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17 C H A P T E R Advertising and Public Relations Mc. Graw-Hill/Irwin 17 C H A P T E R Advertising and Public Relations Mc. Graw-Hill/Irwin © 2007 The Mc. Graw-Hill Companies, Inc. All rights reserved.

Learning Objectives After studying this chapter, you should be able to: § Understand the Learning Objectives After studying this chapter, you should be able to: § Understand the characteristics, functions, and types of § § § advertising. Realize how people process advertising information and how it affects buyer behavior. Discuss approaches to developing advertising campaigns. Describe different advertising objectives and the message strategies used to achieve them. Understand the decisions involved in selecting media and scheduling advertising. Explain how marketers assess advertising effectiveness. Appreciate the roles of public relations and publicity in marketing. Bearden Marketing 5 th Ed 17 -2 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

British Airways has used its advertising in a variety of efforts. For example, the British Airways has used its advertising in a variety of efforts. For example, the company’s “Future and Shape” strategy includes a marketing blitz to combat its damaging reputation as an expensive airline. BA, which has seen its market share eroded by budget carriers, invests heavily in tactical advertising to promote competitive fares to Europe. Recent plans also include heavy use of public relations to introduce its lower fares and to fight against budget airlines such as easy. Jet. Bearden Marketing 5 th Ed 17 -3 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Total US Advertising – 2004 Medium Expenditures Network TV ($ million) $ 22, 500 Total US Advertising – 2004 Medium Expenditures Network TV ($ million) $ 22, 500 Newspapers 24, 600 Spot TV 17, 300 Magazines 21, 800 Cable TV networks 14, 200 Syndicated TV 3, 900 National newspapers 3, 300 National spot radio 2, 600 Outdoor 3, 200 Internet 7, 400 Bearden Marketing 5 th Ed 17 -4 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Advertising Defined A marketing communications element Advertising that is persuasive, nonpersonal, paid for by Advertising Defined A marketing communications element Advertising that is persuasive, nonpersonal, paid for by an identified sponsor, and disseminated through mass channels of communication to promote the adoption of goods, services, persons, or ideas. Bearden Marketing 5 th Ed 17 -5 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

World's Top Five Advertising Agencies Global Expenditures Close to $300 Billion Bearden Marketing 5 World's Top Five Advertising Agencies Global Expenditures Close to $300 Billion Bearden Marketing 5 th Ed 17 -6 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Classification of Advertising Target Audience Geographic Area Medium Purpose Advertising can be classified by Classification of Advertising Target Audience Geographic Area Medium Purpose Advertising can be classified by target audience, geographic area, medium, and purpose. Bearden Marketing 5 th Ed 17 -7 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Classification of Advertising Target Audience Geographic Area Medium Purpose Consumer advertising: Aimed at people Classification of Advertising Target Audience Geographic Area Medium Purpose Consumer advertising: Aimed at people who buy the product for their own or someone else’s personal use. Business advertising: Aimed at people who buy or specify goods and services for use in business: § § Industrial Trade Professional Agricultural (farm) Bearden Marketing 5 th Ed 17 -8 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Classification of Advertising Target Audience Geographic Area Medium Purpose Local (retail) advertising: Advertising by Classification of Advertising Target Audience Geographic Area Medium Purpose Local (retail) advertising: Advertising by businesses whose customers come from only one city or local trading area. Regional advertising: Advertising for products sold in one area or region, but not the whole country. National advertising: Advertising aimed at customers in several regions of the country. International advertising: Advertising directed at foreign Ed Bearden Marketing 5 markets. © 2007 The Mc. Graw-Hill Companies, Inc. All rights re 17 -9 th

