©2002 South-Western Chapter 15 Version 6e1 chapter Advertising and Public Relations 15

©2002 South-Western Chapter 15 Version 6e2 chapter Learning Objectives 15 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.

©2002 South-Western Chapter 15 Version 6e3 chapter Learning Objectives (continued) Describe media evaluation and selection techniques. 5.Discuss the role of public relations in the promotional mix.

©2002 South-Western Chapter 15 Version 6e4 Learning Objective 1 1 Discuss the effect of advertising on market share and consumers.

©2002 South-Western Chapter 15 Version 6e5 Advertising  U.S. advertising spending exceeds $215 billion per year  Industry employs only 272,000  Ad budgets of some firms exceed over $2 billion per year 1 1

©2002 South-Western Chapter 15 Version 6e6 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. 1 1

©2002 South-Western Chapter 15 Version 6e7 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. 1 1

©2002 South-Western Chapter 15 Version 6e8 Learning Objective 2 2 Identify the major types of advertising.

©2002 South-Western Chapter 15 Version 6e9 Major Types of Advertising Institutional Advertising Institutional Advertising Designed to enhance a company’s image rather than promote a particular product. Product Advertising Product Advertising Designed to tout the benefits of a specific good or service. 2 2

©2002 South-Western Chapter 15 Version 6e10 Major Types of Advertising 2 2 Enhance corporation’s identify Pioneering Competitive Comparative ProductAdvertisingProductAdvertising InstitutionalAdvertisingInstitutionalAdvertising Advocacy advertising

©2002 South-Western Chapter 15 Version 6e11 Product Advertising PioneeringPioneering Stimulates primary demand for new product or categoryCompetitiveCompetitive 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

©2002 South-Western Chapter 15 Version 6e12 Learning Objective Discuss the creative decisions in developing an advertising campaign 3 3

©2002 South-Western Chapter 15 Version 6e13 Advertising Campaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. 3 3

©2002 South-Western Chapter 15 Version 6e14 Steps in Creating an Advertising Campaign Determine the advertising objectives. Make creative decisions. Make media decisions. Evaluate the campaign. 3 3

©2002 South-Western Chapter 15 Version 6e15 Setting Objectives: The DAGMAR Approach 3 3 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

©2002 South-Western Chapter 15 Version 6e16 Creative Decisions 3 3 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

©2002 South-Western Chapter 15 Version 6e17 Identify Product Benefits 3 3  “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

©2002 South-Western Chapter 15 Version 6e18 Advertising Appeal 3 3 Reason for a person to buy a product.

©2002 South-Western Chapter 15 Version 6e19 Common Advertising Appeals 3 3 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

©2002 South-Western Chapter 15 Version 6e20 Unique Selling Proposition 3 3 Desirable, exclusive, and believable advertising appeal selected as the theme for a campaign.

©2002 South-Western Chapter 15 Version 6e21 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

©2002 South-Western Chapter 15 Version 6e22 Learning Objective Describe media evaluation and selection techniques. 4 4

©2002 South-Western Chapter 15 Version 6e23 Media Types Newspapers Magazines Radio Television Outdoor Internet Alternative Media Major Types ofAdvertisingMedia ofAdvertisingMedia 4 4

©2002 South-Western Chapter 15 Version 6e24 Advertising Spending for

©2002 South-Western Chapter 15 Version 6e25 Newspapers 4 4AdvantagesAdvantages  Year-round readership  Geographic selectivity  Immediacy  High individual market coverage  Short lead timeDisadvantagesDisadvantages  Limited demographic selectivity  Little color  May be expensive  Low pass-along rate  Clutter  Mass market medium

©2002 South-Western Chapter 15 Version 6e26 Cooperative Advertising An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand. 4 4

©2002 South-Western Chapter 15 Version 6e27 Magazines 4 4  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

©2002 South-Western Chapter 15 Version 6e28 Radio 4 4AdvantagesAdvantages  Selectivity and audience segmentation  Immediate and portable  Geographic flexibility  Entertainment carryover  Short-term ad commitmentsDisadvantagesDisadvantages  No visual treatment  Short advertising life  High frequency to generate retention  Commercial clutter  Background distractions

©2002 South-Western Chapter 15 Version 6e29 Television 4 4AdvantagesAdvantages  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

©2002 South-Western Chapter 15 Version 6e30 Outdoor Media 4 4AdvantagesAdvantages  High exposure frequency  Moderate cost  Flexibility  Geographic selectivity  Broad, diverse marketDisadvantagesDisadvantages  Short message  Lack of demographic selectivity  High “noise” level

©2002 South-Western Chapter 15 Version 6e31 Internet and World Wide Web 4 4  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

©2002 South-Western Chapter 15 Version 6e32 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 Examples of Alternative Media Examples of Alternative Media 4 4

©2002 South-Western Chapter 15 Version 6e33 Media Selection Considerations Cost per Contact Factors Influencing Media Mix Decisions Factors Influencing Media Mix Decisions Reach Frequency Audience Selectivity 4 4

©2002 South-Western Chapter 15 Version 6e34 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

©2002 South-Western Chapter 15 Version 6e35 Media Scheduling Types of Media Schedules Types of Media Schedules Continuous Media Schedule Flighted Media Schedule Pulsing Media Schedule Seasonal Media Schedule 4 4

©2002 South-Western Chapter 15 Version 6e36 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

©2002 South-Western Chapter 15 Version 6e37 Learning Objective Discuss the role of public relations in the promotional mix. 5 5

©2002 South-Western Chapter 15 Version 6e38 Public Relations 5 5 Evaluates public attitudes Identifies issues of public concern Executes programs to gain public acceptance The Role of Public Relations The Role of Public Relations

©2002 South-Western Chapter 15 Version 6e39 Functions of Public Relations Press Relations Product Publicity Corporate Communication Public Affairs LobbyingLobbying Employee and Investor Relations Crisis Management 5 5

©2002 South-Western Chapter 15 Version 6e40 Public Relations Tools Tools Used By PRProfessionalsTools PRProfessionals Product Placement Consumer Education Event Sponsorship Issue Sponsorship Internet Web Sites New Product Publicity 5 5

©2002 South-Western Chapter 15 Version 6e41 Managing Unfavorable Publicity 5 5 A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event.CrisisManagement