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Marketing Chapter 19 Advertising


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Marketing Chapter 19 Advertising

  2. 2. ADVERTISING AND ITS PURPOSE <ul><li>The average person is exposed to more than 2000 ads in one week. </li></ul><ul><li>There are two main types of advertising: </li></ul><ul><ul><li>Promotional Advertising </li></ul></ul><ul><ul><ul><ul><li>advertising designed to increase sales. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Introduces new products and explains features and benefits. </li></ul></ul></ul></ul><ul><ul><li>Institutional Advertising </li></ul></ul><ul><ul><ul><ul><li>attempts to create a favorable impression and goodwill for a business. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Provides positive information about a business. </li></ul></ul></ul></ul>
  3. 3. ADVERTISING DRAWBACKS <ul><li>Advertising cannot focus on individual needs because the same message is conveyed to all customers. </li></ul><ul><li>Many forms of advertising, such as TV, is too expensive for small companies. </li></ul><ul><li>Advertising is inefficient--not everyone is a potential customer. </li></ul><ul><li>Ad messages are often very short, lacking information. </li></ul>
  4. 4. TYPES OF AD MEDIA <ul><li>Media are the agencies, means, or instruments used to convey advertising messages to the public. </li></ul><ul><li>There are four general categories of ad media: </li></ul><ul><ul><li>1) Print Media </li></ul></ul><ul><ul><li>2) Broadcast Media </li></ul></ul><ul><ul><li>3) Online Media </li></ul></ul><ul><ul><li>4) Specialty Media </li></ul></ul>
  5. 5. PRINT MEDIA <ul><li>Print Media is written advertising found in the following forms: </li></ul><ul><ul><li>Newspaper </li></ul></ul><ul><ul><li>Magazine </li></ul></ul><ul><ul><li>Direct Mail </li></ul></ul><ul><ul><li>Directory </li></ul></ul><ul><ul><li>Outdoor </li></ul></ul><ul><ul><li>Transit </li></ul></ul>
  6. 6. NEWSPAPER ADS <ul><li>PROS </li></ul><ul><li>timely--daily or weekly </li></ul><ul><li>local, regional, or national </li></ul><ul><li>55% of US adults read paper everyday </li></ul><ul><li>cost is relatively low per person </li></ul><ul><li>can target using sections </li></ul><ul><li>CONS </li></ul><ul><li>Ad life is very short </li></ul><ul><li>Ads are less appealing than other print media due to lack of color </li></ul>
  7. 7. MAGAZINE ADVERTISING <ul><li>PROS </li></ul><ul><li>can be classified as local, regional, or national </li></ul><ul><li>can be weekly, monthly, or quarterly </li></ul><ul><li>they can easily target their audiences by demographic, psychographic, or geography </li></ul><ul><li>Longer life span </li></ul><ul><li>Read more slowly and thoroughly than newspapers </li></ul><ul><li>Good print quality </li></ul><ul><li>CONS </li></ul><ul><li>much more expensive to advertise in </li></ul><ul><li>deadlines for print are often many months before circulation </li></ul>
  8. 8. DIRECT MAIL ADVERTISING <ul><li>PROS </li></ul><ul><li>mailing lists are assembled from customer records or bought from direct mail specialty firms. </li></ul><ul><li>Can be highly selective about target </li></ul><ul><li>Can control the timing accurately </li></ul><ul><li>Wide choice of types </li></ul><ul><li>Can use coupons or other incentives </li></ul><ul><li>Order form included </li></ul><ul><li>CONS </li></ul><ul><li>low level of response--usually less than 1% </li></ul><ul><li>“ Junk Mail” </li></ul><ul><li>Cost is high per person, including producing and printing, mailing, and maintaining lists </li></ul>
  9. 9. DIRECTORY ADVERTISING <ul><li>PROS </li></ul><ul><li>This is an alphabetical listing of households and businesses. Ex. Phone </li></ul><ul><li>Relatively inexpensive and hit 98% of the population </li></ul><ul><li>Kept for at least a year </li></ul><ul><li>CONS </li></ul><ul><li>Cannot change message often </li></ul>
  10. 10. OUTDOOR ADS <ul><li>PROS </li></ul><ul><li>Highly visible </li></ul><ul><li>Relatively inexpensive </li></ul><ul><li>24 hour a day message </li></ul><ul><li>can reach specific markets </li></ul><ul><li>Great use of color, space, size, and motion </li></ul><ul><li>CONS </li></ul><ul><li>Have become limited and banned in some states </li></ul><ul><li>Limited viewing time </li></ul><ul><li>unknown audience </li></ul><ul><li>increasing regulations due to safety concerns </li></ul>
