for executing the message.

Message can be presented in different execution styles.

Slice of Life – this style uses one or more “typical” people

using the product in normal setting.

Lifestyle – this style shows how a product fits in with a

particular lifestyle and among Asian consumers, they have an

unlimited appetite for American and European lifestyles.

Example: California Fitness Center, a foreign named fitness

center that aims to promote a healthy western Lifestyle.

Fantasy – this style creates a fantasy around the product or

its use. For instance, many ads are built around dream

themes.

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Mood or Image – this style builds a mood or image around

the product, such as beauty, love or serenity. No claim is

made about the product except for suggestions. Across

Asia, hotel and tourism ads create such moods that target at

busy professionals working throughout the region.

Musical – this style shows one or more people or cartoon

characters singing about the product. Example: Coca-Cola,

they used their own jingle (I’d Like to Teach the World to Sing)

before but now they’re using pop music.

Personality Symbol – this style creates a character that

represents the products. The character might be animated

(Garfield the Cat, Jollibee) or real (the Marlboro man).

Technical Expertise – this style shows the company’s

expertise in making the product. To convey some technical

expertise, celebrities are used.

Scientific Evidence – this style presents survey or scientific

evidence that the brand is better or better liked than one r

more other brands. Example: Colgate vs. Other brands.

Testimonial Evidence or Endorsement – this style features

a highly believable or likable source endorsing the product. It

could be ordinary people saying how much they like a given

product or a celebrity presenting the product.

The advertiser also must choose a tone for the ad. P&G always

uses positive tone: its ads say something very positive about its

products. They usually avoid humour that might take attention

away from the message.

They must also use memorable and attention getting WORDS

in the ad. Example: instead of saying “BMW is a well engineered

automobile”, they use more creative and higher impact phrasing

like “BMW: The ultimate driving Machine”.

Format – makes a difference in an ad’s impact. It has elements

and these must effectively work together.

Illustration – first thing the reader notices – it must be strong

enough to draw attention.

Headline – must effectively entice the right people to read the

copy.

Copy – the main block of text in the ad – must be simple but

strong and convincing.

2. Selecting Advertising Media

There are MAJOR STEPS in media selection.

2.1 Deciding on Reach, Frequency, and Impact

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Reach – is a measure of the percentage of people in the target

market who are exposed to the ad campaign during a given period

of time.

a. Example: The advertiser must reach 70% of the target market

during the first 3 months of the campaign.

Frequency – is a measure of how many times the average person

in the target market is exposed to the message.

a. Example: The advertiser might want an average exposure

frequency of three.

Media Impact – the qualitative value of a message exposure

through a given medium

a. Example: for products that need to be demonstrated, messages

on TV may have more impact than messages on radio because

television users sight and sound. The same message in one

magazine may be more believable than in other.

In general, the more reach, frequency and impact the advertiser

seeks, the higher the advertising budget will have to be.

2.2 Choosing Among Major Media Types

Different types of messages may require different media type.

a) Fashions are best advertised in color magazines and

automobile is best demonstrated on television.

b) A message announcing a major sale tomorrow will require radio

or newspaper; a lot of technical data might require magazines,

direct mailings, or online ad and Website.

Cost – is another major factor in media choice. The media planner

looks both at the total cost of using a medium and at the cost per

thousand exposures – the cost of reaching 1,000 people using the

medium.

Profiles of Major Media Types

Medium Advantages Disadvantages

Newspaper Flexibility; timeliness; good local market coverage; broad capability; high believability

Short life; poor reproduction quality; small pass – along audience

Television Good mass – market coverage; low cost per exposure; combines sight, sound, and motion; appealing to the senses

High absolute costs; high clutter; fleeting exposure; less audience selectivity

Direct Mail High audience selectivity; flexibility; no ad competition within the same mediums; allows personalization

Relatively high cost per exposure; “junk mail” image

Radio Good local acceptance; high geographic and demographic selectivity, low cost

Audio only, fleeting exposure; low attention (“the half – hard” medium); fragmented audiences

Magazines High geographic an demographic selectivity; credibility and prestige; high quality reproduction; long – life and good pass – along the readership

Long ad purchase lead time; high cost; no guarantee of position

Outdoor Flexibility; high repeat exposure; low cost; low message competition; good

Little audience selectivity; creative limitations

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positional selectivity

Internet High selectivity; low cost; immediacy; interactive capabilities

Small, demographically skewed audience; relatively low impact; audience control exposures

Three media benefiting greatly from the shift are outdoor

advertising, cable television, and digital satellite television

systems.

