Chapter 20 Management of Advertising, Sales Promotion and Public Relations

Sommers

Barnes

Ninth Canadian Edition

Presentation by

Karen A. Blotnicky Mount Saint Vincent University, Halifax, NS

Copyright 2001 by McGraw-Hill Ryerson Limited

Chapter Goals
To gain an understanding of: The nature of advertising The importance of advertising to the firm and society Different types of advertising Development of advertising campaigns Selection of advertising media The use of public relations and publicity
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Advertising
Includes all activities involved in presenting a non-personal, sponsoridentified, paid-for message about a product or organization. Can classify it by: The target audience: consumers or businesses Product/service vs. organization/company Objective: Primary or selective demand
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The Nature of Advertising

advertising is distinguished from other forms of promotion as follows it has a verbal and/or visual message the sponsor of the message is identified delivery is through recognizable media there is payment by the advertiser to the media for carrying the message advertisers are increasingly being able to reach specific audiences with tailor-made messages
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Advertising to Target Audiences

advertising can be classified by the target audience to which it is directed consumer advertising generally appears in mass media and is directed to end consumers: may be product or institutional in nature business-to-business advertising is often called trade advertising and is directed to a business market
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What is Being Advertised?

product advertising is designed to promote the sale of a specific product or service: may be direct-action, quick-response may be indirect-action over a longer time institutional advertising promotes the firm or tries to create a positive image: may promote customer service or send a public service message
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What are the Objectives?

primary-demand advertising is intended to stimulate use of a category of products selective-demand advertising is intended to encourage purchase of a particular brand or the products and services of a specific firm

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Comparative Advertising
Selective-demand advertising Involves comparing a product to its competing brand May be:
Direct, naming competitors outright Less direct, alluding to competitors (e.g., leading brand, Brand X) but not naming them
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Co-operative Advertising
co-operative advertising involves the sharing of the cost of advertising by two or more sponsors: a manufacturer and retailers (vertical), or a group of retailers (horizontal)

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Advertising Revenues by Medium (1997)

Medium Television Newspapers (Daily) Revenues (Millions $) 2,100 1,545

Yellow Pages
Magazines (General) Catalogues/Direct Mail

894
347 1,168

Outdoor/Transit Ads
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Key Advertising Categories in Canada (1998)

Industry Retail Automotive (Mfr.) Business Equip. & Services Food Financial/Insurance Entertainment Local Auto Dealerships Travel & Transportation
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Spending (Million $) 953.5 753.8 521.6 395.6 388.0 314.8 266.6 249.3
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An Advertising Campaign (Steps 1 and 2)

1. Transforming a theme into a coordinated advertising program to accomplish a specific goal. 2. Objectives of the campaign determined by firms overall marketing strategy. Typical objectives are:

Support personal selling Improve dealer relations Introduce a new product Counteract substitution Expand use of a product category
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The Advertising Campaign (Steps 3 and 4)

Creating a message that: Gets and holds the attention of the intended audience. Influences the audience in the desired way. Selecting media involves: The choice of a medium such as television, radio, newspaper, or magazine. The specific category of the selected medium to be used, such as special interest (Chatelaine) vs. general interest magazines (Macleans). The specific media vehicles.
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The Campaign Budget

A budget must be allocated among the various activities comprising the overall promotional program. Promotional budgets can be extended with co-operative advertising.

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Choosing Media
Objectives of the ad. Audience coverage. Requirements of the message. Time and location of the buying decision. Media cost (CPM) Media characteristics.
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Characteristics of Key Media

Newspapers: flexible, local Television: versatile, powerful but costly, fragmented Direct Mail: personal, selective, effective, but tough Radio: strong locally, cheap but single medium Magazines: top quality, little flexibility
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More Key Media

out-of-home advertising specialty advertising emerging media: World Wide Web infomercials place-based media videos and CD-ROMs yellow pages
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Evaluating the Major Media

newspapers are flexible and timely, have a local orientation and wide coverage, low cost television is versatile, but audience is now fragmented, reaches mass audiences direct mail is efficient, targets certain audience
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More Media Evaluations

radio stations target specific segments, low cost, local orientation, short message life magazines deliver quality advertising to specific segments, message stays around

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The Changing Nature of Media

media are becoming less mass, more targeted cable TV offers many specialty channels direct-to-home TV adds to fragmentation lots of new out-of-home media Yellow Pages and other directories on CDROM place-based media where they shop and live advertising on the Web works as Yellow Pages does -- the customer seeks out the advertiser
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Evaluating Advertising
It is difficult to measure the sales effectiveness of advertising because: Ads have different objectives. Ads can have an effect over time period. Measurement problems. Effectiveness can be tested: Before an ad is presented. While it is being presented. After it has completed its run.
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Organizing for Advertising

Develop an internal advertising department. Many large retailers do this. Use an outside advertising agency. Specialized, skilled professionals. Experienced, many services offered Do both.

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Sales Promotion
Demand-stimulating devices designed to supplement advertising and facilitate personal selling. Sales promotions include such things as coupons, in-store displays, premiums, trade shows, in-store demonstrations, and contests. The target for these activities may be middlemen, end users, or the producers own salesforce.
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Types of Sales Promotion

Trade promotions, directed to members of the distribution channel. Consumer promotions, aimed at consumers. Consumers got 3.3 billion coupons for packaged goods alone in 1996.

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Advantages of Sales Promotion

It can produce short-term results. Competitors are using sales promotions. Sales promotions are attractive to price-conscious consumers. Can enhance/facilitate retail salesmanship which is often of low quality.
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Key Reasons for Sales Promotion

Stimulating end-user demand. Sampling program for new/improved product Improving the marketing performance of middlemen and salespeople.

Sell more, win a holiday trip.

Supplementing advertising and facilitating personal selling.

Displays, promotional giveaways

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Managing Sales Promotion

Select from wide range of techniques, depending on your objectives Select promotional devices based on: Nature of target audience Your promotional objectives: Push vs. Pull. Cost of device-- sampling can get costly. Current economic conditions-- coupons, rebates work best in recessionary period. Evaluating Sales Promotion: Much easier than with advertising. Usually clear start, finish, goal.
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Public Relations
A tool designed to influence favourably attitudes towards an organization, its products and policies. Public relations is often overlooked by management because of: Organization structure; not in marketing. Inadequate definitions; loosely defined. Unrecognized benefits; many nonbelievers.
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Publicity
Publicity is a form of public relations that includes any communication about an organization or its products that is presented by the media but is not paid for by the organization.

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Strengths of Publicity
Can announce new products, recognize employees, report good results, breakthroughs. Key Benefits: Lower cost than advertising or personal selling. Increased readership; advertising ignored often. More information. Timeliness.
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Weaknesses of Publicity
Some loss of control over message. Limited exposure; only happens once. Not free; preparation costs.

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