CHAPTER 15

ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS

CHAPTER OBJECTIVES 1. Define the roles of advertising, sales promotion, and public relations in the promotion mix. 2. Describe the major decisions involved in developing an advertising program. 3. Explain how sales promotion campaigns are developed and implemented. 4. Explain how companies use public relations to communicate with their publics.

CHAPTER OVERVIEW
Close Ad Three of the promotional mix elements (advertising, sales promotion, and public relations) are mass communication tools. Advertising is the first of these important elements to be discussed in the chapter. Advertising is described as being any paid form of nonpersonal presentation and promotion of ideas, goods, and services by an identified sponsor. There are five important tasks to be accomplished as the marketer attempts to organize and direct the advertising function. Each of these tasks (setting objectives, budget decisions, message decisions, media decisions, and campaign evaluation) is discussed in detail and explained within the context of building an advertising campaign. In addition, several forms of advertising, various advertising strategies, and descriptions of the mass media are presented to the reader. The marketing firm can undertake the advertising function themselves or they can contract with an advertising agency to accomplish their advertising objective, planning, and implementation.

Sales promotion, as the second of the mass communication tools described in this chapter, is a process of providing short-term incentives to encourage purchase or sales of a product or service. Sales promotion offers the buyer reasons to buy now. In addition, sales promotion is also intended to stimulate reseller effectiveness. Sales promotion has grown rapidly in the recent past because of pressure to increase sales, increased competition, and the declining efficiency of the other mass communication methods. The chapter discusses the objectives of a sound sales promotion campaign and offers examples of most of the major tools for accomplishing those objectives. Public relations, the final mass communication tool described in this chapter, is an attempt to build good relations with the companys various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, or events. The organization has a variety of tools at their disposal for accomplishing this feat. One of the overriding tasks of public relations is to control the exposure and relationship with the mass media. By focusing on consumer attitudes, awareness, and knowledge of the organization, the company is better prepared to succeed.

CHAPTER OUTLINE 1. Advertising a. Advertising is centuries old. During the Golden Age in Greece, for example, town criers announced the sale of cattle, crafted items, and even cosmetics. b. Today, U. S. advertisers spend in excess of $175 billion each year. c. Although advertising is used mostly by business firms, it is also used by a wide range of nonprofit organizations, professionals, and social agencies. d. Advertising is formally defined as being any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor (definition found in Chapter 14). *****Use Key Term advertising Here; Use Table 15-1 Here; Use PowerPoint Slide #15-2 Here***** 2. Major Decisions in Advertising a. Marketing management must make five important decisions when developing an an advertising program.

*****Use Figure 15-1 Here; Use PowerPoint Slide #15-3 Here***** Setting Objectives b. Setting objectives is the first step in developing an advertising program. These objectives should be based on past decisions about the target market, positioning, and marketing mix, which define the job that advertising must do in the total marketing program. An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time . c. Advertising objectives can be classified by primary purpose as: 1). Informative advertising which is advertising used to inform consumers about a new product or feature and to build primary demand. 2). Persuasive advertising which is advertising used to build selective demand for a brand by persuading consumers that it offers the best quality for their money. 3). Comparison advertising which is advertising that compares one brand directly or indirectly to one or more other brands. 4). Reminder advertising which is advertising used to keep consumers thinking about a product. *****Use Key Terms advertising objective, informative advertising, persuasive advertising, comparison advertising, and reminder advertising Here; Use Table 15-2 Here; Discussing the Issues #1 Here; Use PowerPoint Slide #15-4 Here*****

