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Advertising, Sales Promotion and Public Relations

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1 Advertising, Sales Promotion and Public Relations
PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong Chapter 15 Advertising, Sales Promotion and Public Relations

2 What is Advertising? Any form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. U.S. advertisers spend in excess of $175 billion each year. Advertising is used by: Business firms, Nonprofit organizations, Professionals, Social Agencies.

3 Major Decisions in Advertising
Objectives Setting Major Decisions in Advertising Major Decisions in Advertising This CTR corresponds to Figure 15-1 on p. 451 and relates to the material on pp Instructor’s Note: This CTR and Notes provide an overview of advertising decisions. Each decision area is covered in greater detail on subsequent CTRs. Budget Decisions Major Decisions in Advertising Setting Objectives. Advertising objectives are specific communications tasks to be accomplished for a specific target audience during a specified time period. Advertising objectives can be to inform (build primary demand), persuade (selective demand), or remind (brand loyalty). Advertising objectives are often linked to specific sales objectives. Budget Decisions. Advertising budgets are set for each product consist with the advertising objectives. The details of budget decisions are covered in greater detail on the following CTR. Message Decisions. Advertisers must construct their messages carefully to reach target markets. The details of message decisions are covered in greater detail on a subsequent CTR. Media Decisions. In selecting media for ads, advertisers must consider the several factors to reach consumer when, how, and how often it takes to reach promotional objectives. The details of media decisions are covered in greater detail on a subsequent CTR. Campaign Evaluation. Measures of communication effects and sales effects should be employed. Discussion Note: You might wish to tell students of the controversy involved in measuring campaign effectiveness. Traditionally, advertisers measured effectiveness in terms of recall or recognition. Management wants a behavioral change in purchases. Marketers who successfully merge the two have a bright career ahead of them. Message Decisions Media Decisions Campaign Evaluation

4 Setting Objectives Advertising Objectives Specific Communication Task
Accomplished with a Specific Target Audience During a Specific Period of Time Informative Advertising Build Primary Demand Persuasive Advertising Build Selective Demand Comparison Advertising Compares One Brand to Another Reminder Advertising Keeps Consumers Thinking About a Product. Tugas : Cari 4 iklan yang memiliki tujuan di atas. Analisislah….!

5 Setting the Advertising Budget
This CTR relates to the discussion on pp Advertising Budget Methods Affordable, Percentage of Sales, Competitive-Parity and Objective-and-Task Stage in the Product Life Cycle Product Differentiation Budget Decisions Advertising budgets are set for each product consist with the advertising objectives. To implement objectives, budgets must be set in consideration of the products position in terms of: Stage in the Product Life Cycle. New product usually require larger advertising budgets to build awareness and induce product trial. Mature brands may have large dollar amounts in their budgets, but are lower in terms of advertising as a ratio of sales. Market Share. High share products need more advertising as a percent of sales than do low-share brands. Competition and Clutter. Highly competitive markets with high spending rivals require more advertising expenditures than other markets. Advertising Frequency. The greater the frequency needed to reach the target consumer, the higher the advertising budget. Product Differentiation. Brands that closely resemble other brands in a product class (like soft drinks) require high advertising budgets to create product differentiation. Advertising Frequency Market Share Factors in Setting the Advertising Budget Competition and Clutter

6 Click to add title Advertising Strategy Creating Advertising Messages
Plan a Message Strategy General Message to Be Communicated to Customers Click to add title Advertising Strategy Creating Advertising Messages Develop a Message Focus on Customer Benefits Creative Concept “Big Idea” Visualization or Phrase Combination of Both Advertising Appeals Meaningful Believable Distinctive

7 Advertising Strategy Message Execution
This CTR relates to the discussion on pp Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and Interest. Testimonial Evidence Slice of Life Message Decisions Advertisers must construct their messages carefully to reach target markets. Three areas are important: Typical Message Execution Styles Scientific Evidence Lifestyle Message Generation. This consists of creative brainstorming to generate several alternative ways of communicating to the target market. Message Evaluation and Selection. This process ranks and then chooses among messages on the how meaningful, distinctive, and believable they are. Message Execution. Execution involves determining how to best communicate with the target market. Typical message styles include: Slice of Life. This shows people using the product in a normal setting. Lifestyle. This matches product use to a targeted lifestyle. Fantasy. This creates an escape or flight of fancy with the product. Mood or image. Here a specific mood or image is suggested as an outcome of or experience similar to product use. Musical. This uses music to promote the product. Personality Symbol. This style creates a character (animated or real) to represent the product. Technical Expertise. This style emphasizes the company’s successful experience as making it better able to offer a superior product. Scientific Evidence. This offers survey or scientific study as proof that the product outperforms others. Testimonial Evidence. This uses a likely or highly believable source to endorse the product. Technical Expertise Fantasy Personality Symbol Mood or Image Musical Tugas : ……….???? Tugas : Cari beberapa iklan dan analisislah jenis eksekusi pesannya….!

