Chapter 1

Chapter 1

MKTG Lamb, Hair, McDaniel 2008-2009 1 CHAPTER Designed by Amy McGuire, B-books, Ltd. Chapter 15 Advertising and Public Prepared by Deborah Baker, Texas Christian University Relations Copyright 2009 Cengage Learning Inc. All rights reserved 1 Learning Outcomes LO1 Discuss the effects of advertising on market share and consumers LO2

Identify the major types of advertising LO Discuss the creative decisions in developing an advertising campaign Chapter 15 3 Copyright 2009 Cengage Learning Inc. All rights reserved 2 Learning Outcomes LO 4 LO5 Chapter 15 Describe media evaluation and selection techniques Discuss the role of public relations in the promotional mix

Copyright 2009 Cengage Learning Inc. All rights reserved 3 The Effects of Advertising U.S. advertising was almost $300 billion in 2006 In that same year, 40 U.S. companies spent over $1 billion each The advertising industry is smallonly 150,000 employed by the 12,000 advertising agencies Ad budgets of some firms are almost $4 billion annually LO1 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 4 The Effects of Advertising Top TopTen TenLeaders Leadersby byU.S. U.S.Advertising AdvertisingSpending Spending Ad Spending In 2006 (in millions)

$0 Chapter 15 $1,000 $1,500 $2,000 $2,500 $3,000 1 Procter & Gamble Co. 2 AT&T $3,345 3 General Motors Corp. $3,296 4

Time Warner 5 Verizon Communications 6 Ford Motor Co. 7 GlaxoSmithKline 8 Walt Disney Co. 9 Johnson & Johnson $2,291 10 LO1 $500 Unilever

$3,500 $4,000 $4,500 $5,000 $5,500 $4,898 $3,089 $2,822 $2,577 $2,444 $2,320 $2,098 Source: Advertising Age, June 25, 2007 Copyright 2009 Cengage Learning Inc. All rights reserved 5 Advertising and Market Share 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. LO1 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 6 The Effects of Advertising on Consumers The average U.S. citizen is exposed to hundreds of ads each day. Advertising may change a consumers negative attitude toward a product, or reinforce a positive attitude. LO1 Chapter 15 Advertising can affect consumer ranking of a brands attributes. Copyright 2009 Cengage Learning Inc. All rights reserved

7 LO1 REVIEW LEARNING OUTCOME Effects of Advertising Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 8 Major Types of Advertising Institutional Institutional Advertising Advertising Enhances Enhancesaacompanys companysimage image rather ratherthan thanpromotes promotesaa particular particularproduct. product.

Product Product Advertising Advertising Touts Toutsthe thebenefits benefitsof ofaa specific specificgood goodor orservice. service. LO2 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 9 Major Types of Advertising Institutional Institutional Advertising Advertising Corporate Corporateidentity

identity Advocacy Advocacy advertising advertising Pioneering Pioneering Product Product Advertising Advertising LO Chapter 15 2 Competitive Competitive Comparative Comparative Copyright 2009 Cengage Learning Inc. All rights reserved 10 Product Advertising Pioneering Pioneering

Stimulates primary demand for new product or category Used in the PLC introductory stage Competitive Competitive Influences demand for brand in the growth phase of the PLC Often uses emotional appeal Comparative Comparative Compares two or more competing brands product attributes Used if growth is sluggish, or if competition is strong LO2 http://www.pizzahut.com http://www.papajohns.com Online Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 11

LO2 REVIEW LEARNING OUTCOME The Major Types of Advertising Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 12 Creative Decisions in Advertising Advertising Advertising Campaign Campaign A series of related advertisements focusing on a common theme, slogan, and set of advertising appeals. LO3 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 13 Creative Decisions in Advertising Determine the

advertising objectives Make creative decisions LO 3 Chapter 15 Make media decisions Evaluate the campaign Copyright 2009 Cengage Learning Inc. All rights reserved 14 Setting Objectives: The DAGMAR Approach Define Define target target audience audience Define Define desired desired percentage percentage change change Define

Define the the time time frame frame for for change change LO3 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 15 Creative Decisions Identify Identifyproduct product benefits benefits Develop Developand andevaluate evaluateadvertising advertisingappeals appeals Execute Executethe the message message Evaluate Evaluatethe

the campaigns campaignseffectiveness effectiveness LO3 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 16 Identify Product Benefits Sell the Sizzle, not the Steak Sell products benefits, not its attributes A benefit should answer Whats in it for me? LO3 Chapter 15 Ask So? to determine if it is a benefit Copyright 2009 Cengage Learning Inc. All rights reserved 17 Identify Product Benefits Attribute

Powerades new line has been reformulated to combine the scientific benefits of sports drinks with B vitamins and to speed up energy metabolism. - So? Benefit So, youll satisfy your thirst with a great-tasting drink that will power you throughout the day. LO3 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 18 Advertising Appeals LO3 Chapter 15 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 Fun and pleasure Key to advertising vacations, beer, parks Vanity and egotism Used for expensive or conspicuous items Environmental Consciousness Centers around environmental protection

