Communicating Customer Value:Advertising, Sales Promotion & PR           My Chinh, Vu
Learning Goals1. Explore the roles & understand the objectives   of advertising, sales promotion, & public   relations2. F...
Advertising
ContentsWhat?   When?      Where?         How?             Why?
Advertising         Any paid form of   non-personal communicationabout an organization, good, service,  or idea by an iden...
Characteristics of Advertising• Can reach masses of geographically  dispersed buyers at a low cost per exposure• Can repea...
Who uses Advertising?•   Business firms•   Not-for-profit organizations•   Professionals•   Social agencies•   Government
US ad expenditures (1998-2003)
10 Leading Advertisers in 2005 in the US
Key advertising decisions•   Setting objectives•   Setting the budget•   Developing the advertising strategy•   Evaluating...
Key advertising decisions (2)                              Advertising objectives can be• Setting objectives          clas...
Key advertising decisions (3)• Setting objectives     • 5 popular budget setting• Setting the budget       methods• Develo...
5 popular budget setting methods             • Historical method             • Task-objective method:               Bottom...
5 popular budget setting methods (2)                         • Common budgeting method.                         • May be b...
5 popular budget setting methods (3)Competitive Methods   • Relates the amount invested in                        advertis...
Advertising expenditures as a          percentage of salesWal-Mart Corporation                            0.34%Sears, Roeb...
Key advertising decisions (4)• Setting objectives     • Creative challenges: Advertising• Setting the budget       clutter...
Advertising Execution Styles• Creative execution refers to the manner in which          an advertising appeal is carried o...
Advertising Execution Styles (1)1. Straight - sell or factual message2. Scientific or technical evidence3. Demonstration4....
Advertising Execution Styles (2)1. Animation2. Personality symbols3. Fantasy4. Dramatization5. Humour6. Lifestyle
Advertising Execution Styles (3)1. Mood or Image2. Musical3. Culture or Tradition4. Surrogate5. Social6. Combinations
Key advertising decisions (5)• Setting objectives     • Select advertising media• Setting the budget        – Decide on le...
Setting media objectives• Reach: Percentage of people exposed to ad• Frequency: Number of times a person is  exposed to ad...
Choosing the major media types• Each media type has specific advantages &  disadvantages.• The following points should tak...
Major media types• Newspapers (local, national, free, trade)• Television (local, national, terrestrial, satellite)• Direct...
Media Alternatives•   Yellow Pages•   Transit advertising•   Electronic information terminals•   Shopping guides•   etc.
Advertising Scheduling          On or just before big          buying days          Concentrated on pay dates          ...
Ad Spending Growth Expenditures of 100 leading national advertisers        Outdoor                9.8%Cable TV Network    ...
Key Advertising Decisions                               • Measuring communications effect                                 ...
10 errors causing ineffective advertising (1)  • Bombarding the customer with so many    messages & sales that any single ...
10 errors causing ineffective advertising (2)• Poor internal communication among sales staff,    cashiers, stock staff, an...
Sales Promotion
ContentsWhat?   When?      Where?         How?             Why?
Sales promotion    Sales promotion are short-termincentives to encourage the purchase or      sale of a product or service...
Characteristics of Sales promotion•    Wide assortment of tools.•    Attracts consumer attention.•    Offers strong incent...
Reasons forrapid growth of Sales promotion• Greater focus on increasing sales                              in the  short-t...
Who does sales promotion target at?• Final buyers E.g.: Coupons/ Frequent shoppers• Retailers/ Wholesalers E.g.: Gifts, pr...
Forms of Sales promotion1.   Consumer promotion2.   Trade promotion3.   Business promotion4.   Sales force promotions.
1. Consumer promotion         Consumer promotion          is directed toward         ultimate users of the             goo...
Consumer promotion objectives• Increase short-term sales• Generate product trial• Encourage consumers to  prefer a particu...
Consumer promotion tools• Coupons                   •   Patronage Rewards• Cash Refunds/ Rebates     •   POP Displays• Pri...
Consumer promotion pitfalls•   Displaced sales (those who would buy anyway)•   Stocking up effect•   Reduction in profits•...
2. Trade promotion• Trade promotion are activities designed to  gain manufacturers, wholesalers, &  retailers support for ...
Trade promotion objectives• Persuade retailers/ wholesalers to carry a brand       Create initial distribution.• Give a b...
Trade promotion tools•   Price-offs            •   Premiums•   Allowances            •   Discounts•   Free goods          ...
