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  1. 1. Chapter 15Advertising, Sales Promotion, and Public Relations 1
  2. 2. AdvertisingAdvertising is centuries old.U.S. advertisers spend in excess of $212billion each year; worldwide spendingexceeds $414 billion.Advertising is used by: Business firms, Nonprofit organizations, Professionals, and Social agencies. 2
  3. 3. What is Advertising? Advertising is Any Paid Form of Nonpersonal Presentation and Promotion of Ideas, Goods, or Services by an Identified Sponsor. 3
  4. 4. Major Advertising Decisions (Fig. 15.1) Message Decisions •Message Strategy •Message ExecutionObjectives Setting Budget •Communication Decisions Campaign Evaluation objectives •Affordable Approach •Communication Impact •Sales Objectives •Percent of sales •Sales Impact •Competitive parity •Objective and task Media Decisions •Reach, Frequency, Impact •Major Media Types •Specific Media Types •Media Timing 4
  5. 5. Setting Advertising ObjectivesInformative Advertising Persuasive Advertising Inform Consumers or Build Selective Demand Build Primary Demand i.e Sony CD Players i.e CD Players Advertising Objective Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of TimeComparison Advertising Reminder Advertising Compares One Brand to Keeps Consumers Thinking Another About a Product i.e. Avis vs. Hertz i.e. Coca-Cola 5
  6. 6. Setting the Promotion Budget After Determining Its Advertising Objectives, the Each Product and Market. (From Chapter 14) Marketer Must Set the Advertising Budget for 6 Affordable Percentage o Percentage o Based on What the Based on a Certain Based on a Certain Company Can Afford of Current or Forec of Current or Forec Objective-and-Task Objective-and-Task Competitive Competitive Based on Determining Based on Determining Based on the Co Based on the Com Objectives & Tasks, Then Objectives & Tasks, Then Promotion B Promotion Bu Estimating Costs Estimating Costs
  7. 7. Setting the Advertising BudgetFactors to beconsidered whensetting the advertisingbudget: Stage in the product life cycle, Market share, Competition and clutter, Product differentiation. 7
  8. 8. Developing Advertising StrategyAdvertising Strategy Consists of Two Major Elementsand Companies are Realizing the Benefits of Planning These Two Elements Jointly. Creating the Selecting the Advertising Advertising Media Messages 8
  9. 9. Developing Advertising Strategy: Creating Ad Messages Plan a Message Strategy General Message to Be Communicated to CustomersDevelop a MessageDevelop a Message Focus on Focus on Customer Benefits Customer Benefits Creative Concept Creative Concept “Big Idea” “Big Idea”Some phrases or Big Ideas become soeffective that they spark trends in speaking, Visualization or Phrase Advertising Appeals Visualization or Phrase Advertising Appealsfashion, or even in other ads. Combination of Both Combination of Both Meaningful Meaningful Believable Believable Distinctive Distinctive 9
  10. 10. Mes sa ge E xec u t i on What type of message executi on do these two Developing Advertising ads employ? In both cases, what distingui shes the product from the rest of the ad? Strategy: Message Execution Click or p res s spacebar to retu rn. Turning the “Big Idea” Into an Actual Ad to Capture theThis Colgate ad Target Market’s Attention and Interest.informs customersabout the necessityof brushing afterlunch.In addition toacquiring newcustomers, Colgatemay increasetoothpaste use bypresent customers. Testimonial Evidence Testimonial Evidence Slice of Life Slice of Life Scientific Evidence Scientific Evidence Typical Lifestyle Lifestyle Message Technical Expertise Execution Fantasy Technical Expertise Fantasy Styles Personality Symbol Personality Symbol Mood or Image Mood or Image What type of mood does this set ab o t the product? u Musical Musical 10 Which lifestyle does it appeal to?
