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©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Advertising, Sales
Promotion, and Public
Relations
CHAPTER
16
Roger A. Kerin
Steven W. H artley
MARKETING
THE CORE
Eighth Edition
©McGraw-Hill Education.
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO:
(1 of 2)
1. Explain the differences between product
advertising and institutional advertising and
the variations within each.
2. Describe the steps used to develop,
execute, and evaluate an advertising
program.
3. Explain the advantages and disadvantages
of alternative advertising media.
16-2
©McGraw-Hill Education.
LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO:
(2 of 2)
4. Discuss the strengths and weaknesses of
consumer-oriented and trade-oriented sales
promotions.
5. Recognize public relations as an important
form of communication.
16-3
©McGraw-Hill Education.
FANTASY IS BECOMING REALITY FOR
ADVERTISERS!
More than 20M people have tried VR and AR
technologies!
• Used for more than video games.
• VR and AR offer unique, immersive
experiences to consumers.
• New medium for advertisers.
• Get consumers’ undivided attention.
Virtual Reality
16-4
©McGraw-Hill Education.
TYPES OF ADVERTISEMENTS
PRODUCT ADVERTISEMENTS
Advertising
Product advertisements
Three forms:
1. Pioneering (or informational)
2. Competitive (or persuasive)
3. Reminder
16-5
©McGraw-Hill Education.
WHICH TYPE OF ADVERTISEMENTS ARE
SHOWN?
Mercedes-Benz print ad promoting a
new, self-driving car.
Progressive website comparing
insurance quotes.
Duracell print ad during the holidays
urging consumers to not forget the
batteries.
16-6
©McGraw-Hill Education.
TYPES OF ADVERTISEMENTS
INSTITUTIONAL ADVERTISEMENTS
Institutional advertisements
Four forms:
1. Advocacy
2. Pioneering institutional
3. Competitive institutional
4. Reminder institutional
Chevron Ad
16-7
©McGraw-Hill Education.
DEVELOPING THE ADVERTISING PROGRAM
Steps in developing an ad program:
1. Identifying the target audience
2. Specifying the advertising objectives
3. Setting the advertising budget
Amazon
Super Bowl Ad
16-8
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DESIGNING THE ADVERTISEMENT (1 of 2)
Message content
• Informational element
• Persuasive element
Common types of appeals
1. Fear appeals – avoid negative experiences
2. Sex appeals – increase attractiveness
3. Humorous appeals – fun and exciting
16-9
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DESIGNING THE ADVERTISEMENT (2 of 2)
Creating the actual message:
• Copywriters create the text.
• Translating text to advertisement is
complex.
• High-quality, 30-second ad = $345,000 to
produce.
Anomaly
Agency
Beats by
Dre Ad
16-10
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA (1 of 2)
1. Advertising media choices:
• Print
• Radio
• TV
2. Media selection:
• Target audience, product,
messages, costs
3. Media planning goals
16-11
©McGraw-Hill Education.
FIGURE 16-1 Television, direct mail, and the
Internet account for more than 75% of all advertising
expenditures ($ in millions).
16-12
Return to slide containing original image.
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
SELECTING THE RIGHT MEDIA (2 of 2)
Basic terms of media buyers:
• Reach
• Rating
• Frequency
• Gross rating points (grps) = Reach ×
frequency
• Cost per thousand (CPM)
16-13
©McGraw-Hill Education.
APPLYING MARKETING METRICS
What Is the Best Way to Reach 1,000 Customers?
Cost per thousand (CPM) impressions
CPM = (Cost of Ad ÷ Audience size) × 1,000
Media
Alternative
Cost of Ad Audience Size Cost per
Thousand
Impressions
Time
(magazine)
$254,200 2,000,000 $127
USA Today
(newspaper)
$242,600 852,955 $284
Super Bowl
(television)
$5,000,000 103,000,000 $49
©McGraw-Hill Education.
FIGURE 16-2 Advertisers must consider the advantages and
disadvantages of the many media alternatives.
