Lamb, Hair, McDaniel

1. Lamb, Hair, McDaniel CHAPTER 16 Advertising, Public Relations and Sales Promotion

2. Basic Facts about Advertising U.S. advertising expenditure is related to economic conditions. In recent years, 30 companies spent more than $1 billion each. More than 100 companies spend over $300 million annually. 850,000 people work in media advertising such as newspapers, magazines, television, radio, and internet media. New brands with a small market share spend proportionally more for advertising and sales promotion than those with a large market share. Beyond a certain level of spending, diminishing returns set in. New brands require higher spending to reach a minimum level of exposure needed to affect purchase habits. 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.

3. Return on advertising expense (in sales or market share) Advertisingresponse function Money spent Relationship between Advertising and Market Share: Effects of Advertising Maintainingsales/share Buildingsales/share ____ change negative attitude to positive P Advertising can: P ____ reinforce positive attitude P ____ affect how consumers rank brand attributes

4. Corporate identity Institutional Advertising Advocacy advertising Pioneering Product Advertising Competitive Comparative Major Types of Advertising

5. Stimulates primary demand for new product or category • Used in the PLC introductory stage Pioneering • Influences demand for brand in the growth phase of the PLC • Often uses emotional appeal Competitive • Compares two or more competing brands’ product attributes • Used if growth is sluggish, or if competition is strong Comparative Product Advertising

6. Advertising and PLC

7. Creative Decisions in Advertising • Identify Product benefits • Sell the sizzle not the steak • Develop and Evaluate Advertising Appeals • Common appeals are-profit/benefit, health, fear, admiration, fun/pleasure, vanity/ego, environment • Unique selling proposition • Execute the Message • Post Campaign Evaluation

8. Common Advertising Appeals

9. Common Executional Styles for Advertising

10. Media Decisions in Advertising Direct Mail Trade Exhibits Cooperative Advertising Brochures Coupons Catalogs Special Events Monitored Media Unmonitored Media Newspapers Magazines Radio Television Internet Outdoor Media

11. Alternative Media Advertainments Subway Tunnel Ads Hold Music Shopping Carts Bathroom Posters Computer Screen Savers DVDs and CDs Interactive Kiosks Ads before Movies

12. Media Selection Considerations Cost Per Contact Target Audience Considerations Cost Per Click Medium Flexibility Reach Noise Level Frequency Life Span

13. Media Scheduling 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.

14. Presidential TV Advertising When it comes to advertising, presidential hopefuls continue to favor local TV: • Nearly 95 percent of presidential campaign ads between January 1 to October 10, 2007 were aired on local TV stations • Mitt Romney led other Republican presidential candidates with 10,893 TV ads in that time period • Bill Richardson led Democrats with 5,975 TV ads, followed by Barack Obama with 4,293 ads SOURCE: “Candidates Still Bank On Local TV Ads,” Mediaweek, Oct 22, 2007 p22 .

15. Public Relations The element in the promotional mix that evaluates public attitudes, identifies issues that may elicit public concern, and executes programs to gain public understanding and acceptance.

16. Public Relations Tools New-product publicity Product placement Consumer education Sponsorship Company Web sites

17. Managing Unfavorable Publicity A coordinated effort to handle the effects of unfavorable publicity or an unexpected unfavorable event. Crisis Management

18. Sales Promotion Consumer Sales Promotion is… Trade Sales Promotion is… Sales promotion activities targeting a marketing channel member, such as a wholesaler or retailer. Sales promotion activities targeting the ultimate consumer.

19. Objectives of Sales Promotion Type of Buyer Desired Results Sales PromotionExamples Loyal Customers • Reinforce behavior • Increase consumption • Change purchase 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

20. Consumer Sales Promotion Tools Coupons and Rebates Premiums Loyalty Marketing Programs Contests and Sweepstakes Sampling Point-of-Purchase Promotion Online Sales Promotion

21. Trade Sales Promotion Tools Trade Allowances Push Money Training Free Merchandise Store Demonstration Conventions and Trade Shows

22. Point-of-Purchase Promotion A point-of-purchase (P-O-P) display includes any promotional display set up at the retailer’s location to build traffic, advertise the product, or induce impulse buying.

23. Ch 16 Discussion Questions • Discuss the relationship between advertising and market share. • Discuss the advantages and disadvantages of various media. • Explain media evaluation and selection in advertising. • Discuss the role of Public Relations in promotion. • Discuss the role of Sales Promotion in marketing