chapter 15copyright ©2008 by south-western, a division of thomson learning. all rights reserved 1...

Chapter 15 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1

MKTG

Designed byAmy McGuire, B-books, Ltd.

Prepared byDeborah Baker, Texas Christian University

Lamb, Hair, McDaniel 2007-2008

15

CHAPTERAdvertising and Public Relations


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

LO1

LO2

LO3


Learning Outcomes

Describe media evaluation and selection techniques

Discuss the role of public relations in the promotional mix

LO4

LO5


Discuss the effects of

advertising on market share and consumers

The Effects of AdvertisingThe Effects of AdvertisingLO1


LO1

The Effects of Advertising

U.S. advertising was almost $300 billion in 2006

In 2005, 32 companies spent over $1 billion each

The advertising industry is small—only 155,000 employed by the 12,000 advertising agencies

Ad budgets of some firms are almost $4 billion annually


LO1

The Effects of Advertising

Top Ten Leaders by U.S.Advertising Spending

Top Ten Leaders by U.S.Advertising Spending


LO1

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.

Beyond a certain level of spending, diminishing returns set in.

New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits.


LO1

The Effects of Advertising on Consumers

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.


REVIEW LEARNING OUTCOMELO1

Effects of Advertising


Identify the major types of advertising

Major Types of AdvertisingMajor Types of AdvertisingLO2


Major Types of Advertising

LO2

InstitutionalAdvertising

InstitutionalAdvertising

Enhances a company’s image rather than promotes a particular product.

Enhances a company’s image rather than promotes a particular product.

ProductAdvertising

ProductAdvertising

Touts the benefits of a specific good or service.

Touts the benefits of a specific good or service.


Major Types of Advertising

LO2

Corporate identityCorporate identity

PioneeringPioneering

CompetitiveCompetitive

ComparativeComparative

ProductAdvertising

ProductAdvertising

InstitutionalAdvertisingInstitutionalAdvertising

Advocacy advertisingAdvocacy advertising


Product Advertising

LO2

PioneeringPioneeringPioneeringPioneering Stimulates primary demand for new

product or category Used in the PLC introductory stage

CompetitiveCompetitiveCompetitiveCompetitive Influences demand for brand in the

growth phase of the PLC Often uses emotional appeal

ComparativeComparativeComparativeComparative Compares two or more competing

brands’ product attributes Used if growth is sluggish, or if

competition is strong

Online

http://www.pizzahut.comhttp://www.papajohns.com



The Major Types of Advertising


Discuss the creative decisions in developing an

advertising campaign

Creative Decisions in AdvertisingCreative Decisions in AdvertisingLO3


Creative Decisions in Advertising

LO3

A series of related

advertisements focusing on a

common theme, slogan, and set

of advertising appeals.

AdvertisingCampaign

AdvertisingCampaign


Creative Decisions in Advertising

LO3

Determine the advertising objectives

Make creative decisions Make media decisions

Evaluate the campaign


Setting Objectives: The DAGMAR Approach

LO3

Define target audience Define target audience

Define desired percentage change Define desired percentage change

Define the time frame for change Define the time frame for change


Creative Decisions

LO3

Develop and evaluate advertising appealsDevelop and evaluate advertising appeals

Execute the messageExecute the message

Evaluate the campaign’s effectivenessEvaluate the campaign’s effectiveness

Identify product benefitsIdentify product benefits


Identify Product Benefits

LO3

“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


Identify Product Benefits

LO3

Attribute

Benefit

“Powerade’s new line has been reformulated to combine the scientific

benefits of sports drinks with B vitamins and to speed up energy

metabolism.”

“So, you’ll satisfy your thirst with a great-tasting drink that will power you

throughout the day.”

- So?


Advertising Appeals

LO3

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


Unique Selling Proposition

LO3

A desirable, exclusive, and believable

advertising appeal selected as the

theme for a campaign.

Unique SellingProposition

Unique SellingProposition


Executing the Message

LO3

Mood or Image

Mood or Image

MusicalMusical

Demon-stration

Demon-stration

ScientificScientific

Real/AnimatedProductSymbols

Real/AnimatedProductSymbols

FantasyFantasy

LifestyleLifestyleSlice-of-LifeSlice-of-Life

HumorousHumorous

Spokes-person/

Testimonial

Spokes-person/

Testimonial



Creative Decisions for Ad CampaignSet

advertisingobjectives

Identify benefits

Develop appeal

Evaluate campaign results

Evaluatingresults helpsmarketersadjust objectivesfor futurecampaigns

Execute message


Describe media evaluation

and selection techniques

Media Decisions in AdvertisingMedia Decisions in AdvertisingLO4


Media Decisions in Advertising

LO4

NewspapersNewspapers

MagazinesMagazines

Yellow PagesYellow Pages

InternetInternet

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Direct MailDirect Mail

Trade ExhibitsTrade Exhibits

Cooperative AdvertisingCooperative Advertising

BrochuresBrochures

CouponsCoupons

CatalogsCatalogs

Special EventsSpecial Events

Monitored MediaMonitored Media Unmonitored MediaUnmonitored Media


Major Advertising Media

LO4

NewspapersNewspapers

MagazinesMagazines

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Yellow PagesYellow Pages

InternetInternet


Newspapers

LO4

AdvantagesAdvantages

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

DisadvantagesDisadvantages

Limited demographic selectivity

Limited color Low pass-along rate May be expensive


LO4B

eyond

the

Book

Free Newspapers?