Copyright 2009 Cengage Learning Inc. All rights reserved 19 Unique Selling Proposition Unique UniqueSelling Selling Proposition Proposition A desirable, exclusive, and believable advertising appeal selected as the theme for a campaign. LO3 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 20 Executing the Message Scientific Scientific Slice-of-Life Slice-of-Life Musical Musical

Lifestyle Lifestyle SpokesSpokesperson/ person/ Testimonial Testimonial DemonDemonstration stration Mood Moodor or Image Image LO3 Chapter 15 Real/ Real/ Animated Animated Product Product Symbols Symbols Fantasy

Fantasy Humorous Humorous Copyright 2009 Cengage Learning Inc. All rights reserved 21 LO3 REVIEW LEARNING OUTCOME Creative Decisions for Ad Campaign Set advertising objectives Identify benefits Develop appeal Evaluating results helps marketers adjust objectives for future campaigns Chapter 15 Execute message Evaluate campaign results

Copyright 2009 Cengage Learning Inc. All rights reserved 22 Media Decisions in Advertising LO4 Chapter 15 Monitored Monitored Media Media Unmonitored Unmonitored Media Media Newspapers Newspapers Direct Direct Mail Mail Magazines Magazines Trade Trade Exhibits Exhibits

Yellow Yellow Pages Pages Cooperative Cooperative Advertising Advertising Internet Internet Brochures Brochures Radio Radio Coupons Coupons Television Television Catalogs Catalogs Outdoor Outdoor Media Media Special

Special Events Events Copyright 2009 Cengage Learning Inc. All rights reserved 23 Major Advertising Media Newspapers Newspapers Magazines Magazines Radio Radio Television Television Outdoor Outdoor Media Media Yellow Yellow Pages Pages LO4 Chapter 15 Internet Internet Copyright 2009 Cengage Learning Inc. All rights reserved 24

Newspapers Advantages 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 Disadvantages Limited demographic selectivity Limited color

Low pass-along rate May be expensive LO4 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 25 Cooperative Advertising Cooperative Cooperative Advertising Advertising An arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturers brand. LO4 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 26 Magazines Advantages Good reproduction

Demographic selectivity Regional/local selectivity Long advertising life High pass-along rate Disadvantages Long-term advertiser commitments Slow audience build-up Limited demonstration capabilities Lack of urgency Long lead time LO4 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved

27 Radio Advantages Low cost Immediacy of message Short notice scheduling No seasonal audience change Highly portable Short-term advertiser commitments Entertainment carryover Disadvantages No visual treatment

Short advertising life High frequency to generate comprehension and retention Background distractions Commercial clutter LO4 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 28 Television Advantages Wide, diverse audience Low cost per thousand Creative opportunities for demonstration Immediacy of messages Entertainment carryover Demographic selectivity with cable

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 LO4 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 29 Outdoor Media Advantages

Repetition Moderate cost Flexibility Geographic selectivity Disadvantages Short message Lack of demographic selectivity High noise level LO4 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 30 Internet Advantages

Fast growing Ability to reach narrow target audience Short lead time Moderate cost Disadvantages LO4 Difficult to measure ad effectiveness and ROI Ad exposure relies on click through from banner ads Not all consumers have access to Internet http://www.fox.com http://www.abc.com Online Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved

31 Alternative Media Shopping Shopping Carts Carts Floor Floor Ads Ads Computer Computer Screen Screen Savers Savers Subway Subway Tunnel Tunnel Ads Ads DVDs DVDs Video Video Game Game Ads Ads

Interactive Interactive Kiosks Kiosks Cell Cell Phone Phone Ads Ads Ads Ads in in Movies Movies LO4 Chapter 15 Advertainments Advertainments Copyright 2009 Cengage Learning Inc. All rights reserved 32 Qualitative Factors in Media Selection Attention to the commercial and the program Program liking Lack of distractions Other audience behaviors LO4

Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 33 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.

LO4 Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 34 LO4 REVIEW LEARNING OUTCOME Media Evaluation and Selection Type: Newspaper Magazine Radio Television Outdoor Internet Alternative Scheduling: continuous flighted Considerations: Mix Cost per contact Reach Frequency Audience selectivity

How much of each? How much per person? How many people? How often? How targeted is audience? pulsing seasonal Winter Chapter 15 Spring Copyright 2009 Cengage Learning Inc. All rights reserved Summer Fall 35 LO5 Public Relations Public Public Relations Relations

The element in the promotional mix that: evaluates public attitudes identifies issues of public concern executes programs to gain public acceptance Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 36 LO5 Functions of Public Relations Press Press relations relations Product Product publicity publicity Corporate Corporate communication communication Public Public affairs affairs Lobbying Lobbying Employee Employee and

and investor investor relations relations Crisis Crisis management management Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 37 LO5 Public Relations Tools New New product product publicity publicity Product Product placement placement Consumer Consumer education education Event Event sponsorship sponsorship Issue Issue sponsorship sponsorship Internet Internet Web

Web sites sites http://www.vw.com http://www.chevrolet.com Online Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 38 LO 5 Managing Unfavorable Publicity Crisis Crisis Management Management A coordinated effort to handle the effects of unfavorable publicity or of an unfavorable event. Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved

39 LO5 REVIEW LEARNING OUTCOME The Role of Public Relations Chapter 15 Copyright 2009 Cengage Learning Inc. All rights reserved 40

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