Classification of Advertising Target Audience Geographic Area Medium Purpose Print advertising: Newspaper, magazine. Broadcast Classification of Advertising Target Audience Geographic Area Medium Purpose Print advertising: Newspaper, magazine. Broadcast (electronic) advertising: Radio, TV. Out-of-home advertising: Outdoor, transit. Direct-mail advertising: Advertising sent through the mail. Bearden Marketing 5 th Ed 17 -10 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Classification of Advertising Target Audience Geographic Area Medium Purpose Product advertising: Intended to promote Classification of Advertising Target Audience Geographic Area Medium Purpose Product advertising: Intended to promote goods and services. Nonproduct (corporate or institutional) advertising: Intended to promote firm’s mission or philosophy rather than a product. Commercial advertising: Intended to promote goods, services, or ideas with the expectancy of making a profit. Bearden Marketing 5 th Ed 17 -11 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Classification of Advertising Target Audience Geographic Area Medium Purpose Noncommercial advertising: Sponsored by or Classification of Advertising Target Audience Geographic Area Medium Purpose Noncommercial advertising: Sponsored by or for a charitable institution, civic group, or religious or political organization. Action advertising: Intended to bring about immediate action on the part of the reader. Awareness advertising: Intended to build the image of a product or familiarity with the product’s name and package. Bearden Marketing 5 th Ed 17 -12 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Hierarchy of Effects Advertising’s influence on consumers is often explained by using the hierarchy Hierarchy of Effects Advertising’s influence on consumers is often explained by using the hierarchy of effects, or informationprocessing, model. Of course, not every consumer consciously, or even subconsciously, goes through a sequence of steps for all ads. Yet each stage of this hierarchy represents a specific goal for advertisers to pursue. Bearden Marketing 5 th Ed 17 -13 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Influences on Ad Processing Motivation is related to the concept of consumer involvement, or Influences on Ad Processing Motivation is related to the concept of consumer involvement, or the personal relevance or importance of the marketing communications message. Ability implies the buyer knows enough about the product category to understand the advertised message. Opportunity Bearden Marketing 5 th Ed Opportunity is the extent to which distractions or limited exposure time affect the buyer’s attention to brand information in an ad. 17 -14 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Advertising Development and Evaluation Bearden Marketing 5 th Ed 17 -15 © 2007 The Advertising Development and Evaluation Bearden Marketing 5 th Ed 17 -15 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Message Strategy Alternatives § § § Subjective Claims Expansion Advertising Comparative Advertising Emotional Appeals Message Strategy Alternatives § § § Subjective Claims Expansion Advertising Comparative Advertising Emotional Appeals Fear Appeals Celebrity Endorsement Humor Appeals Subliminal Advertising Advertorial Infomercial Product Placement Advertising Bearden Marketing 5 th Ed 17 -16 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Selecting and Scheduling Media Classes Media Vehicles Television Specific vehicle depends on the cost Selecting and Scheduling Media Classes Media Vehicles Television Specific vehicle depends on the cost effectiveness of a particular outlet for desired market. Magazines Newspapers Radio Outdoor Transit Direct Mail Bearden Marketing 5 th Ed Media Schedules Evaluation Reach Pre-testing Post-testing Sales Effectiveness Evaluation Frequency 17 -17 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Important Research Findings 1. Advertising elasticities are higher for durables than nondurables. 2. Price Important Research Findings 1. Advertising elasticities are higher for durables than nondurables. 2. Price promotion elasticities are up to 20 times greater than advertising elasticities. 3. Advertising elasticities are greater early in the product life cycle and for established brands. 4. The first exposures to advertising are most important to short-term sales. 5. Price advertising increases price sensitivity, whereas nonprice advertising decreases price sensitivity. Bearden Marketing 5 th Ed 17 -18 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Ethical and Legal Issues Is advertising manipulative? Is advertising deceptive or misleading? How does Ethical and Legal Issues Is advertising manipulative? Is advertising deceptive or misleading? How does advertising affect children? Is advertising intrusive? Cause-related advertising Advertising harmful products Bearden Marketing 5 th Ed 17 -19 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Public Relations Public relations (PR) is often used as a complement to support advertising, Public Relations Public relations (PR) is often used as a complement to support advertising, personal selling, and sales promotions for disseminating marketing communications. Publics include: Customers Community Members Employees News Media Stockholders Government Bearden Marketing 5 th Ed 17 -20 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Marketing Public Relations Public relations functions designed to support marketing activities are termed marketing Marketing Public Relations Public relations functions designed to support marketing activities are termed marketing public relations. These activities are as follows: § Building marketplace excitement before media advertising § § § breaks. Creating advertising news where there is no product news. Introducing a product with little or no advertising. Providing a value-added customer service. Building brand-to-customer bonds. Influencing the influentials (opinion leaders). Defending products at risk and giving consumers a reason to buy. Bearden Marketing 5 th Ed 17 -21 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re

Summary After studying this chapter, you should be able to: § Understand the characteristics, Summary After studying this chapter, you should be able to: § Understand the characteristics, functions, and types of § § § advertising. Realize how people process advertising information and how it affects buyer behavior. Discuss approaches to developing advertising campaigns. Describe different advertising objectives and the message strategies used to achieve them. Understand the decisions involved in selecting media and scheduling advertising. Explain how marketers assess advertising effectiveness. Appreciate the roles of public relations and publicity in marketing. Bearden Marketing 5 th Ed 17 -22 © 2007 The Mc. Graw-Hill Companies, Inc. All rights re