Setting the Advertising Budget d. After setting the objectives, the company sets its advertising budget for each product. The four commonly used methods were discussed in Chapter 14. Some specific factors that should be considered when setting the advertising budget are: 1). Stage in the product life cycle . New products typically need large advertising budgets. 2). Market share . High-market share brands usually need more advertising. 3). Competition and clutter. More advertising is usually required in a market with many more competitors and their advertising clutter. 4). Advertising frequency. More money is needed in the budget when many repetitions are needed. 5). Product differentiation. When a brand closely resembles other brands in its product class, more advertising (and therefore budget) is needed. e. The primary questions to be answered during the budget process are how much to spend and what impact is expected or acceptable. This process is difficult because measurement techniques of effectiveness rarely give precise answers. *****Use PowerPoint Slide #15-5 Here***** Advertising Strategy f. Advertising strategy consists of two major elements: creating the advertising message and selecting the advertising media. g. At one time these two functions were done separately. Today, however, more focused strategies toward the target markets, rising costs, and fragmentation within the media has caused planners to pursue more coordinated approaches and attempt to reduce friction between the two elements. *****Use Marketing Highlight 15-1 The Medium and the Message: A New Harmony Here***** h. The budget must be invested in effective advertising messages. 1). There is a tremendous amount of advertising clutter in the marketplace. 2). The first step in creating effective advertising messages is to decide what general message will be communicated to consumers (plan a message

strategy). a). This begins with developing a message that focuses on benefits . b). By talking to consumers, dealers, experts, and competitors, the company can attempt to understand what the benefits of the product or service are. c). Secondly, develop a creative concept (the big idea). This concept may emerge as a visualization, a phrase, or a combination of the two. d). The creative concept guides the choice of specific appeals to be used in an advertising campaign. The appeals should be: 1]. Meaningful. 2]. Distinctive . 3]. Believable . *****Use Discussing the Issues #2 and Discussing the Issues #3 Here; Use PowerPoint Slide #15-6 Here***** 3). The next major phase is to examine the impact of the message (message execution). Here, what is said is as important as how it is said. The creative people must find the best style, tone, words, and format for executing the message. Specific styles are: a). Slice of life --shows one or more people using the product in a normal setting. b). Lifestyle --shows how a product fits in with a particular lifestyle. c). Fantasy--creates a fantasy around the product or its use. d). Mood or image --builds a mood or image around the product. e). Musical--shows one or more people or cartoon characters singing a song about the product. f). Personality symbol--creates a character (animated or real) that represents the product. g). Technical expertise --shows the companys expertise in making the product. h). Scientific evidence --presents survey or scientific evidence that the brand is better or better liked than one or more other brands. i). Testimonial evidence --features a highly believable or likable source (celebrity or ordinary person) endorsing the product. *****Use Applying the Concepts #1 and Applying the Concepts #2 Here; Use PowerPoint Slide #15-7 Here***** 4). The advertiser must also choose a tone for the ad (use humor for example). 5). Memorable and attention-getting words must be carefully considered for the ad. 6). Finally, a format (the illustration, headline, the copy, and even the slogan) should all be coordinated for maximum impact on the consumer. i. The major steps in selecting the media are: 1). Deciding on reach, frequency, and impact. a). Reach is the percentage of people in the target market exposed to an ad campaign during a given period of time. b). Frequency is the number of times the average person in the target market is exposed to an advertising message during a given period. c). Media impact is the qualitative value of an exposure through a given medium. *****Use Discussing the Issues #4 Here; Use PowerPoint Slide #15-8 Here***** 2). Each medium has different reach, frequency, and impact as well as advantages and limitations. Media planners consider the following factors when making their choice: a). The media habits of consumers . b). The nature of the product. c). The type of messages . d). Cost.

