Advertising and Public Relations

1. 17 Advertising andPublic Relations

2. Learning Objectives • After studying this chapter, you should be able to: • Understand the characteristics, functions, and types of advertising. • Realize how people process advertising information and how it affects buyer behavior. • Discuss approaches to developing advertising campaigns. • Describe different advertising objectives and the message strategies used to achieve them. • Understand the decisions involved in selecting media and scheduling advertising. • Explain how marketers assess advertising effectiveness. • Appreciate the roles of public relations and publicity in marketing.

3. British Airways • British Airways has used its advertising in a variety of efforts. For example, the company’s “Future and Shape” strategy includes a marketing blitz to combat its damaging reputation as an expensive airline. • BA, which has seen its market share eroded by budget carriers, invests heavily in tactical advertising to promote competitive fares to Europe. Recent plans also include heavy use of public relations to introduce its lower fares and to fight against budget airlines such as easyJet.

4. Total US Advertising – 2004 Medium Expenditures ($ million) • Network TV • Newspapers • Spot TV • Magazines • Cable TV networks • Syndicated TV • National newspapers • National spot radio • Outdoor • Internet • $ 22,500 • 24,600 • 17,300 • 21,800 • 14,200 • 3,900 • 3,300 • 2,600 • 3,200 • 7,400

5. Advertising Defined Advertising A marketing communications element that is persuasive, nonpersonal, paid for by an identified sponsor, and disseminated through mass channels of communication to promote the adoption of goods, services, persons, or ideas.

6. Global Expenditures Close to $300 Billion World's Top Five Advertising Agencies

7. Classification of Advertising TargetAudience GeographicArea Medium Purpose • Advertising can be classified by target audience, geographic area, medium, and purpose.

8. Classification of Advertising TargetAudience GeographicArea Medium Purpose • Consumer advertising: Aimed at people who buy the product for their own or someone else’s personal use. • Business advertising: Aimed at people who buy or specify goods and services for use in business: • Industrial • Trade • Professional • Agricultural (farm)

9. Classification of Advertising TargetAudience GeographicArea Medium Purpose • Local (retail) advertising: Advertising by businesses whose customers come from only one city or local trading area. • Regional advertising: Advertising for products sold in one area or region, but not the whole country. • National advertising: Advertising aimed at customers in several regions of the country. • International advertising: Advertising directed at foreign markets.

10. Classification of Advertising TargetAudience GeographicArea Medium Purpose • Print advertising: Newspaper, magazine. • Broadcast (electronic) advertising: Radio, TV. • Out-of-home advertising: Outdoor, transit. • Direct-mail advertising: Advertising sent through the mail.

11. Classification of Advertising TargetAudience GeographicArea Medium Purpose • Product advertising: Intended to promote goods and services. • Nonproduct (corporate or institutional) advertising: Intended to promote firm’s mission or philosophy rather than a product. • Commercial advertising: Intended to promote goods, services, or ideas with the expectancy of making a profit.

12. Classification of Advertising TargetAudience GeographicArea Medium Purpose • Noncommercial advertising: Sponsored by or for a charitable institution, civic group, or religious or political organization. • Action advertising: Intended to bring about immediate action on the part of the reader. • Awareness advertising: Intended to build the image of a product or familiarity with the product’s name and package.

13. Hierarchy of Effects • Advertising’s influence on consumers is often explained by using the hierarchy of effects, or information-processing, model. • Of course, not every consumer consciously, or even subconsciously, goes through a sequence of steps for all ads. Yet each stage of this hierarchy represents a specific goal for advertisers to pursue.

14. Influences on Ad Processing Motivation Motivation is related to the concept of consumer involvement, or the personal relevance or importance of the marketing communications message. Ability Abilityimplies the buyer knows enough about the product category to understand the advertised message. Opportunity Opportunityis the extent to which distractions or limited exposure time affect the buyer’s attention to brand information in an ad.

15. Advertising Development and Evaluation

16. Message Strategy Alternatives • Subjective Claims • Expansion Advertising • Comparative Advertising • Emotional Appeals • Fear Appeals • Celebrity Endorsement • Humor Appeals • Subliminal Advertising • Advertorial • Infomercial • Product Placement Advertising

17. Reach Frequency Selecting and Scheduling Media MediaClasses MediaVehicles Media Schedules Evaluation Television Magazines Newspapers Radio Outdoor Transit Direct Mail Specific vehicle depends on the cost effective- ness of a particular outlet for desired market. Pre-testing Post-testing Sales Effectiveness Evaluation

18. Important Research Findings • 1. Advertising elasticities are higher for durables than nondurables. • 2. Price promotion elasticities are up to 20 times greater than advertising elasticities. • 3. Advertising elasticities are greater early in the product life cycle and for established brands. • 4. The first exposures to advertising are most important to short-term sales. • 5. Price advertising increases price sensitivity, whereas nonprice advertising decreases price sensitivity.

19. Ethical and Legal Issues • Is advertising manipulative? • Is advertising deceptive or misleading? • How does advertising affect children? • Is advertising intrusive? • Cause-related advertising • Advertising harmful products

20. Public Relations • Public relations (PR) is often used as a complement to support advertising, personal selling, and sales promotions for disseminating marketing communications. Publics include: Customers Community Members Employees News Media Stockholders Government

21. Marketing Public Relations • Public relations functions designed to support marketing activities are termed marketing public relations. These activities are as follows: • Building marketplace excitement before media advertising breaks. • Creating advertising news where there is no product news. • Introducing a product with little or no advertising. • Providing a value-added customer service. • Building brand-to-customer bonds. • Influencing the influentials (opinion leaders). • Defending products at risk and giving consumers a reason to buy.

22. Summary • After studying this chapter, you should be able to: • Understand the characteristics, functions, and types of advertising. • Realize how people process advertising information and how it affects buyer behavior. • Discuss approaches to developing advertising campaigns. • Describe different advertising objectives and the message strategies used to achieve them. • Understand the decisions involved in selecting media and scheduling advertising. • Explain how marketers assess advertising effectiveness. • Appreciate the roles of public relations and publicity in marketing.