The new Baltimore Examiner is delivering 250,000 newspapers—at no charge and unsolicited!

Advertising brings in the revenue for this niche publication targeting households with income of $73,000 or more.

The ads are $2,900 for a full page, compared with $17,000 for its competition, the Baltimore Sun.

The Examiner is betting that low ad rates and the target market will be a valuable proposition to advertisers.

SOURCE: Joseph T. Hallinan, “Do New Free Dailies Mean Sun is Setting for Paid Newspapers?,” Wall Street Journal, April 5, 2006, B1.


An arrangement in which the

manufacturer and the retailer

split the costs of advertising

the manufacturer’s brand.

Cooperative Advertising

LO4

CooperativeAdvertising

CooperativeAdvertising


Magazines

LO4


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


Radio

LO4


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


Television

LO4


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


LO4B

eyond

the

Book

TV Advertising: Is Less More?

The number of ads in TV shows is a longstanding complaint of viewers and advertisers.

The media is cluttered and consumers change channels or speed through commercials on a DVR.

Tests are being conducted to feature shorter commercial pods.

SOURCE: Suzanne Vranica, “TV-Ad Test to Show if Less is More,”

Wall Street Journal, April 5,2006, B3.

Yea

r

Commercial Minutesper Hour

13.5 14 14.5 15 15.5

2000

01

02

03

04

05


Outdoor Media

LO4


Repetition Moderate cost Flexibility Geographic selectivity


Short message Lack of demographic

selectivity High “noise” level


Internet

LO4


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

http://www.fox.comhttp://www.abc.com


Alternative Media

LO4

Ads in MoviesAds in Movies

Interactive KiosksInteractive Kiosks

Computer Screen Savers

Computer Screen Savers

Shopping CartsShopping Carts

DVDsDVDs

AdvertainmentsAdvertainments

Cell Phone AdsCell Phone Ads

Subway Tunnel AdsSubway

Tunnel Ads

Floor AdsFloor Ads

Video Game AdsVideo Game Ads


LO4B

eyond

the

Book

Videogame Advertising

Microsoft plans to acquire 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.

SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,” Wall Street Journal, April 26,2006, B1.


LO4B

eyond

the

Book

Directory Assistance Advertising

Companies are offering free telephone directory assistance—but there’s an advertisement first.

The audio ads are narrowly targeted, and are 10 to 12 seconds.

The growth of such free services could represent another change in the telecom industry.

Dial 1-800-FREE411 or 1-800-411-METRO

SOURCE: Rebecca Buckman, “Your Listing, and a Word From Our Sponsor,” Wall Street Journal, April 20,2006, B1.


Qualitative Factors in Media Selection

LO4

Attention to the commercial and the program

Program liking

Lack of distractions

Other audience behaviors


Media Scheduling

LO4

ContinuousMedia Schedule

Flighted Media Schedule

PulsingMedia Schedule

SeasonalMedia 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.


LO4B

eyond

the

Book

Media Scheduling on the Web

Competition for Web advertising spots is driving up prices.

Some Web advertisers now run campaigns based on time of day. Examples:● McDonald’s: breakfast meals during

morning hours ● Xerox: copier ads during the workday● Budweiser: beer ads on Friday afternoons

Scheduling Web ads during prime times is a more efficient use of ad dollars and more targeted.

SOURCE: David Kesmodel, “More Marketers Place Web Ads by Time of Day,” Wall Street Journal, June 23, 2006, B1.



Media Evaluation and Selection

Scheduling:

continuous

flighted

pulsing

seasonal

Winter Spring Summer Fall

Type: NewspaperMagazineRadioTelevision

OutdoorInternetAlternative

Considerations:Mix How much of each?Cost per contact How much per person?Reach How many people?Frequency How often?Audience How targeted is selectivity audience?


Discuss the role of public

relations in the promotional mix

Public RelationsPublic RelationsLO5


Public RelationsLO5

The element in the promotional

mix that:

Public Relations

Public Relations

evaluates public attitudes

identifies issues of public concern

executes programs to gain public acceptance


Functions of Public RelationsLO5

Press relations Press relations

Product publicityProduct publicity

Corporate communicationCorporate communication

Public affairsPublic affairs

LobbyingLobbying

Employee and investor relationsEmployee and investor relations

Crisis managementCrisis management


Public Relations ToolsLO5

Product placementProduct placement

Consumer educationConsumer education

Event sponsorshipEvent sponsorship

Issue sponsorshipIssue sponsorship

Internet Web sitesInternet Web sites

New product publicityNew product publicity

Online

http://www.vw.comhttp://www.chevrolet.com


LO5B

eyond

the

Book

Example of Consumer Education

Corporations are teaching public school students about personal finance.

People under age 25 are a fast-growing group for credit card debt increases and bankruptcy.

Is it appropriate to use educational materials with a corporate identity?

How should financial literacy be taught?

SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,” Wall Street Journal, April 8-9, 2006, B1.


Managing Unfavorable Publicity

LO5

A coordinated effort to handle the

effects of unfavorable publicity or

of an unfavorable event.

CrisisManagement

CrisisManagement


Biz Flix

LO5 EdTV



The Role of Public Relations

chapter 15copyright ©2008 by south-western, a division of thomson learning. all rights reserved 1...

Documents

chapter advertising

effects of advertising

advertising objectives

advertising appeals

advertising industry

advertising spending

advertising campaign

division of thomson