3). The media planner must now choose the best media vehicles (specific media within a given type--magazines, radio, television, etc.). This choice is based on which vehicles give the best reach, frequency, and impact for the money. a). Costs per thousand is considered. b). The cost of producing an ad is considered. c). Finally, the media planner must balance media cost measures against several media factors: 1]. Audience quality. 2]. Audience attention. 3]. Editorial quality. *****Use Key Term media vehicles Here; Use Table 15-3 Here; Use Marketing Highlight 15-2 Advertisers Seek Alternative Media Here ***** 4). Deciding on the media timing is also an important decision. The advertiser must decide how to schedule the advertising over the course of a year. They also have to examine the pattern of the ads (some advertisers only do seasonal advertising). Forms to be considered are: a). Continuity--scheduling ads evenly within a year period. b). Pulsing--scheduling ads unevenly or in bursts over a certain time period. *****Use PowerPoint Slide #15-8 Here***** Advertising Evaluation j. The advertising program should evaluate both the communication effects and the sales effects of advertising regularly. This reveals whether or not an ad is communicating well. This involves copy testing (measuring the communication effect of an advertisement before or after it is printed or broadcast). k. Measuring the sales effect is often harder to measure than the communication effect since sales are affected by many factors besides advertising. Methods that can be used are: 1). Comparing past sales with past advertising expenditures. 2). Design experiments to examine different expenditure levels. *****Use Chapter Objective #2 Here; Use PowerPoint Slide #15-9 Here***** Organizing for Advertising l. Different companies organize in different ways to handle advertising. 1). Small companies usually use their own employees. 2). Large companies may use advertising agencies. m. An advertising agency is a marketing service organization that assists other companies in the planning, creation, and implementation of their advertising programs. 1). Ad agencies can be very large (Leo Burnett billed over $2.6 billion) or they can be small one person shops. 2). Large agencies divide their staffs to specialize in creative, media, research, or account planning. 3). Agencies have been traditionally paid through commissions or fees. Typically, this has been 15 percent of the media cost. However, unhappiness with the commission system has caused many organizations to move to a straight fee or combination methods. 4). There is a new trend by ad agencies to diversify into related marketing services. *****Use Key Term advertising agency Here; Use Company Case #15 Here; Use Video Case #15 and Video Case #16 Here; Use PowerPoint Slide #15-10 Here***** International Advertising Decisions n. International advertisers face many complexities not encountered by domestic advertisers. The most basic issue concerns the degree to which global advertising should be adapted to the unique characteristics of the various country markets. The general rule is to think globally but to act locally.

o. Additional problems are: 1). Advertising media differ considerably in availability and cost from one country to another. 2). Countries also differ in the extent to which they regulate advertising practices. *****Use Chapter Objective #1 Here; Use PowerPoint Slide #15-11 Here***** 3. Sales Promotion a. Sales promotion is a mass communication technique that offers short-term incentives to encourage purchase or sales of a product or service. 1). Sales promotion offers reasons to buy now. 2). Many tools are available to stimulate consumer purchasing and dealer effectiveness. *****Use Key Term sales promotion Here; Use Discussing the Issues #5 and Discussing the Issues #6 Here; Use PowerPoint Slide #15-12 Here***** Rapid Growth of Sales Promotion b. Sales promotion tools are used by a variety of organizations. These tools can take the form of consumer promotions , business promotions , trade promotions , and even members of the sales force . c. Growth in the industry has been achieved because: 1). Product managers are facing more pressure to increase their current sales. 2). The company faces more competition. 3). Advertising efficiency has declined. 4). Consumers have become more deal oriented and retailers are demanding more deals from manufacturers. d. The growing use of sales promotion has produced sales promotion clutter. *****Use PowerPoint Slide #15-12 Here***** Setting Sales Promotion Objectives e. Sales promotion objectives vary widely. General forms are: 1). Entice consumers to try a new product. 2). Lure consumers away from competitors products. 3). Get consumers to load up on a mature product. 4). Hold and reward loyal consumers. f. In general, sales promotion should focus on consumer relationship building. Selecting Sales Promotion Tools g. The primary consumer promotion tools are: 1). Samples--offer to consumers of a trial amount of a product. 2). Coupons--certificates that give buyers a saving when they purchase a specified product. 3). Cash refund offers (rebates)--offers to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer. 4). Price packs (cents-off deals)--reduced prices that are marked by the producer directly on the label or package. 5). Premiums--goods offered either free or at low cost as an incentive to buy a product. 6). Advertising specialties--useful articles imprinted with an advertisers name that are given as gifts to consumers. 7). Patronage rewards--cash or other rewards for the regular use of a certain companys products or services. 8). Point-of-purchase (POP) promotions--displays and demonstrations that take place at the point of purchase or sale. 9). Contests, sweepstakes, and games--promotional events that give consumers the chance to win something (such as cash, trips, or goods) by luck or through extra effort.

