1 Copyright ©2009 by Cengage Learning Inc. All rights reserved Designed by Eric Brengle B-books, Ltd. CHAPTER 17 Advertising and Public Relations Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10

Copyright ©2009 by Cengage Learning Inc. All rights reserved The Effects of Advertising 2 LO I Top Ten Leaders by U.S. Advertising Spending

Copyright ©2009 by Cengage Learning Inc. All rights reserved Advertising and Market Share New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share 1.Beyond a certain level of spending, diminishing returns set in. 2.New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits. 3 LO I

Copyright ©2009 by Cengage Learning Inc. All rights reserved The Effects of Advertising on Consumers 4 LO I  The average U.S. citizen is exposed to hundreds of ads each day.  Advertising may change a consumer’s negative attitude toward a product, or reinforce a positive attitude.  Advertising can affect consumer ranking of a brand’s attributes.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Major Types of Advertising 5 LO 2 Corporate identity Pioneering Competitive Comparative Product Advertising Product Advertising Institutional Advertising Institutional Advertising Advocacy advertising

Copyright ©2009 by Cengage Learning Inc. All rights reserved Product Advertising 6 LO 2 PioneeringPioneering  Stimulates primary demand for new product or category  Used in the PLC introductory stage CompetitiveCompetitive  Influences demand for brand in the growth phase of the PLC  Often uses emotional appealComparativeComparative  Compares two or more competing brands’ product attributes  Used if growth is sluggish, or if competition is strong Online

Copyright ©2009 by Cengage Learning Inc. All rights reserved Creative Decisions in Advertising 7 LO 3 Determine the advertising objectives Make creative decisions Make media decisions Evaluate the campaign

Copyright ©2009 by Cengage Learning Inc. All rights reserved Setting Objectives: The DAGMAR Approach ( Defining Advertising Goals for Measured Advertising Results ) 8 LO 3 Define target audience Define desired percentage change Define the time frame for change

Copyright ©2009 by Cengage Learning Inc. All rights reserved 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 9 LO 3

Copyright ©2009 by Cengage Learning Inc. All rights reserved Identify Product Benefits 10 LO 3 Attribute Benefit “SoBe Life Water has reformulated five delicious, low-calorie flavors, each infused with essential vitamins and healthy herbal ingredients.” “SoBe Life Water is not only an enhanced water; it is a lifestyle unto itself. It provides consumers the healthiest, most fun and refreshing products, delivering the incredibly positive benefits of hydration.” - So?

Copyright ©2009 by Cengage Learning Inc. All rights reserved Advertising Appeals 11 LO 3 Profit Health Love or romance Fear Admiration Convenience Fun and pleasure Vanity and egotism 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

Copyright ©2009 by Cengage Learning Inc. All rights reserved Major Advertising Media 12 LO 4 Newspapers Magazines Radio Television Outdoor Media Yellow Pages Internet

Copyright ©2009 by Cengage Learning Inc. All rights reserved Newspapers 13 LO 4 Advantages  Geographic selectivity  Short-term advertiser commitments  News value and immediacy  Year-round readership  High individual market coverage  Co-op and local tie-in availability  Short lead time Disadvantages  Limited demographic selectivity  Limited color  Low pass-along rate  May be expensive

Copyright ©2009 by Cengage Learning Inc. All rights reserved Magazines 14 LO 4 AdvantagesDisadvantages  Good reproduction  Demographic selectivity  Regional/local selectivity  Long advertising life  High pass-along rate  Long-term advertiser commitments  Slow audience build-up  Limited demonstration capabilities  Lack of urgency  Long lead time

Copyright ©2009 by Cengage Learning Inc. All rights reserved Radio 15 LO 4 AdvantagesDisadvantages  Low cost  Immediacy of message  Short notice scheduling  No seasonal audience change  Highly portable  Short-term advertiser commitments  Entertainment carryover  No visual treatment  Short advertising life  High frequency to generate comprehension and retention  Background distractions  Commercial clutter

Copyright ©2009 by Cengage Learning Inc. All rights reserved Television 16 LO 4 AdvantagesDisadvantages  Wide, diverse audience  Low cost per thousand  Creative opportunities for demonstration  Immediacy of messages  Entertainment carryover  Demographic selectivity with cable  Short life of message  Consumer skepticism  High campaign cost  Little demographic selectivity with stations  Long-term advertiser commitments  Long lead times for production  Commercial clutter

Copyright ©2009 by Cengage Learning Inc. All rights reserved Outdoor Media 17 LO 4 AdvantagesDisadvantages  Repetition  Moderate cost  Flexibility  Geographic selectivity  Short message  Lack of demographic selectivity  High “noise” level

Copyright ©2009 by Cengage Learning Inc. All rights reserved Internet 18 LO 4 AdvantagesDisadvantages  Fast growing  Ability to reach narrow target audience  Short lead time  Moderate cost  Difficult to measure ad effectiveness and ROI  Ad exposure relies on “click through” from banner ads  Not all consumers have access to Internet Online

Copyright ©2009 by Cengage Learning Inc. All rights reserved Videogame Advertising In 2006, Microsoft acquired Massive inc., a start- up that places ads in video games. Ads are inserted into the game environment. Video games could become a large new medium for advertising. 19 LO 4 SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,” Wall Street Journal, April 26,2006, B1.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Cell Phones Newest advertising media Useful for reaching youth market 3 billion cell phone users in the world In 2006 cell phone ad sales reached over $400 million in U.S. – nearly $900 million worldwide 20 LO 4

Copyright ©2009 by Cengage Learning Inc. All rights reserved Quantitative Factors in Media Selection Media Mix – Combination of media to be used for a promotional campaign Cost per contact – The cost of reaching one member of the target market Reach – number of target consumers exposed to a commercial at least once during a specific period, usually four weeks Frequency – number of times an individual is exposed to a given message during a specific period 21 LO 4

Copyright ©2009 by Cengage Learning Inc. All rights reserved Qualitative Factors in Media Selection Attention to the commercial and the program Involvement Program liking Lack of distractions Other audience behaviors 22 LO 4

Copyright ©2009 by Cengage Learning Inc. All rights reserved Media Scheduling 23 LO 4 Continuous Media Schedule Flighted Media Schedule Pulsing Media Schedule Seasonal Media Schedule 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.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Public Relations 24 Public Relations LO 5 The element in the promotional mix that:  evaluates public attitudes  identifies issues of public concern  executes programs to gain public acceptance

Copyright ©2009 by Cengage Learning Inc. All rights reserved Functions of Public Relations 25 LO 5 Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management

Copyright ©2009 by Cengage Learning Inc. All rights reserved Managing Unfavorable Publicity 26 Crisis Management Crisis Management LO 5 A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event.