Designed by Eric Brengle B-books, Ltd.

1. 10 MarketingLamb, Hair, McDaniel Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University Advertising and Public Relations CHAPTER 17

2. Learning Outcomes Discuss the effects of advertising on market share and consumers Identify the major types of advertising Discuss the creative decisions in developing an advertising campaign LOI LO2 LO3

3. Learning Outcomes Describe media evaluation and selection techniques Discuss the role of public relations in the promotional mix LO4 LO5

4. The Effects of Advertising LOI Discuss the effects of advertising on market share and consumers

5. LOI The Effects of Advertising • U.S. advertising was forecasted at nearly $480 billion in 2008 • In 2005, 32 companies spent over $1 billion each • The advertising and marketing services employ 800,000 people • Ad budgets of some firms are almost $4 billion annually

6. LOI The Effects of Advertising Top Ten Leaders by U.S.Advertising Spending

7. Advertising and Market Share LOI 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.

8. The Effects of Advertising on Consumers • The average U.S. citizen is exposed to hundreds of ads each day. • 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. LOI

9. LOI REVIEW LEARNING OUTCOMEEffects of Advertising

10. Major Types of Advertising LO2 Identify the major types of advertising

11. Institutional Advertising Enhances a company’s image rather than promotes a particular product. Product Advertising Touts the benefits of a specific good or service. Major Types of Advertising LO2

12. Corporate identity Institutional Advertising Advocacy advertising Pioneering Product Advertising Competitive Comparative LO2 Major Types of Advertising

13. 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 LO2 Product Advertising • Compares two or more competing brands’ product attributes • Used if growth is sluggish, or if competition is strong Comparative http://www.pizzahut.com http://www.papajohns.com Online

14. LO2 REVIEW LEARNING OUTCOMEThe Major Types of Advertising

15. Creative Decisions in Advertising LO3 Discuss the creative decisions in developing an advertising campaign

16. Creative Decisions in Advertising LO3 AdvertisingCampaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals.

17. Determine the advertising objectives Make media decisions Make creative decisions Evaluate the campaign LO3 Creative Decisions in Advertising

18. Define target audience Define desired percentage change Define the time frame for change Setting Objectives: The DAGMAR Approach LO3

19. Identify product benefits Develop and evaluate advertising appeals Execute the message Evaluate the campaign’s effectiveness LO3 Creative Decisions

20. LO3 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

21. LO3 Attribute “SoBe Life Water has reformulated five delicious, low-calorie flavors, each infused with essential vitamins and healthy herbal ingredients.” Benefit “SoBe Life Water is not only an enhanced water; it is a lifestyle unto itself. It provides consumers the healthiest, most fun and refreshing products, delivering the incredibly positive benefits of hydration.” Identify Product Benefits - So?

22. 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 Admiration Reason for use of celebrity spokespeople Convenience Used for fast foods and microwave foods Key to advertising vacations, beer, parks Fun and pleasure Vanity and egotism Used for expensive or conspicuous items Environmental Consciousness Centers around environmental protection Advertising Appeals LO3

23. Unique SellingProposition Unique Selling Proposition LO3 A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign.

24. Scientific Slice-of-Life Musical Lifestyle Demon- stration Spokes-person/ Testimonial Mood or Image Fantasy Real/ Animated Product Symbols Humorous Executing the Message LO3

25. LO3 Setadvertising objectives Identify benefits Develop appeal Execute message Evaluatingresults helpsmarketersadjust objectivesfor futurecampaigns Evaluate campaign results REVIEW LEARNING OUTCOMECreative Decisions for Ad Campaign

26. Media Decisions in Advertising LO4 Describe media evaluation and selection techniques

27. Monitored Media Unmonitored Media Newspapers Direct Mail Magazines Trade Exhibits Yellow Pages Cooperative Advertising Internet Brochures Radio Coupons Television Catalogs Outdoor Media Special Events LO4 Media Decisions in Advertising

28. LO4 Newspapers Magazines Radio Television Outdoor Media Yellow Pages Internet Major Advertising Media

29. Newspapers LO4 Advantages Disadvantages • Geographic selectivity • Short-term advertiser commitments • News value and immediacy • Year-round readership • High individual market coverage • Co-op and local tie-in availability • Short lead time • Limited demographic selectivity • Limited color • Low pass-along rate • May be expensive

