1. 1Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Advertising, Public Relations, and Sales Promotion Prepared by Deborah Baker Texas Christian University Chapter 13

2. 2Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objectives 1.Discuss the effect of advertising on market share and consumers. 2. Identify the major types of advertising. 3. Discuss the creative decisions in developing an advertising campaign.

3. 3Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objectives (continued) 4. Describe media evaluation and selection techniques. 5.Discuss the role of public relations in the promotional mix.

4. 4Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objectives 6.Define and state the objectives of sales promotion. 7. Discuss the most common forms of consumer sales promotion. 8. List the most common forms of trade sales promotion.

5. 5Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objective Discuss the effect of advertising on market share and consumers. 1 1 On Line http://www.redbull.com On Line http://www.redbull.com

6. 6Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Advertising  U.S. advertising spending exceeds $240 billion per year  Industry employs only 284,000  Ad budgets of some firms exceed over $2 billion per year—over $6 million per day! 1 1

7. 7Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Top Ten Leaders by U.S. Advertising Spending 1 1

8. 8Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Advertising and Market Share  New brands spend proportionately more for advertising than old ones.  A certain level of exposure is needed to affect purchase habits.  Beyond a certain level, diminishing returns set in.  New brands spend proportionately more for advertising than old ones.  A certain level of exposure is needed to affect purchase habits.  Beyond a certain level, diminishing returns set in. 1 1

9. 9Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Advertising and the Consumer  Average U.S. citizen is exposed to hundreds of ads each day.  Advertising may change a consumer’s attitude toward a product.  Advertising can affect consumer ranking of brand attributes.  Average U.S. citizen is exposed to hundreds of ads each day.  Advertising may change a consumer’s attitude toward a product.  Advertising can affect consumer ranking of brand attributes. 1 1

10. 10Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objective Identify the major types of advertising. 2 2

11. 11Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Major Types of Advertising Institutional Advertising Institutional Advertising Product Advertising Product Advertising Designed to enhance a company’s image rather than promote a particular product. Designed to tout the benefits of a specific good or service. 2 2

12. 12Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Major Types of Advertising Enhance corporation’s identity Pioneering Competitive Comparative ProductAdvertisingProductAdvertising InstitutionalAdvertisingInstitutionalAdvertising Advocacy advertising 2 2

13. 13Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning On Line http://www.pizzahut.com http://www.papajohns.com On Line http://www.pizzahut.com http://www.papajohns.com Product Advertising PioneeringPioneering Stimulates primary demand for new product or category. Used in the PLC introductory stage.CompetitiveCompetitive Influence demand for brand in the growth phase of the PLC. Often uses emotional appeal. ComparativeComparative Compares two or more competing brands’ product attributes. Used if growth is sluggish, or if competition is strong. 2 2

14. 14Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objective Discuss the creative decisions in developing an advertising campaign. 3 3

15. 15Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Advertising Campaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. 3 3

16. 16Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Steps in Creating an Advertising Campaign Determine the advertising objectives. Make creative decisions. Make media decisions. Evaluate the campaign. 3 3

17. 17Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Setting Objectives: The DAGMAR Approach Define Target Audience Define Desired Percentage Change Define Desired Percentage Change Define the Time Frame for Change Goal of Advertising Objectives Goal of Advertising Objectives 3 3

18. 18Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Creative Decisions Components of Creative Decisions Components of Creative Decisions Develop and Evaluate Advertising Appeals Develop and Evaluate Advertising Appeals Execute the Message Evaluate the Campaign’s Effectiveness Evaluate the Campaign’s Effectiveness Identify Product Benefits 3 3

19. 19Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Identify Product Benefits  “Sell the Sizzle, not the Steak”  Sell product’s benefits, not its attributes  A benefit should answer “What’s in it for me?”  Ask “So?” to determine if it is a benefit 3 3

20. 20Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Advertising Appeal Reason for a person to buy a product. 3 3

21. 21Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Common Advertising Appeals Profit Health Love or romance Fear Admiration Convenience Fun and pleasure Vanity and egotism Environmental Consciousness Environmental Consciousness Product saves, makes, or protects money Appeals to body-conscious or health seekers Used in selling cosmetics and perfumes Social embarrassment, old age, losing health Reason for use of celebrity spokespeople Used for fast foods and microwave foods Key to advertising vacations, beer, parks Used for expensive or conspicuous items Centers around environmental protection 3 3

22. 22Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Unique Selling Proposition Desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. 3 3