*****Use Key Terms samples, coupons, cash refund offers (rebates), price packs (cents-off deals), premiums, advertising specialties, patronage rewards, point-of-purchase (POP) promotions, contests, sweepstakes, and games Here; Use Discussing the Issues #7 Here; Use PowerPoint Slide #15-13 Here***** h. Trade-promotional tools include: 1). Discount --a straight reduction in price on purchases during a stated period of time. 2). Allowance--promotional money paid by manufacturers to retailers who agree to feature the manufacturers products in some way. *****Use Key Terms discount and allowance Here; Use PowerPoint Slide #15-14 Here***** i. Business-promotion tools (such as trade shows and sales contests) are intended to generate business leads, stimulate purchases, reward customers, and motivate salespeople. *****Use PowerPoint Slide #15-15 Here***** Developing the Sales Promotion Program j. The marketer must make other decisions in order to define the full sales promotion program. 1). Decide on the size of the incentive . 2). Set conditions for participation. 3). Determine how to promote and distribute the promotion program. 4). Determine the length of the promotion. 5). Evaluate the program. *****Use Chapter Objectives #1 and #3 Here; Use Company Case #15 Here; Use PowerPoint Slide #15-16 Here***** 4. Public Relations a. Public relations involves building good relations with the companys various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. b. Major functions are: 1). Press relations or press agentry. 2). Product publicity. 3). Public affairs . 4). Lobbying. 5). Investor relations . 6). Development. c. Public relations is used to promote products, places, ideas, activities, organizations, and even nations. d. Public relations can have a strong impact on public awareness at a much lower cost than advertising. *****Use Key Term public relations Here; Use Marketing Highlight 15-3 Public Relations: Stretching the Marketing Budget Here; Use PowerPoint Slide #15-17 Here***** e. Despite its potential strengths, public relations often is described as a marketing stepchild because of its limited and scattered use. However, this may be changing. Many companies today are looking for public relations to take a more active role in marketing and promotion planning. Marketing public relations departments are being formed. Major Public Relations Tools f. Major tools include:

News . Speeches . Special events . Written materials (such as annual reports, brochures, articles, and company newsletters). 5). Audiovisual materials (such as films, slide-and-sound programs, video and audio cassettes). 6). Corporate identity materials (such as logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms, company cars and trucks). g. Companies also improve public relations by contributing time and money to public service activities . h. A companys Web site can be a good public relations vehicle. Consumer and members of other publics can visit the site for information and entertainment. *****Use PowerPoint Slide #15-18 Here***** Major Public Relations Decisions i. Major decisions include: 1). Setting the right public relations objectives. 2). Choosing public relations messages and vehicles. 3). Implementing the public relations plan. 4). Evaluating public relations results. *****Use Chapter Objectives #1 and #4 Here; Use PowerPoint Slide #15-19 Here*****

1). 2). 3). 4).

DISCUSSING THE ISSUES 1. Advertising objectives can be classified by primary purpose--whether the aim is to inform, persuade, or remind. Using your local newspaper, find three examples of each of the above objectives. Using the material found in Table 15.2, discuss why your examples appropriately describe the chosen objective. This question asks the students to become involved in and make judgments of advertising objectives. The local newspaper is a convenient place to find advertisements wherein judgments can be formulated. This exercise can be accomplished in a variety of ways: individual assignment, group assignment, class discussion, or class demonstration. In addition, an extension of this exercise is to ask students to use a variety of media formats to accomplish the same objective or they can be instructed to surf the Web and investigate sites and then apply advertising objectives criteria to what they find. Table 15.2 provides several versions (within the major categories--to inform, to persuade, and to remind) that may be applied to the students advertisements. The students should be instructed to identify which of the sub-categories might apply. 2. Contrast the benefits and drawbacks of comparison advertising. Which has more to gain from using comparison advertising -- the leading brand in a market or a lesser brand? Why? The basic advantage of comparison advertising (often called "comparative advertising") is that it provides information that potentially helps consumers make better purchase decisions. This saves consumers the effort of finding the information from other sources, and helps producers of innovative products to position their products on the basis of competitive superiority. Comparison advertising has several disadvantages. One is misleading comparisons. By carefully selecting the grounds for comparison, most products on the market could describe themselves as superior to the competition. Another problem is confusion--consumers may not remember which product had which features in the comparison. The market leader has little reason to run comparison advertising--the competitor's product is as likely to benefit from the extra advertising exposure as it is to suffer from the comparison. Another disadvantage is the potential for consumer resentment at what they think of as irrelevant, unfair, or annoying comparisons. A 1983 survey by the Roper Organization found that 51% of the respondents said that they did not like comparative advertising, for example. Yet another disadvantage is the potential for competitor retaliation. Competitors who feel they have been wronged are likely to challenge the comparison through the advertising industrys self-regulatory process or in the courts, and with potentially painful results for the advertiser (see the annotations for an example). 3. Surveys show that many Americans are skeptical of advertising claims. Do you mistrust advertising? Analyze why or why not. What type of advertising do you trust the most? The least? Suggest some things advertisers could do to increase credibility. This question is designed to have students consider the credibility of advertising. The discussion may be quite animated-every student can relate examples of ads which make dubious claims. There is no quick and easy answer to the problem of building credibility for advertising. In general, it requires that advertisers make only claims that are true, and express them in a believable fashion. Advertising style is also a related issue. Consumers react negatively to fear appeals or ads which intrude by being irritating, for example, and this can also reduce the credibility of advertising as a source of