  11. 11. Advertising Strategy:Selecting Advertising Media Step 1. Decide on Reach, Frequency, and ImpactStep 2. Choosing Among Major Media Types Media Habits of Target Consumers, Nature of the Product, Types of Message, Cost Step 3. Selecting Specific Media Vehicles Specific Media Within a Given Type, i.e. Magazines. Must Balance Media Cost Against Media Factors: Audience Quality & Attention, Editorial Quality Step 4. Deciding on Media Timing Scheduling of Advertising Over the Course of a Year Pattern of Ads: Continuity or Pulsing 11
  12. 12. Jon Steel, of Goodby, Silverstein, and Partners: Evaluating Advertising Advertising Program Evaluation Communication Effects Communication Effects Sales Effects Sales EffectsIs the Ad Communicating Well? Is the Ad Communicating Well? Is the Ad Increasing Sales? Is the Ad Increasing Sales? 12
  13. 13. Discussion ConnectionsAdvertising objectives can be classifiedby primary purpose: to inform, persuade,or remind.Using your local newspaper, findexamples of ads pursuing each of theabove.Apply Table 15.1 to explain your answers. 13
  14. 14. Other AdvertisingConsiderationsSales Departments in Advertising Departments Small Companies in Larger Companies Advertising Agency Firm that Assists Companies in the Planning, Creation, & Implementation of Their Advertising Programs 14
  15. 15. Advertising AgenciesLarge agencies divide their staffs to specialize increative,media,research, or business (accountplanning).Ad agencies are moving away from thecommission system because it no long accuratelyreflects the services performed.Most ad agency clients still want just a few of theservices that can be provided by the agency, sodiversification efforts have been limited. 15
  16. 16. International AdvertisingDecisions 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 16
  17. 17. What is Sales Promotion ? Sales Promotion is a Mass Communication Technique That Offers Short-Term Incentives toEncourage Purchase or Sales of a Product or Service. Offers Reasons to Buy Now. 17
  18. 18. Rapid Growth of Sales PromotionSales promotion can take the form of consumerpromotions, business promotions, tradepromotions or sales force promotions.Rapid growth in the industry has been achievedbecause: 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. 18
  19. 19. Sales Promotion ObjectivesIncrease short-term sales or help buildlong-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 focuson consumer relationship building. 19
  20. 20. Major Consumer Sales Promotion Tools Sample Sample Trial amount of a product Trial amount of a product Savings when purchasing specified Savings when purchasing specified Coupons Coupons products productsCash RefundsCash Refunds Refund of part of the purchase price Refund of part of the purchase price Reduced prices marked on the label or Reduced prices marked on the label orPrice PacksPrice Packs package package Goods offered free or low cost as an Goods offered free or low cost as an Premiums Premiums incentive to buy a product incentive to buy a product Advertising Advertising Articles imprinted with an advertiser’s Articles imprinted with an advertiser’s Specialties Specialties name given as gifts name given as gifts 20
  21. 21. Major Consumer Sales Promotion Tools Cash or other rewards for the use of a Cash or other rewards for the use of aPatronage RewardsPatronage Rewards certain product certain product Displays and demonstrations that take Displays and demonstrations that takePoint-of-PurchasePoint-of-Purchase place at the point of sale place at the point of sale Contests Contests Consumers submit an entry to be judged Consumers submit an entry to be judged Consumers submit their names for a Consumers submit their names for a Sweepstakes Sweepstakes drawing drawing Presents consumers with something every Presents consumers with something every Game Game time they buy time they buy 21
  22. 22. Major Trade Sales Promotion Tools Trade-Promotion Trade-Promotion Objectives Tools Persuade Retailers or Persuade Retailers orWholesalers to Carry a BrandWholesalers to Carry a Brand Discounts Discounts Give a Brand Shelf Space Give a Brand Shelf Space Promote a Brand in Allowances Allowances Promote a Brand in Advertising AdvertisingPush a Brand to ConsumersPush a Brand to Consumers Sales Promotion T his K ibble s ‘n Bit s promotion off ered pet owner s a chance to see their dogs in a commer cial. Which of the fou r obj ectives does this type of promoti on 22 fulfill?
  23. 23. Major Business Sales Promotion Tools Business-Promotion Business-Promotion Objectives ToolsGenerate Business LeadsGenerate Business Leads Conventions Conventions Stimulate Purchases Stimulate Purchases Trade Shows Trade Shows Reward Customers Reward Customers Sales Contests Sales Contests Motivate Salespeople Motivate Salespeople 23
  24. 24. Developing the SalesPromotion Program Decide on the Size of the Incentive Decide on the Size of the Incentive Set Conditions for Participation Set Conditions for Participation Determine How to Promote and Determine How to Promote and Distribute the Promotion Program Distribute the Promotion Program Determine the Length of the Program Determine the Length of the Program Evaluate the Program Evaluate the Program 24
  25. 25. What is Public Relations?Public Relations Involves Building GoodRelations With the Company’s Various Publics by Obtaining FavorablePublicity, Building Up a Good Corporate Image, and Handling or Heading Off Unfavorable Rumors, Stories, and Events. 25
  26. 26. Perform Any of All Departments May Public Relations of the Following Functions: 26Major Public RelationsPress Relations or AgentryPress Relations or Agentry Product Publicity Product Publicity Public Affairs Public Affairs Lobbying LobbyingFunctions Investor Relations Investor Relations Developm Developme
  27. 27. Major Public Relations Tools News Web Site Speeches Public Special Service EventsActivities Corporate Written Identity Audiovisual Materials Materials Materials 27
  28. 28. 28Major Public Relations Setting Public Relations Objectives Setting Public Relations Objectives Choosing the Public Relations Message Choosing the Public Relations Messages and Vehicles and Vehicles Implementing the Public Relations Plan Implementing the Public Relations PlanDecisions Evaluating Public Relations Results Evaluating Public Relations Results
  29. 29. Review of Concept ConnectionsDefine the roles of advertising, salespromotion, and public relations in thepromotion mix.Describe the major decisions involved indeveloping an advertising program.Explain how sales promotion campaigns aredeveloped and implemented.Explain how companies use public relationsto communicate with their publics. 29