23. 23Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Executing the Message Mood or Image Musical Demon- stration Demon- stration Scientific Real/ Animated Product Symbols Real/ Animated Product Symbols Fantasy Lifestyle Slice-of-Life Humorous CommonExecutionalStylesCommonExecutionalStyles Spokes- person/ Testimonial 3 3

24. 24Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objective Describe media evaluation and selection techniques. 4 4

25. 25Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Major Types of Advertising Media Newspapers Magazines Radio Television Outdoor Media Internet Alternative Media 4 4

26. 26Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Advertising Spending for 2000 4 4

27. 27Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Newspapers AdvantagesAdvantages  Year-round readership  Geographic selectivity  Immediacy  High individual market coverage  Short lead time DisadvantagesDisadvantages  Limited demographic selectivity  Little color  May be expensive  Low pass-along rate  Clutter  Mass market medium 4 4

28. 28Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Cooperative Advertising An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. 4 4

29. 29Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Magazines  Good reproduction  Demographic selectivity  Regional/local selectivity  Long advertising life  High pass-along rateAdvantagesAdvantages  Higher cost per contact  Long-term advertiser commitments  Slow audience build-up  Limited demonstration capabilities  Lack of urgency  Long lead timeDisadvantagesDisadvantages 4 4

30. 30Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning On Line http://www.radioindustry.about.com On Line http://www.radioindustry.about.comRadio AdvantagesAdvantages  Selectivity and audience segmentation  Immediate and portable  Geographic flexibility  Entertainment carryover  Short-term ad commitments DisadvantagesDisadvantages  No visual treatment  Short advertising life  High frequency to generate retention  Commercial clutter  Background distractions 4 4

31. 31Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning On Line http://www.fox.com http://www.abc.com On Line http://www.fox.com http://www.abc.comTelevisionAdvantagesAdvantages  Wide, diverse audience  Low cost per thousand  Creative and demonstrative  Immediacy of messages  Entertainment carryover  Demographic selectivity with cableDisadvantagesDisadvantages  Short life of message  Expensive with high campaign cost  Little demographic selectivity with network  Long-term advertiser commitments  Long lead times  Clutter 4 4

32. 32Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Outdoor Media AdvantagesAdvantages  High exposure frequency  Moderate cost  Flexibility  Geographic selectivity  Broad, diverse market DisadvantagesDisadvantages  Short message  Lack of demographic selectivity  High “noise” level 4 4

33. 33Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Internet  Fast growing  Ability to reach narrow target audience  Short lead time  Moderate costAdvantagesAdvantages  Difficult to measure ad effectiveness and ROI  Ad exposure relies on “click through”  Not all consumers have access to internetDisadvantagesDisadvantages 4 4 On Line http://www.bannerite.com http://www.flash-banner-design.com On Line http://www.bannerite.com http://www.flash-banner-design.com

34. 34Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Examples of Alternative Media Ads in Movies and Videos Ads in Movies and Videos Interactive Kiosks Computer Screen Savers Computer Screen Savers Video Shopping Carts Fax Machines 4 4 On Line http://www.looksmart.com http://www.yahoo.com On Line http://www.looksmart.com http://www.yahoo.com

35. 35Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Media Selection Considerations Cost per Contact ContactReachReach FrequencyFrequency AudienceSelectivityAudienceSelectivity The cost of reaching one member of the target market. The number of target consumers exposed to a commercial at least once during a time period. The number of times an individual is exposed to a message during a time period. The ability of an advertising medium to reach a precisely defined market. 4 4

36. 36Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Cable TV Network Viewer Profiles 4 4

37. 37Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Media Scheduling Continuous Media Schedule Continuous Flighted Media Schedule Pulsing Media Schedule Pulsing Seasonal Seasonal Advertising is run steadily throughout the period. Advertising is run heavily every other month or every two weeks. Advertising combines continuous scheduling with flighting. Advertising is run only when the product is likely to be used. 4 4

38. 38Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objective Discuss the role of public relations in the promotional mix. 5 5

39. 39Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Public Relations Evaluates public attitudes Identifies issues of public concern Executes programs to gain public acceptance The Role of Public Relations The Role of Public Relations 5 5

40. 40Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Functions of Public Relations Press Relations Product Publicity Corporate Communication Public Affairs LobbyingLobbying Employee and Investor Relations Crisis Management 5 5

41. 41Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning On Line http://www.bmwfilms.com On Line http://www.bmwfilms.com Public Relations Tools Product Placement Consumer Education Event Sponsorship Issue Sponsorship Internet Web Sites New Product Publicity 5 5