MEDIUM ADVANTAGES DISADVANTAGES
Television Reaches extremely large audience; uses picture,
print, sound, and motion for effect; can target
specific audiences
High cost to prepare and run ads; short exposure
time and perishable message; difficult to convey
complex information
Radio Can target specific local audiences; ads can be
placed quickly, can use sound, humor, and intimacy
effectively
No visual element; short exposure time and
perishable message; difficult to convey complex
information
Magazines Can target specific audiences; high-quality color;
long life of ad; ads can be clipped and saved; can
convey complex information
Long time needed to place ad; relatively high cost;
competes for attention with other magazine
features
Newspapers Excellent coverage of local markets; ads can be
placed and changed quickly; ads can be saved;
quick consumer response; low cost
Ads compete for attention with other newspaper
features; short life span; poor color
Yellow Pages Excellent coverage of geographic segments; long
use period; available 24 hours/365 days
Proliferation in competitive directories in many
markets; difficult to keep up to date
Internet Video and audio capabilities; animation can capture
attention; ads can be interactive and link to
advertiser
Animation and interactivity require large files and
more time to load; effectiveness is still uncertain
Outdoor Low cost; local market focus; high visibility;
opportunity for repeat exposures
Message must be short and simple; low selectivity
of audience; criticized as a traffic hazard
Direct mail High selectivity of audience; can contain complex
information and personalized messages; high-
quality graphics
High cost per contact; poor image (junk mail)
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (1 of 8)
Television:
• Reaches 96% of households
• Out-of-home TV in hotels, bars,
offices, etc.
• Infomercials
• 30-minute advertisements
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (2 of 8)
Radio:
• 15,500 radio stations
• Satellite radio
• Peak times are drive times
• Use limited if products must be seen
Walmart
Radio Ad
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (3 of 8)
Magazines:
• 7,293 consumer magazines
• 237 new magazines/year
• Specific topics for segments and
geographies
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (4 of 8)
Newspapers:
• Local medium and current events
• Call for action
• Online and mobile editions
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (5 of 8)
Yellow pages:
• 40% of U.S. consumers use print Yellow
Pages once/year.
• 25% use online Yellow Pages each month.
• Reach almost all households.
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (8 of 8)
Internet and online advertising:
• Audio and video
• Rich media
• Banner/display ads
• Mobile marketing
©McGraw-Hill Education.
MAKING RESPONSIBLE DECISIONS
Who Is Responsible for Preventing Click Fraud?
Internet ad spending $78+ billion
• Paid-to-read.
• “Clickbots.”
• Estimated 20% of clicks may be result of
fraud costing advertisers $6.5 billion!
• Solutions?
16-22
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (7 of 8)
Outdoor:
• Billboards and digital billboards
• Targeted geographical market
• Transit advertising
• Conditional content changes as needed
16-23
©Bhubeth Bhajanavorakul/Shutterstock
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
DIFFERENT MEDIA ALTERNATIVES (8 of 8)
Other media
• Place-based media
• Out-of-home advertising (OOH)
• Locations that attract target
audience
• In-store campaigns
• Airports
• Hotels
• Health clubs
16-24
©Roman Tiraspolsky/Shutterstock
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING (1 of 2)
Factors to consider:
• Buyer turnover – how often new buyers
enter the market
• Purchase frequency – how frequently
product is purchased
• Forgetting rate – speed that buyers forget
the brand
16-25
©McGraw-Hill Education.
DEVELOPING THE
ADVERTISING PROGRAM
SCHEDULING THE ADVERTISING (2 of 2)
Scheduling approaches:
1. Continuous (steady) schedule
• Steady, seasons not important
2. Flighting (intermittent) schedule
• Intermittent, reflect seasonal demand
3. Pulse (burst) schedule
• Burst, flighting and continuous, new product
16-26
©McGraw-Hill Education.
EXECUTING THE
ADVERTISING PROGRAM
PRETESTING THE ADVERTISING
Pretests
• Portfolio test: to test copy alternatives.
• Jury tests: show copy to panel of
consumers to rate.
• Theater tests: consumers view new
shows or movies (may include recording
devices during viewing).
16-27
©McGraw-Hill Education.
EXECUTING THE
ADVERTISING PROGRAM
CARRYING OUT THE ADVERTISING PROGRAM
Full-service agency
• Complete range of services
Limited-service agencies
• Contract for creative work
In-house agencies
• Company’s own staff
16-28
©McGraw-Hill Education.
