Chapter 11 Advertising, sales promotion and public relations

1. Chapter 11Advertising, sales promotion and public relations

2. Learning objectives 1 Discuss the effect advertising has on market share, consumers,brand loyalty and perception of product attributes 2 Identify the main types of advertising 3 Describe the advertising campaign process 4 Describe media evaluation and selection techniques

3. Learning objectives (cont.) 5 Define and state the objectives of sales promotion 6 Discuss the most common forms of consumer sales promotion 7 List the most common forms of trade sales promotion 8 Discuss the role of public relations in the promotional mix

4. Learning objective 1 Discuss the effect advertising has on market share, consumers, brand loyalty and perception of product attributes Define the term marketing

5. 1 Advertising • Australia’s advertising spending exceeds US$3370 million per year. • The industry is small in Australia – there are only about 6000 people in the top 150 agencies. • Ford Australia spent $500 million to launch new Explorer in 2001.

6. 1 Advertising and market share • New brands spend proportionately more for advertising than old ones. • A certain level of exposure is needed to affect purchase habits. • Beyond a certain level, diminishing returns set in.

7. 1 Advertising and the consumer • The average Australian citizen is exposed to hundreds of ads each day. • Advertising may change a consumer’s attitude toward a product. • Advertising can affect consumer ranking of brand attributes.

8. Learning objective 2 Describe four marketing management philosophies. Identify the main types of advertising

9. 2 Major types of advertising Institutional advertising Designed to enhance a company’s image rather than promote a particular product. Product advertising Designed to tout the benefits of a specific good or service.

10. 2 Major types of advertising (cont.) • Institutional advertising • Enhances corporation’s identity • Advocacy advertising • Product advertising • Pioneering • Competitive • Comparative

11. 2 Product advertising • Pioneering • Stimulates primary demand for new product or category. • Competitive • Influences demand for brand in the growth phase of the product life cycle. • Often uses emotional appeal. • Comparative • Compares two or more competing brands’ product attributes. • Used if growth is sluggish or if competition is strong.

12. Learning objective 3 Describe four marketing management philosophies. Describe the advertising campaign process

13. 3 Advertising campaign A series of related advertisements focusing on a common theme, slogan and set of advertising appeals.

14. 3 Steps in creating an advertising campaign Determine campaign objectives Make creative decisions Make media decisions Evaluate the campaign

15. 3 Creative decisions • Identify product benefits • Develop and evaluate advertising appeals • Execute the message • Evaluate the campaign’s effectiveness

16. 3 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.

17. 3 Advertising appeal Reason for a person to buy a product.

18. 3 Common advertising appeals Profit Product saves, makes or protects money Health Appeals to body-conscious or health seekers Love or romance Used in selling cosmetics and perfumes Fear Social embarrassment, old age, losing health Reason for use of celebrity spokespeople Admiration Convenience Used for fast foods and microwave foods Fun and pleasure Key to advertising vacations, beer, parks Vanity and egotism Used for expensive or conspicuous items Environmental consciousness Centres around environmental protection

19. 3 Common executional styles • Slice-of-life • Lifestyle • Spokesperson/testimonial • Fantasy • Humorous • Real/animated product symbols • Mood or image • Demonstration • Musical • Scientific

20. 3 Unique selling proposition Desirable, exclusive and believable advertising appeal selected as the theme for a campaign.

21. Learning objective 4 Describe media evaluation and selection techniques

22. 4 Media types • Newspapers • Magazines • Radio • Television • Outdoor • Internet • Alternative media

23. 4 Advertising spending for Australia AFA

24. 4 Newspapers • Advantages • Year-round readership • Geographic selectivity • Immediacy • High individual market coverage • Short lead time • Disadvantages • Limited demographic selectivity • Little color • May be expensive • Low pass-along rate • Clutter • Mass-market medium

25. 4 Cooperative advertising An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand.