42. 42Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Crisis Management A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event. 5 5

43. 43Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objective Define and state the objectives of sales promotion. 6 6 On Line http://www.nba.com/mavericks http://www.mavs.com On Line http://www.nba.com/mavericks http://www.mavs.com

44. 44Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Sales Promotion Marketing communication activities, other than advertising, personal selling, and public relations, in which a short-term incentive motivates a purchase. 6 6 On Line http://www.onlineclothingstores.com http://www1.coolsavings.com On Line http://www.onlineclothingstores.com http://www1.coolsavings.com

45. 45Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Sales Promotion Targets Consumer Sales Promotion Trade Sales Promotion Trade Sales Promotion 6 6

46. 46Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Uses of Sales Promotion Immediate purchases Increase trial Boost consumer inventory Encourage repurchase Increase ad effectiveness Encourage brand switching Encourage brand loyalty 6 6

47. 47Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Objectives of Sales Promotion Type of Buyer Loyal Customers Competitor’s Customers Competitor’s Customers Brand Switchers Price Buyers Desired Results Reinforce behavior Increase consumption Change timing Reinforce behavior Increase consumption Change timing Break loyalty Persuade to switch Break loyalty Persuade to switch Persuade to buy your brand more often Appeal with low prices Supply added value Appeal with low prices Supply added value Sales Promotion Examples Loyalty marketing Bonus packs Loyalty marketing Bonus packs Sampling Sweepstakes, contests, premiums Sampling Sweepstakes, contests, premiums Price-lowering promotion Trade deals Price-lowering promotion Trade deals Coupons, price-off packages, refunds Trade deals Coupons, price-off packages, refunds Trade deals 6 6

48. 48Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objective Discuss the most common forms of consumer sales promotion. 7 7

49. 49Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Tools for Consumer Sales Promotion Coupons and Rebates Premiums Loyalty Marketing Programs Contests & Sweepstakes Sampling Point-of-Purchase Promotion 7 7

50. 50Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Coupon Rebate Premium A certificate that entitles consumers to an immediate price reduction. A cash refund given for the purchase of a product during a specific product. A cash refund given for the purchase of a product during a specific product. An extra item offered to the consumer, usually in exchange for some proof of purchase. Tools for Consumer Sales Promotion 7 7

51. 51Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Loyalty Marketing Program Loyalty Marketing Program Frequent Buyer Program Frequent Buyer Program A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. A loyalty program in which loyal consumers are rewarded for making multiple purchases. A loyalty program in which loyal consumers are rewarded for making multiple purchases. Tools for Consumer Sales Promotion 7 7

52. 52Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Contest Sweepstakes Promotions that require skill or ability to compete for prizes. Promotions that depend on chance or luck, with free participation. Tools for Consumer Sales Promotion 7 7 On Line http://www.sweepstakesonline.com On Line http://www.sweepstakesonline.com

53. 53Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Sampling A promotional program that allows the consumer the opportunity to try a product or service for free. Tools for Consumer Sales Promotion 7 7

54. 54Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Sampling Methods of Sampling Methods of Sampling Direct mail Door-to-door delivery Packaging with another product Retail store demonstration 7 7

55. 55Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Tools for Consumer Sales Promotion Goals of Goals of Point-of-Purchase Point-of-Purchase Displays Displays Goals of Goals of Point-of-Purchase Point-of-Purchase Displays Displays Build traffic Advertise the product Induce impulse buying 7 7

56. 56Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning On Line http://www.burgerking.com http://www.philipmorris.com http://www.upromote.com On Line http://www.burgerking.com http://www.philipmorris.com http://www.upromote.com Tools for Consumer Sales Promotion Free merchandise Sweepstakes Free shipping Coupons Effective Types of On-Line Sales Promotion Effective Types of On-Line Sales Promotion 7 7

57. 57Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Learning Objective List the most common forms of trade sales promotion. 8 8

58. 58Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Tools for Trade Sales Promotion Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions & Trade Shows 8 8

59. 59Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Trade Allowance A price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers. 8 8

60. 60Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning Push Money Money offered to channel intermediaries to encourage them to “push” products-- that is, to encourage other members of the channel to sell the products. 8 8

61. 61Chap. 13 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning The Role of Trade Sales Promotion Improve trade relations Gain new distributors Build or reduce dealer inventories Obtain support for consumer sales promotions 8 8