ASSESSING THE
ADVERTISING PROGRAM
Posttests:
• Aided recall
1. Noted
2. Associated
3. Read any
• Unaided recall
• Attitude tests
• Inquiry tests
• Sales tests
Then, make any needed changes!
16-29
Courtesy of GfK North America
©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (1 of 6)
Consumer-oriented sales promotion
• Coupons: Offer discounted prices
• Deals
• Short-term price reductions
• Increase trials
• React to competition
16-30
©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (2 of 6)
Premiums
• Offers items free or at significant savings
• Self-liquidating: free toy
• Encourages frequent buying
Contests: Encourage consumers to apply skills
or creative thinking to win a prize.
Oreo Creation
Contest
©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (3 of 6)
Sweepstakes
• Value-based prizes
• Experience-based prizes
Samples
• Free product or trial size
• Encourages consumers to try new things
and save money
©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (4 of 6)
Loyalty programs
• Encourages and rewards repeat
purchases
• Offers a premium as purchases
accumulate
16-33
©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (5 of 6)
Point-of-purchase displays
• Signs hold or display
products
• Located in high-traffic areas
Rebates: Cash rebates with proof
of purchase
©McGraw-Hill Education
©McGraw-Hill Education.
SALES PROMOTION
CONSUMER-ORIENTED SALES PROMOTION (6 of 6)
Product placement
• Use of brand-name product
in movie or TV
• Annual value of product
placements exceeds $6
billion
• Consumer complaints are
leading to new regulations
about disclosure
©Walt Disney Studios Motion Pictures/Photofest
©McGraw-Hill Education.
SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION (1 of 2)
Trade-oriented sales promotion
• Allowances and discounts
• Merchandise allowance
• Case allowance
• Free goods
• Finance allowance
• Floor stock protection
• Freight allowance
16-36
©McGraw-Hill Education.
SALES PROMOTION
TRADE-ORIENTED SALES PROMOTION (2 of 2)
Cooperative advertising: Manufacturer
pays percentage of retailer’s advertising
expense
Training of distributors’ sales forces
• Success rests on resellers’ sales force
• Produce manuals, brochures
• National sales meetings
• Recognition programs
16-37
©McGraw-Hill Education.
PUBLIC RELATIONS
Publicity tools:
• News release
• News conference
• Public service
announcement (PSA)
Publicity often provides stronger
impact than does advertising!
American
Red Cross PSA
16-38
©Theo Wargo/NBC/Stringer/Getty Images
©McGraw-Hill Education.
Advertising
Advertising is any paid form of nonpersonal
communication about an organization,
product, service, or idea by an identified
sponsor.
16-39
©McGraw-Hill Education.
Product Advertisements
Product advertisements are
advertisements that focus on selling a
product or service and which take three
forms: (1) pioneering (or informational), (2)
competitive (or persuasive), and (3)
reminder.
16-40
©McGraw-Hill Education.
Institutional Advertisements
Institutional advertisements are
advertisements designed to build goodwill or
an image for an organization rather than
promote a specific product or service.
16-41
©McGraw-Hill Education.
Reach
Reach is the number of different people or
households exposed to an advertisement.
16-42
©McGraw-Hill Education.
Rating
A rating is the percentage of households in
a market that are tuned to a particular TV
show or radio station.
16-43
©McGraw-Hill Education.
Frequency
Frequency is the average number of times
a person in the target audience is exposed
to a message or an advertisement.
16-44
©McGraw-Hill Education.
Gross Rating Points (GRPs)
Gross rating points (GRPs) is a reference
number used by advertisers that is obtained
by multiplying reach (expressed as a
percentage of the total market) by
frequency.
16-45
©McGraw-Hill Education.
Cost per Thousand (CPM)
Cost per thousand (CPM) is the cost of
reaching 1,000 individuals or households
with the advertising message in a given
medium (M is the Roman numeral for
1,000).
16-46
©McGraw-Hill Education.
Infomercials
Infomercials are program-length (30-
minute) advertisements that take an
educational approach to communication with
potential customers.
16-47
©McGraw-Hill Education.
