Chapter 15

Advertising, Sales Promotion, and Public Relations

Advertising
Advertising is centuries old. U.S. advertisers spend in excess of $212 billion each year; worldwide spending exceeds $414 billion. Advertising is used by:

Business firms, Nonprofit organizations, Professionals, and Social agencies.

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What is Advertising?
Advertising is Any Paid Form of Nonpersonal Presentation and Promotion of Ideas, Goods, or Services by an Identified Sponsor.

Major Advertising Decisions (Fig. 15.1)

Message Decisions
Message Strategy Message Execution

Objectives Setting
Communication objectives Sales Objectives

Budget Decisions
Affordable Approach Percent of sales Competitive parity Objective and task

Campaign Evaluation
Communication Impact Sales Impact

Reach, Frequency, Impact Major Media Types Specific Media Types Media Timing
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Media Decisions

Setting Advertising Objectives

Informative Advertising
Inform Consumers or Build Primary Demand i.e CD Players

Persuasive Advertising
Build Selective Demand i.e Sony CD Players

Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time

Advertising Objective

Comparison Advertising
Compares One Brand to Another i.e. Avis vs. Hertz

Reminder Advertising
Keeps Consumers Thinking About a Product i.e. Coca-Cola
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Setting the Promotion Budget

After Determining Its Advertising Objectives, the Marketer Must Set the Advertising Budget for Each Product and Market. (From Chapter 14)
Based on What the Company Can Afford

Affordable

Based on a Certain Percentage of Current or Forecasted Sales

Percentage of Sales

Objective-and-Task

Based on Determining Objectives & Tasks, Then Estimating Costs

Based on the Competitors Promotion Budget

Competitive-Parity

Setting the Advertising Budget

Factors to be considered when setting the advertising budget:

Stage in the product life cycle, Market share, Competition and clutter, Product differentiation.
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Developing Advertising Strategy

Advertising Strategy Consists of Two Major Elements and Companies are Realizing the Benefits of Planning These Two Elements Jointly.
Creating the Advertising Messages
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Selecting the Advertising Media

Developing Advertising Strategy: Creating Ad Messages

General Message to Be Communicated to Customers

Plan a Message Strategy

Develop a Message
Focus on Customer Benefits

Visualization or Phrase Advertising Appeals Meaningful Combination of Both Believable Distinctive

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Creative Concept Big Idea

M es s a ge Exe cut i o n
What type of message execution do these two ads employ?

Developing Advertising Strategy: Message Execution

Testimonial Evidence Scientific Evidence Technical Expertise Personality Symbol Musical Slice of Life Lifestyle Fantasy

In both cases, what dis tinguishes the product from the res t of the ad?

Click or p res s spacebar to retu rn.

Turning the Big Idea Into an Actual Ad to Capture the Target Markets Attention and Interest.

Typical Message Execution Styles

Mood or Image

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Advertising Strategy:

Selecting Advertising Media

Step 1. Decide on Reach, Frequency, and Impact
Step 2. Choosing Among Major Media Types
Media Habits of Target Consumers, Nature of the Product, Types of Message, Cost

Specific Media Within a Given Type, i.e. Magazines. Must Balance Media Cost Against Media Factors:
Audience Quality & Attention, Editorial Quality

Step 3. Selecting Specific Media Vehicles

Scheduling of Advertising Over the Course of a Year Pattern of Ads: Continuity or Pulsing
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Step 4. Deciding on Media Timing

Evaluating Advertising
Advertising Program Evaluation

Communication Effects
Is the Ad Communicating Well?

Sales Effects
Is the Ad Increasing Sales?

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Discussion Connections
Advertising objectives can be classified by primary purpose: to inform, persuade, or remind. Using your local newspaper, find examples of ads pursuing each of the above. Apply Table 15.1 to explain your answers.
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Other Advertising Considerations

Sales Departments in Small Companies Advertising Departments in Larger Companies

Advertising Agency
Firm that Assists Companies in the Planning, Creation, & Implementation of Their Advertising Programs
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Advertising Agencies
Large agencies divide their staffs to specialize in creative,media,research, or business (account planning). Ad agencies are moving away from the commission system because it no long accurately reflects the services performed. Most ad agency clients still want just a few of the services that can be provided by the agency, so diversification efforts have been limited.
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International Advertising Decisions

Adaptation of Global Advertising Advertising Media Differ Considerably in Availability and Cost
Regulation in Advertising Practices Comparison Ads Not Acceptable in All Countries Programs Must be Matched to Local Cultures and Customs
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What is Sales Promotion ?

Sales Promotion is a Mass Communication Technique That Offers Short-Term Incentives to Encourage Purchase or Sales of a Product or Service. Offers Reasons to Buy Now.
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Rapid Growth of Sales Promotion

Sales promotion can take the form of consumer promotions, business promotions, trade promotions or sales force promotions. Rapid growth in the industry has been achieved because:

Product managers are facing more pressure to increase their current sales, Companies face more competition, Advertising efficiency has declined, Consumers have become more deal oriented.
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Sales Promotion Objectives

Increase short-term sales or help build long-term market share. Get retailers to:

carry new items and more inventory, advertise products, give products more shelf space, and buy product ahead.

In general, sales promotion should focus on consumer relationship building.

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Major Consumer Sales Promotion Tools

Sample Coupons
Trial amount of a product Savings when purchasing specified products Refund of part of the purchase price Reduced prices marked on the label or package Goods offered free or low cost as an incentive to buy a product Articles imprinted with an advertisers name given as gifts
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Cash Refunds Price Packs

Premiums Advertising Specialties

Major Consumer Sales Promotion Tools

Patronage Rewards
Point-of-Purchase Contests Sweepstakes Game
Cash or other rewards for the use of a certain product Displays and demonstrations that take place at the point of sale Consumers submit an entry to be judged Consumers submit their names for a drawing Presents consumers with something every time they buy
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Major Trade Sales Promotion Tools

Trade-Promotion Objectives
Persuade Retailers or Wholesalers to Carry a Brand

Trade-Promotion Tools Discounts

Give a Brand Shelf Space

Promote a Brand in Advertising Push a Brand to Consumers
Sales Promotion

Allowances

This K ibble s n Bit s promotion offered pet owners a chance to see their dogs in a commercial.

Which of the four obj ectives does this type of promoti on fulfill?

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Major Business Sales Promotion Tools

Business-Promotion Objectives Generate Business Leads Stimulate Purchases Reward Customers Motivate Salespeople Business-Promotion Tools Conventions

Trade Shows
Sales Contests

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Developing the Sales Promotion Program

Decide on the Size of the Incentive Set Conditions for Participation Determine How to Promote and Distribute the Promotion Program Determine the Length of the Program Evaluate the Program
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What is Public Relations?

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.
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Major Public Relations Functions

Press Relations or Agentry Product Publicity Public Affairs Lobbying

Public Relations Departments May Perform Any of All of the Following Functions:

Investor Relations
Development
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Major Public Relations Tools

News Web Site Public Service Activities Corporate Identity Materials Written Materials
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Speeches Special Events

Audiovisual Materials

Major Public Relations Decisions

Setting Public Relations Objectives Choosing the Public Relations Messages and Vehicles

Implementing the Public Relations Plan

Evaluating Public Relations Results

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Review of Concept Connections

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