Communicating Customer Value:

1. Communicating Customer Value: Advertising and Public Relations Chapter 12

2. George Washington HillAmerican Tobacco Company 1910 “I am convinced that 50 % of our advertising is sheer waste, but I can never find out which half”

3. Previewing the Concepts Five promotion mix tools Ch,ch,ch,changes Advertising objectives and strategy Advertising effectiveness and evaluation Public relations

4. The Promotion Mix • Promotion mix (also called marketing communications mix): • Advertising • Sales promotion • Personal selling • Public relations • Direct marketing

5. the times they are a changin’ • Consumers • the wireless age • Marketing Strategy • mass marketing is dead • Communication Technology • interacting with customers

6. “I’m not dead yet” Traditional mass marketing is in decline Costs increasing Audiences shrinking Clutter However… Proctor & Gamble only spend 5% of advertising budget on digital media

7. It’s about the mix

8. Advertising Super Bowl XLIII – 96 million Academy Awards – 36 million American Idol – 30 million

9. Advertising Advantages Disadvantages Impersonal One-way communication Costly • Reaches the masses • Low cost per exposure • Repetition • Legitimization

10. Personal Selling Advantages Disadvantages Requires long-term commitment to sales force Most expensive promotion tool • Personal interaction between two or more people • Building preferences, convictions, and actions • Relationship building and two-way communication

11. Sales Promotion Advantages Disadvantages Short-lived affects Not long term (in terms of brand preference and customer relationship) • Attracts consumer attention • Offers incentives • Dramatize product offers • Invites and rewards quick consumer response

12. Public Relations Advantages Disadvantages Tends to be used as an afterthought • believable • Reaches people who avoid • Can dramatize a company or product • can be effective and economical

13. Direct Marketing • Nature of direct marketing: • Many forms of direct marketing exist, but all forms share primary characteristics: • Less public • Immediate and customized • Interactive • Well suited to highly targeted marketing efforts and to building one-to-one relationships

14. Promotion Mix Strategies Push versus Pull

15. Advertising Objectives Task Target Time Overall advertising goal is to build customer relationships by communicating customer value

16. Advertising Decisions Informative advertising Persuasive advertising Comparative advertising (a special type of persuasive advertising) Reminder advertising

17. Budgeting • Setting the advertising budget: • Affordable method • Percentage-of-sales method • Competitive-parity method • Objective-and-task method

18. Developing Advertising Strategy

19. Madison & Vine Merging advertising & entertainment The Greatest Movie Ever Sold

20. Creative Concept • Identify customer benefits that can be used as advertising appeals • Develop a compelling creative concept-the “big idea” • Choose an advertising appeal that is: • Meaningful • Believable • Distinctive

21. Major Advertising Decisions Message Execution Styles Personality symbol Technical expertise Scientific evidence Testimonial evidence or endorsement • Slice of Life • Lifestyle • Fantasy • Mood or image • Musical

22. Major Advertising Decisions Message execution – Calgary condominium ad:

23. Major Advertising Decisions • Consumer-generated messages: • Tapping consumers for message ideas or ads: • Searching existing Web video sites • Holding contests or inviting consumers to submit ad message ideas and videos • Benefits of consumer-generated messages: • Collects new ideas • Fresh brand perspective • Relatively little expense • Gets consumers talking and thinking about the brand

24. Media Selection • Steps in advertising media selection: • Deciding on reach, frequency, impact • Choosing among media types • Selecting specific media vehicles • Deciding on media timing

25. Return on Advertising Investment • Return on advertising investment: • The net return on advertising investment divided by the costs of the advertising investment • Evaluating advertising involves: • Measuring the communication effects of an ad or campaign • Measuring the sales and profit effects of the ad campaign

26. Agencies

27. Other Advertising Considerations • International advertising issues: • To what degree should global advertising be adapted to various countries? • Greater need for standardization of global brand advertising strategies • Specific advertising programs must usually be adapted to local cultures and other factors

28. Public Relations • Public relations departments perform the following functions: • Press relations or press agency • Product publicity • Public affairs (community relations) • Lobbying • Investor relations • Development

29. Public Relations Major Public Relations Tools Corporate identity materials Public service activities Buzz marketing Company website • News • Speeches • Special events • Written materials • Audiovisual materials

30. Managing Crisis Tylenol 1980s Exxon Valdez 1990s Maple Leaf 2000s

31. Previewing the Concepts Five promotion mix tools Ch,ch,ch,changes Advertising objectives and strategy Advertising effectiveness and evaluation Public relations