Pretests
Pretests are tests conducted before an
advertisement is placed in any medium to
determine whether it communicates the
intended message or to select among
alternative versions of the advertisement.
16-48
©McGraw-Hill Education.
Full-Service Agency
A full-service agency is an advertising
agency that provides the most complete
range of services, including market
research, media selection, copy
development, artwork, and production.
16-49
©McGraw-Hill Education.
Limited-Service Agencies
Limited-service agencies are advertising
agencies that specialize in one aspect of the
advertising process, such as providing
creative services to develop the advertising
copy, buying previously unpurchased media
space, or providing Internet services.
16-50
©McGraw-Hill Education.
In-House Agencies
In-house agencies consist of the
company’s own advertising staff, who may
provide full services or a limited range of
services.
16-51
©McGraw-Hill Education.
Posttests
Posttests are tests conducted after an
advertisement has been shown to the target
audience to determine whether it
accomplished its intended purpose.
16-52
©McGraw-Hill Education.
Consumer-Oriented Sales Promotion
Consumer-oriented sales promotion
consists of sales tools used to support a
company’s advertising and personal selling
directed to ultimate consumers. Also called
consumer promotions.
16-53
©McGraw-Hill Education.
Product Placement
Product placement is a consumer sales
promotion tool that uses a brand-name
product in a movie, television show, video
game, or a commercial for another product.
16-54
©McGraw-Hill Education.
Trade-Oriented Sales Promotions
Trade-oriented sales promotions are
sales tools used to support a company’s
advertising and personal selling directed to
wholesalers, distributors, or retailers. Also
called trade promotions.
16-55
©McGraw-Hill Education.
Cooperative Advertising
Cooperative advertising consists of
advertising programs by which a
manufacturer pays a percentage of the
retailer’s local advertising expense for
advertising the manufacturer’s products.
16-56
©McGraw-Hill Education.
Publicity Tools
Publicity tools are methods of obtaining
nonpersonal presentations of an
organization, product, or service without
direct cost, such as news releases, news
conferences, and public service
announcements.
16-57
©McGraw-Hill Education.
Mobile Marketing
Mobile marketing is the broad set of
interactive messaging options that enable
organizations to communicate and engage
with consumers through any mobile device.
16-58

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BA104 Chapter 16

  • 1. ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Advertising, Sales Promotion, and Public Relations CHAPTER 16 Roger A. Kerin Steven W. H artley MARKETING THE CORE Eighth Edition
  • 2. ©McGraw-Hill Education. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO: (1 of 2) 1. Explain the differences between product advertising and institutional advertising and the variations within each. 2. Describe the steps used to develop, execute, and evaluate an advertising program. 3. Explain the advantages and disadvantages of alternative advertising media. 16-2
  • 3. ©McGraw-Hill Education. LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO: (2 of 2) 4. Discuss the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions. 5. Recognize public relations as an important form of communication. 16-3
  • 4. ©McGraw-Hill Education. FANTASY IS BECOMING REALITY FOR ADVERTISERS! More than 20M people have tried VR and AR technologies! • Used for more than video games. • VR and AR offer unique, immersive experiences to consumers. • New medium for advertisers. • Get consumers’ undivided attention. Virtual Reality 16-4
  • 5. ©McGraw-Hill Education. TYPES OF ADVERTISEMENTS PRODUCT ADVERTISEMENTS Advertising Product advertisements Three forms: 1. Pioneering (or informational) 2. Competitive (or persuasive) 3. Reminder 16-5
  • 6. ©McGraw-Hill Education. WHICH TYPE OF ADVERTISEMENTS ARE SHOWN? Mercedes-Benz print ad promoting a new, self-driving car. Progressive website comparing insurance quotes. Duracell print ad during the holidays urging consumers to not forget the batteries. 16-6
  • 7. ©McGraw-Hill Education. TYPES OF ADVERTISEMENTS INSTITUTIONAL ADVERTISEMENTS Institutional advertisements Four forms: 1. Advocacy 2. Pioneering institutional 3. Competitive institutional 4. Reminder institutional Chevron Ad 16-7
  • 8. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM Steps in developing an ad program: 1. Identifying the target audience 2. Specifying the advertising objectives 3. Setting the advertising budget Amazon Super Bowl Ad 16-8
  • 9. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DESIGNING THE ADVERTISEMENT (1 of 2) Message content • Informational element • Persuasive element Common types of appeals 1. Fear appeals – avoid negative experiences 2. Sex appeals – increase attractiveness 3. Humorous appeals – fun and exciting 16-9
  • 10. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DESIGNING THE ADVERTISEMENT (2 of 2) Creating the actual message: • Copywriters create the text. • Translating text to advertisement is complex. • High-quality, 30-second ad = $345,000 to produce. Anomaly Agency Beats by Dre Ad 16-10
  • 11. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM SELECTING THE RIGHT MEDIA (1 of 2) 1. Advertising media choices: • Print • Radio • TV 2. Media selection: • Target audience, product, messages, costs 3. Media planning goals 16-11
  • 12. ©McGraw-Hill Education. FIGURE 16-1 Television, direct mail, and the Internet account for more than 75% of all advertising expenditures ($ in millions). 16-12 Return to slide containing original image.