8 Advertising Strategy Selecting Advertising Media
Step 1. Decide on Reach, Frequency, and Impact Advertising Strategy Selecting Advertising Media Advertising Strategy Selecting Advertising Media This CTR relates to the discussion on pp Step 2. Choosing Among Major Media Types Media Habits of Target Consumers Nature of the Product Type of Message Cost Step 3. Selecting Specific Media Vehicles Specific Media Within a Given Type, i.e. Magazines. Must Balance Media Cost Against Media Factors: Audience Quality & Attention, Editorial Quality Selecting Advertising Media In selecting media for ads, advertisers must consider the factors that will influence reception of the message. Not all such factors are under the control of the marketer. Of those that are, the following concepts are important: Reach. Reach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time. Frequency. Frequency is a measure of the how many times the average person in the target market is exposed to the message. Media Impact. Impact refers to the qualitative value of a message exposure through a given medium. Media Vehicles. Vehicles are specific media within a general category. Thus, “The Tonight Show” is a media vehicle on television, whereas a single magazine, The Economist, is a media vehicle in magazine print media. Media Timing. Timing involves the how and when of presenting a campaign. Advertisements should support strategic decisions based upon such factors as peak seasons and demand. Also, the pattern of the ads while shown must be considered: Continuity. This schedules ads evenly within a given period. Pulsing. This schedules ads unevenly within a given period. Step 4. Deciding on Media Timing Scheduling of Advertising Over the Course of a Year Pattern of Ads: Continuity or Pulsing

9 Advertising Evaluation
Advertising Program Evaluation Advertising Evaluation Communication Effects Is the Ad Communicating Well? Sales Effects Is the Ad Increasing Sales?

10 Advertising Departments Firm that Assists Companies
Ways to Handle Advertising Advertising Departments in Larger Companies Sales Departments in Small Companies Advertising Agency Firm that Assists Companies in Planning, Preparing, Implementing and Evaluating Their Advertising Programs.

11 Advertising Media Costs Advertising Practices
Adaptation of Global Advertising International Advertising Decisions Advertising Media Costs & Availability Regulation of Advertising Practices

12 What is Sales Promotion?
This CTR relates to the material on pp What is Sales Promotion? Mass communication technique that offers short-term incentives to encourage purchase or sales of a product or service. Rapid growth in the industry has been achieved because: Product managers are facing more pressure to increase their current sales, Companies face more competition, Advertising efficiency has declined, Consumers have become more deal oriented. Sales Promotion Sales Promotion. Sales promotion consists of short term incentives to encourage purchase or sales of a product or service. Areas of sales promotion include: Rapid Growth of Sales Promotion. Key factors contributing to the use of sales promotion include: Top management acceptance of sales promotion as an effective element in the marketing mix. Increased competition and decreased differentiation. Decreased advertising effectiveness has also put pressure on companies to shift more emphasis to sales promotion. Consumers have become more deal oriented and retailers are demanding more deals from manufacturers.

13 Consumer - Promotion Tools
This CTR relates to the discussion on pp Short-Term Incentives to Encourage Purchase or Sales of a Product or Service. Consumer-Promotion Tools Consumer-Promotion Objectives Consumer Promotion Tools A number of tools are used by marketers to reach consumers directly, including: Samples. Samples offer consumers a trial amount of a product. Coupons. Coupons give buyers a savings on specified products. Rebates. Rebates consist of cash back after the purchase. Price Packs. Price packs offer reductions in price for special combinations of products or quantities of the product. Premiums. Premiums are goods offered free or at low cost as an incentive to buy the product. Advertising Specialties. Advertising specialties are useful items imprinted with the advertiser’s name or logo. Patronage Rewards. Patronage rewards are cash or prizes offered for the regular use of the product or service. Point-of-Purchase. Point-of-purchase promotions include displays and demonstrations at the retail level. Contests, Sweepstakes, and Games. These give consumers a chance to win something and draw attention to the product. Samples Advertising Specialties Entice Consumers to Try a New Product Coupons Lure Customers Away From Competitors’ Products Patronage Rewards Patronage Rewards Cash Refunds Get Consumers to “Load Up’ on a Mature Product Contests Price Packs Sweepstakes Hold & Reward Loyal Customers Premiums Games Consumer Relationship Building Point-of-Purchase Displays

14 Trade - Promotion Tools
This CTR relates to the discussion on pp Short-Term Incentives That are Directed to Retailers and Wholesalers. Trade-Promotion Tools Trade-Promotion Objectives Price-Offs Premiums Persuade Retailers or Wholesalers to Carry a Brand Trade Promotion Tools. A discount is a reduction in the price from the manufacturer to a member of the channel of distribution. An allowance is an authorized reduction in the amount paid to the manufacturer in return for performing one or more marketing channel functions. Allowances Give a Brand Shelf Space Patronage Rewards Displays Buy-Back Guarantees Promote a Brand in Advertising Discounts Push Money Push a Brand to Consumers Free Goods Specialty Advertising Items Contests