Outdoor Advertising – provides an excellent way to reach

important local consumer segments at a fraction of the cost

per exposure of other major media.

Cable Television & digital satellite system – allow narrow

programming formats such as all sports, all news, nutrition,

arts, gardening, cooking, travel, history, and other target

select groups. Advertisers can take advantage of such

“narrowcasting” to “rifle in” on special market segments

rather than use the “shotgun” approach offered by network

broadcasting.

2.3 Selecting Specific Media Vehicles

Media planner must now compute the cost per thousand persons

reached by a vehicle.

The media planner must also consider the costs of producing ad

for different media. Whereas newspaper ads my cost very little to

produce, flashy television ads may cost millions.

In selecting media vehicles, the media planner must balance

media cost measures against several media impact.

o First – the planner should balance costs against the media

vehicle’s audience quality.

o Second – the media planner should consider audience

attention.

o Third – the planner should assess the vehicle’s editorial quality

– TIME and the Asian Wall Street Journal are more believable

and prestigious than a local business magazine.

2.4 Deciding on Media Timing

The advertiser must also decide how to schedule the advertising over the course of a year.

The firm can vary its advertising to follow the seasonal pattern, to oppose the seasonal pattern, or to be same all year. Most firms do some seasonal advertising. Some do only seasonal advertising.

Finally, the advertiser has to choose the pattern of the ads. Continuity – means scheduling ads evenly within a given period.

Pulsing – means scheduling ads unevenly over a given time.

Recent advances in technology have had a substantial impact on the media planning and buying functions. Today, computer

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software applications called media optimizers allow media planners to evaluate vast combinations of television programs and prices. Such programs help advertisers to make better decisions about which mix of networks, programs and hours of the day will yield the highest reach per ad dollar.

The creative department first created good advertisements, and

then the media department selected the best media carrying these advertisements to desired target audiences.

In some cases, an advertising campaign might start with a great idea followed by the choice of appropriate media. In other cases however, a campaign might begin with a good media opportunity followed by advertisements designed to take advantage of the opportunity.

Example: Absolut Vodka. Media planners work with creative to design ads targeted to specific media audiences. “Absolute Singapore”, “absolute Manila”, absolute Beijing”, absolute Tokyo”.

4. EVALUATING ADVERTISING

The advertising program should evaluate both the communication effects

and the sales effects of advertising regularly.

Measuring the communication effects of an ad – copy testing – tells whether the ad is communicating well.

Copy testing can be done before or after an ad is printed or

broadcast. Before the ad is placed, the advertiser can show it to

consumers, ask how they like it and measure recall or attitude

changes resulting from it.

What sales are caused by an ad that increases brand awareness by 20% and brand preference by 10%? It is the sales effect of advertising are often harder to measure that

the communication effects. Sales are affected by many factors such besides advertising – such as product features, price and availability.

One way to measure the sales effect of advertising is to compare the past sales with past advertising expenditures. Another way is through experiments. More complex experiments could be designed to include other variables, such as difference in the ads or media used.

5. OTHER ADVERTISING CONSIDERATIONS

In developing advertising strategies and programs, the company must address two additional questions. First, how will the company organize its advertising – who will perform which advertising takes? Second, how will the company adapt its advertising strategies and programs to the complexities of international markets?

a. Organizing for Advertising

Advertising Agency

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A marketing services firm that assists companies in planning, preparing, implementing and evaluating all or portions of their advertising programs.

How does and advertising agency work? Advertising Agencies were started in the mid – to – late 1800s by

salespeople or brokers who worked for the media and received a commission for selling advertising space to companies.

As times passed, salespeople started to help customers prepare their ads. Eventually, they formed agencies and grew closer to the advertisers that to media.

Today’s agencies employ specialists who can often perform advertising tasks better than can the company’s own staff. Agencies also bring an outside point of view to solving the company’s problems, along with lots of experience from working with different clients and situation.

Thus, even the company nowadays uses advertising agencies even if they have already a strong advertising department.

b. International Advertising Decisions

International advertisers face many complexities not encountered by domestic advertisers. The most basic issues concern the degree to which global advertising should be adapted to the unique characteristics of various country markets.

Some large advertisers have attempted to support their global brands with highly standardized worldwide advertising, with campaigns that work as well in Bangkok as they do in New York.

Standardization produces many benefits – lower advertising costs, greater global advertising coordination, and a more consistent worldwide image.

