Advertising, Sales Promotion, and Public Relations Chapter 16

16- 1 Objectives Understand the roles of advertising, sales promotion, and public relations in the promotion mix. Know the major decisions involved in developing an advertising program.

16- 2 Objectives Learn how sales promotion campaigns are developed and implemented. Learn how companies use public relations to communicate with their publics.

16- 3 A few years ago, only 13% of U.S. recognized AFLAC Old ads: “warm and fuzzy” similar to other insurance ads Goal: break through advertising clutter 1999: AFLAC developed the “duck” campaign to enhance brand awareness Incredibly successful: name recognition is now 91%; sales growth of 30% each year campaign has run c AFLAC

16- 4 What is Advertising? Any form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. U.S. advertisers spend in excess of $231 billion each year ($500b in the World). Advertising is used by:  Business firms,  Nonprofit organizations,  Professionals,  Social Agencies.

16- 5 Major Decisions in Advertising* Objectives Setting Budget Decisions Message Decisions Campaign Evaluation Media Decisions

16- 6 Informative Advertising Build Primary Demand Informative Advertising Build Primary Demand Setting Objectives Persuasive Advertising Build Selective Demand Persuasive Advertising Build Selective Demand Comparison Advertising Compares One Brand to Another Comparison Advertising Compares One Brand to Another Advertising Objectives Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time Reminder Advertising Keeps Consumers Thinking About a Product. Reminder Advertising Keeps Consumers Thinking About a Product.

16- 7 Setting the Advertising Budget Stage in the Product Life Cycle Stage in the Product Life Cycle Competition and Clutter Competition and Clutter Market Share Market Share Advertising Frequency Advertising Frequency Product Differentiation Product Differentiation Factors in Setting the Advertising Budget Advertising Budget Methods Affordable, Percentage of Sales, Competitive-Parity and Objective-and-Task

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16- 9 Plan a Message Strategy General Message to Be Communicated to Customers Develop a Message Focus on Customer Benefits Develop a Message Focus on Customer Benefits Creative Concept “Big Idea” Visualization or Phrase Combination of Both Creative Concept “Big Idea” Visualization or Phrase Combination of Both Advertising Appeals Meaningful Believable Distinctive Advertising Appeals Meaningful Believable Distinctive Developing Advertising Strategy: Creating Ad Messages

Typical Message Execution Styles Testimonial Evidence Slice of Life Scientific Evidence Lifestyle Technical Expertise Fantasy Musical Personality Symbol Mood or Image Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and Interest. Developing Advertising Strategy : Message Execution

Advertising Strategy Selecting Advertising Media Step 1. Decide on Reach, Frequency, and Impact Step 1. Decide on Reach, Frequency, and Impact Step 2. Choosing Among Major Media Types Media Habits of Target Consumers Nature of the Product Type of Message Cost Step 2. Choosing Among Major Media Types Media Habits of Target Consumers Nature of the Product Type of Message Cost Step 3. Selecting Specific Media Vehicles Specific Media Within a Given Type, i.e. Magazines. Must Balance Media Cost Against Media Factors: Audience Quality & Attention, Editorial Quality Step 3. Selecting Specific Media Vehicles Specific Media Within a Given Type, i.e. Magazines. Must Balance Media Cost Against Media Factors: Audience Quality & Attention, Editorial Quality Step 4. Deciding on Media Timing Scheduling of Advertising Over the Course of a Year Pattern of Ads: Continuity or Pulsing Step 4. Deciding on Media Timing Scheduling of Advertising Over the Course of a Year Pattern of Ads: Continuity or Pulsing

Advertising Media Reach  Target percentage of people exposed Frequency  how many time message is presented  pulsing vs. continuity Impact  which type of media best communicates  sight vs. sound vs. smell  New Yorker vs. Inquirer

Advertising Major Media Types Newspapers Newspapers Television Television Direct Mail Direct Mail Radio Radio Magazines Magazines Outdoor Outdoor Internet Internet

TIVO is one example of how technology presents challenges to media planners. With TIVO, consumers can easily zap ads. TIVO

Communication Effects Is the Ad Communicating Well? Communication Effects Is the Ad Communicating Well? Advertising Program Evaluation Sales Effects Is the Ad Increasing Sales? Sales Effects Is the Ad Increasing Sales? Evaluating Advertising

What is Sales Promotion? Mass communication technique that offers short-term incentives to encourage purchase or sales of a product or service. Rapid growth of Sales promotion has been achieved because:  Product managers are facing more pressure to increase their current sales,  Companies face more competition,  Advertising efficiency has declined,  Consumers have become more deal oriented.

Point-of-Purchase Displays Point-of-Purchase Displays Consumer - Promotion Tools Premiums Price Packs Cash Refunds Coupons Samples Short-Term Incentives to Encourage Purchase or Sales of a Product or Service. Consumer- Promotion Objectives Consumer-Promotion Tools Patronage Rewards Games Sweepstakes Contests Advertising Specialties Advertising Specialties Patronage Rewards Entice Consumers to Try a New Product Entice Consumers to Try a New Product Lure Customers Away From Competitors’ Products Lure Customers Away From Competitors’ Products Get Consumers to “Load Up’ on a Mature Product Get Consumers to “Load Up’ on a Mature Product Hold & Reward Loyal Customers Hold & Reward Loyal Customers Consumer Relationship Building Consumer Relationship Building

Checkout direct offers marketers an excellent opportunity to reach users of the competition Coupons are only issued to those who purchase specific brands

Specialty Advertising Items Specialty Advertising Items Trade - Promotion Tools Contests Free Goods Buy-Back Guarantees Buy-Back Guarantees Allowances Price-Offs Short-Term Incentives That are Directed to Retailers and Wholesalers. Trade-Promotion Objectives Trade-Promotion Tools Patronage Rewards Push Money Discounts Premiums Displays Persuade Retailers or Wholesalers to Carry a Brand Persuade Retailers or Wholesalers to Carry a Brand Give a Brand Shelf Space Promote a Brand in Advertising Promote a Brand in Advertising Push a Brand to Consumers

Objectives – Sales Force Promotions:  Signing up new accounts  Stimulating sales of specific items Sales Promotion

Business - Promotion Tools Short-Term Incentives That are Directed to Industrial Customers. Business-Promotion Objectives Business-Promotion Tools Generate Business Leads Stimulate Purchases Reward Customers Motivate Salespeople Conventions Trade Shows Sales Contests

Decide on the Size of the Incentive Set Conditions for Participation Evaluate the Program Determine How to Promote and Distribute the Promotion Program Determine How to Promote and Distribute the Promotion Program Determine the Length of the Program Developing the Sales Promotion Program

Public Relations building good relations with the company’s publics favorable publicity building good corporate image

Press Relations or Agentry Product Publicity Public Affairs Lobbying Investor Relations Development Public Relations Departments May Perform Any of All of the Following Functions: Major Public Relations Functions

Role & Impact of Public Relations  Advantages:  Strong impact on public awareness at a lower cost than advertising  Greater credibility than advertising  Publicity is often underused  Good public relations can be a powerful brand-building tool Public Relations

Special Events Special Events Written Materials Written Materials Corporate Identity Materials Corporate Identity Materials Speeches News Audiovisual Materials Audiovisual Materials Major Public Relations Tools Public Service Activities Public Service Activities Web Site

Setting Public Relations Objectives Choosing the Public Relations Messages and Vehicles Choosing the Public Relations Messages and Vehicles Implementing the Public Relations Plan Evaluating Public Relations Results Major Public Relations Decisions