information. Many quality advertisers already follow these guidelines, of course. Credibility will be difficult to increase unless nearly all advertisers act responsibly-which may not happen in the near future.

4. Explain what factors call for more frequency in an advertising media schedule, and what factors call for more reach. How can you increase one without sacrificing the other or increasing the advertising budget? Patti and Frazer suggest emphasizing reach when a product is being introduced, when it has a large target market, and when implementing a pull strategy. Frequency should be emphasized when products are in the decline stage of their life cycles, when products are purchased frequently, when brand loyalty is not high, when the target market is small, and when the product message is difficult to explain. By sacrificing continuity, reach and frequency can be increased in a given time period without increasing expenditures. Patti and Frazer describe two forms of uneven ad scheduling: Flighting involves periods of advertising interspersed with periods of no advertising (useful for such products as vacation travel and many industrial goods), whereas pulsing involves continuous advertising supplemented by periods of heavier spending (useful for products where demand is seasonal, but off-season demand is still important, as with cars and beer). 5. Companies often run advertising, sales promotion, and public relations efforts at the same time. Can their effects be separated? Discuss how a company might evaluate the effectiveness of each element in this mix. Most marketing mix elements interact, and it is often difficult to tease apart their effects. A new trier for a brand may have been triggered by advertising, sales promotion, or even public relations efforts--or a combination of these and other marketing-mix elements. Ultimately, it is rarely possible to attribute specific business results to one single element of the marketing mix. However, it is possible to gauge the effectiveness of each element in different ways. Advertising can be measured with survey research. Brand awareness can be checked before and after advertising, for example, to see what effects the ad has had. Similarly, the advertiser can measure attitudes about the brand, whether specific advertising claims are remembered, and so forth. Sales promotion can be evaluated more directly. Trade promotions can be measured by how much product was sold to the reseller during the promotion. Consumer response can be calculated by examining sales before, during, and after the promotion to assess incremental sales. Other measures, such as the number of coupons redeemed, rebates submitted, or displays built, can be helpful as part of the evaluation. Public relations programs are quite difficult to evaluate. Most companies look at an output measure--how many mentions were received on television, how many articles covered the public relations topic, and the like. This can be converted to a rough estimate of how much this amount of media space and time might have cost if purchased outright. Going beyond output measures to assessing sales achieved is generally not possible. Ultimately, the business results achieved are a result of all marketing efforts together. Evaluation can rarely attribute specific results to one program, but it can readily indicate which programs appear more effective overall.

