Chapter Objectives • Tell what advertising is and describe the major types of advertising • Describe the process of developing an advertising campaign • Explain how marketers evaluate advertising • Explain what sales promotion is and describe the different types of trade and consumer sales promotion activities • Explain the role of public relations • Describe the steps in developing a public relations campaign
BZZAGENT.COM Real People, Real Choices • BzzAgent, Inc. (Joe Chernov) • Negative articles questioned “disclosure” in word-of-mouth marketing campaigns • What public relations strategy to use to respond to the criticism? • Option 1: take charge of the discussion. • Option 2: defend without being defensive. • Option 3: go quiet.
EXTREME MAKEOVER: HOME EDITION Advertising: The Image of Marketing • Advertising: nonpersonal communication paid for by an identified sponsor using mass media to persuade or inform an audience
Discussion • Some people say advertising is obnoxious, insults their intelligence, and promotes claims that are untrue. • Others argue it provides value for consumers. --What are some arguments on each side? --How do you feel about advertising?
Types of Advertising • Product advertising: focuses on a specific good/service
ROCK THE VOTE Types of Advertising (cont’d) • Institutional advertising: promotes the activities, personality, or point of view of an organization or company Advocacy advertising Public service announcement (PSA)
WWW.PRICELESS.COM Types of Advertising (cont’d) • Retail and local advertising: encourages customers to shop at a specific store or use a local service • Do-it-yourself advertising • “Generation C” phenomenon: consumer-generated ad content on the Web
Discussion • Chevy found that DIY advertising programs can sometimes backfire when consumers created anti-SUV TV commercials. • --Should companies avoid DIY campaigns? • --What are the benefits of DIY advertising?
LEO BURNETT WORLDWIDE Who Creates Advertising? • Advertising campaign: a coordinated, comprehensive plan that carries out promotion objectives and results in a series of ads placed in media over a period of time
Who Creates Advertising? (cont’d) • Limited-service agency • Full-service agency • Account management • Creative services • Research and marketing services • Media planning Motorola Video
Steps in Developing an Advertising Campaign • Step 1: Identify the target audiences • Step 2: Establish message and budget objectives • Step 3: Design the Ads • Creative strategy: process that turns a concept into an advertisement
Advertising Appeal: Central Idea of the Ad Reasons why: the Unique Selling Proposition (USP) Comparative advertising Demonstration Slice of life Lifestyle
Advertising Appeal: Central Idea of the Ad (cont’d) Testimonial Fear appeals Sex appeals Humorous appeals Slogans and jingles
Group Activity • As an account team for an advertising agency, your group has been assigned a new line of high- quality, high-priced makeup. • Consider different types of appeals: • USP Comparative advertising • Fear appeal Celebrity endorsement • Slice-of-life ad Sex appeal • Humor • Outline the strengths and weaknesses of each of these appeals for advertising the makeup.
Step 4: Pretest What the Ads Will Say • Pretesting: seeks to minimize mistakes by getting consumer reactions to ad messages before they appear in the media • Copy testing: measures effectiveness of ads
Step 5: Choose the Media Type(s) and Media Schedule • Media planning: develops media objectives, strategies and tactics • Aperture: is the best place and time to reach the target market
Where to Say It: Traditional Media • Television • Radio • Newspapers • Magazines • Directories • Out-of-home media • Place-based media
Discussion • When Internet travel company Hotels.nl began using blankets on sheep for advertising, one town fined the company for ignoring a ban on advertising along the highways. • --What are the positive and negative aspects for companies of using sheep, or even horses and cows, to advertise products? For consumers?
Where to Say It: Internet advertising • Banners • Buttons • Search engine and directory listings • Pop-up ads • Email • Spamming • Permission marketing
Discussion • Through TV remotes, DVDs, computers, and cable television, technology gives today’s consumers control over the advertising images they see. • --How has this affected the advertising industry so far? • --How do you think consumer control will affect advertising in the future?