  11. 11. TRANSIT ADVERTISING <ul><li>This uses public transportation to bring advertising messages to people. </li></ul><ul><ul><ul><li>Printed posters found inside business and commuter trains </li></ul></ul></ul><ul><ul><ul><li>Exterior posters on the outside of taxis and buses </li></ul></ul></ul><ul><ul><ul><li>Station posters located near or in subways or airline terminals </li></ul></ul></ul><ul><li>Reaches wide audience </li></ul><ul><li>Relatively low cost per person </li></ul><ul><li>E-Billboards are growing--TVs in transit terminals </li></ul>
  12. 12. BROADCAST MEDIA <ul><li>This includes radio and television. </li></ul><ul><li>The average person will spend about ten years of their life watching TV and six years listening to the radio in a life span of seventy years. </li></ul><ul><li>People are more likely to believe info from TV than from print media. </li></ul><ul><li>In the US, there are over 10,000 radio and over 1,200 network TV stations. </li></ul><ul><li>98 million households have at least one TV </li></ul>
  13. 13. TV ADVERTISING <ul><li>Can communicate a message with sound, action and color. </li></ul><ul><li>Prime time is 8-11 PM because millions of targeted viewers are watching. </li></ul><ul><li>Can demonstrate product features. </li></ul><ul><li>Can capture attention very well. </li></ul><ul><li>Can direct message easily--news, comedy, history, etc. through cable stations. </li></ul><ul><li>Very high cost per person </li></ul><ul><li>Actual audience size is not assured. </li></ul>
  14. 14. RADIO ADVERTISING <ul><li>Reaches a very wide audience. </li></ul><ul><li>Drive time is best time advertise with most people listening and captive. </li></ul><ul><li>Music, slogans, jingles add excitement, drama, or humor </li></ul><ul><li>Can target based on style or format of the station </li></ul><ul><li>It is a mobile medium which can be taken almost anywhere--beach, car, jogging, etc. </li></ul><ul><li>Ads have short life span </li></ul><ul><li>Listeners can be easily distracted by what they are doing </li></ul>
  15. 15. ONLINE ADVERTISING <ul><li>This involves placing ads on the internet. </li></ul><ul><li>This is the fastest growing ad medium today. </li></ul><ul><li>Most ads are banner ads --a wide shallow rectangle seen at the top or bottom of a web page. </li></ul><ul><li>Interstitial Ads--pop-up ads that either have to be clicked or closed. Annoy many people. </li></ul><ul><li>Easy to record how effective ad is by using a counter. </li></ul><ul><li>Response rate currently is about 1% </li></ul>
  16. 16. SPECIALTY MEDIA <ul><li>Relatively inexpensive, useful items with an advertiser’s name printed on them. </li></ul><ul><li>The items are usually given away with no obligation. </li></ul><ul><li>Items must be practical and useful. </li></ul><ul><li>Common items are bottle openers, calendars, magnets, pens, pencils, memo pads, and key chains. </li></ul><ul><li>Generally not expensive, but sometimes large amount of waste. </li></ul>
  17. 17. SELECTION OF PROMOTIONAL MEDIA <ul><li>Three basic questions need to be addressed to choose which type of media: </li></ul><ul><ul><li>Does the medium have the ability to present the product and the appropriate business image? </li></ul></ul><ul><ul><li>Does the medium have the ability to target the desired customers? </li></ul></ul><ul><ul><li>Does the medium have the ability to obtain the desired response rate? </li></ul></ul><ul><li>The bottom line is what is the cost per person and am I reaching enough potential customers? </li></ul>
  18. 18. MEDIA COSTS <ul><li>NEWSPAPER RATES--display or classified ad </li></ul><ul><li>MAGAZINE RATES--based on circulation, quality, size and production technique </li></ul><ul><li>ONLINE RATES--based upon the type of format the customer desires. Also based on the volume of monthly page views. </li></ul><ul><li>RADIO RATES--network radio, national spot radio, local radio. Time of day and station ratings determine cost. </li></ul><ul><li>TV RATES--time of day, rating of station determine. Class system(A,B,C, etc.) </li></ul>
  19. 19. COOPERATIVE ADVERTISING <ul><li>This is a cost sharing arrangement whereby both a supplier and a local advertiser pay for advertising. </li></ul><ul><li>Examples include Coca Cola on sale at Waldbaums or Levi’s at Macy’s. </li></ul><ul><li>Advantages are shared ad expenses. </li></ul><ul><li>Disadvantages are loss of control of ad content, and the need to follow the guidelines of suppliers. </li></ul>
  20. 20. PROMOTIONAL BUDGET <ul><li>There are basically four methods to determine your promotional budget: </li></ul><ul><ul><li>Percentage of Anticipated Sales-- based on past performance </li></ul></ul><ul><ul><li>All You Can Afford-- pay all other expenses first </li></ul></ul><ul><ul><li>Following the Competition-- do what everyone else does </li></ul></ul><ul><ul><li>Objective and Task-- create own goals and research the best way to reach it. </li></ul></ul>