  • 13. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM SELECTING THE RIGHT MEDIA (2 of 2) Basic terms of media buyers: • Reach • Rating • Frequency • Gross rating points (grps) = Reach × frequency • Cost per thousand (CPM) 16-13
  • 14. ©McGraw-Hill Education. APPLYING MARKETING METRICS What Is the Best Way to Reach 1,000 Customers? Cost per thousand (CPM) impressions CPM = (Cost of Ad ÷ Audience size) × 1,000 Media Alternative Cost of Ad Audience Size Cost per Thousand Impressions Time (magazine) $254,200 2,000,000 $127 USA Today (newspaper) $242,600 852,955 $284 Super Bowl (television) $5,000,000 103,000,000 $49
  • 15. ©McGraw-Hill Education. FIGURE 16-2 Advertisers must consider the advantages and disadvantages of the many media alternatives. MEDIUM ADVANTAGES DISADVANTAGES Television Reaches extremely large audience; uses picture, print, sound, and motion for effect; can target specific audiences High cost to prepare and run ads; short exposure time and perishable message; difficult to convey complex information Radio Can target specific local audiences; ads can be placed quickly, can use sound, humor, and intimacy effectively No visual element; short exposure time and perishable message; difficult to convey complex information Magazines Can target specific audiences; high-quality color; long life of ad; ads can be clipped and saved; can convey complex information Long time needed to place ad; relatively high cost; competes for attention with other magazine features Newspapers Excellent coverage of local markets; ads can be placed and changed quickly; ads can be saved; quick consumer response; low cost Ads compete for attention with other newspaper features; short life span; poor color Yellow Pages Excellent coverage of geographic segments; long use period; available 24 hours/365 days Proliferation in competitive directories in many markets; difficult to keep up to date Internet Video and audio capabilities; animation can capture attention; ads can be interactive and link to advertiser Animation and interactivity require large files and more time to load; effectiveness is still uncertain Outdoor Low cost; local market focus; high visibility; opportunity for repeat exposures Message must be short and simple; low selectivity of audience; criticized as a traffic hazard Direct mail High selectivity of audience; can contain complex information and personalized messages; high- quality graphics High cost per contact; poor image (junk mail)
  • 16. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES (1 of 8) Television: • Reaches 96% of households • Out-of-home TV in hotels, bars, offices, etc. • Infomercials • 30-minute advertisements
  • 17. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES (2 of 8) Radio: • 15,500 radio stations • Satellite radio • Peak times are drive times • Use limited if products must be seen Walmart Radio Ad
  • 18. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES (3 of 8) Magazines: • 7,293 consumer magazines • 237 new magazines/year • Specific topics for segments and geographies
  • 19. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES (4 of 8) Newspapers: • Local medium and current events • Call for action • Online and mobile editions
  • 20. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES (5 of 8) Yellow pages: • 40% of U.S. consumers use print Yellow Pages once/year. • 25% use online Yellow Pages each month. • Reach almost all households.