26. 4 Magazines • Advantages • Good reproduction • Demographic selectivity • Regional/local selectivity • Long advertising life • High pass-along rate • Disadvantages • Higher cost per contact • Long-term advertiser commitments • Slow audience build-up • Limited demonstration capabilities • Lack of urgency • Long lead time

27. 4 Radio • Advantages • Selectivity and audience segmentation • Immediate and portable • Geographic flexibility • Entertainment carryover • Short-term ad commitments Disadvantages • No visual treatment • Short advertising life • High frequency to generate retention • Commercial clutter • Background distractions

28. 4 Television • Advantages • Wide diverse audience • Low cost per thousand • Creative and demonstrative • Immediacy of messages • Entertainment carryover • Demographic selectivity with cable • Disadvantages • Short life of message • Expensive with high campaign cost • Little demographic selectivity with network • Long-term advertiser commitments • Long lead times • Clutter

29. 4 Outdoor media • Advantages • High exposure frequency • Moderate cost • Flexibility • Geographic selectivity • Broad, diverse market • Disadvantages • Short message • Lack of demographic selectivity • High ‘noise’ level

30. 4 Internet and World Wide Web • Advantages • Fast growing • Ability to reach narrow target audience • Short lead time • Moderate cost • Disadvantages • Difficult to measure ad effectiveness and ROI • Ad exposure relies on ‘click-through’ • Not all consumers have access to Internet

31. 4 Media selection considerations Factors influencing media mix decisions • Cost per contact • Reach • Frequency • Audience selectivity

32. 4 Media selection considerations (cont.) Cost per contact The cost of reaching one member of the target market. Reach The number of target consumers exposed to a commercial at least once during a time period. Frequency The number of times an individual is exposed to a message during a time period. Audience selectivity The ability of an advertising medium to reach a precisely defined market.

33. 4 Media scheduling • Continuous media schedule • Flighted media schedule • Pulsing media schedule • Seasonal media schedule

34. 4 Media scheduling (cont.) Continuous media schedule Advertising is run steadily throughout the period. Flighted media schedule Advertising is run heavily every other month or every two weeks. Pulsing media schedule Advertising combines continuous scheduling with flighting. Seasonal media schedule Advertising is run only when the product is likely to be used.

35. Learning objective 5 Define and state the objectives of sales promotion

36. 5 Sales promotion Marketing activities – other than personal selling, advertising and public relations – that stimulate consumer buying and dealer effectiveness.

37. 5 Sales promotion (cont.) • Sales promotion targets: • end consumers • trade customers

38. 5 Objectives of sales promotion Type of buyer Desired results Sales promotionexamples Loyal customers • Reinforce behaviour • Increase consumption • Change timing • Loyalty marketing • Bonus packs Competitor’s customers • Break loyalty • Persuade to switch • Sampling • Sweepstakes, contests, premiums Brand switchers • Persuade to buy your brand more often • Price-lowering promotion • Trade deals Price buyers • Appeal with low prices • Supply added value • Coupons, price-offpackages, refunds • Trade deals

39. Learning objective 6 Discuss the most common forms of consumer sales promotion

40. 6 Popular tools for consumer sales promotion • Coupons and rebates • Premiums • Loyalty programs • Contests • Sampling • Point of purchase

41. 6 Tools for consumer sales promotion Coupon A certificate that entitles consumers to an immediate price reduction. Rebate A cash refund given for the purchase of a product during a specific period. Premium An extra item offered to the consumer, usually in exchange for some proof of purchase.

42. 6 Tools for consumer sales promotion (cont.) Loyalty marketing program A promotional program designed to build long-term, mutually beneficial relationships between a company and key customers. Frequent buyer program A loyalty program in which loyal consumers are rewarded for making multiple purchases.

43. 6 Tools for consumer sales promotion (cont.) Contest Promotion that requires skill or ability to compete for prizes. Sweepstake Promotion that depends on chance or luck, with free participation. Sampling Promotional program that allows the consumer the opportunity to try a product or service for free.

44. 6 Sampling • Direct mail • Door-to-door delivery • Packaging with another product • Retail store demonstration

45. 6 Point-of-purchase displays • Build traffic • Advertise the product • Induce impulse buying

46. Learning objective 7 List the most common forms of trade promotion

47. 7 Unique tools for trade sales promotion • Trade allowances • Push money • Training • Free merchandise • Store demonstration • Conventions and trade shows

48. 7 Trade allowance A price reduction offered by manufacturers to intermediaries such as wholesalers and retailers.

49. 7 Push money Money offered to channel intermediaries to encourage them to ‘push’ products – that is, to encourage other members of the channel to sell the products.

50. Learning objective 8 Discuss the role of public relations in the promotional mix