Global advertisers face several special problems. For instance, advertising media costs and availability differ vastly from country to country. Many countries have extensive systems of laws restricting how much a company can spend on advertising, the media used, the nature of advertising claims, and other aspects of advertising programs. Such restrictions often require advertisers to adapt their campaigns from country to country.

Thus, although advertiser may develop global strategies to guide their overall advertising efforts, specific advertising programs must usually be adapted to meet local cultures and customs, media characteristics, and advertising regulations.

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SALES PROMOTION

Advertising and personal selling often work closely with another promotion tool, sales promotion.

Sales promotion is a short term incentives to encourage the purchase or sale of a product or services. Whereas advertising and personal selling offer reasons to buy a product of service, sales promotion offers to buy now. Example of sales promotions are found everywhere.

A. Rapid Growth of Sales Promotion

Sales Promotion tools used by organizations, including manufacturers,

distributors, retailers, trade associations and not – for – profit institutions. They are targeted toward final buyers (consumer promotions), retailers and wholesalers (trade promotion), business costumers (business promotions), and members of the sales force (sales force promotion).

Several factors have contributed to the rapid growth of sales promotion (particularly in consumer packaged – goods market).

a. FIRST Inside the company, product managers face greater pressures to

increase their current sales, and promotion is an effective short – run sales tool.

b. SECOND Externally, the company faces more competition and competing

brands are less differentiated. c. THIRD

Advertising efficiency has declined because f rising costs, media clutter, and legal restraint.

d. FINALLY Consumers have become more deal oriented, and ever – larger

retailers are demanding more deals from manufacturers.

In developing a sales promotion program, a company must first set sales promotion objectives and then select the best tools for accomplishing these objectives.

B. Sales Promotion Objectives Sales promotion objectives vary widely.

Sellers may use consumer promotions – to increase short – term sales; to

help build long – term market share.

Objectives for trade promotion includes the following; a.) getting retailers to carry new items and more inventory, b.) getting them to advertise the product and give it more shelf space, c.) getting them to buy ahead.

Sale force include; a.) getting more sales force support for current or new products or getting salespeople to sign up new accounts.

Sales promotions are usually used together with advertising, personal selling or other promotion mix tools. Consumer promotions must usually be advertised and can be add excitement and pulling power to ads. Trade and sales force promotion supports the firm’s personal selling process.

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In general, rather than creating only short – term sales or temporary brand switching, sales promotions should help to reinforce the product’s position and build long – term costumer relationships.

C. Major Sales Promotion Tools 1. Consumer Promotion Tools

a. Sample

A small amount of product offered to consumers for trial. Some samples are free; for others, the company charges a small

amount to offset its cost. The sample might be delivered door to door, email, handed in a

store, attached to another product or featured in an ad. Sometimes it combined into sample packs which can then be used to promote other products and services.

b. Coupons Certificate that gives buyers a saving when they purchase a

specified products It can stimulate sales of mature brand or promote early trial for new

brand.

c. Cash refund offers (REBATES) Offer to refund part of the purchase price of a product to consumers

who send a “proof of purchase” to the manufacturer It is somehow alike with coupon except that the price reduction

occurs after the purchase occurs.

d. Price packs (cents – off deals) Reduced price that is marked by the producer directly on the label

or package. Buy one Take one.

e. Premiums

Good offered either free or at low cost as an incentive to buy a product.

Example: figurines outside the product of Jollibee. (Freebies)

f. Advertising Specialties These are useful articles imprinted with an advertiser’s name that is

given as gifts to consumers. Typical items include pens, calendars, key rings, matches, shopping

bags, t-shirts, caps, nail files and coffee mug. Such items can be very effective.

g. Patronage Rewards These are cash or other rewards offered for the regular use of a

certain company’s products or services. Example: Airlines (Ticket promos), Petron (earn points)

h. Point – of – Purchase (POP) Promos

Display and demonstration that takes place at the point of purchase or sale.

i. Contest, Sweepstakes, Games

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Promotional events that gives consumers the chance to win something – such as cash, trips, or goods – by luck or through efforts.

Example: Raffle draws or Pageant.

2. Trade Promotions It can persuade resellers to carry a brand, give it shelf space, promote it

in advertising and push it to consumers.

a. Discount A straight reduction in price on purchase during a stated period of

time also called a price – off, off – invoice, or off – list.

b. Allowance Promotional money paid by manufacturers to retailers in return for

an agreement to feature the manufacturer’s products in some way. An advertising allowance compensates retailers for advertising

the product. A display allowance compensates them for using special displays.

Manufacturers may offer free goods, push – money, and specialty advertising items.

