Lamb Hair Mc Daniel MKTG 2007 -2008 15

Lamb, Hair, Mc. Daniel MKTG 2007 -2008 15 CHAPTER Designed by Amy Mc. Guire, B-books, Ltd. Chapter 15 Advertising and Public Relations Prepared by Deborah Baker, Texas Christian University Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 1

Learning Outcomes LO 1 Discuss the effects of advertising on market share and consumers LO 2 Identify the major types of advertising LO 3 Discuss the creative decisions in developing an advertising campaign Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 2

Learning Outcomes LO 4 Describe media evaluation and selection techniques LO 5 Discuss the role of public relations in the promotional mix Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 3

LO 1 The Effects of Advertising Discuss the effects of advertising on market share

The Effects of Advertising u U. S. advertising was almost $300 billion in 2006 u In 2005, 32 companies spent over $1 billion each u The advertising industry is small—only 155, 000 employed by the 12, 000 advertising agencies u Ad budgets of some firms are almost $4 billion annually LO 1 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 5

The Effects of Advertising Top Ten Leaders by U. S. Advertising Spending LO 1

Advertising and Market Share New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share. u Beyond a certain level of spending, diminishing returns set in. u New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits. LO 1 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 7

The Effects of Advertising on Consumers u The average U. S. citizen is exposed to hundreds of ads each day. u Advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude. LO 1 Chapter 15 u Advertising can affect consumer ranking of a brand’s attributes. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 8

LO 1 REVIEW LEARNING OUTCOME Effects of Advertising Chapter 15 Copyright © 2008 by

LO 2 Major Types of Advertising Identify the major types of advertising Chapter 15

Major Types of Advertising Institutional Advertising Enhances a company’s image rather than promotes a particular product. Product Advertising Touts the benefits of a specific good or service. LO 2 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 11

Major Types of Advertising Institutional Advertising Corporate identity Advocacy advertising Pioneering Product Advertising LO 2 Chapter 15 Competitive Comparative Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 12

Product Advertising Pioneering § Stimulates primary demand for new product or category § Used in the PLC introductory stage Competitive § Influences demand for brand in the growth phase of the PLC § Often uses emotional appeal Comparative § Compares two or more competing brands’ product attributes § Used if growth is sluggish, or if competition is strong LO 2 http: //www. pizzahut. com http: //www. papajohns. com Online Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 13

LO 2 REVIEW LEARNING OUTCOME The Major Types of Advertising Chapter 15 Copyright ©

LO 3 Creative Decisions in Advertising Discuss the creative decisions in developing an advertising campaign Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 15

Creative Decisions in Advertising Campaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. LO 3 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 16

Creative Decisions in Advertising Determine the advertising objectives Make creative decisions LO 3 Chapter 15 Make media decisions Evaluate the campaign Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 17

Setting Objectives: The DAGMAR Approach Define target audience Define desired percentage change Define the time frame for change LO 3 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 18

Creative Decisions Identify product benefits Develop and evaluate advertising appeals Execute the message Evaluate the campaign’s effectiveness LO 3 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 19

Identify Product Benefits u “Sell the Sizzle, not the Steak” u Sell product’s benefits, not its attributes u A benefit should answer “What’s in it for me? ” LO 3 Chapter 15 u Ask “So? ” to determine if it is a benefit Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 20

Identify Product Benefits Attribute “Powerade’s new line has been reformulated to combine the scientific benefits of sports drinks with B vitamins and to speed up energy metabolism. ” - So? Benefit “So, you’ll satisfy your thirst with a great-tasting drink that will power you throughout the day. ” LO 3 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 21

Advertising Appeals Profit Health Used in selling cosmetics and perfumes Fear Social embarrassment, old age, losing health Admiration Reason for use of celebrity spokespeople Convenience Used for fast foods and microwave foods Fun and pleasure Key to advertising vacations, beer, parks Vanity and egotism Chapter 15 Appeals to body-conscious or health seekers Love or romance LO 3 Product saves, makes, or protects money Used for expensive or conspicuous items Environmental Consciousness Centers around environmental protection Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 22

Unique Selling Proposition A desirable, exclusive, and believable advertising appeal selected as theme for a campaign. LO 3 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 23

Executing the Message Scientific Slice-of-Life Musical Lifestyle Spokesperson/ Testimonial Demonstration Mood or Image LO 3 Chapter 15 Real/ Animated Product Symbols Fantasy Humorous Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 24

LO 3 REVIEW LEARNING OUTCOME Creative Decisions for Ad Campaign Set advertising objectives Identify benefits Develop appeal Evaluating results helps marketers adjust objectives for future campaigns Chapter 15 Execute message Evaluate campaign results Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 25

LO 4 Media Decisions in Advertising Describe media evaluation and selection techniques Chapter 15

Media Decisions in Advertising Monitored Media Newspapers Trade Exhibits Yellow Pages Cooperative Advertising Internet Brochures Radio Coupons Television Chapter 15 Direct Mail Magazines LO 4 Unmonitored Media Catalogs Outdoor Media Special Events Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 27

Major Advertising Media Newspapers Magazines Radio Television Outdoor Media Yellow Pages LO 4 Chapter 15 Internet Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 28

Newspapers Advantages § § Geographic selectivity Short-term advertiser commitments News value and immediacy Year-round readership High individual market coverage Co-op and local tie-in availability Short lead time § § § Disadvantages § § Limited demographic selectivity Limited color Low pass-along rate May be expensive LO 4 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 29

