kerinmarketing19

AFTER READING THIS CHAPTER

YOU SHOULD BE ABLE TO:

•Explain the differences between product advertising and institutional advertising and the variations within each type.

•

•Understand the steps used to develop, execute, and evaluate an advertising program.

•Explain the advantages and dis-advantages of alternative advertising media.

•

•Understand the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions.

Recognize public relations as an important form of communications.

ADVERTISING, SALES PROMOTION, AND PUBLIC RELATIONS

WHAT’S THE FUTURE OF ADVERTISING? THE
ANSWER IS PERSONAL

TYPES OF ADVERTISEMENTS

Any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor.

Product Advertisements

Advertisements that focus on selling a good or service and take three forms: (1) pioneering (or informational), (2) competitive (or persuasive), and (3) reminder.

Institutional Advertisements

Advertisements designed to build goodwill or an image for an organization, rather than promote a specific good or service.

1. What is the difference between pioneering and competitive ads?

A: Pioneering ads tell people what a product is, whereas competitive ads promote a specific brand’s features and benefits.

2. What is the purpose of an institutional advertisement?

A: To build goodwill or an image for an organization.

DEVELOPING THE
ADVERTISING PROGRAM

•Identifying the Target Audience
•Specifying Advertising Objectives
•Setting the Advertising Budget

FIGURE 19-1 Super Bowl, super dollars. Pepsi and Monster.com place ads

DEVELOPING THE
ADVERTISING PROGRAM

•Designing the Advertisement

•Message Content
•Creating the Actual Message

1. What are the characteristics of good advertising objectives?

A: (1) A well-defined target audience, (2) measurable, (3) over a specific time period.

2. What is a potential shortcoming of using a celebrity spokesperson?

A: The spokesperson’s image may change to become inconsistent with the company or brand.

DEVELOPING THE
ADVERTISING PROGRAM

•Selecting the Right Media

•Choosing a Medium and a Vehicle within That Medium

FIGURE 19-2 U.S. advertising expenditures, by category (data in millions of dollars)

DEVELOPING THE
ADVERTISING PROGRAM

•Basic Terms

§Reach
§Rating
§Frequency
§Gross Rating Points
§Cost Per Thousand

The number of people or households exposed to an advertisement.

The percentage of households in a market that are tuned to a particular TV show or radio station.

The average number of times a person in the target audience is exposed to a message or advertisement.

Gross Rating Points

A reference number for advertisers, created by multiplying reach (expressed as a percentage of the total market) by frequency.

Cost per Thousand

The cost of reaching 1,000 individuals or households with an advertising message in a given medium.

FIGURE 19-3 The language of the media buy

DEVELOPING THE
ADVERTISING PROGRAM

•Different Media Alternatives

•Television
§Infomercials
•Radio
•Magazines
•Newspapers
•Internet
•Outdoor

•Internet
•Outdoor
•Other Media
•Selection Criteria

•Scheduling the Advertising

Program-length (30-minute) advertisements that take an educational approach to communication with potential consumers.

FIGURE 19-4 Advantages and Disadvantages

DEVELOPING THE
ADVERTISING PROGRAM

Scheduling the Advertising

1. You see the same ad in Time and Fortune magazines and on billboards and TV. Is this an example of reach or frequency?

A: Frequency

2. Why has the Internet become a popular advertising medium?

A: Large new audience, offers advantages over other forms primarily through combining their advantages, offers potential for tracking effectiveness.

3. What factors must be considered when choosing among alternative media?

A: Target audience media habits, product attributes, and cost.

EXECUTING THE
ADVERTISING PROGRAM

•Pretesting the Advertising

•Portfolio Tests
•Jury Tests
•Theater Tests

Tests conducted before an advertisement is placed to determine whether it communicates the intended message or to select among alternative versions of an advertisement.

EXECUTING THE
ADVERTISING PROGRAM

•Carrying Out the Advertising Program

§Full-service agency
§Limited-service agencies
§In-house agencies

Full-Service Agency

An advertising agency providing the most complete range of services, including market research, media selection, copy development, artwork, and production.

Limited-Service Agencies

Specializes in one aspect of the advertising process such as providing creative services to develop the advertising copy or buying previously unpurchased media space.

In-House Agencies

A company’s own advertising staff, which may provide full services or a limited range of services.