3. Business Promotion Tools Companies spend billions of dollars each year on promotion to industrial

customers.

These business promotion tools are used to generate business leads, stimulate purchases, reward customers, and motivate salespeople.

It uses tools utilized by consumer and trade promotions tools but with this, it has an additional major business tools.

1. Conventions and Trade Shows A company organizes these things to promote their products.

2. Sales Contest

It is a contest for salespeople or dealers to motivate them to increase their sales performance over a given period.

Sale contest motivate and recognize good company performers, who may receive trips, cash prizes or other gifts.

It works best when they tied to measurable and achievable sales objectives (such a finding new accounts, reviving old accounts, or increasing accountability profit).

D. Developing the Sales Promotion Program

The marketer must take several other decisions in order to define the full

sales promotion program.

First, the marketer must decide on the size of incentives. A certain minimum incentives are necessary if the promotion is to succeed; a larger incentive will produce more sales response.

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A marketer also must set conditions for participation. Incentives might be offered to everyone or only to select groups.

Marketer then decides how to promote and distribute the promotion program itself. Each distribution methods involve a different level of reach cost. Increasingly, marketers re blending several media into a campaign concept. The length of promotion is also important. If too – short, many will miss it as to if too – long, the deal will lose some of its “act now” force.

Evaluation is also very important. The most common evaluation method is to compare sales before, during and after a promotion.

Consumer research would also show the kinds of people who responds to the promotion and what they did after. Surveys can provide information on how it affected their buying.

It can also be evaluated through an experiment that varies factors such as incentive value, length and distribution method.

PUBLIC RELATIONS Building goods with the company’s various publics by obtaining favourable

publicity, building up a good corporate image, handling or heading off unfavourable rumors, stories and events.

PR Department may perform any of the following functions: a. Press Relations or Press Agentry

Creating and placing newsworthy information in the news media to attract attention to a person, product or services.

b. Product Publicity Publicizing specific products

c. Public Affairs Building and maintaining national or local community relations.

d. Lobbying Building and maintaining relations with legislators and government officials to influence legislation and regulation.

e. Investor Relations

Maintaining relationships with shareholders and others in the financial community.

f. Development

Public relations with donors or members of non profit organizations to gain financial or volunteer support.

Public relations used to promote brands, products, people, places, ideas, activities, organization, and even nations.

A. The Role and Impact of Public Relations

Public relations can have a strong impact on public awareness at a much

lower cost than advertising can. The company does not pay for the space or time in the media. Rather, it pays for a staff to develop and circulate information and to manage events.

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Public relations involve many functions beyond product publicity including

public affairs, lobbying and investor relations.

Public relations results can sometimes be spectacular. Scholastic sponsored lo – cost sleepovers, games, and costume contests to whip up consumer frenzy for the fourth instalment of its Harry Potter series.

Despite its potential strengths, public relations often described as a marketing stepchild because of its limited and scattered use. Marketing managers and public relations practitioners do not always talk the same language. Many public relations practitioners see their job as simply communicating. In contrast, marketing managers tend to be much more interested in how advertising and public relations affect brand building, sales and profit.

B. Major Public Relations Tools Public relations professionals use several tools.

1. News One of the major tools. PR professionals find or create favourable news about the company and its products or people.

Sometimes news stories occur naturally and sometimes PR person can suggest events or activities that would create news.

2. Speeches Can also create product and company publicity. Increasingly, company executives must field questions from the media or give talks at trade associations or sale meetings and events can either build or hurt the company’s image.

3. Special Events Another common tool. Ranging from news conferences, press tours, grand openings, and fireworks displays to laser show, hot air balloon release, multimedia presentations and star – studded spectaculars and educational programs designed to reach and interest target publics.

4. Mobile Marketing Recent – travelling promotional tours that brings the brand to consumers – has emerged as an effective way to build one – to – one relationship with targeted consumers.

5. Written Materials PR people can prepare this to reach the influence their target markets.

These materials include annual reports, brochures, articles, and company newsletters and magazines.

6. Audio Visual Materials Such as films, slide and sound programs, video and audiocassettes are being used increasingly as communication tools.

7. Corporate Identity Materials

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It can also help create a corporate identity that the public immediately recognizes.

Logos, stationery, brochures, signs, business cards, buildings, uniforms and company cars and trucks – all become marketing tools when they are attractive, distinctive and memorable.

8. Public Service Materials Companies can improve public goodwill by contributing money and time to this.

Company’s WEB can also be a good public relations vehicle. Consumers and members of other publics can visit the site for information and entertainment.