Concerns about trade promotion• High cost; added to cost so higher price of  consumers• Over-reliance on trade promotions ...
3. Business promotionBusiness promotions are directed at membersof the trade – wholesalers, distributors, &retailers in or...
Business promotion objectives•   Generate business leads•   Stimulate purchases•   Reward customers•   Motivate salespeople
Business promotion tools•   Conventions•   Trade shows•   Sales contests•   & many of the same tools used for    consumer ...
Marketing in ActionThe International Consumer Electronics trade show attracts over          20,000 exhibitors and over 130...
4. Sales force promotionSales force promotion are schemes directed towardsthe sales people to motivate them to put in more...
Sales force promotion objectives• Encouraging more sales force support  for new or current products• Signing up new accoun...
Major sales force promotion tools•   Sales contests•   Incentives•   Awards and prizes•   Premiums (gifts)•   Sales meetin...
Key decisions when developing the     Sales promotion program• Size of the incentive• Conditions for participation• Promot...
Evaluating Sales Promotions:   What Sales Promotions Can Achieve• Get consumers to try a new product• Stimulate the sales ...
Evaluating Sales Promotions:   What Sales Promotions Cannot Achieve• Change the basic non-acceptance of an undesired  prod...
Public Relations
ContentsWhat?   When?      Where?         How?             Why?
Public Relations      “PR practice is the planned &      sustained effort to establish &maintain goodwill & mutual underst...
PR objectives    Awareness        Motivational
Types of PR           Product PR… focuses on raising awareness of a    particular product or service              WHILE   ...
PR functions                 Press                Relations                                 ProductCounseling             ...
Characteristics of PR•   Very believable•   Reaches people who avoid salespeople & ads•   Can dramatize a company or produ...
PR – Pros & Cons          PROS                     CONS• Credibility               • Out-of-control• Cost                 ...
How PR can help…                In general,          PR tactically manages       appropriate communicationbetween the orga...
In more detailed, PR can help ...• Assist in the launch of new products• Assist in repositioning a mature product• Build i...
Major PR tools• Publicity  (news release, feature article, captioned  photograph, press conference)• Event sponsorship  (c...
From pizza to doctors, many magazines and websites publish “Best of” lists.
Some examples of publicity through   the issuing of press releases
Some examples of event sponsorship
Criteria for the best choice of PR tool   • Composition of the target audience   • Response of media personnel   • Signifi...
PR Strategies• Push strategy• Pull strategy
Basic questions for any PR                             executive• What do I want to achieve? (objectives)• Who do I want t...
Measuring PR effectiveness (1)• PR’s contribution to the bottom line is  difficult to measure. Why?• The 3 most commonly u...
Measuring PR effectiveness (2)• To measure effectively, the PR objectives  needs to be defined clearly. Say,…  – The natur...
Top 10 PR Mistakes•   Poor timing•   Poor choice of language•   Poorly written press releases•   Poor follow-up•   Too muc...
Quick review
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
Advertising.sales promotion.pr   chinhvm
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  • 3rd Quarter 2002 Analyst Presentation 04/01/12 09:02 AM
  • 3rd Quarter 2002 Analyst Presentation 04/01/12 09:02 AM
  • 3rd Quarter 2002 Analyst Presentation 04/01/12 09:02 AM
  • 3rd Quarter 2002 Analyst Presentation 04/01/12 09:02 AM
  • 3rd Quarter 2002 Analyst Presentation 04/01/12 09:02 AM
  • Advertising.sales promotion.pr chinhvm

    1. 1. Communicating Customer Value:Advertising, Sales Promotion & PR My Chinh, Vu
    2. 2. Learning Goals1. Explore the roles & understand the objectives of advertising, sales promotion, & public relations2. Facilitate understanding of those three tools3. Explain how advertising, sales promotion, & public relations work & understand the factors that influence the use of those tools4. Know how to best use advertising, sales promotion & public relations in an organization
    3. 3. Advertising
    4. 4. ContentsWhat? When? Where? How? Why?
    5. 5. Advertising Any paid form of non-personal communicationabout an organization, good, service, or idea by an identified sponsor.
