1. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University CHAPTER 15 Advertising, Sales Promotion Public Relations and Personal Selling 15 - 1

2. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University After reading this chapter you should be able to: 1.Explain the differences between the various types of advertising. 2.Understand the steps used to develop, execute and evaluate an advertising program. 3.Explain the advantages and disadvantages of alternative advertising media. 4.Understand the strengths and weaknesses of consumer- oriented and trade-oriented sales promotions. 5.Recognise public relations as an important form of communication. 6.Identify the key stages in the personal selling process. 15 - 2

3. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Types of Advertisements Chapter 14 described advertising as any paid form of non-personal communication about an organisation, good, service or idea by an identified sponsor. This chapter describes alternative types of advertisements, the advertising decision process, sales promotion and public relations. Although they all focus on selling a good or service, product advertisements take three forms: 1.pioneering (or informational). 2.competitive (or persuasive). 3.reminder. 15 - 3

4. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Types of Advertisements Which ad would be considered (1) pioneering, (2) competitive and (3) a reminder? 15 - 4

5. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Concept Check 1.What is the difference between pioneering and competitive ads? 2.What is the purpose of a reminder advertisement? 1. pioneering advertisements tell people what a product is, what it can do and where it can be found whereas competitive ads promote a specific brand’s features and benefits. 2. Reminder advertising is used to reinforce previous knowledge of a product. 15 - 5

6. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Developing the Advertising Program The promotion decision process described in Chapter 14 can be applied to each of the promotional elements. Advertising, for example, can be managed by following the three steps (developing, executing and evaluating) of the process. These will be now examined in more detail. 15 - 6

7. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Identifying the Target Audience To develop an effective advertising program advertisers must identify the target audience. All aspects of an advertising program are likely to be influenced by the characteristics of the potential consumer. Understanding the lifestyles, attitudes and demographics of the target market is essential. 15 - 7

8. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Specifying Advertising Objectives The guidelines for setting promotion objectives described in Chapter 14 also apply to setting advertising objectives. The most important step is to identify objectives that are directly linked to advertising. For example, the level of sales following an advertising campaign may be largely influenced by factors other than advertising. Sales volume might be influenced more directly by a significant discount sales promotion in part of the market. Brand awareness, on the other hand, is more influenced by advertising activity. 15 - 8

9. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Setting the Advertising Budget As we have noted elsewhere, several Australian and New Zealand advertisers spent in excess of $100 million on advertising media. How did they arrive at this figure? We shall see that there are only four alternative, recognised methods of setting an advertising budget. 15 - 9

10. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Designing the Advertisement An advertising message usually focuses on the key benefits of the product that are important to a prospective buyer in making trial and adoption decisions. The message depends on the general form or appeal used in the ad and the actual words included in the ad. Let’s consider this in more detail 15 - 10

11. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Designing the Advertisement - Message Appeal Most advertising messages are made up of both informational and persuasional elements. Information and persuasive content can be combined in the form of an appeal to provide a basic reason for the consumer to act. Although the marketer can use many different types of appeals, common advertising appeals include: –fear appeals: suggest to the consumer that he or she can avoid some negative experience through the purchase and use of a product or through a change in behaviour. –sex appeals: suggest to the audience that the product will increase the attractiveness of the user. –humorous appeals: imply either directly or more subtly that the product is more fun or exciting than competitors’ offerings. 15 - 11

12. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Designing the Advertisement - Creating the Actual Message Copywriters are responsible for creating the text portion of the messages in advertisements. Translating a copywriter’s ideas into an actual advertisement is a complex process. Designing quality artwork, layout and production for the advertisements is costly and time-consuming with a high-quality 30-second TV commercial typically costing about $300 000 to produce. 15 - 12

13. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Concept Check 1.Describe three alternative advertising appeal strategies. 2.Describe two common risks when using a humorous advertising appeal 1.Three alternative advertising appeals are fear appeals, sex appeals and humorous appeals. 2.Humour tends to wear out quickly, eventually boring the consumer. Another problem with humorous appeals is that their effectiveness may vary across cultures if used in a global campaign. 15 - 13

14. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Selecting the Right Media In deciding where to place advertisements, a company has several media to choose from and a number of alternatives, or vehicles, within each medium. Often advertisers use a mix of media forms and vehicles to maximise the exposure of the message to the target audience while at the same time minimising costs. These two conflicting goals of (1) maximising exposure and (2) minimising costs are of central importance to media planning. Examples of media options include the familiar newspapers, internet, magazines, radio and TV; 15 - 14

15. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Selecting the Right Media – Reach, Rating and Frequency. Because advertisers try to maximise the number of individuals in the target market exposed to the message, they must be concerned with reach. Reach is the number of different people or households exposed to an advertisement. Television and radio stations describe their reach using the term rating—the percentage of households in a market that are tuned to a particular TV show or radio station. In general, advertisers try to maximise reach in their target market at the lowest cost. When advertisers want to reach the same audience more than once, they are concerned with frequency, the average number of times a person in the target audience is exposed to a message or advertisement. Like reach, greater frequency is generally viewed as desirable. Studies indicate that consumers often absorb more of an advertising message with repeated exposure. 15 - 15

16. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Different Media Alternatives The different media alternatives include: –Television –Radio –Magazines –Newspapers –Internet –Outdoor –Direct mail –Other media Figure 15–2 summarises the advantages and disadvantages of the major advertising media, which are described in more detail below. 15 - 16

17. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Magazine Advertising What sort of target market is Girlfriend aimed at? Why would a marketer use this magazine to advertise in compared to other media types? Or would this just be one media type of many used? 15 - 17

18. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Advantages and disadvantages of major advertising media 15 - 18

19. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Scheduling the Advertising There is no, one correct schedule to advertise a product in all situations, but three factors must be considered. First is the issue of buyer turnover, which is how often new buyers enter the market to buy the product. –The higher the buyer turnover, the greater is the amount of advertising required. A second issue in scheduling is the purchase frequency; the more frequently the product is purchased, the less repetition is required. Finally, companies must consider the forgetting rate, the speed with which buyers forget the brand if advertising is not seen. 15 - 19

20. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Scheduling the Advertising - Approaches Setting schedules requires an understanding of how the market behaves. Most companies tend to follow one of three basic approaches: 1.Continuous (steady) schedule. –When seasonal factors are unimportant, advertising is run at a continuous or steady schedule throughout the year. 2.Flighting (intermittent) schedule. –Periods of advertising are scheduled between periods of no advertising to reflect seasonal demand. 3.Pulse (burst) schedule. –A flighting schedule is combined with a continuous schedule because of increases in demand, heavy periods of promotion or introduction of a new product. 15 - 20

21. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Concept Check 1.You see the same ad in Cleo magazine and on billboards and TV. Is this an example of reach or frequency? 2.Why has the Internet become a popular advertising medium? 3.Describe three approaches to scheduling advertising. 1.Frequency 2.It has become a popular advertising medium because it can use audio and video capabilities. Sound and movement may simply attract more attention from viewers, or they may provide an element of entertainment to the message. Online advertising also has the unique feature of being interactive. 3.Three approaches to scheduling advertising are Continuous (steady) schedule, Flighting (intermittent) schedule and Pulse (burst) schedule. 15 - 21

22. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Executing the Advertising Program ‘I know half my advertising is wasted, but I don’t know which half.’ This quote is attributed to people as diverse as William Westgarth Lever (one of the founders of Unilever) and John Wanamaker (founder of Wanamaker’s Department Store in Philadelphia) but it could have been uttered by any major advertiser in the past. By evaluating advertising efforts, marketers can try to ensure that their advertising expenditures are not wasted. Evaluation is done usually at two separate times: before and after the advertisements are run in the actual campaign. Several methods used in the evaluation process at the stages of idea formulation and copy development are discussed below. Posttesting methods are reviewed in the section on evaluation. 15 - 22

23. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Executing the Advertising Program - Pretesting the Advertising To determine whether the advertisement communicates the intended message or to select among alternative versions of the advertisement, pretests are conducted before the advertisements are placed in any medium. The different types of pretests are: –Portfolio tests –Jury tests –Theatre tests 15 - 23

24. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Executing the Advertising Program - Carrying Out the Advertising Program The responsibility for actually carrying out the advertising program can be handled in one of three types of agencies. The full-service agency provides the most complete range of services, including market research, media selection, copy development, artwork and production. A limited-service agency specialises in one aspect of the advertising process such as providing creative services to develop the advertising copy or buying previously unpurchased media space. Finally, an in-house agency made up of the company’s own advertising staff may provide full services or a limited range of services. 15 - 24

25. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Evaluating the Advertising Program The advertising decision process does not stop with executing the advertising program. The advertisements must be posttested to determine whether they are achieving their intended objectives, and results may indicate that changes must be made in the advertising program. Common types of posttests include: –Aided Recall (Recognition-Readership) –Unaided Recall –Attitude Tests –Inquiry Tests –Sales Tests 15 - 25

26. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Concept Check 1.Explain the difference between pretesting and posttesting advertising copy. 1.Pretests are tests conducted before an advertisement is placed to determine whether it communicates the intended message or to select among alternative versions of an advertisement whereas postests are tests conducted after an advertisement has been shown to the target audience to determine whether it has accomplished its intended purpose. 15 - 26

27. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Concept Check 2.What is the difference between aided and unaided recall posttests? 2.Aided recall is where after being shown an ad, respondents are asked whether their previous exposure to it was through reading, viewing or listening whereas with unaided recall tests questions are asked of respondents is asked of respondents without any prompting to determine whether they saw or heard advertising messages. 15 - 27

28. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Sales Promotion Sales promotion has become a key element of the promotional mix. We are all deluged with special offers on the packs of products we buy, in the store where we bought them, through our letterbox and through every communication medium we encounter. Selection and integration of the many promotion techniques require a good understanding of the advantages and disadvantages of each kind of promotion. 15 - 28

29. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Consumer-Oriented Sales Promotions Consumer-oriented sales promotions, or simply consumer promotions, are sales tools used to support a company’s advertising and personal selling that are directed to consumers. Sales promotion tools include: –Samples. –Continuity or loyalty programs. –Point-of-purchase. –Displays. –Rebates. –Product placement. –Coupons. –Deals. –Premiums. –Contests. –Sweepstakes. 15 - 29

30. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University QANTAS Frequent Flyers QANTAS Frequent Flyers is an example of what type of consumer oriented sales promotion? Is this successful? 15 - 30

31. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Trade-Oriented Sales Promotions Trade-oriented sales promotions, or simply trade promotions, are sales tools used to support a company’s advertising and personal selling directed to wholesalers, retailers or distributors. Some of the sales promotions just reviewed are used for this purpose, but there are three other common approaches targeted uniquely to these intermediaries: 1.allowances and discounts. 2.co-operative advertising. 3.training of distributors’ sales forces. 15 - 31

32. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Concept Check 1.Which sales promotional tool is most common for new products? 2.Which trade promotion is used to encourage local advertising efforts of resellers? 1. Samples 2. Co-operative advertising 15 - 32

33. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Public Relations As noted in Chapter 14, public relations is a form of communication management that seeks to influence the image of an organisation and its products. In developing a public relations campaign, several methods of obtaining non-personal presentation of an organisation, good or service without direct cost - publicity tools - are available to the public relations director. The two most common methods used are: –News conference –Media release 15 - 33

34. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Concept Check 1.Which marketing situations are most appropriately handled with publicity tools? 2.What is a news release? 1. Many companies frequently use a media release to announce changes in the company or the product line. The news conference is used for negative publicity stories or events. 2. A news release is an announcement regarding changes in the company or the product line. The objective of a news release is to inform a newspaper, radio station or other medium of an idea for a story. 15 - 34

35. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Personal Selling Although it is important to recognise that personal selling is a useful means of communicating with present and potential buyers, it is much more. Personal selling involves the two-way flow of communication between a buyer and a seller, often in a face-to-face encounter, designed to influence a person’s or group’s purchase decision. However, with advances in telecommunications, personal selling also takes place over the telephone, through video teleconferencing and Internet/Web-enabled links between buyers and sellers. Despite these advances in technology, personal selling remains the most highly human-intensive element in the promotion mix. 15 - 35

36. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University The Personal Selling Process: Building Relationships Selling, and particularly order getting, is a complicated activity that involves building buyer–seller relationships. Although the salesperson–customer interaction is essential to personal selling, much of a salesperson’s work occurs before this meeting and continues after the sale itself. The personal selling process consists of six steps: 1.Prospecting 2.Preapproach 3.Approach 4.Presentation 5.Close 6.Follow-up 15 - 36

37. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Stages and objectives of the personal selling process 15 - 37

38. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Prospecting Personal selling begins with prospecting—the search for and qualification of potential customers. For some products that are one-time purchases such as encyclopaedias, continual prospecting is necessary to maintain sales. There are three types of prospects: –A lead is the name of a person who may be a possible customer. –A prospect is a customer who wants or needs the product. –If an individual wants the product, can afford to buy it and is the decision maker, this individual is a qualified prospect. 15 - 38

39. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Preapproach Once a salesperson has identified a qualified prospect, preparation for the sale begins with the preapproach. The preapproach stage involves obtaining further information on the prospect and deciding on the best method of approach. Knowing how the prospect prefers to be approached and what the prospect is looking for in a product or service is essential. Marketers of all sorts are at their most effective when they are in a position to tailor-make a presentation based on the characteristics and the needs of the audience. 15 - 39

40. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Approach The approach stage involves the first meeting between the salesperson and prospect. The objectives are to gain the prospect’s attention, stimulate interest and build the foundation for the sales presentation itself and the basis for a working relationship. The first impression is critical at this stage, and it is common for salespeople to begin the conversation with a reference to common acquaintances, a referral or even the product or service itself. Which tactic is taken will depend on the information obtained in the prospecting and preapproach stages. 15 - 40

41. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Presentation The presentation is at the core of the order-getting selling process, and its objective is to convert a prospect into a customer by creating a desire for the product or service. Three major presentation formats exist: 1.Stimulus-response format: Assumes that given the appropriate stimulus by a salesperson, the prospect will buy. 2.Formula selling format: based on the view that a presentation consists of information that must be provided in an accurate, thorough and step-by-step manner to inform the prospect. Need-satisfaction format: emphasises probing and listening by the salesperson to identify needs and interests of prospective buyers. 15 - 41

42. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Handling Objections A critical concern in the presentation stage is handling objections. Objections are excuses for not making a purchase commitment or decision. Some objections are valid and are based on the characteristics of the product or service or price. Many objections reflect prospect scepticism or indifference. The most common techniques for dealing with objections are: 1.Acknowledge and convert the objection. 2.Postpone. 3.Agree and neutralise. 4.Accept the objection. 5.Denial. 6.Ignore the objection. 15 - 42

43. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Close The closing stage in the selling process involves obtaining a purchase commitment from the prospect. This stage is the most important and the most difficult because the salesperson must determine when the prospect is ready to buy. The close itself can take several forms. Three closing techniques are used when a salesperson believes a buyer is ready to make a purchase: 1.Trial close. 2.Assumptive close. 3.Urgency close. 15 - 43

44. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Follow-Up The selling process does not end with the closing of a sale. Rather, professional selling Requires customer follow-up. The follow-up stage includes making certain the customer’s purchase has been properly delivered and installed. Any difficulties experienced with the use of the item are addressed. Attention to this stage of the selling process solidifies the buyer–seller relationship. Moreover, the cost and effort to obtain repeat sales from a satisfied customer is roughly half of that necessary to gain a sale from a new customer.29 In short, today’s satisfied customers become tomorrow’s qualified prospects or referrals. 15 - 44

45. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Concept Check What are the six stages in the personal selling process? Which presentation format is most consistent with the marketing concept? Why? 1. They are: (1) prospecting, (2) preapproach, (3) approach, (4) presentation, (5) close, and (6) follow-up. 2. The need-satisfaction format is most consistent with the marketing concept because it emphasizes problem solving. 15 - 45

46. Copyright  2008 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: The Core by Kerin et al Slides prepared by Andrew Hughes, Australian National University Finish Questions? 15 - 46