© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/IrwinSlide 19-1.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-1

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-2

ADVERTISING, SALES

PROMOTION, AND PUBLIC RELATIONS

CHAPTER

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-3

AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

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

2. Describe the steps used to develop, execute, and evaluate an advertising program.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-4

AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

3. Explain the advantages and disadvantages to alternative advertising media.

4. Discuss the strengths and weaknesses of consumer-oriented and trade-oriented sales promotions.

5. Recognize public relations as an important form of communication.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-6

TYPES OF ADVERTISEMENTS

• Advertising

• Product Advertisements

Competitive (or Persuasive)

Pioneering (or Informational)

Comparative

Reminder

Reinforcement

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-17

TYPES OF ADVERTISEMENTS

• Institutional Advertisements

Pioneering Institutional

Advocacy

Competitive Institutional

Reminder Institutional

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-25

Concept Check

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

A: Pioneering ads tell people what a product is, what it can do, and where it can be found. Competitive ads promote a specific brand’s features and benefits to persuade the target market to select the firm’s brand rather than that of a competitor.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-26

Concept Check

2. What is the purpose of an institutional advertisement?

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-27

DEVELOPING THEADVERTISING PROGRAM

• Identifying the Target Audience

• Setting the Advertising Budget

• Specifying Advertising Objectives

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-28

FIGURE 19-1 FIGURE 19-1 Super Bowl, super dollars, super audience

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-31

DEVELOPING THEADVERTISING PROGRAM

• Designing the Advertisement

Message Content

• Fear Appeals

• Sex Appeals

• Humorous Appeals

Creating the Actual Message

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

ETHICS AND SOCIAL RESPONSIBILITY ALERT

Who Decides What Is“Appropriate” Advertising?

Slide 19-35

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-39

FIGURE 19-A FIGURE 19-A Top 15 advertising slogans of the century

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-40

FIGURE 19-B FIGURE 19-B Top 10 advertising icons of the century

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-41

Concept Check

1. What are characteristics of good advertising objectives?

A: The same guidelines used for setting promotion objectives described in Chapter 18: They should (1) be designed for a well-defined target audience, (2) be measurable, and(3) cover a specified time period.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-42

Concept Check

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

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-43

DEVELOPING THEADVERTISING PROGRAM

• Selecting the Right Media

Advertising Media

• Maximizing Exposure

Choosing a Medium and a Vehicle within That Medium

• Minimizing Costs

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-44

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-45

DEVELOPING THEADVERTISING PROGRAM

• Selecting the Right Media

Basic Terms

• Frequency

• Gross Rating Points (GRPs)

• Reach

• Rating

• Cost per Thousand (CPM)

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-46

FIGURE 19-3 FIGURE 19-3 The language of the media buyer

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-47

DEVELOPING THEADVERTISING PROGRAM

• Different Media Alternatives

Television

• Wasted Coverage

• Digital Video Recorders (DVRs)

• Out-of-Home TV

• “Spot” Ads

• Infomercials

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-48

FIGURE 19-4 FIGURE 19-4 Advantages and disadvantages of major advertising media

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-50

Ronco InfomercialsWhat are the advantages and disadvantages

of this medium?

Click on Icon

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-51

DEVELOPING THEADVERTISING PROGRAM

• Different Media Alternatives

Radio

Magazines

Newspapers

Yellow Pages

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-59

DEVELOPING THEADVERTISING PROGRAM

• Different Media Alternatives

Internet

• Rich Media

• Online Advertising Options

• Permission-Based Advertising

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

MARKETING NEWSNET

Does Internet Advertising Really Work?

Slide 19-61

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-62

DEVELOPING THEADVERTISING PROGRAM

• Different Media Alternatives

Outdoor

• Billboards

• Transit Advertising

• Place-Based Media

Other Media

Selection Criteria

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-65

DEVELOPING THEADVERTISING PROGRAM

• Scheduling the Advertising

Buyer Turnover

Purchase Frequency

Forgetting Rate

Continuous (Steady) Schedule

Flighting (Intermittent) Schedule

Pulse (Burst) Schedule

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-66

Concept Check

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-67

Concept Check

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

A: The Internet offers a visual message, can use both audio and video, is interactive through rich media, and tends to reach younger consumers.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-68

Concept Check

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

A: The media habits of the target audience, the product’s attributes, and the reach and cost, as measured by CPM.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-69

