Chapter 16 – Advertising, Public Relations, and Sales Chapter 16 Advertising, Public Relations, and Sales Promotion Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcomes Discuss the effects of advertising on market share and consumers Identify the major types of advertising Discuss the creative decisions in developing an advertising campaign Describe media evaluation and selection techniques Discuss the role of public relations in the promotional mix Define and state the objectives of sales promotion and the tools used to achieve them

Effects of Advertising Chapter 16 Advertising, Public Relations, and Sales Promotion LO 1 Popular form of promotion New brands with small market shares spend more on advertising and sales promotion because due to: Advertising response function Requirement of a minimum level of exposure to measurably affect purchase habits Companies are collecting huge amounts of information and need skilled, creative, web-savvy people to interpret the data coming in from web, mobile, and other digital ad campaigns. Advertising is utilized for maintaining brand awareness and market share. Advertising response function: Phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level but then produces diminishing returns

Effects of Advertising on Consumers Chapter 16 Advertising, Public Relations, and Sales Promotion LO 1 Helps change a consumer’s negative attitude toward a product into a positive one Reinforces positive attitudes toward brands Can affect the way a consumer ranks a brand’s attributes The influence of advertising on the U.S. socioeconomic system has been the subject of extensive debate in nearly all corners of society. Discussion/Team Activity Discuss advertisements that are memorable. What makes them stand out?

Institutional Advertising Chapter 16 Advertising, Public Relations, and Sales Promotion LO 2 Designed to enhance a company’s image rather than promote a particular product Advocacy advertising Advertising in which an organization expresses its views on controversial issues or responds to media attacks Institutional advertising is designed to establish, change, or promote the corporation’s identity as a whole. A form of institutional advertising is advocacy advertising, and is typically used to safeguard against negative consumer attitudes and to enhance the company’s credibility among consumers who already favor its position. Discussion/Team Activity Discuss examples of institutional advertising and the industries that frequently use this form.

Touts the benefits of a specific good or service Types Product Advertising Chapter 16 Advertising, Public Relations, and Sales Promotion LO 2 Touts the benefits of a specific good or service Types Pioneering advertising Competitive advertising Comparative advertising Online Pizza Hut vs. Papa John’s Can you find evidence of comparative advertising on either Pizza Hut’s or Papa John’s Web site? The product’s stage in its life cycle often determines the type of product advertising to be selected.

Creative work begins with determining an advertising objective Advertising Campaign Chapter 16 Advertising, Public Relations, and Sales Promotion LO 3 Series of related advertisements focusing on a common theme, slogan, and set of advertising appeals Creative work begins with determining an advertising objective DAGMAR approach helps set objectives that defines: Target audience Desired percentage change in some specified measure of effectiveness Time frame for the change Advertising strategies are organized around an advertising campaign. An ad campaign is a series of related ads focusing on a common theme, slogan, and set of advertising appeals. Objective depends on the overall corporate objectives and the product being advertised. Advertising objective: Specific communication task that a campaign should accomplish for a specified target audience during a specified period

Creative Decisions in Advertising Chapter 16 Advertising, Public Relations, and Sales Promotion LO 3 Identifying product benefits Developing and evaluating advertising appeals Executing the message Identifying product benefits reflects on the fact that the goal of advertising is to sell the benefits of a product, not its attributes. Advertising appeal: Reason for a person to buy a product Advertising appeals play off consumers’ emotions or address some need or want of the consumers Criteria for evaluation of an appeal include desirability, exclusiveness, and believability. Unique selling proposition: Desirable, exclusive, and believable advertising appeal selected as the theme for a campaign Executing the message involves the style in which information is portrayed.

16.1 Common Advertising Appeals Chapter 16 Advertising, Public Relations, and Sales Promotion LO 3 16.1 Common Advertising Appeals

Post-Campaign Evaluation Chapter 16 Advertising, Public Relations, and Sales Promotion LO 3 Advertisers do a post-campaign analysis To identify how the campaign might have been more efficient and what factors contributed to its success Several monitoring techniques determine whether the campaign has met its original goals Before a campaign is released, pretests are used to determine the best advertising appeal, layout, and media vehicle. Testing ad effectiveness can be done before and/or after the campaign. Post-campaign evaluation can be the most demanding task facing advertisers.

Media Decisions in Advertising Chapter 16 Advertising, Public Relations, and Sales Promotion LO 4 Choice of medium Medium: Channel used to convey a message to a target market Affected by promotional objectives and the appeal and executional style of advertising Media planning: Series of decisions advertisers make regarding the selection and use of media Allows the marketer to optimally and cost-effectively communicate the message to the target audience Advertising objectives dictate the medium and the creative approach to be used.