  • 21. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES (8 of 8) Internet and online advertising: • Audio and video • Rich media • Banner/display ads • Mobile marketing
  • 22. ©McGraw-Hill Education. MAKING RESPONSIBLE DECISIONS Who Is Responsible for Preventing Click Fraud? Internet ad spending $78+ billion • Paid-to-read. • “Clickbots.” • Estimated 20% of clicks may be result of fraud costing advertisers $6.5 billion! • Solutions? 16-22
  • 23. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES (7 of 8) Outdoor: • Billboards and digital billboards • Targeted geographical market • Transit advertising • Conditional content changes as needed 16-23 ©Bhubeth Bhajanavorakul/Shutterstock
  • 24. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM DIFFERENT MEDIA ALTERNATIVES (8 of 8) Other media • Place-based media • Out-of-home advertising (OOH) • Locations that attract target audience • In-store campaigns • Airports • Hotels • Health clubs 16-24 ©Roman Tiraspolsky/Shutterstock
  • 25. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM SCHEDULING THE ADVERTISING (1 of 2) Factors to consider: • Buyer turnover – how often new buyers enter the market • Purchase frequency – how frequently product is purchased • Forgetting rate – speed that buyers forget the brand 16-25
  • 26. ©McGraw-Hill Education. DEVELOPING THE ADVERTISING PROGRAM SCHEDULING THE ADVERTISING (2 of 2) Scheduling approaches: 1. Continuous (steady) schedule • Steady, seasons not important 2. Flighting (intermittent) schedule • Intermittent, reflect seasonal demand 3. Pulse (burst) schedule • Burst, flighting and continuous, new product 16-26
  • 27. ©McGraw-Hill Education. EXECUTING THE ADVERTISING PROGRAM PRETESTING THE ADVERTISING Pretests • Portfolio test: to test copy alternatives. • Jury tests: show copy to panel of consumers to rate. • Theater tests: consumers view new shows or movies (may include recording devices during viewing). 16-27
  • 28. ©McGraw-Hill Education. EXECUTING THE ADVERTISING PROGRAM CARRYING OUT THE ADVERTISING PROGRAM Full-service agency • Complete range of services Limited-service agencies • Contract for creative work In-house agencies • Company’s own staff 16-28
  • 29. ©McGraw-Hill Education. ASSESSING THE ADVERTISING PROGRAM Posttests: • Aided recall 1. Noted 2. Associated 3. Read any • Unaided recall • Attitude tests • Inquiry tests • Sales tests Then, make any needed changes! 16-29 Courtesy of GfK North America
  • 30. ©McGraw-Hill Education. SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION (1 of 6) Consumer-oriented sales promotion • Coupons: Offer discounted prices • Deals • Short-term price reductions • Increase trials • React to competition 16-30
  • 31. ©McGraw-Hill Education. SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION (2 of 6) Premiums • Offers items free or at significant savings • Self-liquidating: free toy • Encourages frequent buying Contests: Encourage consumers to apply skills or creative thinking to win a prize. Oreo Creation Contest
  • 32. ©McGraw-Hill Education. SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION (3 of 6) Sweepstakes • Value-based prizes • Experience-based prizes Samples • Free product or trial size • Encourages consumers to try new things and save money
  • 33. ©McGraw-Hill Education. SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION (4 of 6) Loyalty programs • Encourages and rewards repeat purchases • Offers a premium as purchases accumulate 16-33
  • 34. ©McGraw-Hill Education. SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION (5 of 6) Point-of-purchase displays • Signs hold or display products • Located in high-traffic areas Rebates: Cash rebates with proof of purchase ©McGraw-Hill Education
  • 35. ©McGraw-Hill Education. SALES PROMOTION CONSUMER-ORIENTED SALES PROMOTION (6 of 6) Product placement • Use of brand-name product in movie or TV • Annual value of product placements exceeds $6 billion • Consumer complaints are leading to new regulations about disclosure ©Walt Disney Studios Motion Pictures/Photofest
  • 36. ©McGraw-Hill Education. SALES PROMOTION TRADE-ORIENTED SALES PROMOTION (1 of 2) Trade-oriented sales promotion • Allowances and discounts • Merchandise allowance • Case allowance • Free goods • Finance allowance • Floor stock protection • Freight allowance 16-36
  • 37. ©McGraw-Hill Education. SALES PROMOTION TRADE-ORIENTED SALES PROMOTION (2 of 2) Cooperative advertising: Manufacturer pays percentage of retailer’s advertising expense Training of distributors’ sales forces • Success rests on resellers’ sales force • Produce manuals, brochures • National sales meetings • Recognition programs 16-37