6. Assess why many companies are spending more on trade promotions and consumer promotions than on advertising. Is heavy spending on sale promotions a good strategy for long-term profits? Why or why not? Many advertising commentators have decried the trend toward increased sales promotion, saying that marketers are sacrificing long-run consumer loyalty for short-term sales. (They have been pointing out the perils of excessive dealing since the 1950s.) Sales promotion is being increasingly used because it does stimulate sales; unfortunately for the marketer, it also stimulates regular brand switching and an emphasis on buying from whoever is currently offering the best deal. New products are being introduced at such a rapid pace that manufacturers have difficulty getting them into their channels of distribution. Heavy trade promotion is often necessary to convince wholesalers or retailers to carry a product. These are marketing problems without any easy solutions. Marketers who try to cut back on sales promotions may lose market share to competitors who continue their promotions; marketers who continue to maintain sales through heavy promotions may sacrifice profits and any chance of having customer loyalty. Probably the best strategy marketers can take is to offer products with such obvious consumer value that they can be sold at a fair price without a suicidal amount of sales promotion. 7. Many tools can be used to accomplish sales-promotion objectives. Evaluate each of the consumer-promotion tools listed in the text to determine (a) overall effectiveness, (b) general cost approximation, (c) potential for growth, and (d) ability to combine with other promotional tools. Using an analysis grid of your own design, explain your ranking and judgments. The consumer-promotional tools cited by the text are: The primary consumer promotion tools are: 1). Samples--offer to consumers of a trial amount of a product. 2). Coupons--certificates that give buyers a saving when they purchase a specified product. 3). Cash refund offers (rebates)--offers to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer.

4). Price packs (cents-off deals)--reduced prices that are marked by the producer directly on the label or package. 5). Premiums--goods offered either free or at low cost as an incentive to buy a product. 6). Advertising specialties--useful articles imprinted with an advertisers name that are given as gifts to consumers. 7). Patronage rewards--cash or other rewards for the regular use of a certain companys products or services. 8). Point-of-purchase (POP) promotions--displays and demonstrations that take place at the point of purchase or sale. 9). Contests, sweepstakes, and games--promotional events that give consumers the chance to win something (such as cash, trips, or goods) by luck or through extra effort. The primary point of this exercise is to get the students to devise a method by which evaluation of the above tools can be accomplished. Any simple grid pattern will be sufficient. As indicated in the question, category sub-titles should be overall effectiveness, general cost approximation, potential for growth, and ability to combine with other promotional tools. To some extent, the answer is judgmental in nature, however, many of the issues are discussed in the chapter section entitled consumer-promotion tools. Students that are willing to go the extra mile with their assignment can interview a manager in the grocery or retailing industry to get an interesting perspective on the issue. If time allows, the instructor can invite a member of the grocery or retail industry to be a guest speaker to discuss the consumer-promotions issue. These guest speakers always provide an interesting perspective that is often missed.

APPLYING THE CONCEPTS 1. The impact of the message depends not only on what is said, but also on how it is said. Take the following execution styles: (a) find an example, (b) evaluate the effectiveness of the example (demonstrate how the example fits the category), (c) identify the target audience, and (d) propose any changes that might make the example more effective. Report your findings to the class. Execution styles include: (a) slice of life, (b) lifestyle, (c) fantasy, (d) mood or image, (e) personality symbol, (f) technical evidence, (g) scientific evidence, and (h) testimonial evidence. Be sure to find separate examples (even though there might be some overlap between the forms). 2. Find two current television advertisements that you think are particularly effective, and two more that you feel are ineffective. (a) Describe precisely why you think the better ads are effective, and why the ineffective ads fall short. (b) How would you improve the less effective ads? If you feel they are too poor to be improved, write a rough draft of an alternate ad for each. Comments on Applying the Concepts for Chapter 15 1. This assignment requires students to review advertisements. The instructor may give this assignment as an in-class discussion project, as a required turn-in project, or as a take-home assignment to be used as part of an examination. Students find the project to be interesting and a useful way to reinforce information learned in the text. 2. This project is similar to #1 above, however, this project differs in that it asks students to make judgments about what they perceive to be effective or ineffective. The instructor needs to be sure that the student relates what constitutes effective and ineffective in their opinion--in other words, how are they making the effectiveness judgment?

CASE COMMENTS Use Company Case 15: McDonalds: Where to Go From Here with Chapter 15. See Company Case Comments section at the end of the Instructors Manual. This case is best used following the section entitled organizing for advertising or developing the sales-promotion program.

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