    6. 6. Characteristics of Advertising• Can reach masses of geographically dispersed buyers at a low cost per exposure• Can repeat a message many times• Consumers view advertised products as more legitimate• Is impersonal, one-way communication• Can be very costly for some media types
    7. 7. Who uses Advertising?• Business firms• Not-for-profit organizations• Professionals• Social agencies• Government
    8. 8. US ad expenditures (1998-2003)
    9. 9. 10 Leading Advertisers in 2005 in the US
    10. 10. Key advertising decisions• Setting objectives• Setting the budget• Developing the advertising strategy• Evaluating advertising campaigns
    11. 11. Key advertising decisions (2) Advertising objectives can be• Setting objectives classified by primary purpose:• Setting the budget • Inform• Developing the – Introducing new products  Help stimulate & build initial advertising strategy demand• Evaluating advertising • Persuade campaigns – Becoming more important as competition increases  Help improve the competitive status of a product • Remind – Most important for mature products  Help maintain awareness of the importance & usefulness of a product.
    12. 12. Key advertising decisions (3)• Setting objectives • 5 popular budget setting• Setting the budget methods• Developing the • Several factors should be advertising strategy considered when setting the ad• Evaluating advertising budget: – Stage in the PLC campaigns – Market share – Level of competition – Ad clutter – Degree of brand differentiation
    13. 13. 5 popular budget setting methods • Historical method • Task-objective method: Bottom-Up • Percentage-of-sales method • Competitive methods • All-you-can-afford method
    14. 14. 5 popular budget setting methods (2) • Common budgeting method. • May be based on last year’s with a Historical Method percentage increase. • Nothing to do with advertising objectives. • Most common method.Task-Objective Method: • Looks at objectives set for each activity, & Bottom-Up determines the cost of accomplishing each objective. Percentage-of-Sales Compares total sales with the total advertising budget during a previous time period to Method compute a percentage.
    15. 15. 5 popular budget setting methods (3)Competitive Methods • Relates the amount invested in advertising to the product’s share of market. • Must understand share-of-mind. All You Can Afford • Allocates whatever is left over to Method advertising. • Companies who use this don’t value advertising very much.
    16. 16. Advertising expenditures as a percentage of salesWal-Mart Corporation 0.34%Sears, Roebuck & Co. 3.78%Kmart Corp. 1.25%Dayton Hudson Corp. 2.15%J.C. Penney Co. 3.42%Federated Dept. Stores 3.75%May Dept. Stores Co. 3.43%Woolworth Corporation 1.30%Source: Retailing, 3rd Edition, Dunne & Lusch, 1999
    17. 17. Key advertising decisions (4)• Setting objectives • Creative challenges: Advertising• Setting the budget clutter • Creating ad messages• Developing the – Message strategy advertising strategy • Creative concept/ Big Idea• Evaluating advertising • Advertising appeal (Meaningful, campaigns Believable, Distinctive) – Message execution • Many execution styles • Tone ; Use memorable, attention- getting words); Format (illustration, headline, sound & colour)
    18. 18. Advertising Execution Styles• Creative execution refers to the manner in which an advertising appeal is carried out or presented.• A particular advertising appeal can be executed in a variety of ways.• The impact of the message depends not only on what is said but also on how it is said.• Any message can be presented in different
    19. 19. Advertising Execution Styles (1)1. Straight - sell or factual message2. Scientific or technical evidence3. Demonstration4. Comparison5. Testimonials6. Slice of life
    20. 20. Advertising Execution Styles (2)1. Animation2. Personality symbols3. Fantasy4. Dramatization5. Humour6. Lifestyle
    21. 21. Advertising Execution Styles (3)1. Mood or Image2. Musical3. Culture or Tradition4. Surrogate5. Social6. Combinations
    22. 22. Key advertising decisions (5)• Setting objectives • Select advertising media• Setting the budget – Decide on level of reach,• Developing the frequency & impact advertising strategy – Choose among the major media (cont.) types by considering:• Evaluating advertising • Consumer media habits, nature of the product, types of messages, campaigns and costs – Select specific media vehicles – Decide on media timing
    23. 23. Setting media objectives• Reach: Percentage of people exposed to ad• Frequency: Number of times a person is exposed to ad• Media Impact: The qualitative value of a message exposure through a given medium.
    24. 24. Choosing the major media types• Each media type has specific advantages & disadvantages.• The following points should take into consideration. –Consumer media habits, –Nature of the product, –Types of messages, –Costs, –Media vehicles (E.g.: Newsweek)  Factors need considering: Cost, Audience quality, Audience engagement, Editorial quality
    25. 25. Major media types• Newspapers (local, national, free, trade)• Television (local, national, terrestrial, satellite)• Direct Mail• Radio• Magazines• Outdoor (e.g.: posters, bus sides)• Internet
    26. 26. Media Alternatives• Yellow Pages• Transit advertising• Electronic information terminals• Shopping guides• etc.