Media Scheduling: When To Say It • Media schedule: specifies exact media to use and when to use it • Advertising exposure: defines degree to which the target market will see an advertising message in specific vehicles • Impressions: measures number of people exposed to a message in one or more vehicles
Media Scheduling: When To Say It (cont’d) • Reach: measures percentage of target market exposed to media vehicle • Frequency: measures average number of times a person in the target group will be exposed to the message
Media Scheduling: When To Say It (cont’d) • Gross rating points (GRPs) = reach X frequency • Cost per thousand (CPM): the cost to deliver a message to 1,000 people
Media Scheduling: How Often To Say It • Continuous schedule: puts out steady stream of advertising • Pulsing schedule: varies the amount of advertising • Flighting schedule: puts ads out in short, intense bursts
Step 6: Evaluate the Advertising • Posttesting: research on consumers’ responses to advertising they have seen or heard • Unaided recall • Aided recall
Sales Promotion • Programs designed to build interest in or encourage purchase of a product during a specified period of time • Deliver short-term sales results • Can target end consumers, channel partners, and/or employees
Sales Promotion DirectedToward the Trade: Trade Promotions • Discounts and deals • Merchandising allowances • Case allowances • Increasing industry visibility • Trade shows • Promotional products • Incentive programs (push money)
SMARTSOURCE.COM Sales Promotion DirectedToward Consumers • Price-Based Consumer Sales Promotion • Coupons • Price deals, refunds, and rebates • Frequency (loyalty/continuity) programs • Special/bonus packs
Discussion • Companies sometimes teach consumers a “bad lesson” by overusing sales promotion. • As a result, consumers expect the product always to be “on sale.” • --What are some products for which this bad lesson has occurred? • --How can companies prevent it?
FREESAMPLES.COM Sales Promotion DirectedToward Consumers (cont’d) • Attention-getting consumer promotion • Contests and sweepstakes • Premiums • Sampling • Point-of-purchase promotion • Product/brand placements • Cross-promotion
Group Project • Your group works for a firm producing several brands of household cleaning products. • --Develop recommendations for trade and consumer sales promotion activities for a new laundry detergent • --In a role-playing situation, present and defend your recommendations to your boss.
Public Relations • PR: communication function that seeks to build good relationships with an organization’s publics. • Publics include consumers, stockholders, legislators, and other firm stakeholders. • Basic rule of good PR: do something good, then talk about it.
Public Relations (cont’d) • Proactive PR activities stem from firm’s marketing objectives. • Publicity: unpaid communication about an organization that gets media exposure. • PR is even more important when firm’s image is at risk due to negative publicity. • PR is responsible for preparing a crisis management plan.
Discussion • Some critics denounce PR specialists, calling them “flacks” or “spin doctors” whose job is to hide the truth about a company’s problems • What is the proper role of PR within an organization? • Should PR specialists try to put a good face on bad news?
Objectives of Public Relations • Introducing new products to manufacturers • Introducing new products to consumers • Influencing government legislation • Enhancing image of a firm • Enhancing image of a city, region, or country • Calling attention to a firm’s involvement with the community
Planning a Public Relations Campaign • A statement of objectives • Situation analysis • Specification of publics, communicated messages, and specific program elements • Timetable and budget • Discussion of program evaluation plan
Public Relations Activities • Press releases (timely topics, research project stories, and consumer information releases) • Internal PR • Investor relations • Lobbying • Speech writing • Corporate identity
Public Relations Activities (cont’d) • Media relations • Sponsorships • Special events • Buzz-building: word-of-mouth/blogging • Advice and counsel
Group Activity • As PR professionals employed by your university, your group must develop strategies for improving your school’s PR program. --Write a memo to your university president with your recommendations.
Real People, Real Choices • BzzAgent, Inc. (Joe Chernov) • Joe chose option 1: take charge of the discussion. • BzzAgent issued a press release announcing it had enhanced its disclosure policy, becoming the first company to enforce compliance with disclosure policies.
Marketing Plan Exercise • Think about one of the following: • A new brand of toothpaste • Your local city or state • Your university • Outline an advertising campaign for the product and discuss the following: • The type of appeal • The main message • The media (include at least one print and one broadcast medium) • How you’ll develop the ads to share the same look and feel
Marketing in Action Case:You Make the Call • What is the decision facing Amazon? • What factors are important in understanding this decision situation? • What are the alternatives? • What decision(s) do you recommend? • What are some ways to implement your recommendation?
Keeping It Real: Fast-Forward to Next Class, Decision Time at IBM • Meet Esther Ferre, a General Manager at IBM. • IBM sales teams are responsible for IBM relationships with clients and are evaluated on maximizing revenue and profits. • The decision: How to allocate resources across a broad customer base?