Beyond the Book LO 4 Free Newspapers? Chapter 15 u The new Baltimore Examiner is delivering 250, 000 newspapers—at no charge and unsolicited! u Advertising brings in the revenue for this niche publication targeting households with income of $73, 000 or more. u The ads are $2, 900 for a full page, compared with $17, 000 for its competition, the Baltimore Sun. u The Examiner is betting that low ad rates and the target market will be a valuable proposition to advertisers. SOURCE: Joseph T. Hallinan, “Do New Free Dailies Mean Sun is Setting for Paid Newspapers? , ” Wall Street Journal, April 5, 2006, B 1. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 30

Cooperative Advertising An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. LO 4 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 31

Magazines Advantages § § § Good reproduction Demographic selectivity Regional/local selectivity Long advertising life High pass-along rate Disadvantages § § § Long-term advertiser commitments Slow audience build-up Limited demonstration capabilities Lack of urgency Long lead time LO 4 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 32

Radio Advantages § § Low cost Immediacy of message Short notice scheduling No seasonal audience change Highly portable Short-term advertiser commitments Entertainment carryover § § § Disadvantages § § § No visual treatment Short advertising life High frequency to generate comprehension and retention Background distractions Commercial clutter LO 4 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 33

Television Advantages § § § Wide, diverse audience Low cost per thousand Creative opportunities for demonstration Immediacy of messages Entertainment carryover Demographic selectivity with cable § § § Disadvantages § § § § Short life of message Consumer skepticism High campaign cost Little demographic selectivity with stations Long-term advertiser commitments Long lead times for production Commercial clutter LO 4 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 34

Chapter 15 u The number of ads in TV shows is a longstanding complaint of viewers and advertisers. u The media is cluttered and consumers change channels or speed through commercials on a DVR. u Tests are being conducted to feature shorter commercial SOURCE: Suzanne Vranica, “TV-Ad Test to Show if Less is More, ” Wall Street Journal, April 5, 2006, B 3. Year Beyond the Book LO 4 TV Advertising: Is Less More? pods. Commercial Minutes per Hour Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 35

Outdoor Media Advantages § § Repetition Moderate cost Flexibility Geographic selectivity Disadvantages § § § Short message Lack of demographic selectivity High “noise” level LO 4 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 36

Internet Advantages § § Fast growing Ability to reach narrow target audience Short lead time Moderate cost § § Disadvantages § § § LO 4 Difficult to measure ad effectiveness and ROI Ad exposure relies on “click through” from banner ads Not all consumers have access to Internet http: //www. fox. com http: //www. abc. com Online Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 37

Alternative Media Shopping Carts Floor Ads Computer Screen Savers Subway Tunnel Ads DVDs Video Game Ads Interactive Kiosks Cell Phone Ads in Movies LO 4 Chapter 15 Advertainments Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 38

Beyond the Book LO 4 Videogame Advertising Chapter 15 u Microsoft plans to acquire Massive inc. , a start -up that places ads in video games. u Ads are inserted into the game environment. u Video games could become a large new medium for advertising. SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads, ” Wall Street Journal, April 26, 2006, B 1. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 39

Beyond the Book LO 4 Directory Assistance Advertising Chapter 15 u Companies are offering free telephone directory assistance—but there’s an advertisement first. u The audio ads are narrowly targeted, are 10 to 12 seconds. and u The growth of such free services could represent another change in the telecom industry. u Dial 1 -800 -FREE 411 or -800 -411 -METRO 1 SOURCE: Rebecca Buckman, “Your Listing, and a Word From Our Sponsor, ” Wall Street Journal, April 20, 2006, B 1. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 40

Qualitative Factors in Media Selection u Attention to the commercial and the program u Program liking u Lack of distractions u Other audience behaviors LO 4 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 41

Media Scheduling Continuous Media Schedule Advertising is run steadily throughout the period. Flighted Media Schedule Advertising is run heavily every other month or every two weeks. Pulsing Media Schedule Advertising combines continuous scheduling with flighting. Seasonal Media Schedule Advertising is run only when the product is likely to be used. LO 4 Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 42

Beyond the Book LO 4 Media Scheduling on the Web Chapter 15 u Competition for Web advertising is driving up prices. spots u Some Web advertisers now run campaigns based on time of day. Examples: ● Mc. Donald’s: breakfast meals morning hours ● Xerox: copier ads during the workday ● Budweiser: beer ads on Friday afternoons during u Scheduling Web ads during prime times is a more efficient use of ad dollars and more targeted. SOURCE: David Kesmodel, “More Marketers Place Web Ads by Time of Day, ” Wall Street Journal, June 23, 2006, B 1. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 43

LO 4 REVIEW LEARNING OUTCOME Media Evaluation and Selection Type: Newspaper Magazine Radio Television Outdoor Internet Alternative Scheduling: continuous flighted Considerations: Mix Cost per contact Reach Frequency Audience selectivity How much of each? How much person? How many people? How often? How targeted is audience? pulsing seasonal Winter Chapter 15 Spring Summer Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved Fall 44

LO 5 Public Relations Discuss the role of public relations in the promotional mix

LO 5 Public Relations The element in the promotional mix that: § evaluates public attitudes § identifies issues of public concern § executes programs to gain public acceptance Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 46

LO 5 Functions of Public Relations Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 47

LO 5 Public Relations Tools New product publicity Product placement Consumer education Event sponsorship Issue sponsorship Internet Web sites http: //www. vw. com http: //www. chevrolet. com Online Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 48

Beyond the Book LO 5 Example of Consumer Education Chapter 15 u Corporations are teaching public school students about personal finance. u People under age 25 are a fast-growing group for credit card debt increases and bankruptcy. u Is it appropriate to use educational materials with corporate identity? a u How should financial literacy be taught? SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank, ” Wall Street Journal, April 8 -9, 2006, B 1. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 49

LO 5 Managing Unfavorable Publicity Crisis Management A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event. Chapter 15 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 50