  • 38. ©McGraw-Hill Education. PUBLIC RELATIONS Publicity tools: • News release • News conference • Public service announcement (PSA) Publicity often provides stronger impact than does advertising! American Red Cross PSA 16-38 ©Theo Wargo/NBC/Stringer/Getty Images
  • 39. ©McGraw-Hill Education. Advertising Advertising is any paid form of nonpersonal communication about an organization, product, service, or idea by an identified sponsor. 16-39
  • 40. ©McGraw-Hill Education. Product Advertisements Product advertisements are advertisements that focus on selling a product or service and which take three forms: (1) pioneering (or informational), (2) competitive (or persuasive), and (3) reminder. 16-40
  • 41. ©McGraw-Hill Education. Institutional Advertisements Institutional advertisements are advertisements designed to build goodwill or an image for an organization rather than promote a specific product or service. 16-41
  • 42. ©McGraw-Hill Education. Reach Reach is the number of different people or households exposed to an advertisement. 16-42
  • 43. ©McGraw-Hill Education. Rating A rating is the percentage of households in a market that are tuned to a particular TV show or radio station. 16-43
  • 44. ©McGraw-Hill Education. Frequency Frequency is the average number of times a person in the target audience is exposed to a message or an advertisement. 16-44
  • 45. ©McGraw-Hill Education. Gross Rating Points (GRPs) Gross rating points (GRPs) is a reference number used by advertisers that is obtained by multiplying reach (expressed as a percentage of the total market) by frequency. 16-45
  • 46. ©McGraw-Hill Education. Cost per Thousand (CPM) Cost per thousand (CPM) is the cost of reaching 1,000 individuals or households with the advertising message in a given medium (M is the Roman numeral for 1,000). 16-46
  • 47. ©McGraw-Hill Education. Infomercials Infomercials are program-length (30- minute) advertisements that take an educational approach to communication with potential customers. 16-47
  • 48. ©McGraw-Hill Education. Pretests Pretests are tests conducted before an advertisement is placed in any medium to determine whether it communicates the intended message or to select among alternative versions of the advertisement. 16-48
  • 49. ©McGraw-Hill Education. Full-Service Agency A full-service agency is an advertising agency that provides the most complete range of services, including market research, media selection, copy development, artwork, and production. 16-49
  • 50. ©McGraw-Hill Education. Limited-Service Agencies Limited-service agencies are advertising agencies that specialize in one aspect of the advertising process, such as providing creative services to develop the advertising copy, buying previously unpurchased media space, or providing Internet services. 16-50
  • 51. ©McGraw-Hill Education. In-House Agencies In-house agencies consist of the company’s own advertising staff, who may provide full services or a limited range of services. 16-51
  • 52. ©McGraw-Hill Education. Posttests Posttests are tests conducted after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose. 16-52
  • 53. ©McGraw-Hill Education. Consumer-Oriented Sales Promotion Consumer-oriented sales promotion consists of sales tools used to support a company’s advertising and personal selling directed to ultimate consumers. Also called consumer promotions. 16-53
  • 54. ©McGraw-Hill Education. Product Placement Product placement is a consumer sales promotion tool that uses a brand-name product in a movie, television show, video game, or a commercial for another product. 16-54
  • 55. ©McGraw-Hill Education. Trade-Oriented Sales Promotions Trade-oriented sales promotions are sales tools used to support a company’s advertising and personal selling directed to wholesalers, distributors, or retailers. Also called trade promotions. 16-55
  • 56. ©McGraw-Hill Education. Cooperative Advertising Cooperative advertising consists of advertising programs by which a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products. 16-56
  • 57. ©McGraw-Hill Education. Publicity Tools Publicity tools are methods of obtaining nonpersonal presentations of an organization, product, or service without direct cost, such as news releases, news conferences, and public service announcements. 16-57
  • 58. ©McGraw-Hill Education. Mobile Marketing Mobile marketing is the broad set of interactive messaging options that enable organizations to communicate and engage with consumers through any mobile device. 16-58