30. CooperativeAdvertising Cooperative Advertising LO4 An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand.

31. Magazines LO4 Advantages Disadvantages • Long-term advertiser commitments • Slow audience build-up • Limited demonstration capabilities • Lack of urgency • Long lead time • Good reproduction • Demographic selectivity • Regional/local selectivity • Long advertising life • High pass-along rate

32. Radio LO4 Advantages Disadvantages • No visual treatment • Short advertising life • High frequency to generate comprehension and retention • Background distractions • Commercial clutter • Low cost • Immediacy of message • Short notice scheduling • No seasonal audience change • Highly portable • Short-term advertiser commitments • Entertainment carryover

33. Television LO4 Advantages Disadvantages • Short life of message • Consumer skepticism • High campaign cost • Little demographic selectivity with stations • Long-term advertiser commitments • Long lead times for production • Commercial clutter • Wide, diverse audience • Low cost per thousand • Creative opportunities for demonstration • Immediacy of messages • Entertainment carryover • Demographic selectivity with cable

34. TV Advertising: Is Less More? LO4 • The number of ads in TV shows is a longstanding complaint of viewers and advertisers. • The media is cluttered and consumers change channels or speed through commercials on a DVR. • Tests are being conducted to feature shorter commercial pods.

35. Outdoor Media LO4 Advantages Disadvantages • Short message • Lack of demographic selectivity • High “noise” level • Repetition • Moderate cost • Flexibility • Geographic selectivity

36. http://www.fox.com http://www.abc.com Online Internet LO4 Advantages Disadvantages • Difficult to measure ad effectiveness and ROI • Ad exposure relies on “click through” from banner ads • Not all consumers have access to Internet • Fast growing • Ability to reach narrow target audience • Short lead time • Moderate cost

37. Videogame Advertising LO4 • In 2006, Microsoft acquired Massive inc., a start-up that places ads in video games. • Ads are inserted into the game environment. • Video games could become a large new medium for advertising. SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,” Wall Street Journal, April 26,2006, B1.

38. Cell Phones LO4 • Newest advertising media • Useful for reaching youth market • 3 billion cell phone users in the world • In 2006 cell phone ad sales reached over $400 million in U.S. – nearly $900 million worldwide

39. LO4 Media Selection Media Mix – Combination of media to be used for a promotional campaign Cost per contact – The cost of reaching one member of the target market Reach – number of target consumers exposed to a commercial at least once during a specific period, usually four weeks Frequency – number of times an individual is exposed to a given message during a specific period

40. LO4 Qualitative Factors in Media Selection Attention to the commercial and the program Involvement Program liking Lack of distractions Other audience behaviors

41. Media Scheduling LO4 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.

42. LO4 continuous Scheduling: flighted pulsing seasonal Winter Spring Summer Fall REVIEW LEARNING OUTCOMEMedia Evaluation and Selection Type: Newspaper Magazine Radio Television Outdoor Internet Alternative Considerations: Mix How much of each? Cost per contact How much per person? Reach How many people? Frequency How often? Audience selectivity How targeted is audience?

43. Public Relations LO5 Discuss the role of public relations in the promotional mix

44. Public Relations Public Relations LO5 The element in the promotional mix that: • evaluates public attitudes • identifies issues of public concern • executes programs to gain public acceptance

45. Press relations Product publicity Corporate communication Public affairs Lobbying Employee and investor relations Crisis management LO5 Functions of Public Relations

46. New product publicity Product placement Consumer education Event sponsorship Issue sponsorship Internet Web sites http://www.vw.com http://www.chevrolet.com Online Public Relations Tools LO5

47. Example of Consumer Education LO5 • Corporations are teaching public school students about personal finance. • People under age 25 are a fast-growing group for credit card debt increases and bankruptcy. • Is it appropriate to use educational materials with a corporate identity? • How should financial literacy be taught? SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,” Wall Street Journal, April 8-9, 2006, B1.

48. Crisis Management A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event. Managing Unfavorable Publicity LO5

49. LO5 REVIEW LEARNING OUTCOMEThe Role of Public Relations