Computer screen savers Interactive kiosks Advertisements before movies Alternative Media Chapter 16 Advertising, Public Relations, and Sales Promotion LO 4 Shopping carts Computer screen savers Interactive kiosks Advertisements before movies Posters Advertainments Advertisers are using new media vehicles to cut through the clutter of traditional advertising media. Marketers are looking for more innovative ways to reach captive and often bored commuters.

Factors Affecting Media Mix Selection Chapter 16 Advertising, Public Relations, and Sales Promotion LO 4 Cost per contact Cost per click Reach Frequency Audience selectivity Flexibility An important element in any advertising campaign is the media mix, the combination of media to be used. Noise level Life span

Qualitative Factors in Media Selection Chapter 16 Advertising, Public Relations, and Sales Promotion LO 4 Attention to the commercial and the program Involvement Program liking Lack of distractions Other audience behaviors Advertisers also evaluate the qualitative factors involved in media selection. The qualitative factors affect the likelihood that a commercial message is being seen and absorbed. The audience must pay attention to the ad for it to be effective.

Media Scheduling Continuous media schedule Flighted media schedule Chapter 16 Advertising, Public Relations, and Sales Promotion LO 4 Advertising is run steadily throughout the period Continuous media schedule Advertising is run heavily every other month or every two weeks Flighted media schedule Advertising combines continuous scheduling with flighted scheduling Pulsing media schedule After choosing the media for the campaign, advertisers must schedule the ads. A media schedule designates the medium or media to be used, the specific vehicles, and the insertion dates of the advertising. Continuous media schedule: Examples include Ivory soap and Charmin toilet tissue. Flighted media schedule: Examples include movie ads on Wednesday and Thursday nights. Pulsing media schedule: Examples include Thanksgiving, Christmas, and back-to-school sales. Seasonal media schedule: Examples include cold medication and sunscreen lotion. Recency planning is the theory of scheduling television advertising for frequently purchased products, such as Coca-Cola and Tide detergent. Its main premise is to influence the brand choice of people who are ready to buy. Advertising is run only when the product is likely to be used Seasonal media schedule

Public Relations Tools Chapter 16 Advertising, Public Relations, and Sales Promotion LO 5 New-product publicity Product placement Consumer education Sponsorship Experiential marketing Company websites

Functions of Public Relations Chapter 16 Advertising, Public Relations, and Sales Promotion LO 5 Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management Crisis management: Coordinated effort to handle all the effects of unfavorable publicity or another unexpected unfavorable event Discussion/Team Activity Identify some corporate crises and discuss how the public relations was handled. Examples include Walmart’s low wages and sparse benefits and the BP oil spill.

16.4 Types of Consumers and Sales Promotion Goals LO 6 16.4 Types of Consumers and Sales Promotion Goals

Tools for Trade Sales Promotion Chapter 16 Advertising, Public Relations, and Sales Promotion LO 6 Trade allowances Push money Training Free merchandise Store demonstrations Business meetings, conventions, and trade shows While consumer promotions pull a product through the channel by creating demand, trade promotions push a product through the distribution channel. Consumer promotion tools are used when selling to members of the distribution channel. However, several tools are unique to manufacturers and intermediaries.

Tools for Consumer Sales Promotion Chapter 16 Advertising, Public Relations, and Sales Promotion LO 6 Coupons and rebates Premiums Loyalty marketing programs Contests and sweepstakes Sampling Point-of-purchase promotion The tools selected for sales promotion must suit the objectives to ensure success of the overall promotion plan.

Key Terms Advertising response function Institutional advertising Product advertising Advocacy advertising Pioneering advertising Competitive advertising Comparative advertising Advertising campaign Advertising objective Advertising appeal Unique selling proposition Medium Media planning Cooperative advertising Infomercial Advergaming Media mix

Key Terms (continued 1) Cost per contact (cost per thousand or CPM) Cost per click Reach Frequency Audience selectivity Media schedule Continuous media schedule Flighted media schedule Pulsing media schedule Seasonal media schedule Public relations Publicity Product placement Sponsorship Crisis management Sales promotion

Key Terms (continued 2) Trade sales promotion Consumer sales promotion Trade allowance Push money Coupon Rebate Premium Loyalty marketing program Frequent buyer program Sampling Point of purchase (P-O-P) display

Summary Advertising is a popular form of promotion A firm's promotional objectives determine the type of advertising it uses Advertising strategies are organized around an advertising campaign Choice of medium is a major decision for advertisers Public relations is a vital link in a company’s marketing communication mix Sales promotion helps increase the effectiveness of promotional efforts