EXECUTING THEADVERTISING PROGRAM

• Pretesting the Advertising

Portfolio Tests

Jury Tests

Theater Tests

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-70

EXECUTING THEADVERTISING PROGRAM

• Carrying Out the Advertising Program

Full-Service Agency

Limited-Service Agencies

In-House Agencies

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-71

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-72

EVALUATING THEADVERTISING PROGRAM

• Posttesting the Advertising

Aided Recall (Recognition-Readership)

Unaided Recall

Attitude Tests

Inquiry Tests

Sales Tests

• Making Needed Changes

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-74

Concept Check

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

A: Pretests are conducted before ads are placed in any medium to determine whether the ads communicate the intended message or select among alternative versions. Posttests are shown to the target audience to determine whether it accomplished its intended purpose.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-75

Concept Check

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

A: Aided recall involves showing an ad to respondents who then are asked if their previous exposure to it was through reading, viewing, or listening. Unaided recall involves asking respondents if they remember an ad without any prompting to determine if they saw or heard its message.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-76

SALES PROMOTION

• Consumer-Oriented Sales Promotion

Coupons

Deals

Premiums

• Self-Liquidating

Contests

Sweepstakes

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-77

FIGURE 19-6 FIGURE 19-6 Sales promotion alternatives

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-80

SALES PROMOTION

• Consumer-Oriented Sales Promotion

Samples

Loyalty Programs

Point-of-Purchase Displays

Rebates

Product Placement

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-85

SALES PROMOTION

• Trade-Oriented Sales Promotion

Allowances and Discounts

Cooperative Advertising

• Merchandise Allowance

• Case Allowance

• Finance Allowance

Training of Distributors’ Salesforces

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-86

Concept Check

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

A: sales promotion

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-87

Concept Check

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.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-88

Concept Check

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

A: trade allowance

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-89

PUBLIC RELATIONS

• Publicity Tools

News Release

News Conference

Public Service Announcements (PSAs)

Personal Appearance/Visibility

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-92

INCREASING THE VALUEOF PROMOTION

• Building Long-Term Relationships with Promotion

• Self-Regulation

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-93

Concept Check

1. What is a news release?

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-94

Concept Check

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

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-95

ADVERTISINGON THE INTERNET

GOING ONLINE

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-96

1. Visit the Interactive Advertising Bureau website and review the “Standards and Guidelines” section to determine what type of online ad you would recommend.

How many types of (a) rectangles and pop-ups, (b) banners and buttons, and (c) skyscrapers does the IAB specify?

Going Online

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-97

2. Describe the profile of the audience for each of the websites.

Going Online

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-98

3. What does the IAB suggest you include in your online advertising privacy policy?

Going Online

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-99

A HISTORICAL LOOKAT ADVERTISING

SUPPLEMENTALLECTURE NOTE 19-1

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-100

SHOULD ADVERTISERS BELIEVE TV RATINGS?

SUPPLEMENTALLECTURE NOTE 19-2

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-101

ONLINE ADVERTISING TAKES OFF!

SUPPLEMENTALLECTURE NOTE 19-3

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-102

A HISTORICAL LOOK ATTHE OBJECTIVES OFSALES PROMOTIONS

SUPPLEMENTALLECTURE NOTE 19-4

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-104

ARE YOU ALOYAL CUSTOMER?

SUPPLEMENTALLECTURE NOTE 19-5

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-105

FALLON WORLDWIDE:IN THE CREATIVITY BUSINESS

VIDEO CASE 19

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-107

1. Fallon Worldwide stresses its creativity, as shown by comments from the Fallon people in the case. In what ways do the Citi and BMW campaigns reflect their creativity? Compare the sources of the ideas in the two campaigns.

VIDEO CASE 19Fallon Worldwide

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-108

2. In the Citi and BMW campaignshow were (a) the target markets and (b) each brand’s positioning changed from the situation prior to the campaign?

VIDEO CASE 19Fallon Worldwide

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-109

3. Compare the media used for the Citi and BMW campaigns. Why were these media chosen? Do you expect the use of these or other media to change in the future?

VIDEO CASE 19Fallon Worldwide

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-110

4. How might Fallon and its clients measure the success of (a) the Citi and (b) the BMW campaigns?

VIDEO CASE 19Fallon Worldwide

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-111

VOLKSWAGEN:THE DRIVERS WANTED

CAMPAIGN

APPENDIX D CASE D-19

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-112

1. What were the primary promotional objectives for Volkswagen at the beginning of the “Drivers Wanted” campaign? What are Volkswagen’s current promotional objectives? How do you expect the promotional objectives for the overall Volkswagen brand and for specific car models, such as the Jetta or Touareg, to change over time?