    27. 27. Advertising Scheduling  On or just before big buying days  Concentrated on pay dates  Periods of highest demand  Period of highest CPM  Habit (same day each week)
    28. 28. Ad Spending Growth Expenditures of 100 leading national advertisers Outdoor 9.8%Cable TV Network 11.0% Internet 13.3%Sunday Magazine 13.7% Local Magazine 25.2% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Source: Advertising Age, 2005
    29. 29. Key Advertising Decisions • Measuring communications effect Copy testing• Setting objectives – Viewer playback of what ad is saying• Setting the budget – Cognitive response (thoughts while• Developing the advertising watching) strategy (cont.) – Motivation research (hidden meanings) – Objective measures• Evaluating advertising – Theater testing campaigns – Day after recall (DAR) • Measuring sales effect – Compare past sales with past advertising expenditures – Experimental designs; scanner data, direct response/ mail
    30. 30. 10 errors causing ineffective advertising (1) • Bombarding the customer with so many messages & sales that any single message or sale tends to be discounted. • The advertising was not creative or appealing. • The advertising didn’t give all the needed information. • Advertising dollars were spread too thinly over too many departments or merchandise lines.
    31. 31. 10 errors causing ineffective advertising (2)• Poor internal communication among sales staff, cashiers, stock staff, and management.• Advertisement not directed at the proper target market.• Not all media options are considered.• Too many last-minute changes in the advertising copy.• Retailer took co-op dollars just because they were “free” & therefore presumably a good deal.• Used a medium that reached too many people not in the target market.
    32. 32. Sales Promotion
    33. 33. ContentsWhat? When? Where? How? Why?
    34. 34. Sales promotion Sales promotion are short-termincentives to encourage the purchase or sale of a product or service. GOOD ON YOUR NEXT SHOPPING ORDER THANKS FOR BUYING ASPIRIN
    35. 35. Characteristics of Sales promotion• Wide assortment of tools.• Attracts consumer attention.• Offers strong incentives to buy.• Invites & rewards quick consumer response.• Effects are short-lived.• Should build long-term customer relationships.
    36. 36. Reasons forrapid growth of Sales promotion• Greater focus on increasing sales in the short-term• Greater competition• Decline in advertising efficiency• Consumers are more “deal-oriented”
    37. 37. Who does sales promotion target at?• Final buyers E.g.: Coupons/ Frequent shoppers• Retailers/ Wholesalers E.g.: Gifts, price breaks• Business customers• Members of the sales force E.g.: Bonuses, training
    38. 38. Forms of Sales promotion1. Consumer promotion2. Trade promotion3. Business promotion4. Sales force promotions.
    39. 39. 1. Consumer promotion Consumer promotion is directed toward ultimate users of the good or service
    40. 40. Consumer promotion objectives• Increase short-term sales• Generate product trial• Encourage consumers to prefer a particular brand to competitive offerings• Help build long-term customer relationships
    41. 41. Consumer promotion tools• Coupons • Patronage Rewards• Cash Refunds/ Rebates • POP Displays• Price Packs/ • Demonstrations Money-off deals • Contests• Samples • Sweepstakes• Premiums • Games• Advertising Specialties
    42. 42. Consumer promotion pitfalls• Displaced sales (those who would buy anyway)• Stocking up effect• Reduction in profits• Risk of reducing brand equity• Cause consumers to expect price cuts
    43. 43. 2. Trade promotion• Trade promotion are activities designed to gain manufacturers, wholesalers, & retailers support for a product.• More money is actually spent on promoting to businesses than to consumers.
    44. 44. Trade promotion objectives• Persuade retailers/ wholesalers to carry a brand  Create initial distribution.• Give a brand shelf space (E.g. eye-level/ superior location).• Push brand to customers.• Promote a brand in advertising• Maintain support for established brands  Share of shelf (SOS) = Share of market (SOM)
    45. 45. Trade promotion tools• Price-offs • Premiums• Allowances • Discounts• Free goods • Push money• Contests • Specialty advertising• Buy-back guarantees (E.g. A give-away)
    46. 46. Concerns about trade promotion• High cost; added to cost so higher price of consumers• Over-reliance on trade promotions to push merchandise• Often used for short-term sales goals• Potential erosion of brand image• Impact on small manufacturers
    47. 47. 3. Business promotionBusiness promotions are directed at membersof the trade – wholesalers, distributors, &retailers in order to • stimulate demand in the short run • help push the product through the distribution channel more immediately.
