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10. Marketing Lamb, Hair, McDaniel. Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University. Advertising and Public Relations. CHAPTER 17. Learning Outcomes. Discuss the effects of advertising on market share and consumers - PowerPoint PPT PresentationTRANSCRIPT
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1Copyright ©2009 by Cengage Learning Inc. All rights reserved
Designed by Eric Brengle B-books, Ltd.
CHAPTER
17
Advertising and Public Relations
Prepared byAmit Shah
Frostburg State University
MarketingLamb, Hair, McDaniel
10
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Learning Outcomes
2
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
LOI
LO2
LO3
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Learning Outcomes
3
Describe media evaluation and selection techniques
Discuss the role of public relations in the promotional mix
LO5
LO4
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The Effects of Advertising
4
Discuss the effects of advertising on
market share and consumers
LOI
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The Effects of Advertising • U.S. advertising was forecasted at
nearly $480 billion in 2008
• In 2005, 32 companies spent over $1 billion each
• The advertising and marketing services employ 800,000 people
• Ad budgets of some firms are almost $4 billion annually
5
LOI
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The Effects of Advertising
6
LOI
Top Ten Leaders by U.S.Advertising Spending
Top Ten Leaders by U.S.Advertising Spending
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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.
7
LOI
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The Effects of Advertising on Consumers
8LOI
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.
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REVIEW LEARNING OUTCOMEEffects of Advertising
9
LOI
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Major Types of Advertising
10
Identify the major types of advertising
LO2
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Major Types of Advertising
11
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.
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Major Types of Advertising
12
LO2
Corporate identityCorporate identity
PioneeringPioneering
CompetitiveCompetitive
ComparativeComparative
ProductAdvertising
ProductAdvertising
InstitutionalAdvertisingInstitutionalAdvertising
Advocacy advertisingAdvocacy advertising
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Product Advertising
13
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
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REVIEW LEARNING OUTCOMEThe Major Types of Advertising
14
LO2
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Creative Decisions in Advertising
15
Discuss the creative decisions in developing an
advertising campaign
LO3
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Creative Decisions in Advertising
16
AdvertisingCampaign
AdvertisingCampaign
A series of related
advertisements focusing on a
common theme, slogan, and
set of advertising appeals.
LO3
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Creative Decisions in Advertising
17
LO3
Determine the advertising objectives
Make creative decisions Make media decisions
Evaluate the campaign
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Setting Objectives: The DAGMAR Approach
18LO3
Define target audienceDefine target audience
Define desired percentage changeDefine desired percentage change
Define the time frame for change Define the time frame for change
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Creative Decisions
19
LO3
Develop and evaluateadvertising appeals
Develop and evaluateadvertising appeals
Execute the message
Execute the message
Evaluate thecampaign’s effectiveness
Evaluate thecampaign’s effectiveness
Identify product benefits
Identify product benefits
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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
20
LO3
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Identify Product Benefits
21
LO3
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?
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Advertising Appeals
22
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
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Unique Selling Proposition
23
LO3
Unique SellingProposition
Unique SellingProposition
A desirable, exclusive, and
believable advertising
appeal selected as the
theme for a campaign.
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LO3
Executing the Message
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
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REVIEW LEARNING OUTCOMECreative Decisions for Ad Campaign
25
LO3
Setadvertisingobjectives
Identify benefits
Develop appeal
Evaluate campaign results
Evaluatingresults helpsmarketersadjust objectivesfor futurecampaigns
Execute message
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Media Decisions in Advertising
26
Describe media evaluation and
selection techniques
LO4
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Media Decisions in Advertising
27
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
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Major Advertising Media
28
LO4
NewspapersNewspapers
MagazinesMagazines
RadioRadio
TelevisionTelevision
Outdoor MediaOutdoor Media
Yellow PagesYellow Pages
InternetInternet
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Newspapers
29
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
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Cooperative Advertising
30
LO4
CooperativeAdvertising
CooperativeAdvertising
An arrangement in which the
manufacturer and the retailer
split the costs of advertising
the manufacturer’s brand.
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Magazines
31
LO4
AdvantagesAdvantages DisadvantagesDisadvantages
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
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Radio
32
LO4
AdvantagesAdvantages DisadvantagesDisadvantages
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
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Television
33
LO4
AdvantagesAdvantages DisadvantagesDisadvantages
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
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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.
34
LO4
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Outdoor Media
35
LO4
AdvantagesAdvantages DisadvantagesDisadvantages
Repetition
Moderate cost
Flexibility
Geographic selectivity
Short message
Lack of demographic selectivity
High “noise” level
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Internet
36
LO4
AdvantagesAdvantages DisadvantagesDisadvantages
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
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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.
37
LO4
SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,”
Wall Street Journal, April 26,2006, B1.
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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
38
LO4
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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
39
LO4
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Qualitative Factors in Media Selection
• Attention to the commercial and the program
• Involvement
• Program liking
• Lack of distractions
• Other audience behaviors
40
LO4
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Media Scheduling
41
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.
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REVIEW LEARNING OUTCOMEMedia Evaluation and Selection
42
LO4
Type: NewspaperMagazineRadioTelevisionOutdoorInternetAlternative
Considerations:
Mix How much of each?Cost per contact How much per person?Reach How many people?Frequency How often?Audience selectivity How targeted is audience?
Scheduling: continuous
flighted
pulsing
seasonal
Winter Spring Summer Fall
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Public Relations
43
Discuss the role of public relations
in the promotional mix
LO5
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Public Relations
44
Public RelationsPublic Relations
LO5
The element in the promotional
mix that:
evaluates public attitudes
identifies issues of public concern
executes programs to gain public acceptance
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Functions of Public Relations
45
LO5
Press relations Press relations
Product publicityProduct publicity
Corporate communicationCorporate communication
Public affairsPublic affairs
LobbyingLobbying
Employee and investor relationsEmployee and investor relations
Crisis managementCrisis management
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Public Relations Tools
46
LO5
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
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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?
47
LO5
SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,”
Wall Street Journal, April 8-9, 2006, B1.
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Managing Unfavorable Publicity
48
CrisisManagement
CrisisManagement
LO5
A coordinated effort to
handle the effects of
unfavorable publicity or of
an unfavorable event.
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REVIEW LEARNING OUTCOMEThe Role of Public Relations
49
LO5