APPENDIX D CASE D-19Volkswagen

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-113

2. What do you feel are the most valid measures for assessing the success of the Volkswagen advertising campaign? Explain why you feel that these are the best means of determining effectiveness.

APPENDIX D CASE D-19Volkswagen

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-114

3. Volkswagen’s promotional program has heavily emphasized a pull promotional strategy versus a push promotional strategy. Why? Is this emphasis likely to change over time?

APPENDIX D CASE D-19Volkswagen

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-115

Advertising

Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea byan identified sponsor.

Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea byan identified sponsor.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-116

Product Advertisements

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

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-117

Institutional Advertisements

Institutional advertisements are advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service.

Institutional advertisements are advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-118

Reach

Reach is the number of different people or households exposed to an advertisement.

Reach is the number of different people or households exposed to an advertisement.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-119

Rating

A rating is the percentage of households in a market that are tuned to a particular TV show or radio station.

A rating is the percentage of households in a market that are tuned to a particular TV show or radio station.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-120

Frequency

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

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-121

Gross Rating Points

Gross rating points (GRPs) is a reference number used by advertisersthat is obtained by multiplying reach (expressed as a percentage of the total market) by frequency.

Gross rating points (GRPs) is a reference number used by advertisersthat is obtained by multiplying reach (expressed as a percentage of the total market) by frequency.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-122

Cost per Thousand

Cost per thousand (CPM) is the cost of reaching 1,000 individuals or households with the advertising message in a given medium (M is the Roman numeral for 1,000).

Cost per thousand (CPM) is the cost of reaching 1,000 individuals or households with the advertising message in a given medium (M is the Roman numeral for 1,000).

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-123

Infomercials

Infomercials are program-length(30-minute) advertisements that take an educational approach to communication with potential customers.

Infomercials are program-length(30-minute) advertisements that take an educational approach to communication with potential customers.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-124

Pretests

Pretests are tests conducted before the advertisements are placed in any medium to determine whether it communicates the intended message or to select among alternative versions of the advertisement.

Pretests are tests conducted before the advertisements are placed in any medium to determine whether it communicates the intended message or to select among alternative versions of the advertisement.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-125

Full-Service Agency

A full-service agency is an advertising agency that provides the most complete range of services, including market research, media selection, copy development, artwork, and production.

A full-service agency is an advertising agency that provides the most complete range of services, including market research, media selection, copy development, artwork, and production.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-126

Limited-Service Agencies

Limited-service agencies are advertising agencies that specialize in one aspect of the advertising process such as providing creative services to develop the advertising copy or buying previously unpurchased media space.

Limited-service agencies are advertising agencies that specialize in one aspect of the advertising process such as providing creative services to develop the advertising copy or buying previously unpurchased media space.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-127

In-House Agencies

In-house agencies consists of the company’s own advertising staff,which may provide full services or a limited range of services.

In-house agencies consists of the company’s own advertising staff,which may provide full services or a limited range of services.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-128

Posttests

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

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-129

Consumer-OrientedSales Promotions

Consumer-oriented sales promotions are sales tools used to support a company’s advertising and personal selling directed to ultimate consumers.

Consumer-oriented sales promotions are sales tools used to support a company’s advertising and personal selling directed to ultimate consumers.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-130

Product Placement

Product placement is a sales promotion tool that uses a brand-name product in a movie, television show, video, or a commercial for another product.

Product placement is a sales promotion tool that uses a brand-name product in a movie, television show, video, or a commercial for another product.

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-131

Trade-oriented sales promotions are a Sales tools used to support a company’s advertising and personal selling directed to wholesalers, distributors, or retailers. Also called trade promotions.

Trade-oriented sales promotions are a Sales tools used to support a company’s advertising and personal selling directed to wholesalers, distributors, or retailers. Also called trade promotions.

Trade-OrientedSales Promotions

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-132

Cooperative Advertising

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

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

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Slide 19-133

Publicity Tools

Publicity tools consist of methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost. Examples include news releases, news conferences, and public service announcements.

Publicity tools consist of methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost. Examples include news releases, news conferences, and public service announcements.