    48. 48. Business promotion objectives• Generate business leads• Stimulate purchases• Reward customers• Motivate salespeople
    49. 49. Business promotion tools• Conventions• Trade shows• Sales contests• & many of the same tools used for consumer or trade promotions.
    50. 50. Marketing in ActionThe International Consumer Electronics trade show attracts over 20,000 exhibitors and over 130,000 visitors.
    51. 51. 4. Sales force promotionSales force promotion are schemes directed towardsthe sales people to motivate them to put in more efforts• to increase sales,• to increase distribution,• to promote new or seasonal products• to sell more deals to resellers• to develop prospects lists• to build up morale & enthusiasm.
    52. 52. Sales force promotion objectives• Encouraging more sales force support for new or current products• Signing up new accounts• Getting market information
    53. 53. Major sales force promotion tools• Sales contests• Incentives• Awards and prizes• Premiums (gifts)• Sales meetings• Training• Sales manuals
    54. 54. Key decisions when developing the Sales promotion program• Size of the incentive• Conditions for participation• Promotion & distribution of the actual sales promotion program• Length of the promotional program• Evaluation
    55. 55. Evaluating Sales Promotions: What Sales Promotions Can Achieve• Get consumers to try a new product• Stimulate the sales of products• Neutralize competitive advertising & sales promotions• Encourage repeat usage by current users• Reinforce advertising
    56. 56. Evaluating Sales Promotions: What Sales Promotions Cannot Achieve• Change the basic non-acceptance of an undesired product• Compensate for a poorly trained sales force• Give consumers a compelling reason to continue purchasing a product over the long run• Permanently stop an established product’s declining sales trend
    57. 57. Public Relations
    58. 58. ContentsWhat? When? Where? How? Why?
    59. 59. Public Relations “PR practice is the planned & sustained effort to establish &maintain goodwill & mutual understanding between an organization & its publics.”
    60. 60. PR objectives Awareness Motivational
    61. 61. Types of PR Product PR… focuses on raising awareness of a particular product or service WHILE Corporate PR… tries to positively portray a whole company or brand
    62. 62. PR functions Press Relations ProductCounseling Publicity Corporate Lobbying Communications
    63. 63. Characteristics of PR• Very believable• Reaches people who avoid salespeople & ads• Can dramatize a company or product• Tends to be used as an afterthought• Planned use can be effective & economical
    64. 64. PR – Pros & Cons PROS CONS• Credibility • Out-of-control• Cost message after having been released• Avoidance of clutter • Not completing the• Lead generation communications• Ability to reach specific process groups • Not easy to measure• Image building its effectiveness
    65. 65. How PR can help… In general, PR tactically manages appropriate communicationbetween the organization & its stakeholders. Notes: Communication can influence behavior
    66. 66. In more detailed, PR can help ...• Assist in the launch of new products• Assist in repositioning a mature product• Build interest in a product category• Influence specific target groups• Defend products that have encountered public problems• Build the corporate image in a way that reflects favourably on its products
    67. 67. Major PR tools• Publicity (news release, feature article, captioned photograph, press conference)• Event sponsorship (concert, sports competition, festival, play).• Written materials (brochures, newsletters, company magazines, annual reports, news releases)• Corporate identity material (logos, business cards, signs, stationery)
    68. 68. From pizza to doctors, many magazines and websites publish “Best of” lists.
    69. 69. Some examples of publicity through the issuing of press releases
    70. 70. Some examples of event sponsorship
    71. 71. Criteria for the best choice of PR tool • Composition of the target audience • Response of media personnel • Significance of the news item
    72. 72. PR Strategies• Push strategy• Pull strategy
    73. 73. Basic questions for any PR executive• What do I want to achieve? (objectives)• Who do I want to talk to? (publics)• What do I want to say? (messages)
    74. 74. Measuring PR effectiveness (1)• PR’s contribution to the bottom line is difficult to measure. Why?• The 3 most commonly used measures of PR effectiveness: – Number of exposures -- the easiest way, – Awareness/ attitude change, & – Contribution to sales & profits.
    75. 75. Measuring PR effectiveness (2)• To measure effectively, the PR objectives needs to be defined clearly. Say,… – The nature of the intended change – The target public – The outcome to be achieved – The amount of change desired – A target date for achieving the outcome.
    76. 76. Top 10 PR Mistakes• Poor timing• Poor choice of language• Poorly written press releases• Poor follow-up• Too much hype• Press releases without purpose• No newspaper knowledge• Lack of plan• No help• Staying inside the box
    77. 77. Quick review

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