15 Business - Promotion Tools
This CTR relates to the discussion on pp Short-Term Incentives That are Directed to Industrial Customers. Business-Promotion Tools Business-Promotion Objectives Generate Business Leads Conventions Business Promotion Tools. Conventions and trade shows provide a stage for showing products and meeting the salesforce. Sales contests provide the salesforce with incentives for performance over a given period. Stimulate Purchases Trade Shows Reward Customers Sales Contests Motivate Salespeople

16 Developing the Sales Promotion Program
This CTR relates to the material on p. 468. Developing the Sales Promotion Program Decide on the Size of the Incentive Set Conditions for Participation Evaluate the Program Determine How to Promote and Distribute the Promotion Program Determine the Length of the Program Developing the Program Incentives. All sales promotions must recognize that a certain minimum level of incentive is needed to have any effect. Conditions of Participation. These may be both legally mandated in some areas and/or linked to specific goals. Sweepstakes may restrict some participants or be linked to other behaviors such as prior purchases or bulk buys. How to inform participants must also be considered, for example, direct mailing of coupons or placing them on the package. Length of Time. Time considerations must be weighed between too short to have much effect or penetration of the market versus too long so as to lose any sense of immediacy to "act now." Budget . Sales promotion budgeting suffers from the same organizational problems faced by marketers in other areas. Percentage of sales approaches do not see promotion as a cause of sales. Objective-based budgeting often fails to consider cost effectiveness. Pretesting and Implementation Sales promotion tools benefit from pretesting their effectiveness prior to implementation. Unfortunately, pretesting is seldom done. You may challenge students to come up with suggestions about how to do a "mini pretest" that managers might use within the time constraints of sales promotion deadlines. Implementation requires coordinating effective lead time and sell off time resources to manage the sales promotion effectively. Evaluating the Results A key part of evaluation is determining whether the promotion affected the total demand for the product or only its timing. Consumers may be surveyed or experiments conducted to ascertain the long-term impact of the promotion.

17 What is Public Relations?
This CTR relates to the material on pp Building good relations with the company’s various publics by obtaining favorable publicity, building up a good “corporate image” and handling or heading off unfavorable rumors, stories and events. Major functions are: Press Relations or Press Agentry Product Publicity Public Affairs Lobbying Investor Relations Development Press Relations is an on-going process of establishing and maintaining good relations with the news media reporters and editors to help place newsworthy information about company products or objectives in their vehicles. Product Publicity. Product Publicity seeks news coverage of specific products usually in conjunction with other promotional efforts. Public Affairs/ Investor Relations. Public Affairs and Investor Relations involves creating and managing internal and external communications promoting understanding the of company and its objectives. Counseling of management on public issues may be included in corporate communications functions in some companies. Lobbying. Lobbying involves dealing with legislators and government administrators. Discussion Note: Lobbying has justly earned a bad reputation for the “special interest” favors awarded some companies. But it is also true that a great deal of lobbying is ethical and fair -- a point not typically found in the popular press. Also, federalism is designed precisely so that “special interests” can be taken into consideration. Not all “special interests” are bad for society as a whole.

18 Major Public Relations Tools
This CTR relates to the material on pp Web Site Public Service Activities News Key tools of Public Relations include: News and Speeches. Finding or creating favorable news stories about the company or products. Giving talks at trade association meetings or sales meetings. Special Events. Special Events consist of public service activities sponsored and controlled by public relations in-house. Written and Audiovisual Materials. Materials include written information for reporters, and audio-visual information such as slide, sound programs, and videos on corporate identity. Corporate spokespersons also make public speeches to promote the views important to the company. Public Service Activities. Public Service Activities include contributions of time and money for community projects and programs. Discussion Note: Many companies donate land and equipment to towns and cities for parks and recreational areas as part of PR. Corporate Identity Materials Speeches Audiovisual Materials Special Events Written Materials

19 Major Public Relations Decisions
Click to add title Setting Public Relations Objectives Choosing the Public Relations Messages and Vehicles Implementing the Public Relations Plan Evaluating Public Relations Results Major Public Relations Decisions Major Public Relations Decisions This CTR relates to the discussion on pp Public Relations Decisions Objectives. Objectives are the first order of public relations business. PR must determine what it wants to accomplish and how these objectives support the overall promotion objectives. Messages. Messages require that the PR department creates the "story" it wants to tell about the company and finds the appropriate media for transmitting it. Teaching Tip: Students may wonder if editors will be angry that PR people are trying to manipulate them. If PR is open and honest, editors are willing to consider the merits of the message. Of course the company has its point of view -- but that’ legitimate and PR people can provide sources of information that save reporters time and are unavailable elsewhere. Implementation. Implementation relies as much on the personal working relationships the PR people have with media editors as the content of the stories themselves. Good relations are built on trust over time thus implementation is but one step in the on-going process of media relations. Teaching Tip: In short, PR people have to do something for editors if they expect editors to do something for them. Evaluation. Evaluation of PR efforts is difficult because so much PR is designed to support other promotion efforts. Traditional evaluation includes clippings books counting the number of media exposures.

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