FIGURE 19-5 Alternative structures of ad agencies used to carry out the ad program

EVALUATING THE
ADVERTISING PROGRAM

•Posttesting the Advertising

•Aided Recall (Recognition-Readership)
•Unaided Recall
•Attitude Tests
•Inquiry Tests
•Sales Tests

•Making Needed Changes

Tests conducted after an advertisement has been shown to the target audience to determine whether it has accomplished its intended purpose.

1. Explain the difference between pretesting and posttesting advertising copy.

A: Pretesting is done to test alternative copy or to determine whether the ad communicates the intended message. Pretests are done before the ad is placed in the media. Posttesting determines whether the ad accomplished its intended purpose.

2. What is the difference between aided and unaided recall?

A: With aided recall, respondents see one or more actual ads on which they comment. With unaided recall, respondents are shown no ads and must rely on memory alone.

•Consumer-Oriented Sales Promotion

•Coupons
•Deals
•Premiums
•Contests
•Sweepstakes

•Samples
•Continuity Programs
•Point-of-Purchase Displays
•Rebates
•Product Placement

Consumer-Oriented
Sales Promotions

Sales tools used to support a company’s advertising and personal selling efforts directed to ultimate consumers, examples include coupons, sweepstakes, and samples.

Product Placement

Using a brand-name product in a movie, television show, video, or a commercial for another product.

FIGURE 19-6 Sales promotion alternatives

•Trade-Oriented Sales Promotions

•Allowances and Discounts
•Cooperative Advertising
•Training of Distributor’s Salesforces

Trade-Oriented
Sales Promotions

Sales tools used to support a company’s advertising and personal selling efforts directed to wholesalers, distributors, or retailers.

Cooperative Advertising

Advertising programs by which a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products.

1. Which sales promotional tool is most common for new products?

A: Samples

2. What’s the difference between a coupon and a deal?

A: A coupon provides a reduced price for an item based on redemption. A deal is a short-term price reduction.

3. Which trade promotion is used on an ongoing basis?

A: Trade allowance

PUBLIC RELATIONS

Methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost.

INCREASING THE VALUE
OF PROMOTION

•Building Long-Term Relationships
with Promotions
•Self-Regulation

1. What is a news release?

A: An announcement regarding changes in a company or its product line.

2. What is the difference between government regulation and self-regulation?

A: Government regulation involves laws or other controls set by an agency or local, state, or federal government, whereas self-regulation involves ethical guidelines for business practices set by advertising agencies, trade associations, and marketing organizations.

Chapter 19 - Summary

Advertising may be classified as either product or institutional. Product advertising can take three forms: pioneering, competitive, or reminder. Institutional ads are one of these three or advocacy.
The promotion decision process described in Chapter 18 can be applied to each of the promotional elements such as advertising.
Copywriters and art directors have the responsibility of identifying the key benefits of a product and communicating them to the target audience with attention-getting advertising. Common appeals include fear, sex, and humor.
In selecting the right medium, there are distinct trade-offs among television, radio, magazines, newspapers, direct mail, outdoor, and other media. The decision is based on media habits of the target audience, product characteristics, message requirements, and media costs.
In determining advertising schedules, a balance must be made between reach and frequency. Scheduling must take into account buyer turnover, purchase frequency, and the rate at which consumers forget.
Advertising is evaluated before and after the ad is run. Pretesting can be done with portfolio, jury, or theater tests. Posttesting is done on the basis of aided recall, unaided recall, attitude tests, inquiry tests, and sales tests.
To execute an advertising program, companies can use several types of advertising agencies. These firms can provide a full range of services or specialize in creative or placement activities. Some firms use their own in-house agency.
Almost equal amounts of money are spent on sales promotion and advertising. Selecting sales promotions requires a good understanding of the advantages and disadvantages of each option.
There is a wide range of consumer-oriented sales promotions: coupons, deals, premiums, contests, sweepstakes, samples, continuity programs, point-of-purchase displays, rebates, and product placements.
Trade-oriented promotions consist of allowances and discounts, cooperative advertising, and training of distributors' salesforces. These are used at all levels of the channel.
The most frequently used public relations tool is publicity-a nonpersonal, indirectly paid presentation of an organization, good, or service conducted through new releases, news conferences, or public service announcements.
Efforts to improve the value of promotion include emphasizing long-term relationships and increasing self-regulation.

Chapter 19

Marketing: Advertising, Sales Promotion, and Public Relations